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pdfFOR REFERENCE ONLY – NOT FOR EXECUTION – UPDATED 3.25.2022
EXHIBIT A
(ECIP Bank/Thrifts/BHCs/SLHCs
Senior Preferred Stock)
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 ....................................................................................................................... 5
Disclosure Restrictions ....................................................................................................... 6
ARTICLE II
PURCHASE; CLOSING
Section 2.1
Section 2.2
Section 2.3
Purchase .............................................................................................................................. 6
Closing ................................................................................................................................ 6
Closing Conditions ............................................................................................................. 6
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Section 3.1
Representations and Warranties of the Recipient ............................................................... 8
ARTICLE IV
COVENANTS
Section 4.1
Section 4.2
Affirmative Covenants ...................................................................................................... 17
Negative Covenants .......................................................................................................... 23
ARTICLE V
REMEDIES OF THE INVESTOR UPON BREACH
Section 5.1
Section 5.2
Section 5.3
Rate Reductions in the Event of Breaches and Violations ................................................ 23
Recipient Breach, Violation or Default ............................................................................ 24
Additional Remedies......................................................................................................... 24
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
Purchase for Investment .................................................................................................... 25
Legends ............................................................................................................................. 26
Transfer of Preferred Shares ............................................................................................. 27
Rule 144; Rule 144A; 4(a)(1½) Transactions ................................................................... 29
Depositary Shares ............................................................................................................. 30
Expenses and Further Assurances ..................................................................................... 30
Noncompliance ................................................................................................................. 31
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ARTICLE VII
MISCELLANEOUS
Section 7.1
Section 7.2
Section 7.3
Section 7.4
Section 7.5
Section 7.6
Section 7.7
Section 7.8
Section 7.9
Section 7.10
Termination ....................................................................................................................... 31
Survival ............................................................................................................................. 32
Amendment ....................................................................................................................... 32
Waiver of Conditions ........................................................................................................ 32
Governing Law; Submission to Jurisdiction, etc. ............................................................. 33
Notices .............................................................................................................................. 33
Assignment ....................................................................................................................... 33
Severability ....................................................................................................................... 34
No Third Party Beneficiaries ............................................................................................ 34
Specific Performance ........................................................................................................ 34
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FOR REFERENCE ONLY – NOT FOR EXECUTION – UPDATED 3.25.2022
LIST OF ANNEXES
ANNEX A:
FORM OF OFFICER’S CERTIFICATE
ANNEX B:
FORM OF CERTIFICATE OF DESIGNATIONS FOR PREFERRED STOCK
ANNEX C:
FORM OF OPINION
ANNEX D:
FORM OF ECIP INTERIM FINAL RULE CERTIFICATION
ANNEX E:
REGISTRATION RIGHTS
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INDEX OF DEFINED TERMS
Term
Affiliate
Agreement
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
Certificate of Designations
Charter
Closing
Closing Date
Code
Common Stock
Community Development Banking Act
Contagion Event
Contagion Event Measures
control; controlled by; under common control with
Controlled Group
Disclosure Schedule
Disclosure Update
ECIP
ECIP Application
ECIP Interim Final Rule
ECIP Period
Eligible Financial Institution
Eligible Nonprofit
ERISA
Exchange Act
Executive Officer
Federal Reserve
GAAP
Governmental Entities, Governmental Entity
Holders
IDI Subsidiary
Indemnitee
Initial Supplemental Report
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Location of
Definition
Section 1.1
Recitals
Section 1.1
Section 1.1
Section 1.1
Section 3.1(e)(i)
Section 1.1
Section 2.3(e)
Section 7.7
Section 1.2
Section 1.1
Section 3.1(b)
Section 1.1
Section 1.1
Section 2.3(d)
Section 2.3(d)
Section 2.2(a)
Section 2.2(a)
Section 3.1(n)
Section 3.1(b)
Section 1.1
Section 1.1
Section 1.1
Section 1.1
Section 3.1(n)
Section 1.1
Section 2.3(j)
Recitals
Section 1.1
Section 1.1
Section 1.1
Section 1.1
Section 6.3(a)(iv)
Section 3.1(n)
Section 1.1
Section 1.1
Section 1.1
Section 1.1
Section 2.3(a)
Section 6.4(a)
Section 1.1
Section 6.4(c)
Section 2.3(l)
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Term
Insured CDFI
Investment and Lending Plan
Investor
knowledge of the Recipient; Recipient’s knowledge
Letter Agreement
Material Adverse Effect
MDI
Offer Price
Offered Shares
Part 16
Plan
Preferred Shares
Preferred Stock
Previously Disclosed
Proprietary Rights
Purchase
Purchase Price
Qualified Lending
Quarterly Supplemental Report
Recipient
Recipient Financial Statements
Recipient Reports
Recipient Subsidiary; Recipient Subsidiaries
Regulatory Agreement
Related Party
Response Notice
Review Period
ROFR Notice
Savings and Loan Holding Company
Schedules
SEC
Securities Act
Senior Executive Officers
Signing Date
subsidiary
Supplemental Reports
Target Communities
Tax; Taxes
Tenth Anniversary
Transfer
Treasury
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Location of
Definition
Section 1.1
Section 1.1
Recitals
Section 1.1
Recitals
Section 1.1
Section 1.1
Section 6.3(a)(ii)
Section 6.3(a)(ii)
Section 3.1(k)
Section 3.1(n)
Recitals
Recitals
Section 1.1
Section 3.1(u)
Recitals
Section 2.1
Section 1.1
Section 4.1(g)(i)
Recitals
Section 2.3(k)
Section 3.1(i)(i)
Section 3.1(e)(ii)
Section 3.1(s)
Section 3.1(x)
Section 6.3(a)(ii)
Section 6.3(a)(ii)
Section 6.3(a)(ii)
Section 1.1
Recitals
Section 3.1(k)
Section 3.1(a)
Section 1.1
Section 1.1
Section 1.1
Section 1.1
Section 1.1
Section 1.1
Section 1.1
Section 6.3(a)
Recitals
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 shares of preferred stock 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 the number of
shares of the series of its Preferred Stock (“Preferred Stock”) set forth on Schedule A to the Letter
Agreement (the “Preferred Shares”) and the Investor intends to purchase (the “Purchase”) from
the Recipient the Preferred Shares;
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.
“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).
“Call Reports” means Reports of Condition and Income.
“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.
“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.
“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
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in a provision hereof or as an exception to one or more representations or warranties contained in
Section 3.1.
“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 6.3(a)(iv).
“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).
“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.
“IDI Subsidiary” means any Recipient Subsidiary that is an insured depository
institution.
“Insured CDFI” means an insured community development financial institution, as
defined in 12 U.S.C. § 4702(13).
“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.
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“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
accounting principles in the United States (“GAAP”), or authoritative interpretations thereof, or
(C) changes or proposed changes after the Signing Date in securities, banking and other laws of
general applicability or related policies or interpretations of Governmental Entities (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) (in the case
of each of these clauses (A), (B) and (C), other than changes or occurrences to the extent that such
changes or occurrences have or would reasonably be expected to have a materially
disproportionate adverse effect on the 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.
“Offer Price” has the meaning set forth in Section 6.3(a)(ii).
“Offered Shares” has the meaning set forth in Section 6.3(a)(ii).
“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.
“Qualified Lending” has the meaning set forth in the definition of Qualified
Lending in the applicable Supplemental Report.
“Related Party” has the meaning set forth in Section 3.1(x).
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“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).
“Senior Executive Officer” has the meaning set forth in the ECIP Interim Final
Rule.
“Signing Date” has the meaning set forth in the definition of Material Adverse
Effect.
“subsidiary” has the meaning set forth in 12 U.S.C. § 1813(w)(4), except that a
CDFI 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.
“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.
“Tenth Anniversary” means the date that is ten (10) years from the original issue
date of the Preferred Shares.
“Transfer” has the meaning set forth in Section 6.3(a).
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
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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.
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 Preferred Shares for the price set forth on Schedule A (the “Purchase
Price”).
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 Preferred Shares as evidenced by one or more certificates 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
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or decree of any Governmental Entity shall prohibit the purchase and sale of the Preferred Shares
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;
(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 A;
(d)
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, or similar organizational document
(“Charter”) in substantially the form attached hereto as Annex B (the “Certificate of
Designations”) and the Recipient shall have delivered to the Investor a copy of the filed Certificate
of Designations with appropriate evidence from the Secretary of State or other applicable
Governmental Entity that the filing has been accepted, or if a filed copy is unavailable, a certificate
signed on behalf of the Recipient by a Senior Executive Officer certifying to the effect that the
filing of the Certificate of Designations has been accepted;
(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
Preferred Shares;
(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, if applicable, the certificates representing the Preferred Shares
(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, certificates in proper
form evidencing the Preferred Shares issued to the Investor or, with the prior consent of the
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Investor, evidence of the Preferred Shares having been registered and issued in uncertificated (or
book-entry) form;
(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
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):
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(a)
Organization, Authority and Significant Subsidiaries. The Recipient has been duly
incorporated 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 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 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, except to
the extent that the Charter has been amended by the Certificate of Designations.
(b)
Capitalization. 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 most recent fiscal month-end preceding the Signing
Date (the “Capitalization Date”) is set forth on Schedule B. The outstanding shares of capital stock
of the Recipient have been duly authorized and are validly issued and outstanding, fully paid and
nonassessable (subject, in the case of a national bank, to 12 U.S.C. § 55, or in the case of any other
insured depository institution any similar statute under the laws of its jurisdiction of organization),
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 common stock (“Common Stock”) or other capital stock
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 Common Stock or other capital stock. Since the
Capitalization Date, the Recipient has not issued any shares of Common Stock or other capital
stock, other than (A) shares issued upon the exercise of stock options or delivered under other
equity-based awards or other convertible securities or warrants which were issued and outstanding
on the Capitalization Date and disclosed on Schedule B and (B) shares disclosed on Schedule B.
If the Recipient is a Bank Holding Company or a Savings and Loan Holding Company, (x) the
percentage of each IDI Subsidiary’s issued and outstanding capital stock that is owned by the
Recipient is disclosed on Schedule B; and (y) all shares of issued and outstanding capital stock of
the IDI Subsidiary(ies) owned by the Recipient are free and clear of all liens, security interests,
charges or encumbrances. Each holder of five percent (5%) or more of any class of capital stock
of the Recipient and such holder’s primary address are disclosed on Schedule B.
(c)
Preferred Shares. The Preferred Shares have been duly and validly authorized, and,
when issued and delivered pursuant to this Agreement, such Preferred Shares will be duly and
validly issued and fully paid and non-assessable, will not be issued in violation of any preemptive
rights, and will rank pari passu with or senior to all other series or classes of Preferred Stock,
whether or not designated, issued or outstanding, with respect to the payment of dividends and the
distribution of assets in the event of any dissolution, liquidation or winding up of the Recipient.
The aggregate liquidation preference of the Preferred Shares does not exceed the maximum
specified in the Letter Agreement.
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(d)
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.
(e)
Authorization, Enforceability.
(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
the Preferred Shares) and, when issued, under the Preferred Shares. The execution, delivery
and performance by the Recipient of this Agreement and the consummation of the
transactions contemplated hereby have been duly authorized by all necessary corporate
action on the part of the Recipient and its stockholders, 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 Preferred Shares, 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. This Agreement is a valid and binding obligation of the
Recipient enforceable against the Recipient in accordance with its terms, subject to any
limitations by applicable bankruptcy, insolvency, reorganization, moratorium,
conservatorship, receivership 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”).
(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
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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 the filing of the Certificate of Designations with the Secretary of
State of its jurisdiction of organization or other applicable Governmental Entity, such
filings and approvals as are required to be made or obtained under any state “blue sky”
laws and such as have been made or obtained, no notice to, filing with, exemption or review
by, or authorization, consent or approval of, any Governmental Entity is required to be
made or obtained by the 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)
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 share”, “fair price”, “interested stockholder” or other antitakeover 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
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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.
(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 Preferred
Shares 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 Preferred Shares 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”).
(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
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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 declare and pay dividends on
the Preferred Shares on the Dividend Payment Dates (as defined in the Certificate of Designations),
except such as may be required to be obtained or made after the Closing Date under federal or state
banking laws or regulations relating to capital adequacy, recent earnings, retained earnings or
undivided profits. 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
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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.
(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.
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(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
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
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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,
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
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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 to 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
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 Preferred Shares 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 Preferred Shares, only with respect to the period in
which the Investor or one of its Affiliates directly or indirectly owned any Preferred Shares.
Subject to the foregoing, and limited solely to information determined by the Investor to
be relevant to the Preferred Shares, the Recipient will permit, and shall cause each of the
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Recipient’s 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 or the Comptroller General of the United States and their respective
agents, consultants, contractors or advisors, shall be subject to the agreement by the
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 Preferred Shares
have 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
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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 other stockholders 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 any stockholders of the
Recipient, copies of any information or documents sent by the Recipient to its
stockholders; 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.
(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 Preferred Shares with a
liquidation preference of no less than an amount equal to ten percent (10%) of the initial
aggregate liquidation preference of the Preferred Shares.
(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;
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(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 thirty (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).
(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.
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(g)
Qualified Lending Reports.
(i)
Following the Closing Date, for the period through the earlier of (x) the date
on which the Preferred Shares are redeemed in whole and (y) the end of the period during
which the dividend rate applicable to the Preferred Shares adjusts based on the
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, 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 dividend payment(s) actually made
to the Investor based on such inaccurate report and (y) the correct amount of the dividend
payment(s) that should have been made, but for such inaccuracy; provided, that to the
extent such inaccuracy resulted in an overpayment of a dividend, the Investor shall not
have any obligation to return to or otherwise reimburse the Recipient for such excess
dividend 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 Preferred Shares, then any amounts payable in
respect of Preferred Shares that have been transferred shall, if and as directed by the
Investor, be paid to the transferee of the Preferred Shares;
(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
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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
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.
(h)
Reporting Requirements. Prior to the date on which all the Preferred Shares have
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.
(i)
Nonpayment of Dividends. If the Board of Directors or a duly authorized
committee of the Board of Directors determines not to pay any dividend that has been declared or
not to declare any dividend in full for any Dividend Period (as defined in the Certificate of
Designations), then no later than three (3) business days prior to the Dividend Payment Date (as
defined in the Certificate of Designations) corresponding to such dividend 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 pay a
declared dividend or determined not to declare dividends in full and providing the rationale of the
Board of Directors, or a duly authorized committee thereof, for not paying or declaring dividends,
as applicable.
(j)
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.
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(k)
Transactions with Affiliates. Until such time as the Investor or one of its Affiliates,
directly or indirectly, ceases to own any Preferred Shares, (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
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.
(l)
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, or, in the case of an issuer
that is a Bank Holding Company, any insured depository institution subsidiary, 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 to be performed and observed by
the Recipient, including, if applicable, the issuance by the successor party of senior preferred stock
equivalent to the Preferred Shares. 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)
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.
ARTICLE V
REMEDIES OF THE INVESTOR UPON BREACH
Section 5.1 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
Preferred Shares, (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 Preferred Shares for such period as Treasury, in its sole discretion, shall
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determine. Any such determination shall cause the applicable dividend rate of the Preferred Stock
to reset as specified in the Certificate of Designations. 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 5.1 or the
Preferred Shares. Notwithstanding the foregoing, a determination by the Recipient not to declare
dividends for any dividend period or a default in the payment of dividends that have been declared
shall not be subject to this Section 5.1.
Section 5.2
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 Preferred Shares,
(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
Preferred Stock set forth in Section 6.3(a)(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 Preferred Shares, (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.
Section 5.3
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 Preferred Shares,
(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 5.3(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
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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 5.3(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 the Preferred Shares to be redeemed as a remedy under this Section 5.3
and such redemption shall be governed exclusively by the terms and conditions set forth in the
Certificate of Designations.
(c)
Treasury may make a final determination regarding a breach, violation or default
without regard to Section 5.3(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 determination by the Recipient not to declare
dividends or a default in the payment of dividends that have been declared for any dividend period
shall not be subject to this Section 5.3.
ARTICLE VI
ADDITIONAL AGREEMENTS
Section 6.1 Purchase for Investment. The Investor acknowledges that the Preferred
Shares have 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 (a) is
acquiring the Preferred Shares pursuant to an exemption from registration under the Securities Act
(and, if the Recipient is a national bank or federal savings association, Part 16) solely for
investment with no present intention to distribute them to any person in violation of the Securities
Act or any applicable U.S. state securities laws (or, if applicable, Part 16), (b) will not sell or
otherwise dispose of any of the Preferred Shares, except in compliance with the registration
requirements or exemption provisions of the Securities Act and any applicable U.S. state securities
laws (and, 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.
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Section 6.2
Legends.
(a)
The Investor agrees that all certificates or other instruments representing the
Preferred Shares will bear a legend substantially to the following effect, as applicable:
If the Recipient is a Bank Holding Company, Savings and Loan Holding Company,
national bank or federal savings association:
“THE SECURITIES REPRESENTED BY THIS INSTRUMENT ARE NOT
SAVINGS ACCOUNTS, DEPOSITS OR OTHER OBLIGATIONS OF A BANK
AND ARE NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE
CORPORATION OR ANY OTHER GOVERNMENTAL AGENCY. THE
SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 (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
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
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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.
“THIS INSTRUMENT IS ISSUED SUBJECT TO THE RESTRICTIONS ON
TRANSFER AND OTHER PROVISIONS OF A SECURITIES PURCHASE
AGREEMENT BETWEEN THE ISSUER OF THESE SECURITIES AND THE
INVESTOR REFERRED TO THEREIN, A COPY OF WHICH IS ON FILE
WITH THE ISSUER. THE SECURITIES REPRESENTED BY THIS
INSTRUMENT MAY NOT BE SOLD OR OTHERWISE TRANSFERRED
EXCEPT IN COMPLIANCE WITH SAID AGREEMENT. ANY SALE OR
OTHER TRANSFER NOT IN COMPLIANCE WITH SAID AGREEMENT
WILL BE VOID.”
If the Recipient is a state-chartered bank or savings association:
“THE SECURITIES REPRESENTED BY THIS INSTRUMENT ARE NOT
SAVINGS ACCOUNTS, DEPOSITS OR OTHER OBLIGATIONS OF A BANK
AND ARE NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE
CORPORATION OR ANY OTHER GOVERNMENTAL AGENCY.
“THIS INSTRUMENT IS ISSUED SUBJECT TO THE RESTRICTIONS ON
TRANSFER AND OTHER PROVISIONS OF A SECURITIES PURCHASE
AGREEMENT BETWEEN THE ISSUER OF THESE SECURITIES AND THE
INVESTOR REFERRED TO THEREIN, A COPY OF WHICH IS ON FILE
WITH THE ISSUER. THE SECURITIES REPRESENTED BY THIS
INSTRUMENT MAY NOT BE SOLD OR OTHERWISE TRANSFERRED
EXCEPT IN COMPLIANCE WITH SAID AGREEMENT. ANY SALE OR
OTHER TRANSFER NOT IN COMPLIANCE WITH SAID AGREEMENT
WILL BE VOID.”
(b)
In the event that any Preferred Shares (i) become registered under the Securities
Act (or, if applicable, Part 16) or (ii) are eligible to be transferred without restriction in accordance
with Rule 144 or another exemption from registration under the Securities Act (other than
Rule 144A) (or, if applicable, Part 16), the Recipient shall issue new certificates or other
instruments representing such Preferred Shares, which shall not contain the applicable legends in
Section 6.2(a) above; provided that the Investor surrenders to the Recipient the previously issued
certificates or other instruments.
Section 6.3
Transfer of Preferred Shares.
(a)
Subject to compliance with applicable law, the Investor (and any investment
vehicles established and used by the Investor to purchase, hold, and sell Preferred Shares) shall be
permitted to transfer, sell, assign or otherwise dispose of (each, a “Transfer”) all or a portion of
the Preferred Shares at any time and from time to time, and the Recipient shall take all steps as
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may be reasonably requested by the Investor to facilitate the sale of the Preferred Shares, including,
as set forth in Section 6.4, provided that:
(i)
The Investor shall not Transfer any Preferred Shares 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 Preferred Shares by the Investor to
a third party, the Investor shall deliver to the Recipient a notice (“ROFR Notice”) setting
forth the number of Preferred Shares proposed to be sold (the “Offered Shares”) and the
cash purchase price per Preferred Share (which shall reflect a valuation of the Preferred
Shares to be sold determined by an independent third party) (the “Offer Price”) and other
terms and conditions on which the Investor proposes to sell the Offered Shares. 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 Shares and irrevocably
offering to purchase such number of Offered Shares 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 6.3(a)(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 Shares 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 equity interests of the Recipient 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
Preferred Shares 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 5.2(b), the Investor shall not sell the Preferred Shares to
a third party (other than to an Eligible Nonprofit) prior to the Tenth Anniversary without
the prior consent of the Recipient (which may not be unreasonably delayed, conditioned or
withheld). In addition, subject to Section 5.2(b), the Investor shall provide the Recipient
eighteen (18) months’ advance notice of the Investor’s intent to Transfer the Preferred
Shares to a third party other than an Eligible Nonprofit.
(b)
In furtherance of the foregoing, the Recipient shall provide reasonable cooperation
to facilitate any Transfers of the Preferred Shares, 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
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FOR REFERENCE ONLY – NOT FOR EXECUTION – UPDATED 3.25.2022
available to respond to questions of a proposed transferee in accordance with customary practice,
subject in all cases to the proposed transferee agreeing to a customary confidentiality agreement.
For the avoidance of doubt, the term “third party” as used in this Section 6.3 shall not refer to an
investment vehicle or other entity controlled by the Investor, or to any Affiliate of the Investor.
Section 6.4
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 Preferred Shares (“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 Preferred Shares (including, in the case of a Recipient that is a national bank
or federal savings association, as Rule 144 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 socalled “Section 4(a)(1½)” exemption to sell any of its Preferred Shares, 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
Preferred Shares 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 Preferred
Shares, 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 Preferred Shares 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 Rule 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 the case of a Recipient that is a national bank or a federal
savings association, as applicable under Part 16); provided that the Recipient shall not be required
to take any action described in this Section 6.4(a) 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 Preferred Shares 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 Preferred Shares are
subject to the exemption provided by Section 3(a)(2) or Section 3(a)(5) of the Securities Act, the
provisions of this Section 6.4 shall be interpreted so as to nonetheless provide a Holder of Preferred
Shares with the benefit of the cooperation of the Recipient to facilitate a sale of the Preferred
Shares, including the preparation and provision of materials referenced in Section 6.4(a)(1)(y).
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(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 6.4 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 6.4(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 6.4(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 6.4(b). No Indemnitee guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be
entitled to contribution from the Recipient if the Recipient was not guilty of such fraudulent
misrepresentation.
Section 6.5 Depositary Shares. Upon request by the Investor at any time following the
Closing Date, the Recipient shall promptly enter into a depositary arrangement, pursuant to
customary agreements reasonably satisfactory to the Investor and with a depositary reasonably
acceptable to the Investor, pursuant to which the Preferred Shares may be deposited and depositary
shares, each representing a fraction of a Preferred Share, as specified by the Investor, may be
issued. From and after the execution of any such depositary arrangement, and the deposit of any
Preferred Shares, as applicable, pursuant thereto, the depositary shares issued pursuant thereto
shall be deemed “Preferred Shares” and, as applicable, “Registrable Securities” for purposes of
this Agreement.
Section 6.6
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
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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 6.4 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 Preferred Shares purchased by the Investor, as Investor may reasonably require;
and (iii) do and execute all and such further lawful and reasonable acts, conveyances and
assurances for the better and more effective carrying out of the intents and purposes of this
Agreement, as the Investor shall reasonably require from time to time.
Section 6.7 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.
ARTICLE VII
MISCELLANEOUS
Section 7.1
(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 7.1(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
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(b)
the date on which all the Preferred Shares have been redeemed in whole; or
(c)
the date on which the Investor has transferred all the Preferred Shares to third
parties which are not Affiliates of the Investor; or
(d)
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 7.1,
subject to Section 7.2(b), this Agreement shall forthwith become void and there shall be no liability
on the part of either party hereto except that nothing herein shall relieve either party from liability
for any breach of this Agreement.
Section 7.2
Survival.
(a)
This Agreement and all representations, warranties, covenants and agreements
made herein shall survive the Closing without limitation.
(b)
The covenants set forth in Article IV and Annex E and the agreements set forth in
Article V shall, to the extent such covenants do not explicitly terminate at such time as the Investor
no longer owns any Preferred Shares, survive the termination of this Agreement pursuant to
Section 7.1(c) hereof without limitation until the date on which all the Preferred Shares have been
redeemed in whole; provided that the covenant set forth in Section 4.1(c)(i) shall survive
indefinitely with respect to the Inspector General of the Treasury and the Comptroller General of
the United States and the period described in Section 4.1(c)(i)(y).
(c)
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 7.3 Amendment. No amendment of any provision of this Agreement will be
effective unless made in writing and signed by an officer or a duly authorized representative of
each party; provided that for so long as the Preferred Shares are 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. 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 7.4 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.
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Section 7.5 Governing Law; Submission to Jurisdiction, etc. This Agreement and any
claim, controversy or dispute arising under or related to this Agreement, the relationship of the
parties, and/or the interpretation and enforcement of the rights and duties of the parties shall be
enforced, governed, and construed in all respects (whether in contract or in tort) in accordance
with the federal law of the United States if and to the extent such law is applicable, and otherwise
in accordance with the laws of the State of New York applicable to contracts made and to be
performed entirely within such State. Each of the parties hereto agrees (a) to submit to the
exclusive jurisdiction and venue of the United States District Court for the District of Columbia
and the United States Court of Federal Claims for any and all civil actions, suits or proceedings
arising out of or relating to this Agreement or the 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 7.6 and (ii) the Investor at the address and in the manner set forth for notices
to the Recipient in Section 7.6, 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 7.6 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 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:
E-mail: [to come]
Section 7.7 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 stockholders (a “Business Combination”) where such party is not the surviving
entity, or a sale of substantially all of its assets, to the entity which is the survivor of such Business
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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(g) 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 7.8 Severability. If any provision of this Agreement, or the application thereof
to any person or circumstance, is determined by a court of competent jurisdiction to be invalid,
void or unenforceable, the remaining provisions hereof, or the application of such provision to
persons or circumstances other than those as to which it has been held invalid or unenforceable,
will remain in full force and effect and shall in no way be affected, impaired or invalidated thereby,
so long as the economic or legal substance of the transactions contemplated hereby is not affected
in any manner materially adverse to any party. Upon such determination, the parties shall negotiate
in good faith in an effort to agree upon a suitable and equitable substitute provision to effect the
original intent of the parties.
Section 7.9 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 7.10 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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ANNEX A
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 Certificate of Designations, a true, complete and correct copy of which
is attached as Exhibit A hereto, has been filed with, and accepted by the [Secretary of State of the
State of _________]//[insert name of other applicable Governmental Authority].
4.
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.
5.
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.
6.
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.
7.
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 A-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 A-2
FOR REFERENCE ONLY – NOT FOR EXECUTION – UPDATED 3.25.2022
EXHIBIT A
Annex A-3
FOR REFERENCE ONLY – NOT FOR EXECUTION – UPDATED 3.25.2022
ANNEX B
FORM OF CERTIFICATE OF DESIGNATIONS FOR PREFERRED STOCK
[SEE ATTACHED]
Annex B-1
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 Preferred Shares have been duly and validly authorized, and, when
issued and delivered pursuant to the Agreement, the Preferred Shares will be duly and validly
issued and fully paid and non-assessable, will not be issued in violation of any preemptive rights,
and will rank pari passu with or senior to all other series or classes of Preferred Stock issued on
the Closing Date with respect to the payment of dividends and the distribution of assets in the
event of any dissolution, liquidation or winding up of the Recipient.
(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
Preferred Shares).
(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 stockholders, 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
bankruptcy, insolvency, reorganization, moratorium, conservatorship, receivership 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 the filing of the Certificate of Designations with the Secretary of
State of its jurisdiction of organization or other applicable Governmental Entity, such filings and
approvals as are required to be made or obtained under any state “blue sky” laws and such 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 Preferred
Shares 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 on the Preferred Shares; 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]
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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
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 Preferred Shares 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.
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(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 stock
transfer taxes applicable to the sale of Registrable Securities and fees and disbursements of counsel
for any Holder (other than the fees and disbursements of Holders’ Counsel included in Registration
Expenses).
(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.
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 national
bank or 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 national bank or 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). So long
as the Registrant 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 Recipient is not eligible to file a registration statement on
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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 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 (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 under this Section 1.2(d) prior to the effectiveness of
such registration, whether or not Investor or any other Holders have elected to include Registrable
Securities in such registration.
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(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 share 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 share
offering price), which securities will be so included in the following order of priority: (A) first, in
the case of a Piggyback Registration under Section 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 or
shares 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.
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.
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
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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 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. 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 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) with respect to the
disposition of all securities covered by such registration statement.
(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), 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
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.
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(f)
Give written notice to the Holders:
(i)
when any registration statement 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 a
national bank or federal savings association)) and when such registration statement
or any post-effective 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 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 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)(iii) of this Annex E at the earliest practicable time.
(h)
Upon the occurrence of any event contemplated by Section 1.4(e) or
1.4(f)(v) of this Annex E, promptly prepare a post-effective amendment to such registration
statement or a supplement to the related prospectus or file any other required document so that, as
thereafter delivered to the Holders and any underwriters, the prospectus will not contain an untrue
statement of a material fact or omit to state any material fact necessary to make the statements
therein, in light of the circumstances under which they were made, not misleading. If the Recipient
notifies the Holders in accordance with Section 1.4(f)(v) of this Annex E to suspend the use of the
prospectus until the requisite changes to the prospectus have been made, then the Holders and any
underwriters shall suspend use of such prospectus and use their reasonable best efforts to return to
the 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
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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 stock certificates 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
stockholders 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.
(k)
Make available for inspection by a representative of Holders that are selling
stockholders, the managing underwriter(s), if any, and any attorneys or accountants retained by
such Holders or managing underwriter(s), at the offices where normally kept, during reasonable
business hours, financial and other records, pertinent corporate documents and properties of the
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
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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.
1.5
Suspension of Sales. Upon receipt of written notice from the Recipient that
a registration statement, prospectus or prospectus supplement contains or may contain an untrue
statement of a material fact or omits or may omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading or that circumstances exist that
make inadvisable use of such registration statement, prospectus or prospectus supplement, the
Investor and each Holder of Registrable Securities shall forthwith discontinue disposition of
Registrable Securities until the Investor and/or Holder has received copies of a supplemented or
amended prospectus or prospectus supplement, or until the Investor and/or such Holder is advised
in writing by the Recipient that the use of the prospectus and, if applicable, prospectus supplement
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 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.
1.6
Termination of Registration Rights. A Holder’s registration rights as to any
securities held by such Holder (and its Affiliates, partners, members and former members) shall
not be available unless such securities are Registrable Securities.
1.7
Furnishing Information.
(a)
Neither the Investor nor any Holder shall use any free writing prospectus
(as defined in Rule 405) in connection with the sale of Registrable Securities without the prior
written consent of the Recipient.
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(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.
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) 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) 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 (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.
(b)
If the indemnification provided for in Section 1.8(a) 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
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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(a) 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.
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.
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 preferred stock of the Recipient or any securities convertible
into or exchangeable or exercisable for preferred stock 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.
1.11 Forfeiture of Rights. At any time, any holder of Registrable Securities
(including any Holder) may elect to forfeit its rights set forth in this Annex E from that date
forward; provided, that a Holder forfeiting such rights shall nonetheless be entitled to participate
under Section 1.2(d) – (f) of this Annex E in any Pending Underwritten Offering to the same extent
that such Holder would have been entitled to if the holder had not withdrawn; and provided,
further, that no such forfeiture shall terminate a Holder’s rights or obligations under Section 1.7
of this Annex E with respect to any prior registration or Pending Underwritten Offering.
1.12 Specific Performance. The parties hereto acknowledge that there would be
no adequate remedy at law if the 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.
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
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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 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.
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.
1.15 Other Cooperation. If the Recipient is a state-chartered bank or 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.
1.16 State-Chartered Banks and Savings Associations. If the Recipient is a statechartered 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
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
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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 |