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pdfFOR REFERENCE ONLY – NOT FOR EXECUTION – UPDATED 3.25.2022
EXHIBIT A
(ECIP Mutual Institutions/Subchapter S Corporations
Subordinated Debt)
SECURITIES PURCHASE AGREEMENT
STANDARD TERMS
FOR REFERENCE ONLY – NOT FOR EXECUTION – UPDATED 3.25.2022
TABLE OF CONTENTS
Page
ARTICLE I
Section 1.1
Section 1.2
Section 1.3
Definitions................................................................................................................1
Interpretation ............................................................................................................9
Disclosure Restrictions ............................................................................................9
ARTICLE II
PURCHASE; CLOSING
Section 2.1
Section 2.2
Section 2.3
Purchase .................................................................................................................10
Closing ...................................................................................................................10
Closing Conditions ................................................................................................10
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Section 3.1
Representations and Warranties of the Recipient ..................................................12
ARTICLE IV
COVENANTS
Section 4.1
Section 4.2
Affirmative Covenants ...........................................................................................21
Negative Covenants ...............................................................................................28
ARTICLE V
REMEDIES OF THE HOLDERS UPON EVENT OF DEFAULT AND OTHER BREACHES
OR DEFAULTS
Section 5.1
Section 5.2
Section 5.3
Section 5.4
Section 5.5
Section 5.6
Section 5.7
Section 5.8
Section 5.9
Event of Default .....................................................................................................29
Acceleration and Other Remedies .........................................................................30
Suits for Enforcement ............................................................................................30
Holders May File Proofs of Claim .........................................................................31
Waiver of Past Defaults .........................................................................................31
Receivership ...........................................................................................................31
Rate Reductions in the Event of Breaches and Violations ....................................32
Recipient Breach, Violation or Default .................................................................32
Additional Remedies..............................................................................................33
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FOR REFERENCE ONLY – NOT FOR EXECUTION – UPDATED 3.25.2022
ARTICLE VI
ADDITIONAL AGREEMENTS
Section 6.1
Section 6.2
Section 6.3
Section 6.4
Section 6.5
Section 6.6
Section 6.7
Section 6.8
Section 6.9
Section 6.10
Section 6.11
Section 6.12
Section 6.13
Section 6.14
Section 6.15
Purchase for Investment.........................................................................................34
Form of Subordinated Security ..............................................................................34
Execution of Subordinated Debt ............................................................................34
Computation of Interest .........................................................................................34
Legends ..................................................................................................................35
Transfer of Subordinated Debt...............................................................................40
Replacement of Subordinated Debt .......................................................................42
Cancellation ...........................................................................................................42
Rule 144; Rule 144A; 4(a)(1½) Transactions ........................................................42
Redemption ............................................................................................................44
Governance Rights for Non-Payment of Interest...................................................45
Communications to Holders ..................................................................................47
Noncompliance ......................................................................................................47
Deferral of Interest .................................................................................................47
Expenses and Further Assurances ..........................................................................48
ARTICLE VII
SUBORDINATION OF THE SUBORDINATED DEBT
Section 7.1
Section 7.2
Section 7.3
Section 7.4
Section 7.5
Section 7.6
Agreement to Subordinate .....................................................................................48
Default on Senior Indebtedness .............................................................................49
Liquidation; Dissolution ........................................................................................49
Subrogation ............................................................................................................50
Notice by the Recipient..........................................................................................51
Subordination May Not Be Impaired .....................................................................51
ARTICLE VIII
MISCELLANEOUS
Section 8.1
Section 8.2
Section 8.3
Section 8.4
Section 8.5
Section 8.6
Section 8.7
Section 8.8
Section 8.9
Section 8.10
Termination ............................................................................................................52
Survival ..................................................................................................................53
Amendment ............................................................................................................53
Waiver of Conditions .............................................................................................53
Governing Law; Submission to Jurisdiction, etc. ..................................................53
Notices ...................................................................................................................54
Assignment ............................................................................................................54
Severability ............................................................................................................55
No Third Party Beneficiaries .................................................................................55
Specific Performance .............................................................................................55
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FOR REFERENCE ONLY – NOT FOR EXECUTION – UPDATED 3.25.2022
LIST OF ANNEXES
ANNEX A:
FORM OF SUBORDINATED SECURITY
ANNEX B:
FORM OF OFFICER’S CERTIFICATE
ANNEX C:
FORM OF OPINION
ANNEX D:
FORM OF ECIP INTERIM FINAL RULE CERTIFICATION
ANNEX E:
REGISTRATION RIGHTS
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FOR REFERENCE ONLY – NOT FOR EXECUTION – UPDATED 3.25.2022
INDEX OF DEFINED TERMS
Location of
Definition
Section 1.1
Recitals
Face of Subordinated Security
Section 1.1
Section 1.1
Section 1.1
Section 3.1(c)(i)
Section 1.1
Section 2.3(e)
Section 8.7
Section 1.2
Section 1.1
Section 1.1
Section 1.1
Section 1.1
Section 2.3(d)
Section 2.2(a)
Section 2.2(a)
Section 3.1(n)
Section 1.1
Section 1.1
Section 1.1
Section 3.1(n)
Section 6.4(c)
Section 6.14(b)
Section 6.11(b)(i)
Section 1.1
Section 2.3(j)
Recitals
Section 1.1
Section 1.1
Section 1.1
Section 1.1
Section 6.6(f)(iv)
Section 1.1
Section 3.1(e)(i)
Section 3.1(n)
Section 5.1
Section 1.1
Section 1.1
Section 1.1
Section 1.1
Section 1.1
Term
Affiliate
Agreement
Applicable Interest Rate
Appropriate Federal Banking Agency
Appropriate State Banking Agency
Bank Holding Company
Bankruptcy Exceptions
Baseline
Board of Directors
Business Combination
business day
Call Report
Capitalization Date
CDFI
CDFI Fund
Charter
Closing
Closing Date
Code
Community Development Banking Act
Contagion Event
Contagion Event Measures
Controlled Group
Defaulted Interest
Deferred Interest
Director Trigger Event
Disclosure Schedule
Disclosure Update
ECIP
ECIP Application
ECIP Interim Final Rule
ECIP Period
Eligible Financial Institution
Eligible Nonprofit
Equity
Equityholders
ERISA
Event of Default
Exchange Act
Executive Officer
Existing Parity Subordinated Debt
Federal Reserve
GAAP
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FOR REFERENCE ONLY – NOT FOR EXECUTION – UPDATED 3.25.2022
Term
Governmental Entities, Governmental Entity
Holder; Holders
IDI Subsidiary
Indebtedness
Indemnitee
Indenture
Indenture Act
Initial Supplemental Report
Insured CDFI
Interest Deferral Period
Interest Payment Date
Interest Period
Investment and Lending Plan
Investor
knowledge of the Recipient; Recipient’s knowledge
Letter Agreement
Major Depository Institution Subsidiary
Majority Holders
Material Adverse Effect
Maturity Date
MDI
Members
Offer Price
Offered Securities
officers
Part 16
Plan
Previously Disclosed
Proprietary Rights
Purchase
Purchase Price
QSub
Qualified Lending
Quarterly Supplemental Report
Recipient
Recipient Financial Statements
Recipient Reports
Recipient Subsidiary; Recipient Subsidiaries
Redemption Date
Regular Record Date
Regulatory Agreement
Regulatory Trigger Event
Related Party
Reporting Issuer
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Location of
Definition
Section 2.3(a)
Section 1.1
Section 1.1
Section 1.1
Section 6.9(c)
Section 6.1
Section 6.1
Section 2.3(l)
Section 1.1
Section 1.1
Face of Subordinated Security
Section 1.1
Section 1.1
Recitals
Section 1.1
Recitals
Section 1.1
Section 6.11(b)(vi)
Section 1.1
Face of Subordinated Security
Section 1.1
Section 1.1
Section 6.6(f)(ii)
Section 6.6(f)(ii)
Section 1.1
Section 3.1(k)
Section 3.1(n)
Section 1.1
Section 3.1(u)
Recitals
Section 2.1
Section 1.1
Section 1.1
Section 4.1(h)(i)
Recitals
Section 2.3(k)
Section 3.1(i)(i)
Section 3.1(e)(ii)
Section 6.10(a)
Face of Subordinated Security
Section 3.1(s)
Section 1.1
Section 3.1(x)
Section 6.9(a)
FOR REFERENCE ONLY – NOT FOR EXECUTION – UPDATED 3.25.2022
Location of
Definition
Section 6.6(f)(ii)
Section 6.6(f)(ii)
Section 6.6(f)(ii)
Section 3.1(d)(v)
Section 1.1
Recitals
Section 3.1(k)
Face of Subordinated Security
Section 3.1(a)
Section 1.1
Section 1.1
Section 3.1(a)
Section 1.1
Recitals
Section 6.11(b)(i)
Section 6.11(a)
Recitals
Section 6.6(a)
Section 1.1
Section 1.1
Section 1.1
Section 1.1
Face of Subordinated Security
Section 1.1
Section 6.6(f)
Recitals
Term
Response Notice
Review Period
ROFR Notice
S Corp
Savings and Loan Holding Company
Schedules
SEC
Second Anniversary
Securities Act
Senior Executive Officers
Senior Indebtedness
Significant Subsidiary
Signing Date
Subordinated Debt
Subordinated Director
Subordinated Observer
Subordinated Securities
Subordinated Securities Register
subsidiary
Supplemental Reports
Target Communities
Tax; Taxes
Tenth Anniversary
Transaction Documents
Transfer
Treasury
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FOR REFERENCE ONLY – NOT FOR EXECUTION – UPDATED 3.25.2022
SECURITIES PURCHASE AGREEMENT – STANDARD TERMS
Recitals:
WHEREAS, the United States Department of the Treasury (the “Investor” or the
“Treasury”) may from time to time agree to purchase subordinated debentures from Eligible
Financial Institutions that elect to participate in the Emergency Capital Investment Program
(“ECIP”);
WHEREAS, an Eligible Financial Institution electing to participate in ECIP and
issue securities to the Investor shall enter into a letter agreement (the “Letter Agreement”) with the
Investor that incorporates this Securities Purchase Agreement – Standard Terms (the Eligible
Financial Institution identified in the Letter Agreement, the “Recipient”);
WHEREAS, the Recipient intends to issue in a private placement subordinated
debentures (each, a “Subordinated Security” and together, the “Subordinated Debt”), in an amount
as set forth on Schedule A to the Letter Agreement and the Investor intends to purchase (the
“Purchase”) from the Recipient the Subordinated Debt;
WHEREAS, the Recipient (i) provides, among other things, loans, grants, and
forbearance for small businesses, minority-owned businesses, and consumers, in Target
Communities; and (ii) intends to participate in the ECIP to increase its Qualified Lending in Target
Communities that may be disproportionately impacted by the economic effects of the COVID-19
pandemic, as set forth in the Investment and Lending Plan submitted to the Investor as part of the
Recipient’s ECIP Application; 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 this Securities Purchase
Agreement. The Disclosure Schedule (as defined below) shall be 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
Section 1.1 Definitions. Except as otherwise specified herein or as the context may
otherwise require, the following terms have the respective meanings set forth below for all
purposes of this Agreement.
“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
FOR REFERENCE ONLY – NOT FOR EXECUTION – UPDATED 3.25.2022
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.
“Appropriate Federal Banking Agency” means the “appropriate Federal banking
agency” for the Recipient as defined in Section 3(q) of the Federal Deposit Insurance Act (12
U.S.C. Section 1813(q)), or any successor provision.
“Appropriate State Banking Agency” means, if the Recipient is a state-chartered
bank or savings association, the Recipient’s state bank supervisor (as defined in Section 3(r) of the
Federal Deposit Insurance Act, 12 U.S.C. § 1813(r)).
“Bank Holding Company” means a company registered as a bank holding company
with the Federal Reserve pursuant to 12 U.S.C. § 1842.
“Bankruptcy Exceptions” has the meaning set forth in Section 3.1(c)(i).
“Baseline” means the “Baseline Qualified Lending” set forth on the Initial
Supplemental Report, subject to adjustment as provided in the applicable Quarterly Supplemental
Report.
“Board of Directors” has the meaning set forth in Section 2.3(e).
“Business Combination” has the meaning set forth in Section 8.7.
“business day” has the meaning set forth in Section 1.2.
“Call Reports” means Reports of Condition and Income.
“Capitalization Date” means the most recent fiscal month-end preceding the
Signing Date.
“CDFI” means a regulated community development financial institution currently
certified by the CDFI Fund pursuant to 12 C.F.R. § 1805.201(a) as having satisfied the eligibility
requirements of the Community Development Financial Institutions Program and that satisfies the
eligibility requirements for a community development financial institution set forth in 12 C.F.R.
§ 1805.201(b)(1) – (6).
“CDFI Fund” means the Community Development Financial Institution Fund of
the United States Department of the Treasury.
“Charter” has the meaning set forth in Section 2.3(d).
“Closing” has the meaning set forth in Section 2.2(a).
“Closing Date” has the meaning set forth in Section 2.2(a).
“Code” has the meaning set forth in Section 3.1(n).
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“Community Development Banking Act” means the Community Development
Banking and Financial Institutions Act of 1994 (12 U.S.C. § 4701 et seq.)
“Contagion Event” means the outbreak or continued presence of contagious
disease, epidemic or pandemic (including SARS-CoV-2 or COVID-19, or any evolutions or
mutations thereof, or any other viruses (including influenza)), and the governmental responses
thereto.
“Contagion Event Measures” means any quarantine, “shelter in place”, “stay at
home”, workforce reduction, social distancing, shut down, closure, sequester or other directives,
guidelines or recommendations promulgated by any Governmental Entity, including the Centers
for Disease Control and Prevention and the World Health Organization, in each case, in connection
with or in response to a Contagion Event.
“Controlled Group” has the meaning set forth in Section 3.1(n).
“Defaulted Interest” has the meaning set forth in Section 6.4(c).
“Deferred Interest” has the meaning set forth in Section 6.14(b).
“Disclosure Schedule” means the schedule to the Letter Agreement delivered to the
Investor on or prior to the Signing Date, setting forth, among other things, items the disclosure of
which is necessary or appropriate either in response to an express disclosure requirement contained
in a provision hereof or as an exception to one or more representations or warranties contained in
Section 3.1.
“Disclosure Update” has the meaning set forth in Section 2.3(j).
“ECIP Application” has the meaning set forth in the definition of Eligible Financial
Institution.
“ECIP Interim Final Rule” means the interim final rule promulgated by the Investor
setting forth restrictions on executive compensation, share buybacks and dividends applicable to
participants in ECIP, originally codified at 31 C.F.R. Part 35.
“ECIP Period” has the meaning set forth in the ECIP Interim Final Rule.
“Eligible Financial Institution” means a financial institution that is, as of the date
of submitting an application to participate in ECIP (the “ECIP Application”), and as of the Signing
Date (1)(i) a CDFI or (ii) a MDI; and (2)(i) an insured depository institution not controlled by a
Bank Holding Company or Savings and Loan Holding Company that is also an Eligible Financial
Institution, (ii) a Bank Holding Company; (iii) a Savings and Loan Holding Company, or (iv) any
credit union the member accounts of which are insured by the National Credit Union Share
Insurance Fund.
“Eligible Nonprofit” has the meaning set forth in Section 6.6(f).
“Employee Benefit Plan” has the meaning set forth in Section 3.1(n).
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“Equity” means: (i) in the case of mutual institutions, mutual capital certificates,
other capital instruments authorized by law, non-withdrawable accounts and other mutual interests
issued by the Recipient, including rights of Members arising from their membership but excluding
the rights of Members in respect of deposit liabilities of the Recipient, or (ii) in the case of S Corps,
the common or capital stock of the Recipient.
“Equityholders” has the meaning set forth in Section 3.1(e)(i).
“ERISA” has the meaning set forth in Section 3.1(n).
“Event of Default” has the meaning set forth in Section 5.1.
“Exchange Act” means the Securities Exchange Act of 1934 (15 U.S.C. § 78a et
seq.).
“Executive Officer” means any of the Recipient’s “executive officers” as defined in
12 C.F.R. § 215.2(e)(1) (regardless of whether or not such regulation is applicable to the
Recipient).
“Existing Parity Subordinated Debt” means subordinated debt of the Recipient
outstanding on the Signing Date that ranks equally with the Subordinated Debt and is identified
on Schedule A.
“Federal Reserve” means the Board of Governors of the Federal Reserve System.
“GAAP” has the meaning set forth in the definition of Material Adverse Effect.
“Governmental Entities” or “Governmental Entity” has the meaning set forth in
Section 2.3(a).
“Holder” or “Holders” means a holder of the Subordinated Debt.
“IDI Subsidiary” means any Recipient Subsidiary that is an insured depository
institution.
“Indebtedness” means, whether or not recourse is to all or a portion of the assets of
the Recipient and whether or not contingent, (i) the claims of the Recipient’s secured and general
creditors; (ii) every obligation of the Recipient for money borrowed; (iii) every obligation of the
Recipient evidenced by bonds, debentures, notes or other similar instruments, including
obligations incurred in connection with the acquisition of property, assets or businesses; (iv) every
reimbursement obligation of the Recipient, contingent or otherwise, with respect to letters of
credit, bankers’ acceptances, security purchase facilities or similar facilities issued for the account
of the Recipient; (v) every obligation of the Recipient issued or assumed as the deferred purchase
price of property or services; (vi) every capital lease obligation of the Recipient; (vii) all
indebtedness of the Recipient for claims in respect of securities contracts, derivative products,
including interest rate, foreign exchange rate and commodity forward contracts, options and swaps
and similar arrangements; (viii) every obligation of the type referred to in clauses (i) through (vii)
of another person and all dividends of another person the payment of which, in either case, the
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FOR REFERENCE ONLY – NOT FOR EXECUTION – UPDATED 3.25.2022
Recipient has guaranteed or is responsible or liable for directly or indirectly, as obligor or
otherwise, and (ix) every obligation of the type referred to in clauses (i) through (vii) of another
person and all dividends of another person the payment of which, in either case, is secured by a
lien on any property or assets of the Recipient.
“Indemnitee” has the meaning set forth in Section 6.9(c).
“Indenture” has the meaning set forth in Section 6.1.
“Indenture Act” has the meaning set forth in Section 6.1.
“Initial Supplemental Report” has the meaning set forth in Section 2.3(l).
“Insured CDFI” means an insured community development financial institution, as
defined in 12 U.S.C. § 4702(13).
“Interest Deferral Period” means the period during which an installment of interest
is deferred in accordance with Section 6.14(a).
“Interest Period” means the period from and including any Interest Payment Date
to, but excluding, the next Interest Payment Date; provided, however, the initial Interest Period
shall be the period from and including the Second Anniversary to the next succeeding Interest
Payment Date. Interest Payment Dates and Interest Periods will not be adjusted for business days.
“Investment and Lending Plan” means an investment and lending plan of the
Recipient that meets the criteria set forth in Section 104A(d)(4) of the Community Development
Banking Act.
“knowledge of the Recipient” or “Recipient’s knowledge” means the actual
knowledge after reasonable and due inquiry of the “officers” (as defined in Rule 3b-2 under the
Exchange Act) of the Recipient.
“Major Depository Institution Subsidiary” means any subsidiary of the Recipient
that (a) is a depository institution and (b) meets the definition of “significant subsidiary” within
the meaning of Rule 405 under the Securities Act.
“Majority Holders” has the meaning set forth in Section 6.11(b)(vi).
“Material Adverse Effect” means a material adverse effect on (i) the business,
results of operation or financial condition of the Recipient and its consolidated subsidiaries taken
as a whole; provided, however, that 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 Recipient and its subsidiaries operate (including any such changes resulting from a
Contagion Event), (B) changes or proposed changes after the Signing Date in generally accepted
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accounting principles in the United States (“GAAP”), or authoritative interpretations thereof,
(C) changes or proposed changes after the Signing Date in securities, banking and other laws of
general applicability or related policies or interpretations of Governmental Entities (including any
law in respect of Taxes, and laws newly enacted for, relating to or arising out of efforts to
implement Contagion Event Measures and address the spread of any Contagion Event) or (D), if
the Recipient is an S Corp, changes or proposed changes after the Signing Date in the taxation of
(I) the Recipient as a validly electing S corporation within the meaning of Sections 1361 and 1362
of the Code, or (II) any Recipient Subsidiary as a “qualified subchapter S subsidiary” (“QSub”)
within the meaning of Section 1361(b)(3)(B) of the Code, (in the case of each of these clauses (A),
(B), (C) and, if applicable, (D), other than changes or occurrences to the extent that such changes
or occurrences have or would reasonably be expected to have a materially disproportionate adverse
effect on the Recipient and its consolidated subsidiaries taken as a whole relative to comparable
U.S. banking or financial services organizations); or (ii) the ability of the Recipient to consummate
the Purchase and other transactions contemplated by this Agreement and perform its obligations
hereunder or thereunder on a timely basis.
“MDI” means a minority depository institution, (i) as defined in section 308 of the
Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. § 1463 et seq.);
or (ii) considered to be a minority depository institution by the Appropriate Federal Banking
Agency or the National Credit Union Administration; or (iii) as listed in the Federal Deposit
Insurance Corporation’s Minority Depository Institutions List published for the third quarter of
2020.
“Members” means, in the case of mutual institutions, persons having ownership
rights in the Recipient by virtue of their ownership of a deposit at the Recipient.
“Offer Price” has the meaning set forth in Section 6.6(f)(ii).
“Offered Securities” has the meaning set forth in Section 6.6(f)(ii).
“officers” has the meaning set forth in the definition of knowledge of the Recipient
or Recipient’s knowledge.
“Original Issue Date” means the date on which the Subordinated Debt is issued by
the Recipient to the Investor.
“Part 16” has the meaning set forth in Section 3.1(k).
“Plan” has the meaning set forth in Section 3.1(n).
“Previously Disclosed” means information set forth in the Disclosure Schedule or
the Disclosure Update, as applicable; provided, however, that disclosure in any section of such
Disclosure Schedule or Disclosure Update, as applicable, shall apply only to the indicated section
of this Agreement except to the extent that it is reasonably apparent from the face of such
disclosure that such disclosure is relevant to another section of this Agreement; provided, further,
that the inclusion of information in a Disclosure Update shall not be deemed to correct an existing
breach or misrepresentation and, therefore, shall not obligate the Investor to consummate the
Purchase or limit or affect any rights of or remedies available to the Investor.
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“Proprietary Rights” has the meaning set forth in Section 3.1(u).
“Purchase Price” has the meaning set forth in Section 2.1.
“QSub” has the meaning set forth in the definition of Material Adverse Effect.
“Qualified Lending” has the meaning set forth in the definition of Qualified
Lending in the applicable Supplemental Report.
“Quarterly Supplemental Report” has the meaning set forth in Section 4.1(h)(i).
“Recipient Financial Statements” has the meaning set forth in Section 2.3(k).
“Recipient Reports” has the meaning set forth in Section 3.1(i)(i).
“Recipient Subsidiary” or “Recipient Subsidiaries” has the meaning set forth in
Section 3.1(e)(ii).
“Redemption Date” has the meaning set forth in Section 6.10(a).
“Regulatory Agreement” has the meaning set forth in Section 3.1(s).
“Regulatory Trigger Event” means, for so long as the Subordinated Debt is
outstanding the good faith determination by the Recipient that as a result of (i) any amendment to,
or change in, the laws, rules or regulations of the United States (including, for the avoidance of
doubt, any agency or instrumentality of the United States, including the Appropriate Federal
Banking Agency) or any political subdivision of or in the United States that is enacted or becomes
effective after the initial issuance of the Subordinated Debt, or (ii) any official administrative
decision or judicial decision or administrative action or other official pronouncement interpreting
or applying those laws, rules or regulations or policies with respect thereto that is announced after
the initial issuance of Subordinated Debt, there is more than an insubstantial risk that the Recipient
will not be entitled to treat the Subordinated Debt then outstanding as “Tier 2 capital” (or its
equivalent) for purposes of the capital adequacy rules or regulations of the Appropriate Federal
Banking Agency as then in effect and applicable, to at least the same extent as on the Signing Date.
“Related Party” has the meaning set forth in Section 3.1(x).
“Reporting Issuer” has the meaning set forth in Section 6.9(a).
“Response Notice” has the meaning set forth in Section 6.6(f)(ii).
“Review Period” has the meaning set forth in Section 6.6(f)(ii).
“ROFR Notice” has the meaning set forth in Section 6.6(f)(ii).
“S Corp” has the meaning set forth in Section 3.1(d)(v).
“Savings and Loan Holding Company” means a company registered as a savings
and loan holding company with the Federal Reserve pursuant to 12 U.S.C. § 1467(a).
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“Schedules” has the meaning set forth in the Recitals.
“SEC” has the meaning set forth in Section 3.1(k).
“Securities Act” has the meaning set forth in Section 3.1(a).
“Senior Executive Officer” has the meaning set forth in the ECIP Interim Final
Rule.
“Senior Indebtedness” means, with respect to the Subordinated Debt, (i) all
Indebtedness, including all principal thereof, premium, if any, thereon and interest, if any, thereon
(including interest accruing on or after the appointment of a receiver or conservator relating to the
Recipient, or on or after the filing of any petition in bankruptcy or for reorganization relating to
the Recipient, whether or not such claim for post-appointment or post-petition interest is allowed),
whether outstanding on the Signing Date, or thereafter created, assumed or incurred, and any
deferrals, renewals or extensions of such Indebtedness, and (ii) if the Recipient is an insured
depository institution, all deposit liabilities of the Recipient; provided, however that Senior
Indebtedness shall not include (A) Existing Parity Subordinated Debt, (B) any Indebtedness issued
to any statutory trust created by the Recipient for the purpose of issuing trust preferred securities
in connection with such issuance of Indebtedness, which shall in all cases be junior to the
Subordinated Debt, (C) any guarantees of the Recipient in respect of the equity securities or other
securities of any financing entity referred to in clause (B) above, or (D) any other subordinated
debt of the Recipient that by its terms ranks pari passu with or junior to the Subordinated Debt
issued hereunder.
“Significant Subsidiary” has the meaning set forth in Section 3.1(a).
“Signing Date” has the meaning set forth in the definition of Material Adverse
Effect.
“Subordinated Director” has the meaning set forth in Section 6.11(b).
“Subordinated Observer” has the meaning set forth in Section 6.11(a).
“Subordinated Securities Register” has the meaning set forth in Section 6.6(a).
“subsidiary” has the meaning set forth in 12 U.S.C. § 1813(w)(4), except that a
Recipient that is a corporation shall not be considered to be a subsidiary of any Insured Depository
Institution or Depository Institution Holding Company that controls less than twenty-five percent
(25%) of any class of the voting shares of such corporation, and does not otherwise control in any
manner the election of a majority of the directors of the corporation.
“Supplemental Reports” means, collectively, the Initial Supplemental Report and
the Quarterly Supplemental Reports.
“Target Communities” means the categories of communities set forth under the
“Categories of Target Communities” heading in the “Rate Reduction Incentive Guidelines”
published by the Treasury.
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“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, penalty
or addition imposed by any Governmental Entity.
“Transaction Documents” means this Agreement, the Letter Agreement, the
debentures representing the Subordinated Debt, and all other instruments, documents and
agreements executed by or on behalf of the Recipient and delivered concurrently herewith or at
any time hereafter to or for the benefit of any Holders in connection with the transactions
contemplated by this Agreement, all as amended, supplemented or modified from time to time.
“Transfer” has the meaning set forth in Section 6.6(f).
Section 1.2 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, a reference to “Schedules” shall
be to a Schedule to this Securities Purchase Agreement and a reference to “Disclosure Schedules”
shall be to the Disclosure 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 entered into between sophisticated parties
having access to 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, in the case of interim final rules, include such rules as may be finalized, revised or
succeeded by a final rule) and to any section of any statute, rule or regulation include any successor
to the section. References to a “business day” shall mean any day except Saturday, Sunday and
any day on which banking institutions in the State of New York or the District of Columbia
generally are authorized or required by law or other governmental actions to close.
Section 1.3 Disclosure Restrictions. No representation, warranty, covenant or other
agreement or provision contained in this Agreement shall be deemed to contemplate or require the
disclosure of “confidential supervisory information” or other similar information, the disclosure
of which is restricted pursuant to laws and regulations to which the Recipient is subject.
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ARTICLE II
PURCHASE; CLOSING
Section 2.1 Purchase. On the terms and subject to the conditions set forth in this
Agreement, the Recipient agrees to sell, and the Investor agrees to purchase, at the Closing (as
hereinafter defined), the Subordinated Debt in the form attached hereto as Annex A, appropriately
completed in conformity herewith and duly and validly issued, authorized and executed by the
Recipient, in the aggregate principal amount set forth on Schedule A for the purchase price set
forth on Schedule A (the “Purchase Price”). The Subordinated Debt, including the principal and
interest, shall be unsecured and subordinate and junior in right of payment to Senior Indebtedness
to the extent set forth in Article VII hereof.
Section 2.2 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 by electronic exchange of
documents at 8:00 am, New York City time, on the date set forth in Schedule A or as soon as
practicable thereafter, or at such other time and date as shall be agreed between the Recipient 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 Closing in Section 2.3, at
the Closing the Recipient will deliver, by registered mail or by courier or express delivery service
(with confirmation of delivery, and tracking information, where possible) to the address provided
in Schedule A, the Subordinated Debt as evidenced by one or more debentures dated as of the
Closing Date and bearing appropriate legends as hereinafter provided, 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 Recipient on Schedule A.
Section 2.3 Closing Conditions. The obligation of the Investor to consummate the
Purchase is subject to the fulfillment (or waiver by the Investor) at or prior to the Closing of each
of the following conditions:
(a)
(i) any approvals or authorizations of all United States and other governmental,
regulatory or judicial authorities (each, a “Governmental Entity”, and 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 Subordinated
Debt as contemplated by this Agreement;
(b)
(i) the representations and warranties of the Recipient set forth in Section 3.1 shall
be true and correct in all respects as though made on and as of the Closing Date (other than
representations and warranties that by their terms speak as of another date, which representations
and warranties shall be true and correct in all respects as of such other date) and (ii) the Recipient
shall have performed in all respects all obligations required to be performed by it under this
Agreement at or prior to the Closing;
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(c)
the Recipient shall have delivered to the Investor a certificate signed on behalf of
the Recipient by a Senior Executive Officer, in substantially the form attached hereto as Annex B;
(d)
if applicable, the Recipient shall have duly adopted and filed with the Secretary of
State of its jurisdiction of organization or other applicable Governmental Entity an amendment to
its certificate or articles of incorporation, articles of association, organization certificate or similar
organizational document (“Charter”) and its bylaws as in effect on the Closing Date;
(e)
the Recipient shall have delivered to the Investor true, complete and correct
certified copies of the Charter and bylaws of the Recipient and the resolutions of the Board of
Directors of the Recipient (the “Board of Directors”) authorizing the execution and delivery of
this Agreement and the performance of its obligations hereunder, including the issuance of the
Subordinated Debt;
(f)
the Recipient shall have delivered to the Investor a good standing or equivalent
certificate from the Secretary of State of its jurisdiction of organization or other applicable
Governmental Entity, dated as of a recent date, with respect to the existence, organization and, if
applicable, good standing of the Recipient;
(g)
the Recipient shall have delivered to the Investor a certificate addressing the
incumbency of each officer of the Recipient who signs the Letter Agreement, the certificate
referred to in Section 2.3(c) and the debentures representing the Subordinated Debt (provided that
if any such officer ceases to serve in such officer’s position following the Signing Date, then the
Recipient shall deliver a duly updated incumbency certificate reflecting the incumbency of the
respective officers as of the Closing);
(h)
the Recipient shall have delivered to the Investor a written opinion from counsel to
the Recipient (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;
(i)
the Recipient shall have delivered to the Investor, or the designee identified in
writing (which may be via e-mail) by the Investor prior to the Closing Date, physical debentures
in proper form evidencing the Subordinated Debt to the Investor in the form attached hereto as
Annex A;
(j)
the Recipient shall have delivered to the Investor a copy of the Disclosure Schedule
on or prior to the Signing Date and, to the extent that any information set forth on the Disclosure
Schedule needs to be updated or supplemented to make it true, complete and correct as of the
Closing Date, (i) the Recipient shall have delivered to the Investor an update to the Disclosure
Schedule (the “Disclosure Update”), setting forth any information necessary to make the
Disclosure Schedule true, correct and complete as of the Closing Date and (ii) the Investor, in its
sole discretion, shall have approved the Disclosure Update, provided, however, that the delivery
and acceptance of the Disclosure Update shall not be deemed to obligate the Investor to
consummate the Purchase nor limit or affect any rights of or remedies available to the Investor;
(k)
the Recipient shall have delivered to the Investor on or prior to the Signing Date
each of the consolidated financial statements of the Recipient and its consolidated subsidiaries for
each of the last three (3) completed fiscal years of the Recipient (which shall be audited to the
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extent audited financial statements are available prior to the Signing Date) and each completed
quarterly period since the last completed fiscal year (collectively, the “Recipient Financial
Statements”);
(l)
at least ten (10) business days prior to the Closing Date, the Recipient shall have
delivered to the Investor (i) a report, in a form substantially similar to that posted on Investor’s
ECIP website, setting forth its calculation of Qualified Lending for the annual period ending on
September 30, 2020 (the “Initial Supplemental Report”) and (ii) a certification signed by the
Recipient’s principal executive officer or principal financial officer (each as defined in the ECIP
Interim Final Rule), certifying to the Investor that the information provided in the Initial
Supplemental Report is accurate; and
(m)
at least ten (10) business days prior to the Closing Date, the Recipient shall have
delivered to the Investor and the Appropriate Federal Banking Agency, an Investment and Lending
Plan describing to the satisfaction of the Investor: (i) how the Recipient’s business strategy and
operating goals will address the community development needs in communities that may be
disproportionately impacted by the economic effects of COVID-19, which includes the needs of
small businesses, consumers, nonprofit organizations and other projects in Target Communities
(ii) a plan to provide community outreach and communication; and (iii) how the Recipient plans
to expand or maintain significant lending or investment activity in low- or moderate-income and
minority communities, especially those that may be disproportionately impacted by COVID-19,
to historically disadvantaged borrowers, and to minorities that have significant unmet capital or
financial services needs.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Section 3.1 Representations and Warranties of the Recipient. Except as Previously
Disclosed, the Recipient 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 Recipient has been duly
organized and is validly existing and, if applicable, in good standing under the laws of its
jurisdiction of organization, with the necessary power and authority to own, operate and lease its
properties and conduct its business in all material respects as it is being currently conducted, and
except as has not, individually or in the aggregate, had and would not reasonably be expected to
have a Material Adverse Effect, has been duly qualified as a foreign corporation for the transaction
of business and, if applicable, 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 Recipient that would be considered a “significant subsidiary” within the meaning
of Rule 1-02(w) of Regulation S-X (a “Significant Subsidiary”) under the Securities Act of 1933
(the “Securities Act”), has been duly organized and is validly existing and, if applicable, in good
standing under the laws of its jurisdiction of organization. The Charter and bylaws of the Recipient,
copies of which have been provided to the Investor prior to the Signing Date, are true, complete
and correct copies of such documents as in full force and effect as of the Signing Date and as of
the Closing Date.
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(b)
Capitalization.
(i)
If the Recipient is a mutual institution: The authorized and outstanding
Equity instruments of the Recipient and any authorized or outstanding securities
convertible into, or exercisable or exchangeable for, Equity, as of the Capitalization Date
are set forth on Schedule B. The outstanding Equity in the Recipient has 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). On the
Signing Date, the Recipient does not have outstanding any securities or other obligations
providing the holder the right to acquire its Equity that are not reserved for issuance as
specified on Schedule B, and the Recipient has not made any other commitment to
authorize, issue or sell any Equity that is not specified on Schedule B. Since the
Capitalization Date, the Recipient has not issued any Equity, other than (i) Equity issued
upon the exercise of options or delivered under other equity-based awards or other
convertible securities or warrants which were issued and outstanding on the Capitalization
Date and disclosed on Schedule B and (ii) as disclosed on Schedule B. Each holder of five
percent (5%) or more of the Equity of the Recipient and such holder’s primary address are
set forth on Schedule B.
(ii)
If the Recipient is an S Corp: The Recipient maintains only one class of
equity security. The authorized capital stock of the Recipient, and the outstanding capital
stock of the Recipient (including securities convertible into, or exercisable or exchangeable
for, capital stock of the Recipient) as of the Capitalization Date is set forth on Schedule B.
The outstanding shares of capital stock of the Recipient 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). On the Signing Date, the
Recipient does not have outstanding any securities or other obligations providing the holder
the right to acquire its Equity that is not reserved for issuance as specified on Schedule B,
and the Recipient has not made any other commitment to authorize, issue or sell any Equity.
Since the Capitalization Date, the Recipient has not issued any Equity, other than shares
issued upon the exercise of options or delivered under other equity-based awards or other
convertible securities or warrants which were issued and outstanding on the Capitalization
Date and disclosed on Schedule B. Each holder of five percent (5%) or more of the Equity
in the Recipient and such holder’s primary address are set forth on Schedule B.
(c)
Subordinated Debt; Enforceability.
(i)
This Agreement has been duly authorized, executed and delivered and is,
and the Subordinated Debt, when executed and delivered, will be, legal, valid and binding
obligations of the Recipient, each enforceable in accordance with its respective terms,
except to the extent that the enforceability thereof may be limited by applicable bankruptcy,
receivership, conservatorship, 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 aggregate principal amount of the Subordinated Debt does
not exceed the maximum specified in the Letter Agreement.
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(ii)
The Subordinated Debt does not constitute a separate class of equity
securities, is subordinate and junior in right of payment to the Senior Indebtedness to the
extent set forth in Article VII hereof, and are senior to the Recipient’s Equity (and, if the
Recipient is an S Corp, any other class of equity in the event the Recipient ceases to be a
validly electing S corporation within the meaning of Sections 1361 and 1362 of the Code)
whether or not issued or outstanding, with respect to the distribution of assets in the event
of any dissolution, liquidation or winding up of the Recipient.
(d)
Entity Status; Eligible Financial Institution Status; ECIP Application Matters.
(i)
The Recipient satisfies the definition of “Eligible Financial Institution” and
is in compliance with Section 104A of the Community Development Banking Act, and all
rules and regulations issued by the Investor thereunder, including the ECIP Interim Final
Rule.
(ii)
The (A) information provided by the Recipient in the ECIP Application is
true, correct and complete in all material respects and (B) projections included in the
Investment and Lending Plan submitted as part of the ECIP Application were reasonable
on the date the ECIP Application was submitted to the Investor.
(iii) Neither the Recipient nor any Recipient Subsidiary is a “covered entity” as
defined in Section 104A(h)(2)(ii) of the Community Development Banking Act.
(iv)
The Recipient is not ineligible to participate in ECIP under Section 104A(i),
or any other provision, of the Community Development Banking Act.
(v)
If the Recipient is an S Corp, the Recipient (A) is a validly electing S
corporation under Sections 1361 and 1362 of the Code (an “S Corp”), and each Recipient
Subsidiary is a “qualified subchapter S subsidiary” within the meaning of Section
1361(b)(3)(B) of the Code, (B) has not and the Recipient Subsidiaries and the stockholders
of the Recipient have not taken any action which would invalidate such elections, (C) is
either (1) a U.S. bank or U.S. savings association not controlled by a Bank Holding
Company or Savings and Loan Holding Company; (2) a top-tier U.S. Bank Holding
Company that engages predominately in activities that are permitted for financial holding
companies under relevant law, (3) a top-tier U.S. Savings and Loan Holding Company,
which engages solely or predominately in activities that are permitted for financial holding
companies under relevant law or (4) a U.S. bank or U.S. savings association that is a
qualifying S Corp subsidiary that is controlled by a Bank Holding Company or Savings
and Loan Holding Company that itself is a S Corp and that does not engage solely or
predominately in activities that are permitted for financial holding companies under
relevant law and (D) has paid all dividends that are (i) distributed to stockholders in order
to fund their individual tax payments on allocable taxable income and (ii) required by any
agreement among stockholders.
(e)
Authorization, No Conflict.
(i)
The Recipient has the corporate power and authority to execute and deliver
this Agreement and to carry out its obligations hereunder (which includes the issuance of
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the Subordinated Debt) and, when issued, under the Subordinated Debt. The execution,
delivery and performance by the Recipient of this Agreement and the consummation of the
transactions contemplated hereby and thereby have been duly authorized by all necessary
corporate action on the part of the Recipient and the holders of its Equity (including nonMember holders in the case of mutual institutions) (collectively, “Equityholders”), and no
further approval or authorization is required on the part of the Recipient. The resolutions
of the Board of Directors authorizing the execution and delivery of this Agreement and the
performance of the Recipient’s obligations hereunder, including the issuance of the
Subordinated Debt, a copy of which has been provided to the Investor prior to the Signing
Date, are true, complete and correct copies of such documents as in full force and effect as
of the Signing Date and as of the Closing Date.
(ii)
The execution, delivery and performance by the Recipient of this
Agreement and the consummation of the transactions contemplated hereby and compliance
by the Recipient with the provisions hereof, will not (A) violate, conflict with, or result in
a breach of any provision of, or constitute a default (or an event which, with notice or lapse
of time or both, would constitute a default) under, or result in the termination of, or
accelerate the performance required by, or result in a right of termination or acceleration
of, or result in the creation of, any lien, security interest, charge or encumbrance upon any
of the properties or assets of the Recipient or any subsidiary of the Recipient (each
subsidiary, a “Recipient Subsidiary” and, collectively, the “Recipient Subsidiaries”) under
any of the terms, conditions or provisions of (x) its organizational documents or (y) any
note, bond, mortgage, indenture, deed of trust, license, lease, agreement or other instrument
or obligation to which the Recipient or any Recipient Subsidiary is a party or by which it
or any Recipient Subsidiary may be bound, or to which the Recipient or any Recipient
Subsidiary or any of the properties or assets of the Recipient or any Recipient 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 Recipient or any Recipient Subsidiary or any of
their respective properties or assets except, in the case of clauses (A)(y) and (B), for those
occurrences that, individually or in the aggregate, have not had and would not reasonably
be expected to have a Material Adverse Effect.
(iii) Other than such filings and approvals as are required to be made or obtained
under any state “blue sky” laws and such as have been made or obtained, no notice to,
filing with, exemption or review by, or authorization, consent or approval of, any
Governmental Entity is required to be made or obtained by the Recipient in connection
with the consummation by the Recipient 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 Material Adverse Effect.
(f)
Charter; Bylaws; Agreements Among Equityholders; Anti-Takeover Provisions
and Rights Plan. The Board of Directors has taken all necessary action to ensure that the
transactions contemplated by this Agreement and the consummation of the transactions
contemplated hereby will be exempt from any anti-takeover or similar provisions of the
Recipient’s Charter and bylaws, and any other provisions of any applicable “moratorium”, “control
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share”, “fair price”, “interested stockholder” or other anti-takeover laws and regulations of any
jurisdiction.
(g)
No Material Adverse Effect. Since the last day of the last completed fiscal period
for which financial statements are included in the Recipient Financial Statements, 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 Material Adverse Effect,
except as disclosed on Schedule C.
(h)
Recipient Financial Statements. The Recipient Financial Statements present fairly
in all material respects the consolidated financial position of the Recipient and its consolidated
subsidiaries as of the dates indicated therein and the consolidated results of their operations for the
periods specified therein; and except as stated therein, such financial statements (i) were prepared
in conformity with GAAP applied on a consistent basis (except as may be noted therein) and
(ii) have been prepared from, and are in accordance with, the books and records of the Recipient
and the Recipient Subsidiaries.
(i)
Reports.
(i)
Since December 31, 2019, the Recipient and each Recipient Subsidiary has
filed all reports, registrations, documents, filings, statements and submissions, together
with any amendments thereto, that it was required to file with any Governmental Entity
(the foregoing, collectively, the “Recipient 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 Material Adverse Effect. As of their
respective dates of filing, the Recipient Reports complied in all material respects with all
statutes and applicable rules and regulations of the applicable Governmental Entities.
(ii)
The records, systems, controls, data and information of the Recipient and
the Recipient 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 Recipient or the
Recipient Subsidiaries or their accountants (including all means of access thereto and
therefrom), except for any non-exclusive ownership and non-direct control that would not
reasonably be expected to have a material adverse effect on the system of internal
accounting controls described below in this Section 3.1(i)(ii). The Recipient (A) has
implemented and maintains adequate disclosure controls and procedures to ensure that
material information relating to the Recipient, including the consolidated Recipient
Subsidiaries, is made known to the chief executive officer and the chief financial officer of
the Recipient by others within those entities, and (B) has disclosed, based on its most recent
evaluation prior to the Signing Date, to the Recipient’s outside auditors and the audit
committee of the Board of Directors (x) any significant deficiencies and material
weaknesses in the design or operation of internal controls that are reasonably likely to
adversely affect the Recipient’s ability to record, process, summarize and report financial
information and (y) any fraud, whether or not material, that involves management or other
employees who have a significant role in the Recipient’s internal controls over financial
reporting.
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(j)
No Undisclosed Liabilities. Neither the Recipient nor any of the Recipient
Subsidiaries has any liabilities or obligations of any nature (absolute, accrued, contingent or
otherwise) which are not properly reflected or reserved against in the Recipient Financial
Statements to the extent required to be so reflected or reserved against in accordance with GAAP,
except for (i) liabilities that have arisen since the last fiscal year end in the ordinary and usual
course of business and consistent with past practice and (ii) liabilities that, individually or in the
aggregate, have not had and would not reasonably be expected to have a Material Adverse Effect.
(k)
Offering of Securities. Neither the Recipient nor any person acting on its behalf
has taken any action (including any offering of any securities of the Recipient under circumstances
which would require the integration of such offering with the offering of any of the Subordinated
Debt under the Securities Act, and the rules and regulations of the Securities and Exchange
Commission (the “SEC”) promulgated thereunder), which might subject the offering, issuance or
sale of any of the Subordinated Debt to Investor pursuant to this Agreement to the registration
requirements of the Securities Act, or, if the Recipient is a national bank or federal savings
association, the registration requirements of Part 16—Securities Offering Disclosure Rules of the
Office of the Comptroller of the Currency (12 C.F.R. Part 16) (“Part 16”). The offering of the
Subordinated Debt is exempt from registration under the Securities Act pursuant to
Section 3(a)(2), 3(a)(5) or 4(a)(2) 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 Material Adverse
Effect, there is no (A) pending or, to the knowledge of the Recipient, threatened, claim, action,
suit, investigation or proceeding, against the Recipient or any Recipient Subsidiary or to which
any of their assets are subject nor is the Recipient or any Recipient 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 Recipient or any
Recipient Subsidiaries. There is no claim, action, suit, investigation or proceeding pending or, to
the Recipient’s knowledge, threatened against any institution-affiliated party (as defined in 12
U.S.C. § 1813(u)) of the Recipient or any of the IDI Subsidiaries that, if determined or resolved in
a manner adverse to such institution-affiliated party, could result in such institution-affiliated party
being prohibited from participation in the conduct of the affairs of any financial institution or
holding company of any financial institution and, to the Recipient’s knowledge, there are no facts
or circumstances that could reasonably be expected to provide a basis for any such claim, action,
suit, investigation or proceeding.
(m)
Compliance with Laws. Except as would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect, the Recipient and the Recipient
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 Recipient or such Recipient
Subsidiary. The Recipient has all permits, licenses, franchises, authorizations, orders and
approvals of, and has made all filings, applications and registrations with, Governmental Entities
and third parties that are required in order to permit the Recipient to pay interest on the
Subordinated Debt on the Interest Payment Dates set forth in the form of Subordinated Security,
except such as may be required to be obtained or made after the Closing Date under federal or state
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laws or regulations relating to capital adequacy, including, as applicable, pursuant to 12 C.F.R.
Part 3, 12 C.F.R. Part 6, 12 C.F.R. Part 208, 12 C.F.R. Part 217 and 12 C.F.R. Part 324. Except as
set forth on Schedule E, the Recipient and the Recipient Subsidiaries have complied in all respects
and are not in default or violation of, and none of them is, to the knowledge of the Recipient, under
investigation with respect to or, to the knowledge of the Recipient, 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 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 Recipient or any Recipient Subsidiary that would, individually or
in the aggregate, reasonably be expected to have a Material Adverse Effect.
(n)
Employee Benefit Matters. Except as would not reasonably be expected to have,
either individually or in the aggregate, a Material Adverse Effect: (i) each “employee benefit plan”
(within the meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974
(“ERISA”)) providing benefits to any current or former employee, officer or director of the
Recipient or any member of its “Controlled Group” (defined as any organization which is a
member of a controlled group of corporations within the meaning of Section 414 of the Internal
Revenue Code of 1986 (the “Code”)) that is sponsored, maintained or contributed to by the
Recipient or any member of its Controlled Group and for which the Recipient or any member of
its Controlled Group would have any liability, whether actual or contingent (each, a “Plan”) has
been maintained in compliance with its terms and with the requirements of all applicable statutes,
rules and regulations, including ERISA and the Code; (ii) with respect to each Plan subject to
Title IV of ERISA (including, for purposes of this clause (ii), any plan subject to Title IV of ERISA
that the Recipient or any member of its Controlled Group previously maintained or contributed to
in the six (6) years prior to the Signing Date), (1) no “reportable event” (within the meaning of
Section 4043(c) of ERISA), other than a reportable event for which the notice period referred to
in Section 4043(c) of ERISA has been waived, has occurred in the three years prior to the Signing
Date or is reasonably expected to occur, (2) no “accumulated funding deficiency” (within the
meaning of Section 302 of ERISA or Section 412 of the Code), whether or not waived, has
occurred in the three years prior to the Signing Date or is reasonably expected to occur, (3) the fair
market value of the assets under each Plan exceeds the present value of all benefits accrued under
such Plan (determined based on the assumptions used to fund such Plan) and (4) neither the
Recipient nor any member of its Controlled Group has incurred in the six (6) years prior to the
Signing Date, or reasonably expects to incur, any liability under Title IV of ERISA (other than
contributions to the Plan or premiums to the Pension Benefit Guaranty Corporation in the ordinary
course and without default) with respect to a Plan (including any Plan that is a “multiemployer
plan”, within the meaning of Section 4001(c)(3) of ERISA); and (iii) each Plan that is intended to
be qualified under Section 401(a) of the Code has received a favorable determination letter from
the Internal Revenue Service with respect to its qualified status that has not been revoked, or such
a determination letter has been timely applied for but not received by the Signing Date, and nothing
has occurred, whether by action or by failure to act, which could reasonably be expected to cause
the loss, revocation or denial of such qualified status or favorable determination letter.
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(o)
Taxes. Except as would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect, (i) the Recipient and the Recipient Subsidiaries have
filed all federal, state, local and foreign income and franchise Tax returns (together with any
schedules and attached thereto) required to be filed through the Signing Date, subject to permitted
extensions, and have paid all Taxes due thereon, (ii) all such Tax returns (together with any
schedules and attached thereto) are true, complete and correct in all material respects and were
prepared in compliance with all applicable laws and (iii) no Tax deficiency has been determined
adversely to the Recipient or any of the Recipient Subsidiaries, nor does the Recipient have any
knowledge of any Tax deficiencies.
(p)
Properties and Leases. Except as would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect, the Recipient and the Recipient
Subsidiaries have good and marketable title to all real properties and all other properties and assets
owned by them, in each case free from liens (including, without limitation, liens for Taxes),
encumbrances, claims and defects that would affect the value thereof or interfere with the use made
or to be made thereof by them. Except as would not, individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect, the Recipient and the Recipient 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 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 Recipient or any Recipient 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 Recipient’s knowledge,
threatened against the Recipient or any Recipient Subsidiary;
(ii)
to the Recipient’s knowledge, there is no reasonable basis for any such
proceeding, claim or action; and
(iii) neither the Recipient nor any Recipient 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 Material Adverse Effect, all derivative instruments,
including, swaps, caps, floors and option agreements, whether entered into for the Recipient’s own
account, or for the account of one or more of the Recipient 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 Recipient or one of the
Recipient Subsidiaries, enforceable in accordance with its terms, except as may be limited by the
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Bankruptcy Exceptions. Neither the Recipient or the Recipient Subsidiaries, nor, to the knowledge
of the Recipient, 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 Material Adverse Effect.
(s)
Agreements with Regulatory Agencies. For the avoidance of doubt, this
Section 3.1(s) shall not be deemed to contemplate or require any representation or disclosure
including on Schedule F that would involve “confidential supervisory information” or other
similar information the disclosure of which is restricted pursuant to laws and regulations to which
the Recipient is subject. Except as set forth on Schedule F, neither the Recipient nor any Recipient
Subsidiary is subject to any material cease-and-desist or other similar order or enforcement or
supervisory action issued by, or is a party to any material written agreement, consent agreement
or memorandum of understanding with, or is a party to any commitment letter or similar
undertaking to, or is subject to any capital directive by, or since December 31, 2017, has adopted
any board resolutions at the request of, any Governmental Entity that currently restricts in any
material respect the conduct of its business or that in any material manner relates to its capital
adequacy, its liquidity and funding policies and practices, its ability to pay dividends, its credit,
risk management or compliance policies or procedures, its internal controls, its management or its
operations or business (each item in this sentence, a “Regulatory Agreement”), nor has the
Recipient or any Recipient Subsidiary been advised since December 31, 2017, by any such
Governmental Entity that it is considering issuing, initiating, ordering, or requesting any such
Regulatory Agreement. The Recipient and each Recipient Subsidiary is in compliance in all
material respects with each Regulatory Agreement to which it is party or subject, and neither the
Recipient nor any Recipient Subsidiary has received any notice from any Governmental Entity
indicating that either the Recipient or any Recipient Subsidiary is not in compliance in all material
respects with any such Regulatory Agreement.
(t)
Insurance. The Recipient and the Recipient Subsidiaries are insured with reputable
insurers against such risks and in such amounts as the management of the Recipient reasonably
has determined to be prudent and consistent with industry practice. The Recipient and the
Recipient 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 Material Adverse Effect.
(u)
Intellectual Property. Except as would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect, (i) the Recipient and each Recipient
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 Recipient nor any
of the Recipient Subsidiaries is materially infringing, diluting, misappropriating or violating, nor
has the Recipient or any of the Recipient Subsidiaries received any written (or, to the knowledge
of the Recipient, oral) communications alleging that any of them has materially infringed, diluted,
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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 Material Adverse
Effect, to the Recipient’s knowledge, no other person is infringing, diluting, misappropriating or
violating, nor has the Recipient or any or the Recipient Subsidiaries sent any written
communications since December 31, 2019, alleging that any person has infringed, diluted,
misappropriated or violated, any of the Proprietary Rights owned by the Recipient and the
Recipient Subsidiaries.
(v)
Brokers and Finders. The Investor has no liability for any amounts that any broker,
finder or investment banker is entitled to for any financial advisory, brokerage, finder’s or other
fee or commission in connection with this Agreement or the transactions contemplated hereby
based upon arrangements made by or on behalf of the Recipient or any Recipient Subsidiary.
(w)
Disclosure Schedule. The Recipient has delivered the Disclosure Schedule and, if
applicable, the Disclosure Update to the Investor and the information contained in the Disclosure
Schedule, as modified by the information contained in the Disclosure Update, if applicable, is true,
complete and correct.
(x)
Related Party Transactions. Neither the Recipient nor any Recipient Subsidiary has
made any extension of credit to any director or Executive Officer of the Recipient or any Recipient
Subsidiary, any holder of five percent (5%) or more of the Recipient’s issued and outstanding
capital stock, or any of their respective spouses or children or any Affiliate of any of the foregoing
(each, a “Related Party”), other than in compliance with 12 C.F.R. Part 215 (Regulation O).
Except as disclosed on Schedule G, to the Recipient’s knowledge, no Related Party has any (i)
material commercial, industrial, banking, consulting, legal, accounting, charitable or familial
relationship with any vendor or material customer of the Recipient or any Recipient Subsidiary
that is not on arms-length terms, or (ii) direct or indirect ownership interest in any person or entity
with which the Recipient or any Recipient Subsidiary has a material business relationship that is
not on arms-length terms (not including publicly-traded entities in which such person owns less
than two percent (2%) of the outstanding capital stock).
ARTICLE IV
COVENANTS
Section 4.1
Investor that:
Affirmative Covenants. The Recipient hereby covenants and agrees with
(a)
Commercially Reasonable Efforts. Subject to the terms and conditions of this
Agreement, each of the parties will use its commercially reasonable efforts in good faith to take,
or cause to be taken, all actions, and to do, or cause to be done, all things necessary, proper or
desirable, or advisable under applicable laws, so as to permit consummation of the 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)
Certain Notifications Until Closing. From the Signing Date until the Closing, the
Recipient shall promptly notify the Investor of (i) any fact, event or circumstance of which it is
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aware and which would reasonably be expected to cause any representation or warranty of the
Recipient contained in this Agreement to be untrue or inaccurate in any material respect or to cause
any covenant or agreement of the Recipient 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 Recipient is aware and which,
individually or in the aggregate, has had or would reasonably be expected to have a Material
Adverse Effect; provided, however, that delivery of any notice pursuant to this Section 4.1(b) shall
not limit or affect any rights of or remedies available to the Investor.
(c)
Access and Information.
(i)
The provisions of this Section 4.1(c)(i) shall apply, (x) with respect to the
Investor, from the Signing Date until the date when the Investor or one of its Affiliates no
longer owns, directly or indirectly, any Subordinated Debt and (y) with respect to the
Inspector General of the Treasury and the Comptroller General of the United States, from
and after the Signing Date but, after the date when the Investor or one of its Affiliates no
longer owns, directly or indirectly, any Subordinated Debt, only with respect to the period
in which the Investor or one of its Affiliates directly or indirectly owned any Subordinated
Debt. Subject to the foregoing, and limited solely to information determined by the Investor
to be relevant to the Subordinated Debt, the Recipient will permit, and shall cause each of
the Recipient Subsidiaries to permit, the Investor, the Inspector General of the Treasury
and the Comptroller General of the United States and their respective agents, consultants,
contractors and advisors to (x) examine any books, papers, records, Tax returns (including
all schedules and attachments thereto), data and other information, (y) make copies thereof
and (z) discuss the affairs, finances and accounts of the Recipient and the Recipient
Subsidiaries with the personnel (including the principal officers) of the Recipient and the
Recipient Subsidiaries, all upon reasonable notice, provided, that:
(A)
any examinations and discussions pursuant to this Section 4.1(c)(i)
shall be conducted during normal business hours and in such manner as not to
interfere unreasonably with the conduct of the business of the Recipient and the
Recipient Subsidiaries;
(B)
neither the Recipient nor any Recipient Subsidiary shall be required
by this Section 4.1(c)(i) to disclose any information to the extent (x) prohibited by
applicable law or regulation (including laws and regulations relating to the use or
disclosure of confidential supervisory information), or (y) that such disclosure
would reasonably be expected to cause a violation of any agreement to which the
Recipient or any Recipient Subsidiary is a party or would cause a risk of a loss of
privilege to the Recipient or any Recipient Subsidiary (provided that the Recipient
shall use commercially reasonable efforts to make appropriate substitute disclosure
arrangements under circumstances where the restrictions in this clause (B) apply);
(C)
the obligations of the Recipient and the Recipient Subsidiaries to
disclose information pursuant to this Section 4.1(c)(i) to the Inspector General of
the Treasury, the Comptroller General of the United States and their respective
agents, consultants, contractors or advisors, shall be subject to the agreement by the
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Inspector General of the Treasury or the Comptroller General of the United States,
as applicable, with respect to documents obtained under this Section 4.1(c)(i), to
follow applicable law and regulation (and the applicable customary policies and
procedures) regarding the dissemination of confidential materials, including
redacting confidential information from the public version of its reports and
soliciting the input from the Recipient as to information that should be afforded
confidential treatment, as appropriate; and
(D)
for avoidance of doubt, any investigation or discussions pursuant to
this Section 4.1(c)(i) may, at the Investor’s option, be conducted on site at any
office of the Recipient or any Recipient Subsidiary.
(ii)
Subject to the assignment of the rights under this Section 4.1(c)(ii) pursuant
to Section 4.1(c)(iii), from the Signing Date until the date on which all the Subordinated
Debt has been redeemed in whole, the Recipient will deliver, or will cause to be delivered,
to the Investor:
(A)
as soon as available after the end of each fiscal year of the Recipient,
and in any event within one hundred twenty (120) days thereafter, a consolidated
balance sheet of the Recipient as of the end of such fiscal year, and consolidated
statements of income, retained earnings and cash flows of the Recipient for such
year, in each case prepared in accordance with GAAP and setting forth in each case
in comparative form the figures for the previous fiscal year of the Recipient and
which shall be audited to the extent audited financial statements are available;
(B)
as soon as available after the end of the first, second and third
quarterly periods in each fiscal year of the Recipient, a copy of any quarterly reports
provided to Equityholders of the Recipient;
(C)
as soon as available after the Recipient receives any assessment of
the Recipient’s internal controls, a copy of such assessment (other than assessments
provided by the Appropriate Federal Banking Agency or the Appropriate State
Banking Agency that the Recipient is prohibited by applicable law or regulation
from disclosing to the Investor);
(D)
as soon as such items become effective, any amendments to the
Charter, bylaws or other organizational documents of the Recipient; and
(E)
at the same time as such items are sent to all Equityholders in the
case of S Corps or Members in the case of mutual institutions, copies of any
information or documents, excluding, if the Recipient is a mutual institution, any
general solicitations or advertisements for services and products, sent by the
Recipient to its Members; provided, however that, notwithstanding clauses (A)-(E)
of this Section 4.1(c)(ii), this Section 4.1(c)(ii) shall not require the Recipient to
prepare audited financial statements if it does not otherwise prepare audited
financial statements and shall not require the Recipient to submit Call Reports to
the Investor.
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(iii) The Investor’s information rights pursuant to Section 4.1(c)(ii) and the
Investor’s right to receive certifications from the Recipient pursuant to Section 4.1(d)(i)
may be assigned by the Investor to a transferee or assignee of the Subordinated Debt with
a face value of no less than an amount equal to ten percent (10%) of the Purchase Price.
(iv)
Nothing in this Section shall be construed to limit the authority that the
Inspector General of the Treasury, the Comptroller General of the United States or any
other applicable Governmental Entity has under law.
(v)
The Recipient shall provide to the Investor all such information as the
Investor may request from time to time related to the study under Section 525 of Division N
of the Consolidated Appropriations Act, 2021 and related studies.
(d)
Certifications. Subject to the assignment of the rights under Section 4.1(d)(i)
pursuant to Section 4.1(c)(iii), the Recipient shall provide the following certifications to the
Investor:
(i)
Upon delivery of each Supplemental Report, the Recipient’s principal
executive officer or principal financial officer (each as defined in the ECIP Interim Final
Rule) will certify to the Investor that the information provided on each Supplemental
Report is accurate;
(ii)
Following the Closing Date, within one hundred twenty (120) days of the
end of each fiscal year of the Recipient during which a Supplemental Report is submitted,
the Recipient will deliver to the Investor (1) a certification by the Recipient that the
processes and controls used to generate the Supplemental Reports are satisfactory and
(2) an attestation with respect to the processes and controls used to generate the
Supplemental Reports from the Recipient’s independent auditor if the Recipient is required
to include an attestation as to its internal control over financial reporting in connection with
the filing of audited financial statements with any Governmental Entity or self-regulatory
agency; and
(iii) By December 31 of the calendar year in which the Closing occurs and,
thereafter, annually, for so long as required by the ECIP Interim Final Rule, a certification
substantially in the form attached hereto as Annex D by two of the Recipient’s Senior
Executive Officers (one of which must be the Recipient’s principal executive officer or
principal financial officer) (each as defined in the ECIP Interim Final Rule) that the
Recipient is in compliance with each of the excessive compensation, severance pay and
excessive or luxury expenditures requirements and limitations on capital distributions set
forth in ECIP Interim Final Rule, as published and in effect at the time of the certification;
provided that without the consent of the Investor, the date of such annual certifications
shall not be later than nor more than 30 days earlier than the anniversary date for the first
annual certification following the Closing.
The Recipient shall immediately notify the Investor upon the occurrence of any
breach of any of the covenants set forth in this Section 4.1(d).
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(e)
Compensation Matters.
(i)
Restrictions on compensation and severance payments. During the ECIP
Period, the Recipient shall comply, and take all necessary action to ensure that any
Recipient Subsidiary complies, in all respects with the requirements set forth in the ECIP
Interim Final Rule regarding restrictions on executive compensation and severance
payments, and any material changes to the policies and procedures related thereto.
(ii)
Excessive or luxury expenditures. Within ninety (90) days of the Closing
Date, the Board of Directors shall adopt an excessive or luxury expenditures policy,
provide such policy to the Investor and the Recipient’s Appropriate Federal Banking
Agency, and post the text of such policy on its Internet website, if the Recipient maintains
an Internet website. The Recipient shall comply, and take all necessary action to ensure
that any Recipient Subsidiary complies, in all respects with the requirements set forth in
the ECIP Interim Final Rule regarding restrictions on excessive or luxury expenditures,
and any material changes to the excessive or luxury expenditures policy adopted by the
Board of Directors.
(f)
Capital Distributions. During the ECIP Period, the Recipient shall comply with
each of the restrictions on capital distributions (as defined in 31 C.F.R. § 35.21) applicable to it as
set forth in the ECIP Interim Final Rule.
(g)
Payment of Principal and Interest. The Recipient covenants and agrees for the
benefit of the Holders of the Subordinated Debt that it will duly and punctually pay or cause to be
paid the principal of and interest on the Subordinated Debt at the respective times and in the
manner provided herein and in the Subordinated Debt. Payment of the principal of and interest on
the Subordinated Debt due on the Maturity Date will be made by the Recipient in immediately
available funds against presentation and surrender of the Subordinated Debt. Subject to the terms
of the Subordinated Debt, each installment of interest on the Subordinated Debt due on an Interest
Payment Date other than the Maturity Date shall be paid by wire transfer of immediately available
funds to any account with a banking institution located in the United States designated by such
Holder no later than the related Regular Record Date. Notwithstanding anything herein to the
contrary, if the Recipient is an insured depository institution, (1) the Recipient shall not pay any
interest on the Subordinated Debt while it remains in default in the payment of any assessment to
the Federal Deposit Insurance Corporation if payment of such interest would then be prohibited
by 12 U.S.C. Section 1828(b) (or any successor statute), and (2) if the Recipient becomes a
critically undercapitalized depository institution, the Recipient shall not make any payments of
principal or interest on the Subordinated Debt if the Recipient would then be prohibited from
making any such payments by 12 U.S.C. Section 1831o (or any successor statute), provided, in
each case, the Recipient shall not be relieved from making such payments of principal or interest
on the Subordinated Debt when permitted by applicable law.
(h)
Qualified Lending Reports.
(i)
Following the Closing Date, for the period through the earlier of (x) the date
on which the Subordinated Debt is redeemed in whole and (y) the end of the period during
which the interest rate applicable to the Subordinated Debt adjusts based on the
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Supplemental Reports, the Recipient shall submit to the Investor a report in a form
substantially similar to that posted on Investor’s ECIP website (the “Quarterly
Supplemental Report”), in accordance with the submission instructions set forth in such
Quarterly Supplemental Report concurrently with (A) in the case of a Recipient that is an
insured depository institution, the submission of the Call Report for the quarter covered by
the Quarterly Supplemental Report, (B) with respect to a Bank Holding Company or
Savings and Loan Holding Company that files on Reporting Form FR Y-9SP or Reporting
Form FR Y-9LP but not FR Y-9C, the submission of its IDI Subsidiary’s(ies’) Call Report
for the quarter covered by the Quarterly Supplemental Report and (C) in the case of a
Recipient that is a Bank Holding Company or Savings and Loan Holding Company that
files on Reporting Form FR Y-9C, the Form FR Y-9C for the quarter covered by the
Quarterly Supplemental Report, as applicable, setting forth an updated calculation of (i) the
amount of Qualified Lending as of the applicable quarter end date and (ii) as applicable,
the difference between the Baseline and such updated amount of Qualified Lending;
(ii)
If the Investor determines that the Initial Supplemental Report or any
Quarterly Supplemental Report is inaccurate, the Investor may require the Recipient to
restate the Initial Supplemental Report or any applicable Quarterly Supplemental Report,
and (i) the “Baseline Qualified Lending” on such restated Initial Supplemental Report shall
become the Baseline or (ii) the Qualified Lending on such restated Quarterly Supplemental
Report shall become the Qualified Lending, as applicable;
(iii) If any Initial Supplemental Report or Quarterly Supplemental Report is
inaccurate, the Investor shall be entitled to recover from the Recipient, upon demand, the
amount of any difference between (x) the amount of the interest payment(s) actually made
to the Investor based on such inaccurate report and (y) the correct amount of the interest
payment(s) that should have been made, but for such inaccuracy; provided, that to the
extent such inaccuracy resulted in an overpayment of interest, the Investor shall not have
any obligation to return to or otherwise reimburse the Recipient for such excess interest
payment. The Recipient shall provide the Investor with a written description of any such
inaccuracy within three (3) business days after the Recipient’s discovery thereof;
(iv)
If the Investor transfers the Subordinated Debt, then any amounts payable
in respect of Subordinated Debt that have been transferred shall, if and as directed by the
Investor, be paid to the transferee of the Subordinated Debt;
(v)
The Investor shall have the right from time to time to modify the Quarterly
Supplemental Report, by posting an amended and restated version of the Quarterly
Supplemental Report on its website, to conform the Quarterly Supplemental Report to
(A) reflect changes in GAAP, (B) reflect changes in the form or content of, or definitions
used in, Call Reports, Reporting Form FR Y-9C or any other applicable reporting form or
(C) to make clarifications, technical corrections and/or any other adjustments as the
Investor determines to be necessary or appropriate. Notwithstanding anything herein to the
contrary, upon posting by the Investor on its website, the Quarterly Supplemental Report
shall be deemed to be amended and restated as so posted, without the need for any further
act on the part of any person or entity. If any such modification includes a change to the
caption or number of any line item of the Quarterly Supplemental Report, any reference
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herein to such line item shall thereafter be a reference to such re-captioned or renumbered
line item;
(vi)
The Recipient’s financial records shall be maintained in such a manner and
scope so as to ensure that the Initial Supplemental Report and Quarterly Supplemental
Reports can be prepared and filed in accordance with the instructions thereto and will
reflect a fair presentation of the Recipient’s, and its Affiliates’ as applicable, Qualified
Lending and Deep Impact Lending, as defined in such Supplemental Report; and
(vii) The Recipient shall maintain in its files a signed and attested record of its
completed Initial Supplemental Report, any Quarterly Supplemental Reports, any amended
reports, and the methodology used to generate the data in the Initial Supplemental Report
and Quarterly Supplemental Reports, for five (5) years after the report date, unless any
applicable state requirements mandate a longer retention period.
(i)
Reporting Requirements. Prior to the date on which all the Subordinated Debt has
been redeemed in whole, the Recipient covenants and agrees that, upon the written request of the
Investor or any Holder to which rights are assigned pursuant to Section 1.9 of Annex E and at all
times from and after such request, (i) to the extent it is subject to the reporting requirements of
Section 13 or 15(d) of the Exchange Act, it shall comply with the terms and conditions set forth in
Annex E or (ii) as soon as practicable after the date that the Recipient becomes subject to the
reporting requirements of Section 13 or 15(d) of the Exchange Act, it shall comply with the terms
and conditions set forth in Annex E.
(j)
Nonpayment of Interest. Whenever interest payable on the Subordinated Debt will
not be paid in full for any Interest Period (as defined in the Subordinated Debt), including
nonpayment because interest will be deferred pursuant to the applicable provisions of this
Agreement and the Subordinated Security, then no later than three (3) business days prior to the
applicable Interest Payment Date (as defined in the Subordinated Debt) the principal executive
officer and principal financial officer of the Recipient shall provide written notice, in a form
reasonably satisfactory to the Investor, informing the Investor that the Recipient will not make the
applicable interest payment and providing the rationale of the Recipient for not making such
interest payment.
(k)
Compliance with Federal Law. The Recipient shall comply with, and hereby
assures that it will comply with, all applicable federal statutes and regulations relating to
nondiscrimination including: (i) Title VI of the Civil Rights Act of 1964 (42 U.S.C. § 2000d et
seq.), including Treasury’s implementing regulations at 31 C.F.R. Part 22; (ii) Section 504 of the
Rehabilitation Act of 1973, as amended (29 U.S.C. § 794); and (iii) the Age Discrimination Act
of 1975, as amended (42 U.S.C. §§ 6101–6107), including Treasury’s implementing regulations
at 31 C.F.R. Part 23 and the general age discrimination regulations at 45 C.F.R. Part 90.
(l)
Transactions with Affiliates. Until such time as the Investor or one of its Affiliates,
directly or indirectly, ceases to own any Subordinated Debt, (i) the Recipient, if subject to Section
23A and Section 23B of the Federal Reserve Act (12 U.S.C. §§ 371c and 371c-1) shall comply
with such Sections and Regulation W promulgated thereunder (12 C.F.R. Part 223) and (ii) the
Recipient, if not subject to such Sections and Regulation, shall comply with such Sections and
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Regulation to the same extent as if the Recipient were a member of the Federal Reserve System,
except for any transactions between a Bank Holding Company or Savings and Loan Holding
Company and its IDI Subsidiaries.
(m)
Outreach Plan. The Recipient shall provide community outreach and
communication, where appropriate, describing the availability and application process of receiving
loans made possible by the ECIP through organizations, trade associations, and individuals that
represent or work within or are members of minority communities.
Section 4.2
Investor that:
Negative Covenants. The Recipient hereby covenants and agrees with the
(a)
Certain Transactions. The Recipient shall not merge or consolidate with, or sell,
transfer, convey 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 Recipient), expressly assumes the due and punctual performance and observance of each and
every covenant, agreement and condition of this Agreement and the Subordinated Debt to be
performed and observed by the Recipient, including the due and punctual payment of the principal
of and interest on the Subordinated Debt, and, if applicable, the issuance by the successor party of
an instrument equivalent to the Subordinated Debt. Any such successor entity must also qualify
at the time of the transaction as an Eligible Financial Institution unless prior written approval of
the Investor is obtained.
(b)
S Corporation Status. If the Recipient is an S Corp as of the Signing Date, the
Recipient shall not revoke or change its status for federal income tax purposes as an S corporation
within the meaning of Sections 1361 and 1362 of the Code or the status of any Recipient
Subsidiary as a QSub within the meaning of Section 1361(b)(3)(B) of the Code without the prior
written consent of the Majority Holders.
(c)
CDFI and MDI Status. If the Recipient is a CDFI as of the Signing Date, the
Recipient shall not revoke its status as a CDFI and shall use its reasonable best efforts to prevent
its status as a CDFI from being changed, within the meaning of 12 U.S.C. § 4702 and in accordance
with 12 C.F.R. § 1805.201. If the Recipient is an MDI as of the Signing Date, the Recipient shall
not revoke its designation as an MDI and shall use its reasonable best efforts to maintain its
designation as an MDI.
(d)
Restriction on Dividends and Repurchases.
(i)
In the case of mutual institutions, (A) no dividends may be declared or paid
by the Recipient on any Equity or other capital instruments it is authorized to issue under
applicable law, nor may any discretionary payments be made on any other securities or
instruments that are pari passu with or junior to the Subordinated Debt with respect to
distributions or ranking in liquidation, unless all accrued and unpaid interest for all past
Interest Periods on the Subordinated Debt has been paid in full, and there is no unpaid
Deferred Interest, and (B) the Recipient may not repurchase or redeem any Equity or other
capital instruments, or any securities or instruments ranking pari passu with or junior to
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the Subordinated Debt, unless all accrued and unpaid interest for all past Interest Periods
on the Subordinated Debt has been paid in full, and there is no unpaid Deferred Interest.
(ii)
In the case of S corps, (A) no dividends may be declared or paid by the
Recipient on any securities or other instruments it is authorized to issue under applicable
law, nor may any discretionary payments be made on any other securities or instruments,
that are pari passu with or junior to the Subordinated Debt with respect to distributions or
ranking in liquidation unless all accrued and unpaid interest for all past Interest Periods on
the Subordinated Debt has been paid in full, and there is no unpaid Deferred Interest, and
(B) the Recipient may not repurchase or redeem any securities or instruments ranking pari
passu with or junior to the Subordinated Debt, including Equity or an equivalent equity
interest, unless all accrued and unpaid interest for all past Interest Periods on the
Subordinated Debt has been paid in full, and there is no unpaid Deferred Interest.
Notwithstanding anything to the contrary above, the Recipient may make capital
distributions, or purchase or redeem securities that are pari passu with or junior to the
Subordinated Debt, to the extent reasonably required to cover its owners’ tax obligations
in respect of the entity’s earnings. Such distributions shall be subject to an annual
reconciliation, with any surplus or deficiency to be deducted or added to distributions, as
applicable, in the following year.
(iii) For the avoidance of doubt, the foregoing contractual restrictions shall not
restrict the Recipient from making required, non-discretionary payments on securities or
instruments that are pari passu with or junior to the Subordinated Debt it has issued, such
as payments at stated maturity in accordance with an instrument’s terms or payments of
interest that may not be deferred, and the foregoing contractual restrictions and clarification
shall not supersede otherwise applicable limitations or determinations with respect to
distributions or payments pursuant to the rules or regulations of any Appropriate Federal
Banking Agency.
ARTICLE V
REMEDIES OF THE HOLDERS UPON EVENT OF DEFAULT AND OTHER
BREACHES OR DEFAULTS
Section 5.1 Event of Default. “Event of Default” shall mean the occurrence or existence
of any one or more of the following (whatever the reason for such and whether it shall be voluntary
or involuntary or be effected by operation of law or pursuant to any judgment, decree or order of
any court or any order, rule or regulation of any administrative or governmental agency or body)
with respect to the Subordinated Debt:
(a)
if the Recipient is an insured depository institution, (i) the Recipient shall consent
to the appointment of a receiver or other similar official (other than a conservator) in any
liquidation, insolvency or similar proceeding with respect to the Recipient or all or substantially
all of its property; or (ii) a court having jurisdiction in the premises or any administrative or
governmental agency or body shall enter a decree or order for the appointment of a receiver or
other similar official (other than a conservator) in any liquidation, insolvency or similar proceeding
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with respect to the Recipient for all or substantially all of its property, and such decree or order
shall have remained in force undischarged or unstayed for a period of sixty (60) days; or
(b)
if the Recipient is a Bank Holding Company or Savings and Loan Holding
Company, (i) the entry by a court having jurisdiction in the premises of (A) a decree or order for
relief in respect of the Recipient or a Major Depository Institution Subsidiary in an involuntary
case or proceeding under any applicable federal or state bankruptcy, insolvency, reorganization or
other similar law or (B) a decree or order appointing a custodian, receiver, liquidator, assignee,
trustee, sequestrator or other similar official of the Recipient or a Major Depository Institution
Subsidiary or of any substantial part of their respective property, or ordering the winding up or
liquidation of their respective affairs, and the continuance of any such decree or order for relief or
any such other decree or order unstayed and in effect for a period of sixty (60) consecutive days,
or (ii) the commencement by the Recipient or a Major Depository Institution Subsidiary of a
voluntary case or proceeding under any applicable federal or state bankruptcy, insolvency,
reorganization or other similar law or the consent by the Recipient or a Major Depository
Institution Subsidiary to the filing of such petition or to the appointment of or taking possession
by a custodian, receiver, liquidator, assignee, trustee, sequestrator or other similar official of the
Recipient or such Major Depository Institution Subsidiary or of any substantial part of their
respective property, or the making by the Recipient or such Major Depository Institution
Subsidiary of an assignment for the benefit of creditors, or the admission by it in writing of its
inability to pay its debts generally as they become due, or the taking of corporate action by the
Recipient or a Major Depository Institution Subsidiary in furtherance of any such action.
Section 5.2
Acceleration and Other Remedies.
(a)
When any Event of Default has occurred and is continuing, then principal and
interest, and all fees, charges and other obligations payable hereunder and under the Transaction
Documents, shall immediately become due and payable without presentment, demand, protest or
notice of any kind. In addition, each Holder may exercise any and all remedies available to it under
the Transaction Documents or applicable law. For the avoidance of doubt, there is no right of
acceleration in the case of a default in the payment of principal of, premium, if any, or interest on,
the Subordinated Debt or in the performance of any other obligation of the Recipient under this
Agreement or the Subordinated Debt.
(b)
Notwithstanding anything to the contrary herein, to the extent then required under
or pursuant to applicable laws or regulations (including, without limitation, applicable capital
regulations) then in effect, no repayment pursuant to an acceleration of maturity may be made on
the Subordinated Debt without the prior written approval of any bank supervisory authority having
jurisdiction over the Recipient and requiring such approval.
Section 5.3 Suits for Enforcement. In case any one or more Events of Default shall have
occurred and be continuing, any Holder, subject to the terms of Article VII hereof, may proceed
to protect and enforce its rights under this Article V by suit in equity or action at law. In the event
of the failure by the Recipient to make payment of principal of or interest on the Subordinated
Debt (and, in the case of payment of interest, such failure to pay shall have continued for two (2)
business days), the Recipient will, upon written demand of any Holder, pay to such Holder the
whole amount then due and payable (without acceleration) on such Holder’s Subordinated Debt,
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with interest on the overdue amount at the rate borne by the Subordinated Debt to the extent such
interest is legally enforceable. Such demand shall not serve to accelerate the Holder’s Subordinated
Debt. If the Recipient fails to pay such amount upon such demand, the Holder may among other
things, institute a judicial proceeding for the collection of such amount. It is agreed that in the
event of such action, or any action between a Holder of the Subordinated Debt and the Recipient
(including its officers and agents) in connection with a breach or enforcement of this Agreement,
the Holder of the Subordinated Debt shall be entitled to receive all reasonable fees, costs and
expenses incurred, including without limitation such reasonable fees and expenses of attorneys
(whether or not litigation is commenced) and reasonable fees, costs and expenses of appeals.
Section 5.4 Holders May File Proofs of Claim. In case there shall be pending
receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment,
composition or other administrative or judicial proceeding relative to the Recipient or the property
of the Recipient, any Holder, irrespective of whether the principal of the Subordinated Debt shall
then be due and payable as therein expressed or by declaration or otherwise and irrespective of
whether any such Holder shall have made any demand pursuant to the provisions of this
Section 5.4, shall be entitled and empowered, by intervention in such proceedings or otherwise, to
file and prove a claim or claims for the whole amount of principal and interest owing and unpaid
in respect of the Subordinated Debt held by any such Holder and, in case of any administrative or
judicial proceedings, to file such proofs of claim and other papers or documents as may be
necessary or advisable in order to have the claims of any such Holder allowed in such
administrative or judicial proceedings relative to the Recipient, or to the creditors or property of
the Recipient, unless prohibited by applicable law and regulations, to vote in any election of a
trustee or a standby trustee in arrangement, reorganization, liquidation or other bankruptcy or
insolvency proceedings or person performing similar functions in comparable proceedings, and to
collect and receive any moneys or other property payable or deliverable to any such Holder on any
such claims.
Section 5.5 Waiver of Past Defaults. The Majority Holders may on behalf of the Holders
of all the Subordinated Debt waive any past default hereunder with respect to such Subordinated
Debt and its consequences, except a default in the payment of principal or interest. Upon any such
waiver, such default shall cease to exist, for every purpose of this Agreement except Section 5.7
through Section 5.9; but no such waiver shall extend to any subsequent or other default or impair
any right consequent thereon or for any purpose to Section 5.7 through Section 5.9. This
Section 5.5 shall apply only to the rights of the Holders in their capacity as such and,
notwithstanding anything to the contrary in the preceding sentences of this Section 5.5, any waiver
pursuant to this Section 5.5 shall not extend to the rights, remedies or consequences set forth in
Section 5.7 through Section 5.9.
Section 5.6 Receivership. If the Recipient is an insured depository institution, it is
expressly understood and agreed that the Federal Deposit Insurance Corporation, as receiver or
conservator of the Recipient, shall have the right, but not the obligation, in the performance of its
legal duties, and as part of any transaction or plan of reorganization or liquidation designed to
protect or further the continued existence of the Recipient or the rights of any parties or agencies
with an interest in, or claim against, the Recipient or its assets, to transfer or direct the transfer of
the obligations of the Subordinated Debt to any national banking association, state bank or bank
holding company selected by such official which shall expressly assume the obligation of the due
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and punctual payment of the unpaid principal of, premium, if any, and interest on, the Subordinated
Debt and the due and punctual performance of all covenants and conditions hereof; and that the
completion of such transfer and assumption shall serve to supersede and void any default,
acceleration or subordination which may have occurred, or which may occur due or related to such
transaction, plan, transfer or assumption pursuant to the provisions of the Subordinated Debt, and
shall serve to return the Holder of the Subordinated Debt to the same position, other than for
substitution of the obligor, it would have occupied had no default, acceleration or subordination
occurred.
Section 5.7 Rate Reductions in the Event of Breaches and Violations. If Treasury
determines, in its sole discretion, that the Recipient has breached, violated or defaulted under
(i) any covenant, agreement or obligation of the Recipient included in this Agreement or the
Subordinated Debt, (ii) Section 104A of the Community Development Banking Act or the ECIP
Interim Final Rule, or (iii) any additional rules or regulations established in connection with ECIP
that further the purposes of Section 104A of the Community Development Banking Act, Treasury
may, in its sole discretion, determine that the Recipient shall not be eligible for any rate reduction
with respect to the Subordinated Debt for such period as Treasury, in its sole discretion, shall
determine. Any such determination shall cause the applicable interest rate of the Subordinated
Debt to reset as specified in the Subordinated Security. Treasury shall provide notice to the
Recipient of any determination with respect to the Recipient’s disqualification from eligibility for
rate reductions or the termination of any such disqualification; provided that any failure by
Treasury to provide notice of any such determination or defect in such notice or the transmission
thereof shall not affect or prejudice Treasury’s rights or remedies under this Section 5.7 or the
Subordinated Debt. Notwithstanding the foregoing, a default in the payment of interest shall not
be subject to this Section 5.7.
Section 5.8
Recipient Breach, Violation or Default.
(a)
If Treasury determines, in its sole discretion, that the Recipient or an Affiliate of
the Recipient has breached, violated or defaulted under (i) any covenant, agreement or obligation
of the Recipient or an Affiliate of the Recipient included in this Agreement or the Subordinated
Debt, (ii) Section 104A of the Community Development Banking Act or the ECIP Interim Final
Rule, or (iii) any additional rules or regulations established in connection with ECIP that further
the purposes of Section 104A of the Community Development Banking Act, Treasury may, in its
sole discretion, report such breach, violation or default to the CDFI Fund or other entities within
or affiliated with Treasury. The Recipient acknowledges that any such report of a breach, violation
or default may result in the Recipient becoming ineligible for awards or programs offered by the
CDFI Fund or other entities within or affiliated with Treasury at that time or in the future in
accordance with the terms and conditions of such awards or programs offered by the CDFI Fund
or other entities within or affiliated with Treasury.
(b)
The restrictions on, and notice requirement with respect to, the transferability of the
Subordinated Debt set forth in Section 6.6(f)(v) shall cease to apply if Treasury determines, in its
sole discretion, that the Recipient or an Affiliate of the Recipient has breached, violated or
defaulted under (i) any covenant, agreement or obligation of the Recipient or an Affiliate of the
Recipient included in this Agreement or the Subordinated Debt, (ii) Section 104A of the
Community Development Banking Act or the ECIP Interim Final Rule, or (iii) any additional rules
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or regulations established in connection with ECIP that further the purposes of Section 104A of
the Community Development Banking Act.
Section 5.9
Additional Remedies.
(a)
If Treasury determines, in its sole discretion, that the Recipient or an Affiliate of
the Recipient has breached, violated or defaulted under (i) any covenant, agreement or obligation
of the Recipient or an Affiliate of the Recipient included in this Agreement or the Subordinated
Debt, (ii) Section 104A of the Community Development Banking Act or the ECIP Interim Final
Rule, or (iii) any additional rules or regulations established in connection with ECIP that further
the purposes of Section 104A of the Community Development Banking Act, Treasury may
propose a remedy that Treasury determines, in its sole discretion, is proportional to the breach,
violation or default. If Treasury makes such a determination and proposes a remedy under this
Section 5.9(a), Treasury shall notify the Recipient in writing of its proposed determination of a
breach, violation or default, provide an explanation of the nature of the breach, violation or default,
and specify the proposed remedy. Upon receipt of such notice, the Recipient shall, within seven
(7) days, accept Treasury’s proposed remedy, propose an alternative remedy, or provide
information and documentation contesting Treasury’s proposed determination. Treasury shall
consider any such submission by the Recipient and make a final written determination, which will
state Treasury’s findings regarding the breach, violation or default and the remedy to be imposed.
(b)
If Treasury makes a final determination under Section 5.9(a) that a breach, violation
or default has occurred, Treasury may, in its sole discretion, require additional reporting or
monitoring; initiate suspension or debarment proceedings as authorized under 2 C.F.R. Part 180;
or take any such other action as Treasury, in its sole discretion, deems appropriate and determines,
in its sole discretion, to be proportional to the breach, violation or default; provided, however, that
Treasury shall not require acceleration of the interest or principal on the Subordinated Debt as a
remedy under this Section 5.9 and such acceleration shall be governed exclusively by Section 5.2.
(c)
Treasury may make a final determination regarding a breach, violation or default
without regard to Section 5.9(a) if Treasury determines, in its sole discretion, that such
determination is necessary to protect a material interest of the federal government. In such event,
Treasury shall notify the Recipient of the remedy that Treasury, in its sole discretion, shall impose,
after which the Recipient may contest Treasury’s final determination or propose an alternative
remedy in writing to Treasury. Following the receipt of such a submission by the Recipient,
Treasury may, in its sole discretion, maintain or alter its final determination.
(d)
Instead of, or in addition to, the remedies listed above, Treasury may refer any
breach, violation or default or any allegations of fraud, waste, or abuse to the Inspector General of
the Treasury.
(e)
Notwithstanding the foregoing, a default in the payment of interest shall not be
subject to this Section 5.9.
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ARTICLE VI
ADDITIONAL AGREEMENTS
Section 6.1 Purchase for Investment. The Investor acknowledges that the Subordinated
Debt has not been registered under the Securities Act, or under any state securities laws (or, if the
Recipient is a national bank or federal savings association, Part 16). The Investor acknowledges
that the Subordinated Debt is not being sold pursuant to an indenture (an “Indenture”) qualified
under the Trust Indenture Act of 1939 (the “Indenture Act”). The Investor (a) is acquiring the
Subordinated Debt pursuant to an exemption from registration under the Securities Act (and, if the
Recipient is a national bank or federal savings association, Part 16) and an exemption from
qualification of an indenture under the Indenture Act, and is acquiring the Subordinated Debt
solely for investment with no present intention to distribute the Subordinated Debt to any person
in violation of the Securities Act or any applicable U.S. state securities laws (or if, applicable,
Part 16), (b) will not sell or otherwise dispose of any of the Subordinated Debt, except in
compliance with the registration requirements or exemption provisions of the Securities Act and
any applicable U.S. state securities laws (or if, applicable, Part 16), 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.
Section 6.2 Form of Subordinated Security. The Subordinated Debt shall be
substantially in the form of Annex A hereto, the terms of which are incorporated in and made a
part of this Agreement. The Subordinated Debt shall be issued, and may be transferred, only in
denominations having an aggregate principal amount of not less than $1,000 and integral multiples
of $1,000 in excess thereof. The Subordinated Debt shall be in registered form without coupons
and shall be numbered, lettered or otherwise distinguished in such manner or in accordance with
such plans as the officers executing the same may determine as evidenced by the execution thereof.
Section 6.3 Execution of Subordinated Debt. The Subordinated Debt shall be executed
in the name and on behalf of the Recipient by the manual or facsimile signature of its President,
Chief Executive Officer, Chief Financial Officer or one of its Executive Vice Presidents under its
seal (if legally required) which may be affixed thereto or printed, engraved or otherwise
reproduced thereon, by facsimile or otherwise, and which need not be attested, unless otherwise
required by the Recipient’s Charter or bylaws or applicable law. Every Subordinated Security shall
be dated the date of its issuance and delivery.
Section 6.4 Computation of Interest. (a) The amount of interest payable for any Interest
Period will be computed as provided in the Subordinated Debt.
(b)
Each Subordinated Security will bear interest at the Applicable Interest Rate set
forth in Section 2(a) of the face of the Subordinated Security attached hereto as Annex A for the
Interest Period on the principal thereof, on any overdue principal and (to the extent that payment
of such interest is enforceable under applicable law) on any overdue installment of interest
(including Defaulted Interest but excluding, for the avoidance of doubt, any interest installment
the payment of which has been deferred pursuant to Section 6.14), payable on each Interest
Payment Date or the Maturity Date, as the case may be. Interest on any Subordinated Security that
is payable, and is punctually paid or duly provided for by the Recipient, on any Interest Payment
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Date shall be paid to the person in whose name such Subordinated Security is registered at the
close of business on the Regular Record Date for such interest installment.
(c)
Any interest on the Subordinated Security that is payable, but is not punctually paid
or duly provided for by the Recipient, on any Interest Payment Date (herein called “Defaulted
Interest”) shall forthwith cease to be payable to the Holder on the relevant Regular Record Date,
and such Defaulted Interest shall be paid by the Recipient on either the next succeeding Interest
Payment Date or another date specified by the Recipient to the persons in whose names such
Subordinated Debt is registered at the close of business on either (x), if such Defaulted Interest is
to be paid on the next succeeding Interest Payment Date, the related Regular Record Date, or (y), if
such Defaulted Interest is to be paid on any other date, a special record date for the payment of
such Defaulted Interest. To the extent any Defaulted Interest is paid by the Recipient, the Recipient
shall notify the Holder in writing of the amount of Defaulted Interest proposed to be paid on each
such Subordinated Security and the date of the proposed payment.
(d)
To the extent that Defaulted Interest is to be paid on a date other than on an Interest
Payment Date, the Board of Directors shall fix a special record date for the payment of such
Defaulted Interest, which shall not be more than fifteen (15) nor less than ten (10) days prior to
the date of the proposed payment. The Recipient shall cause notice of the proposed payment of
such Defaulted Interest and the special record date therefor to be mailed, first class postage prepaid,
to each Holder of a Subordinated Security at his, her or its address as it appears in the Subordinated
Securities Register, not less than ten (10) days prior to such special record date. Notice of the
proposed payment of such Defaulted Interest and the special record date therefor having been
mailed as aforesaid, such Defaulted Interest shall be paid to the person in whose name such
Subordinated Security is registered at the close of business on such special record date and
thereafter the Recipient shall have no further payment obligation in respect of the Defaulted
Interest.
(e)
The Recipient may make payment of any Defaulted Interest on the Subordinated
Debt in any other lawful manner not inconsistent with the requirements of any securities exchange
on which such Subordinated Debt may be listed, and upon such notice as may be required by such
exchange.
Subject to the foregoing provisions of this Section 6.4, each Subordinated Security delivered under
this Agreement upon registration of transfer of or in exchange for or in lieu of any other
Subordinated Security shall carry the rights to interest accrued and unpaid, and to accrue, that were
carried by such other Subordinated Security.
Section 6.5
Legends.
(a)
The Investor agrees that all certificates or other instruments representing the
Subordinated Debt will bear a legend substantially to the following effect:
“THIS SUBORDINATED SECURITY WILL BE ISSUED AND MAY BE
TRANSFERRED ONLY IN DENOMINATIONS OF A MINIMUM OF $1,000
AND MULTIPLES OF $1,000 IN EXCESS THEREOF. ANY ATTEMPTED
TRANSFER OF SUCH SECURITIES IN A DENOMINATION OF LESS THAN
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$1,000 OR IN A DENOMINATION OTHER THAN IN A MULTIPLE OF $1,000
IN EXCESS THEREOF SHALL BE DEEMED TO BE VOID AND OF NO
LEGAL EFFECT WHATSOEVER. ANY SUCH PURPORTED TRANSFEREE
SHALL BE DEEMED NOT TO BE THE HOLDER OF SUCH SECURITIES FOR
ANY PURPOSE, INCLUDING, BUT NOT LIMITED TO, THE RECEIPT OF
PAYMENTS ON SUCH SECURITIES, AND SUCH PURPORTED
TRANSFEREE SHALL BE DEEMED TO HAVE NO INTEREST
WHATSOEVER IN SUCH SECURITIES.
THIS SECURITY IS SUBJECT TO THE TERMS AND CONDITIONS SET
FORTH IN THE LETTER AGREEMENT BY AND BETWEEN THE ISSUER
AND THE UNITED STATES DEPARTMENT OF THE TREASURY AND
SECURITIES PURCHASE AGREEMENT – STANDARD TERMS
(TOGETHER, THE “AGREEMENT”), EACH OF WHICH ARE
INCORPORATED INTO THIS SUBORDINATED SECURITY.
THE TERMS UNDER WHICH THE ISSUER MAY PREPAY THIS
SUBORDINATED SECURITY ARE SET FORTH IN THE AGREEMENT.
THE PAYMENT OF PRINCIPAL OF OR INTEREST ON THIS
SUBORDINATED DEBT SECURITY MAY NOT BE ACCELERATED
WITHOUT THE PRIOR APPROVAL OF THE APPROPRIATE FEDERAL
BANKING AGENCY IF REQUIRED UNDER RULES OR REGULATIONS OF
SUCH APPROPRIATE FEDERAL BANKING AGENCY, AND THE ISSUER
MAY NOT REDEEM THIS SUBORDINATED DEBT SECURITY PRIOR TO
MATURITY, REPURCHASE THIS SUBORDINATED DEBT SECURITY, OR
EXERCISE A CALL OPTION IN CONNECTION WITH THIS
SUBORDINATED DEBT SECURITY WITHOUT THE PRIOR APPROVAL OF
THE APPROPRIATE FEDERAL BANKING AGENCY IF REQUIRED UNDER
RULES OR REGULATIONS OF SUCH APPROPRIATE FEDERAL BANKING
AGENCY.
THIS SECURITY MAY BE FULLY SUBORDINATED TO INTERESTS HELD
BY THE U.S. GOVERNMENT IN THE EVENT THAT THE ISSUER ENTERS
INTO A RECEIVERSHIP, INSOLVENCY, LIQUIDATION, OR SIMILAR
PROCEEDING.
[IF THE ISSUER IS A BANK HOLDING COMPANY, SAVINGS AND LOAN
HOLDING COMPANY, NATIONAL BANK OR FEDERAL SAVINGS
ASSOCIATION, INCLUDE: THIS SECURITY HAS NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 (THE “SECURITIES ACT”), OR THE
SECURITIES LAWS OF ANY STATE, OR (IF THE ISSUER IS A NATIONAL
BANK OR FEDERAL SAVINGS ASSOCIATION) PART 16 OF THE
REGULATIONS OF THE OFFICE OF THE COMPTROLLER OF THE
CURRENCY (“PART 16”), AND MAY NOT BE TRANSFERRED, SOLD OR
OTHERWISE DISPOSED OF EXCEPT WHILE A REGISTRATION
STATEMENT RELATING THERETO IS IN EFFECT UNDER SUCH ACT
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FOR REFERENCE ONLY – NOT FOR EXECUTION – UPDATED 3.25.2022
AND APPLICABLE STATE SECURITIES LAWS AND PART 16 (IF
APPLICABLE) OR PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER SUCH ACT OR SUCH LAWS OR SUCH
REGULATIONS, AS APPLICABLE. 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 (IF
THE ISSUER IS A NATIONAL BANK OR FEDERAL SAVINGS
ASSOCIATION, AS INCORPORATED INTO PART 16). 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
OR PART 16, AS APPLICABLE, (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 (IF THE ISSUER IS A NATIONAL
BANK OR FEDERAL SAVINGS ASSOCIATION, AS INCORPORATED INTO
PART 16), (C) TO THE ISSUER OR (D) PURSUANT TO ANY OTHER
AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS
OF THE SECURITIES ACT AND PART 16, AS APPLICABLE, 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.
[IF THE ISSUER IS A FEDERAL SAVINGS ASSOCIATION, INCLUDE:
WITHOUT LIMITING THE FOREGOING, AN INDENTURE MEETING THE
REQUIREMENTS OF 12 C.F.R. 5.56(d) MUST BE IN PLACE BEFORE THIS
SECURITY IS TRANSFERRED TO ANY PERSON WHO IS NOT AN
“ACCREDITED INVESTOR” (AS DEFINED IN RULE 501(a) UNDER THE
SECURITIES ACT).]
THIS INSTRUMENT IS ISSUED SUBJECT TO THE RESTRICTIONS ON
TRANSFER AND OTHER PROVISIONS OF THE AGREEMENT, 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.”
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FOR REFERENCE ONLY – NOT FOR EXECUTION – UPDATED 3.25.2022
THIS SECURITY IS NOT A SAVINGS ACCOUNT OR DEPOSIT AND IT IS
NOT INSURED OR GUARANTEED BY THE FEDERAL DEPOSIT
INSURANCE CORPORATION OR ANY OTHER GOVERNMENT AGENCY.
THIS SECURITY IS SUBORDINATED TO THE CLAIMS OF GENERAL AND
SECURED CREDITORS, IS NOT SECURED AND IS SUBORDINATE AND
JUNIOR IN ITS RIGHT OF PAYMENT TO THE OBLIGATIONS OF ALL
CREDITORS, INCLUDING BOTH SECURED AND UNSECURED OR
GENERAL CREDITORS, AND TO ALL “SENIOR INDEBTEDNESS” AS
DEFINED IN THE AGREEMENT, EXCEPT THOSE SPECIFICALLY
DESIGNATED AS RANKING ON A PARITY WITH, OR SUBORDINATED
TO, THIS SUBORDINATED SECURITY.
[IF THE ISSUER IS AN INSURED DEPOSITORY INSTITUTION, INCLUDE:
THIS SECURITY IS ALSO SUBORDINATED TO CLAIMS OF DEPOSITORS
AND IS INELIGIBLE AS COLLATERAL FOR A LOAN BY THE ISSUER.]
[IF THE ISSUER IS A FEDERAL SAVINGS ASSOCIATION, INCLUDE: THIS
SECURITY IS ALSO SUBORDINATED ON LIQUIDATION, AS TO
PRINCIPAL, INTEREST, AND PREMIUM, TO ALL CLAIMS AGAINST THE
ISSUER THAT HAVE THE SAME PRIORITY AS SAVINGS ACCOUNTS OR
A HIGHER PRIORITY.]
THIS SECURITY IS NOT SECURED BY THE ISSUER’S ASSETS OR THE
ASSETS OF ANY AFFILIATE OF THE ISSUER. AN AFFILIATE MEANS
ANY PERSON OR COMPANY THAT CONTROLS, IS CONTROLLED BY, OR
IS UNDER COMMON CONTROL WITH THE ISSUER. THIS SECURITY IS
NOT ELIGIBLE COLLATERAL FOR A LOAN BY THE ISSUER.
[IF THE ISSUER IS AN INSURED DEPOSITORY INSTITUTION, INCLUDE:
PURSUANT TO 12 U.S.C. 1828(b), THE ISSUER SHALL NOT PAY ANY
DIVIDENDS ON ITS CAPITAL STOCK OR INTEREST ON ITS CAPITAL
NOTES OR DEBENTURES (IF SUCH INTEREST IS REQUIRED TO BE PAID
ONLY OUT OF NET PROFITS) OR DISTRIBUTE ANY OF ITS CAPITAL
ASSETS WHILE IT REMAINS IN DEFAULT IN THE PAYMENT OF ANY
ASSESSMENT DUE TO THE FEDERAL DEPOSIT INSURANCE
CORPORATION.]
[IF THE ISSUER IS AN INSURED DEPOSITORY INSTITUTION, INCLUDE:
PURSUANT TO 12 U.S.C. 1831o(h), THE ISSUER MAY NOT MAKE ANY
PAYMENT OF PRINCIPAL OR INTEREST ON THIS OBLIGATION
BEGINNING
60
DAYS
AFTER
BECOMING
CRITICALLY
UNDERCAPITALIZED, UNLESS THE FEDERAL DEPOSIT INSURANCE
CORPORATION HAS MADE AN EXCEPTION PURSUANT TO 12 U.S.C.
1831o(h)(2)(B).]
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FOR REFERENCE ONLY – NOT FOR EXECUTION – UPDATED 3.25.2022
PURSUANT TO SECTION 11 OF THE REGULATORY CAPITAL RULES SET
FORTH IN 12 C.F.R. PART 3 (WITH RESPECT TO NATIONAL BANKS AND
FEDERAL SAVINGS ASSOCIATIONS), 12 C.F.R. PART 217 (WITH
RESPECT TO BANK HOLDING COMPANIES, SAVINGS AND LOAN
HOLDING COMPANIES AND STATE MEMBER BANKS) AND 12 C.F.R.
PART 324 (WITH RESPECT TO STATE NONMEMBER BANKS OR STATE
SAVINGS ASSOCIATIONS), THE ISSUER WILL BE SUBJECT TO
LIMITATIONS ON DISTRIBUTIONS (INCLUDING PAYMENTS OF
INTEREST ON THIS SUBORDINATED SECURITY) IF THE ISSUER DOES
NOT SATISFY ITS CAPITAL BUFFER REQUIREMENT IN FULL.
[IF THE ISSUER IS AN INSURED DEPOSITORY INSTITUTION, INCLUDE:
WITH RESPECT TO AN INSOLVENCY OF THE ISSUER, THE FEDERAL
DEPOSIT INSURANCE CORPORATION, ACTING AS RECEIVER, HAS THE
AUTHORITY TO TRANSFER THE ISSUER’S OBLIGATION UNDER THIS
SUBORDINATED SECURITY AND TO SUPERSEDE OR VOID ANY
DEFAULT, ACCELERATION, OR SUBORDINATION THAT MAY HAVE
OCCURRED.]
[IF THE ISSUER IS AN INSURED DEPOSITORY INSTITUTION, INCLUDE: IF
THE ISSUER IS “UNDERCAPITALIZED” AS DEFINED BY APPLICABLE
LAW AND FAILS TO SATISFACTORILY IMPLEMENT A REQUIRED
CAPITAL RESTORATION PLAN, THE ISSUER MAY BE SUBJECT TO ALL
THE ADDITIONAL RESTRICTIONS AND REQUIREMENTS APPLICABLE
TO A “SIGNIFICANTLY UNDERCAPITALIZED” INSTITUTION, AS
DEFINED BY APPLICABLE LAW, INCLUDING BEING REQUIRED TO
SELL SHARES IN THE ISSUER, BEING ACQUIRED BY A DEPOSITORY
INSTITUTION HOLDING COMPANY, OR BEING MERGED OR
CONSOLIDATED WITH ANOTHER DEPOSITORY INSTITUTION, AND
SUCH AUTHORITY BY THE OCC SUPERSEDES AND VOIDS ANY
DEFAULTS THAT MAY HAVE OCCURRED.]
[IF THE ISSUER IS AN INSURED DEPOSITORY INSTITUTION, INCLUDE: IF
THE ISSUER IS “CRITICALLY UNDERCAPITALIZED,” AS DEFINED BY
APPLICABLE LAW, THE ISSUER IS PROHIBITED FROM MAKING
PRINCIPAL OR INTEREST PAYMENTS ON THIS SUBORDINATED
SECURITY WITHOUT PRIOR REGULATORY APPROVAL.]”
(b)
In the event that any Subordinated Debt (i)(A) becomes registered under the
Securities Act (or, if applicable, Part 16) or (B) is eligible to be transferred without restriction in
accordance with Rule 144 or another exemption from registration under the Securities Act (other
than Rule 144A) (or, if applicable, Part 16); and (ii)(A) becomes subject to an Indenture qualified
under the Indenture Act or (B) is exempt from qualification under the Indenture Act, the Recipient
shall issue new certificates or other instruments representing such Subordinated Debt, which shall
not contain the applicable legends in Section 6.5(a) above; provided that the Investor surrenders
to the Recipient the previously issued certificates or other instruments.
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FOR REFERENCE ONLY – NOT FOR EXECUTION – UPDATED 3.25.2022
Section 6.6
Transfer of Subordinated Debt.
(a)
The Recipient or its duly appointed agent shall maintain a register (the
“Subordinated Securities Register”) for the Subordinated Debt in which it shall register the
issuance and transfer of the Subordinated Debt. All transfers of the Subordinated Debt shall be
recorded on the Subordinated Securities Register maintained by the Recipient or its agent, and the
Recipient shall be entitled to regard the registered Holder of such Subordinated Security as the
actual owner of the Subordinated Security so registered until the Recipient or its agent is required
to record a transfer of such Subordinated Security on its Subordinated Securities Register. The
Recipient or its agent shall, subject to applicable securities laws, be required to record any such
transfer when it receives the Subordinated Security to be transferred duly and properly endorsed
by the registered Holder or by its attorney duly authorized in writing.
(b)
The Recipient shall at any time, upon written request of the Holder of a
Subordinated Security and surrender of the Subordinated Security for such purpose, at the expense
of the Recipient, issue new Subordinated Debt in exchange therefor in such denominations of at
least $1,000, as shall be specified by the Holder of such Subordinated Security, in an aggregate
principal amount equal to the then unpaid principal amount of the Subordinated Debt surrendered
and substantially in the form of Annex A, with appropriate insertions and variations, and bearing
interest from the date to which interest has been paid on the Subordinated Security surrendered.
All Subordinated Debt issued upon any registration of transfer of exchange pursuant to this
Section 6.6(b) shall be valid obligations of the Recipient, evidencing the same debt, and entitled
to the same benefits under this Agreement, as the Subordinated Debt surrendered upon such
registration of transfer or exchange.
(c)
All Subordinated Debt presented for registration of transfer or for exchange or
payment shall be duly endorsed by, or be accompanied by, a written instrument or instruments of
transfer in a form satisfactory to the Recipient duly executed by the Holder or such Holder’s
attorney duly authorized in writing.
(d)
No service charge shall be incurred for any exchange or registration of transfer of
Subordinated Debt, but the Recipient may require payment of a sum sufficient to cover any tax,
fee or other governmental charge that may be imposed in connection therewith.
(e)
Prior to due presentment for the registration of a transfer of any Subordinated
Security, the Recipient and any agent of the Recipient may deem and treat the person in whose
name such Subordinated Security is registered as the absolute owner and Holder of such
Subordinated Security for the purpose of receiving payment of principal of and interest on such
Subordinated Security and none of the Recipient or any agents of the Recipient shall be affected
by notice to the contrary.
(f)
Subject to compliance with applicable law, the Investor (and any investment
vehicles established and used by the Investor to purchase, hold, and sell Subordinated Debt) shall
be permitted to transfer, sell, assign or otherwise dispose of (“Transfer”) all or a portion of the
Subordinated Debt at any time and from time to time, and the Recipient shall take all steps as may
be reasonably requested by the Investor to facilitate the sale of the Subordinated Debt, including
as set forth in Section 6.9, provided that:
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FOR REFERENCE ONLY – NOT FOR EXECUTION – UPDATED 3.25.2022
(i)
The Investor shall not Transfer any Subordinated Debt if such Transfer
would (A) require the Recipient to be subject to the periodic reporting requirements of
Section 13 or 15(d) of the Exchange Act and the Recipient was not already subject to such
requirements, or (B) if the Recipient is a national bank or federal savings association,
require the Recipient to register the securities under Part 16;
(ii) Prior to the sale of all or a portion of the Subordinated Debt by the Investor
to a third party, the Investor shall deliver to the Recipient a notice (“ROFR Notice”) setting
forth the aggregate principal amount of Subordinated Debt proposed to be sold (the
“Offered Securities”) and the cash purchase price thereof (which shall reflect a valuation
of the Subordinated Debt by an independent third party) (the “Offer Price”) and other terms
and conditions on which the Investor proposes to sell the Offered Securities. Within ten
(10) days from the date the Investor delivers the ROFR Notice to the Recipient (the
“Review Period”), the Recipient shall deliver to the Investor a written notice (a “Response
Notice”) stating whether it elects to purchase all the Offered Securities and irrevocably
offering to purchase such number of Offered Securities on the terms contained in the ROFR
Notice, which purchase shall, as applicable, be conditional upon receipt of prior approval
from the Recipient’s Appropriate Federal Banking Agency. If the Recipient does not
deliver a Response Notice in accordance with this Section 6.6(f)(ii) prior to the expiration
of the Review Period, then the Recipient will be deemed to have elected not to exercise the
right of first refusal specified in the ROFR Notice and the Investor shall be free to sell the
Offered Securities to a third party on the terms reflected in the ROFR Notice.
(iii) The Investor shall not sell more than twenty-five percent (25%) of the
outstanding obligations referred to in clause (iii) of the definition of “Indebtedness” to a
single third party without the Recipient’s consent, which may not be unreasonably delayed,
conditioned or withheld;
(iv)
With the prior consent of the Recipient (which may not be unreasonably
delayed, conditioned or withheld), the Investor may Transfer all or a portion of the
Subordinated Debt for no consideration or for a de minimis amount to a mission-aligned
nonprofit Affiliate of an Eligible Financial Institution participating in the ECIP that is an
Insured CDFI (an “Eligible Nonprofit”); and
(v)
Subject to Section 5.8(b), the Investor shall not sell the Subordinated Debt
to a third party (other than to an Eligible Nonprofit) prior to the Tenth Anniversary (as
defined in the Subordinated Security) without the prior consent of the Recipient (which
may not be unreasonably delayed, conditioned or withheld). In addition, subject to
Section 5.8(b), the Investor shall provide the Recipient eighteen (18) months’ advance
notice of the Investor’s intent to Transfer the Subordinated Debt to a third party other than
an Eligible Nonprofit.
(g)
In furtherance of the foregoing, the Recipient shall provide reasonable cooperation
to facilitate any Transfers of the Subordinated Debt, including, as is reasonable under the
circumstances, by furnishing such information concerning the Recipient and its business as a
proposed transferee may reasonably request and making management of the Recipient reasonably
available to respond to questions of a proposed transferee in accordance with customary practice,
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FOR REFERENCE ONLY – NOT FOR EXECUTION – UPDATED 3.25.2022
subject in all cases to the proposed transferee agreeing to a customary confidentiality agreement.
For the avoidance of doubt, the term “third party” as used in this Section 6.6 shall not refer to an
investment vehicle or other entity controlled by the Investor, or to any Affiliate of the Investor.
Section 6.7 Replacement of Subordinated Debt. Upon receipt of evidence reasonably
satisfactory to the Recipient of the loss, theft, destruction or mutilation of any Subordinated
Security, and, in the case of any such loss, theft or destruction, upon delivery of a bond of
indemnity reasonably satisfactory to the Recipient (provided that any Holder of a Subordinated
Security may instead deliver to the Recipient an indemnity agreement in form and substance
reasonably satisfactory to the Recipient), or, in the case of any such mutilation, upon surrender
and cancellation of the Subordinated Security, as the case may be, the Recipient will issue a new
Subordinated Security of like tenor, in lieu of such lost, stolen, destroyed or mutilated
Subordinated Security.
Section 6.8 Cancellation. All Subordinated Debt surrendered for the purpose of
payment, exchange or registration of transfer, shall be surrendered to the Recipient and promptly
canceled by it, and no Subordinated Debt shall be issued in lieu thereof except as expressly
permitted by any of the provisions of this Agreement. The Recipient shall destroy all canceled
Subordinated Debt.
Section 6.9
Rule 144; Rule 144A; 4(a)(1½) Transactions.
(a)
At all times after the Signing Date, the Recipient covenants that (1) it will, upon
the request of the Investor or any subsequent holders of the Subordinated Debt (“Holders”), use
its reasonable best efforts to (x), to the extent any Holder is relying on Rule 144 under the
Securities Act to sell any of the Subordinated Debt (including, in the case of a Recipient that is a
national bank or federal savings association, as such Rule is incorporated into Part 16), make
“current public information” available, as provided in Section (c)(1) of Rule 144 (if the Recipient
is a “Reporting Issuer” within the meaning of Rule 144) or in Section (c)(2) of Rule 144 (if the
Recipient is a “Non-Reporting Issuer” within the meaning of Rule 144), in either case for such
time period as necessary to permit sales pursuant to Rule 144, (y), to the extent any Holder is
relying on the so-called “Section 4(a)(1½)” exemption to sell any of its Subordinated Debt, prepare
and provide to such Holder such information, including the preparation of private offering
memoranda or circulars or financial information, as the Holder may reasonably request to enable
the sale of the Subordinated Debt pursuant to such exemption, or (z) to the extent any Holder is
relying on Rule 144A under the Securities Act (including, in the case of a Recipient that is a
national bank or federal savings association, as such Rule is incorporated into Part 16) to sell any
of its Subordinated Debt, prepare and provide to such Holder the information required pursuant to
Rule 144A(d)(4), and (2) it will take such further action as any Holder may reasonably request
from time to time to enable such Holder to sell Subordinated Debt without registration under the
Securities Act (or, in the case of a Recipient that is a national bank or federal savings association,
under Part 16) within the limitations of the exemptions provided by (i) the provisions of the
Securities Act or any interpretations thereof or related thereto by the SEC, including transactions
based on the so-called “Section 4(a)(1½)” and other similar transactions, (ii) Rule 144 or 144A
under the Securities Act, as such rules may be amended from time to time, or (iii) any similar rule
or regulation hereafter adopted by the SEC (or, in each case and in the case of a Recipient that is
a national bank or federal savings association, as applicable under Part 16); provided that the
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FOR REFERENCE ONLY – NOT FOR EXECUTION – UPDATED 3.25.2022
Recipient shall not be required to take any action described in this Section 6.9 that would cause
the Recipient to become subject to the reporting requirements of Section 13 or 15(d) of the
Exchange Act if the Recipient was not subject to such requirements prior to taking such action.
Upon the request of any Holder, the Recipient will deliver to such Holder a written statement as
to whether it has complied with such requirements and, if not, the specifics thereof.
(b)
If the Recipient is a state-chartered bank or savings association, the Investor and
Recipient acknowledge that, as of the Signing Date, the offer and sale of the Subordinated Debt is
a security of an insured depository institution and, accordingly, the transfer of such securities is
exempt from the registration requirements of the Securities Act and qualification and registration
requirements under state law. Notwithstanding the foregoing, so long as the Subordinated Debt is
subject to the exemption provided by Section 3(a)(2) or Section 3(a)(5) of the Securities Act, the
provisions of this Section 6.9 shall be interpreted so as to nonetheless provide a Holder of
Subordinated Debt with the benefit of the cooperation of the Recipient to facilitate a sale of the
Subordinated Debt, including the preparation and provision of materials referenced in
Section 6.9(a)(1)(y).
(c)
The Recipient agrees to indemnify Investor, Investor’s officials, officers, directors,
employees, agents, representatives and Affiliates, and each person, if any, that controls Investor
within the meaning of the Securities Act (each, an “Indemnitee”), against any and all losses, claims,
damages, actions, liabilities, costs and expenses (including reasonable fees, expenses and
disbursements of attorneys and other professionals incurred in connection with investigating,
defending, settling, compromising or paying any such losses, claims, damages, actions, liabilities,
costs and expenses), joint or several, arising out of or based upon any untrue statement or alleged
untrue statement of material fact contained in any document or report provided by the Recipient
pursuant to this Section 6.9 or any omission to state therein a material fact required to be stated
therein or necessary to make the statements therein, in light of the circumstances under which they
were made, not misleading.
(d)
If the indemnification provided for in Section 6.9(c) 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 Recipient, 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 Recipient, 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 Recipient, 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 Recipient or by the Indemnitee and the parties’ relative intent, knowledge, access
to information and opportunity to correct or prevent such statement or omission; the Recipient and
Investor agree that it would not be just and equitable if contribution pursuant to this Section 6.9(d)
were determined by pro rata allocation or by any other method of allocation that does not take
account of the equitable considerations referred to in Section 6.9(b). No Indemnitee guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be
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FOR REFERENCE ONLY – NOT FOR EXECUTION – UPDATED 3.25.2022
entitled to contribution from the Recipient if the Recipient was not guilty of such fraudulent
misrepresentation.
Section 6.10 Redemption.
(a)
Optional Redemption. The Recipient may, at its option, redeem the outstanding
Subordinated Debt (i) in whole or in part, from time to time, on or after the fifth anniversary of the
Original Issue Date, or (ii) in whole but not in part at any time within ninety (90) days following
a Regulatory Trigger Event (any such date, a “Redemption Date”), in each case, at a redemption
price equal to the sum of (i) 100% of the principal amount thereof being called for redemption and
(ii) any accrued and unpaid interest (including accrued and unpaid Deferred Interest). The
redemption price for any Subordinated Debt shall be payable on the relevant Redemption Date to
the Holder of such Subordinated Debt against surrender thereof to the Recipient or its agent.
Interest shall be paid at the then Applicable Interest Rate from the date of the last Interest Payment
Date up to but not including the Redemption Date. Notwithstanding the foregoing, the Recipient
may not redeem any Subordinated Debt without having received the prior approval of the
Appropriate Federal Banking Agency to the extent required under capital rules applicable to the
Recipient and without complying with the capital rules applicable to the Recipient.
(b)
No Sinking Fund. The Subordinated Debt will not be subject to any mandatory
redemption, sinking fund or other similar provisions. Holders of Subordinated Debt will have no
right to require redemption or repurchase of any of the Subordinated Debt.
(c)
Notice of Redemption. Notice of redemption of the Subordinated Debt shall be
given by first class mail, postage prepaid, addressed to the Holders of record of the Subordinated
Debt to be redeemed at their respective last addresses appearing on the Subordinated Securities
Register. Such mailing shall be at least thirty (30) days and not more than sixty (60) days before
the relevant Redemption Date. Any notice mailed as provided in this subsection shall be
conclusively presumed to have been duly given, whether or not the Holder receives such notice,
but failure duly to give such notice by mail, or any defect in such notice or in the mailing thereof,
to any Holder of Subordinated Debt designated for redemption shall not affect the validity of the
proceedings for the redemption of any other Subordinated Debt. Notwithstanding the foregoing, if
Subordinated Debt is issued in book-entry form through The Depository Trust Company or any
other similar facility, notice of redemption may be given to the Holders of Subordinated Debt at
such time and in any manner permitted by such facility. Each notice of redemption given to a
Holder shall state: (1) the Redemption Date; (2) the amount of Subordinated Debt to be redeemed
by such Holder; (3) the redemption price; and (4) the place or places where such Subordinated
Debt is to be surrendered for payment of the redemption price.
(d)
Partial Redemption. The Recipient may redeem less than all of the outstanding
Subordinated Debt, provided that the amount called for redemption at any time is not less than
twenty percent (20%) of the Purchase Price (or one hundred percent (100%) of the Subordinated
Debt then outstanding if representing a principal amount less than twenty percent (20%) of the
Purchase Price). 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 Subordinated Debt shall be redeemed from time to time. If less than the full aggregate
principal amount of any Subordinated Security is redeemed, the Recipient shall issue a new
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FOR REFERENCE ONLY – NOT FOR EXECUTION – UPDATED 3.25.2022
Subordinated Security in the unredeemed aggregate principal amount thereof without charge to
the Holder thereof. Subordinated Debt may be redeemed in part only on a pro rata basis and only
in minimum denominations of $1,000 and integral multiples 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 Recipient, in trust for the pro rata benefit of the Holders of the
Subordinated Debt called for redemption, with a bank or trust company doing business in the
Borough of Manhattan, The City of New York, and having a capital and surplus of at least $500
million and selected by the Board of Directors, so as to be and continue to be available solely
therefor, then, notwithstanding that any Subordinated Security so called for redemption has not
been surrendered for cancellation, on and after the Redemption Date interest shall cease to accrue
on the aggregate principal amount of such Subordinated Debt so called for redemption, the
aggregate principal amount of such Subordinated Debt so called for redemption shall no longer be
deemed outstanding and shall cease to bear interest from and after the Redemption Date. All rights
with respect to such Subordinated Debt (or the portion thereof so called for redemption) shall
forthwith on such Redemption Date cease and terminate, except only the right of the Holders
thereof to receive the redemption price payable on such redemption from such bank or trust
company, without interest. Any funds unclaimed at the end of three years from the Redemption
Date shall, to the extent permitted by applicable law, be released to the Recipient, after which time
the Holders of such Subordinated Debt (or portion thereof so called for redemption) shall look
only to the Recipient for payment of the redemption price of such Subordinated Debt.
(f)
Status of Redeemed Securities. Subordinated Debt that is redeemed, repurchased
or otherwise acquired by the Recipient shall be cancelled and shall not thereafter be reissued by
the Recipient.
Section 6.11 Governance Rights for Non-Payment of Interest.
(a)
Board Observation Rights. Whenever, at any time or times, interest on the
Subordinated Debt has not been paid for an aggregate of five (5) Interest Periods or more, whether
due to deferral or otherwise and whether or not consecutive, the Recipient shall invite a
representative (a “Subordinated Observer”) selected by the Holders of the Subordinated Debt,
voting as a single class, to attend all meetings of the Board of Directors in a nonvoting observer
capacity and, in this respect, shall give such Subordinated Observer copies of all notices, minutes,
consents, and other materials that it provides to its directors in connection with such meetings
(subject to disclosure limitations under applicable law); provided, that the Holders of the
Subordinated Debt shall not be obligated to select a Subordinated Observer, nor shall such
Subordinated Observer, if selected, be obligated to attend any meeting to which he/she is invited.
The rights of the holders of the Subordinated Debt set forth in this Section 6.11(a) shall terminate
when interest payments have been timely paid in full on the Subordinated Debt for at least four (4)
consecutive Interest Periods and when there is no unpaid Deferred Interest, subject to revesting in
the event of each and every subsequent default of the character above mentioned.
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(b)
Subordinated Directors.
(i)
If, at any time or times, interest on the Subordinated Debt has not been paid
for an aggregate of six (6) Interest Periods or more, whether due to deferral or otherwise
and whether or not consecutive (a “Director Trigger Event”), the Holders shall have the
right, but not the obligation, to select up to two (2) individuals to serve on the Board of
Directors of the Recipient; it being understood, that even if the Holders do not immediately
select any individuals to serve on the Board of Directors of the Recipient following the
occurrence of a Director Trigger Event, the Holders shall nevertheless retain the right to
do so until termination of such right pursuant to Section 6.11(b)(v). Upon the Holders’
selection of any such individuals, the Recipient and its Board of Directors shall take all
necessary action to: (i) cause the size of the Board of Directors to be increased by one (1)
(if the Holders select one (1) individual) or two (2) (if the Holders select two (2)
individuals) and (ii) cause such director vacancy or two (2) director vacancies, as the case
may be, to be filled by the individual or two (2) individuals selected by the Holders, as the
case may be (the “Subordinated Directors” and each a “Subordinated Director”).
(ii)
After any Subordinated Director joins the Recipient’s Board of Directors
pursuant to Section 6.11(b)(i), until the termination of the Holders’ selection rights
pursuant to Section 6.11(b)(v), the Board of Directors shall take all necessary action to
(x) include such Subordinated Director on the slate of directors for nomination at the
Recipient’s annual meetings of stockholders, (y) recommend that the Recipient’s
shareholders vote to elect such Subordinated Director and (z) solicit proxies for such
Subordinated Director in the same manner that the Board of Directors solicits proxies for
the other director nominees of the Recipient.
(iii) If at any time after a Subordinated Director joins the Board of Directors and
prior to the termination of the selection and nomination rights pursuant to
Section 6.11(b)(v) the office of any Subordinated Director becomes vacant for any reason,
the Holders may select a successor, and the Board of Directors shall take all action
necessary to appoint such successor to the Board of Directors.
(iv)
Notwithstanding the foregoing, it shall be a qualification for selection or
nomination for any Subordinated Director that the nomination or election of such
Subordinated Director to the Board of Directors shall not cause the Recipient to violate any
corporate governance requirements of any securities exchange or other trading facility on
which securities of the Recipient may then be listed or traded that listed or traded
companies must have a majority of independent directors.
(v)
The selection and nomination rights set forth in Section 6.11(b)(i), (ii) and
(iii) shall terminate when all accrued and unpaid interest has been timely paid in full on the
Subordinated Debt for at least four (4) consecutive Interest Periods and there is no unpaid
Deferred Interest, subject to revesting upon the occurrence of a subsequent Director Trigger
Event.
(vi)
For the avoidance of doubt, the Holders holding more than fifty percent
(50%) of the aggregate outstanding principal amount of the Subordinated Debt (the
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“Majority Holders”) shall be entitled to take all necessary action to exercise and enforce
the rights set forth in this Section 6.11 on behalf of the Holders.
Section 6.12 Communications to Holders. Any Holder shall have the right, upon five (5)
business days prior written notice to the Recipient or its duly appointed agent to obtain a complete
list of Holders. In addition, any Holder shall have the right to request that the Recipient or its duly
appointed agent send a notice on behalf of such Holder to all other Holders at the addresses set
forth on the Subordinated Securities Register.
Section 6.13 Noncompliance. The Recipient acknowledges and agrees that this
Agreement is entered into under Section 104A of the Community Development Banking Act and
that the ECIP Interim Final Rule was promulgated under that Act and, accordingly, where
applicable, the enforcement of the provisions of the Agreement and the ECIP Interim Final Rule
(and any violations thereof) are subject to 12 U.S.C. § 4717. The Recipient further acknowledges
and agrees that the Investor may inform the Appropriate Federal Banking Agency of Recipient’s
apparent noncompliance.
Section 6.14 Deferral of Interest.
(a)
Payments of interest on the Subordinated Debt shall be deferred for any Interest
Period, with the result that such payment of interest shall not be due on the originally scheduled
Interest Payment Date and shall instead be due on a subsequent Interest Payment Date or the
Maturity Date, as applicable and as determined in accordance with this Section 6.14 if as of the
applicable Interest Payment Date, any of the following is true:
(i)
the Recipient fails to be classified as “well capitalized”, as defined in the
applicable regulations of its Appropriate Federal Banking Agency;
(ii)
the Recipient failed to achieve positive net income for the most recently
completed quarter prior to the relevant Interest Payment Date;
(iii) the Recipient is subject to distribution limitations under the capital rules
applicable to it, such as those set forth in 12 C.F.R. § 3.11; 12 C.F.R. § 217.11 or 12 C.F.R.
§ 324.11; or
(iv)
the Recipient determines that the payment would be detrimental to the
financial health of the Recipient, and the principal executive officer and principal financial
officer of the Recipient provide written notice, in a form reasonably satisfactory to the
Investor, of such determination and the basis thereof.
(b)
Any interest installment that is deferred pursuant to Section 6.14(a) (“Deferred
Interest”) shall be tested against Section 6.14(a)(i)–Section 6.14(a)(iv) at each subsequent Interest
Payment Date, and the applicable Interest Deferral Period shall continue until none of the items in
Section 6.14(a)(i)–Section 6.14(a)(iv) is true. Deferred Interest shall be payable on any Interest
Payment Date and shall become due at the first Interest Payment Date as of which none of such
items is true. No Interest Deferral Period may end on a date other than an Interest Payment Date
or extend beyond the Maturity Date, as the case may be. During any Interest Deferral Period,
interest will continue to accrue on the principal amount of the Subordinated Debt in accordance
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with the terms thereof, but no additional interest will accrue on any Deferred Interest. If an Interest
Deferral Period has occurred and is continuing on the Maturity Date, any accrued and unpaid
Deferred Interest shall be due on the Maturity Date.
(c)
The Recipient may, in its discretion, provide the Investor notice that it waives the
deferral provisions set forth in Section 6.14(a) above with respect to any Interest Payment Date,
and may pay interest that would otherwise be subject to deferral. Notwithstanding any such waiver
pursuant to this Section 6.14(c), the Recipient’s interest payments must adhere to any distribution
or interest payment limitations set forth by the Recipient’s Appropriate Federal Banking Agency.
Section 6.15 Expenses and Further Assurances. (a) Unless otherwise provided in this
Agreement, 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, including fees
and expenses of its own financial or other consultants, investment bankers, accountants and
counsel.
(b)
The Recipient shall, at the Recipient’s sole cost and expense, (i) furnish to the
Investor all instruments, documents and other agreements required to be furnished by the Recipient
pursuant to the terms of this Agreement, including any documents required to be delivered
pursuant to Section 6.9 above, or which are reasonably requested by the Investor in connection
therewith; (ii) execute and deliver to the Investor such documents, instruments, certificates,
assignments and other writings, and do such other acts necessary or desirable, to evidence, preserve
and/or protect the Subordinated Debt purchased by the Investor, as Investor may reasonably
require; and (iii) do and execute all and such further lawful and reasonable acts, conveyances and
assurances for the better and more effective carrying out of the intents and purposes of this
Agreement, as the Investor shall reasonably require from time to time.
ARTICLE VII
SUBORDINATION OF THE SUBORDINATED DEBT
Section 7.1 Agreement to Subordinate. (a) The Recipient covenants and agrees, and
each Holder of Subordinated Debt issued hereunder likewise covenants and agrees, that the
Subordinated Debt shall be issued subject to the provisions of this Article VII; and each Holder of
a Subordinated Security, whether upon original issue or upon transfer or assignment thereof,
accepts and agrees to be bound by such provisions.
(b)
The payment by the Recipient of the principal of and interest on all Subordinated
Debt issued hereunder shall, to the extent and in the manner hereinafter set forth, be subordinated
and subject in right of payment to the prior payment in full of all amounts then due and payable in
respect of Senior Indebtedness, whether outstanding at the date of this Agreement or thereafter
incurred.
(c)
No provision of this Article VII shall prevent the occurrence of any Event of
Default (or any event which, after notice or the lapse of time or both would become, an Event of
Default) with respect to the Subordinated Debt hereunder.
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Section 7.2 Default on Senior Indebtedness. (a) In the event and during the continuation
of any default by the Recipient in the payment of principal, premium, interest or any other payment
due on any Senior Indebtedness, no payment shall be made by the Recipient with respect to the
principal or interest on the Subordinated Debt or any other amounts which may be due on the
Subordinated Debt pursuant to the terms hereof or thereof.
(b)
In the event of the acceleration of the maturity of the Senior Indebtedness, then no
payment shall be made by the Recipient with respect to the principal or interest on the Subordinated
Debt or any other amounts which may be due on the Subordinated Debt pursuant to the terms
hereof or thereof until the holders of all Senior Indebtedness outstanding at the time of such
acceleration shall receive payment, in full, of all amounts due on or in respect of such Senior
Indebtedness (including any amounts due upon acceleration).
(c)
In the event that, notwithstanding the foregoing, any payment is received by any
Holder of a Subordinated Security, when such payment is prohibited by the preceding paragraphs
of this Section 7.2, such payment shall be held in trust for the benefit of, and shall be paid over or
delivered by the Holder of the Subordinated Security to the holders of Senior Indebtedness or their
respective representatives, or to the trustee or trustees under any indenture pursuant to which any
of such Senior Indebtedness may have been issued, as their respective interests may appear, but
only to the extent of the amounts in respect of such Senior Indebtedness and to the extent that the
holders of the Senior Indebtedness (or their representative or representatives or a trustee) notify
the Recipient in writing within ninety (90) days of such payment of the amounts then due and
owing on such Senior Indebtedness, and only the amounts specified in such notice to the Recipient
shall be paid to the holders of such Senior Indebtedness. The Recipient shall, within ten (10)
business days of receipt of such notice, provide Investor with (i) a copy of such notice delivered
to the Recipient and (ii) a certificate signed on behalf of the Recipient by a Senior Executive
Officer certifying that the information set forth in such notice is true and correct and confirming
that the Holder of the Subordinated Security should pay or deliver the amounts specified in such
notice in the manner specified therein.
Section 7.3 Liquidation; Dissolution. (a) Upon any payment by the Recipient or
distribution of assets of the Recipient of any kind or character, whether in cash, property or
securities, to creditors upon any dissolution, winding-up, liquidation or reorganization of the
Recipient, whether voluntary or involuntary or in insolvency, receivership or other proceedings,
the holders of all Senior Indebtedness of the Recipient will first be entitled to receive payment in
full of amounts due on or in respect of such Senior Indebtedness, before any payment is made by
the Recipient on account of the principal of or interest on the Subordinated Debt or any other
amounts which may be due on the Subordinated Debt pursuant to the terms hereof or thereof; and
upon any such dissolution, winding-up, liquidation or reorganization, any payment by the
Recipient, or distribution of assets of the Recipient of any kind or character, whether in cash,
property or securities, which the Holder of the Subordinated Debt would be entitled to receive
from the Recipient, except for the provisions of this Article VII, shall be paid by the Recipient or
by any receiver, liquidating trustee, agent or other person making such payment or distribution, or
by the Holder of the Subordinated Debt under this Agreement if received by them or it, directly to
the holders of Senior Indebtedness of the Recipient (pro rata to such holders on the basis of the
respective amounts of Senior Indebtedness held by such holders, as calculated by the Recipient)
or their representative or representatives, or to the trustee or trustees under any indenture pursuant
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to which any instruments evidencing such Senior Indebtedness may have been issued, as their
respective interests may appear, to the extent necessary to pay all such amounts of Senior
Indebtedness in full, in money or money’s worth, after giving effect to any concurrent payment or
distribution to or for the holders of such Senior Indebtedness, before any payment or distribution
is made to the Holder of the Subordinated Debt.
(b)
In the event that, notwithstanding the foregoing, any payment or distribution of
assets of the Recipient of any kind or character prohibited by Section 7.3(a), whether in cash,
property or securities, shall be received by any Holder of the Subordinated Debt, before the
amounts of all Senior Indebtedness are paid in full, or provision is made for such payment in
money in accordance with its terms, such payment or distribution shall be held in trust for the
benefit of and shall be paid over or delivered by any Holder of a Subordinated Security, to the
holders of such Senior Indebtedness or their representative or representatives, or to the trustee or
trustees under any indenture pursuant to which any instruments evidencing such Senior
Indebtedness may have been issued, as their respective interests may appear, as calculated by the
Recipient, for application to the payment of all amounts of Senior Indebtedness remaining unpaid
to the extent necessary to pay all amounts due on or in respect of such Senior Indebtedness in full
in money in accordance with its terms, after giving effect to any concurrent payment or distribution
to or for the benefit of the holders of such Senior Indebtedness. In such event, the Recipient shall
provide Investor with a certificate signed on behalf of the Recipient by a Senior Executive Officer
confirming that the Holder of the Subordinated Debt should pay or deliver such amounts to the
holders of such Senior Indebtedness.
(c)
For purposes of this Article VII, the words “cash, property or securities” shall not
be deemed to include Equity of the Recipient as reorganized or readjusted, or securities of the
Recipient or any other entity provided for by a plan of reorganization or readjustment, the payment
of which is subordinated at least to the extent provided in this Article VII with respect to the
Subordinated Debt to the payment of Senior Indebtedness that may at the time be outstanding,
provided that (i) such Senior Indebtedness is assumed by the new entity, if any, resulting from any
such reorganization or readjustment, and (ii) the rights of the holders of such Senior Indebtedness
are not, without the consent of such holders, altered by such reorganization or readjustment. The
consolidation of the Recipient with, or the merger of the Recipient into, another person or the
liquidation or dissolution of the Recipient following the sale, conveyance, transfer or lease of its
property as an entirety, or substantially as an entirety, to another person upon the terms and
conditions provided for in Section 4.2(a) of this Agreement shall not be deemed a dissolution,
winding-up, liquidation or reorganization for the purposes of this Section 7.3 if such other person
shall, as a part of such consolidation, merger, sale, conveyance, transfer or lease, comply with the
conditions stated in Section 4.2(a) of this Agreement.
Section 7.4 Subrogation. (a) Subject to the payment in full of all Senior Indebtedness,
the rights of the Holders of the Subordinated Debt shall be subrogated to the rights of the holders
of such Senior Indebtedness to receive payments or distributions of cash, property or securities of
the Recipient, as the case may be, applicable to such Senior Indebtedness until the principal of and
interest on the Subordinated Debt shall be paid in full; and, for the purposes of such subrogation,
no payments or distributions to the holders of such Senior Indebtedness of any cash, property or
securities to which the Holders of the Subordinated Debt would be entitled except for the
provisions of this Article VII, and no payment pursuant to the provisions of this Article VII to or
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for the benefit of the holders of such Senior Indebtedness by the Holders of the Subordinated Debt
shall, as between the Recipient, its creditors other than holders of Senior Indebtedness of the
Recipient, and the Holders of the Subordinated Debt, be deemed to be a payment by the Recipient
to or on account of such Senior Indebtedness. It is understood that the provisions of this Article VII
are intended solely for the purposes of defining the relative rights of the Holders of the
Subordinated Debt, on the one hand, and the holders of such Senior Indebtedness on the other
hand.
(b)
Nothing contained in this Article VII or elsewhere in this Agreement or in the
Subordinated Debt is intended to or shall impair, as between the Recipient, its creditors other than
the holders of Senior Indebtedness of the Recipient, and the Holders of the Subordinated Debt, the
obligation of the Recipient, which is absolute and unconditional, to pay to the Holders of the
Subordinated Debt the principal of and interest on the Subordinated Debt as and when the same
shall become due and payable in accordance with their terms, or is intended to or shall affect the
relative rights of the Holders of the Subordinated Debt and creditors of the Recipient, as the case
may be, other than the holders of Senior Indebtedness of the Recipient, as the case may be, nor
shall anything herein or therein prevent the Holder of any Subordinated Debt from exercising all
remedies otherwise permitted by applicable law upon default under this Agreement, subject to the
rights, if any, under this Article VII of the holders of such Senior Indebtedness in respect of cash,
property or securities of the Recipient, as the case may be, received upon the exercise of any such
remedy.
Section 7.5 Notice by the Recipient. (a) The Recipient shall give prompt written notice
to the Holders of the Subordinated Debt of any fact known to the Recipient that would prohibit the
making of any payment of monies in respect of the Subordinated Debt pursuant to the provisions
of this Article VII.
(b)
Upon any payment or distribution of assets of the Recipient referred to in this
Article VII, the Holders of the Subordinated Debt shall be entitled to conclusively rely upon any
order or decree entered by any court of competent jurisdiction in which such insolvency,
receivership, liquidation, reorganization, dissolution, winding-up or similar case or proceeding is
pending, or a certificate of the liquidating trustee, custodian, receiver, assignee for the benefit of
creditors, agent or other person making such payment or distribution, delivered to the Holders of
the Subordinated Debt, for the purpose of ascertaining the persons entitled to participate in such
payment or distribution, the holders of Senior Indebtedness and other indebtedness of the
Recipient, the amount thereof or payable thereon, the amount or amounts paid or distributed
thereon and all other facts pertinent thereto or to this Article VII.
Section 7.6 Subordination May Not Be Impaired. (a) No right of any present or future
holder of any Senior Indebtedness of the Recipient to enforce subordination as herein provided
shall at any time in any way be prejudiced or impaired by any act or failure to act on the part of
the Recipient, as the case may be, or by any act or failure to act, in good faith, by any such holder,
or by any noncompliance by the Recipient, as the case may be, with the terms, provisions and
covenants of this Agreement, regardless of any knowledge thereof that any such holder may have
or otherwise be charged with.
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(b)
Without in any way limiting the generality of the foregoing paragraph, the holders
of Senior Indebtedness of the Recipient may, at any time and from time to time, without the consent
of or notice to the Holders of the Subordinated Debt, without incurring responsibility to the Holders
of the Subordinated Debt and without impairing or releasing the subordination provided in this
Article VII or the obligations hereunder of the Holders of the Subordinated Debt to the holders of
such Senior Indebtedness, do any one or more of the following: (i) change the manner, place or
terms of payment or extend the time of payment of, or renew or alter, such Senior Indebtedness,
or otherwise amend or supplement in any manner such Senior Indebtedness or any instrument
evidencing the same or any agreement under which such Senior Indebtedness is outstanding;
(ii) sell, exchange, release or otherwise deal with any property pledged, mortgaged or otherwise
securing such Senior Indebtedness; (iii) release any person liable in any manner for the collection
of such Senior Indebtedness; and (iv) exercise or refrain from exercising any rights against the
Recipient, as the case may be, and any other person.
ARTICLE VIII
MISCELLANEOUS
Section 8.1
(a)
Termination. This Agreement shall terminate upon the earliest to occur of:
termination at any time prior to the Closing:
(i)
by either the Investor or the Recipient if the Closing shall not have occurred
by the thirtieth (30th) calendar day following the Signing Date; provided, however, that in
the event the Closing has not occurred by such thirtieth (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 calendar day after
such thirtieth (30th) calendar day and not be under any obligation to extend the term of this
Agreement thereafter; provided, further, that the right to terminate this Agreement under
this Section 8.1(a)(i) shall not be available to any party whose breach of any representation
or warranty or failure to perform any obligation under this Agreement shall have caused or
resulted in the failure of the Closing to occur on or prior to such date; or
(ii)
by either the Investor or the Recipient in the event that any Governmental
Entity shall have issued an order, decree or ruling or taken any other action restraining,
enjoining or otherwise prohibiting the transactions contemplated by this Agreement, and
such order, decree, ruling or other action shall have become final and nonappealable; or
(iii)
by the mutual written consent of the Investor and the Recipient; or
(b)
the date on which all the Subordinated Debt has been redeemed in whole; or
(c)
if the Closing shall not have occurred by June 30, 2022, on such date.
In the event of termination of this Agreement as provided in this Section 8.1, this
Agreement shall forthwith become void and there shall be no liability on the part of either party
hereto except that nothing herein shall relieve either party from liability for any breach of this
Agreement.
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Section 8.2
Survival.
(a)
This Agreement and all representations, warranties, covenants and agreements
made herein shall survive the Closing without limitation.
(b)
The rights and remedies of Treasury with respect to the representations, warranties,
covenants and obligations of the Recipient herein shall not be affected by any investigation
conducted with respect to, or any knowledge acquired (or capable of being acquired) at any time
by Treasury or any of its personnel or agents with respect to the accuracy or inaccuracy of, or
compliance with, any such representation, warranty, covenant or obligation.
Section 8.3 Amendment. No amendment, modification, termination or waiver of any
provision of this Agreement or the Subordinated Debt or any of the other Transaction Documents
will be effective unless made in writing and signed by an officer or a duly authorized representative
of each party hereto, and, in the case of any amendment, modification, termination or waiver
affecting the Subordinated Debt, the Majority Holders; provided that for so long as the
Subordinated Debt is outstanding, the Investor may at any time and from time to time unilaterally
amend this Agreement to the extent the Investor deems necessary, in its sole discretion, to comply
with, or conform to, any changes after the Signing Date in any federal statutes and any rules and
regulations; provided, further that notwithstanding anything else in this Section 8.3, no
amendment, modification, termination or waiver with respect to the Subordinated Debt shall,
unless in writing and signed by all Holders, do any of the following: (A) change the principal of
or the rate of interest on any Subordinated Security; (B) extend any date fixed for any payment of
principal or interest; (C) change the definition of the terms “Holders” or “Majority Holders” or
the percentage of Holders which shall be required for Holders to take any action hereunder;
(D) amend or waive this Section 8.3 or the definitions of the terms used in this Section 8.3 insofar
as the definitions affect the substance of this Section 8.3; or (E) consent to the assignment,
delegation or other transfer by the Recipient of any of its rights and obligations under any
Transaction Documents. Any amendment, modification, termination, waiver or consent effected
in accordance with this Section 8.3 shall be binding upon each Holder of the Subordinated Debt at
the time outstanding, each future Holder of the Subordinated Debt and the Recipient. No failure
or delay by any party in exercising any right, power or privilege hereunder shall operate as a waiver
thereof nor shall any single or partial exercise thereof preclude any other or further exercise of any
other right, power or privilege. The rights and remedies herein provided shall be cumulative of any
rights or remedies provided by law.
Section 8.4 Waiver of Conditions. The conditions to each party’s obligation to
consummate the 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.
Section 8.5 Governing Law; Submission to Jurisdiction, etc. This Agreement and any
claim, controversy or dispute arising under or related to this Agreement, the relationship of the
parties, and/or the interpretation and enforcement of the rights and duties of the parties shall be
enforced, governed, and construed in all respects (whether in contract or in tort) in accordance
with the federal law of the United States if and to the extent such law is applicable, and otherwise
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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 Purchase contemplated hereby and (b) that notice
may be served upon (i) the Recipient at the address and in the manner set forth for notices to the
Recipient in Section 8.6 and (ii) the Investor at the address and in the manner set forth for notices
to the Recipient in Section 8.6, but otherwise in accordance with federal law. TO THE EXTENT
PERMITTED BY APPLICABLE LAW, EACH OF THE PARTIES HERETO HEREBY
UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY CIVIL LEGAL ACTION OR
PROCEEDING RELATING TO THIS AGREEMENT OR THE PURCHASE
CONTEMPLATED HEREBY.
Section 8.6 Notices. Any notice, request, instruction or other document to be given
hereunder by any party to the other will be in writing and will be deemed to have been duly given
(a) on the date of delivery if delivered personally, or by facsimile, upon confirmation of receipt,
or (b) on the second business day following the date of dispatch if delivered by a recognized next
day courier service. All notices to the Recipient shall be delivered as set forth in Schedule A, or
pursuant to such other instruction as may be designated in writing by the Recipient to the Investor.
All notices to the Holders of Subordinated Debt shall be delivered in writing, mailed first-class
postage prepaid, to each Holder of a Subordinated Security at the address of such Holder as it
appears in the Subordinated Securities Register. 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 Recipient.
If to the Investor:
United States Department of the Treasury
1500 Pennsylvania Avenue, NW
Washington, D.C. 20220
Attention: [to come]
Facsimile: [to come]
E-mail: [to come]
with a copy to:
[Address to come]
Attention: [to come]
Facsimile: [to come]
E-mail: [to come]
Section 8.7 Assignment. Neither this Agreement nor any right, remedy, obligation nor
liability arising hereunder or by reason hereof shall be assignable by any party hereto without the
prior written consent of the other party, and any attempt to assign any right, remedy, obligation or
liability hereunder without such consent shall be void, except (a) an assignment, in the case of a
merger, consolidation, statutory share exchange or similar transaction that requires the approval of
the Recipient’s Equityholders or other equity securityholders (a “Business Combination”) where
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FOR REFERENCE ONLY – NOT FOR EXECUTION – UPDATED 3.25.2022
such party is not the surviving entity, or a sale of substantially all of its assets, to the entity which
is the survivor of such Business Combination or the purchaser in such sale, (b) an assignment of
certain access and information rights as provided in Section 4.1(c) or the right to receive Qualified
Lending Reports as provided in Section 4.1(h) or Annex E or (c) an assignment by the Investor of
this Agreement to an Affiliate of the Investor; provided that if the Investor assigns this Agreement
to an Affiliate, the Investor shall be relieved of its obligations under this Agreement but (i) all
rights, remedies and obligations of the Investor hereunder shall continue and be enforceable by
such Affiliate, (ii) the Recipient’s obligations and liabilities hereunder shall continue to be
outstanding and (iii) all references to the Investor herein shall be deemed to include such Affiliate.
Section 8.8 Severability. If any provision of this Agreement or the Subordinated Debt,
or the application thereof to any person or circumstance, is determined by a court of competent
jurisdiction to be invalid, void or unenforceable, the remaining provisions hereof, or the
application of such provision to persons or circumstances other than those as to which it has been
held invalid or unenforceable, will remain in full force and effect and shall in no way be affected,
impaired or invalidated thereby, so long as the economic or legal substance of the transactions
contemplated hereby is not affected in any manner materially adverse to any party. Upon such
determination, the parties shall negotiate in good faith in an effort to agree upon a suitable and
equitable substitute provision to effect the original intent of the parties.
Section 8.9 No Third Party Beneficiaries. Other than as expressly provided herein,
nothing contained in this Agreement, expressed or implied, is intended to confer upon any person
or entity other than the Recipient and the Investor (and any Indemnitee) any benefit, right or
remedies.
Section 8.10 Specific Performance. The parties agree that irreparable damage would
occur in the event that any of the provisions of this Agreement were not performed in accordance
with their specific terms. It is accordingly agreed that the parties shall be entitled (without the
necessity of posting a bond) to specific performance of the terms hereof, this being in addition to
any other remedies to which they are entitled at law or equity.
***
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FOR REFERENCE ONLY – NOT FOR EXECUTION – UPDATED 3.25.2022
ANNEX A
FORM OF SUBORDINATED SECURITY
[ATTACHED]
Annex A-1
FOR REFERENCE ONLY – NOT FOR EXECUTION – UPDATED 3.25.2022
ANNEX B
FORM OF OFFICER’S CERTIFICATE
OFFICER’S CERTIFICATE OF
[RECIPIENT]
In connection with that certain letter agreement, dated [
], 20[ ] (the
“Agreement”) by and between [RECIPIENT] (the “Recipient”) and the United States Department
of the Treasury which incorporates that certain Securities Purchase Agreement – Standard Terms
referred to therein (the “Standard Terms”), the undersigned does hereby certify as follows:
1.
I am a duly elected/appointed [
] of the Recipient.
2.
The representations and warranties of the Recipient set forth in Section 3.1
of the Standard Terms are true and correct in all respects as though as of the date hereof (other
than representations and warranties that by their terms speak as of another date, which
representations and warranties shall be true and correct in all respects as of such other date) and
the Recipient has performed in all material respects all obligations required to be performed by it
under the Agreement.
3.
The Recipient is an Eligible Financial Institution and, as applicable, has
delivered to the Investor true, complete and correct copies of any certifications pertinent to its
status as an Eligible Financial Institution.
4.
No material changes have been made, or are anticipated to be made, to the
Investment and Lending Plan the Recipient submitted in connection with its ECIP Application.
5.
The Recipient is in compliance with the provisions of Section 104A of the
Community Development Banking and Financial Institutions Act of 1994, and all rules and
regulations issued thereunder, including the ECIP Interim Final Rule.
6.
Neither the Recipient nor any Recipient Subsidiary is a “covered entity” as
defined in Section 104A(h)(2)(ii) of the Community Development Banking Act.
The foregoing certifications are made and delivered as of [
Section 2.3 of the Standard Terms.
] pursuant to
Capitalized terms used and not otherwise defined herein shall have the meanings
assigned to them in the Standard Terms.
[SIGNATURE PAGE FOLLOWS]
Annex B-1
FOR REFERENCE ONLY – NOT FOR EXECUTION – UPDATED 3.25.2022
IN WITNESS WHEREOF, this Officer’s Certificate has been duly executed and
delivered as of the [ ] day of [
], 20[ ].
[RECIPIENT]
By:
Name:
Title:
Annex B-2
FOR REFERENCE ONLY – NOT FOR EXECUTION – UPDATED 3.25.2022
ANNEX C
FORM OF OPINION
(a)
The Recipient has been duly formed and is validly existing as a [TYPE OF
ORGANIZATION] and, if applicable, is in good standing under the laws of the jurisdiction of its
organization. The Recipient has all necessary power and authority to own, operate and lease its
properties and to carry on its business as it is being conducted.
(b)
The Recipient has been duly qualified as a foreign entity for the transaction
of business and is, if applicable, in good standing, under the laws of each jurisdiction in which it
owns or leases material properties or conducts any material business so as to require such
qualification.
(c)
The Subordinated Debt has been duly and validly authorized, and, when
executed and delivered pursuant to the Agreement, the Subordinated Debt will be the legal, valid
and binding obligations of the Recipient, enforceable in accordance with their terms, except as the
same may be limited by applicable receivership, insolvency, reorganization, moratorium or similar
laws affecting the enforcement of creditors’ rights generally and general equitable principles,
regardless of whether such enforceability is considered in a proceeding at law or in equity.
(d)
The Recipient has the corporate power and authority to execute and deliver
the Agreement and to carry out its obligations thereunder (which includes the issuance of the
Subordinated Debt).
(e)
The execution, delivery and performance by the Recipient of the Agreement
and the consummation of the transactions contemplated thereby have been duly authorized by all
necessary corporate action on the part of the Recipient and its Equityholders, and no further
approval or authorization is required on the part of the Recipient, including, without limitation, by
any rule or requirement of any national securities exchange.
(f)
The Agreement is a legal, valid and binding obligation of the Recipient
enforceable against the Recipient in accordance with its terms, except as limited by applicable
receivership, bankruptcy, insolvency, reorganization, moratorium, conservatorship or similar laws
affecting the enforcement of creditors’ rights generally and general equitable principles, regardless
of whether such enforceability is considered in a proceeding at law or in equity.
(g)
The execution and delivery by the Recipient of this Agreement and the
performance by the Recipient of its obligations thereunder (i) do not require any approval by any
Governmental Entity to be obtained on the part of the Recipient, except those that have been
obtained, (ii) do not violate or conflict with any provision of the Charter, (iii) do not violate,
conflict with, or result in a breach of any provision of, or constitute a default (or an event which,
with notice or lapse of time or both, would constitute a default) under, or result in the termination
of, or accelerate the performance required by, or result in a right of termination or acceleration of,
or result in the creation of, any lien, security interest, charge or encumbrance upon any of the
properties or assets of the Recipient or any Recipient Subsidiary under any of the terms, conditions
or provisions of its organizational documents or under any agreement, contract, indenture, lease,
mortgage, power of attorney, evidence of indebtedness, letter of credit, license, instrument,
Annex C-1
FOR REFERENCE ONLY – NOT FOR EXECUTION – UPDATED 3.25.2022
obligation, purchase or sales order, or other commitment, whether oral or written, to which it is a
party or by which it or any of its properties is bound or (iv) do not conflict with, breach or result
in a violation of, or default under any judgment, decree or order known to us that is applicable to
the Recipient and, pursuant to any applicable laws, is issued by any Governmental Entity having
jurisdiction over the Recipient.
(h)
Other than such filings and approvals as are required to be made or obtained
under any state “blue sky” laws and such consents and approvals that have been made or obtained,
no notice to, filing with, exemption or review by, or authorization, consent or approval of, any
Governmental Entity is required to be made or obtained by the Recipient in connection with the
consummation by the Recipient of the Purchase.
(i)
The Recipient is not nor, after giving effect to the issuance of the
Subordinated Debt pursuant to the Agreement, would be on the date hereof an “investment
company” or an entity “controlled” by an “investment company,” as such terms are defined in the
Investment Company Act of 1940.
(j)
The Recipient is an Eligible Financial Institution.
Annex C-2
FOR REFERENCE ONLY – NOT FOR EXECUTION – UPDATED 3.25.2022
ANNEX D
FORM OF ECIP INTERIM FINAL RULE CERTIFICATION
ECIP CERTIFICATION OF
[RECIPIENT]
In connection with that certain Letter Agreement, dated [
], 20[ ] (the “Agreement”)
by and between [RECIPIENT] (the “Recipient”) and the United States Department of the Treasury
(the “Investor”), the undersigned does hereby certify on behalf of the Recipient as follows:
1. I am a duly elected/appointed Senior Executive Officer of the Recipient.
2. From the Closing Date through the date of this certification, the Recipient has complied
with the requirements in:
a. 31 C.F.R. 35.22(a), which addresses restrictions on executive compensation;
b. 31 C.F.R. 35.22(b), which addresses restrictions on severance payments;
c. 31 C.F.R. 35.22(c), which addresses restrictions on excessive or luxury expenditures;
d. 31 C.F.R. 35.22(d), which addresses material changes in policies or procedures
maintained for purposes of compliance with 31 C.F.R. 35.22(a)–(c);
e. 31 C.F.R. 35.23(a), which addressees restrictions on capital distributions due to
nonpayment of the Subordinated Debt; and
f. 31 C.F.R. 35.23(b), which addresses limitations on the amount of capital distributions.
3. The undersigned and the Recipient understand that a knowing and willful false or
fraudulent statement made in connection with this certification may be punished by fine,
imprisonment, or both. (See, for example, 18 U.S.C. 1001).
The foregoing certifications are made and delivered as of [
Section 4.1(d)(iii) of the Agreement.
] pursuant to
Capitalized terms used and not otherwise defined herein shall have the meanings assigned to them
in the Agreement unless otherwise stated.
[Signature page follows]
Annex D-1
FOR REFERENCE ONLY – NOT FOR EXECUTION – UPDATED 3.25.2022
IN WITNESS WHEREOF, this Certificate has been duly executed and delivered as of the [
day of [
], 20[ ].
[RECIPIENT]
By:
Name:
Title: [Chief Executive Officer/
Chief Financial Officer]
By:
Name:
Title: [Chief Executive Officer/
Chief Financial Officer]
Annex D-2
]
FOR REFERENCE ONLY – NOT FOR EXECUTION – UPDATED 3.25.2022
ANNEX E
REGISTRATION RIGHTS
Section 1.1 Definitions. Terms not defined in this Annex shall have the meaning
given to such terms in the Agreement. As used in this Annex E, the following terms shall have the
following respective meanings:
(a)
“Applicable Securities Regulator” means, in the case of a Recipient that is
a state-chartered bank or savings association, the Governmental Entity having the powers,
functions and duties of the SEC to administer and enforce Sections 12, 13, 14(a), 14(c), 14(d),
14(f) and 16 of the Exchange Act with respect to securities issued by the Recipient.
(b)
“Holder” means the Investor and any other holder of Registrable Securities
to whom the registration rights conferred by this Agreement have been transferred in compliance
with Section 1.9 hereof.
(c)
“Holders’ Counsel” means one counsel for the selling Holders chosen by
Holders holding a majority interest in the Registrable Securities being registered.
(d)
“OCC” means the Office of the Comptroller of the Currency.
(e)
“Pending Underwritten Offering” means, with respect to any Holder
forfeiting its rights pursuant to Section 1.11 of this Annex E, any underwritten offering of
Registrable Securities in which such Holder has advised the Recipient of its intent to register its
Registrable Securities either pursuant to Section 1.2(b) or Section 1.2(d) of this Annex E prior to
the date of such Holder’s forfeiture.
(f)
“Register”, “registered”, and “registration” shall refer to a registration
effected by preparing and (A) filing a registration statement or amendment thereto in compliance
with the Securities Act and applicable rules and regulations thereunder (or Part 16, if the Recipient
is a national bank or federal savings association), and the declaration or ordering of effectiveness
of such registration statement or amendment thereto or (B) filing a prospectus and/or prospectus
supplement with respect to an appropriate effective registration statement on Form S-3.
(g)
“Registrable Securities” means (A) all Subordinated Debt, and (B) any
equity securities issued or issuable directly or indirectly with respect to the securities referred to
in the foregoing clause (A) by way of conversion, exercise or exchange thereof, or 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 (or Part 16, if the Recipient is a national
bank or federal savings association), (2) they shall have ceased to be outstanding or (3) they have
been sold in any transaction in which the transferor’s rights under this Agreement are not assigned
to the transferee of the securities. No Registrable Securities may be registered under more than
one registration statement at any one time.
Annex E-1
FOR REFERENCE ONLY – NOT FOR EXECUTION – UPDATED 3.25.2022
(h)
“Registration Expenses” mean all expenses incurred by the Recipient 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 Annex E,
including all registration, filing and listing fees, printing expenses, fees and disbursements of
counsel for the Recipient, “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
Recipient’s independent accountants in connection with any regular or special reviews or audits
incident to or required by any such registration, but shall not include Selling Expenses.
(i)
“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.
(j)
“Selling Expenses” mean all discounts, selling commissions and security
transfer taxes applicable to the sale of Registrable Securities and fees and disbursements of counsel
for any Holder (other than the fees and disbursements of Holders’ Counsel included in Registration
Expenses).
(k)
“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 Recipient or Recipient Subsidiaries or in connection with dividend reinvestment plans.
Section 1.2
Registration.
(a)
The Recipient covenants and agrees that as promptly as practicable after the
date that the Recipient becomes subject to the reporting requirements of Section 13 or 15(d) of the
Exchange Act (and in any event no later than thirty (30) days thereafter), the Recipient shall
prepare and file with the SEC (or the OCC, if the Recipient is a national bank or federal savings
association) a Shelf Registration Statement covering all Registrable Securities (or otherwise
designate an existing shelf registration on an appropriate form under Rule 415 under the Securities
Act (a “Shelf Registration Statement”) filed with the SEC (or the OCC, if the Recipient is a federal
savings association) 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 Recipient 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 (or Part 16, if the Recipient is a federal savings
association) and usable for resale of such Registrable Securities for a period from the date of its
initial effectiveness until such time as there are no Registrable Securities remaining (including by
refiling such Shelf Registration Statement (or a new Shelf Registration Statement) if the initial
Shelf Registration Statement expires), and prepare an Indenture covering the Registrable Securities
meeting the requirements of the Indenture Act and use its reasonable best efforts to cause such
Indenture to be qualified under the Indenture Act. So long as the Recipient 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
Recipient as an automatic Shelf Registration Statement. Notwithstanding the foregoing, if the
Annex E-2
FOR REFERENCE ONLY – NOT FOR EXECUTION – UPDATED 3.25.2022
Recipient is not eligible to file a registration statement on Form S-3, then the Recipient shall not
be obligated to file a Shelf Registration Statement unless and until requested to do so in writing by
the Investor.
(b)
Any registration pursuant to Section 1.2(a) of this Annex E shall be effected
by means of a Shelf Registration Statement on an appropriate form under Rule 415 under the
Securities Act (or Part 16, if the Recipient is a national bank or federal savings association). 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 Recipient and the Recipient shall take all
reasonable steps to facilitate such distribution, including the actions required pursuant to
Section 1.2(d) of this Annex E; provided that the Recipient shall not be required to facilitate an
underwritten offering of Registrable Securities unless (i) the expected gross proceeds from such
offering exceed $200,000 or (ii) such underwritten offering includes all the outstanding Registrable
Securities held by such Holder. The lead underwriters in any such distribution shall be selected by
the Holders of a majority of the Registrable Securities to be distributed.
(c)
The Recipient shall not be required to effect a registration (including a
resale of Registrable Securities from an effective Shelf Registration Statement) or an underwritten
offering pursuant to Section 1.2 of this Annex E: (A) with respect to securities that are not
Registrable Securities; or (B) if the Recipient 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
Recipient or its securityholders for such registration or underwritten offering to be effected at such
time, in which event the Recipient shall have the right to defer such registration or offering for a
period of not more than forty-five (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 Recipient (1) only if the Recipient 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 twelve (12)-month period and not more than ninety (90) days in
the aggregate in any twelve (12)-month period. The Recipient shall notify the Holders of the date
of any anticipated termination of any such deferral period prior to such date.
(d)
If during any period when an effective Shelf Registration Statement is not
available, the Recipient proposes to register any of its equity securities, other than a registration
pursuant to Section 1.2(a) of this Annex E or a Special Registration, and the registration form to
be filed may be used for the registration or qualification for distribution of Registrable Securities,
the Recipient will (A) give prompt written notice to the Investor and all other Holders of its
intention to effect such a registration (but in no event less than ten (10) days prior to the anticipated
filing date) and will include in such registration all Registrable Securities with respect to which
the Recipient has received written requests for inclusion therein within ten (10) business days after
the date of the Recipient’s notice and (B) if requested by the Investor or a Holder, prepare an
Indenture meeting the requirements of the Indenture Act and use its reasonable best efforts to cause
such Indenture to be qualified under the Indenture Act (such registration and qualification, a
“Piggyback Registration”). Any such person that has made such a written request may withdraw
its Registrable Securities from such Piggyback Registration by giving written notice to the
Recipient and the managing underwriter, if any, on or before the fifth (5th) business day prior to
the planned effective date of such Piggyback Registration. The Recipient may terminate or
withdraw any registration or qualification under this Section 1.2(d) of this Annex E prior to the
Annex E-3
FOR REFERENCE ONLY – NOT FOR EXECUTION – UPDATED 3.25.2022
effectiveness of such registration or qualification, whether or not Investor or any other Holders
have elected to include Registrable Securities in such registration or qualification.
(e)
If the registration referred to in Section 1.2(d) of this Annex E is proposed
to be underwritten, the Recipient will so advise Investor and all other Holders as a part of the
written notice given pursuant to Section 1.2(d) of this Annex E. In such event, the right of Investor
and all other Holders to registration pursuant to Section 1.2 of this Annex E will be conditioned
upon such persons’ participation in such underwriting and the inclusion of such person’s
Registrable Securities in the underwriting if such securities are of the same class of securities as
the securities to be offered in the underwritten offering, and each such person will (together with
the Recipient 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 Recipient; 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 Recipient, the managing underwriters and the Investor
(if the Investor is participating in the underwriting).
(f)
If either (x) the Recipient grants “piggyback” registration rights to one or
more third parties to include their securities in an underwritten offering under the Shelf
Registration Statement pursuant to Section 1.2(b) of this Annex E or (y) a Piggyback Registration
under Section 1.2(d) of this Annex E relates to an underwritten offering on behalf of the Recipient,
and in either case the managing underwriters advise the Recipient that in their reasonable opinion
the number of securities requested to be included in such offering exceeds the number which can
be sold without adversely affecting the marketability of such offering (including an adverse effect
on the per security offering price), the Recipient will include in such offering only such number of
securities that in the reasonable opinion of such managing underwriters can be sold without
adversely affecting the marketability of the offering (including an adverse effect on the per security
offering price), which securities will be so included in the following order of priority: (A) first, in
the case of a Piggyback Registration under Section 1.2(d) of this Annex E, the securities the
Recipient proposes to sell, (B) then the Registrable Securities of the Investor and all other Holders
who have requested inclusion of Registrable Securities pursuant to Section 1.2(b) or Section 1.2(d)
of this Annex E, as applicable, pro rata on the basis of the aggregate number of such securities
owned by each such person and (C) lastly, any other securities of the Recipient that have been
requested to be so included, subject to the terms of this Agreement; provided, however, that if the
Recipient 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 this Annex E would otherwise result in a
breach under such agreement.
Section 1.3 Expenses of Registration. All Registration Expenses incurred in
connection with any registration, qualification or compliance hereunder shall be borne by the
Recipient. 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.
Annex E-4
FOR REFERENCE ONLY – NOT FOR EXECUTION – UPDATED 3.25.2022
Section 1.4 Obligations of the Recipient. The Recipient shall use its reasonable
best efforts, for so long as there are Registrable Securities outstanding, to take such actions as are
under its control to not become an ineligible issuer (as defined in Rule 405 under the Securities
Act) and to remain a well-known seasoned issuer (as defined in Rule 405 under the Securities Act)
if it has such status on the Signing Date or becomes eligible for such status thereafter. 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
Recipient shall, as expeditiously as reasonably practicable:
(a)
Prepare and file with the SEC (or the OCC, if the Recipient is a national
bank or federal savings association) (A) a prospectus supplement or post-effective amendment
with respect to a proposed offering of Registrable Securities pursuant to an effective registration
statement, subject to Section 1.4 of this Annex E, keep such registration statement effective and
keep such prospectus supplement current until the securities described therein are no longer
Registrable Securities; and (B) an Indenture for qualification under the Indenture Act. The plan
of distribution included in such registration statement shall include, among other things, an
underwritten offering, ordinary brokerage transactions and transactions in which the broker-dealer
solicits purchasers, block trades, privately negotiated transactions, the writing or settlement of
options or other derivative transactions and any other method permitted pursuant to applicable law,
and any combination of any such methods of sale.
(b)
Prepare and file with the SEC(or the OCC, if the Recipient is a national
bank or federal savings association) such amendments and supplements: (A) to the applicable
registration statement and the prospectus or prospectus supplement used in connection with such
registration statement as may be necessary to comply with the provisions of the Securities Act (or
Part 16, if the Recipient is a national bank or federal savings association); and (B) to the Indenture,
with respect to the disposition of all securities covered by such registration statement and
Indenture.
(c)
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 (or Part 16, if the Recipient is a national bank or federal
savings association), the Indenture and such other documents as they may reasonably request in
order to facilitate the disposition of Registrable Securities owned or to be distributed by them.
(d)
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 Recipient 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.
(e)
Notify each Holder of Registrable Securities at any time when a prospectus
relating thereto is required to be delivered under the Securities Act (or Part 16, if the Recipient is
Annex E-5
FOR REFERENCE ONLY – NOT FOR EXECUTION – UPDATED 3.25.2022
a national bank or federal savings association) 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.
(f)
Give written notice to the Holders:
(i)
when any registration statement or Indenture filed pursuant to
Section 4.1(i) of the Agreement or any amendment thereto has been filed with the
SEC (or Part 16, if the Recipient is a national bank or federal savings association)
(except for any amendment effected by the filing of a document with the SEC
pursuant to the Exchange Act) (or with the OCC, if the Recipient is national bank
or federal savings association) and when such registration statement or any posteffective amendment thereto has become effective;
(ii)
of any request by the SEC (or the OCC, if the Recipient is a national
bank or federal savings association) for amendments or supplements to any
registration statement or the prospectus included therein, or the Indenture or for
additional information;
(iii) of the issuance by the SEC (or the OCC, if the Recipient is a national
bank or federal savings association) of any stop order suspending the effectiveness
of any registration statement or the initiation of any proceedings for that purpose;
(iv)
of the receipt by the Recipient or its legal counsel of any notification
with respect to the suspension of the qualification of the applicable Registrable
Securities for sale in any jurisdiction or the initiation or threatening of any
proceeding for such purpose;
(v)
of the happening of any event that requires the Recipient to make
changes in any effective registration statement or the prospectus related to the
registration statement or to the Indenture in order to make the statements therein
not misleading (which notice shall be accompanied by an instruction to suspend the
use of the prospectus until the requisite changes have been made); and
(vi)
if at any time the representations and warranties of the Recipient
contained in any underwriting agreement contemplated by Section 1.4(j) of this
Annex E cease to be true and correct.
(g)
Use its reasonable best efforts to prevent the issuance or obtain the
withdrawal of any order suspending the effectiveness of any registration statement referred to in
Section 1.4(f)(i) of this Annex E at the earliest practicable time.
(h)
Upon the occurrence of any event contemplated by Section 1.4(a) or
Section 1.4(f)(iv) of this Annex E, promptly prepare a post-effective amendment to such
registration statement or a supplement to the related prospectus or the Indenture or file any other
required document so that, as thereafter delivered to the Holders and any underwriters, the
prospectus or the Indenture will not contain an untrue statement of a material fact or omit to state
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any material fact necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading. If the Recipient notifies the Holders in accordance with
Section 1.4(f)(iv) of this Annex E to suspend the use of the prospectus until the requisite changes
to the prospectus or the Indenture have been made, then the Holders and any underwriters shall
suspend use of such prospectus and use their reasonable best efforts to return to the Recipient all
copies of such prospectus (at the Recipient’s expense) other than permanent file copies then in
such Holders’ or underwriters’ possession. The total number of days that any such suspension may
be in effect in any twelve (12)-month period shall not exceed ninety (90) days. The Recipient shall
notify the Holders of the date of any anticipated termination of any such suspension period prior
to such date.
(i)
Use reasonable best efforts to procure the cooperation of the Recipient’s
transfer agent in settling any offering or sale of Registrable Securities, including with respect to
the transfer of physical debentures into book-entry form in accordance with any procedures
reasonably requested by the Holders or any managing underwriter(s).
(j)
If an underwritten offering is requested pursuant to Section 1.2(b) of this
Annex E, enter into an underwriting agreement in customary form, scope and substance and take
all such other actions reasonably requested by the Holders of a majority of the Registrable
Securities being sold in connection therewith or by the managing underwriter(s), if any, to expedite
or facilitate the underwritten disposition of such Registrable Securities, and in connection
therewith in any underwritten offering (including making members of management and executives
of the Recipient available to participate in “road shows”, similar sales events and other marketing
activities), (A) make such representations and warranties to the Holders that are selling
securityholders and the managing underwriter(s), if any, with respect to the business of the
Recipient 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 and “10b-5” letters of counsel to
the Recipient, addressed to the managing underwriter(s), if any, covering the matters customarily
covered in such opinions and letters requested in underwritten offerings, (C) use its reasonable
best efforts to obtain “cold comfort” letters from the independent certified public accountants of
the Recipient (and, if necessary, any other independent certified public accountants of any business
acquired by the Recipient for which financial statements and financial data are included in the
Shelf Registration Statement) who have certified the financial statements included in such Shelf
Registration Statement, addressed to each of the managing underwriter(s), if any, such letters to
be in customary form and covering matters of the type customarily covered in “cold comfort”
letters, (D) if an underwriting agreement is entered into, the same shall contain indemnification
provisions and procedures customary in underwritten offerings (provided that the Investor shall
not be obligated to provide any indemnity), and (E) deliver such documents and certificates as may
be reasonably requested by the Holders of a majority of the Registrable Securities being sold in
connection therewith, their counsel and the managing underwriter(s), if any, to evidence the
continued validity of the representations and warranties made pursuant to clause (A) above and to
evidence compliance with any customary conditions contained in the underwriting agreement or
other agreement entered into by the Recipient.
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(k)
Make available for inspection by a representative of selling Holders, 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 Recipient, and
cause the officers, directors and employees of the Recipient 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.
(l)
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 Recipient are
then listed or, if no similar securities issued by the Recipient 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.
(m)
If requested by Holders of a majority of the Registrable Securities being
registered and/or sold in connection therewith, or the managing underwriter(s), if any, promptly
include in a prospectus supplement or amendment such information as the Holders of a majority
of the Registrable Securities being registered and/or sold in connection therewith or managing
underwriter(s), if any, may reasonably request in order to permit the intended method of
distribution of such securities and make all required filings of such prospectus supplement or such
amendment as soon as practicable after the Recipient has received such request.
(n)
Timely provide to its security holders earning statements satisfying the
provisions of Section 11(a) of the Securities Act and Rule 158 thereunder.
Section 1.5 Suspension of Sales. Upon receipt of written notice from the
Recipient that a registration statement, prospectus or prospectus supplement, or Indenture contains
or may contain an untrue statement of a material fact or omits or may omit to state a material fact
required to be stated therein or necessary to make the statements therein not misleading or that
circumstances exist that make inadvisable use of such registration statement, prospectus or
prospectus supplement, or Indenture, the Investor and each Holder of Registrable Securities shall
forthwith discontinue disposition of Registrable Securities until the Investor and/or Holder has
received copies of a supplemented or amended prospectus or prospectus supplement, or Indenture,
or until the Investor and/or such Holder is advised in writing by the Recipient that the use of the
prospectus and, if applicable, prospectus supplement or Indenture may be resumed, and, if so
directed by the Recipient, the Investor and/or such Holder shall deliver to the Recipient (at the
Recipient’s expense) all copies, other than permanent file copies then in the Investor and/or such
Holder’s possession, of the prospectus and, if applicable, prospectus supplement or Indenture
covering such Registrable Securities current at the time of receipt of such notice. The total number
of days that any such suspension may be in effect in any twelve (12)-month period shall not exceed
ninety (90) days. The Recipient shall notify the Investor and the Holders prior to the anticipated
termination of any such suspension period of the date of such anticipated termination.
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Section 1.6 Termination of Registration Rights. A Holder’s registration rights
as to any securities held by such Holder (and its Affiliates, partners, members and former
members) shall not be available unless such securities are Registrable Securities.
Section 1.7
Furnishing Information.
(a)
Neither the Investor nor any Holder shall use any free writing prospectus
(as defined in Rule 405) in connection with the sale of Registrable Securities without the prior
written consent of the Recipient.
(b)
It shall be a condition precedent to the obligations of the Recipient to take
any action pursuant to Section 1.4 of this Annex E that Investor and/or the selling Holders and the
underwriters, if any, shall furnish to the Recipient 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.
Section 1.8
Indemnification.
(a)
The Recipient agrees to indemnify each Holder and, if a Holder is a person
other than an individual, such Holder’s officers, directors, employees, agents, representatives and
Affiliates, and each person, if any, that controls a Holder within the meaning of the Securities Act
(each, an “Indemnitee”), against any and all losses, claims, damages, actions, liabilities, costs and
expenses (including reasonable fees, expenses and disbursements of attorneys and other
professionals incurred in connection with investigating, defending, settling, compromising or
paying any such losses, claims, damages, actions, liabilities, costs and expenses), joint or several,
arising out of or based upon any untrue statement or alleged untrue statement of material fact
contained in any registration statement, including any preliminary prospectus or final prospectus
contained therein or any amendments or supplements thereto or any documents incorporated
therein by reference or contained in any free writing prospectus (as defined in Rule 405) or
contained in any Indenture, prepared by the Recipient 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 Recipient 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 defined in Rule 405) or contained in any Indenture,
prepared by the Recipient 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
Recipient by such Indemnitee for use in connection with such registration statement, including any
such preliminary prospectus or final prospectus contained therein or any such amendments or
supplements thereto, or any Indenture or (B) offers or sales effected by or on behalf of such
Indemnitee “by means of” (as defined in Rule 159A) a “free writing prospectus” (as defined in
Rule 405) that was not authorized in writing by the Recipient.
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(b)
If the indemnification provided for in Section 1.8 of this Annex E is
unavailable to an Indemnitee with respect to any losses, claims, damages, actions, liabilities, costs
or expenses referred to therein or is insufficient to hold the Indemnitee harmless as contemplated
therein, then the Recipient, 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 Recipient, 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 Recipient, 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 Recipient or by the Indemnitee and the parties’ relative intent,
knowledge, access to information and opportunity to correct or prevent such statement or
omission; the Recipient and each Holder agree that it would not be just and equitable if contribution
pursuant to this Section 1.8(b) of this Annex E were determined by pro rata allocation or by any
other method of allocation that does not take account of the equitable considerations referred to in
Section 1.8(b) of this Annex E. No Indemnitee guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from the Recipient
if the Recipient was not guilty of such fraudulent misrepresentation.
Section 1.9 Assignment of Registration Rights. The rights of the Investor to
registration of Registrable Securities pursuant to Section 1.2 of this Annex E may be assigned by
the Investor to a transferee or assignee of Registrable Securities; provided, however, the transferor
shall, within ten (10) days after such transfer, furnish to the Recipient written notice of the name
and address of such transferee or assignee and the number and type of Registrable Securities that
are being assigned.
Section 1.10 Clear Market. With respect to any underwritten offering of
Registrable Securities by the Investor or other Holders pursuant to this Annex E, the Recipient
agrees not to effect (other than pursuant to such registration or pursuant to a Special Registration)
any public sale or distribution, or to file any Shelf Registration Statement (other than such
registration or a Special Registration) covering any subordinated debentures or equity securities of
the Recipient or any securities convertible into or exchangeable or exercisable for subordinated
debentures or equity securities of the Recipient, during the period not to exceed ten (10) days prior
and sixty (60) days following the effective date of such offering or such longer period up to ninety
(90) days as may be requested by the managing underwriter for such underwritten offering. The
Recipient 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 ninety (90) days
as may be requested by the managing underwriter.
Section 1.11 Forfeiture of Rights. At any time, any holder of Registrable
Securities (including any Holder) may elect to forfeit its rights set forth in this Annex E from that
date forward; provided, that a Holder forfeiting such rights shall nonetheless be entitled to
participate under Section 1.2(d) – (f) of this Annex E in any Pending Underwritten Offering to the
same extent that such Holder would have been entitled to if the holder had not withdrawn; and
provided, further, that no such forfeiture shall terminate a Holder’s rights or obligations under
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Section 1.7 of this Annex E with respect to any prior registration or Pending Underwritten
Offering.
Section 1.12 Specific Performance. The parties hereto acknowledge that there
would be no adequate remedy at law if the Recipient fails to perform any of its obligations under
this Annex E and that the Investor and the Holders from time to time may be irreparably harmed
by any such failure, and accordingly agree that the Investor and such Holders, in addition to any
other remedy to which they may be entitled at law or in equity, to the fullest extent permitted and
enforceable under applicable law shall be entitled to compel specific performance of the
obligations of the Recipient under this Section 1.12 in accordance with the terms and conditions
of this Annex E.
Section 1.13 No Inconsistent Agreements. The Recipient shall not, on or after the
Signing Date, enter into any agreement with respect to its securities that may impair the rights
granted to the Investor and the Holders under this Annex E or that otherwise conflicts with the
provisions hereof in any manner that may impair the rights granted to the Investor and the Holders
under this Annex E. In the event the Recipient has, prior to the Signing Date, entered into any
agreement with respect to its securities that is inconsistent with the rights granted to the Investor
and the Holders under this Annex E (including agreements that are inconsistent with the order of
priority contemplated by Section 1.2(f) of this Annex E) or that may otherwise conflict with the
provisions hereof, the Recipient shall use its reasonable best efforts to amend such agreements to
ensure they are consistent with the provisions of this Annex E. Any transaction entered into by
the Recipient that would reasonably be expected to require the inclusion in a Shelf Registration
Statement or any report of the Recipient filed with the SEC (or the OCC, if the Recipient is a
national bank or federal savings association) of any separate financial statements pursuant to
Rule 3-05 of Regulation S-X or pro forma financial statements pursuant to Article 11 of
Regulation S-X shall include provisions requiring the Recipient’s counterparty to provide any
information necessary to allow the Recipient to comply with its obligation hereunder.
Section 1.14 Certain Offerings by the Investor. An “underwritten” offering or
other disposition shall include any distribution of such securities on behalf of the Investor by one
or more broker-dealers, an “underwriting agreement” shall include any purchase agreement
entered into by such broker-dealers, and any “registration statement” or “prospectus” shall include
any offering document approved by the Recipient and used in connection with such distribution.
Section 1.15 Other Cooperation. If the Recipient is a state-chartered savings
association and the transfer or sale of the Registrable Securities is subject to any requirements
under applicable state law or regulation relating to such transfer or sale, the Recipient will
cooperate and assist in complying with such law and regulation in order to provide the Holders
with the benefit of rights to effect or participate in broadly distributed underwritten offerings of
the Registrable Securities.
Section 1.16 State-Chartered Banks and Savings Associations. If the Recipient
is a state-chartered bank or savings association, the Investor and Recipient acknowledge that, as
of the Signing Date, the Registrable Securities are securities of an insured depository institution
and, accordingly, the transfer of such securities is exempt from the registration requirements of the
Securities Act and qualification and registration requirements under state law. Notwithstanding
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the foregoing, so long as the Registrable Securities are subject to the exemption provided by
Section 3(a)(2) or Section 3(a)(5) of the Securities Act, the provisions of this Annex E shall, to the
extent practicable and where applicable, be interpreted so as to nonetheless provide the Holders
with the benefit of rights to effect or participate in broadly distributed underwritten offerings of
the Registrable Securities. Without limiting the generality of the foregoing, so long as the
Registrable Securities are subject to the exemption provided by Section 3(a)(2) or Section 3(a)(5)
of the Securities Act: (i) all references to the “SEC” shall be deemed to refer to the Applicable
Securities Regulator and all references to provisions of the Securities Act shall be deemed to refer
to the corresponding provision of the applicable banking law or regulation, if any; and (ii) if, under
such applicable laws, rules and regulations of the Applicable Securities Regulator, no registration
statement or correlative filing is required to be made, then (A) any references herein to a
“registration statement” or “prospectus” shall be deemed to refer to an offering memorandum or
other offering materials with respect to the applicable transfer of Registrable Securities, (B) any
references herein to the filing of a registration statement shall be deemed to refer instead to the
time when such broadly distributed underwritten offering is proposed to be commenced and
(C) any references herein to the preparation and filing of a registration statement or prospectus
shall be deemed to refer to the preparation of an offering memorandum or other appropriate
offering materials.
Annex E-12
| File Type | application/pdf |
| File Modified | 2022-03-29 |
| File Created | 2022-03-29 |