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In Re: UST Sequence No. 1163
UNHED STA lES DEPARTMENT OF TIM TREASURY
1500 PENNSYLVANIA AVENTJE, NW
WASHENGTON, D.C. 20220
Dear Ladies and Gentlemen:
The company set forth on the signature page hereto (the "Company") intends to issue the
subordinated debentures, which such subordinated debentures do not constitute a new class of
equity, set forth on Schedule A hereto (the "CDCI Senior Subordinated Securities") to the
United States Department of the Treasury (the "Investor") in exchange for the subordinated
debentures previously acquired by the Investor pursuant to the Company's participation in the
Troubled Asset Relief Program Capital Purchase Program set forth on Schedule A (the "CPP
Senior Subordinated Securities").
The purpose of this letter agreement is to confirm the terms and conditions of the
exchange. Except to the extent supplemented or superseded by the terms set forth herein or in
the Schedules hereto, the provisions contained in the Exchange Agreement — Standard Terms
attached hereto as Exhibit A (the "Exchange Agreement") are incorporated by reference herein.
Terms that are defined in the Exchange Agreement are used in this letter agreement as so
defined. In the event of any inconsistency between this letter agreement and the Exchange
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 CDCI Senior Subordinated Securities and the
exchange of the "subordinated debentures" for the CPP Senior Subordinated Securities pursuant
to this letter agreement and the Exchange Agreement on the terms specified on Schedule A
hereto.
This letter agreement (including the Schedules hereto), the Exchange Agreement
(including the Annexes thereto) and the Disclosure Schedules (as defined in the Exchange
Agreement) 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 Exchange Agreement.
This letter agreement may be executed in any number of separate counterparts, each such
counterpart being deemed to be an original instrument, and all such counterparts will together
constitute the same agreement. Executed signature pages to this letter agreement may be
delivered by facsimile and such facsimiles will be deemed as sufficient as if actual signature
pages had been delivered.
***
In Re: UST Sequence No. 1163
IN WITNESS WHEREOF, this letter agreement has been duly executed and delivered by
the duly authorized representatives of the parties hereto as of the date written below.
UNITED STATES DEPARTMENT OF THE
TREASURY
By:
As—
647
Name: Herbert M. Allison, Jr.
Title: Assistant Secretary for Financ al tability
COMPANY: IBC BANCORP, INC
By:
Name: Frank Wang
Title: Vice Chairman
Date: September 10, 2010
Signature Page
10
Letter Agreement
In Re: UST Sequence No. 1163
IN WITNESS WHEREOF, this letter agreement has been duly executed and delivered by
the duly authorized representatives of the parties hereto as of the date written below.
UNITED STATES DEPARTMENT OF THE
TREASURY
By:
Name:
Title:
COMPANY: IBC BANCORP, INC
By:
Name: Frank Wang
Title: Vice Chairman
Date: September 10, 2010
Signature Page to Letter Agreement
In Re: UST Sequence No. 1163
EXHIBIT A
EXCHANGE AGREEMENT
EXHIBIT A
(CDFI Subchapter S Corporation
Senior Securities)
EXCHANGE AGREEMENT
STANDARD TERMS
UST Sequence No. 1163
TABLE OF CONTENTS
Page
ARTICLE I
THE CLOSING; THE EXCHANGE OF CDCI SENIOR SUBORDINATED SECURITIES FOR
CPP SENIOR SUBORDINATED SECURITIES
Section 1.1
Section 1.2
The CDCI Senior Subordinated Securities
The Closing
2
2
ARTICLE II
EXCHANGE
Section 2.1
Section 2.2
Exchange
Exchange Documentation
5
5
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Section 3.1
Section 3.2
Section 3.3
Section 3.4
Section 3.5
Section 3.6
Section 3.7
Section 3.8
Section 3.9
Section 3.10
Section 3.11
Section 3.12
Section 3.13
Section 3.14
Section 3.15
Section 3.16
Section 3.17
Section 3.18
Section 3.19
Section 3.20
Section 3.21
Existence and Power
CDCI Senior Subordinated Securities
Subchapter S Election; Community Development Financial Institution
Status; Domestic Ownership
Authorization and Enforceability
Anti-Takeover Provisions and Rights Plan
No Company Material Adverse Effect
Company Financial Statements
No Undisclosed Liabilities
Offering of Securities
Litigation and Other Proceedings
Compliance with Laws
Employee Benefit Matters
Taxes
Properties and Leases
Environmental Liability
Risk Management Instruments
Agreements with Regulatory Agencies
Insurance
Intellectual Property
Brokers and Finders
Disclosure Schedule
UST Sequence No. 1163
6
6
7
7
8
9
9
9
9
9
9
10
11
11
11
11
12
12
12
13
13
Section 3.22
Section 3.23
CPP Senior Subordinated Securities
Amendment to Charter and Other Documents to Effect Section 5.12(b)
13
13
ARTICLE IV
COVENANTS
Section 4.1
Section 4.2
Affirmative Covenants
Negative Covenants
13
20
ARTICLE V
ADDITIONAL AGREEMENTS
Section 5.1
Section 5.2
Section 5.3
Section 5.4
Section 5.5
Section 5.6
Section 5.7
Section 5.8
Section 5.9
Section 5.10
Section 5.11
Section 5.12
Section 5.13
Section 5.14
Purchase for Investment
Form of CDCI Senior Subordinated Security
CDCI Senior Subordinated Securities
Computation of Interest
Legends
Transfer of CDCI Senior Subordinated Securities
Replacement of CDCI Senior Subordinated Securities
Cancellation
Rule 144; Rule 144A; 4(1 1/2) Transactions
Depository Senior Subordinated Securities
Redemption
Voting Rights
Expenses and Further Assurances
Communications to Holders
22
22
22
23
24
26
28
28
28
29
29
31
33
34
ARTICLE VI
SUBORDINATION OF THE CDCI SENIOR SUBORDINATED SECURITIES
Section 6.1
Section 6.2
Section 6.3
Section 6.4
Section 6.5
Section 6.6
Agreement to Subordinate
Default on Senior Indebtedness
Liquidation; Dissolution
Subrogation
Notice by the Company
Subordination May Not Be Impaired
34
35
35
37
37
38
ARTICLE VII
REMEDIES OF THE HOLDERS UPON EVENT OF DEFAULT
Section 7.1
Event of Default
UST Sequence No. 1163
38
Section 7.2
Section 7.3
Section 7.4
Section 7.5
Acceleration and Other Remedies
Suits for Enforcement
Holders May File Proofs of Claim
Waiver of Past Defaults
39
39
39
40
ARTICLE VIII
MISCELLANEOUS
Section 8.1
Section 8.2
Section 8.3
Section 8.4
Section 8.5
Section 8.6
Section 8.7
Section 8.8
Section 8.9
Section 8.10
Section 8.11
Section 8.12
Section 8.13
Section 8.14
Termination
Survival
Amendment
Waiver of Conditions
Governing Law; Submission to Jurisdiction, etc
Notices
Definitions
Interpretation
Assignment
Severability
No Third-Party Beneficiaries
Entire Agreement, etc
Tax Treatment of CDCI Senior Subordinated Securities
Specific Performance
UST Sequence No. 1163
40
41
41
42
42
42
43
46
47
47
47
47
47
48
LIST OF ANNEXES
ANNEX A: FORM OF OFFICER'S CERTIFICATE
ANNEX B: FORM OF OPINION
ANNEX C: FORM OF WAWER
ANNEX D: FORM OF CDCI SENIOR SUBORDINATED SECURITY
ANNEX E: REGISTRATION RIGHTS
ANNEX F: FORM OF OFFICER'S CERTIFICATE (CDFI REQUIREMENTS)
UST Sequence No. 1163
-iv-
Defined Terms
Additional Dividends
Section 3.1(b)
Affiliate
Section 8.7(b)
Agreement
Recitals
Appropriate Federal Banking Agency
Section 8.7(c)
Bank Holding Company
Section 8.7(d)
Bankruptcy Exceptions
Section 3.4(a)
Benefit Plans
Section 1.2(c)(vi)
Board of Directors
Section 3.5
Business Combination
Section 8.7(e)
Capitalization Date
Section 3.1(b)
CDCI
Recitals
CDCI Senior Subordinated Securities
Recitals
CDCI Senior Subordinated Securities Director Section 5.12(b)
CDCI Senior Subordinated Securities Register Section 5.6
CDFI
Section 3.3
CDFI Application
Section 1.2(c)(xii)
CDFI Application Update
Section 1.2(c)(xii)
CDFI Events
Section 8.7(s)
Certified Entity
Section 8.7(f)
Charter
Section 1.2(c)(iv)
Closing
Section 1.2(a)
Closing Date
Section 1.2(a)
Code
Section 3.12
Common Stock
Section 3.1(b)
Company
Recitals
Company Financial Statements
Section 8.7(g)
Company Material Adverse Effect
Section 8.7(h)
Company Subsidiaries
Section 3.4(b)
Compensation Regulations
Section 1.2(c)(vi)
Controlled Group
Section 3.12
CPP
Recitals
CPP/CDCI Securities
Section 3.22
CPP Securities
Section 8.12(b)
CPP Securities Purchase Agreement
Recitals
CPP Senior Subordinated Securities
Recitals
CPP Signing Date
Recitals
CPP Waiver
Section 1.2(c)(vii)
Defaulted Interest
Section 5.4(d)
[Deferred Interest
Section 5.4(c)]
Disclosure Schedule
Section 8.7(i)
Disclosure Update
Section 1.2(xi)
EAWA
Section 8.7(j)
EESA
Section 1.2(c)(vi)
ERISA
Section 3.12
UST Sequence No. 1163
-V-
Event of Default
Exchange
Exchange Act
Federal Reserve
Fund
GAAP
Governmental Entities
Holder
Indebtedness
Indemnitee
Indenture
Indenture Act
Information
[Interest Deferral Period
Interest Payment Date
Interest Period
Interest Rate
Investor
Letter Agreement
Major Depository Institution Subsidiary
Majority Holder
Maturity Date
MHA
Obligor
Plan
Previously Disclosed
Proprietary Rights
QSub
Redemption Date
Regular Record Date
Regulatory Agreement
Relevant Period
S-Corp
Savings and Loan Holding Company
Schedules
SEC
Section 4.1(e) Employee
Securities Act
Senior Executive Officers
Senior Indebtedness
Signing Date
subsidiary
Tax
Tax Distribution
Transaction Documents
Transfer
UST Sequence No. 1163
Section 7.1
Recitals
Section 5.6(f)
Section 8.7(d)
Section 1.2(c)(xii)
Section 8.7(h)
Section 1.2(c)(i)
Section 5.9(a)
Section 8.7(k)
Section 5.9(b)
Section 5.1
Section 5.1
Section 4.1(c)(iii)
Section 5.4(c)]
Face of CDCI Senior Subordinated Security
Section 5.4(b)
Face of CDCI Senior Subordinated Security
Recitals
Recitals
Section 8.7(1)
Section 5.12(b)
Face of CDCI Senior Subordinated Security
Section 4.1(i)
Section 7.4
Section 3.12
Section 8.7(m)
Section 3.19
Section 8.7(h)
Section 5.11
Face of CDCI Senior Subordinated Security
Section 3.17
Section 1.2(c)(vi)
Section 3.3(c)
Section 8.7(n)
Recitals
Section 3.9
Section 4.1(e)
Section 3.1(a)
Section 8.7(o)
Section 8.7(p)
Section 1.2(c)(xi)
Section 8.7(a)
Section 8.7(q)
Section 4.2(b)
Section 8.7(r)
Section 5.6(f)
-V1-
EXCHANGE AGREEMENT — STANDARD TERMS
Recitals:
WHEREAS, the United States Depth luient of the Treasury (the "Investor") has
purchased senior subordinated debentures or has acquired senior subordinated debentures
through the exercise of warrants or the exchange of other securities (collectively, "CPP Senior
Subordinated Securities") from eligible financial institutions which elected to participate in the
Troubled Asset Relief Program Capital Purchase Program ("CPP");
WHEREAS, the Investor may from time to time agree to exchange the CPP
Senior Subordinated Securities it received from eligible financial institutions that participated in
CPP for newly issued debentures ("CDCI Senior Subordinated Securities") from such eligible
financial institutions to the extent they elect to participate in the Community Development
Capital Initiative ("CDCI");
WHEREAS, an eligible financial institution electing to participate in the CDCI
and exchange CPP Senior Subordinated Securities for CDCI Senior Subordinated Securities shall
enter into a letter agreement (the "Letter Agreement") with the Investor which incorporates this
Exchange Agreement — Standard Terms (the eligible financial institution identified in the Letter
Agreement, the "Company");
WHEREAS, the Company issued the CPP Senior Subordinated Securities (or the
warrants exercised to acquire the CPP Senior Subordinated Securities or the securities
exchanged for the CPP Senior Subordinated Securities) pursuant to that certain Securities
Purchase Agreement — Standard Terms incorporated into a letter agreement, dated as of the date
set forth on Schedule A to the Letter Agreement (the "CPP Signing Date"), as amended from
time to time, between the Company and the Investor (the "CPP Securities Purchase
Agreement");
WHEREAS, the Company agrees to support the availability of credit and
financial services to underserved populations and communities in the United States to promote
the expansion of small businesses and the creation of jobs in such populations and communities;
WHEREAS, the Company agrees to work diligently, under existing and any future
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 its CDCI Senior Subordinated
Securities in the principal amount set forth on Schedule A to the Letter Agreement to the
Investor in exchange for (the "Exchange") the CPP Senior Subordinated Securities in the
principal amount set forth on Schedule A to the Letter Agreement; and
UST Sequence No. 1163
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WHEREAS, the Exchange will be governed by this Exchange Agreement —
Standard Terms and the Letter Agreement, including the schedules thereto (the "Schedules"),
specifying additional terms of the Exchange. This Exchange 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 Exchange 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
THE CLOSING; THE EXCHANGE OF CDCI SENIOR SUBORDINATED
SECURITIES FOR CPP SENIOR SUBORDINATED SECURITIES
Section 1.1 The CDCI Senior Subordinated Securities. The CDCI Senior
Subordinated Securities are being issued to the Investor in the Exchange pursuant to Article II
hereof. The CPP Senior Subordinated Securities exchanged for the CDCI Senior Subordinated
Securities pursuant to Article II hereof are being reacquired by the Company and shall be
cancelled pursuant to Section 5.11 of the CPP Securities Purchase Agreement.
Section 1.2 The Closing.
(a)
On the terms and subject to the conditions set forth in this Agreement, the closing
of the Exchange (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 (i) the Company will deliver the CDCI Senior Subordinated Securities
to the Investor, as evidenced by one or more certificates dated the Closing Date and registered in
the name of the Investor or its designee(s) and (ii) the Investor will deliver the certificate
representing the CPP Senior Subordinated Securities to the Company.
(c)
The obligation of the Investor to consunmiate the Exchange 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) any approvals or authorizations of all United States and other
governmental, regulatory or judicial authorities (collectively, "Governmental Entities")
required for the consummation of the Exchange 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 (B) no provision of any applicable United States or other law and no
UST Sequence No. 1163
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judgment, injunction, order or decree of any Governmental Entity shall prohibit
consummation of the Exchange as contemplated by this Agreement;
(ii)
(A) the representations and warranties of the Company set forth in Article
III of this Agreement shall be true and correct in all 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 respects
as of such other date) and (B) the Company shall have performed in all respects all
obligations required to be performed by it under this Agreement at or prior to the
Closing;
(iii)
the Company shall have delivered to the Investor 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(c)(ii) have been satisfied, in substantially the form
attached hereto as Annex A;
(iv)
if applicable, the Company shall have duly adopted and filed with the
Secretary of State of its jurisdiction of organization or other applicable Governmental
Entity an amendment to its certificate or articles of incorporation, articles of association,
or similar organizational document ("Charter") and its bylaws as in effect on the Closing
Date and the Company shall have delivered to the Investor a copy of the filed amendment
with appropriate evidence from the Secretary of State or other applicable Governmental
Entity that the filing has been accepted, or if a filed copy is unavailable, a certificate
signed on behalf of the Company by a Senior Executive Officer certifying to the effect
that the filing of the amendment has been accepted;
(v)
the Company shall have delivered to the Investor, a certificate signed on
behalf of the Company by a Senior Executive Officer certifying to the effect that the
Charter and bylaws of the Company delivered to the Investor pursuant to the CPP
Securities Purchase Agreement remain true, complete and correct, in substantially the
form attached hereto as Annex A; to the extent that the Charter and bylaws of the
Company delivered to the Investor pursuant to the CPP Securities Purchase Agreement
are no longer true, correct and complete, prior to the Closing Date, the Company shall
deliver to Investor true, complete and correct certified copies of any amendments or
supplements to the Charter or bylaws of the Company or the documentation necessary to
make the Charter or bylaws of the Company delivered to the Investor true, correct and
complete as of the Closing Date;
(vi)
(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 any other employee of the Company or its
Affiliates subject to Section 111 of the Emergency Economic Stabilization Act of 2008,
as amended by the American Recovery and Reinvestment Act of 2009, or otherwise from
time to time ("EESA"), as implemented by any guidance, rule or regulation thereunder,
as the same shall be in effect from time to time (collectively, the "Compensation
Regulations") (and to the extent necessary for such changes to be legally enforceable,
UST Sequence No. 1163
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each of its Senior Executive Officers and other employees shall have duly consented in
writing to such changes), as may be necessary, during the period in which any obligation
of the Company arising from financial assistance under the Troubled Asset Relief
Program remains outstanding (such period, as it may be further described in the
Compensation Regulations, the "Relevant Period"), in order to comply with Section 111
of EESA or the Compensation Regulations 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(c)(vi)(A) has been satisfied, in
substantially the form attached hereto as Annex A;
(vii)
the Company shall have delivered to the Investor, a written waiver from
each of the Company's Senior Executive Officers and any other employee of the
Company required to have delivered a waiver to Investor pursuant to Section 1.2(d)(v) of
the CPP Securities Purchase Agreement (each, a "CPP Waiver") and, to the extent that
any Senior Executive Officer or any other employee of the Company or its Affiliates that
are subject to Section 111 of EESA did not deliver a CPP Waiver, the Company shall
cause each such Senior Executive Officer or other employee to have delivered to the
Investor a written waiver in the form attached hereto as Annex C releasing the Investor
and the Company from any claims that such Senior Executive Officer or other employee
may otherwise have as a result of the modification of, or the agreement of the Company
hereunder to modify, the terms of any Benefit Plans with respect to its Senior Executive
Officers or other employees to eliminate any provisions of such Benefit Plans that would
not be in compliance with the requirements of Section 111 of EESA as implemented by
the Compensation Regulations;
(viii)
the Company shall have delivered physical certificated debentures in
proper form evidencing the CDCI Senior Subordinated Securities to the Investor or its
designee(s) in the form attached hereto as Annex D;
(ix)
the Company shall have delivered to the Investor written opinions from
counsel (which may be internal counsel) to the Company, addressed to the Investor and
dated as of the Closing Date, in substantially the forms attached hereto as Annex B;
(x)
the Company and the Company Subsidiaries shall have taken all necessary
action to ensure that the Company and the Company Subsidiaries and their executive
officers, respectively, are in compliance with (i) all guidelines put forth by the Investor
with respect to transparency, reporting and monitoring and (ii) the provisions of EESA
and any federal law respecting EESA, including the Employ American Workers Act
(Section 1611 of Division A, Title XVI of the American Recovery and Reinvestment Act
of 2009), Public Law No. 111-5, effective as of February 17, 2009, and all rules,
regulations and guidance issued thereunder;
(xi)
the Company shall have delivered to the Investor, a copy of the Disclosure
Schedule on or prior to the date of the Letter Agreement (the "Signing Date") and, to the
extent that any information set forth on the Disclosure Schedule needs to be updated or
supplemented to make it true, complete and correct as of the Closing Date, (i) the
Company shall have delivered to the Investor an update to the Disclosure Schedule (the
UST Sequence No. 1163
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"Disclosure Update"), setting forth any information necessary to make the Disclosure
Schedule true, correct and complete as of the Closing Date and (ii) the Investor, in its sole
discretion, shall have approved the Disclosure Update, provided, however, that the
delivery and acceptance of the Disclosure Update shall not limit or affect any rights of or
remedies available to the Investor;
(xii)
the Company shall have delivered to the Investor prior to the Signing Date
either (i) a true, complete and correct certified copy of each CDFI Certification
Application that each Certified Entity submitted to the Community Development
Financial Institution Fund (the "Fund") in connection with its certification as a CDFI
along with any updates to the CDFI Certification Application necessary to make it true,
complete and correct as of the Signing Date or (ii), to the extent a copy of the CDFI
Certification Application that any Certified Entity submitted to the Fund in connection
with its certification as a CDFI is not available, a newly completed CDFI Certification
Application with respect to such Certified Entity true, complete and correct as of the
Signing Date (the CDFI Certification Application delivered to the Investor pursuant to
this Section 1.2(c)(xii), the "CDFI Application"), and, to the extent any information set
forth in the CDFI Application is not true, complete and correct as of the Closing Date, the
Company shall have delivered to the Investor an update to the CDFI Application (the
"CDFI Application Update"), setting forth any information necessary to make the
information set forth in the CDFI Application true, correct and complete as of the Closing
Date and
(xiii)
CPP Senior Subordinated Securities. The Company shall have paid to
Investor all accrued and unpaid interest then due on the CPP Senior Subordinated
Securities.
ARTICLE II
EXCHANGE
Section 2.1 Exchange. On the terms and subject to the conditions set forth in this
Agreement, the Company agrees to issue the CDCI Senior Subordinated Securities to the
Investor in exchange for CPP Senior Subordinated Securities, and the Investor agrees to deliver
to the Company the CPP Senior Subordinated Securities in exchange for the CDCI Senior
Subordinated Securities.
Section 2.2 Exchange Documentation. Settlement of the Exchange will take place
on the Closing Date, at which time the Investor will cause delivery of the CPP Senior
Subordinated Securities to the Company or its designated agent and the Company will cause
delivery of the CDCI Senior Subordinated Securities to the Investor or its designated agent.
UST Sequence No. 1163
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ARTICLE III
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) that:
Section 3.1 Existence and Power.
(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, operate and lease its properties and
to conduct its business in all material respects as it is being 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
Certified Entity (if not the Company) and 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 and each Certified Entity (if not 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 and as of the Closing Date.
(b)
Capitalization. The Company maintains only one class of equity security. 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 Common Stock, other than
(i) shares issued upon the exercise of 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 the Common Stock in the Company and such holder's primary address are set forth on
Schedule B. The amount of the (A) "Allowable Tax Distribution", (B) "Additional Dividends"
and (C) Total Dividends declared and paid in each case for the year ended December 31, 2009
are set forth on Schedule B.
Section 3.2 CDCI Senior Subordinated Securities . The CDCI Senior Subordinated
Securities do not constitute a separate class of equity securities, are subordinate and junior in
UST Sequence No. 1163
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right of payment to the Senior Indebtedness to the extent set forth in Article VI hereof, and are
senior to the Company's Common Stock (and any other class of equity in the event the Company
ceases to be a validly electing S corporation within the meaning of Sections 1361 and 1362 of
the Code) whether or not issued or outstanding, with respect to the distribution of assets in the
event of any dissolution, liquidation or winding up of the Company.
Section 3.3 Subchapter S Election; Community Development Financial
Institution Status; Domestic Ownership.
(a)
The Company, collectively with all of its "Affiliates" (within the meaning of 12
C.F.R. 1805.104) satisfies the requirements of 12 C.F.R. 1805.200(b).
(b)
Each Certified Entity (A) is a regulated community development financial
institution (a "CDFI") currently certified by the Fund of the United States Department of the
Treasury pursuant to 12 C.F.R. 1805.201(a) as having satisfied the eligibility requirements of the
Fund's Community Development Financial Institutions Program and (B) satisfies the eligibility
requirements for a CDFI set forth in 12 C.F.R. 1805.201 (b)(1) — (6).
(c)
The Company (A) is a validly electing S corporation under Sections 1361 and
1362 of the Code (a "S-Corp"), and each Company Subsidiary is a "qualified subchapter S
subsidiary" within the meaning of Section 1361(b)(3)(B) of the Code, (B) has not and the
Company Subsidiaries and the shareholders of the Company have not taken any action which
would invalidate such elections, (C) is either (1) a U.S. bank or U.S. savings association not
controlled by a Bank Holding Company or Savings and Loan Holding Company; (2) a top-tier
U.S. Bank Holding Company that engages predominately in activities that are permitted for
financial holding companies under relevant law; (3) a top-tier U.S. Savings and Loan Holding
Company, which engages solely or predominately in activities that are permitted for financial
holding companies under relevant law or (4) a U.S. bank or U.S. savings association that is a
qualifying S-Corp subsidiary that is controlled by a Bank Holding Company or Savings and
Loan Holding Company that itself is a S-Corp and that does not engage solely or predominately
in activities that are permitted for financial holding companies under relevant law and (D) has
paid all dividends that are (i) Allowable Tax Distributions and (ii) required by any agreement
among shareholders.
(d)
The Company is not a Bank Holding Company, Savings and Loan Holding
Company, bank or savings association controlled (within the meaning of the Bank Holding
Company Act of 1956 (12 U.S.C. 1841(a)(2)) and 12 C.F.R. 225(a)(i) in the case of Bank
Holding Companies and banks and the Home Owners' Loan Act of 1933 (12 U.S.C. 1467a
(a)(2)) and 12 C.F.R. 583.7 in the case of Savings and Loan Holding Companies and savings
associations) by a foreign bank or company.
Section 3.4 Authorization and Enforceability.
(a)
The Company has the corporate power and authority to execute and deliver this
Agreement and, to carry out its obligations hereunder (which includes the issuance of the CDCI
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Senior Subordinated Securities). The execution, delivery and performance by the Company of
this Agreement and the consummation of the transactions contemplated hereby 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 any limitations 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").
(b)
The execution, delivery and performance by the Company of this Agreement and
the consummation of the transactions contemplated hereby, and compliance by the Company
with the provisions hereof, 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 or Certified Entity (if not the Company) (each
subsidiary or Certified Entity, 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.
(c)
Other than filing of the amendment to the Charter or other filings 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, if applicable, 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
Exchange 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.
Section 3.5 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 consummation of the transactions
contemplated hereby, 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",
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"control share", "fair price", "interested stockholder" or other anti-takeover laws and regulations
of any jurisdiction.
Section 3.6 No Company Material Adverse Effect. Since the CPP Signing Date, no
fact, circumstance, event, change, occurrence, condition or development has occurred that,
individually or in the aggregate, has had or would reasonably be expected to have a Company
Material Adverse Effect, except as disclosed on Schedule C.
Section 3.7 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 (i) were prepared in conformity with GAAP applied on a consistent basis (except as
may be noted therein) and (ii) have been prepared from, and are in accordance with, the books
and records of the Company and the Company Subsidiaries.
Section 3.8 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 (i) liabilities that have arisen since the last fiscal year end in the ordinary
and usual course of business and consistent with past practice and (ii) liabilities that, individually
or in the aggregate, have not had and would not reasonably be expected to have a Company
Material Adverse Effect.
Section 3.9 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 the
CDCI Senior Subordinated 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 the CDCI Senior Subordinated Securities to the Investor
pursuant to this Agreement to the registration requirements of the Securities Act.
Section 3.10 Litigation and Other Proceedings. Except (i) as set forth on Schedule
D or (ii) as would not, individually or in the aggregate, reasonably be expected to have a
Company Material Adverse Effect, there is no (A) pending or, to the knowledge of the Company,
threatened, claim, action, suit, investigation or proceeding, against the Company or any
Company Subsidiary or to which any of their assets are subject nor is the Company or any
Company Subsidiary subject to any order, judgment or decree or (B) unresolved violation,
criticism or exception by any Governmental Entity with respect to any report or relating to any
examinations or inspections of the Company or any Company Subsidiaries.
Section 3.11 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
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to carry on their business as presently conducted and that are material to the business of the
Company or such Company Subsidiary. Except as set forth on Schedule E, the Company and the
Company Subsidiaries have complied in all respects and are not in default or violation of, and
none of them is, to the knowledge of the Company, under investigation with respect to or, to the
knowledge of the Company, have been threatened to be charged with or given notice of any
violation of, any applicable domestic (federal, state or local) or foreign law, statute, ordinance,
license, rule, regulation, policy or guideline, order, demand, writ, injunction, decree or judgment
of any Governmental Entity, other than such noncompliance, defaults or violations that would
not, individually or in the aggregate, reasonably be expected to have a Company Material
Adverse Effect. Except for statutory or regulatory restrictions of general application or as set
forth on Schedule E, no Governmental Entity has placed any restriction on the business or
properties of the Company or any Company Subsidiary that would, individually or in the
aggregate, reasonably be expected to have a Company Material Adverse Effect.
Section 3.12 Employee Benefit Matters. Except as would not reasonably be expected
to have, either individually or in the aggregate, a Company Material Adverse Effect: (i) 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; (ii) with respect to each Plan subject to Title IV of ERISA (including, for purposes of
this clause (ii), 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 Pension Benefit Guaranty Corporation 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 (iii) 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.
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Section 3.13 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
(together with any schedules and attached thereto) required to be filed through the Signing Date,
subject to permitted extensions, and have paid all Taxes due thereon, (ii) all such Tax returns
(together with any schedules and attached thereto) are true, complete and correct in all material
respects and were prepared in compliance with all applicable laws and (iii) 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.
Section 3.14 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 (including, without limitation,
liens for Taxes), 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.
Section 3.15 Environmental Liability. Except as would not, individually or in the
aggregate, reasonably be expected to have a Company Material Adverse Effect:
(a)
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;
(b)
to the Company's knowledge, there is no reasonable basis for any such
proceeding, claim or action; and
(c)
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.
Section 3.16 Risk Mana2ement 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
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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.
Section 3.17 Agreements with Regulatory Agencies. Except as set forth on Schedule
F, neither the Company nor any Company Subsidiary is subject to any material cease-and-desist
or other similar order or enforcement action issued by, or is a party to any material written
agreement, consent agreement or memorandum of understanding with, or is a party to any
commitment letter or similar undertaking to, or is subject to any capital directive by, or since
December 31, 2006, has adopted any board resolutions at the request of, any Governmental
Entity 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 is 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.
Section 3.18 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.
Section 3.19 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 of 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
UST Sequence No. 1163
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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, 2007 alleging that any
person has infringed, diluted, misappropriated or violated, any of the Proprietary Rights owned
by the Company and the Company Subsidiaries.
Section 3.20 Brokers and Finders. The Investor has no liability for any amounts that
any broker, finder or investment banker is entitled to for any financial advisory, brokerage,
finder's or other fee or commission in connection with this Agreement or the transactions
contemplated hereby based upon arrangements made by or on behalf of the Company or any
Company Subsidiary.
Section 3.21 Disclosure Schedule.
The Company has delivered the Disclosure
Schedule and, if applicable, the Disclosure Update to the Investor and the information contained
in the Disclosure Schedule, as modified by the information contained in the Disclosure Update, if
applicable, is true, complete and correct.
Section 3.22 CPP Senior Subordinated Securities. The Company has (i) not breached
any representation, warranty or covenant set forth in any of the documents governing any
subordinated debentures or other securities issued in connection with its participation in the CPP
or the CDCI (the "CPP/CDCI Securities") or its sale to Investor and (ii) paid to Investor all
accrued and unpaid dividends and/or interest then due on the CPP/CDCI Securities.
Section 3.23 Amendment to Charter and Other Documents to Effect
Section 5.12(b). Except as set forth on Schedule G, the election, appointment, nomination or
designation of CDCI Senior Subordinated Securities Directors by the Holders in accordance
with, and upon the conditions set forth in, Section 5.12(b) is permitted by the laws of the
jurisdiction of organization of the Company. If permitted by such laws, the Company has taken
all action necessary to permit the Holders to elect, appoint, nominate or designate the CDCI
Senior Subordinated Securities Directors, as applicable, in accordance with, and upon the events
set forth in, Section 5.12(b), including amending its Charter and any other applicable
organizational documents, agreements or arrangements as necessary.
ARTICLE IV
COVENANTS
Section 4.1 Affirmative Covenants. The Company hereby covenants and agrees with
Investor that:
(a)
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 Exchange as
promptly as practicable and otherwise to enable consummation of the transactions contemplated
UST Sequence No. 1163
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hereby and shall use commercially reasonable efforts to cooperate with the other party to that
end.
(b)
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 4.1(b) shall not limit or affect any rights of or remedies available to the
Investor.
(c)
Access, Information and Confidentiality.
From the Signing Date until the date when the Investor owns an amount
of CDCI Senior Subordinated Securities having an aggregate face value of less than 10%
of the aggregate face value of the CDCI Senior Subordinated Securities as of the Closing
Date, 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 Company's books, Tax returns (including all schedules and attached thereto)
and other information reasonably requested by Investor relating to Taxes 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 4.1(c) 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 (A) prohibited by applicable law or
regulation or (B) 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 (i) apply).
(ii)
From the Signing Date until the date on which all of the CDCI Senior
Subordinated Securities have been redeemed in whole, the Company will deliver, or will
cause to be delivered, to the Investor:
(A)
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
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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;
(B)
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
by the Company;
(C)
as soon as available after the Company receives any assessment of
the Company's internal controls, a copy of such assessment;
(D)
annually on a date specified by the Investor, a completed survey, in
a form specified by the Investor, providing, among other things, a description of
how the Company has utilized the funds the Company received in connection
with the sale of the CPP Senior Subordinated Securities and the effects of such
funds on the operations and status of the Company;
(E)
as soon as such items become effective, any amendments to the
Charter, bylaws or other organizational documents of the Company; and
(F)
at the same time as such items are sent to any shareholders of the
Company, copies of any information or documents sent by the Company to its
shareholders.
(iii)
The Investor will use reasonable best efforts to hold, and will use
reasonable best efforts to cause its agents, consultants, contractors and advisors, and
United States executive branch officials and employees, to hold, in confidence all nonpublic records, books, contracts, instruments, computer data and other data and
information (collectively, "Information") concerning the Company furnished or made
available to it by the Company or its representatives pursuant to this Agreement (except
to the extent that such information can be shown to have been (A) previously known by
such party on a non-confidential basis, (B) in the public domain through no fault of such
party or (C) 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.
The Investor understands that the Information may contain commercially sensitive
confidential information entitled to an exception from a Freedom of Information Act
request.
(iv)
The Investor's information rights pursuant to Section 4.1(c)(ii)(A), (B),
(C), (E) and (F) and the Investor's right to receive certifications from the Company
pursuant to Section 4.1(d)(ii) may be assigned by the Investor to a transferee or assignee
UST Sequence No. 1163
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of the CDCI Senior Subordinated Securities with a face value of no less than an amount
equal to 2% of the initial face value of the CDCI Senior Subordinated Securities.
(v)
From the Signing Date until the date when the Investor no longer owns
any CDCI Senior Subordinated Securities, the Company shall permit, and shall cause
each of the Company's Subsidiaries to permit (A) the Investor and its agents, consultants,
contractors and advisors, (B) the Special Inspector General of the Troubled Asset Relief
Program, and (C) the Comptroller General of the United States access to personnel and
any books, papers, records or other data, in each case, to the extent relevant to
ascertaining compliance with the financing terms and conditions; provided that prior to
disclosing any information pursuant to clause (B) or (C), the Special Inspector General of
the Troubled Asset Relief Program and the Comptroller General of the United States
shall have agreed, with respect to documents obtained under this Agreement in
furtherance of its function, to follow applicable law and regulation (and the applicable
customary policies and procedures) regarding the dissemination of confidential materials,
including redacting confidential information from the public version of its reports and
soliciting the input from the Company as to information that should be afforded
confidentiality, as appropriate.
(vi)
Nothing in this Section shall be construed to limit the authority that the
Special Inspector General of the Troubled Asset Relief Program, the Comptroller General
of the United States or any other applicable regulatory authority has under law.
(d)
CDFI Requirements.
From the Signing Date until the date on which all of the CDCI Senior
Subordinated Securities have been redeemed in whole, each Certified Entity shall (A) be
certified by the Fund as a CDFI; (B) together with its Affiliates collectively meet the
eligibility requirements of 12 C.F.R. 1805.200(b); (C) have a primary mission of
promoting community development, as may be determined by Investor from time to time,
based on criteria set forth in 12 C.F.R. 1805.201(b)(1); (D) provide Financial Products,
Development Services, and/or other similar financing as a predominant business activity
in arm's-length transactions; (E) serve a Target Market by serving one or more
Investment Areas and/or Targeted Populations as may be determined by Investor from
time to time, substantially in the manner set forth in 12 C.F.R. 1805.201(b)(3); (F)
provide Development Services in conjunction with its Financial Products, directly,
through an Affiliate or through a contract with a third-party provider; (G) maintain
accountability to residents of the applicable Investment Area(s) or Targeted Population(s)
through representation on its governing Board of Directors or otherwise; and (H) remain
a non-governmental entity which is not an agency or instrumentality of the United States
of America, or any State or political subdivision thereof, as described in 12 C.F.R.
1805.201(b)(6) and within the meaning of any supplemental regulations or interpretations
of 12 C.F.R. 1805.201(b)(6) or such supplemental regulations published by the Fund.
Notwithstanding any other provision hereof, as used in this Section 4.1(d), the terms
"Affiliates"; "Financial Products"; "Development Services"; "Target Market";
"Investment Areas"; and "Targeted Populations" have the meanings ascribed to such
terms in 12 C.F.R. 1805.104.
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(ii)
From the Signing Date until the date on which all of the CDCI Senior
Subordinated Securities have been redeemed in whole, the Company shall deliver to
Investor (1)(x) on the date that is 180 days after the Closing Date and (y) annually on the
same date on which the Company delivers the documentation required under Section
4.1(c)(ii)(A) to the Investor, a certificate signed on behalf of the Company by a Senior
Executive Officer, in substantially the form attached hereto as Annex F certifying (A)
that the Company and each Certified Entity remains in compliance with the covenants set
forth in Section 4.1(d)(i); (B) that the information in the CDFI Application, as modified
by any updates to the CDFI Application provided by the Company to the Investor on or
prior to the date of such certificate, with respect to the covenants set forth in Section
4.1(d)(i)(B) and Section 4.1(d)(i)(D) remains true, correct and complete as of such date
or, to the extent any information set forth in the CDFI Application, as modified by any
updates to the CDFI Application provided by the Company to the Investor on or prior to
the date of such certificate, with respect to such covenants needs to be updated or
supplanted to make it true, complete and correct as of such date, that an updated narrative
to the CDFI Application setting forth any information necessary to make the information
set forth in the CDFI Application is true, complete and correct as of such date; (C) either
(a) that the contracts and material agreements entered into by each Certified Entity with
respect to Development Services previously disclosed to the Investor remain in effect or
(b) that attached are any new contracts and material agreements entered into by the
Certified Entity with respect to Development Services; (D) a list of the names and
addresses of the individuals which comprise the board of directors of each Certified
Entity as of such date and, to the extent any of such individuals was not a member of the
board of directors of such Certified Entity as of the last certification to the Investor, a
narrative describing such individuaPs relationship to the applicable Investment Area(s)
and Targeted Population(s) or, if such Certified Entity maintains accountability to
residents of the applicable Investment Area(s) or Target Population(s) through means
other than representation on its governing board of directors and such means have
changed since the date of the last certification to the Investor, a narrative describing such
change; (E) that each Certified Entity is not an agency of the United States of America, or
any State or political subdivision thereof, as described in 12 C.F.R. 1805.201(b)(6) and
within the meaning of any supplemental regulations or interpretations of 12 C.F.R.
1805.201(b)(6) or such supplemental regulations published by the Fund and (F) that the
Company remains in compliance with the covenants set forth in Section 4.1(f) and 4.1(1)
and (2) within five (5) business days of receipt, copies of any notices, correspondence or
other written communication between each Certified Entity and the Fund, including any
form that such Certified Entity is required to provide to the Fund due to the occurrence of
a "Material Event" within the meaning of the Fund's CDFI Certification Procedures.
(iii)
The Company shall immediately notify the Investor upon the occurrence
of any breach of any of the covenants set forth in Section 4.1(d).
(e)
Executive Compensation.
(i)
Benefit Plans. During the Relevant Period, the Company shall take all
necessary action to ensure that the Benefit Plans of the Company and its Affiliates
UST Sequence No. 1163
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comply in all respects with, and shall take all other actions necessary to comply with,
Section 111 of EESA, as implemented by the Compensation Regulations, and neither the
Company nor any of its Affiliates shall adopt any new Benefit Plan (x) that does not
comply therewith or (y) that does not expressly state and require that such Benefit Plan
and any compensation thereunder shall be subject to any relevant Compensation
Regulations adopted, issued or released on or after the date any such Benefit Plan is
adopted. To the extent that EESA and/or the Compensation Regulations are amended or
otherwise change during the Relevant Period in a manner that requires changes to thenexisting Benefit Plans, or that requires other actions, the Company and its Affiliates shall
effect such changes to its or their Benefit Plans, and take such other actions, as promptly
as practicable after it has actual knowledge of such amendments or changes in order to be
in compliance with this Section 4.1(e) (and shall be deemed to be in compliance for a
reasonable period to effect such changes). In addition, the Company and its Affiliates
shall take all necessary action, other than to the extent prohibited by applicable law or
regulation applicable outside of the United States, to ensure that the consummation of the
transactions contemplated by this Agreement will not accelerate the vesting, payment or
distribution of any equity-based awards, deferred cash awards or any nonqualified
deferred compensation payable by the Company or any of its Affiliates.
(ii)
Additional Waivers. After the Closing Date, in connection with the hiring
or promotion of a Section 4.1(e) Employee and/or the promulgation of applicable
Compensation Regulations or otherwise, to the extent any Section 4.1(e) Employee shall
not have executed a waiver in a form satisfactory to the Investor with respect to the
application to such Section 4.1(e) Employee of the Compensation Regulations, the
Company shall use its best efforts to (x) obtain from such Section 4.1(e) Employee a
waiver in substantially the form attached hereto as Annex C and (y) deliver such waiver
to the Investor as promptly as possible, in each case, within sixty days of such Section
4.1(e) Employee becoming subject to the requirements of this Section. "Section 4.1(e)
Employee" means (A) each Senior Executive Officer and (B) any other employee of the
Company or any of its Affiliates determined at any time to be subject to Section 111 of
EESA as implemented by the Compensation Regulations.
(iii)
Clawback. In the event that any Section 4.1(e) Employee receives a
payment in contravention of the provisions of this Section 4.1(e), the Company shall
promptly provide such individual with written notice that the amount of such payment
must be repaid to the Company in full within fifteen business days following receipt of
such notice or such earlier time as may be required by the Compensation Regulations and
shall promptly inform the Investor (i) upon discovering that a payment in contravention
of this Section 4.1(e) has been made and (ii) following the repayment to the Company of
such amount and shall take such other actions as may be necessary to comply with the
Compensation Regulations.
(iv)
Limitation on Deductions. During the Relevant Period, the Company
agrees that it shall not claim a deduction for remuneration for federal income tax
purposes in excess of $500,000 for each Senior Executive Officer that would not be
deductible if Section 162(m)(5) of the Code applied to the Company.
UST Sequence No. 1163
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(v)
Amendment to Prior Agreement. The parties agree that, effective as of the
date hereof, Section 5.16 of the CPP Securities Purchase Agreement shall be amended in
its entirety by replacing such Section 5.16 with the provisions set forth in this
Section 4.1(e) and any terms included in this Section 4.1(e) that are not otherwise defined
in the CPP Securities Purchase Agreement shall have the meanings ascribed to such
terms in this Agreement.
Bank or Savings and Loan 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 either a Bank Holding Company or Savings and Loan
Holding Company, as the case may be, for as long as the Investor owns any CDCI Senior
Subordinated Securities. The Company shall redeem all CDCI Senior Subordinated Securities
held by the Investor prior to terminating its status as a Bank Holding Company or Savings and
Loan Holding Company, as applicable.
(g)
Predominantly Financial. For as long as the Investor owns any CDCI Senior
Subordinated Securities, 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.
(h)
Capital Covenant. From the Signing Date until the date on which all of the
CDCI Senior Subordinated Securities have been redeemed in whole, the Company and the
Company Subsidiaries shall maintain such capital as may be necessary to meet the minimum
capital requirements of the Appropriate Federal Banking Agency, as in effect from time to time.
HAMP Modifications. The Company shall take all necessary action to ensure
that (A) from and after the date the Company or any Company Subsidiary that services
residential mortgage loans has 100 or more residential mortgage loans not owned or guaranteed
by Fannie Mae or Freddie Mac which have been past due for 60 or more days, the Company or
such Company Subsidiary shall, to the extent such programs are open for participation, (1)
participate in the United States Department of the Treasury's Making Home Affordable
("MHA") program, including MHA's Second Lien Modification Program and (2) immediately
execute a Commitment to Purchase Financial Instrument and Servicer Participation Agreement
(in such form as may be set forth on the MHA website at www.hmpadmin.com from time to
time) with Fannie Mae (acting as the United States Depal tment of the Treasury's fiscal agent)
and (B) if the Company or any Company Subsidiary owns mortgage loans that are serviced by a
non-affiliated mortgage servicer, the Company or such Company Subsidiary shall consent to any
MHA modification request made by such mortgage servicer.
Compliance with Employ American Workers Act. The Company shall agree to
0)
comply, and take all necessary action to ensure that any Company Subsidiary complies in all
respects with the provisions of EESA and any federal law respecting EESA, including the
UST Sequence No. 1163
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Employ American Workers Act (Section 1611 of Division A, Title XVI of the American
Recovery and Reinvestment Act of 2009), Public Law No. 111-5, effective as of February 17,
2009, as implemented by any rules, regulation or guidance thereunder, as such may be amended
or supplemented from time to time, and any applicable guidance of the United States Department
of the Treasury with respect thereto.
(k)
Reporting Requirements. Prior to the date on which all of the CDCI Senior
Subordinated Securities have been redeemed in whole, the Company covenants and agrees that,
at all times on or after the Closing Date, (i) to the extent it is subject to the reporting
requirements of Section 13 or 15(d) of the Exchange Act, it shall comply with the terms and
conditions set forth in Annex E or (ii) as soon as practicable after the date that the Company
becomes subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act, it
shall comply with the terms and conditions set forth in Annex E.
(1)
Control by Foreign Bank or Company. Prior to the date on which all of the
CDCI Senior Subordinated Securities have been redeemed in whole, the Company shall not be
controlled (within the meaning of the Bank Holding Company Act of 1956 (12 U.S.C.
1841(a)(2)) and 12 C.F.R. 225(a)(i) in the case of Bank Holding Companies and banks and the
Home Owners' Loan Act of 1933 (12 U.S.C. 1467a (a)(2)) and 12 C.F.R. 583.7 in the case of
Savings and Loan Holding Companies and savings associations) by a foreign bank or company.
(m)
Listing on Exchange. 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 CDCI Senior Subordinated Securities to be approved for listing on a
national securities exchange as promptly as practicable following such request.
Section 4.2 Negative Covenants. The Company hereby covenants and agrees with
the Investor that:
(a)
Certain Transactions.
The Company shall 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.
(ii)
Without the prior written consent of the Investor, until such time as the
Investor shall cease to own any debt or equity securities of the Company acquired
pursuant to this Agreement or the CPP Securities Purchase Agreement (including, for the
avoidance of doubt, the CPP Senior Subordinated Securities or the CDCI Senior
Subordinated Securities), the Company shall not permit any of its "significant
subsidiaries" (as such term is defined in Rule 12b-2 promulgated under the Exchange
Act) to (i) engage in any merger, consolidation, statutory share exchange or similar
transaction following the consummation of which such significant subsidiary is not
wholly-owned by the Company, (ii) dissolve or sell all or substantially all of its assets or
UST Sequence No. 1163
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property other than in connection with an internal reorganization or consolidation
involving wholly-owned subsidiaries of the Company or (iii) issue or sell any shares of
its capital stock or any securities convertible or exercisable for any such shares, other
than issuances or sales in connection with an internal reorganization or consolidation
involving wholly-owned subsidiaries of the Company.
(b)
Restriction on Dividends and Repurchases.
Prior to the date on which all of the CDCI Senior Subordinated Securities
have been redeemed in whole, neither the Company nor any Company Subsidiary shall,
(x) redeem, purchase, repay or acquire any trust preferred securities or other capital
instruments of any kind of the Company or any Company Subsidiary, other than
redemptions, purchases, repayments or other acquisitions of trust preferred securities or
other capital instruments of any kind of the Company or any Company Subsidiary
required pursuant to binding contractual agreements entered into prior to October 21,
2009, unless all accrued and unpaid Interest for all past interest periods on the CDCI
Senior Subordinated Securities is paid in full and (y) permit any increase to regularly paid
common dividends on Common Stock. Notwithstanding the foregoing, an increase in
dividends shall be permitted where such increase is solely proportionate to the increase in
taxable income of the Company and such increased dividends are distributed to
shareholders in order to fund their individual tax payments on such allocable taxable
income (a "Tax Distribution"). The Investor and any subsequent investors who purchase
the CDCI Senior Subordinated Securities shall have the right to challenge the amount of
the proposed Tax Distributions to the extent it believes they exceed the amount necessary
for the Company's shareholders to pay their allocable share of income taxes.
(ii)
Notwithstanding anything contained in this Section 4.2(b), from and after
the eighth (8t1 ) anniversary of the Closing Date and for so long as any of the CDCI Senior
Subordinated Securities are outstanding, neither the Company nor any Company
Subsidiary shall, without the consent of the Investor, pay any dividends or repurchase any
equity securities or trust preferred securities.
(c)
Related Party Transactions. Until such time as the Investor ceases to own any
debt or equity securities of the Company, including the CDCI Senior Subordinated Securities,
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
(A) 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 (B) have been approved
by the audit committee of the Board of Directors or comparable body of independent directors of
the Company, or if there are no independent directors, the Board of Directors, provided that the
Board of Directors shall maintain written documentation which supports its determination that
the transaction meets the requirements of clause (A) of this Section 4.2(c)
(d)
Restriction on Repurchase of CDCI Senior Subordinated Securities Note Held by
Investor. Prior to the date on which the Investor no longer owns any of the CDCI Senior
Subordinated Securities the Company shall not repurchase, redeem, call or otherwise reacquire
any CDCI Senior Subordinated Securities from any holder thereof, whether by means of open
UST Sequence No. 1163
-21-
market purchase, negotiated transaction, or otherwise, unless it offers to repurchase, redeem, call
or otherwise reacquire a ratable portion of the CDCI Senior Subordinated Securities, as the case
may be, then held by the Investor on the same terms and conditions.
ARTICLE V
ADDITIONAL AGREEMENTS
Section 5.1 Purchase for Investment. The Investor acknowledges that the CDCI
Senior Subordinated Securities have not been registered under the Securities Act, or under any
state securities laws. The Investor acknowledges that the CDCI Senior Subordinated Securities
are not being sold pursuant to an indenture (an "Indenture") qualified under the Trust Indenture
Act of 1939, as amended (the "Indenture Act"). The Investor (a) is acquiring the CDCI Senior
Subordinated Securities pursuant to an exemption from registration under the Securities Act and
an exemption from qualification of an indenture under the Indenture Act, and is acquiring the
CDCI Senior Subordinated Securities 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 CDCI Senior Subordinated Securities, 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 Exchange and of making an informed investment decision.
Section 5.2 Form of CDCI Senior Subordinated Security. The CDCI Senior
Subordinated Security shall be substantially in the form of Annex D hereto, the terms of which
are incorporated in and made a part of this Agreement. The CDCI Senior Subordinated
Securities shall be issued, and may be transferred, only in denominations having an aggregate
principal amount of not less than $1,000 and integral multiples of $1,000 in excess thereof. The
CDCI Senior Subordinated Securities shall be in registered form without coupons and shall be
numbered, lettered or otherwise distinguished in such manner or in accordance with such plans
as the officers executing the same may determine as evidenced by the execution thereof.
Section 5.3 CDCI Senior Subordinated Securities. The CDCI Senior
Subordinated Securities shall be executed in the name and on behalf of the Company by the
manual or facsimile signature of its President, Chief Executive Officer, Chief Financial Officer
or one of its Executive Vice Presidents under its corporate seal (if legally required) which may
be affixed thereto or printed, engraved or otherwise reproduced thereon, by facsimile or
otherwise, and which need not be attested, unless otherwise required by the Company's Charter
or bylaws or applicable law. Every CDCI Senior Subordinated Security shall be dated the date
of its execution and delivery.
UST Sequence No. 1163
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Section 5.4 Computation of Interest. (a) The amount of interest payable for
any Interest Period (as defined below) will be computed as provided in the CDCI Senior
Subordinated Securities.
(b)
Each CDCI Senior Subordinated Security will bear interest at the Interest
Rate (i) in the case of the initial Interest Period, for the period from, and including, the date of
original issuance of such CDCI Senior Subordinated Security to, but excluding, the initial
Interest Payment Date and (ii) thereafter, for the period from, and including, the first day
following the end of the preceding Interest Period to, but excluding, the applicable Interest
Payment Date or, in the case of the last Interest Period, the Maturity Date (each such period, an
"Interest Period"), on the principal thereof, on any overdue principal and (to the extent that
payment of such interest is enforceable under applicable law) on any overdue installment of
interest (including Deferred Interest and Defaulted Interest), payable on each Interest Payment
Date or the Maturity Date, as the case may be. Interest on any CDCI Senior Subordinated
Security that is payable, and is punctually paid or duly provided for by the Company, on any
Interest Payment Date shall be paid to the person in whose name such CDCI Senior
Subordinated Security is registered at the close of business on the Regular Record Date for such
interest installment.
(c)
So long as no other Event of Default has occurred and is continuing, the
Company shall have the right, from time to time and without causing an Event of Default, to
defer payments of interest on the CDCI Senior Subordinated Securities by extending the Interest
Period on the CDCI Senior Subordinated Securities at any time and from time to time during the
term of the CDCI Senior Subordinated Securities, for up to 20 consecutive quarterly periods
(each such extended Interest Period, together with all previous and further consecutive
extensions thereof, is referred to herein as an "Interest Deferral Period"). No Interest Deferral
Period may end on a date other than an Interest Payment Date or extend beyond the Maturity
Date, as the case may be. During any Interest Deferral Period, interest will continue to accrue on
the CDCI Senior Subordinated Securities, and interest on such accrued interest (such accrued
interest and interest thereon referred to herein as "Deferred Interest") will accrue at an annual
rate equal to the Interest Rate applicable during such Interest Deferral Period, compounded on
each Interest Payment Date during such Interest Deferral Period, to the extent permitted by
applicable law. No interest or Deferred Interest shall be due and payable during a Interest
Deferral Period, except at the end thereof. At the end of any Interest Deferral Period, the
Company shall pay all Deferred Interest then accrued and unpaid on the CDCI Senior
Subordinated Securities; provided, however, that during any Interest Deferral Period, the
Company shall be subject to the restrictions set forth in Section 4.2(b). Prior to the termination
of any Interest Deferral Period, the Company may further extend such Interest Deferral Period,
provided that no Interest Deferral Period (including all previous and further consecutive
extensions that are part of such Interest Deferral Period) shall exceed 20 consecutive quarterly
periods. Upon the termination of any Interest Deferral Period and upon the payment of all
Deferred Interest, the Company may commence a new Interest Deferral Period for up to 20
consecutive quarterly periods as if no prior Interest Deferral Period had occurred, subject to the
foregoing requirements. The Company must give the Holders notice of its election to begin or
extend a Interest Deferral Period at least one business day prior to the Regular Record Date
applicable to the next succeeding Interest Payment Date.
UST Sequence No. 1163
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(d)
Any interest on the CDCI Senior Subordinated Security (other than
Deferred Interest pursuant to Section 5.4(c)) that is payable, but is not punctually paid or duly
provided for by the Company, on any Interest Payment Date (herein called "Defaulted Interest")
shall forthwith cease to be payable to the Holder on the relevant Regular Record Date, and such
Defaulted Interest shall be paid by the Company to the persons in whose names such CDCI
Senior Subordinated Securities are registered at the close of business on a special record date for
the payment of such Defaulted Interest, which shall be fixed in the following manner: the
Company shall notify the Holder in writing of the amount of Defaulted Interest proposed to be
paid on each such CDCI Senior Subordinated Security and the date of the proposed payment.
Thereupon the Board of Directors shall fix a special record date for the payment of such
Defaulted Interest, which shall not be more than 15 nor less than 10 days prior to the date of the
proposed payment. The Company shall cause notice of the proposed payment of such Defaulted
Interest and the special record date therefor to be mailed, first class postage prepaid, to each
Holder of a CDCI Senior Subordinated Security at his, her or its address as it appears in the
CDCI Senior Subordinated Securities Register, not less than 10 days prior to such special record
date. Notice of the proposed payment of such Defaulted Interest and the special record date
therefor having been mailed as aforesaid, such Defaulted Interest shall be paid to the to the
persons in whose names such CDCI Senior Subordinated Securities are registered on such
special record date and thereafter the Company shall have no further payment obligation in
respect of the Defaulted Interest.
(e)
The Company may make payment of any Defaulted Interest on the CDCI
Senior Subordinated Securities in any other lawful manner not inconsistent with the requirements
of any securities exchange on which such CDCI Senior Subordinated Securities may be listed,
and upon such notice as may be required by such exchange.
Subject to the foregoing provisions of this Section 5.4, each CDCI Senior
(0
Subordinated Security delivered under this Agreement upon registration of transfer of or in
exchange for or in lieu of any other CDCI Senior Subordinated Security shall carry the rights to
interest accrued and unpaid, and to accrue, that were carried by such other CDCI Senior
Subordinated Security.
Section 5.5 Legends. (a) The Investor agrees that all certificates or other instruments
representing the CDCI Senior Subordinated Securities will bear a
legend substantially to the following effect:
"THIS SENIOR SUBORDINATED SECURITY WILL BE
ISSUED AND MAY BE TRANSFERRED ONLY IN MIMMUM
DENOMINATIONS OF $1,000 AND MULTIPLES OF $1,000 IN
EXCESS THEREOF. ANY ATTEMPTED TRANSFER OF
SUCH SECURITIES IN A DENOMINATION OF LESS THAN
$1,000 AND MULTIPLES OF $1,000 IN EXCESS THEREOF
SHALL BE DEEMED TO BE VOID AND OF NO LEGAL
EFFECT WHATSOEVER. ANY SUCH PURPORTED
TRANSFEREE SHALL BE DEEMED NOT TO BE THE
HOLDER OF SUCH SECURITIES FOR ANY PURPOSE,
INCLUDING, BUT NOT LIMITED TO, THE RECEIPT OF
UST Sequence No. 1163
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PAYMENTS ON SUCH SECURITIES, AND SUCH
PURPORTED TRANSFEREE SHALL BE DEEMED TO HAVE
NO INTEREST WHATSOEVER IN SUCH SECURITIES.
THIS SECURITY IS SUBJECT TO THE TERMS AND
CONDITIONS SET FORTH IN THE LETTER AGREEMENT
BY AND BETWEEN THE COMPANY AND THE UNITED
STATES DEPARTMENT OF THE TREASURY AND
EXCHANGE AGREEMENT - STANDARD TERMS (THE
"AGREEMENT"), EACH OF WHICH ARE INCORPORATED
INTO THIS SENIOR SUBORDINATED SECURITY.
THIS OBLIGATION IS NOT A SAVINGS ACCOUNT OR
DEPOSIT AND IS NOT INSURED OR GUARANTEED BY
THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE
BOARD OF GOVERNORS OF THE FEDERAL RESERVE
SYSTEM OR ANY OTHER GOVERNMENTAL AGENCY.
THIS OBLIGATION IS SUBORDINATED TO THE CLAIMS
OF GENERAL AND SECURED CREDITORS OF THE
COMPANY AND IS NOT SECURED.
THIS SECURITY HAS 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 THIS SECURITY 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 THIS SECURITY 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
UST Sequence No. 1163
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INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A
UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS
OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN
THAT THE TRANSFER IS BEING MADE IN RELIANCE ON
RULE 144A, (C) TO THE COMPANY 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 THIS SECURITY IS TRANSFERRED A
NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS
LEGEND.
THIS INSTRUMENT IS ISSUED SUBJECT TO THE
RESTRICTIONS ON TRANSFER AND OTHER PROVISIONS
OF THE AGREEMENT BETWEEN THE COMPANY AND THE
INVESTOR REFERRED TO THEREIN, A COPY OF WHICH IS
ON FILE WITH THE COMPANY. THIS SECURITY 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 the event that any CDCI Senior Subordinated Securities (A) (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), and (B) (i) become subject to an Indenture qualified under the Indenture Act or
(ii) are exempt from qualification under the Indenture Act, the Company shall issue new
certificates or other instruments representing such CDCI Senior Subordinated Securities, which
shall not contain the applicable legends in Section 5.5(a) above; provided that the Investor
surrenders to the Company the previously issued certificates or other instruments.
Section 5.6 Transfer of CDCI Senior Subordinated Securities. (a) The Company
or its duly appointed agent shall maintain a register (the "CDCI Senior Subordinated Securities
Register") for the CDCI Senior Subordinated Securities in which it shall register the issuance and
transfer of the CDCI Senior Subordinated Securities. All transfers of the CDCI Senior
Subordinated Securities shall be recorded on the CDCI Senior Subordinated Securities Register
maintained by the Company or its agent, and the Company shall be entitled to regard the
registered Holder of such CDCI Senior Subordinated Security as the actual owner of the CDCI
Senior Subordinated Security so registered until the Company or its agent is required to record a
transfer of such CDCI Senior Subordinated Security on its CDCI Senior Subordinated Securities
Register. The Company or its agent shall, subject to applicable securities laws, be required to
record any such transfer when it receives the CDCI Senior Subordinated Security to be
transferred duly and properly endorsed by the registered Holder or by its attorney duly
authorized in writing.
UST Sequence No. 1163
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(b)
The Company shall at any time, upon written request of the Holder of a CDCI
Senior Subordinated Security and surrender of the CDCI Senior Subordinated Security for such
purpose, at the expense of the Company, issue new CDCI Senior Subordinated Securities in
exchange therefor in such denominations of at least $1,000, as shall be specified by the Holder of
such CDCI Senior Subordinated Security, in an aggregate principal amount equal to the then
unpaid principal amount of the CDCI Senior Subordinated Securities surrendered and
substantially in the form of Annex D, with appropriate insertions and variations, and bearing
interest from the date to which interest has been paid on the CDCI Senior Subordinated Security
surrendered. All CDCI Senior Subordinated Securities issued upon any registration of transfer of
exchange pursuant to this Section 5.6(b) shall be valid obligations of the Company, evidencing
the same debt, and entitled to the same benefits under this Agreement, as the CDCI Senior
Subordinated Securities surrendered upon such registration of transfer or exchange.
(c)
All CDCI Senior Subordinated Securities presented for registration of transfer or
for exchange or payment shall be duly endorsed by, or be accompanied by, a written instrument
or instruments of transfer in a form satisfactory to the Company duly executed by the Holder or
such Holder's attorney duly authorized in writing.
(d)
No service charge shall be incurred for any exchange or registration of transfer of
CDCI Senior Subordinated Securities, but the Company may require payment of a sum sufficient
to cover any Tax, fee or other governmental charge that may be imposed in connection
therewith.
(e)
Prior to due presentment for the registration of a transfer of any CDCI Senior
Subordinated Security, the Company and any agent of the Company may deem and treat the
person in whose name such CDCI Senior Subordinated Security is registered as the absolute
owner and Holder of such CDCI Senior Subordinated Security for the purpose of receiving
payment of principal of and interest on such CDCI Senior Subordinated Security and none of the
Company or any agents of the Company shall be affected by notice to the contrary.
Subject to compliance with applicable securities laws, the Holder shall be
(0
permitted to transfer, sell, assign or otherwise dispose of ("Transfer") all or a portion of the
CDCI Senior Subordinated Securities at any time, and the Company shall take all steps as may
be reasonably requested by the Investor to facilitate the Transfer of the CDCI Senior
Subordinated Securities; provided that the Investor and its transferees shall use their
commercially reasonable efforts not to effect any Transfer of any CDCI Senior Subordinated
Securities 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") and the Company was not already subject to such requirements. In furtherance of the
foregoing, the Company shall provide reasonable cooperation to facilitate any Transfers of the
CDCI Senior Subordinated Securities, 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 4.1(c)(iv)) and
making management of the Company reasonably available to respond to questions of a proposed
transferee in accordance with customary practice, subject in all cases to the proposed transferee
agreeing to a customary confidentiality agreement.
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Section 5.7 Replacement of CDCI Senior Subordinated Securities. Upon receipt of
evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of
any CDCI Senior Subordinated Security, and, in the case of any such loss, theft or destruction,
upon delivery of a bond of indemnity reasonably satisfactory to the Company (provided that the
Investor or any institutional Holder of a CDCI Senior Subordinated Security may instead deliver
to the Company an indemnity agreement in form and substance reasonably satisfactory to the
Company), or, in the case of any such mutilation, upon surrender and cancellation of the CDCI
Senior Subordinated Security, as the case may be, the Company will issue a new CDCI Senior
Subordinated Security of like tenor, in lieu of such lost, stolen, destroyed or mutilated CDCI
Senior Subordinated Security.
Section 5.8 Cancellation. All CDCI Senior Subordinated Securities surrendered for
the purpose of payment, exchange or registration of transfer, shall be surrendered to the
Company and promptly canceled by it, and no CDCI Senior Subordinated Securities shall be
issued in lieu thereof except as expressly permitted by any of the provisions of this Agreement.
The Company shall destroy all canceled CDCI Senior Subordinated Securities.
Section 5.9 Rule 144; Rule 144A; 4(1%) Transactions. (a) At all times after the
Signing Date, the Company covenants that (1) it will, upon the request of the Investor or any
subsequent holders of the CDCI Senior Subordinated Securities ("Holders"), use its reasonable
best efforts to (x), to the extent any Holder is relying on Rule 144 under the Securities Act to sell
any of the CDCI Senior Subordinated Securities, make "current public information" available, as
provided in Section (c)(1) of Rule 144 (if the Company is a "Reporting Issuer" within the
meaning of Rule 144) or in Section (c)(2) of Rule 144 (if the Company is a "Non-Reporting
Issuer" within the meaning of Rule 144), in either case for such time period as necessary to
permit sales pursuant to Rule 144, (y), to the extent any Holder is relying on the so-called
"Section 4(11/2)" exemption to sell any of its CDCI Senior Subordinated Securities, prepare and
provide to such Holder such information, including the preparation of private offering
memoranda or circulars or financial information, as the Holder may reasonably request to enable
the sale of the CDCI Senior Subordinated Securities pursuant to such exemption, or (z) to the
extent any Holder is relying on Rule 144A under the Securities Act to sell any of its CDCI
Senior Subordinated Securities, prepare and provide to such Holder the information required
pursuant to Rule 144A(d)(4), and (2) it will take such further action as any Holder may
reasonably request from time to time to enable such Holder to sell CDCI Senior Subordinated
Securities without registration under the Securities Act within the limitations of the exemptions
provided by (i) the provisions of the Securities Act or any interpretations thereof or related
thereto by the SEC, including transactions based on the so-called "Section 4(11/2)" and other
similar transactions, (ii) Rule 144 or 144A under the Securities Act, as such Rules may be
amended from time to time, or (iii) any similar rule or regulation hereafter adopted by the SEC;
provided that the Company shall not be required to take any action described in this Section
5.9(a) that would cause the Company to become subject to the reporting requirements of Section
13 or 15(d) of the Exchange Act if the Company was not subject to such requirements prior to
taking such action. Upon the request of any Holder, the Company will deliver to such Holder a
written statement as to whether it has complied with such requirements and, if not, the specifics
thereof.
UST Sequence No. 1163
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(b) The Company agrees to indenmify Investor, Investor's officers, directors, employees,
agents, representatives and Affiliates, and each person, if any, that controls Investor within the
meaning of the Securities Act (each, an "Indenmitee"), 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 document or report provided by the
Company pursuant to this Section 5.9 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.
(c) If the indemnification provided for in Section 5.9(b) is unavailable to an Indemnitee
with respect to any losses, claims, damages, actions, liabilities, costs or expenses referred to
therein or is insufficient to hold the Indemnitee harmless as contemplated therein, then the
Company, in lieu of indemnifying such Indemnitee, shall contribute to the amount paid or
payable by such Indemnitee as a result of such losses, claims, damages, actions, liabilities, costs
or expenses in such proportion as is appropriate to reflect the relative fault of the Indemnitee, on
the one hand, and the Company, on the other hand, in connection with the statements or
omissions which resulted in such losses, claims, damages, actions, liabilities, costs or expenses
as well as any other relevant equitable considerations. The relative fault of the Company, on the
one hand, and of the Indemnitee, on the other hand, shall be determined by reference to, among
other factors, whether the untrue statement of a material fact or omission to state a material fact
relates to information supplied by the Company or by the Indemnitee and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent such statement or
omission; the Company and Investor agree that it would not be just and equitable if contribution
pursuant to this Section 5.9(c) 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 5.9(b).
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.
Section 5.10 Depository Senior Subordinated Securities.
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 CDCI
Senior Subordinated Securities may be deposited.
Section 5.11 Redemption.
(a) The CDCI Senior Subordinated Securities at the time outstanding may be redeemed
by the Company at its option, subject to the approval of the Appropriate Federal Banking
Agency, in whole or in part and subject to Section 5.11(e), at any time and from time to time, out
of funds legally available therefor, upon notice given as provided in Section 5.11(d) below, on
any Interest Payment Date (the "Redemption Date") at a redemption price equal to the sum of
(i) 100% of the principal amount thereof being called for redemption (provided that, if less than
all of the outstanding CDCI Senior Subordinated Securities are then being redeemed, such
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amount shall not be less than 25% of the aggregate face value of the CDCI Senior Subordinated
Securities as of the Closing Date) and (ii) any accrued and unpaid interest (including Deferred
Interest).
(b)
The redemption price for any CDCI Senior Subordinated Securities shall be
payable on the Redemption Date to the Holder of such CDCI Senior Subordinated Securities
against surrender thereof to the Company or its agent. Interest shall be paid at the then
applicable Interest Rate from the date of the last Interest Payment Date up to but not including
the Redemption Date.
(c)
No Sinking Fund. The CDCI Senior Subordinated Securities will not be subject
to any mandatory redemption, sinking fund or other similar provisions. Holders of CDCI Senior
Subordinated Securities will have no right to require redemption or repurchase of any of the
CDCI Senior Subordinated Securities.
(d)
Notice of Redemption. Notice of redemption of the CDCI Senior Subordinated
Securities shall be given by first class mail, postage prepaid, addressed to the Holders of record
of the CDCI Senior Subordinated Securities to be redeemed at their respective last addresses
appearing on the CDCI Senior Subordinated Securities Register. Such mailing shall be at least
30 days and not more than 60 days before the Redemption Date. Any notice mailed as provided
in this Subsection shall be conclusively presumed to have been duly given, whether or not the
Holder receives such notice, but failure duly to give such notice by mail, or any defect in such
notice or in the mailing thereof, to any Holder of CDCI Senior Subordinated Securities
designated for redemption shall not affect the validity of the proceedings for the redemption of
any other CDCI Senior Subordinated Securities. Notwithstanding the foregoing, if CDCI Senior
Subordinated Securities are issued in book-entry form through The Depository Trust Company
or any other similar facility, notice of redemption may be given to the Holders of CDCI Senior
Subordinated Securities at such time and in any manner permitted by such facility. Each notice
of redemption given to a Holder shall state: (1) the Redemption Date; (2) the amount of CDCI
Senior Subordinated Securities to be redeemed by such Holder; (3) the redemption price; and
(4) the place or places where such CDCI Senior Subordinated Securities are to be surrendered for
payment of the redemption price.
(e)
Partial Redemption. The Company may redeem less than all of the outstanding
CDCI Senior Subordinated Securities, provided that the amount called for redemption at any
time is not less than 25% of the amount of the outstanding principal amount of the CDCI Senior
Subordinated Securities. Subject to the provisions hereof, the Board of Directors or a duly
authorized committee thereof shall have full power and authority to prescribe the terms and
conditions upon which CDCI Senior Subordinated Securities shall be redeemed from time to
time. If less than the full aggregate principal amount of any CDCI Senior Subordinated Security
is redeemed, the Company shall issue a new CDCI Senior Subordinated Security in the
unredeemed aggregate principal amount thereof without charge to the Holder thereof. CDCI
Senior Subordinated Securities may be redeemed in part only on a pro rata basis and only in
minimum denominations of $1,000 and integral multiples thereof.
Effectiveness of Redemption. If notice of redemption has been duly given and if
(f)
on or before the Redemption Date specified in the notice all funds necessary for the redemption
UST Sequence No. 1163
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have been deposited by the Company, in trust for the pro rata benefit of the Holders of the CDCI
Senior Subordinated Securities called for redemption, with a bank or trust company doing
business in the Borough of Manhattan, The City of New York, and having a capital and surplus
of at least $500 million and selected by the Board of Directors, so as to be and continue to be
available solely therefor, then, notwithstanding that any CDCI Senior Subordinated Security so
called for redemption has not been surrendered for cancellation, on and after the Redemption
Date interest shall cease to accrue on the aggregate principal amount of such CDCI Senior
Subordinated Securities so called for redemption, the aggregate principal amount of such CDCI
Senior Subordinated Securities so called for redemption shall no longer be deemed outstanding
and shall cease to bear interest from and after the Redemption Date. All rights with respect to
such CDCI Senior Subordinated Securities (or the portion thereof so called for redemption) shall
forthwith on such Redemption Date cease and terminate, except only the right of the Holders
thereof to receive the redemption price payable on such redemption from such bank or trust
company, without interest. Any funds unclaimed at the end of three years from the Redemption
Date shall, to the extent permitted by applicable law, be released to the Company, after which
time the Holders of such CDCI Senior Subordinated Securities (or portion thereof so called for
redemption) shall look only to the Company for payment of the redemption price of such CDCI
Senior Subordinated Securities.
Status of Redeemed Securities. CDCI Senior Subordinated Securities that are
(g)
redeemed, repurchased or otherwise acquired by the Company shall be cancelled and shall not
thereafter be reissued by the Company.
Section 5.12 Voting Rights.
(a)
General. The Holders of CDCI Senior Subordinated Securities shall not have any
voting rights except as set forth below or as otherwise from time to time required by law.
(b)
CDCI Senior Subordinated Securities Directors. Subject to the provisions of
Section 3.23, whenever, at any time or times, interest payable on the CDCI Senior Subordinated
Securities has not been paid in full for an aggregate of eight (8) quarterly Interest Periods or
more, whether or not consecutive, the authorized number of directors of the Company shall
automatically be increased by two and the Holders of the CDCI Senior Subordinated Securities
shall have the right, voting as a class, to elect or appoint two directors to fill such newly created
directorships or, if applicable law does not permit the Holders to elect or appoint such directors,
to designate or nominate two individuals for election or appointment to fill such directorships
(such directors, hereinafter, the "CDCI Senior Subordinated Securities Directors" and each, a
"CDCI Senior Subordinated Securities Director") at the Company's next annual meeting of
shareholders (or at a special meeting called for that purpose prior to such next annual meeting)
and at each subsequent annual meeting of shareholders until all accrued and unpaid interest for
four (4) consecutive Interest Periods, including the latest completed Interest Period, on all
outstanding CDCI Senior Subordinated Securities has been paid in full at which time such right
shall terminate with respect to the CDCI Senior Subordinated Securities, except as herein or by
law expressly provided, subject to revesting in the event of each and every subsequent default of
the character above mentioned; provided that it shall be a qualification for election for any CDCI
Senior Subordinated Securities Director that the election of such CDCI Senior Subordinated
UST Sequence No. 1163
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Securities Director shall not cause the Company to violate any corporate governance
requirements of any securities exchange or other trading facility on which securities of the
Company may then be listed or traded that listed or traded companies must have a majority of
independent directors. Upon any termination of the right of the Holders of CDCI Senior
Subordinated Securities as a class to vote for directors as provided above, the CDCI Senior
Subordinated Securities Directors shall cease to be qualified as directors, the term of office of all
CDCI Senior Subordinated Securities Directors then in office shall terminate immediately and
the authorized number of directors shall be reduced by the number of CDCI Senior Subordinated
Securities Directors elected pursuant hereto. Any CDCI Senior Subordinated Securities Director
may be removed at any time, with or without cause, and any vacancy created thereby may be
filled, only by the affirmative vote of the Holders holding more than fifty percent (50%) of the
aggregate outstanding principal amount of the CDCI Senior Subordinated Securities (the
"Majority Holders") at the time voting separately as a class, to the extent the voting rights of
such Holders described above are then exercisable. If the office of any CDCI Senior
Subordinated Securities Director becomes vacant for any reason other than removal from office
as aforesaid, the remaining CDCI Senior Subordinated Securities Director may choose a
successor who shall hold office for the unexpired term in respect of which such vacancy
occurred.
(c)
Class Voting Rights as to Particular Matters. So long as any CDCI Senior
Subordinated Securities are outstanding, in addition to any other vote or consent of shareholders
required by law or by the Charter, the vote or consent of the Holders of at least 66 2/3% of the
CDCI Senior Subordinated Securities at the time outstanding, voting as a separate class, given in
person or by proxy, either in writing without a meeting or by vote at any meeting called for the
purpose in accordance shall be necessary for effecting or validating:
Amendment of CDCI Senior Subordinated Securities. Any amendment,
(i)
alteration or repeal of any provision of this Agreement or of the form of the CDCI Senior
Subordinated Securities or the Charter (including, unless no vote on such merger or
consolidation is required by Section 5.12(c)(ii) below, any amendment, alteration or
repeal by means of a merger, consolidation or otherwise) so as to adversely affect the
rights, preferences, privileges or voting powers of the CDCI Senior Subordinated
Securities;
(ii)
Exchanges, Reclassifications, Mergers and Consolidations.
Any
consummation of a binding exchange or reclassification involving the CDCI Senior
Subordinated Securities, or of a merger or consolidation of the Company with another
corporation or other entity, unless in each case (x) the CDCI Senior Subordinated
Securities remain outstanding or, in the case of any such merger or consolidation with
respect to which the Company is not the surviving or resulting entity, are converted into
or exchanged for securities of the surviving or resulting entity or its ultimate parent, and
(y) such remaining CDCI Senior Subordinated Securities outstanding or such securities,
as the case may be, have such rights, preferences, privileges and voting powers, and
limitations and restrictions thereof, taken as a whole, as are not materially less favorable
to the Holders thereof than the rights, preferences, privileges and voting powers, and
UST Sequence No. 1163
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limitations and restrictions thereof, of CDCI Senior Subordinated Securities immediately
prior to such consummation, taken as a whole; or
(iii)
Creation of Senior Capital Instruments. Any issuance of any equity
securities or other capital instruments authorized by state law of the Company, or any
securities convertible into or exchangeable or exercisable for any equity securities or
capital instruments, ranking senior to the CDCI Senior Subordinated Securities with
respect to the payment of interest (whether or not such interest compounds) or principal
and the distribution of assets upon liquidation, dissolution or winding up of the Company.
provided, however, that for all purposes of this Section 5.12(c), any increase in the amount of the
CDCI Senior Subordinated Securities, or the creation and issuance of any other Indebtedness of
the Company, or any securities convertible into or exchangeable or exercisable for any CDCI
Senior Subordinated Securities, ranking senior to, equally with and/or subordinate to the CDCI
Senior Subordinated Securities with respect to the payment of interest (whether or not such
interest compounds) and the distribution of assets upon liquidation, dissolution or winding up of
the Company will not be deemed to adversely affect the rights, preferences, privileges or voting
powers, and shall not require the affirmative vote or consent of, the Holders of outstanding CDCI
Senior Subordinated Securities.
(d)
Changes after Provision for Redemption. No vote or consent of the Holders of
CDCI Senior Subordinated Securities shall be required pursuant to Section 5.12(c) above if, at or
prior to the time when any such vote or consent would otherwise be required pursuant to such
Section, all outstanding CDCI Senior Subordinated Securities shall have been redeemed, or shall
have been called for redemption upon proper notice and sufficient funds shall have been
deposited in trust for such redemption, in each case pursuant to Section 5.11 above.
(e)
Procedures for Voting and Consents. The rules and procedures for calling and
conducting any meeting of the Holders of CDCI Senior Subordinated Securities (including,
without limitation, the fixing of a record date in connection therewith), the solicitation and use of
proxies at such a meeting, the obtaining of written consents and any other aspect or matter with
regard to such a meeting or such consents shall be governed by any rules of the Board of
Directors or any duly authorized committee of the Board of Directors, in its discretion, may
adopt from time to time, which rules and/or procedures shall conform to the requirements of the
Charter, the bylaws, and applicable law and the rules of any national securities exchange or other
trading facility on which the CDCI Senior Subordinated Securities are listed or traded at the
time.
Section 5.13 Expenses and Further Assurances. (a) Unless otherwise provided in
this Agreement, each of the parties hereto will bear and pay all costs and expenses incuned by it
or on its behalf in connection with the transactions contemplated under this Agreement,
including fees and expenses of its own financial or other consultants, investment bankers,
accountants and counsel.
(b) The Company shall, at the Company's sole cost and expense, (i) furnish to the
Investor all instruments, documents and other agreements required to be furnished by the
Company pursuant to the terms of this Agreement, including, without limitation, any documents
UST Sequence No. 1163
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required to be delivered pursuant to Section 5.9 above, or which are reasonably requested by the
Investor in connection therewith; (ii) execute and deliver to the Investor such documents,
instruments, certificates, assignments and other writings, and do such other acts necessary or
desirable, to evidence, preserve and/or protect the CDCI Senior Subordinated Securities
purchased by the Investor, as Investor may reasonably require; and (iii) do and execute all and
such further lawful and reasonable acts, conveyances and assurances for the better and more
effective carrying out of the intents and purposes of this Agreement, as the Investor shall
reasonably require from time to time.
Section 5.14 Communications to Holders. Any Holder shall have the right, upon
five (5) business days prior written notice to the Company or its duly appointed agent to obtain a
complete list of Holders. In addition, any Holder shall have the right to request that
the Company or its duly appointed agent send a notice on behalf of such Holder to all
other Holders at the addresses set forth on the CDCI Senior Subordinated Securities Register or,
to the extent the Company has entered into a depositary arrangement, by means of any
procedures applicable to such depositary arrangement.
ARTICLE VI
SUBORDINATION OF THE CDCI SENIOR SUBORDINATED SECURITIES
Section 6.1 Agreement to Subordinate. (a) The Company covenants and agrees,
and each Holder of CDCI Senior Subordinated Securities issued hereunder likewise covenants
and agrees, that the CDCI Senior Subordinated Securities shall be issued subject to the
provisions of this Article VI; and each Holder of a CDCI Senior Subordinated Security, whether
upon original issue or upon transfer or assignment thereof, accepts and agrees to be bound by
such provisions.
(b)
The payment by the Company of the principal of and interest on all CDCI
Senior Subordinated Securities issued hereunder shall, to the extent and in the manner hereinafter
set forth, be subordinated and subject in right of payment to the prior payment in full of (i) with
respect to CDCI Senior Subordinated Securities issued by a bank or savings association, all
claims of the Company's depositors, if applicable, and all amounts then due and payable in
respect of Senior Indebtedness, whether outstanding at the date of this Agreement or thereafter
incurred or (ii) with respect to CDCI Senior Subordinated Securities issued by a Bank Holding
Company or Savings and Loan Holding Company, any Senior Indebtedness of the Company in
accordance with applicable regulations governing Bank Holding Companies or Savings and
Loan Holding Companies.
(c)
No provision of this Article VI shall prevent the occurrence of any Event
of Default (or any event which, after notice or the lapse of time or both would become, an Event
of Default) with respect to the CDCI Senior Subordinated Securities hereunder.
Section 6.2 Default on Senior Indebtedness. (a) In the event and during the
continuation of any default by the Company in the payment of principal, premium, interest or
any other payment due on any Senior Indebtedness, no payment shall be made by the Company
UST Sequence No. 1163
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with respect to the principal or interest on the CDCI Senior Subordinated Securities or any other
amounts which may be due on the CDCI Senior Subordinated Securities pursuant to the terms
hereof or thereof.
(b)
In the event of the acceleration of the maturity of the Senior Indebtedness,
then no payment shall be made by the Company with respect to the principal or interest on the
CDCI Senior Subordinated Securities or any other amounts which may be due on the CDCI
Senior Subordinated Securities pursuant to the terms hereof or thereof until the holders of all
Senior Indebtedness outstanding at the time of such acceleration shall receive payment, in full, of
all amounts due on or in respect of such Senior Indebtedness (including any amounts due upon
acceleration).
(c)
In the event that, notwithstanding the foregoing, any payment is received
by any Holder of a CDCI Senior Subordinated Security, when such payment is prohibited by the
preceding paragraphs of this Section 6.2, such payment shall be held in trust for the benefit of,
and shall be paid over or delivered by the Holder of the CDCI Senior Subordinated Securities to
the holders of Senior Indebtedness or their respective representatives, or to the trustee or trustees
under any indenture pursuant to which any of such Senior Indebtedness may have been issued, as
their respective interests may appear, but only to the extent of the amounts in respect of such
Senior Indebtedness and to the extent that the holders of the Senior Indebtedness (or their
representative or representatives or a trustee) notify the Company in writing within 90 days of
such payment of the amounts then due and owing on such Senior Indebtedness, and only the
amounts specified in such notice to the Company shall be paid to the holders of such Senior
Indebtedness. The Company shall, within ten (10) business days of receipt of such notice,
provide Investor with (i) a copy of such notice delivered to the Company and (ii) a certificate
signed on behalf of the Company by a Senior Executive Officer certifying that the information
set forth in such notice is true and correct and confirming that the Holder of the CDCI Senior
Subordinated Securities should pay or deliver the amounts specified in such notice in the manner
specified therein.
Section 6.3 Liquidation; Dissolution. (a) Upon any payment by the Company or
distribution of assets of the Company of any kind or character, whether in cash, property or
securities, to creditors upon any dissolution, winding-up, liquidation or reorganization of the
Company, whether voluntary or involuntary or in insolvency, receivership or other proceedings,
the holders of all Senior Indebtedness of the Company will first be entitled to receive payment in
full of amounts due on or in respect of such Senior Indebtedness, before any payment is made by
the Company on account of the principal of or interest on the CDCI Senior Subordinated
Securities or any other amounts which may be due on the CDCI Senior Subordinated Securities
pursuant to the terms hereof or thereof); and upon any such dissolution, winding-up, liquidation
or reorganization, any payment by the Company, or distribution of assets of the Company of any
kind or character, whether in cash, property or securities, which the Holder of the CDCI Senior
Subordinated Securities would be entitled to receive from the Company, except for the
provisions of this Article VI, shall be paid by the Company or by any receiver, liquidating
trustee, agent or other person making such payment or distribution, or by the Holder of the CDCI
Senior Subordinated Securities under this Agreement if received by them or it, directly to the
holders of Senior Indebtedness of the Company (pro rata to such holders on the basis of the
UST Sequence No. 1163
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respective amounts of Senior Indebtedness held by such holders, as calculated by the Company)
or their representative or representatives, or to the trustee or trustees under any indenture
pursuant to which any instruments evidencing such Senior Indebtedness may have been issued,
as their respective interests may appear, to the extent necessary to pay all such amounts of Senior
Indebtedness in full, in money or money's worth, after giving effect to any concurrent payment
or distribution to or for the holders of such Senior Indebtedness, before any payment or
distribution is made to the Holder of the CDCI Senior Subordinated Securities.
(b)
In the event that, notwithstanding the foregoing, any payment or
distribution of assets of the Company of any kind or character prohibited by Section 6.3(a),
whether in cash, property or securities, shall be received by any Holder of the CDCI Senior
Subordinated Securities, before the amounts of all Senior Indebtedness is paid in full, or
provision is made for such payment in money in accordance with its terms, such payment or
distribution shall be held in trust for the benefit of and shall be paid over or delivered by any
Holder of a CDCI Senior Subordinated Security, to the holders of such Senior Indebtedness or
their representative or representatives, or to the trustee or trustees under any indenture pursuant
to which any instruments evidencing such Senior Indebtedness may have been issued, as their
respective interests may appear, as calculated by the Company, for application to the payment of
all amounts of Senior Indebtedness remaining unpaid to the extent necessary to pay all amounts
due on or in respect of such Senior Indebtedness in full in money in accordance with its terms,
after giving effect to any concurrent payment or distribution to or for the benefit of the holders of
such Senior Indebtedness. In such event, the Company shall provide Investor with a certificate
signed on behalf of the Company by a Senior Executive Officer confirming that the Holder of the
CDCI Senior Subordinated Securities should pay or deliver such amounts to the holders of such
Senior Indebtedness.
(c)
For purposes of this Article VI, the words "cash, property or securities"
shall not be deemed to include shares of stock of the Company as reorganized or readjusted, or
securities of the Company or any other corporation provided for by a plan of reorganization or
readjustment, the payment of which is subordinated at least to the extent provided in this
Article VII with respect to the CDCI Senior Subordinated Securities to the payment of Senior
Indebtedness that may at the time be outstanding, provided that (i) such Senior Indebtedness is
assumed by the new corporation, if any, resulting from any such reorganization or readjustment,
and (ii) the rights of the holders of such Senior Indebtedness are not, without the consent of such
holders, altered by such reorganization or readjustment. The consolidation of the Company with,
or the merger of the Company into, another person or the liquidation or dissolution of the
Company following the sale, conveyance, transfer or lease of its property as an entirety, or
substantially as an entirety, to another person upon the terms and conditions provided for in
Section 4.2(a) of this Agreement shall not be deemed a dissolution, winding-up, liquidation or
reorganization for the purposes of this Section 6.3 if such other person shall, as a part of such
consolidation, merger, sale, conveyance, transfer or lease, comply with the conditions stated in
Section 4.2(a) of this Agreement.
Section 6.4 Subrogation. (a) Subject to the payment in full of all of Senior
Indebtedness, the rights of the Holders of the CDCI Senior Subordinated Securities shall be
subrogated to the rights of the holders of such Senior Indebtedness to receive payments or
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distributions of cash, property or securities of the Company, as the case may be, applicable to
such Senior Indebtedness until the principal of and interest on the CDCI Senior Subordinated
Securities shall be paid in full; and, for the purposes of such subrogation, no payments or
distributions to the holders of such Senior Indebtedness of any cash, property or securities to
which the Holders of the CDCI Senior Subordinated Securities would be entitled except for the
provisions of this Article VI, and no payment pursuant to the provisions of this Article VI to or
for the benefit of the holders of such Senior Indebtedness by the Holders of the CDCI Senior
Subordinated Securities shall, as between the Company, its creditors other than holders of Senior
Indebtedness of the Company, and the Holders of the CDCI Senior Subordinated Securities, be
deemed to be a payment by the Company to or on account of such Senior Indebtedness. It is
understood that the provisions of this Article VI are intended solely for the purposes of defining
the relative rights of the Holders of the CDCI Senior Subordinated Securities, on the one hand,
and the holders of such Senior Indebtedness on the other hand.
(b)
Nothing contained in this Article VI or elsewhere in this Agreement or in
the CDCI Senior Subordinated Securities is intended to or shall impair, as between the Company,
its creditors other than the holders of Senior Indebtedness of the Company, and the Holders of
the CDCI Senior Subordinated Securities, the obligation of the Company, which is absolute and
unconditional, to pay to the Holders of the CDCI Senior Subordinated Securities the principal of
and interest on the CDCI Senior Subordinated Securities as and when the same shall become due
and payable in accordance with their terms, or is intended to or shall affect the relative rights of
the Holders of the CDCI Senior Subordinated Securities and creditors of the Company, as the
case may be, other than the holders of Senior Indebtedness of the Company, as the case may be,
nor shall anything herein or therein prevent the Holder of any CDCI Senior Subordinated
Securities from exercising all remedies otherwise permitted by applicable law upon default under
this Agreement, subject to the rights, if any, under this Article VI of the holders of such Senior
Indebtedness in respect of cash, property or securities of the Company, as the case may be,
received upon the exercise of any such remedy.
Section 6.5 Notice by the Company. (a) The Company shall give prompt written
notice to the Holders of the CDCI Senior Subordinated Securities of any fact known to the
Company that would prohibit the making of any payment of monies in respect of the CDCI
Senior Subordinated Securities pursuant to the provisions of this Article VI.
(b)
Upon any payment or distribution of assets of the Company referred to in
this Article VI, the Holders of the CDCI Senior Subordinated Securities shall be entitled to
conclusively rely upon any order or decree entered by any court of competent jurisdiction in
which such insolvency, bankruptcy, receivership, liquidation, reorganization, dissolution,
winding-up or similar case or proceeding is pending, or a certificate of the trustee in bankruptcy,
liquidating trustee, custodian, receiver, assignee for the benefit of creditors, agent or other person
making such payment or distribution, delivered to the Holders of the CDCI Senior Subordinated
Securities, for the purpose of ascertaining the persons entitled to participate in such payment or
distribution, the holders of Senior Indebtedness and other indebtedness of the Company, the
amount thereof or payable thereon, the amount or amounts paid or distributed thereon and all
other facts pertinent thereto or to this Article VI.
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Section 6.6 Subordination May Not Be Impaired. (a) No right of any present or
future holder of any Senior Indebtedness of the Company to enforce subordination as herein
provided shall at any time in any way be prejudiced or impaired by any act or failure to act on
the part of the Company, as the case may be, or by any act or failure to act, in good faith, by any
such holder, or by any noncompliance by the Company, as the case may be, with the terms,
provisions and covenants of this Agreement, regardless of any knowledge thereof that any such
holder may have or otherwise be charged with.
(b)
Without in any way limiting the generality of the foregoing paragraph, the holders
of Senior Indebtedness of the Company may, at any time and from time to time, without the
consent of or notice to the Holders of the CDCI Senior Subordinated Securities, without
incurring responsibility to the Holders of the CDCI Senior Subordinated Securities and without
impairing or releasing the subordination provided in this Article VI or the obligations hereunder
of the Holders of the CDCI Senior Subordinated Securities to the holders of such Senior
Indebtedness, do any one or more of the following: (i) change the manner, place or terms of
payment or extend the time of payment of, or renew or alter, such Senior Indebtedness, or
otherwise amend or supplement in any manner such Senior Indebtedness or any instrument
evidencing the same or any agreement under which such Senior Indebtedness is outstanding;
(ii) sell, exchange, release or otherwise deal with any property pledged, mortgaged or otherwise
securing such Senior Indebtedness; (iii) release any person liable in any manner for the collection
of such Senior Indebtedness; and (iv) exercise or refrain from exercising any rights against the
Company, as the case may be, and any other person.
ARTICLE VII
REMEDIES OF THE HOLDERS UPON EVENT OF DEFAULT
Section 7.1 Event of Default. "Event of Default" shall mean the occurrence or
existence of any one or more of the following:
(a)
Bankruptcy, Receivership or Conservatorship. (i) A court having proper
jurisdiction shall enter a decree or order for relief in respect of the Company in an involuntary
case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect,
or appoints a receiver, liquidator, assignee, custodian, trustee, sequestrator or other similar
official of the Company or for any substantial part of its property, or orders the winding-up or
liquidation of its affairs and such decree, appointment or order shall remain unstayed and in
effect for a period of sixty (60) days; or
(ii)
The Company shall commence a voluntary case under any applicable
bankruptcy, insolvency or other similar law now or hereafter in effect, shall consent to
the entry of an order for relief in an involuntary case under any such law, or shall consent
to the appointment of or taking possession by a receiver, liquidator, assignee, trustee,
custodian, sequestrator or other similar official of the Company or of any substantial part
of its property, or shall make any general assignment for the benefit of creditors, or shall
fail generally to pay its debts as they become due; or
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(iii)
A court or administrative or governmental agency or body shall enter a
decree or order for the appointment of a receiver of the Company or a Major Depository
Institution Subsidiary or all or substantially all of its property in any liquidation,
insolvency or similar proceeding with respect to the Company or such Major Depository
Institution Subsidiary or all or substantially all of its property; or
(iv)
The Company or a Major Depository Institution Subsidiary shall consent
to the appointment of a receiver for it or all or substantially all of its property in any
liquidation, insolvency or similar proceeding with respect to it or all or substantially all of
its property; or
(b)
Failure to pay Deferred Interest. If any Interest Deferral Period has occurred, the
failure by the Company to pay any related Deferred Interest and any interest thereon, on or
before the first day immediately following the last day of such Interest Deferral Period.
Section 7.2 Acceleration and Other Remedies. When any Event of Default has
occurred and is continuing, then the CDCI Senior Subordinated Securities, including both
principal and interest, and all fees, charges and other obligations payable hereunder and under
the Transaction Documents, shall immediately become due and payable without presentment,
demand, protest or notice of any kind. In addition, the Holders may exercise any and all
remedies available to it under the Transaction Documents or applicable law.
Section 7.3 Suits for Enforcement. In case any one or more Events of Default shall
have occurred and be continuing, unless such Events of Default shall have been waived in the
manner provided in Section 7.5 hereof, the Majority Holders, subject to the terms of Article VI
hereof, may proceed to protect and enforce their rights under this Article VII by suit in equity or
action at law. It is agreed that in the event of such action, or any action between the Holders of
the CDCI Senior Subordinated Securities and the Company (including its officers and agents) in
connection with a breach or enforcement of this Agreement, the Holders of the CDCI Senior
Subordinated Securities shall be entitled to receive all reasonable fees, costs and expenses
incurred, including without limitation such reasonable fees and expenses of attorneys (whether or
not litigation is commenced) and reasonable fees, costs and expenses of appeals.
Section 7.4 Holders May File Proofs of Claim. In case there shall be pending
proceedings for the bankruptcy or for the reorganization of the Company or any other obligor on
the CDCI Senior Subordinated Securities (other than the Company) under Title 11, United States
Code, or any other applicable law, or in case a receiver, conservator or trustee shall have been
appointed for the Company or a Major Depository Institution Subsidiary of the Company or such
other obligor, or in the case of any other similar judicial proceedings relative to the Company,
Major Depository Institution Subsidiary or other obligor upon the CDCI Senior Subordinated
Securities, or to the creditors or property of the Company, Major Depository Institution
Subsidiary or such other obligor (each, an "Obligor"), any Holder, irrespective of whether the
principal of the CDCI Senior Subordinated Securities shall then be due and payable as therein
expressed or by declaration or otherwise and irrespective of whether any such Holder shall have
made any demand pursuant to the provisions of this Section 7.4, shall be entitled and
empowered, by intervention in such proceedings or otherwise, to file and prove a claim or claims
for the whole amount of principal and interest owing and unpaid in respect of the CDCI Senior
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Subordinated Securities held by any such Holder and, in case of any judicial proceedings, to file
such proofs of claim and other papers or documents as may be necessary or advisable in order to
have the claims of any such Holder allowed in such judicial proceedings relative to the
Company, Major Depository Institution Subsidiary or any other obligor on the CDCI Senior
Subordinated Securities, or to the creditors or property of the Company or such other obligor,
unless prohibited by applicable law and regulations, to vote in any election of a trustee or a
standby trustee in arrangement, reorganization, liquidation or other bankruptcy or insolvency
proceedings or person performing similar functions in comparable proceedings, and to collect
and receive any moneys or other property payable or deliverable to any such Holder on any such
claims.
Section 7.5 Waiver of Past Defaults. The Holders of not less than a majority in
aggregate principal amount of the outstanding CDCI Senior Subordinated Securities may on
behalf of the Holders of all the CDCI Senior Subordinated Securities waive any past default
hereunder with respect such CDCI Senior Subordinated Securities and its consequences. Upon
any such waiver, such default shall cease to exist, and any Event of Default arising therefrom
shall be deemed to have been cured, for every purpose of this Agreement; but no such waiver
shall extend to any subsequent or other default or impair any right consequent thereon.
ARTICLE VIII
MISCELLANEOUS
Section 8.1 Termination. This Agreement shall terminate upon the earliest to occur
of:
(a)
termination at any time prior to the Closing:
by either the Investor or the Company if the Closing shall not have
occurred by the 30th calendar day following the Siring Date; provided, however, that in
the event the Closing has not occurred by such 30 t 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 calendar 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 6.1(a)(i) 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
(ii)
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
(iii)
UST Sequence No. 1163
by the mutual written consent of the Investor and the Company; or
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(b)
the date on which all of the CDCI Senior Subordinated Securities have been
redeemed in whole; or
(c)
the date on which the Investor has transferred all of the CDCI Senior
Subordinated Securities to third parties which are not Affiliates of the Investor; or
(d)
if the Closing shall not have occurred by September 30, 2010, on such date.
In the event of termination of this Agreement as provided in this Section 8.1, 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.
Section 8.2 Survival.
(a)
This Agreement and all representations, warranties, covenants and
agreements made herein shall survive the Closing without limitation.
(b)
The covenants set forth in Article IV and Annex E and the agreements set
forth in Articles VI and VII shall, to the extent such covenants do not explicitly terminate at such
time as the Investor no longer owns any CDCI Senior Subordinated Securities, survive the
termination of this Agreement pursuant to Section 8.1(c) hereof without limitation until the date
on which all of the CDCI Senior Subordinated Securities have been redeemed in whole.
Section 8.3 Amendment. Except as otherwise provided herein, no amendment,
modification, termination or waiver of any provision of this Agreement, the CDCI Senior
Subordinated Securities or any of the other Transaction Documents, or consent to any departure
by the Company therefrom, shall be effective unless made in writing and signed by an officer or
a duly authorized representative of the Company, and in the case of the CDCI Senior
Subordinated Securities, the Majority Holders; provided that for so long as the CDCI Senior
Subordinated Securities are outstanding, the Investor may at any time and from time to time
unilaterally amend Section 4.1(d) to the extent the Investor deems necessary, in its sole
discretion, to comply with, or conform to, any changes after the Signing Date in any federal
statutes, any rules and regulations promulgated thereunder and any other publications or
interpretative releases of the Fund governing CDFIs, including, without limitation, any changes
in the criteria for certification of an entity as a CDFI by the Fund; provided, further, that,
notwithstanding anything else in this Section 8.3, no amendment, modification, termination or
waiver with respect to the CDCI Senior Subordinated Securities shall, unless in writing and
signed by all Holders, do any of the following: (A) change the principal of or the rate of interest
on any CDCI Senior Subordinated Security; (B) extend any date fixed for any payment of
principal or interest; (C) change the definition of the terms "Holders" or "Majority Holders" or
the percentage of Holders which shall be required for Holders to take any action hereunder;
(D) amend or waive this Section 8.3 or the definitions of the terms used in this Section 8.3
insofar as the definitions affect the substance of this Section 8.3; or (E) consent to the
assignment, delegation or other transfer by the Company of any of its rights and obligations
under any Transaction Documents. Any amendment, modification, termination, waiver or
consent effected in accordance with this Section 8.3 shall be binding upon each Holder of the
UST Sequence No. 1163
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CDCI Senior Subordinated Securities at the time outstanding, each future Holder of the CDCI
Senior Subordinated Securities and the Company. 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.
Section 8.4 Waiver of Conditions. The conditions to each party's obligation to
consummate the Exchange 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.
Section 8.5 Governing Law; Submission to Jurisdiction, etc. This Agreement and
any claim, controversy or dispute arising under or related to this Agreement, the relationship of
the parties, and/or the interpretation and enforcement of the rights and duties of the parties shall
be enforced, governed, and construed in all respects (whether in contract or in tort) in accordance
with the federal law of the United States if and to the extent such law is applicable, and
otherwise in accordance with the laws of the State of New York applicable to contracts made and
to be performed entirely within such State. Each of the parties hereto agrees (a) to submit to the
exclusive jurisdiction and venue of the United States District Court for the District of Columbia
and the United States Court of Federal Claims for any and all civil actions, suits or proceedings
arising out of or relating to this Agreement or the Exchange contemplated hereby 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 8.6 and (ii) the Investor at the address and in the Timmer set forth for
notices to the Company in Section 8.6, but otherwise 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 EXCHANGE
CONTEMPLATED HEREBY.
Section 8.6 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 hereunder shall be delivered as set forth below
or pursuant to such other instructions as may be designated in writing by the party to receive
such notice.
If to the Company as set forth in Schedule A.
If to the Investor:
United States Department of the Treasury
1500 Pennsylvania Avenue, NW
Washington, D.C. 20220
UST Sequence No. 1163
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Attention: Chief Counsel, Office of Financial Stability
Facsimile: (202) 927-9225
E-mail: CDCINoticeAdo.treas.gov
with a copy to:
E-mail: OF S ChiefCounselNotices @do. treas . gov
Section 8.7 Definitions.
(a)
When a reference is made in this Agreement to a subsidiary of a person, the term
"subsidiary" means any corporation, partnership, joint venture, limited liability company or other
entity (x) of which such person or a subsidiary of such person is a general partner or (y) of which
a majority of the voting securities or other voting interests, or a majority of the securities or other
interests of which having by their terms ordinary voting power to elect a majority of the board of
directors or persons performing similar functions with respect to such entity, is directly or
indirectly owned by such person and/or one or more subsidiaries thereof.
(b)
The term "Affiliate" means, with respect to any person, any person directly or
indirectly controlling, controlled by or under common control with, such other person. For
purposes of this definition, "control" (including, with correlative meanings, the terms "controlled
by" and "under common control with") when used with respect to any person, means the
possession, directly or indirectly, of the power to cause the direction of management and/or
policies of such person, whether through the ownership of voting securities by contract or
otherwise.
(c)
The term "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)).
(d)
The term "Bank Holding Company" means a company registered as such with the
Board of Governors of the Federal Reserve System (the "Federal Reserve") pursuant to 12
U.S.C. § 1842 and the regulations of the Federal Reserve promulgated thereunder.
(e)
The term "Business Combination" means a merger, consolidation, statutory share
exchange or similar transaction that requires the approval of the Company's shareholders.
(f)
The term "Certified Entity" means the Company or, if the Company itself has not
been certified by the Fund as a CDFI, each Affiliate of the Company that has been certified as a
CDFI and is specified on Schedule A of the Letter Agreement.
(g)
The term "Company Financial Statements" means 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) and each completed quarterly period since the last completed fiscal year, required to
be delivered to Investor pursuant to the CPP Securities Purchase Agreement.
UST Sequence No. 1163
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(h)
The term "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 and each Certified Entity taken as a whole; provided, however, that Company
Material Adverse Effect shall not be deemed to include the effects of (A) changes after 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 authoritative interpretations thereof, (C) changes or proposed
changes after the Signing Date in securities, banking and other laws of general applicability or
related policies or interpretations of Governmental Entities or (D) changes or proposed changes
after the Signing Date in the taxation of (I) the Company as a validly electing S corporation
within the meaning of Sections 1361 and 1362 of the Code, or (II) any Company Subsidiary as a
"qualified subchapter S subsidiary" ("QSub") within the meaning of Section 1361(b)(3)(B) of
the Code, (in the case of each of these clauses (A), (B), (C) and (D), 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 Exchange and other
transactions contemplated by this Agreement and perform its obligations hereunder or thereunder
on a timely basis.
The term "Disclosure Schedule" means collectively, those certain schedules
delivered to the Investor on or prior to (i) the CPP Signing Date, with respect to the "Disclosure
Schedule" delivered in connection with the CPP Securities Purchase Agreement and (ii) the
Signing Date with respect to the schedules required to be delivered under this Agreement, 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 of the CPP Securities
Purchase Agreement or Article III hereof.
(j)
The term "EAWA" means the Employ American Workers Act (Section 1611 of
Division A, Title XVI of the American Recovery and Reinvestment Act of 2009), Public Law
No. 111-5, effective as of February 17, 2009, as may be amended and in effect from time to time.
(k)
The term "Indebtedness" means, whether or not recourse is to all or a portion of
the assets of the Company and whether or not contingent, (i) the claims of the Company's
secured and general creditors; (ii) every obligation of the Company for money borrowed;
(iii) every obligation of the Company evidenced by bonds, debentures, notes or other similar
instruments, including obligations incurred in connection with the acquisition of property, assets
or businesses; (iv) every reimbursement obligation of the Company, contingent or otherwise,
with respect to letters of credit, bankers' acceptances, security purchase facilities or similar
facilities issued for the account of the Company; (v) every obligation of the Company issued or
assumed as the deferred purchase price of property or services (but excluding trade accounts
UST Sequence No. 1163
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payable or accrued liabilities arising in the ordinary course of business); (vi) every capital lease
obligation of the Company; (vii) all indebtedness of the Company for claims in respect of
derivative products, including interest rate, foreign exchange rate and commodity forward
contracts, options and swaps and similar arrangements; (viii) every obligation of the type
referred to in clauses (i) through (vii) of another person and all dividends of another person the
payment of which, in either case, the Company has guaranteed or is responsible or liable for
directly or indirectly, as obligor or otherwise; and (ix) every obligation of the type referred to in
clauses (i) through (vii) of another person and all dividends of another person the payment of
which, in either case, is secured by a lien on any property or assets of the Company.
(1)
The term "Major Depository Institution Subsidiary" means any subsidiary of the
Company that (a) is a depository institution and (b) meets the definition of "significant
subsidiary" within the meaning of Rule 405 under the Securities Act.
(m)
The term "Previously Disclosed" means information set forth on the Disclosure
Schedule or the Disclosure Update, as applicable; provided, however, that disclosure in any
section of such Disclosure Schedule or Disclosure Update, as applicable, 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;
provided further that the existence of Previously Disclosed information, pursuant to a Disclosure
Update, shall neither obligate the Investor to consummate the Exchange nor limit or affect any
rights of or remedies available to the Investor.
(n)
The term "Savings and Loan Holding Company" means a company registered as
such with the Office of Thrift Supervision pursuant to 12 U.S.C. § 1467(a) and the regulations of
the Office of Thrift Supervision promulgated thereunder.
(o)
The term "Senior Executive Officers" means the Company's "senior executive
officers" as defined in Section 111 of the EESA and the Compensation Regulations.
(p)
The term "Senior Indebtedness" means, with respect to the CDCI Senior
Subordinated Securities, the principal of (and premium, if any) and interest, if any (including
interest accruing on or after the filing of any petition in bankruptcy or for reorganization relating
to the Company, whether or not such claim for post petition interest is allowed in such
proceedings), on all Indebtedness, whether outstanding on the date of execution of this
Agreement, or hereafter created, assumed or incurred, and any deferrals, renewals or extensions
of such Indebtedness; provided, however, that Senior Indebtedness shall not include (A) any
Indebtedness issued to any statutory trust created by the Company for the purpose of issuing trust
preferred securities in connection with such issuance of Indebtedness, which shall in all cases be
junior to such CDCI Senior Subordinated Securities, (B) any guarantees of the Company in
respect of the equity securities or other securities of any financing entity referred to in clause (A)
above, or (C) any other subordinated debt of the Company that by its terms ranks pari passu or
junior to the CDCI Senior Subordinated Securities issued hereunder.
(q)
The term "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,
UST Sequence No. 1163
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governmental fee or other like assessment or charge of any kind whatsoever, together with any
interest, penalty or addition imposed by any Governmental Entity.
(r)
The term "Transaction Documents" means this Agreement, the CDCI Senior
Subordinated Securities, and all other instruments, documents and agreements executed by or on
behalf of the Company and delivered concurrently herewith or at any time hereafter to or for the
benefit of any holder of any CDCI Senior Subordinated Security in connection with the
transactions contemplated by this Agreement, all as amended, supplemented or modified from
time to time.
(s)
The term "CDFI Events" means the failure by each Certified Entity at any time
while the CDCI Senior Subordinated Securities are outstanding to (i) be certified by the
Community Development Financial Institution Fund of the United States Depaitment of the
Treasury as a regulated community development financial institution; (ii) together with all of its
Affiliates collectively meet the eligibility requirements of 12 C.F.R. 1805.200(b); (iii) have a
primary mission of promoting community development, as may be determined by the United
States Department of the Treasury from time to time, based on criteria set forth in 12 C.F.R.
1805.201(b)(1); (iv) provide Financial Products, Development Services, and/or other similar
financing as a predominant business activity in arm's-length transactions; (v) serve a Target
Market by serving one or more Investment Areas and/or Targeted Populations as may be
determined by the United States Depai tinent of the Treasury from time to time, substantially in
the manner set forth in 12 C.F.R. 1805.201(b)(3); (vi) provide Development Services in
conjunction with its Financial Products, directly, through an Affiliate or through a contract with a
third-party provider; (vii) maintain accountability to residents of the applicable Investment
Area(s) or Targeted Population(s) through representation on its governing board of directors or
otherwise; and (viii) remain a non-governmental entity which is not an agency or instrumentality
of the United States of America, or any State or political subdivision thereof, as described in 12
C.F.R. 1805.201(b)(6) and within the meaning of any supplemental regulations or interpretations
of 12 C.F.R. 1805.201(b)(6) or such supplemental regulations published by the Fund. For the
avoidance of doubt, a CDFI Event shall not have occurred so long as at least one Certified Entity
satisfies the requirements set forth in clauses (i) through (viii) of the preceding sentence, even if
other Certified Entities fail to satisfy such requirements. Notwithstanding any other provision
hereof, as used in this definition, the terms "Affiliates"; "Financial Products"; "Development
Services";"Target Market"; "Investment Areas"; and "Targeted Populations" have the meanings
ascribed to such terms in 12 C.F.R. 1805.104. A CDFI Event may be waived in writing by the
holders of a majority of the CDCI Senior Subordinated Securities then outstanding.
(t)
To the extent any securities issued pursuant to this Agreement or the transactions
contemplated hereby are registered in the name of a designee of the Investor pursuant to
Section 1.2 or 6.9(c) or transferred to an Affiliate of the Investor, all references herein to the
Investor holding or owning any debt or equity securities of the Company, CDCI Senior
Subordinated Securities shall be deemed to refer to the Investor, together with such designees
and/or Affiliates, holding or owning any debt or equity securities, CDCI Senior Subordinated
Securities (and any like variations thereof), as applicable.
Section 8.8 Interpretation. When a reference is made in this Agreement to
"Recitals," "Articles," "Sections," "Annexes" or "Schedules" such reference shall be to a
UST Sequence No. 1163
-46-
Recital, Article or Section of, or Annex or Schedule to, this Agreement, 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 entered into 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 or the District of Columbia generally are authorized or required by law or other
governmental actions to close.
Section 8.9 Assi2nment. 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 shareholders 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, (b) an assignment of certain rights as provided in
Sections 4.1(c) or 4.1(k) and Annex E or (c) an assignment by the Investor of this Agreement to
an Affiliate of the Investor; provided that if the Investor assigns this Agreement to an Affiliate,
the Investor shall be relieved of its obligations under this Agreement but (i) all rights, remedies
and obligations of the Investor hereunder shall continue and be enforceable by such Affiliate, (ii)
the Company's obligations and liabilities hereunder shall continue to be outstanding and (iii) all
references to the Investor herein shall be deemed to be references to such Affiliate.
Section 8.10 Severability. If any provision of this Agreement, 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.
Section 8.11 No Third-Party Beneficiaries. Other than as expressly provided herein,
nothing contained in this Agreement, expressed or implied, is intended to confer upon any person
UST Sequence No. 1163
-47-
or entity other than the Company and the Investor (and any Indemnitee) any benefit, right or
remedies.
Section 8.12 Entire Agreement, etc. (a) This Agreement (including the Annexes and
Schedules hereto) constitutes the entire agreement, and supersedes all other prior agreements,
understandings, representations and warranties, both written and oral, between the parties, with
respect to the subject matter hereof.
(b)
For the avoidance of doubt, for so long as the Investor holds any outstanding CPP
Senior Subordinated Securities or warrants issued by the Company to the Investor pursuant to the
CPP Securities Purchase Agreement or any securities issuable upon the exercise thereof or
exchanged therefor (collectively, the "CPP Securities"), the CPP Securities Purchase Agreement
and the CPP Securities shall remain in full force and effect, other than as specifically modified
herein.
Section 8.13 Tax Treatment of CDCI Senior Subordinated Securities. The Investor
and the Company agree that, for all tax purposes, the CDCI Senior Subordinated Securities will
be treated as debt instruments and not as stock or equity of the Company.
Section 8.14 Specific Performance. The parties agree that irreparable damage would
occur in the event that any of the provisions of this Agreement were not performed in accordance
with their specific terms. It is accordingly agreed that the parties shall be entitled (without the
necessity of posting a bond) to specific performance of the terms hereof, this being in addition to
any other remedies to which they are entitled at law or equity.
[Remainder of Page Intentionally Left Blank]
UST Sequence No. 1163
-48-
ANNEX A
FORM OF OFFICER'S CERTIFICATE
OFFICER'S CERTIFICATE
OF
[COMPANY]
In connection with that certain letter agreement, dated [
], 2010
(the "Agreement") by and between [COMPANY] (the "Company") and the United States
Department of the Treasury which incorporates that certain Exchange Agreement —Standard
Terms referred to therein (the "Standard Terms"), the undersigned does hereby certify as
follows:
1.
I am a duly elected/appointed [
] of the Company.
2.
The representations and warranties of the Company set forth in Article III
of the Standard Terms are true and correct in all respects as though as of the date hereof (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 respects as of such other date)
and the Company has performed in all material respects all obligations required to be performed
by it under this Agreement.
3.
The Company has effected such changes to its Benefit Plans with respect
to its Senior Executive Officers and any other employee of the Company or its Affiliates subject
to Section 111 of EESA, as implemented by any Compensation Regulations (and to the extent
necessary for such changes to be legally enforceable, each of its Senior Executive Officers and
other employees has duly consented in writing to such changes), as may be necessary, during the
Relevant Period, in order to comply with Section 111 of EESA or the Compensation
Regulations.
4.
The Charter and bylaws of the Company delivered to the Investor pursuant
to the CPP Securities Purchase Agreement are true, complete and correct as of the date hereof
The foregoing certifications are made and delivered as of [
Section 1.2 of the Standard Terms.
I pursuant to
Capitalized terms used and not otherwise defined herein shall have the meanings assigned
to them in the Standard Terms.
[SIGNATURE PAGE FOLLOWS]
UST Sequence No. 1163
IN WITNESS WHEREOF, this Officer's Certificate has been duly executed and
delivered as of the [ 1 day of [
1, 20[ 1.
[COMPANY]
By:
Name:
Title:
UST Sequence No. 1163
Annex A-1
EXHIBIT A
UST Sequence No. 1163
113.ex
A-2
ANNEX B
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. The Company has all necessary
power and authority to own, operate and lease its properties and to carry on its business as it is
being conducted.
(b)
The Company has been duly qualified as a foreign corporation for the transaction
of business and is in good standing under the laws of
I and
],
1.
[
(c)
The CDCI Senior Subordinated Securities have been duly and validly authorized,
and, when executed and delivered pursuant to the Agreement, the CDCI Senior Subordinated
Securities will be the legal, valid and binding obligations of the Company, enforceable in
accordance with their 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, and will rank Senior to the Common Stock, but
subordinated to claims of depositors and to the Company's other debt obligations to its general
and secured creditors, unless such debt obligations are explicitly made pan passu or
subordinated to the CDCI Senior Subordinated Securities, in accordance with applicable
regulations of the Appropriate Federal Banking Agency.
(d)
The Company has the corporate power and authority to execute and deliver the
Agreement and to carry out its obligations thereunder (which includes the issuance of the CDCI
Senior Subordinated Securities).
(e)
The execution, delivery and performance by the Company of the Agreement 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 shareholders, and no further
approval or authorization is required on the part of the Company, including, without limitation,
by any rule or requirement of any national stock exchange.
The Agreement is a legal, valid and binding obligation of the Company
(f)
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.
(g)
The execution and delivery by the Company of this Agreement and the
performance by the Company of its obligations thereunder (i) do not require any approval by any
UST Sequence No. 1163
Annex B-1
Governmental Entity to be obtained on the part of the Company, except those that have been
obtained, (ii) do not violate or conflict with any provision of the Charter, (iii) do not violate,
conflict with, or result in a breach of any provision of, or constitute a default (or an event which,
with notice or lapse of time or both, would constitute a default) under, or result in the termination
of, or accelerate the performance required by, or result in a right of termination or acceleration
of, or result in the creation of, any lien, security interest, charge or encumbrance upon any of the
properties or assets of the Company or any Company Subsidiary under any of the terms,
conditions or provisions of its organizational documents or under any agreement, contract,
indenture, lease, mortgage, power of attorney, evidence of indebtedness, letter of credit, license,
instrument, obligation, purchase or sales order, or other commitment, whether oral or written, to
which it is a party or by which it or any of its properties is bound or (iv) do not conflict with,
breach or result in a violation of, or default under any judgment, decree or order known to us that
is applicable to the Company and, pursuant to any applicable laws, is issued by any
Governmental Entity having jurisdiction over the Company.
(h)
Other than the filing of the amendment to the Charter 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
consents and approvals that 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
Exchange.
The Company is not nor, after giving effect to the issuance of the CDCI Senior
Subordinated Securities pursuant to the Agreement, would be on the date hereof an "investment
company" or an entity "controlled" by an "investment company," as such terms are defined in
the Investment Company Act of 1940, as amended.
(j)
Each Certified Entity (A) is a regulated community development financial
institution (a "CDF1") currently certified by the Community Development Financial Institution
Fund (the "Fund") of the United States Department of the Treasury pursuant to 12 C.F.R.
1805.201(a) and (B) satisfies all of the eligibility requirements of the Fund's Community
Development Financial Institutions Program for a CDFI.
UST Sequence No. 1163
Annex B-2
ANNEX C
FORM OF WAIVER
In consideration for the benefits I will receive as a result of the participation of
1 (together with its subsidiaries and affiliates, the "Company") in the
United States Department of the Treasury's (the "Treasury") Capital Purchase Program,
Community Development Capital Initiative and/or any other economic stabilization program
implemented by the Treasury under the Emergency Economic Stabilization Act of 2008 (as
amended, supplemented, or otherwise modified, the "EESA") (any such program, including the
Capital Purchase Program and the Community Development Capital Initiative, a "Program"), I
hereby voluntarily waive any claim against the United States (and each of its departments and
agencies) or the Company or any of its directors, officers, employees and agents for any changes
to my compensation or benefits that are required to comply with the executive compensation and
corporate governance requirements of Section 111 of the EESA, as implemented by any
guidance or regulations issued and/or to be issued thereunder, including without limitation the
provisions for the Capital Purchase Program, as implemented by any guidance or regulation
thereunder, including the rules set forth in 31 C.F.R. Part 30, or any other guidance or
regulations under the EESA and the applicable requirements of the Exchange Agreement by and
among the Company and the Treasury dated as of , 2010, as amended (such
requirements, the "Limitations").
I acknowledge that the Limitations may require modification or termination of the employment,
compensation, bonus, incentive, severance, retention and other benefit plans, arrangements,
policies and agreements (including so-called "golden parachute" agreements), whether or not in
writing, that I may have with the Company or in which I may participate as they relate to the
period the United States holds any equity or debt securities of the Company acquired through a
Program or for any other period applicable under such Program or Limitations, as the case may
be, and I hereby consent to all such modifications.
This waiver includes all claims I may have under the laws of the United States or any other
jurisdiction (whether or not in existence as of the date hereof) related to the requirements
imposed by the Limitations, including without limitation a claim for any compensation or other
payments or benefits I would otherwise receive, any challenge to the process by which the
Limitations are or were adopted and any tort or constitutional claim about the effect of these
Limitations on my employment relationship and I hereby agree that I will not at any time initiate,
or cause or permit to be initiated on my behalf, any such claim against the United States, the
Company or its directors, officers, employees or agents in or before any local, state, federal or
other agency, court or body.
I agree that, in the event and to the extent that the Compensation Committee of the Board of
Directors of the Company or similar governing body (the "Committee") reasonably determines
that any compensatory payment and benefit provided to me, including any bonus or incentive
compensation based on materially inaccurate financial statements or performance criteria, would
cause the Company to fail to be in compliance with the Limitations (such payment or benefit, an
UST Sequence No. 1163
Annex C-1
"Excess Payment"), upon notification from the Company, I shall repay such Excess Payment to
the Company within 15 business days. In addition, I agree that the Company shall have the right
to postpone any such payment or benefit for a reasonable period of time to enable the Committee
to determine whether such payment or benefit would constitute an Excess Payment.
I understand that any determination by the Committee as to whether or not, including the manner
in which, a payment or benefit needs to be modified, terminated or repaid in order for the
Company to be in compliance with Section 111 of the EESA and/or the Limitations shall be a
final and conclusive determination of the Committee which shall be binding upon me. I further
understand that the Company is relying on this letter from me in connection with its participation
in a Program.
UST Sequence No. 1163
Annex C-2
IN WITNESS WHEREOF, I execute this waiver on my own behalf, thereby communicating my
acceptance and acknowledgement to the provisions herein.
Respectfully,
Name:
Title:
Date
UST Sequence No. 1163
Annex C-3
FORM OF CDCI SENIOR SUBORDINATED SECURITIES
[SEE ATTACHED]
UST Sequence No. 1163
D-1
(CDFI Subchapter S Corporation
Senior Securities)
ANNEX D
FORM OF CDCI SENIOR SUBORDINATED SECURITIES
(FORM OF FACE OF SECURITY)
"THIS CDCI SENIOR SUBORDINATED SECURITY WILL BE ISSUED AND
MAY BE TRANSFERRED ONLY IN MINIMUM DENOMINATIONS OF
$1,000 AND MULTIPLES OF $1,000 IN EXCESS THEREOF. ANY
ATTEMPTED TRANSFER OF SUCH SECURITIES IN A DENOMINATION
OF LESS THAN $1,000 AND MULTIPLES OF $1,000 IN EXCESS THEREOF
SHALL BE DEEMED TO BE VOID AND OF NO LEGAL EFFECT
WHATSOEVER. ANY SUCH PURPORTED TRANSFEREE SHALL BE
DEEMED NOT TO BE THE HOLDER OF SUCH SECURITIES FOR ANY
PURPOSE, INCLUDING, BUT NOT LIMITED TO, THE RECEIPT OF
PAYMENTS ON SUCH SECURITIES, AND SUCH PURPORTED
TRANSFEREE SHALL BE DEEMED TO HAVE NO INTEREST
WHATSOEVER IN SUCH SECURITIES.
THIS SECURITY IS SUBJECT TO THE TERMS AND CONDITIONS SET
FORTH IN THE LETTER AGREEMENT BY AND BETWEEN THE
COMPANY AND THE UNITED STATES DEPARTMENT OF THE
TREASURY AND EXCHANGE AGREEMENT — STANDARD TERMS (THE
"AGREEMENT"), EACH OF WHICH ARE INCORPORATED INTO THIS
CDCI SENIOR SUBORDINATED SECURITY.
THIS OBLIGATION IS NOT A SAVINGS ACCOUNT OR DEPOSIT AND IS
NOT INSURED OR GUARANTEED BY THE FEDERAL DEPOSIT
INSURANCE CORPORATION, THE BOARD OF GOVERNORS OF THE
FEDERAL RESERVE SYSTEM OR ANY OTHER GOVERNMENTAL
AGENCY.
THIS OBLIGATION IS SUBORDINATED TO [Insert for Issuers that are
Bank or Savings Associations: THE CLAIMS OF GENERAL AND SECURED
CREDITORS OF THE COMPANY AND IS NOT SECURED] [Insert for
Issuers that are BHCs or SLHCs:
SENIOR INDEBTEDNESS OF THE
COMPANY IN ACCORDANCE WITH APPLICABLE HOLDING COMPANY
REGULATIONS OF THE APPROPRIATE FEDERAL BANKING AGENCY].
THIS SECURITY HAS 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
UST Sequence No. 1163
D-1
(CDFI Subchapter S Corporation
S enior S ecuriti es)
LAWS. EACH PURCHASER OF THIS SECURITY 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 THIS SECURITY BY ITS ACCEPTANCE HEREOF
(1) REPRESENTS THAT IT IS A "QUALIFIED INSTITUTIONAL BUYER"
(AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT), (2) AGREES
THAT IT WILL NOT OFFER, SELL OR OTHERWISE TRANSFER THE
SECURITIES REPRESENTED BY THIS INSTRUMENT EXCEPT
(A) PURSUANT TO A REGISTRATION STATEMENT WHICH IS THEN
EFFECTIVE UNDER THE SECURITIES ACT, (B) FOR SO LONG AS THE
SECURITIES REPRESENTED BY THIS INSTRUMENT ARE ELIGIBLE FOR
RESALE PURSUANT TO RULE 144A, TO A PERSON IT REASONABLY
BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN
RULE 144A UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS
OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE
TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (C) TO THE
COMPANY 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 THIS SECURITY IS TRANSFERRED A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.
THIS INSTRUMENT IS ISSUED SUBJECT TO THE RESTRICTIONS ON
TRANSFER AND OTHER PROVISIONS OF THE AGREEMENT BETWEEN
THE COMPANY AND THE INVESTOR REFERRED TO THEREIN, A COPY
OF WHICH IS ON FILE WITH THE COMPANY. THIS SECURITY 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."
UST Sequence No. 1163
D-2
(CDFI Subchapter S Corporation
Senior Securities)
[NAME OF COMPANY]
CUSIP No.
3.1% CDCI SENIOR SUBORDINATED SECURITY DUE [Insert for bank or savings
associations: 2023] [Insert for BHCs or SLHCs: 2040]
[Company], a [State corporation] (the "Company," which term includes any
permitted successor thereto), for value received, hereby promises to pay to the order of the
United States Department of the Treasury or registered assigns, by wire transfer, the principal
sum of $
Dollars) on , [Insert for bank
or savings associations: 2023] [Insert for BHCs or SLHCs: 2040] (the "Maturity Date") (or any
earlier redemption date or date of acceleration of the Maturity Date) and to pay interest on the
outstanding principal amount of this CDCI Senior Subordinated Security Due [Insert for bank
or savings associations: 2023] [Insert for BHCs or SLHCs: 2040] (this "CDCI Senior
Subordinated Security") (i) from , or from the most recent interest payment
date to which interest has been paid or duly provided for, quarterly in arrears [Insert for BHCs
or SLHCs: (subject to deferral as set forth in Section 5.4(c) of the Agreement)] on February 15,
May 15, August 15 and November 15 of each year (each such date, an "Interest Payment Date"),
commencing on
, at the rate of 3.1% per annum, until the
eighth anniversary of the date hereof, provided, however, that [(A)] if a CDFI Event shall have
occurred and it or any other CDFI Event is continuing at all times, from and after the 180 th day
after the date on which the first CDFI Event occurred until the date on which no CDFI Events are
continuing, the Interest Rate shall be 7.7% per annum, [To be inserted' if Issuer was not a CDFI
on February 3, 2010: and (B) if a CDFI Event shall have occurred and it or any other CDFI
Event is continuing, at all times, from and after the 270 th day after the date on which the first
CDFI Event occurred until the date on which no CDFI Events are continuing, 13.8% per annum]
and (ii) from and after the eighth anniversary of the date hereof, at a rate of 13.8% per annum
(each such interest rate, the applicable "Interest Rate") until the principal hereof shall have been
paid or duly provided for, compounded quarterly, and on any overdue principal and on any
overdue installment of interest (without duplication and to the extent that payment of such
interest is enforceable under applicable law) at the same rate per annum. The amount of interest
payable hereon shall be computed on the basis of a 360-day year comprised of twelve 30-day
months.
This CDCI Senior Subordinated Security is one of the CDCI Senior Subordinated
Securities referred to in the Letter Agreement and Exchange Agreement — Standard Terms, dated
as of (as amended, modified or restated from time to time, the "Agreement"), by and
among the Company and the United States Department of the Treasury, as the initial Investor
(the "Investor"). Capitalized terms used in this CDCI Senior Subordinated Security are defmed
in the Agreement, unless otherwise expressly stated herein. The CDCI Senior Subordinated
Security is entitled to the benefits of the Agreement and is subject to all of the agreements, terms
UST Sequence No. 1163
D-3
(CDFI Subchapter S Corporation
Senior Securities)
and conditions contained therein, all of which are incorporated herein by this reference. This
CDCI Senior Subordinated Security may be redeemed, in whole or in part, in accordance with
the terms and conditions set forth in the Agreement.
Interest
The interest installment so payable, and punctually paid or duly provided for, on
any Interest Payment Date will be paid to the person in whose name this CDCI Senior
Subordinated Security is registered at the close of business on the regular record date for such
installment of interest, which date shall be at the close of business on the 1st calendar day
(whether or not a business day) of the month in which each Interest Payment Date occurs (each
such date, the "Regular Record Date"). Any such installment of interest (other than Deferred
Interest) not punctually paid or duly provided for shall forthwith cease to be payable to the
Holders on such Regular Record Date and shall be paid to the person in whose name this CDCI
Senior Subordinated Security is registered at the close of business on the date preceding the next
Interest Payment Date, on the next Interest Payment Date, along with all other amounts then due
and payable. In no event, however, shall interest exceed the maximum rate permitted by
applicable law.
If an Interest Payment Date or the Maturity Date falls on a day that is not a
"business day" (as defined in the Agreement), the related payment of principal or interest will be
paid on the next business day, with the same force and effect as if made on such date, and no
interest on such payments will accrue from and after such Interest Payment Date or Maturity
Date, as the case may be. Interest payable on the Maturity Date of the CDCI Senior
Subordinated Securities will be paid to the registered Holder to whom the principal is payable
upon presentation and surrender for cancellation.
Method of Payment
The principal of this CDCI Senior Subordinated Security shall be payable upon
surrender hereof and interest on this CDCI Senior Subordinated Security shall be payable at the
office or agency of the Company or an agent appointed for that purpose in any coin or currency
of the United States of America that at the time of payment is legal tender for payment of public
and private debts; provided, however, that payment of interest shall be made by the Company to
the Holders of this Senior Subordinated Security entitled thereto as shown on the CDCI Senior
Subordinated Securities Register by wire transfer of immediately available funds to any account
with a banking institution located in the United States designated by such Holder no later than
the related Regular Record Date.
Subordination
The indebtedness evidenced by this CDCI Senior Subordinated Security is, to the
extent provided in the Agreement, senior to the Common Stock, but subordinate and junior in
right of payment to the prior payment in full of [Insert for bank and savings associations: all
claims of depositors and to the Company's other debt obligations to its general and secured
creditors] [Insert for BHC and SLHC: senior indebtedness of the Company, in accordance with
applicable holding company regulations of the Appropriate Federal Banking Agency], unless
UST Sequence No. 1163
D-4
(CDFI Subchapter S Corporation
Senior Securities)
such debt obligations are explicitly made pail passu or subordinated to the CDCI Senior
Subordinated Securities, if applicable. Each Holder of this CDCI Senior Subordinated Security,
by accepting the same agrees to and shall be bound by such provisions of the Agreement. Each
Holder hereof, by his or her acceptance hereof, hereby waives all notice of the acceptance of the
subordination provisions contained herein and in the Agreement by each holder of Senior
Indebtedness, whether now outstanding or hereafter incurred, and waives reliance by each such
holder upon said provisions.
The provisions of this CDCI Senior Subordinated Security are continued on the
reverse side hereof and such provisions shall for all purposes have the same effect as though
fully set forth at this place.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed this
day of
[NAME OF COMPANY]
By:
Name:
Title:
Attest:
By:
Name:
Title:
UST Sequence No. 1163
D-5
(CDFI Subchapter S Corporation
Senior Securities)
(FORM OF REVERSE OF SECURITY)
This CDCI Senior Subordinated Security is one of the CDCI Senior Subordinated
Securities of the Company (herein sometimes referred to as the "CDCI Senior Subordinated
Securities"), issued or to be issued under and pursuant to a Letter Agreement and Exchange
Agreement — Standard Terms, dated as of , 2010 (as amended, modified or restated
from time to time, the "Agreement"), by and between the Company and the United States
Department of the Treasury, as the initial Investor (the "Investor"), to which Agreement
reference is hereby made for a description of the rights, limitations of rights, obligations, duties
and immunities thereunder of Company and the Holders of the CDCI Senior Subordinated
Securities. This CDCI Senior Subordinated Security is a single series security with a face value
in aggregate principal amount as set forth on the front of this CDCI Senior Subordinated
Security.
Defaults and Remedies
If an Event of Default as provided for in Section 7.1 of the Agreement occurs,
then the principal of, interest accrued on, and other obligations payable under this CDCI Senior
Subordinated Security and the Transaction Documents, will immediately become due and
payable. Notwithstanding anything to the contrary herein or in the Agreement, other than
Section 7.2 of the Agreement, there is no right of acceleration for any default, including a default
in the payment of principal or interest or the performance of any other covenant or obligation by
the Company under this CDCI Senior Subordinated Security or the Agreement.
Amendment and Waiver
No amendment, modification, termination or waiver of any provision of the
Agreement, the CDCI Senior Subordinated Securities or any of the other Transaction
Documents, or consent to any departure by the Company therefrom, shall be effective unless
made in writing and signed by an officer or a duly authorized representative of the Company and
in the case of the CDCI Senior Subordinated Securities, the Majority Holders; provided that for
so long as the CDCI Senior Subordinated Securities are outstanding, the Investor may at any
time and from time to time unilaterally amend Section 4.1(d) of the Agreement to the extent the
Investor deems necessary, in its sole discretion, to comply with, or conform to, any changes after
the Signing Date in any federal statutes, any rules and regulations promulgated thereunder and
any other publications or interpretative releases of the Fund governing CDFIs, including, without
limitation, any changes in the criteria for certification as a CDFI by the Fund; provided further
that no amendment, modification, termination or waiver with respect to the CDCI Senior
Subordinated Securities shall, unless in writing and signed by all Holders, do any of the
following: (A) change the principal of or the rate of interest on any CDCI Senior Subordinated
Security; (B) extend any date fixed for any payment of principal or interest; (C) change the
definition of the terms "Holders" or "Majority Holders" or the percentage of Holders which shall
be required for Holders to take any action hereunder; or (D) consent to the assignment,
delegation or other transfer by the Company of any of its rights and obligations under any
Transaction Documents.
UST Sequence No. 1163
D-6
(CDFI Subchapter S Corporation
Senior S ecurities)
Any such consent or waiver by the Holder of this CDCI Senior Subordinated
Security shall be conclusive and binding upon such Holder and upon all future Holders of this
CDCI Senior Subordinated Security and of any CDCI Senior Subordinated Security issued in
exchange herefor or in place hereof (whether by registration of transfer or otherwise),
irrespective of whether or not any notation of such consent or waiver is made upon this CDCI
Senior Subordinated Security.
No reference herein to the Agreement and no provision of this CDCI Senior
Subordinated Security or of the Agreement shall alter or impair the obligation of the Company,
which is absolute and unconditional, to pay the principal of and interest on this CDCI Senior
Subordinated Security at the time and place and at the rate and in the money herein prescribed.
Limitation on Dividends and Repurchases of Equity Securities
The Company's ability to declare and pay dividends and purchase or acquire
shares of Common Stock, other equity securities, trust preferred securities or any CDCI Senior
Subordinated Security is limited by the terms of the Agreement. The Company's ability to
redeem this CDCI Senior Subordinated Security is limited by the terms of the Agreement.
Interest Deferral and Voting Rights
The Company may defer interest paid on the CDCI Senior Subordinated
Securities, subject to the terms and conditions in the Agreement. The Holders of this CDCI
Senior Subordinated Security will be permitted to vote for two directors in the event interest is
deferred for eight quarters (regardless of whether such quarters are consecutive). [Insert for
BHCs and SLHCs: Deferral of interest in excess of 20 quarters constitutes an "Event of
Default" as defined in the Agreement.]
Denominations; Transfer; Exchange
The CDCI Senior Subordinated Securities are issuable only in registered form
without coupons in minimum denominations of $1,000.00 and integral multiples of $1,000.00 in
excess thereof As provided in the Agreement, this CDCI Senior Subordinated Security is
transferable by the Holder hereof on the CDCI Senior Subordinated Securities Register
maintained by the Company or its agent, upon surrender of this CDCI Senior Subordinated
Security for registration of transfer at the office or agency of the Company or its agent,
accompanied by a written instrument or instruments of transfer in form satisfactory to the
Company duly executed by the Holder hereof or his or her attorney duly authorized in writing,
and thereupon one or more new CDCI Senior Subordinated Securities of authorized
denominations and for the same aggregate principal amount will be issued to the designated
transferee or transferees. No service charge will be made for any such registration of transfer,
but the Company may require payment of a sum sufficient to cover any tax or other
governmental charge payable in relation thereto.
Prior to due presentment for registration of transfer of this CDCI Senior
Subordinated Security, the Company and any agent thereof may deem and treat the Holder
hereof as the absolute owner hereof (whether or not this CDCI Senior Subordinated Security
shall be overdue and notwithstanding any notice of ownership or writing hereon made) for the
UST Sequence No. 1163
D-7
(CDFI Subchapter S Corporation
S enior S ecurities)
purpose of receiving payment of or on account of the principal hereof and (subject to the
Agreement) interest due hereon and for all other purposes, and none of the Company or any
agent thereof shall be affected by any notice to the contrary.
No Recourse Against Others
No recourse shall be had for the payment of the principal of or interest on this
CDCI Senior Subordinated Security, or for any claim based hereon, or otherwise in respect
hereof, or based on or in respect of the Agreement or any other Transaction Document, against
any incorporator, shareholder, employee, officer or director, as such, past, present or future, as
such, of the Company or of any successor thereto, whether by virtue of any constitution, statute
or rule of law, or by the enforcement of any assessment or penalty or otherwise, all such liability
being, by the acceptance hereof and as part of the consideration for the issuance hereof,
expressly waived and released.
Governing Law
THE AGREEMENT AND THIS CDCI SENIOR SUBORDINATED SECURITY
SHALL EACH BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
FEDERAL LAWS OF THE UNITED STATES, IF AND TO THE EXTENT SUCH LAW IS
APPLICABLE AND OTHERWISE IN ACCORDANCE WITH THE LAWS OF THE STATE
OF NEW YORK, APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED
ENTIRELY WITHIN SUCH STATE.
Abbreviations
The following abbreviations, when used in the inscription on the face of this
CDCI Senior Subordinated Security, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN CON — as tenants in common TEN ENT — as tenants in the entireties
JT TEN — as joint tenants with right of survival
UNIF GIFT MIN ACT — under Uniform Gift to Minors Act and not as
tenants
Additional abbreviations may also be used though not in the above list.
UST Sequence No. 1163
D-8
(CDFI Subchapter S Corporation
Senior Securities)
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby assigns and transfers this
CDCI Senior Subordinated Security to:
(Assignee's social security or tax
identification number)
(Address and zip code of assignee)
and irrevocably appoints
agent to transfer this CDCI Senior Subordinated
Security on the books of the Company. The agent may substitute another to act for him or her.
Date:
Signature:
(Sign exactly as your name appears on the other side of this CDCI Senior Subordinated Security)
Signature Guarantee:
[Signature must be guaranteed by an "eligible
guarantor institution" that is a bank,
stockbroker, savings and loan association or
credit union meeting the requirements of the
Registrar, which requirements include
membership or participation in the Securities
Transfer Agents Medallion Program
("STAMP") or such other "signature guarantee
program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all
in accordance with the Securities Exchange Act
of 1934, as amended.]
UST Sequence No. 1163
D-9
ANNEX E
REGISTRATION RIGHTS
1.1
Definitions. Terms not defined in this Annex shall have the meaning
ascribed to such terms in the Agreement. As used in this Annex E, the following terms shall have
the following respective meanings:
(a)
"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 1.9 hereof
(b)
"Holders' Counsel" means one counsel for the selling Holders chosen by
Holders holding a majority interest in the Registrable Securities being registered.
(c)
"Pending Underwritten Offering" means, with respect to any Holder
forfeiting its rights pursuant to Section 1.11 of this Annex E, 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 1.2(b) or 1.2(d) of this Annex E prior to the date
of such Holder's forfeiture.
(d)
"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.
(e)
"Registrable Securities" means (A) all CDCI Senior Subordinated
Securities, and (B) any securities issued or issuable directly or indirectly with respect to the
securities referred to in the foregoing clause (A) by way of conversion, exercise or exchange
thereof, or in connection with a combination, recapitalization, reclassification, merger,
amalgamation, arrangement, consolidation or other reorganization, provided that, once issued,
such securities will not be Registrable Securities when (1) they are sold pursuant to an effective
registration statement under the Securities Act, (2) they shall have ceased to be outstanding or
(3) they have been sold in any 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.
"Registration Expenses" mean all expenses incurred by the Company in
(f)
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
Annex E, 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
UST Sequence No. 1163
E-1
special reviews or audits incident to or required by any such registration, but shall not include
Selling Expenses.
(g)
"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.
(h)
"Selling Expenses" mean all discounts, selling commissions and security
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).
"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.
1.2
Registration.
(a)
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
(A) 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), and
(B) prepare an Indenture covering the Registrable Securities meeting the requirements of the
Indenture Act. and use its reasonable best efforts to cause such Indenture to be qualified under
the Indenture Act. 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.
(b)
Any registration pursuant to Section 1.2(a) of this Annex E 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 1.2(d) of this Annex E; provided
that the Company shall not be required to facilitate an underwritten offering of Registrable
UST Sequence No. 1163
E-2
Securities unless (i) the expected gross proceeds from such offering exceed $200,000 or (ii) such
underwritten offering includes all of the outstanding Registrable Securities held by such Holder.
The lead underwriters in any such distribution shall be selected by the Holders of a majority of
the Registrable Securities to be distributed.
(c)
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 1.2 of this Annex E: (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.
(d)
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 1.2(a) of this Annex E 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 (A) 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 and (B) if requested by the Investor or a Holder, prepare an
Indenture meeting the requirements of the Indenture Act and use its reasonable best efforts to
cause such Indenture to be qualified under the Indenture Act (such registration and qualification,
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 (5th) business day prior
to the planned effective date of such Piggyback Registration. The Company may terminate or
withdraw any registration or qualification under this Section 1.2(d) of this Annex E prior to the
effectiveness of such registration or qualification, whether or not Investor or any other Holders
have elected to include Registrable Securities in such registration or qualification.
(e)
If the registration referred to in Section 1.2(d) of this Annex E 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 1.2(d) of this Annex E. In such event, the right of
Investor and all other Holders to registration pursuant to Section 1.2 of this Annex E 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
UST Sequence No. 1163
E-3
underwriting) enter into an underwriting agreement in customary form with the underwriter or
underwriters selected for such underwriting by the Company; provided that the Investor (as
opposed to other Holders) shall not be required to indemnify any person in connection with any
registration. If any participating person disapproves of the terms of the underwriting, such
person may elect to withdraw therefrom by written notice to the Company, the managing
underwriters and the Investor (if the Investor is participating in the underwriting).
If either (x) the Company grants "piggyback" registration rights to one or
(f)
more third parties to include their securities in an underwritten offering under the Shelf
Registration Statement pursuant to Section 1.2(b) of this Annex E or (y) a Piggyback
Registration under Section 1.2(d) of this Annex E 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 security 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 security 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 1.2(d) of this Annex E, 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 1.2(b) or Section 1.2(d) of this Annex E, as applicable,
pro rata on the basis of the aggregate number of such securities 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.
1.3
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.
1.4
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:
Prepare and file with the SEC: (A) 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 1.4 of this Annex E, keep such registration statement
effective and keep such prospectus supplement current until the securities described therein are
no longer Registrable Securities; and (B) an Indenture for qualification under the Indenture Act.
UST Sequence No. 1163
E-4
(a)
Prepare and file with the SEC such amendments and supplements: (A) 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; and (B) to the Indenture, with respect to the disposition of all securities
covered by such registration statement and Indenture.
(b)
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, the Indenture 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.
(c)
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.
(d)
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.
(e)
Give written notice to the Holders:
(A)
when any registration statement or Indenture filed pursuant to
Section 4.1(k) of the Agreement 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 the Indenture or for
additional information;
(C)
of the issuance by the SEC of any stop order suspending the
effectiveness of any registration statement or the initiation of any proceedings for
that purpose;
UST Sequence No. 1163
E-5
(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 or to the Indenture 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 1.4(j) of this
Annex E cease to be true and correct.
Use its reasonable best efforts to prevent the issuance or obtain the
(0
withdrawal of any order suspending the effectiveness of any registration statement referred to in
Section 1.4(0(C) of this Annex E at the earliest practicable time.
(g)
Upon the occurrence of any event contemplated by Section 1.4(e) or
1.4(0(E) of this Annex E, promptly prepare a post-effective amendment to such registration
statement or a supplement to the related prospectus or the Indenture or file any other required
document so that, as thereafter delivered to the Holders and any underwriters, the prospectus or
the Indenture 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
1.4(0(E) of this Annex E to suspend the use of the prospectus until the requisite changes to the
prospectus or the Indenture 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.
(h)
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 certificates into book-entry form in accordance with any procedures
reasonably requested by the Holders or any managing underwriter(s).
If an underwritten offering is requested pursuant to Section 1.2(b) of this
(i)
Annex E, enter into an underwriting agreement in customary form, scope and substance and take
all such other actions reasonably requested by the Holders of a majority of the Registrable
Securities being sold in connection therewith or by the managing underwriter(s), if any, to
expedite or facilitate the underwritten disposition of such Registrable Securities, and in
connection therewith in any underwritten offering (including making members of management
and executives of the Company available to participate in "road shows", similar sales events and
other marketing activities), (A) make such representations and warranties to the Holders that are
selling securityholders and the managing underwriter(s), if any, with respect to the business of
UST Sequence No. 1163
E-6
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 (A) above
and to evidence compliance with any customary conditions contained in the underwriting
agreement or other agreement entered into by the Company.
Make available for inspection by a representative of selling Holders, the
(j)
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 governance 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.
(k)
Use reasonable best efforts to cause all such Registrable Securities to be
listed on each national securities exchange on which similar securities issued by the Company
are then listed or, if no similar securities issued by the Company are then listed on any national
securities exchange, use its reasonable best efforts to cause all such Registrable Securities to be
listed on such securities exchange as the Investor may designate.
(1)
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.
(m)
Timely provide to its securityholders earning statements satisfying the
provisions of Section 11(a) of the Securities Act and Rule 158 thereunder.
UST Sequence No. 1163
E-7
1.5
Suspension of Sales. Upon receipt of written notice from the Company
that a registration statement, prospectus or prospectus supplement, or Indenture 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, or Indenture, 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
Indenture, 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 or Indenture 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 or
Indenture 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.
1.6
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.
1.7
Furnishing Information. (a) 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.
(b)
It shall be a condition precedent to the obligations of the Company to take any
action pursuant to Section 1.4 that Investor and/or the selling Holders and the underwriters, if
any, shall furnish to the Company such information regarding themselves, the Registrable
Securities held by them and the intended method of disposition of such securities as shall be
required to effect the registered offering of their Registrable Securities.
1.8
Indemnification.
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
defmed in Rule 405) or contained in any Indenture, 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
UST Sequence No. 1163
E-8
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) or contained in any Indenture, 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 any
Indenture 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.
If the indemnification provided for in Section 1.8(i) of this Annex E is unavailable
to an Indemnitee with respect to any losses, claims, damages, actions, liabilities, costs or
expenses referred to therein or is insufficient to hold the Indemnitee harmless as contemplated
therein, then the Company, in lieu of indemnifying such Indemnitee, shall contribute to the
amount paid or payable by such Indemnitee as a result of such losses, claims, damages, actions,
liabilities, costs or expenses in such proportion as is appropriate to reflect the relative fault of the
Indemnitee, on the one hand, and the Company, on the other hand, in connection with the
statements or omissions which resulted in such losses, claims, damages, actions, liabilities, costs
or expenses as well as any other relevant equitable considerations. The relative fault of the
Company, on the one hand, and of the Indemnitee, on the other hand, shall be determined by
reference to, among other factors, whether the untrue statement of a material fact or omission to
state a material fact relates to information supplied by the Company or by the Indemnitee and the
parties' relative intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission; the Company and each Holder agree that it would not be just and
equitable if contribution pursuant to this Section 1.8(ii) of this Annex E 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 1.8(i) of this Annex E. 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.
1.9
Assignment of Registration Rights. The rights of the Investor to
registration of Registrable Securities pursuant to Section 1.2 may be assigned by the Investor to
a transferee or assignee of Registrable Securities; 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.
1.10 Clear Market. With respect to any underwritten offering of Registrable
Securities by the Investor or other Holders pursuant to this Annex E, the Company agrees not to
UST Sequence No. 1163
E-9
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 subordinated debentures or equity securities of the Company
or any securities convertible into or exchangeable or exercisable for subordinated debentures or
equity securities 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.
1.11 Forfeiture of Rights. At any time, any holder of Registrable Securities
(including any Holder) may elect to forfeit its rights set forth in this Annex E from that date
forward; provided, that a Holder forfeiting such rights shall nonetheless be entitled to participate
under Section 1.2(d) — (f) of this Annex E 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 1.7 with respect to any prior registration or Pending Underwritten Offering.
1.12 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
Annex E and that the Investor and the Holders from time to time may be irreparably harmed by
any such failure, and accordingly agree that the Investor and such Holders, in addition to any
other remedy to which they may be entitled at law or in equity, to the fullest extent permitted and
enforceable under applicable law shall be entitled to compel specific performance of the
obligations of the Company under this Annex E in accordance with the terms and conditions of
this Annex E.
1.13 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 Annex E 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 Annex E. 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 Annex E (including agreements that are inconsistent with the
order of priority contemplated by Section 1.2(f) of this Annex E) 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 Annex E.
1.14 Certain Offerings by the Investor. 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.
UST Sequence No. 1163
E-10
ANNEX F
OFFICER'S CERTIFICATE
OF
[COMPANY]
In connection with that certain letter agreement, dated [
], 2010 (the "Agreement")
by and between [COMPANY] (the "Company") and the United States Department of the
Treasury ("Investor") which incorporates that certain Exchange Agreement —Standard Terms
referred to therein (the "Standard Terms"), the undersigned does hereby certify as follows:
1.
I am a duly elected/appointed [
2.
Each Certified Entity (as defined in the Standard Terms) (A) is certified by the
Community Development Financial Institution Fund (the "Fund") of the United States
Depattment of the Treasury as a regulated community development financial institution
(a "CDFI"); (B) together with its Affiliates collectively meets the eligibility requirements
of 12 C.F.R. 1805.200(b); (C) has a primary mission of promoting community
development, as may be determined by Investor from time to time, based on criteria set
forth in 12 C.F.R. 1805.201(b)(1); (D) provides Financial Products, Development
Services, and/or other similar financing as a predominant business activity in arm' slength transactions; (E) serves a Target Market by serving one or more Investment Areas
and/or Targeted Populations in the manner set forth in 12 C.F.R. 1805.201(b)(3); (F)
provides Development Services in conjunction with its Financial Products, directly,
through an Affiliate or through a contract with a third-party provider; (G) maintains
accountability to residents of the applicable Investment Area(s) or Targeted Population(s)
through representation on its governing Board of Directors or otherwise; and (H) remains
a non-governmental entity which is not an agency or instrumentality of the United States
of America, or any State or political subdivision thereof, as described in 12 C.F.R.
1805.201(b)(6) and within the meaning of any supplemental regulations or interpretations
of 12 C.F.R. 1805.201(b)(6) or such supplemental regulations published by the Fund. As
used herein, the terms "Affiliates", "Financial Products"; "Development Services";
"Target Market"; "Investment Areas"; and "Targeted Populations" have the meanings
ascribed to such terms in 12 C.F.R. 1805.104.
3.
The information set forth in the CDFI Certification Application delivered to the Investor
pursuant to Section 1.2(c)(xii) of the Standard Terms (the "CDFI Application"), as
modified by any updates to the CDFI Application provided on [Insert Date(s)] by the
Company to the Investor on or prior to the date hereof, with respect to the covenants set
forth in Section 4.1(d)(i)(B) and Section 4.1(d)(i)(D) of the Standard Terms remains true,
correct and complete as of the date hereof.
UST Sequence No. 1163
1 of the Company.
F-1
4.
The contracts and material agreements entered into by each Certified Entity with respect
to Development Services previously disclosed to the Investor remain in effect and
copies of any new contracts and material agreements entered into by the Certified Entity
with respect to Development Services are attached hereto as Exhibit A.
5.
Attached hereto as Exhibit B is (A) a list of the names and addresses of the individuals
which comprise the board of directors of each Certified Entity as of the date hereof, (B)
to the extent any member of the board of directors listed on Exhibit B was not a member
of the board of directors as of the last certification provided to the Investor pursuant to
Section 4.1(d)(ii) of the Standard Terms, a narrative describing such individual's
relationship to the applicable Investment Area(s) and Targeted Population(s) and (C) to
the extent any Certified Entity maintains accountability to residents of the applicable
Investment Area(s) or Target Population(s) through means other than representation on
its governing board of directors and such means have changed since the date of the last
certification provided to the Investor pursuant to Section 4.1(d)(ii) of the Standard Terms
on [Insert Date], a narrative describing such change.
6.
Each Certified Entity is not an agency of the United States of America, or any State or
political subdivision thereof, as described in 12 C.F.R. 1805.201(b)(6) and within the
meaning of any supplemental regulations or interpretations of 12 C.F.R. 1805.201(b)(6)
or such supplemental regulations published by the Fund.
7.
[Insert if the Company was a Bank Holding Company or a Savings and Loan Holding
Company on the Signing Date: The Company is and has been at all times since the date
of the last certification provided to the Investor pursuant to Section 4.1(d)(ii) of the
Standard Terms, a [Insert if the Company is a Bank Holding Company: Bank Holding
Company] [Insert if the Company is a Savings and Loan Holding Company: Savings
and Loan Holding Company].] The Company is not, and has not been at any time since
the date of the last certification provided to the Investor pursuant to Section 4.1(f)(ii) of
the Standard Terms on [Insert Date], controlled (within the meaning of [Insert for banks
and Bank Holding Companies: the Bank Holding Company Act of 1956 (12 U.S.C.
1841(a)(2)) and 12 C.F.R. 225(a)(i)][Insert for savings associations and Savings and
Loan Holding Companies: the Home Owners' Loan Act of 1933 (12 U.S.C. 1467a
(a)(2)) and 12 C.F.R. 583.7]) by a foreign bank or company.
The foregoing certifications are made and delivered as of [
Section 4.1(d)(ii) of the Standard Terms.
] pursuant to
Capitalized terms used and not otherwise defined herein shall have the meanings assigned
to them in the Standard Terms.
[SIGNATURE PAGE FOLLOWS]
UST Sequence No. 1163
F-2
IN WITNESS WHEREOF, this Officer's Certificate has been duly executed and
delivered as of the [ 1 day of [
1, 201 1.
[COMPANY]
By:
Name:
Title:
UST Sequence No. 1163
F-3
EXHIBIT A
NEW CONTRACTS AND MATERIAL AGREEMENTS
UST Sequence No. 1163
Exh. A-1
EXHIBIT B
BOARD OF DIRECTORS
CERTIFIED ENTITY: [CERTIFIED ENTITY] l
NAME
I
ADDRESS
NARRATIVE2
Include chart for each Certified Entity.
2
To the extent (x) any of the individuals was not a member of the board of directors of such Certified
Entity as of the last certification to the Investor, include a narrative describing such individual's
relationship to the applicable Investment Area(s) and Targeted Population(s) or, (y) if such Certified
Entity maintains accountability to residents of the applicable Investment Area(s) or Target Population(s)
through means other than representation on its governing board of directors and such means have changed
since the date of the last certification to the Investor, a narrative describing such change.
UST Sequence No. 1163
Exh. B-1
In Re: UST Sequence No. 1163
SCHEDULE A
ADDITIONAL TERMS AND CONDITIONS
Company Information:
Name of the Company: IBC Bancorp, Inc.
Corporate or other organizational form of Company: Corporation
Jurisdiction of Organization of Company: Illinois
Appropriate Federal Banking Agency of Company: The Federal Reserve
Name of Certified Entities: International Bank of Chicago
Corporate or other organizational form of each Certified Entity: Bank
Jurisdiction of Organization of each Certified Entity: Illinois
Appropriate Federal Banking Agency of each Certified Entity: Federal Deposit
Insurance Corporation
Notice Information: Frank Wang
International Bank of Chicago
Terms of the Exchange:
Aggregate Principal Amount of CDCI Senior Subordinated Securities exchanged in the
form of Annex D: $4,205,000
Denomination Amount Of CDCI Senior Subordinated Securities: $1,000
Number of CDCI Senior Subordinated Securities Exchanged: 4,205
Dividend Payment Dates on the CDCI Senior Subordinated Securities: Payable quarterly
in arrears on February 15, May 15, August 15 and November 15 of each year.
Maturity of CDCI Senior Subordinated Securities exchanged: 30 years
CPP Senior Subordinated Securities exchanged: 7.7% Senior Subordinated Securities
Due 2039
Number of CPP Senior Subordinated Securities: 4,205
In Re: UST Sequence No. 1163
Date of Letter Agreement pursuant to which CPP Senior Subordinated Securities were
purchased: May 15, 2009
Closing:
Location of Closing: Telephonic
Time of Closing: 10 AM (EST)
Date of Closing: September 10, 2010
In Re: UST Sequence No. 1163
SCHEDULE 13
CAPITALIZATION
Capitalization date: August 31, 2010
S-Corp Capital
Common Stock:
Par value: 0
Total Authorized:
Outstanding
Reserved for benefit plans and other issuances:
Remaining authorized but unissued:
Trust Preferred Securities Outstanding: N/A
Subordinated Debt N/A
Amount of Allowable Tax Distribution for 2009:
Additional Dividends Paid for 2009: 0
Total Dividends Paid in 2009: 0
Holders of 5% or more of any equity
Primary Address
MEM
In Re: UST Sequence No. 1163
SCHEDULE C
MATERIAL ADVERSE EFFECT
List any exceptions to the representation and warranty in Section 3.6 of the Exchange Agreement
— Standard Terms.
If none, please so indicate by checking the box: Z
In Re: UST Sequence No. 1163
SCHEDULE D
LITIGATION
List any exceptions to the representation and warranty in Section 3.10 of the Exchange
Agreement — Standard Terms.
If none, please so indicate by checking the box: M.
In Re: UST Sequence No. 1163
SCHEDULE E
COMPLIANCE WITH LAWS
List any exceptions to the representation and warranty in the second sentence of Section 3.11 of
the Exchange Agreement— Standard Terms.
If none, please so indicate by checking the box: M.
List any exceptions to the representation and warranty in the last sentence of Section 3.11 of the
Exchange Agreement — Standard Terms.
If none, please so indicate by checking the box:
N.
In Re: UST Sequence No. 1163
SCHEDULE F
REGULATORY AGREEMENTS
List any exceptions to the representation and warranty in Section 3.17 of the Exchange
Agreement — Standard Terms.
If none, please so indicate by checking the box:
El .
In Re: UST Sequence No. 1163
SCHEDULE G
AMENDMENT TO CHARTER TO EFFECT SECTION 5.12(b)
List any exceptions to the representation and warranty in Section 3.23 of the Exchange
Agreement Standard Terms.
If none, please so indicate by checking the box: Z.
@FedFRASER