The Treasury required two revised closing documents to be delivered in connection with TARP Capital closings that took place on February 27, 2009: the Officer’s Certificate regarding executive compensation compliance and the Side Letter Agreement.
The revision to the Officer’s Certificate was minimal. The provision of the EESA with which the officer was certifying compliance previously indicated “Section 111(b).” This reference was revised to certify compliance with “Section 111.” We have uploaded a form of this revised Officer’s Certificate.
As we previously indicated, the Treasury added a Side Letter Agreement, addressing the modifications to EESA by the American Recovery and Reinvestment Act of 2009 (the “Act”). SEOs of participating institutions must sign this Side Letter as part of TARP Capital transactions. Unlike the previous version of the Side Letter Agreement, the most recent version contains an explicit acknowledgment that the participating institution shall be permitted to repay the preferred shares after consultation with the appropriate federal banking agency without regard to whether the institution has replaced the funds, and that when such preferred shares are repaid, the Treasury will liquidate the warrants associated with such preferred shares “at the current market price,” both as required by the Act. We understand that this provision was (1) included in the Side Letter executed by companies that closed TARP Capital investments on February 20, 2009, (2) removed from a revised version, and now (3) has returned for TARP Capital investments that closed on February 27, 2009. We have uploaded a clean version of the new Side Letter Agreement.