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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): December 3, 2008
CVB FINANCIAL CORP.
(Exact name of registrant as specified in its charter)
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California
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0-10140
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95-3629339 |
(State or other jurisdiction of
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(Commission file number)
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(I.R.S. employer identification |
incorporation or organization)
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number) |
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701 North Haven Avenue, Ontario, California
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91764 |
(Address of principal executive offices)
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(Zip Code) |
Registrants telephone number, including area code: (909) 980-4030
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the
filing obligation of the registrant under any of the following provisions (See General Instruction
A.2.):
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR240.14d-2(b)) |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17
CFR240.13e-(c)) |
TABLE OF CONTENTS
Item 3.02 Unregistered Sales of Equity Securities.
On December 5, 2008 (the Closing Date), CVB Financial Corp. (the Company) issued and sold, and
the United States Department of the Treasury (the U.S. Treasury) purchased, (1) 130,000 shares
(the Preferred Shares) of the Companys Fixed Rate Cumulative Perpetual Preferred Stock, Series
B, liquidation preference of $1,000 per share, and (2) a ten-year warrant (the Warrant) to
purchase up to 1,669,521 shares of the Companys voting common stock, without par value (Common
Stock), at an exercise price of $11.68 per share, for an aggregate purchase price of $130,000,000
in cash pursuant to the U.S. Treasurys TARP Capital Purchase Program.
Both the Preferred Shares and the Warrant were sold in a private placement exempt from registration
pursuant to Section 4(2) of the Securities Act of 1933, as amended.
Cumulative dividends on the Preferred Shares will accrue on the liquidation preference at a rate of
5% per annum for the first five years, and at a rate of 9% per annum thereafter, if, as and when
declared by the Companys Board of Directors out of funds legally available therefor. The Preferred
Shares have no maturity date and rank senior to the Common Stock with respect to the payment of
dividends and distributions and amounts payable upon liquidation, dissolution and winding up of the
Company. Subject to the approval of the Board of Governors of the Federal Reserve System, the
Preferred Shares are redeemable at the option of the Company at 100% of their liquidation
preference (plus any accrued and unpaid dividends), provided, however, that the Preferred Shares
may be redeemed prior to the first dividend payment date falling after the third anniversary of the
Closing Date (February 15, 2012) only if (i) the Company has raised aggregate gross proceeds in one
or more Qualified Equity Offerings (as defined in the letter agreement, dated the Closing Date,
between the Company and the U.S. Treasury (including the Securities Purchase AgreementStandard
Terms incorporated by reference therein) and set forth below (the Purchase Agreement) and set
forth below) in excess of $32.5 million and (ii) the aggregate redemption price does not exceed the
aggregate net proceeds from such Qualified Equity Offerings.
The U.S. Treasury may not transfer a portion or portions of the Warrant with respect to, and/or
exercise the Warrant for more than one-half of, the shares of Common Stock issuable upon exercise
of the Warrant, in the aggregate, until the earlier of (i) the date on which the Company has
received aggregate gross proceeds of not less than $130 million from one or more Qualified Equity
Offerings and (ii) December 31, 2009. In the event the Company completes one or more Qualified
Equity Offerings on or prior to December 31, 2009 that result in the Company receiving aggregate
gross proceeds of at least $130 million, the number of the shares of Common Stock underlying the
portion of the Warrant then held by the U.S. Treasury will be reduced by one-half of the shares of
Common Stock originally covered by the Warrant. For purposes of the foregoing, Qualified Equity
Offering is defined as the sale and issuance for cash by the Company to persons other than the
Company or any Company subsidiary after the Closing Date of shares of perpetual preferred stock,
Common Stock or any combination of such stock, that, in each case, qualify as and may be included
in Tier I capital of the Company at the time of issuance under the applicable risk-based capital
guidelines of the Board of Governors of the Federal Reserve System (other than any such sales and
issuances made pursuant to agreements or arrangements entered into, or pursuant to financing plans
which were publicly announced, on or prior to October 13, 2008). We have also agreed to register
the Preferred Shares, the Warrant and the shares of Common Stock underlying the Warrant as soon as
practicable after the date of the issuance of the Preferred Shares and the Warrant.
The Purchase Agreement pursuant to which the Preferred Shares and the Warrant were sold contains
limitations on the payment of dividends or distributions on the Common Stock (including with
respect to the payment of cash dividends in excess of the Companys current quarterly cash dividend
of $0.085 per share) and on the Companys ability to repurchase, redeem or acquire its Common Stock
or other securities, and subjects the Company to certain of the executive compensation limitations
included in the Emergency Economic Stabilization Act of 2008 (the EESA) until such time as the
U.S. Treasury no longer owns any debt or equity securities acquired through the TARP Capital
Purchase Program. As a condition to the closing of the transaction, each of Messrs. Christopher D.
Myers, Edward J. Biebrich, Jr., Jay W. Coleman, James F. Dowd, Todd E. Hollander and Christopher
Walters, the Companys Senior Executive Officers (as defined in the Purchase Agreement) (the
Senior Executive Officers), (i) executed a waiver (the Waiver) voluntarily waiving any claim
against the U.S. Treasury or the Company for any changes to such Senior Executive Officers
compensation or benefits that are required to comply with the regulations issued by the U.S.
Treasury under the TARP Capital Purchase Program as published in the Federal Register on
October 20, 2008 and acknowledging that the regulation may require modification of the
compensation,
bonus, incentive and other benefit plans, arrangements and policies and agreements (including
so-called golden parachute agreements) (collectively, Benefit Plans) as they relate to the
period the U.S. Treasury holds any equity or debt securities of the Company acquired through the
TARP Capital Purchase Program; and (ii) entered into a consent letter with the Company amending the
Benefit Plans with respect to such Senior Executive Officer as may be necessary, during the period
that the U.S. Treasury owns any debt or equity securities of the Company acquired pursuant to the
Purchase Agreement or the Warrant, as necessary to comply with Section 111(b) of the EESA. A
consequence of issuing the Preferred Shares includes certain limitations on executive compensation
that could limit the tax deductibility of compensation the Company pays to executive officers.
Copies of the Purchase Agreement, the form of Warrant, the form of Preferred Share certificate and
the Certificate of Determination with respect to the Preferred Shares are included as exhibits to
this Report on Form 8-K and are incorporated by reference into Items 3.02, 3.03, 5.02 and 5.03.
Item 3.03 Material Modification of the Rights of Security Holders.
The information set forth under Item 3.02 Unregistered Sales of Equity Securities is incorporated
by reference into this Item 3.03.
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Item 5.02 |
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Departure of Directors or Certain Officers; Election of
Directors; Appointment of Certain Officers; Compensatory
Arrangements of Certain Officers. |
(e) The information set forth under Item 3.02 Unregistered Sales of Equity Securities is
incorporated by reference into this Item 5.02.
Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.
On December 3, 2008, the Company filed with the California Secretary of State a Certificate of
Determination establishing the terms of the Preferred Shares. This Certificate of Determination is
filed as an exhibit to this Report on Form 8-K and is incorporated by reference into this
Item 5.03.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
The following exhibits are being filed as part of this Report on Form 8-K:
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3.1, 4.1
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Certificate of Determination with respect to the Preferred Shares, filed December 3, 2008. |
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4.2
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Warrant to purchase up to 1,669,521 shares of Common Stock, issued on December 5, 2008. |
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4.3
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Form of Preferred Share Certificate for Fixed Rate Cumulative Perpetual Preferred Stock, Series B. |
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10.1
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Letter Agreement, dated December 5, 2008, including the Securities Purchase Agreement
Standard Terms incorporated by reference therein, between the Company and the U.S. Treasury. |
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10.2
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Form of Waiver, executed by each of Messrs. Christopher D. Myers, Edward J. Biebrich, Jr., Jay
W. Coleman, James F. Dowd, Christopher Walters and Todd E. Hollander as to certain compensation
benefits. |
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10.3
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Form of Consent, executed by each of Messrs. Christopher D. Myers, Edward J. Biebrich, Jr.,
Jay W. Coleman, James F. Dowd, Christopher A. Walters and Todd E. Hollander, to adoption of
amendments to Benefit Plans as required by Section 111(b) of EESA. |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly
caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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CVB FINANCIAL CORP. |
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(Registrant) |
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Date: December 5, 2008
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By:
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/s/ EDWARD J. BIEBRICH, JR. |
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Name:
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Edward J. Biebrich, Jr.
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Title:
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Executive Vice President and Chief
Financial Officer |
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EXHIBIT INDEX
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3.1, 4.1
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Certificate of Determination with respect to the Preferred Shares, dated December 3,
2008. |
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4.2
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Warrant to purchase up to 1,669,521 shares of Common Stock, issued on December 5, 2008. |
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4.3
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Preferred Share Certificate for Fixed Rate Cumulative Perpetual Preferred Stock, Series B. |
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10.1
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Letter Agreement, dated December 5, 2008, including the Securities Purchase Agreement
Standard Terms incorporated by reference therein, between the Company and the U.S. Treasury. |
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10.2
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Form of Waiver, executed by each of Messrs. Christopher D. Myers, Edward J. Biebrich, Jr.,
Jay W. Coleman, James F. Dowd, Christopher A. Walters and Todd E. Hollander, as to certain
compensation benefits. |
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10.3
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Form of Consent, executed by each of Messrs. Christopher D. Myers, Edward J. Biebrich, Jr.,
Jay W. Coleman, James F. Dowd, Christopher A. Walters and Todd E. Hollander, to adoption of
amendments to Benefit Plans as required by Section 111(b) of EESA. |
exv3w1
EXHIBIT 3.1, 4.1
CERTIFICATE OF DETERMINATION
OF PREFERENCES OF
SERIES B FIXED RATE CUMULATIVE PERPETUAL PREFERRED STOCK
OF
CVB FINANCIAL CORP.,
a California Corporation
The undersigned, Christopher D. Myers and Edward J. Biebrich Jr., hereby certify that:
A. They are the duly elected President and Chief Executive Officer and the Chief Financial
Officer and Assistant Secretary, respectively, of CVB Financial Corp., a California corporation
(the Corporation) organized and existing under the laws of the State of California.
B. The authorized number of shares of Preferred Stock is 20,000,000, none of which have been
issued. The authorized number of shares of Series B Fixed Rate Cumulative Perpetual Preferred
Stock is 130,000, none of which have been issued.
C. Pursuant to authority given by said Corporations articles of incorporation, the Board of
Directors of the Corporation duly has adopted the following recitals and resolutions in accordance
with the relevant provisions of the California Corporations Code:
WHEREAS, the articles of incorporation of the Corporation authorize a class of Preferred
Stock comprising 20,000,000 shares issuable from time to time in one or more series; and
WHEREAS, the Board of Directors of the Corporation is authorized to fix or alter the rights,
preferences, privileges, and restrictions granted to or imposed upon any wholly unissued series of
Preferred Stock including but not limited to the dividend rights, dividend rates, conversion
rights, voting rights, and the liquidation preferences, and the number of shares constituting any
such series and the designation thereof, or any of them; and
WHEREAS, it is the desire of the Board of Directors of the Corporation, pursuant to its
authority as aforesaid, to fix the rights, preferences, restrictions and other matters relating to
Series B Fixed Rate Cumulative Perpetual Preferred Stock and the number of shares constituting such
series;
NOW, THEREFORE, BE IT RESOLVED, that the Board of Directors, in accordance with the articles
of incorporation and bylaws of the Corporation and
applicable law, hereby does create and provide for the issue of a series of Preferred Stock
consisting of 130,000 shares designated as Series B Fixed Rate Cumulative Perpetual
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Preferred
Stock, and does hereby fix the voting and other powers, preferences, and relative, participating,
optional or other rights, and the qualifications, limitations and restrictions thereof, and other
matters relating to the Designated Preferred Stock (as defined below) are as follows:
1. Designation and Number of Shares. There is hereby created out of the authorized and
unissued shares of preferred stock of the Corporation a series of preferred stock designated as the
Series B Fixed Rate Cumulative Perpetual Preferred Stock (the Designated Preferred Stock). The
authorized number of shares of Preferred Stock is 20,000,000, none of which have been issued, and
the authorized number of shares of Designated Preferred Stock is 130,000, none of which has been
issued.
2. Standard Provisions. The Standard Provisions contained in Exhibit A
attached hereto are incorporated by reference as if fully set forth herein and shall be deemed to
be a part of this resolution and the Certificate of Determination.
3. Definitions. The following terms are used in this resolution and the Certificate of
Determination (including the Standard Provisions in Exhibit A hereto) as defined below:
(a) Common Stock means the common stock, no par value per share, of the Corporation.
(b) Dividend Payment Date means February 15, May 15, August 15 and
November 15 of each year.
(c) Junior Stock means the Common Stock, the Series A Preferred Stock and any other
class or series of stock of the Corporation the terms of which expressly provide that it ranks
junior to Designated Preferred Stock as to dividend rights and/or as to rights on liquidation,
dissolution or winding up of the Corporation.
(d) Liquidation Amount means $1,000 per share of Designated Preferred Stock.
(e) Minimum Amount means $32,500,000.
(f) Parity Stock means any class or series of stock of the Corporation (other than
Designated Preferred Stock) the terms of which do not expressly provide that such class or series
will rank senior or junior to Designated Preferred Stock as to dividend rights and/or as to rights
on liquidation, dissolution or winding up of the Corporation (in each case without regard to
whether dividends accrue cumulatively or non-cumulatively).
(g) Signing Date means the Original Issue Date.
(h) Series A Preferred Stock means the Series A Participating Preferred Stock, no
par value, of the Corporation.
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4. Certain Voting Matters. Holders of shares of Designated Preferred Stock will be
entitled to one vote for each such share on any matter on which holders of Designated Preferred
Stock are entitled to vote, including any action by written consent.
RESOLVED FURTHER, that any one of the Chairman of the Board, the President or any Vice
President, acting together with any one of the Secretary, the Chief Financial Officer, the
Treasurer, or any Assistant Secretary or Assistant Treasurer of this Corporation are authorized to
execute, verify, and file a Certificate of Determination of Preferences of Series B Fixed Rate
Cumulative Perpetual Preferred Stock of CVB Financial Corp. in accordance with the foregoing
resolutions and provisions of California law.
D. The Standard Provisions contained in Exhibit A attached hereto are incorporated by
reference as if fully set forth herein and shall be deemed to be a part of this Certificate of
Determination.
[Remainder of Page Intentionally Left Blank]
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The undersigned declare under penalty of perjury under the laws of the State of California
that the matters set forth in the foregoing Certificate of Determination are true and correct to
their own knowledge.
Date: December 3, 2008
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By:
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/s/ Christopher D. Myers |
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Name:
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Christopher D. Myers
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Title:
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President and Chief Executive Officer |
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By:
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/s/ Edward J. Biebrich, Jr. |
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Name:
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Edward J. Biebrich, Jr.
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Title:
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Executive Vice President, Chief |
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Financial Officer and Assistant |
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Secretary |
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EXHIBIT A
STANDARD PROVISIONS
Section 1. General Matters. Each share of Designated Preferred Stock shall be
identical in all respects to every other share of Designated Preferred Stock. The Designated
Preferred Stock shall be perpetual, subject to the provisions of Section 5 of these Standard
Provisions that form a part of the Certificate of Determination. The Designated Preferred Stock
shall rank equally with Parity Stock and shall rank senior to Junior Stock with respect to the
payment of dividends and the distribution of assets in the event of any dissolution, liquidation or
winding up of the Corporation.
Section 2. Standard Definitions. As used herein with respect to Designated Preferred
Stock:
(a) Applicable Dividend Rate means (i) during the period from the Original Issue
Date to, but excluding, the first day of the first Dividend Period commencing on or after the fifth
anniversary of the Original Issue Date, 5% per annum and (ii) from and after the first day of the
first Dividend Period commencing on or after the fifth anniversary of the Original Issue Date, 9%
per annum.
(b) Appropriate Federal Banking Agency means the appropriate Federal banking
agency with respect to the Corporation as defined in Section 3(q) of the Federal Deposit Insurance
Act (12 U.S.C. Section 1813(q)), or any successor provision.
(c) Business Combination means a merger, consolidation, statutory share exchange or
similar transaction that requires the approval of the Corporations stockholders.
(d) Business Day means any day except Saturday, Sunday and any day on which banking
institutions in the State of New York generally are authorized or required by law or other
governmental actions to close.
(e) Bylaws means the bylaws of the Corporation, as they may be amended from time to
time.
(f) Certificate of Determination means the Certificate of Determination of
Preferences of Series B Fixed Rate Cumulative Perpetual Preferred Stock of CVB Financial Corp. or
comparable instrument relating to the Designated Preferred Stock, of which these Standard
Provisions form a part, as it may be amended from time to time.
(g) Charter means the Corporations certificate or articles of incorporation,
articles of association, or similar organizational document.
(h) Dividend Period has the meaning set forth in Section 3(a).
(i) Dividend Record Date has the meaning set forth in Section 3(a).
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(j) Liquidation Preference has the meaning set forth in Section 4(a).
(k) Original Issue Date means the date on which shares of Designated Preferred Stock
are first issued.
(l) Preferred Director has the meaning set forth in Section 7(b).
(m) Preferred Stock means any and all series of preferred stock of the Corporation,
including the Designated Preferred Stock.
(n) Qualified Equity Offering means the sale and issuance for cash by the
Corporation to persons other than the Corporation or any of its subsidiaries after the Original
Issue Date of shares of perpetual Preferred Stock, Common Stock or any combination of such stock,
that, in each case, qualify as and may be included in Tier 1 capital of the Corporation at the time
of issuance under the applicable risk-based capital guidelines of the Corporations Appropriate
Federal Banking Agency (other than any such sales and issuances made pursuant to agreements or
arrangements entered into, or pursuant to financing plans which were publicly announced, on or
prior to October 13, 2008).
(o) Share Dilution Amount has the meaning set forth in Section 3(b).
(p) Standard Provisions mean these Standard Provisions that form a part of the
Certificate of Determination relating to the Designated Preferred Stock.
(q) Successor Preferred Stock has the meaning set forth in Section 5(a).
(r) Voting Parity Stock means, with regard to any matter as to which the holders of
Designated Preferred Stock are entitled to vote as specified in Sections 7(a) and 7(b) of these
Standard Provisions that form a part of the Certificate of Determination, any and all series of
Parity Stock upon which like voting rights have been conferred and are exercisable with respect to
such matter.
Section 3. Dividends.
(a) Rate. Holders of Designated Preferred Stock shall be entitled to receive, on each
share of Designated Preferred Stock if, as and when declared by the Board of Directors or any duly
authorized committee of the Board of Directors, but only out of assets legally available therefor,
cumulative cash dividends with respect to each Dividend Period (as defined below) at a rate per
annum equal to the Applicable Dividend Rate on (i) the Liquidation Amount per share of Designated
Preferred Stock and (ii) the amount of accrued and unpaid dividends for any prior Dividend Period
on such share of Designated Preferred Stock, if any. Such dividends shall begin to accrue and be
cumulative from the Original Issue Date, shall compound on each subsequent Dividend Payment Date
(i.e., no dividends shall accrue on other dividends unless and until the first Dividend Payment
Date for such other dividends has passed without such other dividends having been paid on such
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date) and shall be payable quarterly in arrears on each Dividend Payment Date, commencing with
the first such Dividend Payment Date to occur at least 20 calendar days after the Original Issue
Date. In the event that any Dividend Payment Date would otherwise fall on a day that is not a
Business Day, the dividend payment due on that date will be postponed to the next day that is a
Business Day and no additional dividends will accrue as a result of that postponement. The period
from and including any Dividend Payment Date to, but excluding, the next Dividend Payment Date is a
Dividend Period, provided that the initial Dividend Period shall be the period from and including
the Original Issue Date to, but excluding, the next Dividend Payment Date.
Dividends that are payable on Designated Preferred Stock in respect of any Dividend Period
shall be computed on the basis of a 360-day year consisting of twelve 30-day months. The amount of
dividends payable on Designated Preferred Stock on any date prior to the end of a Dividend Period,
and for the initial Dividend Period, shall be computed on the basis of a 360-day year consisting of
twelve 30-day months, and actual days elapsed over a 30-day month.
Dividends that are payable on Designated Preferred Stock on any Dividend Payment Date will be
payable to holders of record of Designated Preferred Stock as they appear on the stock register of
the Corporation on the applicable record date, which shall be the 15th calendar day immediately
preceding such Dividend Payment Date or such other record date fixed by the Board of Directors or
any duly authorized committee of the Board of Directors that is not more than 60 nor less than 10
days prior to such Dividend Payment Date (each, a Dividend Record Date). Any such day that is a
Dividend Record Date shall be a Dividend Record Date whether or not such day is a Business Day.
Holders of Designated Preferred Stock shall not be entitled to any dividends, whether payable
in cash, securities or other property, other than dividends (if any) declared and payable on
Designated Preferred Stock as specified in this Section 3 (subject to the other provisions of the
Certificate of Determination).
(b) Priority of Dividends. So long as any share of Designated Preferred Stock remains
outstanding, no dividend or distribution shall be declared or paid on the Common Stock or any other
shares of Junior Stock (other than dividends payable solely in shares of Common Stock) or Parity
Stock, subject to the immediately following paragraph in the case of Parity Stock, and no Common
Stock, Junior Stock or Parity Stock shall be, directly or indirectly, purchased, redeemed or
otherwise acquired for consideration by the Corporation or any of its subsidiaries unless all
accrued and unpaid dividends for all past Dividend Periods, including the latest completed Dividend
Period (including, if applicable as provided in Section 3(a) above, dividends on such amount), on
all outstanding shares of Designated Preferred Stock have been or are contemporaneously declared
and paid in full (or have been declared and a sum sufficient for the payment thereof has been set
aside for the benefit of the holders of shares of Designated Preferred Stock on the applicable
record date). The foregoing limitation shall not apply to (i) redemptions, purchases or other
acquisitions of shares of Common Stock or other Junior Stock in connection with the administration
of any employee benefit plan in the ordinary course of business (including
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purchases to offset the Share Dilution Amount (as defined below) pursuant to a publicly
announced repurchase plan) and consistent with past practice, provided that any purchases to offset
the Share Dilution Amount shall in no event exceed the Share Dilution Amount; (ii) purchases or
other acquisitions by a broker-dealer subsidiary of the Corporation solely for the purpose of
market-making, stabilization or customer facilitation transactions in Junior Stock or Parity Stock
in the ordinary course of its business; (iii) purchases by a broker-dealer subsidiary of the
Corporation of capital stock of the Corporation for resale pursuant to an offering by the
Corporation of such capital stock underwritten by such broker-dealer subsidiary; (iv) any dividends
or distributions of rights or Junior Stock in connection with a stockholders rights plan or any
redemption or repurchase of rights pursuant to any stockholders rights plan; (v) the acquisition
by the Corporation or any of its subsidiaries of record ownership in Junior Stock or Parity Stock
for the beneficial ownership of any other persons (other than the Corporation or any of its
subsidiaries), including as trustees or custodians; and (vi) the exchange or conversion of Junior
Stock for or into other Junior Stock or of Parity Stock for or into other Parity Stock (with the
same or lesser aggregate liquidation amount) or Junior Stock, in each case, solely to the extent
required pursuant to binding contractual agreements entered into prior to the Signing Date or any
subsequent agreement for the accelerated exercise, settlement or exchange thereof for Common Stock.
Share Dilution Amount means the increase in the number of diluted shares outstanding (determined
in accordance with generally accepted accounting principles in the United States, and as measured
from the date of the Corporations consolidated financial statements most recently filed with the
Securities and Exchange Commission prior to the Original Issue Date) resulting from the grant,
vesting or exercise of equity-based compensation to employees and equitably adjusted for any stock
split, stock dividend, reverse stock split, reclassification or similar transaction.
When dividends are not paid (or declared and a sum sufficient for payment thereof set aside
for the benefit of the holders thereof on the applicable record date) on any Dividend Payment Date
(or, in the case of Parity Stock having dividend payment dates different from the Dividend Payment
Dates, on a dividend payment date falling within a Dividend Period related to such Dividend Payment
Date) in full upon Designated Preferred Stock and any shares of Parity Stock, all dividends
declared on Designated Preferred Stock and all such Parity Stock and payable on such Dividend
Payment Date (or, in the case of Parity Stock having dividend payment dates different from the
Dividend Payment Dates, on a dividend payment date falling within the Dividend Period related to
such Dividend Payment Date) shall be declared pro rata so that the respective amounts of such
dividends declared shall bear the same ratio to each other as all accrued and unpaid dividends per
share on the shares of Designated Preferred Stock (including, if applicable as provided in Section
3(a) above, dividends on such amount) and all Parity Stock payable on such Dividend Payment Date
(or, in the case of Parity Stock having dividend payment dates different from the Dividend Payment
Dates, on a dividend payment date falling within the Dividend Period related to such Dividend
Payment Date) (subject to their having been declared by the Board of Directors or a duly authorized
committee of the Board of Directors out of legally available funds and including, in the case of
Parity Stock that bears cumulative dividends, all accrued but unpaid dividends) bear to each other.
If the Board of Directors or a duly authorized
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committee of the Board of Directors determines not to pay any dividend or a full dividend on a
Dividend Payment Date, the Corporation will provide written notice to the holders of Designated
Preferred Stock prior to such Dividend Payment Date.
Subject to the foregoing, and not otherwise, such dividends (payable in cash, securities or
other property) as may be determined by the Board of Directors or any duly authorized committee of
the Board of Directors may be declared and paid on any securities, including Common Stock and other
Junior Stock, from time to time out of any funds legally available for such payment, and holders of
Designated Preferred Stock shall not be entitled to participate in any such dividends.
Section 4. Liquidation Rights.
(a) Voluntary or Involuntary Liquidation. In the event of any liquidation, dissolution
or winding up of the affairs of the Corporation, whether voluntary or involuntary, holders of
Designated Preferred Stock shall be entitled to receive for each share of Designated Preferred
Stock, out of the assets of the Corporation or proceeds thereof (whether capital or surplus)
available for distribution to stockholders of the Corporation, subject to the rights of any
creditors of the Corporation, before any distribution of such assets or proceeds is made to or set
aside for the holders of Common Stock and any other stock of the Corporation ranking junior to
Designated Preferred Stock as to such distribution, payment in full in an amount equal to the sum
of (i) the Liquidation Amount per share and (ii) the amount of any accrued and unpaid dividends
(including, if applicable as provided in Section 3(a) above, dividends on such amount), whether or
not declared, to the date of payment (such amounts collectively, the Liquidation
Preference).
(b) Partial Payment. If in any distribution described in Section 4(a) above the assets
of the Corporation or proceeds thereof are not sufficient to pay in full the amounts payable with
respect to all outstanding shares of Designated Preferred Stock and the corresponding amounts
payable with respect of any other stock of the Corporation ranking equally with Designated
Preferred Stock as to such distribution, holders of Designated Preferred Stock and the holders of
such other stock shall share ratably in any such distribution in proportion to the full respective
distributions to which they are entitled.
(c) Residual Distributions. If the Liquidation Preference has been paid in full to all
holders of Designated Preferred Stock and the corresponding amounts payable with respect of any
other stock of the Corporation ranking equally with Designated Preferred Stock as to such
distribution has been paid in full, the holders of other stock of the Corporation shall be entitled
to receive all remaining assets of the Corporation (or proceeds thereof) according to their
respective rights and preferences.
(d) Merger, Consolidation and Sale of Assets Not Liquidation. For purposes of this
Section 4, the merger or consolidation of the Corporation with any other corporation or other
entity, including a merger or consolidation in which the holders of
5
Designated Preferred Stock receive cash, securities or other property for their shares, or the
sale, lease or exchange (for cash, securities or other property) of all or substantially all of the
assets of the Corporation, shall not constitute a liquidation, dissolution or winding up of the
Corporation.
Section 5. Redemption.
(a) Optional Redemption. Except as provided below, the Designated Preferred Stock may
not be redeemed prior to the first Dividend Payment Date falling on or after the third anniversary
of the Original Issue Date. On or after the first Dividend Payment Date falling on or after the
third anniversary of the Original Issue Date, the Corporation, at its option, subject to the
approval of the Appropriate Federal Banking Agency, may redeem, in whole or in part, at any time
and from time to time, out of funds legally available therefor, the shares of Designated Preferred
Stock at the time outstanding, upon notice given as provided in Section 5(c) below, at a redemption
price equal to the sum of (i) the Liquidation Amount per share and (ii) except as otherwise
provided below, any accrued and unpaid dividends (including, if applicable as provided in Section
3(a) above, dividends on such amount) (regardless of whether any dividends are actually declared)
to, but excluding, the date fixed for redemption.
Notwithstanding the foregoing, prior to the first Dividend Payment Date falling on or after
the third anniversary of the Original Issue Date, the Corporation, at its option, subject to the
approval of the Appropriate Federal Banking Agency, may redeem, in whole or in part, at any time
and from time to time, the shares of Designated Preferred Stock at the time outstanding, upon
notice given as provided in Section 5(c) below, at a redemption price equal to the sum of (i) the
Liquidation Amount per share and (ii) except as otherwise provided below, any accrued and unpaid
dividends (including, if applicable as provided in Section 3(a) above, dividends on such amount)
(regardless of whether any dividends are actually declared) to, but excluding, the date fixed for
redemption; provided that (x) the Corporation (or any successor by Business Combination) has
received aggregate gross proceeds of not less than the Minimum Amount (plus the Minimum Amount as
defined in the relevant certificate of determination for each other outstanding series of preferred
stock of such successor that was originally issued to the United States Department of the Treasury
(the Successor Preferred Stock) in connection with the Troubled Asset Relief Program Capital
Purchase Program) from one or more Qualified Equity Offerings (including Qualified Equity Offerings
of such successor), and (y) the aggregate redemption price of the Designated Preferred Stock (and
any Successor Preferred Stock) redeemed pursuant to this paragraph may not exceed the aggregate net
cash proceeds received by the Corporation (or any successor by Business Combination) from such
Qualified Equity Offerings (including Qualified Equity Offerings of such successor).
The redemption price for any shares of Designated Preferred Stock shall be payable on the
redemption date to the holder of such shares against surrender of the certificate(s) evidencing
such shares to the Corporation or its agent. Any declared but unpaid dividends payable on a
redemption date that occurs subsequent to the Dividend
6
Record Date for a Dividend Period shall not be paid to the holder entitled to receive the
redemption price on the redemption date, but rather shall be paid to the holder of record of the
redeemed shares on such Dividend Record Date relating to the Dividend Payment Date as provided in
Section 3 above.
(b) No Sinking Fund. The Designated Preferred Stock will not be subject to any
mandatory redemption, sinking fund or other similar provisions. Holders of Designated Preferred
Stock will have no right to require redemption or repurchase of any shares of Designated Preferred
Stock.
(c) Notice of Redemption. Notice of every redemption of shares of Designated Preferred
Stock shall be given by first class mail, postage prepaid, addressed to the holders of record of
the shares to be redeemed at their respective last addresses appearing on the books of the
Corporation. Such mailing shall be at least 30 days and not more than 60 days before the date fixed
for redemption. 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 shares of
Designated Preferred Stock designated for redemption shall not affect the validity of the
proceedings for the redemption of any other shares of Designated Preferred Stock. Notwithstanding
the foregoing, if shares of Designated Preferred Stock are issued in book-entry form through The
Depository Trust Corporation or any other similar facility, notice of redemption may be given to
the holders of Designated Preferred Stock 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
number of shares of Designated Preferred Stock to be redeemed and, if less than all the shares held
by such holder are to be redeemed, the number of such shares to be redeemed from such holder; (3)
the redemption price; and (4) the place or places where certificates for such shares are to be
surrendered for payment of the redemption price.
(d) Partial Redemption. In case of any redemption of part of the shares of Designated
Preferred Stock at the time outstanding, the shares to be redeemed shall be selected either pro
rata or in such other manner as the Board of Directors or a duly authorized committee thereof may
determine to be fair and equitable. 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 shares of Designated Preferred Stock shall be redeemed from time to time. If
fewer than all the shares represented by any certificate are redeemed, a new certificate shall be
issued representing the unredeemed shares without charge to the holder thereof.
(e) Effectiveness of Redemption. If notice of redemption has been duly given and if on
or before the redemption date specified in the notice all funds necessary for the redemption have
been deposited by the Corporation, in trust for the pro rata benefit of the holders of the shares
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
7
continue to be available solely therefor, then, notwithstanding that any certificate for any
share so called for redemption has not been surrendered for cancellation, on and after the
redemption date dividends shall cease to accrue on all shares so called for redemption, all shares
so called for redemption shall no longer be deemed outstanding and all rights with respect to such
shares shall forthwith on such redemption date cease and terminate, except only the right of the
holders thereof to receive the amount 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 law, be released to the Corporation, after which time the holders of the
shares so called for redemption shall look only to the Corporation for payment of the redemption
price of such shares.
(f) Status of Redeemed Shares. Shares of Designated Preferred Stock that are
redeemed, repurchased or otherwise acquired by the Corporation shall revert to authorized but
unissued shares of Preferred Stock (provided that any such cancelled shares of Designated Preferred
Stock may be reissued only as shares of any series of Preferred Stock other than Designated
Preferred Stock).
Section 6. Conversion. Holders of Designated Preferred Stock shares shall have no
right to exchange or convert such shares into any other securities.
Section 7. Voting Rights.
(a) General. The holders of Designated Preferred Stock shall not have any voting
rights except as set forth below or as otherwise from time to time required by law.
(b) Preferred Stock Directors. Whenever, at any time or times, dividends payable on
the shares of Designated Preferred Stock have not been paid for an aggregate of six quarterly
Dividend Periods or more, whether or not consecutive, the holders of the Designated Preferred Stock
shall have the right, with holders of shares of any one or more other classes or series of Voting
Parity Stock outstanding at the time, voting together as a class, to elect two directors
(hereinafter the Preferred Directors and each a Preferred Director) at the Corporations next
annual meeting of stockholders (or at a special meeting called for that purpose prior to such next
annual meeting) and at each subsequent annual meeting of stockholders until all accrued and unpaid
dividends for all past Dividend Periods, including the latest completed Dividend Period (including,
if applicable as provided in Section 3(a) above, dividends on such amount), on all outstanding
shares of Designated Preferred Stock have been declared and paid in full at which time such right
shall terminate with respect to the Designated Preferred Stock, 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 Preferred
Director that the election of such Preferred Director shall not cause the Corporation to violate
any corporate governance requirements of any securities exchange or other trading facility on which
securities of the Corporation 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
8
shares of Designated Preferred Stock and Voting Parity Stock as a class to vote for directors
as provided above, the Preferred Directors shall cease to be qualified as directors, the term of
office of all Preferred Directors then in office shall terminate immediately and the authorized
number of directors shall be reduced by the number of Preferred Directors elected pursuant hereto.
Any Preferred 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 a majority of the shares of
Designated Preferred Stock at the time outstanding voting separately as a class together with the
holders of shares of Voting Parity Stock, to the extent the voting rights of such holders described
above are then exercisable. If the office of any Preferred Director becomes vacant for any reason
other than removal from office as aforesaid, the remaining Preferred 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 shares of Designated
Preferred Stock are outstanding, in addition to any other vote or written consent of stockholders
required by law or by the Charter, the vote or written consent of the holders of at least 66 2/3%
of the shares of Designated Preferred Stock 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, shall be necessary for effecting or validating:
(i) Authorization of Senior Stock. Any amendment or alteration of the
Certificate of Determination for the Designated Preferred Stock or the Charter to authorize
or create or increase the authorized amount of, or any issuance of, any shares of, or any
securities convertible into or exchangeable or exercisable for shares of, any class or
series of capital stock of the Corporation ranking senior to Designated Preferred Stock
with respect to either or both the payment of dividends and/or the distribution of assets
on any liquidation, dissolution or winding up of the Corporation;
(ii) Amendment of Designated Preferred Stock. Any amendment, alteration or
repeal of any provision of the Certificate of Determination for the Designated Preferred
Stock or the Charter (including, unless no vote on such merger or consolidation is required
by Section 7(c)(iii) 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 Designated Preferred Stock; or
(iii) Share Exchanges, Reclassifications, Mergers and Consolidations. Any
consummation of a binding share exchange or reclassification involving the Designated
Preferred Stock, or of a merger or consolidation of the Corporation with another
corporation or other entity, unless in each case (x) the shares of Designated Preferred
Stock remain outstanding or, in the case of any such merger or consolidation with respect
to which the Corporation is not the surviving or resulting entity, are converted into or
exchanged for preference securities of the
9
surviving or resulting entity or its ultimate parent, and (y) such shares remaining
outstanding or such preference 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 limitations and restrictions thereof, of
Designated Preferred Stock immediately prior to such consummation, taken as a whole;
provided, however, that for all purposes of this Section 7(c), any increase in the amount of the
authorized Preferred Stock, including any increase in the authorized amount of Designated Preferred
Stock necessary to satisfy preemptive or similar rights granted by the Corporation to other persons
prior to the Signing Date, or the creation and issuance, or an increase in the authorized or issued
amount, whether pursuant to preemptive or similar rights or otherwise, of any other series of
Preferred Stock, or any securities convertible into or exchangeable or exercisable for any other
series of Preferred Stock, ranking equally with and/or junior to Designated Preferred Stock with
respect to the payment of dividends (whether such dividends are cumulative or non-cumulative) and
the distribution of assets upon liquidation, dissolution or winding up of the Corporation 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 shares of the Designated
Preferred Stock.
(d) Changes after Provision for Redemption. No vote or consent of the holders of
Designated Preferred Stock shall be required pursuant to Section 7(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 shares of the Designated Preferred Stock 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 above.
(e) Procedures for Voting and Consents. The rules and procedures for calling and
conducting any meeting of the holders of Designated Preferred Stock (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 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
Designated Preferred Stock is listed or traded at the time.
Section 8. Record Holders. To the fullest extent permitted by applicable law, the
Corporation and the transfer agent for Designated Preferred Stock may deem and treat the record
holder of any share of Designated Preferred Stock as the true and lawful owner thereof for all
purposes, and neither the Corporation nor such transfer agent shall be affected by any notice to
the contrary.
10
Section 9. Notices. All notices or communications in respect of Designated Preferred
Stock shall be sufficiently given if given in writing and delivered in person or by first class
mail, postage prepaid, or if given in such other manner as may be permitted in this Certificate of
Determination, in the Charter or Bylaws or by applicable law. Notwithstanding the foregoing, if
shares of Designated Preferred Stock are issued in book-entry form through The Depository Trust
Corporation or any similar facility, such notices may be given to the holders of Designated
Preferred Stock in any manner permitted by such facility.
Section 10. No Preemptive Rights. No share of Designated Preferred Stock shall have
any rights of preemption whatsoever as to any securities of the Corporation, or any warrants,
rights or options issued or granted with respect thereto, regardless of how such securities, or
such warrants, rights or options, may be designated, issued or granted.
Section 11. Replacement Certificates. The Corporation shall replace any mutilated
certificate at the holders expense upon surrender of that certificate to the Corporation. The
Corporation shall replace certificates that become destroyed, stolen or lost at the holders
expense upon delivery to the Corporation of reasonably satisfactory evidence that the certificate
has been destroyed, stolen or lost, together with any indemnity that may be reasonably required by
the Corporation.
Section 12. Other Rights. The shares of Designated Preferred Stock shall not have any
rights, preferences, privileges or voting powers or relative, participating, optional or other
special rights, or qualifications, limitations or restrictions thereof, other than as set forth
herein or in the Charter or as provided by applicable law.
11
exv4w2
EXHIBIT 4.2
WARRANT TO PURCHASE COMMON STOCK
THE SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE TRANSFERRED, SOLD OR OTHERWISE
DISPOSED OF EXCEPT WHILE A REGISTRATION STATEMENT RELATING THERETO IS IN EFFECT UNDER SUCH ACT AND
APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT OR
SUCH LAWS. THIS INSTRUMENT IS ISSUED SUBJECT TO THE RESTRICTIONS ON TRANSFER AND OTHER PROVISIONS
OF A SECURITIES PURCHASE AGREEMENT BETWEEN THE ISSUER OF THESE SECURITIES AND THE INVESTOR REFERRED
TO THEREIN, A COPY OF WHICH IS ON FILE WITH THE ISSUER. THE SECURITIES REPRESENTED BY THIS
INSTRUMENT MAY NOT BE SOLD OR OTHERWISE TRANSFERRED EXCEPT IN COMPLIANCE WITH SAID AGREEMENT. ANY
SALE OR OTHER TRANSFER NOT IN COMPLIANCE WITH SAID AGREEMENT WILL BE VOID.
WARRANT
to purchase
1,669,521
Shares of Common Stock
of CVB Financial Corp.
Issue Date: December 5, 2008
1. Definitions. Unless the context otherwise requires, when used herein the following
terms shall have the meanings indicated.
Affiliate has the meaning ascribed to it in the Purchase Agreement.
Appraisal Procedure means a procedure whereby two independent appraisers, one chosen by the
Company and one by the Original Warrantholder, shall mutually agree upon the determinations then
the subject of appraisal. Each party shall deliver a notice to the other appointing its appraiser
within 15 days after the Appraisal Procedure is invoked. If within 30 days after appointment of
the two appraisers they are unable to agree upon the amount in question, a third independent
appraiser shall be chosen within 10 days thereafter by the mutual consent of such first two
appraisers. The decision of the third appraiser so appointed and chosen shall be given within 30
days after the selection of such third appraiser. If three appraisers shall be appointed and the
determination of one appraiser is disparate from the middle determination by more than twice the
amount by which the other determination is disparate from the middle determination, then the
determination of such appraiser shall be excluded, the remaining two determinations shall be
averaged and such average shall be binding and conclusive upon the Company and the Original
Warrantholder; otherwise, the average of all three determinations shall be binding upon the Company
and the Original Warrantholder. The costs of conducting any Appraisal Procedure shall be borne by
the Company.
1
Board of Directors means the board of directors of the Company, including any duly
authorized committee thereof.
Business Combination means a merger, consolidation, statutory share exchange or similar
transaction that requires the approval of the Companys stockholders.
business day means any day except Saturday, Sunday and any day on which banking institutions
in the State of New York generally are authorized or required by law or other governmental actions
to close.
Capital Stock means (A) with respect to any Person that is a corporation or company, any and
all shares, interests, participations or other equivalents (however designated) of capital or
capital stock of such Person and (B) with respect to any Person that is not a corporation or
company, any and all partnership or other equity interests of such Person.
Charter means, with respect to any Person, its certificate or articles of incorporation,
articles of association, or similar organizational document.
Common Stock has the meaning ascribed to it in the Purchase Agreement.
Company means the Person whose name, corporate or other organizational form and jurisdiction
of organization is set forth in Item 1 of Schedule A hereto.
conversion has the meaning set forth in Section 13(B).
convertible securities has the meaning set forth in Section 13(B).
CPP has the meaning ascribed to it in the Purchase Agreement.
Exchange Act means the Securities Exchange Act of 1934, as amended, or any successor
statute, and the rules and regulations promulgated thereunder.
Exercise Price means the amount set forth in Item 2 of Schedule A hereto.
Expiration Time has the meaning set forth in Section 3.
Fair Market Value means, with respect to any security or other property, the fair market
value of such security or other property as determined by the Board of Directors, acting in good
faith or, with respect to Section 14, as determined by the Original Warrantholder acting in good
faith. For so long as the Original Warrantholder holds this Warrant or any portion thereof, it may
object in writing to the Board of Directors calculation of fair market value within 10 days of
receipt of written notice thereof. If the Original Warrantholder and the Company are unable to
agree on fair market value during the 10-day period following the delivery of the Original
Warrantholders objection, the Appraisal Procedure may be invoked by either party to determine Fair
Market Value by delivering written notification thereof not later than the 30th day
after delivery of the Original Warrantholders objection.
Governmental Entities has the meaning ascribed to it in the Purchase Agreement.
2
Initial Number has the meaning set forth in Section 13(B).
Issue Date means the date set forth in Item 3 of Schedule A hereto.
Market Price means, with respect to a particular security, on any given day, the last
reported sale price regular way or, in case no such reported sale takes place on such day, the
average of the last closing bid and ask prices regular way, in either case on the principal
national securities exchange on which the applicable securities are listed or admitted to trading,
or if not listed or admitted to trading on any national securities exchange, the average of the
closing bid and ask prices as furnished by two members of the Financial Industry Regulatory
Authority, Inc. selected from time to time by the Company for that purpose. Market Price shall
be determined without reference to after hours or extended hours trading. If such security is not
listed and traded in a manner that the quotations referred to above are available for the period
required hereunder, the Market Price per share of Common Stock shall be deemed to be (i) in the
event that any portion of the Warrant is held by the Original Warrantholder, the fair market value
per share of such security as determined in good faith by the Original Warrantholder or (ii) in all
other circumstances, the fair market value per share of such security as determined in good faith
by the Board of Directors in reliance on an opinion of a nationally recognized independent
investment banking corporation retained by the Company for this purpose and certified in a
resolution to the Warrantholder. For the purposes of determining the Market Price of the Common
Stock on the trading day preceding, on or following the occurrence of an event, (i) that trading
day shall be deemed to commence immediately after the regular scheduled closing time of trading on
the New York Stock Exchange or, if trading is closed at an earlier time, such earlier time and
(ii) that trading day shall end at the next regular scheduled closing time, or if trading is closed
at an earlier time, such earlier time (for the avoidance of doubt, and as an example, if the Market
Price is to be determined as of the last trading day preceding a specified event and the closing
time of trading on a particular day is 4:00 p.m. and the specified event occurs at 5:00 p.m. on
that day, the Market Price would be determined by reference to such 4:00 p.m. closing price).
Ordinary Cash Dividends means a regular quarterly cash dividend on shares of Common Stock
out of surplus or net profits legally available therefor (determined in accordance with generally
accepted accounting principles in effect from time to time), provided that Ordinary Cash Dividends
shall not include any cash dividends paid subsequent to the Issue Date to the extent the aggregate
per share dividends paid on the outstanding Common Stock in any quarter exceed the amount set forth
in Item 4 of Schedule A hereto, as adjusted for any stock split, stock dividend, reverse stock
split, reclassification or similar transaction.
Original Warrantholder means the United States Department of the Treasury. Any actions
specified to be taken by the Original Warrantholder hereunder may only be taken by such Person and
not by any other Warrantholder.
Permitted Transactions has the meaning set forth in Section 13(B).
Person has the meaning given to it in Section 3(a)(9) of the Exchange Act and as used in
Sections 13(d)(3) and 14(d)(2) of the Exchange Act.
3
Per Share Fair Market Value has the meaning set forth in Section 13(C).
Preferred Shares means the perpetual preferred stock issued to the Original Warrantholder on
the Issue Date pursuant to the Purchase Agreement.
Pro Rata Repurchases means any purchase of shares of Common Stock by the Company or any
Affiliate thereof pursuant to (A) any tender offer or exchange offer subject to Section 13(e) or
14(e) of the Exchange Act or Regulation 14E promulgated thereunder or (B) any other offer available
to substantially all holders of Common Stock, in the case of both (A) or (B), whether for cash,
shares of Capital Stock of the Company, other securities of the Company, evidences of indebtedness
of the Company or any other Person or any other property (including, without limitation, shares of
Capital Stock, other securities or evidences of indebtedness of a subsidiary), or any combination
thereof, effected while this Warrant is outstanding. The Effective Date of a Pro Rata Repurchase
shall mean the date of acceptance of shares for purchase or exchange by the Company under any
tender or exchange offer which is a Pro Rata Repurchase or the date of purchase with respect to any
Pro Rata Repurchase that is not a tender or exchange offer.
Purchase Agreement means the Securities Purchase Agreement Standard Terms incorporated
into the Letter Agreement, dated as of the date set forth in Item 5 of Schedule A hereto, as
amended from time to time, between the Company and the United States Department of the Treasury
(the Letter Agreement), including all annexes and schedules thereto.
Qualified Equity Offering has the meaning ascribed to it in the Purchase Agreement.
Regulatory Approvals with respect to the Warrantholder, means, to the extent applicable and
required to permit the Warrantholder to exercise this Warrant for shares of Common Stock and to own
such Common Stock without the Warrantholder being in violation of applicable law, rule or
regulation, the receipt of any necessary approvals and authorizations of, filings and registrations
with, notifications to, or expiration or termination of any applicable waiting period under, the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the rules and regulations
thereunder.
SEC means the U.S. Securities and Exchange Commission.
Securities Act means the Securities Act of 1933, as amended, or any successor statute, and
the rules and regulations promulgated thereunder.
Shares has the meaning set forth in Section 2.
trading day means (A) if the shares of Common Stock are not traded on any national or
regional securities exchange or association or over-the-counter market, a business day or (B) if
the shares of Common Stock are traded on any national or regional securities exchange or
association or over-the-counter market, a business day on which such relevant exchange or quotation
system is scheduled to be open for business and on which the shares of Common Stock (i) are not
suspended from trading on any national or regional securities exchange or association or
over-the-counter market for any period or periods aggregating one half hour or longer; and
(ii) have traded at least once on the national or regional securities exchange or association or
4
over-the-counter market that is the primary market for the trading of the shares of Common
Stock.
U.S. GAAP means United States generally accepted accounting principles.
Warrantholder has the meaning set forth in Section 2.
Warrant means this Warrant, issued pursuant to the Purchase Agreement.
2. Number of Shares; Exercise Price. This certifies that, for value received, the
United States Department of the Treasury or its permitted assigns (the Warrantholder) is
entitled, upon the terms and subject to the conditions hereinafter set forth, to acquire from the
Company, in whole or in part, after the receipt of all applicable Regulatory Approvals, if any, up
to an aggregate of the number of fully paid and nonassessable shares of Common Stock set forth in
Item 6 of Schedule A hereto, at a purchase price per share of Common Stock equal to the Exercise
Price. The number of shares of Common Stock (the Shares) and the Exercise Price are subject to
adjustment as provided herein, and all references to Common Stock, Shares and Exercise Price
herein shall be deemed to include any such adjustment or series of adjustments.
3. Exercise of Warrant; Term. Subject to Section 2, to the extent permitted by
applicable laws and regulations, the right to purchase the Shares represented by this Warrant is
exercisable, in whole or in part by the Warrantholder, at any time or from time to time after the
execution and delivery of this Warrant by the Company on the date hereof, but in no event later
than 5:00 p.m., New York City time on the tenth anniversary of the Issue Date (the Expiration
Time), by (A) the surrender of this Warrant and Notice of Exercise annexed hereto, duly completed
and executed on behalf of the Warrantholder, at the principal executive office of the Company
located at the address set forth in Item 7 of Schedule A hereto (or such other office or agency of
the Company in the United States as it may designate by notice in writing to the Warrantholder at
the address of the Warrantholder appearing on the books of the Company), and (B) payment of the
Exercise Price for the Shares thereby purchased:
(i) by having the Company withhold, from the shares of Common Stock that would
otherwise be delivered to the Warrantholder upon such exercise, shares of Common stock
issuable upon exercise of the Warrant equal in value to the aggregate Exercise Price as to
which this Warrant is so exercised based on the Market Price of the Common Stock on the
trading day on which this Warrant is exercised and the Notice of Exercise is delivered to
the Company pursuant to this Section 3, or
(ii) with the consent of both the Company and the Warrantholder, by tendering in cash,
by certified or cashiers check payable to the order of the Company, or by wire transfer of
immediately available funds to an account designated by the Company.
If the Warrantholder does not exercise this Warrant in its entirety, the Warrantholder
will be entitled to receive from the Company within a reasonable time, and in any event not
exceeding three business days, a new warrant in substantially identical form for the
purchase of that number of Shares equal to the difference between
5
the number of Shares subject to this Warrant and the number of Shares as to which this
Warrant is so exercised. Notwithstanding anything in this Warrant to the contrary, the
Warrantholder hereby acknowledges and agrees that its exercise of this Warrant for Shares is
subject to the condition that the Warrantholder will have first received any applicable
Regulatory Approvals.
4. Issuance of Shares; Authorization; Listing. Certificates for Shares issued upon
exercise of this Warrant will be issued in such name or names as the Warrantholder may designate
and will be delivered to such named Person or Persons within a reasonable time, not to exceed three
business days after the date on which this Warrant has been duly exercised in accordance with the
terms of this Warrant. The Company hereby represents and warrants that any Shares issued upon the
exercise of this Warrant in accordance with the provisions of Section 3 will be duly and validly
authorized and issued, fully paid and nonassessable and free from all taxes, liens and charges
(other than liens or charges created by the Warrantholder, income and franchise taxes incurred in
connection with the exercise of the Warrant or taxes in respect of any transfer occurring
contemporaneously therewith). The Company agrees that the Shares so issued will be deemed to have
been issued to the Warrantholder as of the close of business on the date on which this Warrant and
payment of the Exercise Price are delivered to the Company in accordance with the terms of this
Warrant, notwithstanding that the stock transfer books of the Company may then be closed or
certificates representing such Shares may not be actually delivered on such date. The Company will
at all times reserve and keep available, out of its authorized but unissued Common Stock, solely
for the purpose of providing for the exercise of this Warrant, the aggregate number of shares of
Common Stock then issuable upon exercise of this Warrant at any time. The Company will
(A) procure, at its sole expense, the listing of the Shares issuable upon exercise of this Warrant
at any time, subject to issuance or notice of issuance, on all principal stock exchanges on which
the Common Stock is then listed or traded and (B) maintain such listings of such Shares at all
times after issuance. The Company will use reasonable best efforts to ensure that the Shares may
be issued without violation of any applicable law or regulation or of any requirement of any
securities exchange on which the Shares are listed or traded.
5. No Fractional Shares or Scrip. No fractional Shares or scrip representing
fractional Shares shall be issued upon any exercise of this Warrant. In lieu of any fractional
Share to which the Warrantholder would otherwise be entitled, the Warrantholder shall be entitled
to receive a cash payment equal to the Market Price of the Common Stock on the last trading day
preceding the date of exercise less the pro-rated Exercise Price for such fractional share.
6. No Rights as Stockholders; Transfer Books. This Warrant does not entitle the
Warrantholder to any voting rights or other rights as a stockholder of the Company prior to the
date of exercise hereof. The Company will at no time close its transfer books against transfer of
this Warrant in any manner which interferes with the timely exercise of this Warrant.
7. Charges, Taxes and Expenses. Issuance of certificates for Shares to the
Warrantholder upon the exercise of this Warrant shall be made without charge to the Warrantholder
for any issue or transfer tax or other incidental expense in respect of the issuance of such
certificates, all of which taxes and expenses shall be paid by the Company.
6
8. Transfer/Assignment.
(A) Subject to compliance with clause (B) of this Section 8, this Warrant and all rights
hereunder are transferable, in whole or in part, upon the books of the Company by the registered
holder hereof in person or by duly authorized attorney, and a new warrant shall be made and
delivered by the Company, of the same tenor and date as this Warrant but registered in the name of
one or more transferees, upon surrender of this Warrant, duly endorsed, to the office or agency of
the Company described in Section 3. All expenses (other than stock transfer taxes) and other
charges payable in connection with the preparation, execution and delivery of the new warrants
pursuant to this Section 8 shall be paid by the Company.
(B) The transfer of the Warrant and the Shares issued upon exercise of the Warrant are subject
to the restrictions set forth in Section 4.4 of the Purchase Agreement. If and for so long as
required by the Purchase Agreement, this Warrant shall contain the legends as set forth in Sections
4.2(a) and 4.2(b) of the Purchase Agreement.
9. Exchange and Registry of Warrant. This Warrant is exchangeable, upon the surrender
hereof by the Warrantholder to the Company, for a new warrant or warrants of like tenor and
representing the right to purchase the same aggregate number of Shares. The Company shall maintain
a registry showing the name and address of the Warrantholder as the registered holder of this
Warrant. This Warrant may be surrendered for exchange or exercise in accordance with its terms, at
the office of the Company, and the Company shall be entitled to rely in all respects, prior to
written notice to the contrary, upon such registry.
10. Loss, Theft, Destruction or Mutilation of Warrant. Upon receipt by the Company of
evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation of this
Warrant, and in the case of any such loss, theft or destruction, upon receipt of a bond, indemnity
or security reasonably satisfactory to the Company, or, in the case of any such mutilation, upon
surrender and cancellation of this Warrant, the Company shall make and deliver, in lieu of such
lost, stolen, destroyed or mutilated Warrant, a new Warrant of like tenor and representing the
right to purchase the same aggregate number of Shares as provided for in such lost, stolen,
destroyed or mutilated Warrant.
11. Saturdays, Sundays, Holidays, etc. If the last or appointed day for the taking of
any action or the expiration of any right required or granted herein shall not be a business day,
then such action may be taken or such right may be exercised on the next succeeding day that is a
business day.
12. Rule 144 Information. The Company covenants that it will use its reasonable best
efforts to timely file all reports and other documents required to be filed by it under the
Securities Act and the Exchange Act and the rules and regulations promulgated by the SEC thereunder
(or, if the Company is not required to file such reports, it will, upon the request of any
Warrantholder, make publicly available such information as necessary to permit sales pursuant to
Rule 144 under the Securities Act), and it will use reasonable best efforts to take such further
action as any Warrantholder may reasonably request, in each case to the extent required from time
to time to enable such holder to, if permitted by the terms of this Warrant and the Purchase
Agreement, sell this Warrant without registration under the Securities Act within the limitation
7
of the exemptions provided by (A) Rule 144 under the Securities Act, as such rule may be
amended from time to time, or (B) any successor rule or regulation hereafter adopted by the SEC.
Upon the written request of any Warrantholder, the Company will deliver to such Warrantholder a
written statement that it has complied with such requirements.
13. Adjustments and Other Rights. The Exercise Price and the number of Shares
issuable upon exercise of this Warrant shall be subject to adjustment from time to time as follows;
provided, that if more than one subsection of this Section 13 is applicable to a single event, the
subsection shall be applied that produces the largest adjustment and no single event shall cause an
adjustment under more than one subsection of this Section 13 so as to result in duplication:
(A) Stock Splits, Subdivisions, Reclassifications or Combinations. If the Company
shall (i) declare and pay a dividend or make a distribution on its Common Stock in shares of Common
Stock, (ii) subdivide or reclassify the outstanding shares of Common Stock into a greater number of
shares, or (iii) combine or reclassify the outstanding shares of Common Stock into a smaller number
of shares, the number of Shares issuable upon exercise of this Warrant at the time of the record
date for such dividend or distribution or the effective date of such subdivision, combination or
reclassification shall be proportionately adjusted so that the Warrantholder after such date shall
be entitled to purchase the number of shares of Common Stock which such holder would have owned or
been entitled to receive in respect of the shares of Common Stock subject to this Warrant after
such date had this Warrant been exercised immediately prior to such date. In such event, the
Exercise Price in effect at the time of the record date for such dividend or distribution or the
effective date of such subdivision, combination or reclassification shall be adjusted to the number
obtained by dividing (x) the product of (1) the number of Shares issuable upon the exercise of this
Warrant before such adjustment and (2) the Exercise Price in effect immediately prior to the record
or effective date, as the case may be, for the dividend, distribution, subdivision, combination or
reclassification giving rise to this adjustment by (y) the new number of Shares issuable upon
exercise of the Warrant determined pursuant to the immediately preceding sentence.
(B) Certain Issuances of Common Shares or Convertible Securities. Until the earlier
of (i) the date on which the Original Warrantholder no longer holds this Warrant or any portion
thereof and (ii) the third anniversary of the Issue Date, if the Company shall issue shares of
Common Stock (or rights or warrants or other securities exercisable or convertible into or
exchangeable (collectively, a conversion) for shares of Common Stock) (collectively, convertible
securities) (other than in Permitted Transactions (as defined below) or a transaction to which
subsection (A) of this Section 13 is applicable) without consideration or at a consideration per
share (or having a conversion price per share) that is less than 90% of the Market Price on the
last trading day preceding the date of the agreement on pricing such shares (or such convertible
securities) then, in such event:
(A) the number of Shares issuable upon the exercise of this Warrant immediately prior
to the date of the agreement on pricing of such shares (or of such convertible securities)
(the Initial Number) shall be increased to the number obtained by multiplying the Initial
Number by a fraction (A) the numerator of which shall be the sum of (x) the number of shares
of Common Stock of the Company outstanding on such
8
date and (y) the number of additional shares of Common Stock issued (or into which
convertible securities may be exercised or convert) and (B) the denominator of which shall
be the sum of (I) the number of shares of Common Stock outstanding on such date and (II) the
number of shares of Common Stock which the aggregate consideration receivable by the Company
for the total number of shares of Common Stock so issued (or into which convertible
securities may be exercised or convert) would purchase at the Market Price on the last
trading day preceding the date of the agreement on pricing such shares (or such convertible
securities); and
(B) the Exercise Price payable upon exercise of the Warrant shall be adjusted by
multiplying such Exercise Price in effect immediately prior to the date of the agreement on
pricing of such shares (or of such convertible securities) by a fraction, the numerator of
which shall be the number of shares of Common Stock issuable upon exercise of this Warrant
prior to such date and the denominator of which shall be the number of shares of Common
Stock issuable upon exercise of this Warrant immediately after the adjustment described in
clause (A) above.
For purposes of the foregoing, the aggregate consideration receivable by the Company in
connection with the issuance of such shares of Common Stock or convertible securities shall be
deemed to be equal to the sum of the net offering price (including the Fair Market Value of any
non-cash consideration and after deduction of any related expenses payable to third parties) of all
such securities plus the minimum aggregate amount, if any, payable upon exercise or conversion of
any such convertible securities into shares of Common Stock; and Permitted Transactions shall
mean issuances (i) as consideration for or to fund the acquisition of businesses and/or related
assets, (ii) in connection with employee benefit plans and compensation related arrangements in the
ordinary course and consistent with past practice approved by the Board of Directors, (iii) in
connection with a public or broadly marketed offering and sale of Common Stock or convertible
securities for cash conducted by the Company or its affiliates pursuant to registration under the
Securities Act or Rule 144A thereunder on a basis consistent with capital raising transactions by
comparable financial institutions and (iv) in connection with the exercise of preemptive rights on
terms existing as of the Issue Date. Any adjustment made pursuant to this Section 13(B) shall
become effective immediately upon the date of such issuance.
(C) Other Distributions. In case the Company shall fix a record date for the making
of a distribution to all holders of shares of its Common Stock of securities, evidences of
indebtedness, assets, cash, rights or warrants (excluding Ordinary Cash Dividends, dividends of its
Common Stock and other dividends or distributions referred to in Section 13(A)), in each such case,
the Exercise Price in effect prior to such record date shall be reduced immediately thereafter to
the price determined by multiplying the Exercise Price in effect immediately prior to the reduction
by the quotient of (x) the Market Price of the Common Stock on the last trading day preceding the
first date on which the Common Stock trades regular way on the principal national securities
exchange on which the Common Stock is listed or admitted to trading without the right to receive
such distribution, minus the amount of cash and/or the Fair Market Value of the securities,
evidences of indebtedness, assets, rights or warrants to be so distributed in respect of one share
of Common Stock (such amount and/or Fair Market Value, the Per Share Fair Market Value) divided
by (y) such Market Price on such date specified in clause (x); such
9
adjustment shall be made successively whenever such a record date is fixed. In such event,
the number of Shares issuable upon the exercise of this Warrant shall be increased to the number
obtained by dividing (x) the product of (1) the number of Shares issuable upon the exercise of this
Warrant before such adjustment, and (2) the Exercise Price in effect immediately prior to the
distribution giving rise to this adjustment by (y) the new Exercise Price determined in accordance
with the immediately preceding sentence. In the case of adjustment for a cash dividend that is, or
is coincident with, a regular quarterly cash dividend, the Per Share Fair Market Value would be
reduced by the per share amount of the portion of the cash dividend that would constitute an
Ordinary Cash Dividend. In the event that such distribution is not so made, the Exercise Price and
the number of Shares issuable upon exercise of this Warrant then in effect shall be readjusted,
effective as of the date when the Board of Directors determines not to distribute such shares,
evidences of indebtedness, assets, rights, cash or warrants, as the case may be, to the Exercise
Price that would then be in effect and the number of Shares that would then be issuable upon
exercise of this Warrant if such record date had not been fixed.
(D) Certain Repurchases of Common Stock. In case the Company effects a Pro Rata
Repurchase of Common Stock, then the Exercise Price shall be reduced to the price determined by
multiplying the Exercise Price in effect immediately prior to the Effective Date of such Pro Rata
Repurchase by a fraction of which the numerator shall be (i) the product of (x) the number of
shares of Common Stock outstanding immediately before such Pro Rata Repurchase and (y) the Market
Price of a share of Common Stock on the trading day immediately preceding the first public
announcement by the Company or any of its Affiliates of the intent to effect such Pro Rata
Repurchase, minus (ii) the aggregate purchase price of the Pro Rata Repurchase, and of which the
denominator shall be the product of (i) the number of shares of Common Stock outstanding
immediately prior to such Pro Rata Repurchase minus the number of shares of Common Stock so
repurchased and (ii) the Market Price per share of Common Stock on the trading day immediately
preceding the first public announcement by the Company or any of its Affiliates of the intent to
effect such Pro Rata Repurchase. In such event, the number of shares of Common Stock issuable upon
the exercise of this Warrant shall be increased to the number obtained by dividing (x) the product
of (1) the number of Shares issuable upon the exercise of this Warrant before such adjustment, and
(2) the Exercise Price in effect immediately prior to the Pro Rata Repurchase giving rise to this
adjustment by (y) the new Exercise Price determined in accordance with the immediately preceding
sentence. For the avoidance of doubt, no increase to the Exercise Price or decrease in the number
of Shares issuable upon exercise of this Warrant shall be made pursuant to this Section 13(D).
(E) Business Combinations. In case of any Business Combination or reclassification of
Common Stock (other than a reclassification of Common Stock referred to in Section 13(A)), the
Warrantholders right to receive Shares upon exercise of this Warrant shall be converted into the
right to exercise this Warrant to acquire the number of shares of stock or other securities or
property (including cash) which the Common Stock issuable (at the time of such Business Combination
or reclassification) upon exercise of this Warrant immediately prior to such Business Combination
or reclassification would have been entitled to receive upon consummation of such Business
Combination or reclassification; and in any such case, if necessary, the provisions set forth
herein with respect to the rights and interests thereafter of the Warrantholder shall be
appropriately adjusted so as to be applicable, as nearly as may reasonably be, to the
Warrantholders right to exercise this Warrant in exchange for any shares of stock or
10
other securities or property pursuant to this paragraph. In determining the kind and amount
of stock, securities or the property receivable upon exercise of this Warrant following the
consummation of such Business Combination, if the holders of Common Stock have the right to elect
the kind or amount of consideration receivable upon consummation of such Business Combination, then
the consideration that the Warrantholder shall be entitled to receive upon exercise shall be deemed
to be the types and amounts of consideration received by the majority of all holders of the shares
of common stock that affirmatively make an election (or of all such holders if none make an
election).
(F) Rounding of Calculations; Minimum Adjustments. All calculations under this
Section 13 shall be made to the nearest one-tenth (1/10th) of a cent or to the nearest
one-hundredth (1/100th) of a share, as the case may be. Any provision of this Section 13 to the
contrary notwithstanding, no adjustment in the Exercise Price or the number of Shares into which
this Warrant is exercisable shall be made if the amount of such adjustment would be less than $0.01
or one-tenth (1/10th) of a share of Common Stock, but any such amount shall be carried forward and
an adjustment with respect thereto shall be made at the time of and together with any subsequent
adjustment which, together with such amount and any other amount or amounts so carried forward,
shall aggregate $0.01 or 1/10th of a share of Common Stock, or more.
(G) Timing of Issuance of Additional Common Stock Upon Certain Adjustments. In any
case in which the provisions of this Section 13 shall require that an adjustment shall become
effective immediately after a record date for an event, the Company may defer until the occurrence
of such event (i) issuing to the Warrantholder of this Warrant exercised after such record date and
before the occurrence of such event the additional shares of Common Stock issuable upon such
exercise by reason of the adjustment required by such event over and above the shares of Common
Stock issuable upon such exercise before giving effect to such adjustment and (ii) paying to such
Warrantholder any amount of cash in lieu of a fractional share of Common Stock; provided, however,
that the Company upon request shall deliver to such Warrantholder a due bill or other appropriate
instrument evidencing such Warrantholders right to receive such additional shares, and such cash,
upon the occurrence of the event requiring such adjustment.
(H) Completion of Qualified Equity Offering. In the event the Company (or any
successor by Business Combination) completes one or more Qualified Equity Offerings on or prior to
December 31, 2009 that result in the Company (or any such successor ) receiving aggregate gross
proceeds of not less than 100% of the aggregate liquidation preference of the Preferred Shares (and
any preferred stock issued by any such successor to the Original Warrantholder under the CPP), the
number of shares of Common Stock underlying the portion of this Warrant then held by the Original
Warrantholder shall be thereafter reduced by a number of shares of Common Stock equal to the
product of (i) 0.5 and (ii) the number of shares underlying the Warrant on the Issue Date (adjusted
to take into account all other theretofore made adjustments pursuant to this Section 13).
(I) Other Events. For so long as the Original Warrantholder holds this Warrant or any
portion thereof, if any event occurs as to which the provisions of this Section 13 are not strictly
applicable or, if strictly applicable, would not, in the good faith judgment of the
11
Board of Directors of the Company, fairly and adequately protect the purchase rights of the
Warrants in accordance with the essential intent and principles of such provisions, then the Board
of Directors shall make such adjustments in the application of such provisions, in accordance with
such essential intent and principles, as shall be reasonably necessary, in the good faith opinion
of the Board of Directors, to protect such purchase rights as aforesaid. The Exercise Price or the
number of Shares into which this Warrant is exercisable shall not be adjusted in the event of a
change in the par value of the Common Stock or a change in the jurisdiction of incorporation of the
Company.
(J) Statement Regarding Adjustments. Whenever the Exercise Price or the number of
Shares into which this Warrant is exercisable shall be adjusted as provided in Section 13, the
Company shall forthwith file at the principal office of the Company a statement showing in
reasonable detail the facts requiring such adjustment and the Exercise Price that shall be in
effect and the number of Shares into which this Warrant shall be exercisable after such adjustment,
and the Company shall also cause a copy of such statement to be sent by mail, first class postage
prepaid, to each Warrantholder at the address appearing in the Companys records.
(K) Notice of Adjustment Event. In the event that the Company shall propose to take
any action of the type described in this Section 13 (but only if the action of the type described
in this Section 13 would result in an adjustment in the Exercise Price or the number of Shares into
which this Warrant is exercisable or a change in the type of securities or property to be delivered
upon exercise of this Warrant), the Company shall give notice to the Warrantholder, in the manner
set forth in Section 13(J), which notice shall specify the record date, if any, with respect to any
such action and the approximate date on which such action is to take place. Such notice shall also
set forth the facts with respect thereto as shall be reasonably necessary to indicate the effect on
the Exercise Price and the number, kind or class of shares or other securities or property which
shall be deliverable upon exercise of this Warrant. In the case of any action which would require
the fixing of a record date, such notice shall be given at least 10 days prior to the date so
fixed, and in case of all other action, such notice shall be given at least 15 days prior to the
taking of such proposed action. Failure to give such notice, or any defect therein, shall not
affect the legality or validity of any such action.
(L) Proceedings Prior to Any Action Requiring Adjustment. As a condition precedent to the
taking of any action which would require an adjustment pursuant to this Section 13, the Company
shall take any action which may be necessary, including obtaining regulatory, New York Stock
Exchange, NASDAQ Stock Market or other applicable national securities exchange or stockholder
approvals or exemptions, in order that the Company may thereafter validly and legally issue as
fully paid and nonassessable all shares of Common Stock that the Warrantholder is entitled to
receive upon exercise of this Warrant pursuant to this Section 13.
(M) Adjustment Rules. Any adjustments pursuant to this Section 13 shall be made
successively whenever an event referred to herein shall occur. If an adjustment in Exercise Price
made hereunder would reduce the Exercise Price to an amount below par value of the Common Stock,
then such adjustment in Exercise Price made hereunder shall reduce the Exercise Price to the par
value of the Common Stock.
12
14. Exchange. At any time following the date on which the shares of Common Stock of
the Company are no longer listed or admitted to trading on a national securities exchange (other
than in connection with any Business Combination), the Original Warrantholder may cause the Company
to exchange all or a portion of this Warrant for an economic interest (to be determined by the
Original Warrantholder after consultation with the Company) of the Company classified as permanent
equity under U.S. GAAP having a value equal to the Fair Market Value of the portion of the Warrant
so exchanged. The Original Warrantholder shall calculate any Fair Market Value required to be
calculated pursuant to this Section 14, which shall not be subject to the Appraisal Procedure.
15. No Impairment. The Company will not, by amendment of its Charter or through any
reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities
or any other voluntary action, avoid or seek to avoid the observance or performance of any of the
terms to be observed or performed hereunder by the Company, but will at all times in good faith
assist in the carrying out of all the provisions of this Warrant and in taking of all such action
as may be necessary or appropriate in order to protect the rights of the Warrantholder.
16. Governing Law. This Warrant will be governed by and construed in accordance with
the federal law of the United States if and to the extent such law is applicable, and otherwise in
accordance with the laws of the State of New York applicable to contracts made and to be performed
entirely within such State. Each of the Company and the Warrantholder agrees (a) to submit to the
exclusive jurisdiction and venue of the United States District Court for the District of Columbia
for any civil action, suit or proceeding arising out of or relating to this Warrant or the
transactions contemplated hereby, and (b) that notice may be served upon the Company at the address
in Section 20 below and upon the Warrantholder at the address for the Warrantholder set forth in
the registry maintained by the Company pursuant to Section 9 hereof. To the extent permitted by
applicable law, each of the Company and the Warrantholder hereby unconditionally waives trial by
jury in any civil legal action or proceeding relating to the Warrant or the transactions
contemplated hereby or thereby.
17. Binding Effect. This Warrant shall be binding upon any successors or assigns of
the Company.
18. Amendments. This Warrant may be amended and the observance of any term of this
Warrant may be waived only with the written consent of the Company and the Warrantholder.
19. Prohibited Actions. The Company agrees that it will not take any action which
would entitle the Warrantholder to an adjustment of the Exercise Price if the total number of
shares of Common Stock issuable after such action upon exercise of this Warrant, together with all
shares of Common Stock then outstanding and all shares of Common Stock then issuable upon the
exercise of all outstanding options, warrants, conversion and other rights, would exceed the total
number of shares of Common Stock then authorized by its Charter.
20. 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
13
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 in Item 8 of Schedule A
hereto, or pursuant to such other instructions as may be designated in writing by the party to
receive such notice.
21. Entire Agreement. This Warrant, the forms attached hereto and Schedule A hereto
(the terms of which are incorporated by reference herein), and the Letter Agreement (including all
documents incorporated therein), contain the entire agreement between the parties with respect to
the subject matter hereof and supersede all prior and contemporaneous arrangements or undertakings
with respect thereto.
[Remainder of page intentionally left blank]
14
EXHIBIT 4.2
[Form of Notice of Exercise]
Date:
TO: CVB Financial Corp.
RE: Election to Purchase Common Stock
The undersigned, pursuant to the provisions set forth in the attached Warrant, hereby agrees
to subscribe for and purchase the number of shares of the Common Stock set forth below covered by
such Warrant. The undersigned, in accordance with Section 3 of the Warrant, hereby agrees to pay
the aggregate Exercise Price for such shares of Common Stock in the manner set forth below. A new
warrant evidencing the remaining shares of Common Stock covered by such Warrant, but not yet
subscribed for and purchased, if any, should be issued in the name set forth below.
Number of Shares of Common Stock
Method of Payment of Exercise Price (note if cashless exercise pursuant to Section 3(i) of the
Warrant or cash exercise pursuant to Section 3(ii) of the Warrant, with consent of the Company and
the Warrantholder)
Aggregate Exercise Price:
15
IN WITNESS WHEREOF, the Company has caused this Warrant to be duly executed by a duly
authorized officer.
Dated: December 5, 2008
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CVB FINANCIAL CORP.
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By: |
/a/ Christopher D. Myers
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Name: |
Christopher D. Myers |
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Title: |
President and Chief Executive Officer |
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Attest:
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By: |
/s/ Edward J. Biebrich, Jr.
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Name: |
Edward J. Biebrich, Jr. |
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Title: |
Executive Vice President and Chief
Financial Officer |
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[Signature Page to Warrant]
16
EXHIBIT 4.2
SCHEDULE A
Item 1
Name: CVB Financial Corp.
Corporate or other organizational form: Corporation
Jurisdiction of organization: California
Item 2
Exercise Price:1 $11.68
Item 3
Issue Date: December 5, 2008
Item 4
Amount of last dividend declared prior to the Issue Date: $.085
Item 5
Date of Letter Agreement between the Company and the United States Department of the Treasury:
December 5, 2008
Item 6
Number of shares of Common Stock: 1,669,521
Item 7
Companys address: 701 North Haven Avenue, Suite 350
Ontario, CA 91764
Item 8
Notice information:
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Primary
Contact
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Secondary Contact |
Edward J. Biebrich, Jr.
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Christopher D. Myers |
Executive Vice President and
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President and Chief Executive Officer |
Chief Financial Officer
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CVB Financial Corp. |
CVB Financial Corp.
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701 North Haven Avenue, Suite 350 |
701 North Avenue Avenue, Suite 350
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Ontario, CA 91764 |
Ontario, CA 92764
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Phone: 909-483-7199 |
Phone: 909-481-2149
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Fax: 909-299-8468 |
Fax: 909-980-6258
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eMail: ceo@cbbank.com |
eMail: cfo@cbbank.com |
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Legal
Contact |
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Craig D.Miller, Esq. |
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Manatt, Phelps & Phillips, LLP |
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One Embarcadero Center, 30th Floor |
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San Francisco, CA 94111 |
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Phone: (415) 291-7415 |
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Fax: (415) 291-7474 |
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eMail: cmiller@manatt.com |
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1 |
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Initial exercise price to be calculated based on the
average of closing prices of the Common Stock on the 20 trading days ending on
the last trading day prior to the date the Companys application for
participation in the Capital Purchase Program was approved by the United States
Department of the Treasury. |
1
exv4w3
EXHIBIT 4.3
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Series B Fixed Rate Cumulative
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Series B Fixed Rate Cumulative |
Perpetual Preferred Stock
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Perpetual Preferred Stock |
No Par Value |
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Certificate
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CVB FINANCIAL CORP.
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Shares
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Number
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INCORPORATED UNDER THE LAWS OF THE STATE OF CALIFORNIA
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130,000 |
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PB 00001 |
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CUSIP 126600 99 9
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THIS CERTIFIES THAT
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UNITED STATES DEPARTMENT OF THE TREASURY |
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TRANSFER OF THIS CERTIFICATE |
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IS RESTRICTED SEE |
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LEGEND ON REVERSE SIDE |
IS THE OWNER OF
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** One Hundred Thirty Thousand (130,000)** |
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FULLY PAID AND NON-ASSESSABLE SHARES OF THE SERIES B FIXED RATE CUMULATIVE PERPETUAL PREFERRED STOCK OF
CVB FINANCIAL CORP.,
transferable in person or by duly authorized attorney upon surrender of this certificate properly
endorsed. This certificate and the shares represented hereby are subject to the provisions of the
Articles of Incorporation, all amendments thereto, and the Bylaws of the Corporation, and to the
rights, preferences, and voting powers of the Preferred Stock of the Corporation now or hereafter
outstanding; the terms of all such provisions, rights, preferences and voting powers being
incorporated herein by reference.
IN WITNESS THEREOF, CVB Financial Corp. has caused this certificate to be executed by signatures of
its duly authorized officers and has caused its corporate seal to be hereunto affixed.
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/x/ Christopher D. Myers |
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President and Chief Executive Officer
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/s/ Myrna L. DiSanto
Secretary
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THE SECURITIES REPRESENTED BY THIS INSTRUMENT ARE NOT SAVINGS ACCOUNTS, DEPOSITS OR OTHER
OBLIGATIONS OF A BANK AND ARE NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER
GOVERNMENTAL AGENCY.
THE SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE SECURITIES ACT), OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE
TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF EXCEPT WHILE A REGISTRATION STATEMENT RELATING THERETO
IS IN EFFECT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER SUCH ACT OR SUCH LAWS. EACH PURCHASER OF THE SECURITIES REPRESENTED BY THIS
INSTRUMENT IS NOTIFIED THAT THE SELLER MAY BE RELYING ON THE EXEMPTION FROM SECTION 5 OF THE
SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER. ANY TRANSFEREE OF THE SECURITIES REPRESENTED BY
THIS INSTRUMENT BY ITS ACCEPTANCE HEREOF (1) REPRESENTS THAT IT IS A QUALIFIED INSTITUTIONAL
BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT), (2) AGREES THAT IT WILL NOT OFFER, SELL
OR OTHERWISE TRANSFER THE SECURITIES REPRESENTED BY THIS INSTRUMENT EXCEPT (A) PURSUANT TO A
REGISTRATION STATEMENT WHICH IS THEN EFFECTIVE UNDER THE SECURITIES ACT, (B) FOR SO LONG AS THE
SECURITIES REPRESENTED BY THIS INSTRUMENT ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A
PERSON IT REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER AS DEFINED IN RULE 144A UNDER
THE SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE
144A, (C) TO THE ISSUER OR (D) PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND (3) AGREES THAT IT WILL GIVE TO EACH PERSON TO WHOM THE
SECURITIES REPRESENTED BY THIS INSTRUMENT ARE TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF
THIS LEGEND.
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FOR VALUE RECEIVED
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hereby sell, assign and transfer unto |
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PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE |
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(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING POSTAL ZIP CODE, OF ASSIGNEE) |
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shares |
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of the capital stock represented by the within Certificate, and do hereby irrevocably constitute and appoint |
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Attorney |
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to transfer the said stock on the books of the within named Corporation with full power of substitution in the premises. |
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Dated: |
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Signature
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Signature |
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NOTE: THE SIGNATURE TO THIS ASSIGNMENT MUST
CORRESPOND WITH THE NAME AS WRITTEN UPON THE FACE OF
THE CERTIFICATE, IN EVERY PARTICULAR, WITHOUT
ALTERATION OR ENLARGEMENT, OR ANY CHANGE WHATEVER. |
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SIGNATURE(S) GUARANTEED:
THE SIGNATURE(S) SHOULD BE GUARANTEED
BY AN ELIGIBLE GUARANTOR INSTITUTION
(Banks, Stockbrokers, Savings and Loan Associations
and Credit Unions) WITH MEMBERSHIPS IN AN
APPROVED SIGNATURE GUARANTEE MEDALLION
PROGRAM, PURSUANT TO S.E.C. RULE 17Ad-15.
exv10w1
EXHIBIT 10.1
United States Department of the Treasury
1500 Pennsylvania Avenue, NW
Washington, D.C. 20220
Dear Ladies and Gentlemen:
The company set forth on the signature page hereto (the Company) intends to issue in a
private placement the number of shares of a series of its preferred stock set forth on Schedule A
hereto (the Preferred Shares) and a warrant to purchase the number of shares of its common stock
set forth on Schedule A hereto (the Warrant and, together with the Preferred Shares, the
Purchased Securities) and the United States Department of the Treasury (the Investor) intends
to purchase from the Company the Purchased Securities.
The purpose of this letter agreement is to confirm the terms and conditions of the purchase by
the Investor of the Purchased Securities. Except to the extent supplemented or superseded by the
terms set forth herein or in the Schedules hereto, the provisions contained in the Securities
Purchase Agreement Standard Terms attached hereto as Exhibit A (the Securities Purchase
Agreement) are incorporated by reference herein. Terms that are defined in the Securities Purchase
Agreement are used in this letter agreement as so defined. In the event of any inconsistency
between this letter agreement and the Securities Purchase Agreement, the terms of this letter
agreement shall govern.
Each of the Company and the Investor hereby confirms its agreement with the other party with
respect to the issuance by the Company of the Purchased Securities and the purchase by the Investor
of the Purchased Securities pursuant to this letter agreement and the Securities Purchase Agreement
on the terms specified on Schedule A hereto.
This letter agreement (including the Schedules hereto) and the Securities Purchase Agreement
(including the Annexes thereto) and the Warrant constitute the entire agreement, and supersede all
other prior agreements, understandings, representations and warranties, both written and oral,
between the parties, with respect to the subject matter hereof. This letter agreement constitutes
the Letter Agreement referred to in the Securities Purchase Agreement.
This letter agreement may be executed in any number of separate counterparts, each such
counterpart being deemed to be an original instrument, and all such counterparts will together
constitute the same agreement. Executed signature pages to this letter agreement may be delivered
by facsimile and such facsimiles will be deemed as sufficient as if actual signature pages had been
delivered.
* * *
1
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.
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UNITED STATES DEPARTMENT OF THE TREASURY
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By: |
/s/
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Name: |
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Title: |
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CVB FINANCIAL CORP.
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By: |
/s/ Christopher D. Myers
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Name: |
Christopher D. Myers |
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Title: |
President and Chief Executive Officer |
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Date:
December 5, 2008
2
EXHIBIT 10.1
EXHIBIT A
SECURITIES PURCHASE AGREEMENT
STANDARD TERMS
TABLE OF CONTENTS
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Page |
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ARTICLE I |
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PURCHASE; CLOSING |
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1 |
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1.1 |
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Purchase |
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1 |
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1.2 |
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Closing |
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2 |
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1.3 |
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Interpretation |
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4 |
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ARTICLE II |
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REPRESENTATIONS AND WARRANTIES |
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4 |
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2.1 |
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Disclosure |
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4 |
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2.2 |
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Representations and Warranties of the Company |
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5 |
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ARTICLE III |
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COVENANTS |
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13 |
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3.1 |
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Commercially Reasonable Efforts |
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13 |
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3.2 |
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Expenses |
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14 |
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3.3 |
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Sufficiency of Authorized Common Stock; Exchange Listing |
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14 |
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3.4 |
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Certain Notifications Until Closing |
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14 |
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3.5 |
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Access, Information and Confidentiality |
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ARTICLE IV |
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ADDITIONAL AGREEMENTS |
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15 |
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4.1 |
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Purchase for Investment |
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15 |
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4.2 |
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Legends |
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16 |
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4.3 |
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Certain Transactions |
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17 |
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4.4 |
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Transfer of Purchased Securities and Warrant Shares; Restrictions on Exercise of the Warrant |
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18 |
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4.5 |
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Registration Rights |
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18 |
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4.6 |
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Voting of Warrant Shares |
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29 |
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4.7 |
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Depositary Shares |
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29 |
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4.8 |
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Restriction on Dividends and Repurchases |
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29 |
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4.9 |
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Repurchase of Investor Securities |
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30 |
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4.10 |
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Executive Compensation |
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ARTICLE V |
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MISCELLANEOUS |
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32 |
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5.1 |
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Termination |
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32 |
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5.2 |
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Survival of Representations and Warranties |
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32 |
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5.3 |
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Amendment |
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32 |
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5.4 |
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Waiver of Conditions |
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33 |
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-i-
TABLE OF CONTENTS
(continued)
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Page |
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5.5 |
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Governing Law: Submission to Jurisdiction, Etc
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33 |
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5.6 |
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Notices
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33 |
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5.7 |
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Definitions
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33 |
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5.8 |
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Assignment
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34 |
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5.9 |
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Severability
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5.10 |
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No Third Party Beneficiaries
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-ii-
LIST OF ANNEXES
ANNEX A: FORM OF CERTIFICATE OF DESIGNATIONS FOR PREFERRED STOCK
ANNEX B: FORM OF WAIVER
ANNEX C: FORM OF OPINION
ANNEX D: FORM OF WARRANT
-iii-
INDEX OF DEFINED TERMS
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Term |
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Location of Definition |
Affiliate |
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5.7(b) |
Agreement |
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Recitals |
Appraisal Procedure |
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4.9(c)(i) |
Appropriate Federal Banking Agency |
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2.2(s) |
Bankruptcy Exceptions |
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2.2(d) |
Benefit Plans |
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1.2(d)(iv) |
Board of Directors |
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2.2(f) |
Business Combination |
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4.4 |
business day |
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1.3 |
Capitalization Date |
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2.2(b) |
Certificate of Designations |
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1.2(d)(iii) |
Charter |
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1.2(d)(iii) |
Closing |
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1.2(a) |
Closing Date |
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1.2(a) |
Code |
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2.2(n) |
Common Stock |
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Recitals |
Company |
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Recitals |
Company Financial Statements |
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2.2(h) |
Company Material Adverse Effect |
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2.1(a) |
Company Reports |
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2.2(i)(i) |
Company Subsidiary; Company Subsidiaries |
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2.2(i)(i) |
control; controlled by; under common control with |
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5.7(b) |
Controlled Group |
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2.2(n) |
CPP |
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Recitals |
EESA |
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1.2(d)(iv) |
ERISA |
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2.2(n) |
Exchange Act |
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2.1(b) |
Fair Market Value |
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4.9(c)(ii) |
GAAP |
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2.1(a) |
Governmental Entities |
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1.2(c) |
Holder |
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4.5(k)(i) |
Holders Counsel |
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4.5(k)(ii) |
Indemnitee |
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4.5(g)(i) |
Information |
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3.5(b) |
Initial Warrant Shares |
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Recitals |
Investor |
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Recitals |
Junior Stock |
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4.8(c) |
knowledge of the Company; Companys knowledge |
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5.7(c) |
Last Fiscal Year |
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2.1(b) |
Letter Agreement |
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Recitals |
iv
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Term |
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Location of Definition |
officers |
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5.7(c) |
Parity Stock |
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4.8(c) |
Pending Underwritten Offering |
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4.5(l) |
Permitted Repurchases |
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4.8(a)(ii) |
Piggyback Registration |
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4.5(a)(iv) |
Plan |
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2.2(n) |
Preferred Shares |
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Recitals |
Preferred Stock |
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Recitals |
Previously Disclosed |
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2.1(b) |
Proprietary Rights |
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2.2(u) |
Purchase |
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Recitals |
Purchase Price |
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1.1 |
Purchased Securities |
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Recitals |
Qualified Equity Offering |
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4.4 |
register; registered; registration |
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4.5(k)(iii) |
Registrable Securities |
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4.5(k)(iv) |
Registration Expenses |
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4.5(k)(v) |
Regulatory Agreement |
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2.2(s) |
Rule 144; Rule 144A; Rule 159A; Rule 405; Rule 415 |
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4.5(k)(vi) |
Schedules |
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Recitals |
SEC |
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2.1(b) |
Securities Act |
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2.2(a) |
Selling Expenses |
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4.5(k)(vii) |
Senior Executive Officers |
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4.10 |
Share Dilution Amount |
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4.8(a)(ii) |
Shelf Registration Statement |
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4.5(a)(ii) |
Signing Date |
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2.1(a) |
Special Registration |
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4.5(i) |
Stockholder Proposals |
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3.1(b) |
subsidiary |
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5.8(a) |
Tax; Taxes |
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2.2(o) |
Transfer |
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4.4 |
Warrant |
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Recitals |
Warrant Shares |
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2.2(d) |
-v-
SECURITIES PURCHASE AGREEMENT STANDARD TERMS
Recitals:
WHEREAS, the United States Department of the Treasury (the Investor) may from time to time
agree to purchase shares of preferred stock and warrants from eligible financial institutions which
elect to participate in the Troubled Asset Relief Program Capital Purchase Program (CPP);
WHEREAS, an eligible financial institution electing to participate in the CPP and issue
securities to the Investor (referred to herein as the Company) shall enter into a letter
agreement (the Letter Agreement) with the Investor which incorporates this Securities Purchase
Agreement Standard Terms;
WHEREAS, the Company agrees to expand the flow of credit to U.S. consumers and businesses on
competitive terms to promote the sustained growth and vitality of the U.S. economy;
WHEREAS, the Company agrees to work diligently, under existing programs, to modify the terms
of residential mortgages as appropriate to strengthen the health of the U.S. housing market;
WHEREAS, the Company intends to issue in a private placement the number of shares of the
series of its Preferred Stock (Preferred Stock) set forth on Schedule A to the Letter
Agreement (the Preferred Shares) and a warrant to purchase the number of shares of its Common
Stock (Common Stock) set forth on Schedule A to the Letter Agreement (the Initial
Warrant Shares) (the Warrant and, together with the Preferred Shares, the Purchased
Securities) and the Investor intends to purchase (the Purchase) from the Company the Purchased
Securities; and
WHEREAS, the Purchase will be governed by this Securities Purchase Agreement Standard Terms
and the Letter Agreement, including the schedules thereto (the Schedules), specifying additional
terms of the Purchase. This Securities Purchase Agreement Standard Terms (including the Annexes
hereto) and the Letter Agreement (including the Schedules thereto) are together referred to as this
Agreement. All references in this Securities Purchase Agreement Standard Terms to Schedules
are to the Schedules attached to the Letter Agreement.
NOW, THEREFORE, in consideration of the premises, and of the representations, warranties,
covenants and agreements set forth herein, the parties agree as follows:
ARTICLE I
Purchase; Closing
1.1 Purchase. On the terms and subject to the conditions set forth in this Agreement,
the Company agrees to sell to the Investor, and the Investor agrees to purchase from the
1
Company, at the Closing (as hereinafter defined), the Purchased Securities for the price set
forth on Schedule A (the Purchase Price).
1.2 Closing.
(a) On the terms and subject to the conditions set forth in this Agreement, the closing of the
Purchase (the Closing) will take place at the location specified in Schedule A, at the
time and on the date set forth in Schedule A or as soon as practicable thereafter, or at
such other place, time and date as shall be agreed between the Company and the Investor. The time
and date on which the Closing occurs is referred to in this Agreement as the Closing Date.
(b) Subject to the fulfillment or waiver of the conditions to the Closing in this Section1.2,
at the Closing the Company will deliver the Preferred Shares and the Warrant, in each case as
evidenced by one or more certificates dated the Closing Date and bearing appropriate legends as
hereinafter provided for, in exchange for payment in full of the Purchase Price by wire transfer of
immediately available United States funds to a bank account designated by the Company on
Schedule A.
(c) The respective obligations of each of the Investor and the Company to consummate the
Purchase are subject to the fulfillment (or waiver by the Investor and the Company, as applicable)
prior to the Closing of the conditions that (i)any approvals or authorizations of all United States
and other governmental, regulatory or judicial authorities (collectively, Governmental Entities)
required for the consummation of the Purchase shall have been obtained or made in form and
substance reasonably satisfactory to each party and shall be in full force and effect and all
waiting periods required by United States and other applicable law, if any, shall have expired and
(ii)no provision of any applicable United States or other law and no judgment, injunction, order or
decree of any Governmental Entity shall prohibit the purchase and sale of the Purchased Securities
as contemplated by this Agreement.
(d) The obligation of the Investor to consummate the Purchase is also subject to the
fulfillment (or waiver by the Investor) at or prior to the Closing of each of the following
conditions:
(i) (A) the representations and warranties of the Company set forth in (x)Section2.2(g) of
this Agreement shall be true and correct in all respects as though made on and as of the Closing
Date, (y)Sections 2.2(a) through (f)shall be true and correct in all material respects as though
made on and as of the Closing Date (other than representations and warranties that by their terms
speak as of another date, which representations and warranties shall be true and correct in all
material respects as of such other date) and (z)Sections 2.2(h) through (v)(disregarding all
qualifications or limitations set forth in such representations and warranties as to materiality,
Company Material Adverse Effect and words of similar import) shall be true and correct as though
made on and as of the Closing Date (other than representations and warranties that by their terms
speak as of another date, which representations and warranties shall be true and correct as of such
other date), except to the extent that the failure of such representations and warranties referred
to in this Section1.2(d)(i)(A)(z) to be so true and correct, individually or in the aggregate, does
not have and would not reasonably be expected to have a Company Material Adverse Effect and (B)the
Company shall have performed in all material
2
respects all obligations required to be performed by it under this Agreement at or prior to
the Closing;
(ii) the Investor shall have received a certificate signed on behalf of the Company by a
senior executive officer certifying to the effect that the conditions set forth in Section1.2(d)(i)
have been satisfied;
(iii) the Company shall have duly adopted and filed with the Secretary of State of its
jurisdiction of organization or other applicable Governmental Entity the amendment to its
certificate or articles of incorporation, articles of association, or similar organizational
document (Charter) in substantially the form attached hereto as Annex A (the Certificate
of Designations) and such filing shall have been accepted;
(iv) (A) the Company shall have effected such changes to its compensation, bonus, incentive
and other benefit plans, arrangements and agreements (including golden parachute, severance and
employment agreements) (collectively, Benefit Plans) with respect to its Senior Executive
Officers (and to the extent necessary for such changes to be legally enforceable, each of its
Senior Executive Officers shall have duly consented in writing to such changes), as may be
necessary, during the period that the Investor owns any debt or equity securities of the Company
acquired pursuant to this Agreement or the Warrant, in order to comply with Section111(b) of the
Emergency Economic Stabilization Act of 2008 (EESA) as implemented by guidance or regulation
thereunder that has been issued and is in effect as of the Closing Date, and (B)the Investor shall
have received a certificate signed on behalf of the Company by a senior executive officer
certifying to the effect that the condition set forth in Section1.2(d)(iv)(A) has been satisfied;
(v) each of the Companys Senior Executive Officers shall have delivered to the Investor a
written waiver in the form attached hereto as Annex B releasing the Investor from any
claims that such Senior Executive Officers may otherwise have as a result of the issuance, on or
prior to the Closing Date, of any regulations which require the modification of, and the agreement
of the Company hereunder to modify, the terms of any Benefit Plans with respect to its Senior
Executive Officers to eliminate any provisions of such Benefit Plans that would not be in
compliance with the requirements of Section111(b) of the EESA as implemented by guidance or
regulation thereunder that has been issued and is in effect as of the Closing Date;
(vi) the Company shall have delivered to the Investor a written opinion from counsel to the
Company (which may be internal counsel), addressed to the Investor and dated as of the Closing
Date, in substantially the form attached hereto as Annex C;
(vii) the Company shall have delivered certificates in proper form or, with the prior consent
of the Investor, evidence of shares in book-entry form, evidencing the Preferred Shares to Investor
or its designee(s); and
(viii) the Company shall have duly executed the Warrant in substantially the form attached
hereto as Annex D and delivered such executed Warrant to the Investor or its designee(s).
3
1.3 Interpretation. When a reference is made in this Agreement to Recitals,
Articles, Sections, or Annexes such reference shall be to a Recital, Article or Section of,
or Annex to, this Securities Purchase Agreement Standard Terms, and a reference to Schedules
shall be to a Schedule to the Letter Agreement, in each case, unless otherwise indicated. The
terms defined in the singular have a comparable meaning when used in the plural, and vice versa.
References to herein, hereof, hereunder and the like refer to this Agreement as a whole and
not to any particular section or provision, unless the context requires otherwise. The table of
contents and headings contained in this Agreement are for reference purposes only and are not part
of this Agreement. Whenever the words include, includes or including are used in this
Agreement, they shall be deemed followed by the words without limitation. No rule of
construction against the draftsperson shall be applied in connection with the interpretation or
enforcement of this Agreement, as this Agreement is the product of negotiation between
sophisticated parties advised by counsel. All references to $ or dollars mean the lawful
currency of the United States of America. Except as expressly stated in this Agreement, all
references to any statute, rule or regulation are to the statute, rule or regulation as amended,
modified, supplemented or replaced from time to time (and, in the case of statutes, include any
rules and regulations promulgated under the statute) and to any section of any statute, rule or
regulation include any successor to the section. References to a business day shall mean any day
except Saturday, Sunday and any day on which banking institutions in the State of New York
generally are authorized or required by law or other governmental actions to close.
ARTICLE II
Representations and Warranties
2.1 Disclosure.
(a) Company Material Adverse Effect means a material adverse effect on (i)the business,
results of operation or financial condition of the Company and its consolidated subsidiaries taken
as a whole; provided, however, that Company Material Adverse Effect shall not be deemed to include
the effects of (A)changes after the date of the Letter Agreement (the Signing Date) in general
business, economic or market conditions (including changes generally in prevailing interest rates,
credit availability and liquidity, currency exchange rates and price levels or trading volumes in
the United States or foreign securities or credit markets), or any outbreak or escalation of
hostilities, declared or undeclared acts of war or terrorism, in each case generally affecting the
industries in which the Company and its subsidiaries operate, (B)changes or proposed changes after
the Signing Date in generally accepted accounting principles in the United States (GAAP) or
regulatory accounting requirements, or authoritative interpretations thereof, (C)changes or
proposed changes after the Signing Date in securities, banking and other laws of general
applicability or related policies or interpretations of Governmental Entities (in the case of each
of these clauses (A), (B)and (C), other than changes or occurrences to the extent that such changes
or occurrences have or would reasonably be expected to have a materially disproportionate adverse
effect on the Company and its consolidated subsidiaries taken as a whole relative to comparable
U.S. banking or financial services organizations), or (D)changes in the market price or trading
volume of the Common Stock or any other equity, equity-related or debt securities of the Company or
its consolidated
4
subsidiaries (it being understood and agreed that the exception set forth in this clause
(D)does not apply to the underlying reason giving rise to or contributing to any such change); or
(ii)the ability of the Company to consummate the Purchase and the other transactions contemplated
by this Agreement and the Warrant and perform its obligations hereunder or thereunder on a timely
basis.
(b) Previously Disclosed means information set forth or incorporated in the Companys Annual
Report on Form 10-K for the most recently completed fiscal year of the Company filed with the
Securities and Exchange Commission (the SEC) prior to the Signing Date (the Last Fiscal Year)
or in its other reports and forms filed with or furnished to the SEC under Sections 13(a), 14(a) or
15(d) of the Securities Exchange Act of 1934 (the Exchange Act) on or after the last day of the
Last Fiscal Year and prior to the Signing Date.
2.2 Representations and Warranties of the Company. Except as Previously Disclosed,
the Company represents and warrants to the Investor that as of the Signing Date and as of the
Closing Date (or such other date specified herein):
(a) Organization, Authority and Significant Subsidiaries. The Company has been duly
incorporated and is validly existing and in good standing under the laws of its jurisdiction of
organization, with the necessary power and authority to own its properties and conduct its business
in all material respects as currently conducted, and except as has not, individually or in the
aggregate, had and would not reasonably be expected to have a Company Material Adverse Effect, has
been duly qualified as a foreign corporation for the transaction of business and is in good
standing under the laws of each other jurisdiction in which it owns or leases properties or
conducts any business so as to require such qualification; each subsidiary of the Company that is a
significant subsidiary within the meaning of Rule 1-02(w) of Regulation S-X under the Securities
Act of 1933 (the Securities Act) has been duly organized and is validly existing in good standing
under the laws of its jurisdiction of organization. The Charter and bylaws of the Company, copies
of which have been provided to the Investor prior to the Signing Date, are true, complete and
correct copies of such documents as in full force and effect as of the Signing Date.
(b) Capitalization. The authorized capital stock of the Company, and the outstanding
capital stock of the Company (including securities convertible into, or exercisable or exchangeable
for, capital stock of the Company) as of the most recent fiscal month-end preceding the Signing
Date (the Capitalization Date) is set forth on Schedule B. The outstanding shares of
capital stock of the Company have been duly authorized and are validly issued and outstanding,
fully paid and nonassessable, and subject to no preemptive rights (and were not issued in violation
of any preemptive rights). Except as provided in the Warrant, as of the Signing Date, the Company
does not have outstanding any securities or other obligations providing the holder the right to
acquire Common Stock that is not reserved for issuance as specified on Schedule B, and the
Company has not made any other commitment to authorize, issue or sell any Common Stock. Since the
Capitalization Date, the Company has not issued any shares of Common Stock, other than (i)shares
issued upon the exercise of stock options or delivered under other equity-based awards or other
convertible securities or warrants which were issued and outstanding on the Capitalization Date and
disclosed on Schedule B and (ii)shares disclosed on Schedule B.
5
(c) Preferred Shares. The Preferred Shares have been duly and validly authorized,
and, when issued and delivered pursuant to this Agreement, such Preferred Shares will be duly and
validly issued and fully paid and non-assessable, will not be issued in violation of any preemptive
rights, and will rank pari passu with or senior to all other series or classes of Preferred Stock,
whether or not issued or outstanding, with respect to the payment of dividends and the distribution
of assets in the event of any dissolution, liquidation or winding up of the Company.
(d) The Warrant and Warrant Shares. The Warrant has been duly authorized and, when
executed and delivered as contemplated hereby, will constitute a valid and legally binding
obligation of the Company enforceable against the Company in accordance with its terms, except as
the same may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar
laws affecting the enforcement of creditors rights generally and general equitable principles,
regardless of whether such enforceability is considered in a proceeding at law or in equity
(Bankruptcy Exceptions). The shares of Common Stock issuable upon exercise of the Warrant (the
Warrant Shares) have been duly authorized and reserved for issuance upon exercise of the Warrant
and when so issued in accordance with the terms of the Warrant will be validly issued, fully paid
and non-assessable, subject, if applicable, to the approvals of its stockholders set forth on
Schedule C.
(e) Authorization, Enforceability.
(i) The Company has the corporate power and authority to execute and deliver this Agreement
and the Warrant and, subject, if applicable, to the approvals of its stockholders set forth on
Schedule C, to carry out its obligations hereunder and thereunder (which includes the
issuance of the Preferred Shares, Warrant and Warrant Shares). The execution, delivery and
performance by the Company of this Agreement and the Warrant and the consummation of the
transactions contemplated hereby and thereby have been duly authorized by all necessary corporate
action on the part of the Company and its stockholders, and no further approval or authorization is
required on the part of the Company, subject, in each case, if applicable, to the approvals of its
stockholders set forth on Schedule C. This Agreement is a valid and binding obligation of
the Company enforceable against the Company in accordance with its terms, subject to the Bankruptcy
Exceptions.
(ii) The execution, delivery and performance by the Company of this Agreement and the Warrant
and the consummation of the transactions contemplated hereby and thereby and compliance by the
Company with the provisions hereof and thereof, will not (A)violate, conflict with, or result in a
breach of any provision of, or constitute a default (or an event which, with notice or lapse of
time or both, would constitute a default) under, or result in the termination of, or accelerate the
performance required by, or result in a right of termination or acceleration of, or result in the
creation of, any lien, security interest, charge or encumbrance upon any of the properties or
assets of the Company or any Company Subsidiary under any of the terms, conditions or provisions of
(i)subject, if applicable, to the approvals of the Companys stockholders set forth on Schedule
C, its organizational documents or (ii)any note, bond, mortgage, indenture, deed of trust,
license, lease, agreement or other instrument or obligation to which the Company or any Company
Subsidiary is a party or by which it or any Company Subsidiary may be bound, or to which the
Company or any Company Subsidiary or any of the
6
properties or assets of the Company or any Company Subsidiary may be subject, or (B)subject to
compliance with the statutes and regulations referred to in the next paragraph, violate any
statute, rule or regulation or any judgment, ruling, order, writ, injunction or decree applicable
to the Company or any Company Subsidiary or any of their respective properties or assets except, in
the case of clauses (A)(ii) and (B), for those occurrences that, individually or in the aggregate,
have not had and would not reasonably be expected to have a Company Material Adverse Effect.
(iii) Other than the filing of the Certificate of Designations with the Secretary of State of
its jurisdiction of organization or other applicable Governmental Entity, any current report on
Form 8-K required to be filed with the SEC, such filings and approvals as are required to be made
or obtained under any state blue sky laws, the filing of any proxy statement contemplated by
Section3.1 and such as have been made or obtained, no notice to, filing with, exemption or review
by, or authorization, consent or approval of, any Governmental Entity is required to be made or
obtained by the Company in connection with the consummation by the Company of the Purchase except
for any such notices, filings, exemptions, reviews, authorizations, consents and approvals the
failure of which to make or obtain would not, individually or in the aggregate, reasonably be
expected to have a Company Material Adverse Effect.
(f) Anti-takeover Provisions and Rights Plan. The Board of Directors of the Company
(the Board of Directors) has taken all necessary action to ensure that the transactions
contemplated by this Agreement and the Warrant and the consummation of the transactions
contemplated hereby and thereby, including the exercise of the Warrant in accordance with its
terms, will be exempt from any anti-takeover or similar provisions of the Companys Charter and
bylaws, and any other provisions of any applicable moratorium, control share, fair price,
interested stockholder or other anti-takeover laws and regulations of any jurisdiction. The
Company has taken all actions necessary to render any stockholders rights plan of the Company
inapplicable to this Agreement and the Warrant and the consummation of the transactions
contemplated hereby and thereby, including the exercise of the Warrant by the Investor in
accordance with its terms.
(g) No Company Material Adverse Effect. Since the last day of the last completed
fiscal period for which the Company has filed a Quarterly Report on Form 10-Q or an Annual Report
on Form 10-K with the SEC prior to the Signing Date, no fact, circumstance, event, change,
occurrence, condition or development has occurred that, individually or in the aggregate, has had
or would reasonably be expected to have a Company Material Adverse Effect.
(h) Company Financial Statements. Each of the consolidated financial statements of
the Company and its consolidated subsidiaries (collectively the Company Financial Statements)
included or incorporated by reference in the Company Reports filed with the SEC since December31,
2006, present fairly in all material respects the consolidated financial position of the Company
and its consolidated subsidiaries as of the dates indicated therein (or if amended prior to the
Signing Date, as of the date of such amendment) and the consolidated results of their operations
for the periods specified therein; and except as stated therein, such financial statements (A)were
prepared in conformity with GAAP applied on a consistent basis (except as may be noted therein),
(B)have been prepared from, and are in accordance with, the books and records of the Company and
the Company Subsidiaries and
7
(C)complied as to form, as of their respective dates of filing with the SEC, in all material
respects with the applicable accounting requirements and with the published rules and regulations
of the SEC with respect thereto.
(i) Reports.
(i) Since December31, 2006, the Company and each subsidiary of the Company (each a Company
Subsidiary and, collectively, the Company Subsidiaries) has timely filed all reports,
registrations, documents, filings, statements and submissions, together with any amendments
thereto, that it was required to file with any Governmental Entity (the foregoing, collectively,
the Company Reports) and has paid all fees and assessments due and payable in connection
therewith, except, in each case, as would not, individually or in the aggregate, reasonably be
expected to have a Company Material Adverse Effect. As of their respective dates of filing, the
Company Reports complied in all material respects with all statutes and applicable rules and
regulations of the applicable Governmental Entities. In the case of each such Company Report filed
with or furnished to the SEC, such Company Report (A)did not, as of its date or if amended prior to
the Signing Date, as of the date of such amendment, contain an untrue statement of a material fact
or omit to state a material fact necessary in order to make the statements made therein, in light
of the circumstances under which they were made, not misleading, and (B)complied as to form in all
material respects with the applicable requirements of the Securities Act and the Exchange Act.
With respect to all other Company Reports, the Company Reports were complete and accurate in all
material respects as of their respective dates. No executive officer of the Company or any Company
Subsidiary has failed in any respect to make the certifications required of him or her under
Section302 or 906 of the Sarbanes-Oxley Act of 2002.
(ii) The records, systems, controls, data and information of the Company and the Company
Subsidiaries are recorded, stored, maintained and operated under means (including any electronic,
mechanical or photographic process, whether computerized or not) that are under the exclusive
ownership and direct control of the Company or the Company Subsidiaries or their accountants
(including all means of access thereto and therefrom), except for any non-exclusive ownership and
non-direct control that would not reasonably be expected to have a material adverse effect on the
system of internal accounting controls described below in this Section2.2(i)(ii). The Company
(A)has implemented and maintains disclosure controls and procedures (as defined in Rule13a-15(e) of
the Exchange Act) to ensure that material information relating to the Company, including the
consolidated Company Subsidiaries, is made known to the chief executive officer and the chief
financial officer of the Company by others within those entities, and (B)has disclosed, based on
its most recent evaluation prior to the Signing Date, to the Companys outside auditors and the
audit committee of the Board of Directors (x)any significant deficiencies and material weaknesses
in the design or operation of internal controls over financial reporting (as defined in
Rule13a-15(f) of the Exchange Act) that are reasonably likely to adversely affect the Companys
ability to record, process, summarize and report financial information and (y)any fraud, whether or
not material, that involves management or other employees who have a significant role in the
Companys internal controls over financial reporting.
8
(j) No Undisclosed Liabilities. Neither the Company nor any of the Company
Subsidiaries has any liabilities or obligations of any nature (absolute, accrued, contingent or
otherwise) which are not properly reflected or reserved against in the Company Financial Statements
to the extent required to be so reflected or reserved against in accordance with GAAP, except for
(A)liabilities that have arisen since the last fiscal year end in the ordinary and usual course of
business and consistent with past practice and (B)liabilities that, individually or in the
aggregate, have not had and would not reasonably be expected to have a Company Material Adverse
Effect.
(k) Offering of Securities. Neither the Company nor any person acting on its behalf
has taken any action (including any offering of any securities of the Company under circumstances
which would require the integration of such offering with the offering of any of the Purchased
Securities under the Securities Act, and the rules and regulations of the SEC promulgated
thereunder), which might subject the offering, issuance or sale of any of the Purchased Securities
to Investor pursuant to this Agreement to the registration requirements of the Securities Act.
(l) Litigation and Other Proceedings. Except (i)as set forth on Schedule D or
(ii)as would not, individually or in the aggregate, reasonably be expected to have a Company
Material Adverse Effect, there is no (A)pending or, to the knowledge of the Company, threatened,
claim, action, suit, investigation or proceeding, against the Company or any Company Subsidiary or
to which any of their assets are subject nor is the Company or any Company Subsidiary subject to
any order, judgment or decree or (B)unresolved violation, criticism or exception by any
Governmental Entity with respect to any report or relating to any examinations or inspections of
the Company or any Company Subsidiaries.
(m) Compliance with Laws. Except as would not, individually or in the aggregate,
reasonably be expected to have a Company Material Adverse Effect, the Company and the Company
Subsidiaries have all permits, licenses, franchises, authorizations, orders and approvals of, and
have made all filings, applications and registrations with, Governmental Entities that are required
in order to permit them to own or lease their properties and assets and to carry on their business
as presently conducted and that are material to the business of the Company or such Company
Subsidiary. Except as set forth on Schedule E, the Company and the Company Subsidiaries
have complied in all respects and are not in default or violation of, and none of them is, to the
knowledge of the Company, under investigation with respect to or, to the knowledge of the Company,
have been threatened to be charged with or given notice of any violation of, any applicable
domestic (federal, state or local) or foreign law, statute, ordinance, license, rule, regulation,
policy or guideline, order, demand, writ, injunction, decree or judgment of any Governmental
Entity, other than such noncompliance, defaults or violations that would not, individually or in
the aggregate, reasonably be expected to have a Company Material Adverse Effect. Except for
statutory or regulatory restrictions of general application or as set forth on Schedule E,
no Governmental Entity has placed any restriction on the business or properties of the Company or
any Company Subsidiary that would, individually or in the aggregate, reasonably be expected to have
a Company Material Adverse Effect.
(n) Employee Benefit Matters. Except as would not reasonably be expected to have,
either individually or in the aggregate, a Company Material Adverse Effect: (A)each
9
employee benefit plan (within the meaning of Section3(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
Section414 of the Internal Revenue Code of 1986, as amended (the Code)) that is sponsored,
maintained or contributed to by the Company or any member of its Controlled Group and for which the
Company or any member of its Controlled Group would have any liability, whether actual or
contingent (each, a Plan) has been maintained in compliance with its terms and with the
requirements of all applicable statutes, rules and regulations, including ERISA and the Code;
(B)with respect to each Plan subject to Title IV of ERISA (including, for purposes of this clause
(B), any plan subject to Title IV of ERISA that the Company or any member of its Controlled Group
previously maintained or contributed to in the six years prior to the Signing Date), (1)no
reportable event (within the meaning of Section4043(c) of ERISA), other than a reportable event
for which the notice period referred to in Section4043(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 Section302 of ERISA or Section412 of the Code), whether
or not waived, has occurred in the three years prior to the Signing Date or is reasonably expected
to occur, (3)the fair market value of the assets under each Plan exceeds the present value of all
benefits accrued under such Plan (determined based on the assumptions used to fund such Plan) and
(4)neither the Company nor any member of its Controlled Group has incurred in the six years prior
to the Signing Date, or reasonably expects to incur, any liability under Title IV of ERISA (other
than contributions to the Plan or premiums to the PBGC in the ordinary course and without default)
in respect of a Plan (including any Plan that is a multiemployer plan, within the meaning of
Section4001(c)(3) of ERISA); and (C)each Plan that is intended to be qualified under Section401(a)
of the Code has received a favorable determination letter from the Internal Revenue Service with
respect to its qualified status that has not been revoked, or such a determination letter has been
timely applied for but not received by the Signing Date, and nothing has occurred, whether by
action or by failure to act, which could reasonably be expected to cause the loss, revocation or
denial of such qualified status or favorable determination letter.
(o) Taxes. Except as would not, individually or in the aggregate, reasonably be
expected to have a Company Material Adverse Effect, (i) the Company and the Company Subsidiaries
have filed all federal, state, local and foreign income and franchise Tax returns required to be
filed through the Signing Date, subject to permitted extensions, and have paid all Taxes due
thereon, and (ii)no Tax deficiency has been determined adversely to the Company or any of the
Company Subsidiaries, nor does the Company have any knowledge of any Tax deficiencies. Tax or
Taxes means any federal, state, local or foreign income, gross receipts, property, sales, use,
license, excise, franchise, employment, payroll, withholding, alternative or add on minimum, ad
valorem, transfer or excise tax, or any other tax, custom, duty, governmental fee or other like
assessment or charge of any kind whatsoever, together with any interest or penalty, imposed by any
Governmental Entity.
(p) Properties and Leases. Except as would not, individually or in the aggregate,
reasonably be expected to have a Company Material Adverse Effect, the Company and the Company
Subsidiaries have good and marketable title to all real properties and all other properties and
assets owned by them, in each case free from liens, encumbrances, claims and
10
defects that would affect the value thereof or interfere with the use made or to be made
thereof by them. Except as would not, individually or in the aggregate, reasonably be expected to
have a Company Material Adverse Effect, the Company and the Company Subsidiaries hold all leased
real or personal property under valid and enforceable leases with no exceptions that would
interfere with the use made or to be made thereof by them.
(q) Environmental Liability. Except as would not, individually or in the aggregate,
reasonably be expected to have a Company Material Adverse Effect:
(i) there is no legal, administrative, or other proceeding, claim or action of any nature
seeking to impose, or that would reasonably be expected to result in the imposition of, on the
Company or any Company Subsidiary, any liability relating to the release of hazardous substances as
defined under any local, state or federal environmental statute, regulation or ordinance, including
the Comprehensive Environmental Response, Compensation and Liability Act of 1980, pending or, to
the Companys knowledge, threatened against the Company or any Company Subsidiary;
(ii) to the Companys knowledge, there is no reasonable basis for any such proceeding, claim
or action; and
(iii) neither the Company nor any Company Subsidiary is subject to any agreement, order,
judgment or decree by or with any court, Governmental Entity or third party imposing any such
environmental liability.
(r) Risk Management Instruments. Except as would not, individually or in the
aggregate, reasonably be expected to have a Company Material Adverse Effect, all derivative
instruments, including, swaps, caps, floors and option agreements, whether entered into for the
Companys own account, or for the account of one or more of the Company Subsidiaries or its or
their customers, were entered into (i)only in the ordinary course of business, (ii)in accordance
with prudent practices and in all material respects with all applicable laws, rules, regulations
and regulatory policies and (iii)with counterparties believed to be financially responsible at the
time; and each of such instruments constitutes the valid and legally binding obligation of the
Company or one of the Company Subsidiaries, enforceable in accordance with its terms, except as may
be limited by the Bankruptcy Exceptions. Neither the Company or the Company Subsidiaries, nor, to
the knowledge of the Company, any other party thereto, is in breach of any of its obligations under
any such agreement or arrangement other than such breaches that would not, individually or in the
aggregate, reasonably be expected to have a Company Material Adverse Effect.
(s) Agreements with Regulatory Agencies. Except as set forth on Schedule 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 December31, 2006, has
adopted any board resolutions at the request of, any Governmental Entity (other than the
Appropriate Federal Banking Agencies with jurisdiction over the Company and the Company
Subsidiaries) that currently restricts in any material respect the conduct of its business or that
in any material manner relates to its capital adequacy, its liquidity and funding
11
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 December31, 2006 by any such Governmental Entity that it is
considering issuing, initiating, ordering, or requesting any such Regulatory Agreement. The
Company and each Company Subsidiary are in compliance in all material respects with each Regulatory
Agreement to which it is party or subject, and neither the Company nor any Company Subsidiary has
received any notice from any Governmental Entity indicating that either the Company or any Company
Subsidiary is not in compliance in all material respects with any such Regulatory Agreement.
Appropriate Federal Banking Agency means the appropriate Federal banking agency with respect to
the Company or such Company Subsidiaries, as applicable, as defined in Section3(q) of the Federal
Deposit Insurance Act (12 U.S.C. Section1813(q)).
(t) Insurance. The Company and the Company Subsidiaries are insured with reputable
insurers against such risks and in such amounts as the management of the Company reasonably has
determined to be prudent and consistent with industry practice. The Company and the Company
Subsidiaries are in material compliance with their insurance policies and are not in default under
any of the material terms thereof, each such policy is outstanding and in full force and effect,
all premiums and other payments due under any material policy have been paid, and all claims
thereunder have been filed in due and timely fashion, except, in each case, as would not,
individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect.
(u) Intellectual Property. Except as would not, individually or in the aggregate,
reasonably be expected to have a Company Material Adverse Effect, (i)the Company and each Company
Subsidiary owns or otherwise has the right to use, all intellectual property rights, including all
trademarks, trade dress, trade names, service marks, domain names, patents, inventions, trade
secrets, know-how, works of authorship and copyrights therein, that are used in the conduct of
their existing businesses and all rights relating to the plans, design and specifications of any of
its branch facilities (Proprietary Rights) free and clear of all liens and any claims of
ownership by current or former employees, contractors, designers or others and (ii)neither the
Company nor any of the Company Subsidiaries is materially infringing, diluting, misappropriating or
violating, nor has the Company or any or the Company Subsidiaries received any written (or, to the
knowledge of the Company, oral) communications alleging that any of them has materially infringed,
diluted, misappropriated or violated, any of the Proprietary Rights owned by any other person.
Except as would not, individually or in the aggregate, reasonably be expected to have a Company
Material Adverse Effect, to the Companys 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 January1, 2006 alleging that any person has infringed, diluted,
misappropriated or violated, any of the Proprietary Rights owned by the Company and the Company
Subsidiaries.
(v) Brokers and Finders. No broker, finder or investment banker is entitled to any
financial advisory, brokerage, finders or other fee or commission in connection with this
Agreement or the Warrant or the transactions contemplated hereby or thereby based upon
12
arrangements made by or on behalf of the Company or any Company Subsidiary for which the
Investor could have any liability.
ARTICLE III
Covenants
3.1 Commercially Reasonable Efforts.
(a) Subject to the terms and conditions of this Agreement, each of the parties will use its
commercially reasonable efforts in good faith to take, or cause to be taken, all actions, and to
do, or cause to be done, all things necessary, proper or desirable, or advisable under applicable
laws, so as to permit consummation of the Purchase as promptly as practicable and otherwise to
enable consummation of the transactions contemplated hereby and shall use commercially reasonable
efforts to cooperate with the other party to that end.
(b) If the Company is required to obtain any stockholder approvals set forth on Schedule
C, then the Company shall comply with this Section3.1(b) and Section3.1(c). The Company shall
call a special meeting of its stockholders, as promptly as practicable following the Closing, to
vote on proposals (collectively, the Stockholder Proposals) to (i)approve the exercise of the
Warrant for Common Stock for purposes of the rules of the national security exchange on which the
Common Stock is listed and/or (ii)amend the Companys Charter to increase the number of authorized
shares of Common Stock to at least such number as shall be sufficient to permit the full exercise
of the Warrant for Common Stock and comply with the other provisions of this Section3.1(b) and
Section3.1(c). The Board of Directors shall recommend to the Companys stockholders that such
stockholders vote in favor of the Stockholder Proposals. In connection with such meeting, the
Company shall prepare (and the Investor will reasonably cooperate with the Company to prepare) and
file with the SEC as promptly as practicable (but in no event more than ten business days after the
Closing) a preliminary proxy statement, shall use its reasonable best efforts to respond to any
comments of the SEC or its staff thereon and to cause a definitive proxy statement related to such
stockholders meeting to be mailed to the Companys stockholders not more than five business days
after clearance thereof by the SEC, and shall use its reasonable best efforts to solicit proxies
for such stockholder approval of the Stockholder Proposals. The Company shall notify the Investor
promptly of the receipt of any comments from the SEC or its staff with respect to the proxy
statement and of any request by the SEC or its staff for amendments or supplements to such proxy
statement or for additional information and will supply the Investor with copies of all
correspondence between the Company or any of its representatives, on the one hand, and the SEC or
its staff, on the other hand, with respect to such proxy statement. If at any time prior to such
stockholders meeting there shall occur any event that is required to be set forth in an amendment
or supplement to the proxy statement, the Company shall as promptly as practicable prepare and mail
to its stockholders such an amendment or supplement. Each of the Investor and the Company agrees
promptly to correct any information provided by it or on its behalf for use in the proxy statement
if and to the extent that such information shall have become false or misleading in any material
respect, and the Company shall as promptly as practicable prepare and mail to its stockholders an
amendment or supplement to correct such information to the extent required by applicable laws and
regulations. The Company shall consult with the Investor
13
prior to filing any proxy statement, or any amendment or supplement thereto, and provide the
Investor with a reasonable opportunity to comment thereon. In the event that the approval of any
of the Stockholder Proposals is not obtained at such special stockholders meeting, the Company
shall include a proposal to approve (and the Board of Directors shall recommend approval of) each
such proposal at a meeting of its stockholders no less than once in each subsequent six-month
period beginning on January1, 2009 until all such approvals are obtained or made.
(c) None of the information supplied by the Company or any of the Company Subsidiaries for
inclusion in any proxy statement in connection with any such stockholders meeting of the Company
will, at the date it is filed with the SEC, when first mailed to the Companys stockholders and at
the time of any stockholders meeting, and at the time of any amendment or supplement thereof,
contain any untrue statement of a material fact or omit to state any material fact necessary in
order to make the statements therein, in light of the circumstances under which they are made, not
misleading.
3.2 Expenses. Unless otherwise provided in this Agreement or the Warrant, each of the
parties hereto will bear and pay all costs and expenses incurred by it or on its behalf in
connection with the transactions contemplated under this Agreement and the Warrant, including fees
and expenses of its own financial or other consultants, investment bankers, accountants and
counsel.
3.3 Sufficiency of Authorized Common Stock; Exchange Listing.
(a) During the period from the Closing Date (or, if the approval of the Stockholder Proposals
is required, the date of such approval) until the date on which the Warrant has been fully
exercised, the Company shall at all times have reserved for issuance, free of preemptive or similar
rights, a sufficient number of authorized and unissued Warrant Shares to effectuate such exercise.
Nothing in this Section3.3 shall preclude the Company from satisfying its obligations in respect of
the exercise of the Warrant by delivery of shares of Common Stock which are held in the treasury of
the Company. As soon as reasonably practicable following the Closing, the Company shall, at its
expense, cause the Warrant Shares to be listed on the same national securities exchange on which
the Common Stock is listed, subject to official notice of issuance, and shall maintain such listing
for so long as any Common Stock is listed on such exchange.
(b) If requested by the Investor, the Company shall promptly use its reasonable best efforts
to cause the Preferred Shares to be approved for listing on a national securities exchange as
promptly as practicable following such request.
3.4 Certain Notifications Until Closing. From the Signing Date until the Closing, the
Company shall promptly notify the Investor of (i)any fact, event or circumstance of which it is
aware and which would reasonably be expected to cause any representation or warranty of the Company
contained in this Agreement to be untrue or inaccurate in any material respect or to cause any
covenant or agreement of the Company contained in this Agreement not to be complied with or
satisfied in any material respect and (ii)except as Previously Disclosed, any fact, circumstance,
event, change, occurrence, condition or development of which the Company is aware and which,
individually or in the aggregate, has had or would reasonably be expected to
14
have a Company Material Adverse Effect; provided, however, that delivery of any notice
pursuant to this Section3.4 shall not limit or affect any rights of or remedies available to the
Investor; provided, further, that a failure to comply with this Section3.4 shall not constitute a
breach of this Agreement or the failure of any condition set forth in Section1.2 to be satisfied
unless the underlying Company Material Adverse Effect or material breach would independently result
in the failure of a condition set forth in Section1.2 to be satisfied.
3.5 Access, Information and Confidentiality.
(a) From the Signing Date until the date when the Investor holds an amount of Preferred Shares
having an aggregate liquidation value of less than 10% of the Purchase Price, the Company will
permit the Investor and its agents, consultants, contractors and advisors (x)acting through the
Appropriate Federal Banking Agency, to examine the corporate books and make copies thereof and to
discuss the affairs, finances and accounts of the Company and the Company Subsidiaries with the
principal officers of the Company, all upon reasonable notice and at such reasonable times and as
often as the Investor may reasonably request and (y)to review any information material to the
Investors investment in the Company provided by the Company to its Appropriate Federal Banking
Agency. Any investigation pursuant to this Section3.5 shall be conducted during normal business
hours and in such manner as not to interfere unreasonably with the conduct of the business of the
Company, and nothing herein shall require the Company or any Company Subsidiary to disclose any
information to the Investor to the extent (i)prohibited by applicable law or regulation, or
(ii)that such disclosure would reasonably be expected to cause a violation of any agreement to
which the Company or any Company Subsidiary is a party or would cause a risk of a loss of privilege
to the Company or any Company Subsidiary (provided that the Company shall use commercially
reasonable efforts to make appropriate substitute disclosure arrangements under circumstances where
the restrictions in this clause (ii)apply).
(b) The Investor will use reasonable best efforts to hold, and will use reasonable best
efforts to cause its agents, consultants, contractors and advisors to hold, in confidence all
non-public records, books, contracts, instruments, computer data and other data and information
(collectively, Information) concerning the Company furnished or made available to it by the
Company or its representatives pursuant to this Agreement (except to the extent that such
information can be shown to have been (i)previously known by such party on a non-confidential
basis, (ii)in the public domain through no fault of such party or (iii)later lawfully acquired from
other sources by the party to which it was furnished (and without violation of any other
confidentiality obligation)); provided that nothing herein shall prevent the Investor from
disclosing any Information to the extent required by applicable laws or regulations or by any
subpoena or similar legal process.
ARTICLE IV
Additional Agreements
4.1 Purchase for Investment. The Investor acknowledges that the Purchased Securities
and the Warrant Shares have not been registered under the Securities Act or under any state
securities laws. The Investor (a)is acquiring the Purchased Securities pursuant to an exemption
from registration under the Securities Act solely for investment with no present
15
intention to distribute them to any person in violation of the Securities Act or any
applicable U.S. state securities laws, (b)will not sell or otherwise dispose of any of the
Purchased Securities or the Warrant Shares, except in compliance with the registration requirements
or exemption provisions of the Securities Act and any applicable U.S. state securities laws, and
(c)has such knowledge and experience in financial and business matters and in investments of this
type that it is capable of evaluating the merits and risks of the Purchase and of making an
informed investment decision.
4.2 Legends.
(a) The Investor agrees that all certificates or other instruments representing the Warrant
and the Warrant Shares will bear a legend substantially to the following effect:
THE SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT
BE TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF EXCEPT WHILE A REGISTRATION STATEMENT
RELATING THERETO IS IN EFFECT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS OR
PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT OR SUCH LAWS.
(b) The Investor agrees that all certificates or other instruments representing the Warrant
will also bear a legend substantially to the following effect:
THIS INSTRUMENT IS ISSUED SUBJECT TO THE RESTRICTIONS ON TRANSFER AND OTHER
PROVISIONS OF A SECURITIES PURCHASE AGREEMENT BETWEEN THE ISSUER OF THESE SECURITIES
AND THE INVESTOR REFERRED TO THEREIN, A COPY OF WHICH IS ON FILE WITH THE ISSUER.
THE SECURITIES REPRESENTED BY THIS INSTRUMENT MAY NOT BE SOLD OR OTHERWISE
TRANSFERRED EXCEPT IN COMPLIANCE WITH SAID AGREEMENT. ANY SALE OR OTHER TRANSFER
NOT IN COMPLIANCE WITH SAID AGREEMENT WILL BE VOID.
(c) In addition, the Investor agrees that all certificates or other instruments representing
the Preferred Shares will bear a legend substantially to the following effect:
THE SECURITIES REPRESENTED BY THIS INSTRUMENT ARE NOT SAVINGS ACCOUNTS, DEPOSITS OR
OTHER OBLIGATIONS OF A BANK AND ARE NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE
CORPORATION OR ANY OTHER GOVERNMENTAL AGENCY.
THE SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE SECURITIES ACT), OR THE SECURITIES LAWS OF
ANY STATE AND MAY NOT BE TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF EXCEPT WHILE A
REGISTRATION STATEMENT
16
RELATING THERETO IS IN EFFECT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS OR
PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT OR SUCH LAWS. EACH
PURCHASER OF THE SECURITIES REPRESENTED BY THIS INSTRUMENT IS NOTIFIED THAT THE
SELLER MAY BE RELYING ON THE EXEMPTION FROM SECTION 5 OF THE SECURITIES ACT PROVIDED
BY RULE 144A THEREUNDER. ANY TRANSFEREE OF THE SECURITIES REPRESENTED BY THIS
INSTRUMENT BY ITS ACCEPTANCE HEREOF (1)REPRESENTS THAT IT IS A QUALIFIED
INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT), (2)AGREES
THAT IT WILL NOT OFFER, SELL OR OTHERWISE TRANSFER THE SECURITIES REPRESENTED BY
THIS INSTRUMENT EXCEPT (A)PURSUANT TO A REGISTRATION STATEMENT WHICH IS THEN
EFFECTIVE UNDER THE SECURITIES ACT, (B)FOR SO LONG AS THE SECURITIES REPRESENTED BY
THIS INSTRUMENT ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A PERSON IT
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER AS DEFINED IN RULE 144A
UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A
QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING
MADE IN RELIANCE ON RULE 144A, (C)TO THE ISSUER OR (D)PURSUANT TO ANY OTHER
AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND
(3)AGREES THAT IT WILL GIVE TO EACH PERSON TO WHOM THE SECURITIES REPRESENTED BY
THIS INSTRUMENT ARE TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS
LEGEND.
(d) In the event that any Purchased Securities or Warrant Shares (i)become registered under
the Securities Act or (ii)are eligible to be transferred without restriction in accordance with
Rule 144 or another exemption from registration under the Securities Act (other than Rule 144A),
the Company shall issue new certificates or other instruments representing such Purchased
Securities or Warrant Shares, which shall not contain the applicable legends in Sections 4.2(a) and
(c)above; provided that the Investor surrenders to the Company the previously issued certificates
or other instruments. Upon Transfer of all or a portion of the Warrant in compliance with
Section4.4, the Company shall issue new certificates or other instruments representing the Warrant,
which shall not contain the applicable legend in Section4.2(b) above; provided that the Investor
surrenders to the Company the previously issued certificates or other instruments.
4.3 Certain Transactions. The Company will not merge or consolidate with, or sell,
transfer or lease all or substantially all of its property or assets to, any other party unless the
successor, transferee or lessee party (or its ultimate parent entity), as the case may be (if not
the Company), expressly assumes the due and punctual performance and observance of each and every
covenant, agreement and condition of this Agreement to be performed and observed by the Company.
17
4.4 Transfer of Purchased Securities and Warrant Shares; Restrictions on Exercise of the
Warrant. Subject to compliance with applicable securities laws, the Investor shall be
permitted to transfer, sell, assign or otherwise dispose of (Transfer) all or a portion of the
Purchased Securities or Warrant Shares at any time, and the Company shall take all steps as may be
reasonably requested by the Investor to facilitate the Transfer of the Purchased Securities and the
Warrant Shares; provided that the Investor shall not Transfer a portion or portions of the Warrant
with respect to, and/or exercise the Warrant for, more than one-half of the Initial Warrant Shares
(as such number may be adjusted from time to time pursuant to Section13 thereof) in the aggregate
until the earlier of (a)the date on which the Company (or any successor by Business Combination)
has received aggregate gross proceeds of not less than the Purchase Price (and the purchase price
paid by the Investor to any such successor for securities of such successor purchased under the
CPP) from one or more Qualified Equity Offerings (including Qualified Equity Offerings of such
successor) and (b)December31, 2009. Qualified Equity Offering means the sale and issuance for
cash by the Company to persons other than the Company or any of the Company Subsidiaries after the
Closing Date of shares of perpetual Preferred Stock, Common Stock or any combination of such stock,
that, in each case, qualify as and may be included in Tier 1 capital of the Company at the time of
issuance under the applicable risk-based capital guidelines of the Companys Appropriate Federal
Banking Agency (other than any such sales and issuances made pursuant to agreements or arrangements
entered into, or pursuant to financing plans which were publicly announced, on or prior to
October13, 2008). Business Combination means a merger, consolidation, statutory share exchange
or similar transaction that requires the approval of the Companys stockholders.
4.5 Registration Rights.
(a) Registration.
(i) Subject to the terms and conditions of this Agreement, the Company covenants and agrees
that as promptly as practicable after the Closing Date (and in any event no later than 30 days
after the Closing Date), the Company shall prepare and file with the SEC a Shelf Registration
Statement covering all Registrable Securities (or otherwise designate an existing Shelf
Registration Statement filed with the SEC to cover the Registrable Securities), and, to the extent
the Shelf Registration Statement has not theretofore been declared effective or is not
automatically effective upon such filing, the Company shall use reasonable best efforts to cause
such Shelf Registration Statement to be declared or become effective and to keep such Shelf
Registration Statement continuously effective and in compliance with the Securities Act and usable
for resale of such Registrable Securities for a period from the date of its initial effectiveness
until such time as there are no Registrable Securities remaining (including by refiling such Shelf
Registration Statement (or a new Shelf Registration Statement) if the initial Shelf Registration
Statement expires). So long as the Company is a well-known seasoned issuer (as defined in Rule 405
under the Securities Act) at the time of filing of the Shelf Registration Statement with the SEC,
such Shelf Registration Statement shall be designated by the Company as an automatic Shelf
Registration Statement. Notwithstanding the foregoing, if on the Signing Date the Company is not
eligible to file a registration statement on Form S-3, then the Company shall not be obligated to
file a Shelf Registration Statement unless and until requested to do so in writing by the Investor.
18
(ii) Any registration pursuant to Section4.5(a)(i) shall be effected by means of a shelf
registration on an appropriate form under Rule 415 under the Securities Act (a Shelf Registration
Statement). If the Investor or any other Holder intends to distribute any Registrable Securities
by means of an underwritten offering it shall promptly so advise the Company and the Company shall
take all reasonable steps to facilitate such distribution, including the actions required pursuant
to Section4.5(c); provided that the Company shall not be required to facilitate an underwritten
offering of Registrable Securities unless the expected gross proceeds from such offering exceed
(i)2% of the initial aggregate liquidation preference of the Preferred Shares if such initial
aggregate liquidation preference is less than $2 billion and (ii)$200 million if the initial
aggregate liquidation preference of the Preferred Shares is equal to or greater than $2 billion.
The lead underwriters in any such distribution shall be selected by the Holders of a majority of
the Registrable Securities to be distributed; provided that to the extent appropriate and permitted
under applicable law, such Holders shall consider the qualifications of any broker-dealer Affiliate
of the Company in selecting the lead underwriters in any such distribution.
(iii) The Company shall not be required to effect a registration (including a resale of
Registrable Securities from an effective Shelf Registration Statement) or an underwritten offering
pursuant to Section4.5(a): (A)with respect to securities that are not Registrable Securities; or
(B)if the Company has notified the Investor and all other Holders that in the good faith judgment
of the Board of Directors, it would be materially detrimental to the Company or its securityholders
for such registration or underwritten offering to be effected at such time, in which event the
Company shall have the right to defer such registration for a period of not more than 45 days after
receipt of the request of the Investor or any other Holder; provided that such right to delay a
registration or underwritten offering shall be exercised by the Company (1)only if the Company has
generally exercised (or is concurrently exercising) similar black-out rights against holders of
similar securities that have registration rights and (2)not more than three times in any 12-month
period and not more than 90 days in the aggregate in any 12-month period.
(iv) If during any period when an effective Shelf Registration Statement is not available, the
Company proposes to register any of its equity securities, other than a registration pursuant to
Section4.5(a)(i) or a Special Registration, and the registration form to be filed may be used for
the registration or qualification for distribution of Registrable Securities, the Company will give
prompt written notice to the Investor and all other Holders of its intention to effect such a
registration (but in no event less than ten days prior to the anticipated filing date) and will
include in such registration all Registrable Securities with respect to which the Company has
received written requests for inclusion therein within ten business days after the date of the
Companys notice (a Piggyback Registration). Any such person that has made such a written
request may withdraw its Registrable Securities from such Piggyback Registration by giving written
notice to the Company and the managing underwriter, if any, on or before the fifth business day
prior to the planned effective date of such Piggyback Registration. The Company may terminate or
withdraw any registration under this Section4.5(a)(iv) prior to the effectiveness of such
registration, whether or not Investor or any other Holders have elected to include Registrable
Securities in such registration.
19
(v) If the registration referred to in Section4.5(a)(iv) is proposed to be underwritten, the
Company will so advise Investor and all other Holders as a part of the written notice given
pursuant to Section4.5(a)(iv). In such event, the right of Investor and all other Holders to
registration pursuant to Section4.5(a) will be conditioned upon such persons participation in such
underwriting and the inclusion of such persons Registrable Securities in the underwriting if such
securities are of the same class of securities as the securities to be offered in the underwritten
offering, and each such person will (together with the Company and the other persons distributing
their securities through such underwriting) enter into an underwriting agreement in customary form
with the underwriter or underwriters selected for such underwriting by the Company; provided that
the Investor (as opposed to other Holders) shall not be required to indemnify any person in
connection with any registration. If any participating person disapproves of the terms of the
underwriting, such person may elect to withdraw therefrom by written notice to the Company, the
managing underwriters and the Investor (if the Investor is participating in the underwriting).
(vi) If either (x)the Company grants piggyback registration rights to one or more third
parties to include their securities in an underwritten offering under the Shelf Registration
Statement pursuant to Section4.5(a)(ii) or (y)a Piggyback Registration under Section4.5(a)(iv)
relates to an underwritten offering on behalf of the Company, and in either case the managing
underwriters advise the Company that in their reasonable opinion the number of securities requested
to be included in such offering exceeds the number which can be sold without adversely affecting
the marketability of such offering (including an adverse effect on the per share offering price),
the Company will include in such offering only such number of securities that in the reasonable
opinion of such managing underwriters can be sold without adversely affecting the marketability of
the offering (including an adverse effect on the per share offering price), which securities will
be so included in the following order of priority: (A)first, in the case of a Piggyback
Registration under Section4.5(a)(iv), the securities the Company proposes to sell, (B)then the
Registrable Securities of the Investor and all other Holders who have requested inclusion of
Registrable Securities pursuant to Section4.5(a)(ii) or Section4.5(a)(iv), as applicable, pro rata
on the basis of the aggregate number of such securities or shares owned by each such person and
(C)lastly, any other securities of the Company that have been requested to be so included, subject
to the terms of this Agreement; provided, however, that if the Company has, prior to the Signing
Date, entered into an agreement with respect to its securities that is inconsistent with the order
of priority contemplated hereby then it shall apply the order of priority in such conflicting
agreement to the extent that it would otherwise result in a breach under such agreement.
(b) Expenses of Registration. All Registration Expenses incurred in connection with
any registration, qualification or compliance hereunder shall be borne by the Company. All Selling
Expenses incurred in connection with any registrations hereunder shall be borne by the holders of
the securities so registered pro rata on the basis of the aggregate offering or sale price of the
securities so registered.
(c) Obligations of the Company. The Company shall use its reasonable best efforts,
for so long as there are Registrable Securities outstanding, to take such actions as are under its
control to not become an ineligible issuer (as defined in Rule 405 under the Securities Act) and to
remain a well-known seasoned issuer (as defined in Rule 405 under the Securities
20
Act) if it has such status on the Signing Date or becomes eligible for such status in the
future. In addition, whenever required to effect the registration of any Registrable Securities or
facilitate the distribution of Registrable Securities pursuant to an effective Shelf Registration
Statement, the Company shall, as expeditiously as reasonably practicable:
(i) Prepare and file with the SEC a prospectus supplement with respect to a proposed offering
of Registrable Securities pursuant to an effective registration statement, subject to
Section4.5(d), keep such registration statement effective and keep such prospectus supplement
current until the securities described therein are no longer Registrable Securities.
(ii) Prepare and file with the SEC such amendments and supplements to the applicable
registration statement and the prospectus or prospectus supplement used in connection with such
registration statement as may be necessary to comply with the provisions of the Securities Act with
respect to the disposition of all securities covered by such registration statement.
(iii) Furnish to the Holders and any underwriters such number of copies of the applicable
registration statement and each such amendment and supplement thereto (including in each case all
exhibits) and of a prospectus, including a preliminary prospectus, in conformity with the
requirements of the Securities Act, and such other documents as they may reasonably request in
order to facilitate the disposition of Registrable Securities owned or to be distributed by them.
(iv) Use its reasonable best efforts to register and qualify the securities covered by such
registration statement under such other securities or Blue Sky laws of such jurisdictions as shall
be reasonably requested by the Holders or any managing underwriter(s), to keep such registration or
qualification in effect for so long as such registration statement remains in effect, and to take
any other action which may be reasonably necessary to enable such seller to consummate the
disposition in such jurisdictions of the securities owned by such Holder; provided that the Company
shall not be required in connection therewith or as a condition thereto to qualify to do business
or to file a general consent to service of process in any such states or jurisdictions.
(v) Notify each Holder of Registrable Securities at any time when a prospectus relating
thereto is required to be delivered under the Securities Act of the happening of any event as a
result of which the applicable prospectus, as then in effect, includes an untrue statement of a
material fact or omits to state a material fact required to be stated therein or necessary to make
the statements therein not misleading in light of the circumstances then existing.
(vi) Give written notice to the Holders:
(A) when any registration statement filed pursuant to Section4.5(a) or any amendment thereto
has been filed with the SEC (except for any amendment effected by the filing of a document with the
SEC pursuant to the Exchange Act) and when such registration statement or any post-effective
amendment thereto has become effective;
21
(B) of any request by the SEC for amendments or supplements to any registration statement or
the prospectus included therein or for additional information;
(C) of the issuance by the SEC of any stop order suspending the effectiveness of any
registration statement or the initiation of any proceedings for that purpose;
(D) of the receipt by the Company or its legal counsel of any notification with respect to the
suspension of the qualification of the Common Stock for sale in any jurisdiction or the initiation
or threatening of any proceeding for such purpose;
(E) of the happening of any event that requires the Company to make changes in any effective
registration statement or the prospectus related to the registration statement in order to make the
statements therein not misleading (which notice shall be accompanied by an instruction to suspend
the use of the prospectus until the requisite changes have been made); and
(F) if at any time the representations and warranties of the Company contained in any
underwriting agreement contemplated by Section4.5(c)(x) cease to be true and correct.
(vii) Use its reasonable best efforts to prevent the issuance or obtain the withdrawal of any
order suspending the effectiveness of any registration statement referred to in
Section4.5(c)(vi)(C) at the earliest practicable time.
(viii) Upon the occurrence of any event contemplated by Section4.5(c)(v) or 4.5(c)(vi)(E),
promptly prepare a post-effective amendment to such registration statement or a supplement to the
related prospectus or file any other required document so that, as thereafter delivered to the
Holders and any underwriters, the prospectus will not contain an untrue statement of a material
fact or omit to state any material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. If the Company notifies the Holders in
accordance with Section4.5(c)(vi)(E) to suspend the use of the prospectus until the requisite
changes to the prospectus have been made, then the Holders and any underwriters shall suspend use
of such prospectus and use their reasonable best efforts to return to the Company all copies of
such prospectus (at the Companys expense) other than permanent file copies then in such Holders
or underwriters possession. The total number of days that any such suspension may be in effect in
any 12-month period shall not exceed 90 days.
(ix) Use reasonable best efforts to procure the cooperation of the Companys transfer agent in
settling any offering or sale of Registrable Securities, including with respect to the transfer of
physical stock certificates into book-entry form in accordance with any procedures reasonably
requested by the Holders or any managing underwriter(s).
(x) If an underwritten offering is requested pursuant to Section4.5(a)(ii), enter into an
underwriting agreement in customary form, scope and substance and take all such other actions
reasonably requested by the Holders of a majority of the Registrable Securities being sold in
connection therewith or by the managing underwriter(s), if
22
any, to expedite or facilitate the underwritten disposition of such Registrable Securities,
and in connection therewith in any underwritten offering (including making members of management
and executives of the Company available to participate in road shows, similar sales events and
other marketing activities), (A)make such representations and warranties to the Holders that are
selling stockholders and the managing underwriter(s), if any, with respect to the business of the
Company and its subsidiaries, and the Shelf Registration Statement, prospectus and documents, if
any, incorporated or deemed to be incorporated by reference therein, in each case, in customary
form, substance and scope, and, if true, confirm the same if and when requested, (B)use its
reasonable best efforts to furnish the underwriters with opinions of counsel to the Company,
addressed to the managing underwriter(s), if any, covering the matters customarily covered in such
opinions requested in underwritten offerings, (C)use its reasonable best efforts to obtain cold
comfort letters from the independent certified public accountants of the Company (and, if
necessary, any other independent certified public accountants of any business acquired by the
Company for which financial statements and financial data are included in the Shelf Registration
Statement) who have certified the financial statements included in such Shelf Registration
Statement, addressed to each of the managing underwriter(s), if any, such letters to be in
customary form and covering matters of the type customarily covered in cold comfort letters,
(D)if an underwriting agreement is entered into, the same shall contain indemnification provisions
and procedures customary in underwritten offerings (provided that the Investor shall not be
obligated to provide any indemnity), and (E)deliver such documents and certificates as may be
reasonably requested by the Holders of a majority of the Registrable Securities being sold in
connection therewith, their counsel and the managing underwriter(s), if any, to evidence the
continued validity of the representations and warranties made pursuant to clause (i)above and to
evidence compliance with any customary conditions contained in the underwriting agreement or other
agreement entered into by the Company.
(xi) Make available for inspection by a representative of Holders that are selling
stockholders, the managing underwriter(s), if any, and any attorneys or accountants retained by
such Holders or managing underwriter(s), at the offices where normally kept, during reasonable
business hours, financial and other records, pertinent corporate documents and properties of the
Company, and cause the officers, directors and employees of the Company to supply all information
in each case reasonably requested (and of the type customarily provided in connection with due
diligence conducted in connection with a registered public offering of securities) by any such
representative, managing underwriter(s), attorney or accountant in connection with such Shelf
Registration Statement.
(xii) Use reasonable best efforts to cause all such Registrable Securities to be listed on
each national securities exchange on which similar securities issued by the Company are then listed
or, if no similar securities issued by the Company are then listed on any national securities
exchange, use its reasonable best efforts to cause all such Registrable Securities to be listed on
such securities exchange as the Investor may designate.
(xiii) If requested by Holders of a majority of the Registrable Securities being registered
and/or sold in connection therewith, or the managing underwriter(s), if any, promptly include in a
prospectus supplement or amendment such information as the Holders of a majority of the Registrable
Securities being registered and/or sold in connection therewith or managing underwriter(s), if any,
may reasonably request in order to permit the intended method
23
of distribution of such securities and make all required filings of such prospectus supplement
or such amendment as soon as practicable after the Company has received such request.
(xiv) Timely provide to its security holders earning statements satisfying the provisions of
Section11(a) of the Securities Act and Rule 158 thereunder.
(d) Suspension of Sales. Upon receipt of written notice from the Company that a
registration statement, prospectus or prospectus supplement contains or may contain an untrue
statement of a material fact or omits or may omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading or that circumstances exist that
make inadvisable use of such registration statement, prospectus or prospectus supplement, the
Investor and each Holder of Registrable Securities shall forthwith discontinue disposition of
Registrable Securities until the Investor and/or Holder has received copies of a supplemented or
amended prospectus or prospectus supplement, or until the Investor and/or such Holder is advised in
writing by the Company that the use of the prospectus and, if applicable, prospectus supplement may
be resumed, and, if so directed by the Company, the Investor and/or such Holder shall deliver to
the Company (at the Companys expense) all copies, other than permanent file copies then in the
Investor and/or such Holders possession, of the prospectus and, if applicable, prospectus
supplement covering such Registrable Securities current at the time of receipt of such notice. The
total number of days that any such suspension may be in effect in any 12-month period shall not
exceed 90 days.
(e) Termination of Registration Rights. A Holders registration rights as to any
securities held by such Holder (and its Affiliates, partners, members and former members) shall not
be available unless such securities are Registrable Securities.
(f) Furnishing Information.
(i) Neither the Investor nor any Holder shall use any free writing prospectus (as defined in
Rule 405) in connection with the sale of Registrable Securities without the prior written consent
of the Company.
(ii) It shall be a condition precedent to the obligations of the Company to take any action
pursuant to Section4.5(c) that Investor and/or the selling Holders and the underwriters, if any,
shall furnish to the Company such information regarding themselves, the Registrable Securities held
by them and the intended method of disposition of such securities as shall be required to effect
the registered offering of their Registrable Securities.
(g) Indemnification.
(i) The Company agrees to indemnify each Holder and, if a Holder is a person other than an
individual, such Holders 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
24
statement of material fact contained in any registration statement, including any preliminary
prospectus or final prospectus contained therein or any amendments or supplements thereto or any
documents incorporated therein by reference or contained in any free writing prospectus (as such
term is defined in Rule 405) prepared by the Company or authorized by it in writing for use by such
Holder (or any amendment or supplement thereto); or any omission to state therein a material fact
required to be stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; provided, that the Company shall not be
liable to such Indemnitee in any such case to the extent that any such loss, claim, damage,
liability (or action or proceeding in respect thereof) or expense arises out of or is based upon
(A)an untrue statement or omission made in such registration statement, including any such
preliminary prospectus or final prospectus contained therein or any such amendments or supplements
thereto or contained in any free writing prospectus (as such term is defined in Rule 405) prepared
by the Company or authorized by it in writing for use by such Holder (or any amendment or
supplement thereto), in reliance upon and in conformity with information regarding such Indemnitee
or its plan of distribution or ownership interests which was furnished in writing to the Company by
such Indemnitee for use in connection with such registration statement, including any such
preliminary prospectus or final prospectus contained therein or any such amendments or supplements
thereto, or (B)offers or sales effected by or on behalf of such Indemnitee by means of (as
defined in Rule 159A) a free writing prospectus (as defined in Rule 405) that was not authorized
in writing by the Company.
(ii) If the indemnification provided for in Section4.5(g)(i)is unavailable to an Indemnitee
with respect to any losses, claims, damages, actions, liabilities, costs or expenses referred to
therein or is insufficient to hold the Indemnitee harmless as contemplated therein, then the
Company, in lieu of indemnifying such Indemnitee, shall contribute to the amount paid or payable by
such Indemnitee as a result of such losses, claims, damages, actions, liabilities, costs or
expenses in such proportion as is appropriate to reflect the relative fault of the Indemnitee, on
the one hand, and the Company, on the other hand, in connection with the statements or omissions
which resulted in such losses, claims, damages, actions, liabilities, costs or expenses as well as
any other relevant equitable considerations. The relative fault of the Company, on the one hand,
and of the Indemnitee, on the other hand, shall be determined by reference to, among other factors,
whether the untrue statement of a material fact or omission to state a material fact relates to
information supplied by the Company or by the Indemnitee and the parties relative intent,
knowledge, access to information and opportunity to correct or prevent such statement or omission;
the Company and each Holder agree that it would not be just and equitable if contribution pursuant
to this Section4.5(g)(ii)were determined by pro rata allocation or by any other method of
allocation that does not take account of the equitable considerations referred to in
Section4.5(g)(i). No Indemnitee guilty of fraudulent misrepresentation (within the meaning of
Section11(f)of the Securities Act) shall be entitled to contribution from the Company if the
Company was not guilty of such fraudulent misrepresentation.
(h) Assignment of Registration Rights. The rights of the Investor to registration of
Registrable Securities pursuant to Section4.5(a) may be assigned by the Investor to a transferee or
assignee of Registrable Securities with a liquidation preference or, in the case of Registrable
Securities other than Preferred Shares, a market value, no less than an amount equal to (i)2% of
the initial aggregate liquidation preference of the Preferred Shares if such
25
initial aggregate liquidation preference is less than $2 billion and (ii)$200 million if the
initial aggregate liquidation preference of the Preferred Shares is equal to or greater than $2
billion; provided, however, the transferor shall, within ten days after such transfer, furnish to
the Company written notice of the name and address of such transferee or assignee and the number
and type of Registrable Securities that are being assigned. For purposes of this Section4.5(h),
market value per share of Common Stock shall be the last reported sale price of the Common Stock
on the national securities exchange on which the Common Stock is listed or admitted to trading on
the last trading day prior to the proposed transfer, and the market value for the Warrant (or any
portion thereof) shall be the market value per share of Common Stock into which the Warrant (or
such portion) is exercisable less the exercise price per share.
(i) Clear Market. With respect to any underwritten offering of Registrable Securities
by the Investor or other Holders pursuant to this Section4.5, the Company agrees not to effect
(other than pursuant to such registration or pursuant to a Special Registration) any public sale or
distribution, or to file any Shelf Registration Statement (other than such registration or a
Special Registration) covering, in the case of an underwritten offering of Common Stock or
Warrants, any of its equity securities or, in the case of an underwritten offering of Preferred
Shares, any Preferred Stock of the Company, or, in each case, any securities convertible into or
exchangeable or exercisable for such securities, during the period not to exceed ten days prior and
60 days following the effective date of such offering or such longer period up to 90 days as may be
requested by the managing underwriter for such underwritten offering. The Company also agrees to
cause such of its directors and senior executive officers to execute and deliver customary lock-up
agreements in such form and for such time period up to 90 days as may be requested by the managing
underwriter. Special Registration means the registration of (A)equity securities and/or options
or other rights in respect thereof solely registered on Form S-4 or Form S-8 (or successor form) or
(B)shares of equity securities and/or options or other rights in respect thereof to be offered to
directors, members of management, employees, consultants, customers, lenders or vendors of the
Company or Company Subsidiaries or in connection with dividend reinvestment plans.
(j) Rule144; Rule 144A. With a view to making available to the Investor and Holders
the benefits of certain rules and regulations of the SEC which may permit the sale of the
Registrable Securities to the public without registration, the Company agrees to use its reasonable
best efforts to:
(i) make and keep public information available, as those terms are understood and defined in
Rule144(c)(1) or any similar or analogous rule promulgated under the Securities Act, at all times
after the Signing Date;
(ii) (A) file with the SEC, in a timely manner, all reports and other documents required of
the Company under the Exchange Act, and (B)if at any time the Company is not required to file such
reports, make available, upon the request of any Holder, such information necessary to permit sales
pursuant to Rule 144A (including the information required by Rule 144A(d)(4) under the Securities
Act);
(iii) so long as the Investor or a Holder owns any Registrable Securities, furnish to the
Investor or such Holder forthwith upon request: a written statement by
26
the Company as to its compliance with the reporting requirements of Rule144 under the
Securities Act, and of the Exchange Act; a copy of the most recent annual or quarterly report of
the Company; and such other reports and documents as the Investor or Holder may reasonably request
in availing itself of any rule or regulation of the SEC allowing it to sell any such securities to
the public without registration; and
(iv) take such further action as any Holder may reasonably request, all to the extent required
from time to time to enable such Holder to sell Registrable Securities without registration under
the Securities Act.
(k) As used in this Section4.5, the following terms shall have the following respective
meanings:
(i) Holder means the Investor and any other holder of Registrable Securities to whom the
registration rights conferred by this Agreement have been transferred in compliance with
Section4.5(h) hereof.
(ii) Holders Counsel means one counsel for the selling Holders chosen by Holders holding a
majority interest in the Registrable Securities being registered.
(iii) Register, registered, and registration shall refer to a registration effected by
preparing and (A)filing a registration statement in compliance with the Securities Act and
applicable rules and regulations thereunder, and the declaration or ordering of effectiveness of
such registration statement or (B)filing a prospectus and/or prospectus supplement in respect of an
appropriate effective registration statement on Form S-3.
(iv) Registrable Securities means (A)all Preferred Shares, (B)the Warrant (subject to
Section4.5(p)) and (C)any equity securities issued or issuable directly or indirectly with respect
to the securities referred to in the foregoing clauses (A)or (B)by way of conversion, exercise or
exchange thereof, including the Warrant Shares, or share dividend or share split or in connection
with a combination of shares, recapitalization, reclassification, merger, amalgamation,
arrangement, consolidation or other reorganization, provided that, once issued, such securities
will not be Registrable Securities when (1)they are sold pursuant to an effective registration
statement under the Securities Act, (2)except as provided below in Section4.5(o), they may be sold
pursuant to Rule 144 without limitation thereunder on volume or manner of sale, (3)they shall have
ceased to be outstanding or (4)they have been sold in a private transaction in which the
transferors rights under this Agreement are not assigned to the transferee of the securities. No
Registrable Securities may be registered under more than one registration statement at any one
time.
(v) Registration Expenses mean all expenses incurred by the Company in effecting any
registration pursuant to this Agreement (whether or not any registration or prospectus becomes
effective or final) or otherwise complying with its obligations under this Section4.5, including
all registration, filing and listing fees, printing expenses, fees and disbursements of counsel for
the Company, blue sky fees and expenses, expenses incurred in connection with any road show, the
reasonable fees and disbursements of Holders Counsel, and expenses of the Companys independent
accountants in connection with any regular or
27
special reviews or audits incident to or required by any such registration, but shall not
include Selling Expenses.
(vi) Rule 144, Rule 144A, Rule 159A, Rule 405 and Rule 415 mean, in each case, such
rule promulgated under the Securities Act (or any successor provision), as the same shall be
amended from time to time.
(vii) Selling Expenses mean all discounts, selling commissions and stock transfer taxes
applicable to the sale of Registrable Securities and fees and disbursements of counsel for any
Holder (other than the fees and disbursements of Holders Counsel included in Registration
Expenses).
(l) At any time, any holder of Securities (including any Holder) may elect to forfeit its
rights set forth in this Section4.5 from that date forward; provided, that a Holder forfeiting such
rights shall nonetheless be entitled to participate under Section4.5(a)(iv) (vi)in any Pending
Underwritten Offering to the same extent that such Holder would have been entitled to if the holder
had not withdrawn; and provided, further, that no such forfeiture shall terminate a Holders rights
or obligations under Section4.5(f) with respect to any prior registration or Pending Underwritten
Offering. Pending Underwritten Offering means, with respect to any Holder forfeiting its rights
pursuant to this Section4.5(l), any underwritten offering of Registrable Securities in which such
Holder has advised the Company of its intent to register its Registrable Securities either pursuant
to Section4.5(a)(ii) or 4.5(a)(iv) prior to the date of such Holders forfeiture.
(m) Specific Performance. The parties hereto acknowledge that there would be no
adequate remedy at law if the Company fails to perform any of its obligations under this Section4.5
and that the Investor and the Holders from time to time may be irreparably harmed by any such
failure, and accordingly agree that the Investor and such Holders, in addition to any other remedy
to which they may be entitled at law or in equity, to the fullest extent permitted and enforceable
under applicable law shall be entitled to compel specific performance of the obligations of the
Company under this Section4.5 in accordance with the terms and conditions of this Section4.5.
(n) No Inconsistent Agreements. The Company shall not, on or after the Signing Date,
enter into any agreement with respect to its securities that may impair the rights granted to the
Investor and the Holders under this Section4.5 or that otherwise conflicts with the provisions
hereof in any manner that may impair the rights granted to the Investor and the Holders under this
Section4.5. In the event the Company has, prior to the Signing Date, entered into any agreement
with respect to its securities that is inconsistent with the rights granted to the Investor and the
Holders under this Section4.5 (including agreements that are inconsistent with the order of
priority contemplated by Section4.5(a)(vi)) or that may otherwise conflict with the provisions
hereof, the Company shall use its reasonable best efforts to amend such agreements to ensure they
are consistent with the provisions of this Section4.5.
(o) Certain Offerings by the Investor. In the case of any securities held by the
Investor that cease to be Registrable Securities solely by reason of clause (2)in the definition of
Registrable Securities, the provisions of Sections 4.5(a)(ii), clauses (iv), (ix)and (x)-(xii)of
28
Section4.5(c), Section4.5(g) and Section4.5(i) shall continue to apply until such securities
otherwise cease to be Registrable Securities. In any such case, an underwritten offering or
other disposition shall include any distribution of such securities on behalf of the Investor by
one or more broker-dealers, an underwriting agreement shall include any purchase agreement
entered into by such broker-dealers, and any registration statement or prospectus shall include
any offering document approved by the Company and used in connection with such distribution.
(p) Registered Sales of the Warrant. The Holders agree to sell the Warrant or any
portion thereof under the Shelf Registration Statement only beginning 30 days after notifying the
Company of any such sale, during which 30-day period the Investor and all Holders of the Warrant
shall take reasonable steps to agree to revisions to the Warrant to permit a public distribution of
the Warrant, including entering into a warrant agreement and appointing a warrant agent.
4.6 Voting of Warrant Shares. Notwithstanding anything in this Agreement to the
contrary, the Investor shall not exercise any voting rights with respect to the Warrant Shares.
4.7 Depositary Shares. Upon request by the Investor at any time following the Closing
Date, the Company shall promptly enter into a depositary arrangement, pursuant to customary
agreements reasonably satisfactory to the Investor and with a depositary reasonably acceptable to
the Investor, pursuant to which the Preferred Shares may be deposited and depositary shares, each
representing a fraction of a Preferred Share as specified by the Investor, may be issued. From and
after the execution of any such depositary arrangement, and the deposit of any Preferred Shares
pursuant thereto, the depositary shares issued pursuant thereto shall be deemed Preferred Shares
and, as applicable, Registrable Securities for purposes of this Agreement.
4.8 Restriction on Dividends and Repurchases.
(a) Prior to the earlier of (x)the third anniversary of the Closing Date and (y)the date on
which the Preferred Shares have been redeemed in whole or the Investor has transferred all of the
Preferred Shares to third parties which are not Affiliates of the Investor, neither the Company nor
any Company Subsidiary shall, without the consent of the Investor:
(i) declare or pay any dividend or make any distribution on the Common Stock (other than
(A)regular quarterly cash dividends of not more than the amount of the last quarterly cash dividend
per share declared or, if lower, publicly announced an intention to declare, on the Common Stock
prior to October14, 2008, as adjusted for any stock split, stock dividend, reverse stock split,
reclassification or similar transaction, (B)dividends payable solely in shares of Common Stock and
(C)dividends or distributions of rights or Junior Stock in connection with a stockholders rights
plan); or
(ii) redeem, purchase or acquire any shares of Common Stock or other capital stock or other
equity securities of any kind of the Company, or any trust preferred securities issued by the
Company or any Affiliate of the Company, other than (A)redemptions, purchases or other acquisitions
of the Preferred Shares, (B)redemptions, purchases or other
29
acquisitions of shares of Common Stock or other Junior Stock, in each case in this clause
(B)in connection with the administration of any employee benefit plan in the ordinary course of
business (including purchases to offset the Share Dilution Amount (as defined below) pursuant to a
publicly announced repurchase plan) and consistent with past practice; provided that any purchases
to offset the Share Dilution Amount shall in no event exceed the Share Dilution Amount,
(C)purchases or other acquisitions by a broker-dealer subsidiary of the Company solely for the
purpose of market-making, stabilization or customer facilitation transactions in Junior Stock or
Parity Stock in the ordinary course of its business, (D)purchases by a broker-dealer subsidiary of
the Company of capital stock of the Company for resale pursuant to an offering by the Company of
such capital stock underwritten by such broker-dealer subsidiary, (E)any redemption or repurchase
of rights pursuant to any stockholders rights plan, (F)the acquisition by the Company or any of
the Company Subsidiaries of record ownership in Junior Stock or Parity Stock for the beneficial
ownership of any other persons (other than the Company or any other Company Subsidiary), including
as trustees or custodians, and (G)the exchange or conversion of Junior Stock for or into other
Junior Stock or of Parity Stock or trust preferred securities for or into other Parity Stock (with
the same or lesser aggregate liquidation amount) or Junior Stock, in each case set forth in this
clause (G), solely to the extent required pursuant to binding contractual agreements entered into
prior to the Signing Date or any subsequent agreement for the accelerated exercise, settlement or
exchange thereof for Common Stock (clauses (C)and (F), collectively, the Permitted Repurchases).
Share Dilution Amount means the increase in the number of diluted shares outstanding (determined
in accordance with GAAP, and as measured from the date of the Companys most recently filed Company
Financial Statements prior to the Closing Date) resulting from the grant, vesting or exercise of
equity-based compensation to employees and equitably adjusted for any stock split, stock dividend,
reverse stock split, reclassification or similar transaction.
(b) Until such time as the Investor ceases to own any Preferred Shares, the Company shall not
repurchase any Preferred Shares from any holder thereof, whether by means of open market purchase,
negotiated transaction, or otherwise, other than Permitted Repurchases, unless it offers to
repurchase a ratable portion of the Preferred Shares then held by the Investor on the same terms
and conditions.
(c) Junior Stock means Common Stock and any other class or series of stock of the Company
the terms of which expressly provide that it ranks junior to the Preferred Shares as to dividend
rights and/or as to rights on liquidation, dissolution or winding up of the Company. Parity
Stock means any class or series of stock of the Company the terms of which do not expressly
provide that such class or series will rank senior or junior to the Preferred Shares as to dividend
rights and/or as to rights on liquidation, dissolution or winding up of the Company (in each case
without regard to whether dividends accrue cumulatively or non-cumulatively).
4.9 Repurchase of Investor Securities.
(a) Following the redemption in whole of the Preferred Shares held by the Investor or the
Transfer by the Investor of all of the Preferred Shares to one or more third parties not affiliated
with the Investor, the Company may repurchase, in whole or in part, at any time any other equity
securities of the Company purchased by the Investor pursuant to this Agreement
30
or the Warrant and then held by the Investor, upon notice given as provided in clause
(b)below, at the Fair Market Value of the equity security.
(b) Notice of every repurchase of equity securities of the Company held by the Investor shall
be given at the address and in the manner set forth for such party in Section5.6. Each notice of
repurchase given to the Investor shall state: (i)the number and type of securities to be
repurchased, (ii)the Board of Directors determination of Fair Market Value of such securities and
(iii)the place or places where certificates representing such securities are to be surrendered for
payment of the repurchase price. The repurchase of the securities specified in the notice shall
occur as soon as practicable following the determination of the Fair Market Value of the
securities.
(c) As used in this Section4.9, the following terms shall have the following respective
meanings:
(i) Appraisal Procedure means a procedure whereby two independent appraisers, one chosen by
the Company and one by the Investor, shall mutually agree upon the Fair Market Value. Each party
shall deliver a notice to the other appointing its appraiser within 10 days after the Appraisal
Procedure is invoked. If within 30 days after appointment of the two appraisers they are unable to
agree upon the Fair Market Value, a third independent appraiser shall be chosen within 10 days
thereafter by the mutual consent of such first two appraisers. The decision of the third appraiser
so appointed and chosen shall be given within 30 days after the selection of such third appraiser.
If three appraisers shall be appointed and the determination of one appraiser is disparate from the
middle determination by more than twice the amount by which the other determination is disparate
from the middle determination, then the determination of such appraiser shall be excluded, the
remaining two determinations shall be averaged and such average shall be binding and conclusive
upon the Company and the Investor; otherwise, the average of all three determinations shall be
binding upon the Company and the Investor. The costs of conducting any Appraisal Procedure shall
be borne by the Company.
(ii) Fair Market Value means, with respect to any security, the fair market value of such
security as determined by the Board of Directors, acting in good faith in reliance on an opinion of
a nationally recognized independent investment banking firm retained by the Company for this
purpose and certified in a resolution to the Investor. If the Investor does not agree with the
Board of Directors determination, it may object in writing within 10 days of receipt of the Board
of Directors determination. In the event of such an objection, an authorized representative of
the Investor and the chief executive officer of the Company shall promptly meet to resolve the
objection and to agree upon the Fair Market Value. If the chief executive officer and the
authorized representative are unable to agree on the Fair Market Value during the 10-day period
following the delivery of the Investors objection, the Appraisal Procedure may be invoked by
either party to determine the Fair Market Value by delivery of a written notification thereof not
later than the 30th day after delivery of the Investors objection.
4.10 Executive Compensation. Until such time as the Investor ceases to own any debt
or equity securities of the Company acquired pursuant to this Agreement or the Warrant, the Company
shall take all necessary action to ensure that its Benefit Plans with respect to its Senior
31
Executive Officers comply in all respects with Section111(b) of the EESA as implemented by any
guidance or regulation thereunder that has been issued and is in effect as of the Closing Date, and
shall not adopt any new Benefit Plan with respect to its Senior Executive Officers that does not
comply therewith. Senior Executive Officers means the Companys senior executive officers as
defined in subsection 111(b)(3) of the EESA and regulations issued thereunder, including the rules
set forth in 31 C.F.R. Part 30.
ARTICLE V
Miscellaneous
5.1 Termination. This Agreement may be terminated at any time prior to the Closing:
(a) by either the Investor or the Company if the Closing shall not have occurred by the
30th calendar day following the Signing Date; provided, however, that in the event the
Closing has not occurred by such 30th calendar day, the parties will consult in good
faith to determine whether to extend the term of this Agreement, it being understood that the
parties shall be required to consult only until the fifth day after such 30th calendar
day and not be under any obligation to extend the term of this Agreement thereafter; provided,
further, that the right to terminate this Agreement under this Section5.1(a) shall not be available
to any party whose breach of any representation or warranty or failure to perform any obligation
under this Agreement shall have caused or resulted in the failure of the Closing to occur on or
prior to such date; or
(b) by either the Investor or the Company in the event that any Governmental Entity shall have
issued an order, decree or ruling or taken any other action restraining, enjoining or otherwise
prohibiting the transactions contemplated by this Agreement and such order, decree, ruling or other
action shall have become final and nonappealable; or
(c) by the mutual written consent of the Investor and the Company.
In the event of termination of this Agreement as provided in this Section5.1, this Agreement shall
forthwith become void and there shall be no liability on the part of either party hereto except
that nothing herein shall relieve either party from liability for any breach of this Agreement.
5.2 Survival of Representations and Warranties. All covenants and agreements, other
than those which by their terms apply in whole or in part after the Closing, shall terminate as of
the Closing. The representations and warranties of the Company made herein or in any certificates
delivered in connection with the Closing shall survive the Closing without limitation.
5.3 Amendment. No amendment of any provision of this Agreement will be effective
unless made in writing and signed by an officer or a duly authorized representative of each party;
provided that the Investor may unilaterally amend any provision of this Agreement to the extent
required to comply with any changes after the Signing Date in applicable federal statutes. No
failure or delay by any party in exercising any right, power or privilege hereunder shall operate
as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further
32
exercise of any other right, power or privilege. The rights and remedies herein provided
shall be cumulative of any rights or remedies provided by law.
5.4 Waiver of Conditions. The conditions to each partys obligation to consummate the
Purchase are for the sole benefit of such party and may be waived by such party in whole or in part
to the extent permitted by applicable law. No waiver will be effective unless it is in a writing
signed by a duly authorized officer of the waiving party that makes express reference to the
provision or provisions subject to such waiver.
5.5 Governing Law: Submission to Jurisdiction, Etc. This Agreement will be governed
by and construed in accordance with the federal law of the United States if and to the extent such
law is applicable, and otherwise in accordance with the laws of the State of New York applicable to
contracts made and to be performed entirely within such State. Each of the parties hereto agrees
(a) to submit to the exclusive jurisdiction and venue of the United States District Court for the
District of Columbia and the United States Court of Federal Claims for any and all civil actions,
suits or proceedings arising out of or relating to this Agreement or the Warrant or the
transactions contemplated hereby or thereby, and (b) that notice may be served upon (i) the Company
at the address and in the manner set forth for notices to the Company in Section 5.6 and (ii) the
Investor in accordance with federal law. To the extent permitted by applicable law, each of the
parties hereto hereby unconditionally waives trial by jury in any civil legal action or proceeding
relating to this Agreement or the Warrant or the transactions contemplated hereby or thereby.
5.6 Notices. Any notice, request, instruction or other document to be given hereunder
by any party to the other will be in writing and will be deemed to have been duly given (a)on the
date of delivery if delivered personally, or by facsimile, upon confirmation of receipt, or (b)on
the second business day following the date of dispatch if delivered by a recognized next day
courier service. All notices to the Company shall be delivered as set forth in Schedule A,
or pursuant to such other instruction as may be designated in writing by the Company to the
Investor. All notices to the Investor shall be delivered as set forth below, or pursuant to such
other instructions as may be designated in writing by the Investor to the Company.
If to the Investor:
United States Department of the Treasury
1500 Pennsylvania Avenue, NW, Room 2312
Washington, D.C. 20220
Attention: Assistant General Counsel (Banking and Finance)
Facsimile: (202) 622-1974
5.7 Definitions
(a) When a reference is made in this Agreement to a subsidiary of a person, the term
subsidiary means any corporation, partnership, joint venture, limited liability company or other
entity (x)of which such person or a subsidiary of such person is a general partner or (y)of which a
majority of the voting securities or other voting interests, or a majority of the securities or
other interests of which having by their terms ordinary voting power to elect a
33
majority of the board of directors or persons performing similar functions with respect to
such entity, is directly or indirectly owned by such person and/or one or more subsidiaries
thereof.
(b) The term Affiliate means, with respect to any person, any person directly or indirectly
controlling, controlled by or under common control with, such other person. For purposes of this
definition, control (including, with correlative meanings, the terms controlled by and under
common control with) when used with respect to any person, means the possession, directly or
indirectly, of the power to cause the direction of management and/or policies of such person,
whether through the ownership of voting securities by contract or otherwise.
(c) The terms knowledge of the Company or Companys knowledge mean the actual knowledge
after reasonable and due inquiry of the officers (as such term is defined in Rule3b-2 under the
Exchange Act, but excluding any Vice President or Secretary) of the Company.
5.8 Assignment. Neither this Agreement nor any right, remedy, obligation nor
liability arising hereunder or by reason hereof shall be assignable by any party hereto without the
prior written consent of the other party, and any attempt to assign any right, remedy, obligation
or liability hereunder without such consent shall be void, except (a)an assignment, in the case of
a Business Combination where such party is not the surviving entity, or a sale of substantially all
of its assets, to the entity which is the survivor of such Business Combination or the purchaser in
such sale and (b)as provided in Section4.5.
5.9 Severability. If any provision of this Agreement or the Warrant, or the
application thereof to any person or circumstance, is determined by a court of competent
jurisdiction to be invalid, void or unenforceable, the remaining provisions hereof, or the
application of such provision to persons or circumstances other than those as to which it has been
held invalid or unenforceable, will remain in full force and effect and shall in no way be
affected, impaired or invalidated thereby, so long as the economic or legal substance of the
transactions contemplated hereby is not affected in any manner materially adverse to any party.
Upon such determination, the parties shall negotiate in good faith in an effort to agree upon a
suitable and equitable substitute provision to effect the original intent of the parties.
5.10 No Third Party Beneficiaries. Nothing contained in this Agreement, expressed or
implied, is intended to confer upon any person or entity other than the Company and the Investor
any benefit, right or remedies, except that the provisions of Section 4.5 shall inure to the
benefit of the persons referred to in that Section.
* * *
34
exv10w2
EXHIBIT 10.2
WAIVER
In consideration for the benefits I will receive as a result of my employers participation in
the United States Department of the Treasurys TARP Capital Purchase Program, I hereby voluntarily
waive any claim against the United States or my employer for any changes to my compensation or
benefits that are required to comply with the regulation issued by the Department of the Treasury
as published in the Federal Register on October 20, 2008.
I acknowledge that this regulation may require modification of the compensation, bonus,
incentive and other benefit plans, arrangements, policies and agreements (including so-called
golden parachute agreements) that I have with my employer or in which I participate as they
relate to the period the United States holds any equity or debt securities of my employer acquired
through the TARP Capital Purchase Program.
This waiver includes all claims I may have under the laws of the United States or any state
related to the requirements imposed by the aforementioned regulation, including without limitation
a claim for any compensation or other payments I would otherwise receive, any challenge to the
process by which this regulation was adopted and any tort or constitutional claim about the effect
of these regulations on my employment relationship.
exv10w3
EXHIBIT 10.3
CONSENT
We, the undersigned, hereby do consent to the adoption of the amendments to the Benefit
Plans as defined in and as described in the attached resolutions to Amend Benefit Plans to Comply
With Emergency Economic Stabilization Act adopted as of October 31, 2008, by the Executive
Compensation Committee of the Board of Directors, as and to the extent, and for the period,
required by the provisions of Section 111 of the Emergency Economic Stabilization Act of 2008
(EESA) applicable to participants in the Capital Purchase Program under EESA and the
regulation issued by the Department of the Treasury as published in the Federal Register on October
20, 2008.
Agreed to and acknowledged as of the day of , 2008:
RECITALS
WHEREAS, CVB FINANCIAL CORP. (the Company) has entered or will enter into a Letter
Agreement, incorporating within a Securities Purchase Agreement, with the United States Department
of Treasury (the Agreement) as part of the Capital Purchase Program under the Emergency Economic
Stabilization Act of 2008, as amended from time to time (EESA);
WHEREAS, pursuant to Section 1.2(d)(iv) of the Agreement, the Company is required to amend its
Benefit Plans with respect to its Senior Executive Officers (as such terms are defined in the
Agreement) to the extent necessary to comply with Section 111 of EESA; and
WHEREAS, the applicable Benefit Plans are the plans in which any Senior Executive Officer
participates, or is eligible to participate, and the agreements to which any Senior Executive
Officer is a party, that either: (i) provide for incentive or bonus compensation based on the
achievement of performance goals tied to or affected by the Companys financial results (Financial
Performance Plans) or (ii) provide for payments or benefits upon an applicable severance from
employment within the meaning of EESA (Involuntary Separation Pay Arrangements).
RESOLUTIONS
RESOLVED, that each Financial Performance Plan and Involuntary Separation Pay Arrangement is
hereby amended effective as of the date of entry into the Agreement as follows:
1. Compliance With Section 111 of EESA. Each Financial Performance Plan and
Involuntary Separation Pay Arrangement is hereby amended by adding the following provision as a
final section to such arrangement:
Compliance With Section 111 of EESA. Solely to the extent, and for the
period, required by the provisions of Section 111 of the Emergency Economic
Stabilization Act of 2008 (EESA) applicable to participants in the Capital
Purchase Program under EESA and the regulation issued by the Department of
the Treasury as published in the Federal Register on October 20, 2008: (a) each
Senior Executive Officer within the meaning of Section 111 of EESA and the
regulation issued by the Department of the Treasury as published in the Federal
Register on October 20, 2008 who participates in this plan or is a party to this
agreement shall be ineligible to receive compensation hereunder to the extent that
the Executive Compensation Committee of the Board of Directors of the Company
determines this plan or agreement includes incentives for the Senior Executive
Officer to take unnecessary and excessive risks that threaten the value of the
financial institution; (b) each Senior Executive Officer who participates in this
plan or is a party to this agreement shall be required to forfeit any bonus or
incentive compensation paid to the Senior Executive Officer hereunder during the
period that the Department of the Treasury holds a debt or equity position in the
Company based on statements of earnings, gains, or other criteria that are later
proven to be materially inaccurate; and (c) the Company shall be prohibited
from making to each Senior Executive Officer who participates in this plan or is a
party to this agreement, and each such Senior Executive Officer shall be ineligible
to receive hereunder, any golden parachute payment in connection with the Senior
Executive Officers applicable severance from employment, in each case, within the
meaning of Section 111 of EESA and the regulation issued by the Department of the
Treasury as published in the Federal Register on October 20, 2008.
2. Continuation of Affected Plans. Except as expressly or by necessary implication
amended hereby, each Financial Performance Plan and Involuntary Separation Pay Arrangement shall
continue in full force and effect.