Exhibit 10.1

 
 
(CDFI Bank/Thrifts
Senior Preferred Stock)

 

 
UNITED STATES DEPARTMENT OF THE TREASURY
1500 PENNSYLVANIA AVENUE, NW
WASHINGTON, D.C. 20220
 
Dear Ladies and Gentlemen:
 
The company set forth on the signature page hereto (the “Company”) intends to
issue the number of shares of a series of its preferred stock set forth on
Schedule A hereto (the “CDCI Preferred Shares”) to the United States Department
of the Treasury (the “Investor”) in exchange for the number of shares of
preferred stock previously acquired by the Investor pursuant to the Company’s
participation in the Troubled Asset Relief Program Capital Purchase Program set
forth on Schedule A (the “CPP Preferred Shares”).
 
The purpose of this letter agreement is to confirm the terms and conditions of
the exchange.  Except to the extent supplemented or superseded by the terms set
forth herein or in the Schedules hereto, the provisions contained in the
Exchange Agreement – Standard Terms attached hereto as Exhibit A (the “Exchange
Agreement”) are incorporated by reference herein.  Terms that are defined in the
Exchange Agreement are used in this letter agreement as so defined.  In the
event of any inconsistency between this letter agreement and the Exchange
Agreement, the terms of this letter agreement shall govern.
 
Each of the Company and the Investor hereby confirms its agreement with the
other party with respect to the issuance by the Company of the CDCI Preferred
Shares and the exchange of the “Preferred Shares” for the CPP Preferred Shares
pursuant to this letter agreement and the Exchange Agreement on the terms
specified on Schedule A hereto.
 
This letter agreement (including the Schedules hereto), the Exchange Agreement
(including the Annexes thereto) and the Disclosure Schedules (as defined in the
Exchange Agreement) constitute the entire agreement, and supersede all other
prior agreements, understandings, representations and warranties, both written
and oral, between the parties, with respect to the subject matter hereof.  This
letter agreement constitutes the “Letter Agreement” referred to in the Exchange
Agreement.
 
This letter agreement may be executed in any number of separate counterparts,
each such counterpart being deemed to be an original instrument, and all such
counterparts will together constitute the same agreement.  Executed signature
pages to this letter agreement may be delivered by facsimile and such facsimiles
will be deemed as sufficient as if actual signature pages had been delivered.
 
* * *

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In witness whereof, this letter agreement has been duly executed and delivered
by the duly authorized representatives of the parties hereto as of the date
written below.
 
 
UNITED STATES DEPARTMENT OF THE TREASURY

 
 
 
         
 By:________________________________________

 
       Name:

 
      Title:

 
 
 
COMPANY:  THE FIRST BANCSHARES, INC.

 
 
 
By:________________________________________     

 
 
      Name:  M. Ray Cole, Jr.

 
 
      Title:    Chief Executive Officer

 
Date:_________________________

UST Sequence No. 511
 
 

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EXHIBIT A
(CDFI Bank/Thrifts
Senior Preferred Stock)

EXCHANGE AGREEMENT
 
 
STANDARD TERMS
 

UST Sequence No. 511
 
 

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TABLE OF CONTENTS
 
Page
 
 
ARTICLE I
 
THE CLOSING; THE EXCHANGE OF CDCI PREFERRED STOCK FOR CPP PREFERRED STOCK
 
 
Section 1.1
The CDCI Preferred Stock 
2

 
Section 1.2
The Closing 
2

 
ARTICLE II
 
EXCHANGE
 
 
Section 2.1
Exchange
6

 
Section 2.2
Exchange Documentation 
6

 
ARTICLE III
 
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
 
 
Section 3.1
Existence and Power 
6

 
Section 3.2
CDCI Preferred Shares 
7

 
Section 3.3
Community Development Financial Institution Status; Domestic Ownership 
7

 
Section 3.4
Authorization and Enforceability 
8

 
Section 3.5
Anti-Takeover Provisions and Rights Plan 
9

 
Section 3.6
No Company Material Adverse Effect 
9

 
Section 3.7
Company Financial Statements 
9

 
Section 3.8
No Undisclosed Liabilities 
9

 
Section 3.9
Offering of Securities 
9

 
Section 3.10
Litigation and Other Proceedings 
9

 
Section 3.11
Compliance with Laws 
10

 
Section 3.12
Employee Benefit Matters 
10

 
Section 3.13
Taxes 
11

 
Section 3.14
Properties and Leases 
11

 
Section 3.15
Environmental Liability 
11

 
Section 3.16
Risk Management Instruments 
12

 
Section 3.17
Agreements with Regulatory Agencies 
12

 
Section 3.18
Insurance 
12

 
Section 3.19
Intellectual Property 
13

 
Section 3.20
Brokers and Finders 
13

 
Section 3.21
Disclosure Schedule 
13

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Section 3.22
CPP Preferred Stock 
13

 
ARTICLE IV
 
COVENANTS
 
 
Section 4.1
Affirmative Covenants 
13

 
Section 4.2
Negative Covenants 
20

 
ARTICLE V
 
ADDITIONAL AGREEMENTS
 
 
Section 5.1
Purchase for Investment 
22

 
Section 5.2
Legends 
22

 
Section 5.3
Transfer of CDCI Preferred Shares 
24

 
Section 5.4
Rule 144; Rule 144A; 4(1½) Transactions 
24

 
Section 5.5
Depositary Shares 
26

 
Section 5.6
Expenses and Further Assurances 
26

 
ARTICLE VI
 
MISCELLANEOUS
 
 
Section 6.1
Termination 
27

 
Section 6.2
Survival 
27

 
Section 6.3
Amendment 
28

 
Section 6.4
Waiver of Conditions 
28

 
Section 6.5
Governing Law; Submission to Jurisdiction, etc 
28

 
Section 6.6
Notices 
29

 
Section 6.7
Definitions, Interpretation 
29

 
Section 6.8
Interpretation 
32

 
Section 6.9
Assignment 
33

 
Section 6.10
Severability 
33

 
Section 6.11
No Third-Party Beneficiaries 
33

 
Section 6.12
Entire Agreement, etc 
33

 
Section 6.13
Specific Performance 
34

 

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LIST OF ANNEXES
 

 
 
ANNEX A:  FORM OF OFFICER’S CERTIFICATE

 
 
ANNEX B:  FORM OF NEW CERTIFICATE OF DESIGNATIONS

 
 
ANNEX C:  FORM OF OPINION

 
 
ANNEX D:  FORM OF WAIVER

 
 
ANNEX E:  REGISTRATION RIGHTS

 
 
ANNEX F:  FORM OF OFFICER’S CERTIFICATE (CDFI REQUIREMENTS)

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Defined Terms
 
Affiliate
Section 6.7(a)(ii)
Agreement
Recitals
Appropriate Federal Banking Agency
Section 6.7(a)(iii)
Bank Holding Company
Section 6.7(a)(iv)
Bankruptcy Exceptions
Section 3.4(a)
Benefit Plans
Section 1.2(c)(vi)
Board of Directors
Section 3.5
Business Combination
Section 6.7(a)(v)
Capitalization Date
Section 3.1(b)
CDCI
Recitals
CDCI Preferred Shares
Recitals
CDCI Preferred Stock
Recitals
CDFI
Section 3.3
CDFI Application
Section 1.2(c)(xii)
CDFI Application Update
Section 1.2(c)(xii)
Certified Entity
Section 6.7 (a)(vi)
Charter
Section 1.2(c)(iv)
Closing
Section 1.2(a)
Closing Date
Section 1.2(a)
Code
Section 3.12
Common Stock
Section 3.1(b)
Company
Recitals
Company Financial Statements
Section 6.7(a)(vii)
Company Material Adverse Effect
Section 6.7(a)(viii)
Company Subsidiaries
Section 3.4(b)
Compensation Regulations
Section 1.2(c)(vi)
Controlled Group
Section 3.12
CPP
Recitals
CPP Preferred Shares
Recitals
CPP Preferred Stock
Recitals
CPP Securities
Section 6.12(b)
CPP Securities Purchase Agreement
Recitals
CPP Signing Date
Recitals
CPP Waiver
Section 1.2(c)(vii)
Designated Matters
Section 6.7(a)(ix)
Development Services
Section 4.1(d)(i)
Disclosure Schedule
Section 6.7(a)(x)
Disclosure Update
Section 1.2(c)(xi)
EAWA
Section 6.7(a)(xi)
EESA
Section 1.2(c)(vi)
ERISA
Section 3.12
Exchange
Recitals

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Exchange Act
Section 5.3
Federal Reserve
Section 6.7(a)(iv)
Financial Products
Section 4.1(d)(i)
Fund
Section 1.2(c)(xii)
Governmental Entities
Section 1.2(c)
Holder
Section 5.4
Indemnitee
Section 5.4(b)
Information
Section 4.1(c)(iii)
Investment Area
Section 4.1(d)(i)
Investor
Recitals
Junior Stock
Section 6.7(a)(xii)
Letter Agreement
Recitals
MHA
Section 4.1(i)
New Certificate of Designations
Section 1.2(c)(iv)
Parity Stock
Section 6.7(a)(xiii)
Plan
Section 3.12
Previously Disclosed
Section 6.7(a)(xiv)
Proprietary Rights
Section 3.19
Regulatory Agreement
Section 3.17
Relevant Period
Section 1.2(c)(vi)
Savings and Loan Holding Company
Section 6.7(a)(xv)
Schedules
Recitals
SEC
Section 3.9
Section 4.1(e) Employee
Section 4.1(e)(ii)
Securities Act
Section 3.1(a)
Senior Executive Officers
Section 6.7(a)(xvi)
Share Dilution Amount
Section 6.7(a)(xvii)
Signing Date
Section 1.2(c)(xi)
subsidiary
Section 6.7(a)(i)
Target Market
Section 4.1(d)(i)
Targeted Populations
Section 4.1(d)(i)
Tax
Section 6.7(xviii)
Transfer
Section 5.3

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EXCHANGE AGREEMENT – STANDARD TERMS
 

 
Recitals:
 
WHEREAS, the United States Department of the Treasury (the “Investor”) has
purchased shares of preferred stock or has acquired shares of preferred stock
through the exercise of warrants or the exchange of other securities
(collectively, the “CPP Preferred Stock”) from eligible financial institutions
which elected to participate in the Troubled Asset Relief Program Capital
Purchase Program (“CPP”);
 
WHEREAS, the Investor may from time to time agree to exchange the shares of CPP
Preferred Stock it received from eligible financial institutions that
participated in CPP for newly issued shares of preferred stock (“CDCI Preferred
Stock”) from such eligible financial institutions to the extent they elect to
participate in the Community Development Capital Initiative (“CDCI”);
 
WHEREAS, an eligible financial institution electing to participate in the
CDCI  and exchange CPP Preferred Stock for CDCI Preferred Stock shall enter into
a letter agreement (the “Letter Agreement”) with the Investor which incorporates
this Exchange Agreement – Standard Terms (the eligible financial institution
identified in the Letter Agreement, the “Company”);
 
WHEREAS, the Company issued the CPP Preferred Stock (or warrants exercised to
acquire the CPP Preferred Stock or the securities exchanged for the CPP
Preferred Stock) pursuant to that certain Securities Purchase Agreement –
Standard Terms incorporated into a letter agreement, dated as of the date set
forth on Schedule A to the Letter Agreement (the “CPP Signing Date”), as amended
from time to time, between the Company and the Investor (the “CPP Securities
Purchase Agreement”);
 
WHEREAS, the Company agrees to support the availability of credit and financial
services to underserved populations and communities in the United States to
promote the expansion of small businesses and the creation of jobs in such
populations and communities;
 
WHEREAS, the Company agrees to work diligently, under existing and any future
programs, to modify the terms of residential mortgages as appropriate to
strengthen the health of the U.S. housing market;
 
WHEREAS, the Company intends to issue the number of shares of the series of its
CDCI Preferred Stock set forth on Schedule A to the Letter Agreement (the “CDCI
Preferred Shares”) to the Investor in exchange for (the “Exchange”) the number
of shares of the CPP Preferred Stock set forth on Schedule A to the Letter
Agreement (the “CPP Preferred Shares”); and

UST Sequence No. 511
 
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WHEREAS, the Exchange will be governed by this Exchange Agreement – Standard
Terms and the Letter Agreement, including the schedules thereto (the
“Schedules”), specifying additional terms of the Exchange. This Exchange
Agreement – Standard Terms (including the Annexes hereto) and the Letter
Agreement (including the Schedules thereto) are together referred to as this
“Agreement”.  All references in this Exchange Agreement – Standard Terms to
“Schedules” are to the Schedules attached to the Letter Agreement.
 
NOW, THEREFORE, in consideration of the premises, and of the representations,
warranties, covenants and agreements set forth herein, the parties agree as
follows:
 
ARTICLE I
 
THE CLOSING; THE EXCHANGE OF CDCI PREFERRED STOCK FOR CPP PREFERRED STOCK
 
Section 1.1 The CDCI Preferred Stock.
 
  The CDCI Preferred Shares are being issued to the Investor in the Exchange
pursuant to Article II hereof.  The CPP Preferred Shares exchanged for the CDCI
Preferred Shares pursuant to Article II hereof are being reacquired by the
Company and shall have the status of authorized but unissued shares of preferred
stock of the Company undesignated as to series and may be designated or
redesignated and issued or reissued, as the case may be, as part of any series
of preferred stock of the Company; provided that such shares shall not be
reissued as shares of CPP Preferred Stock.
 
Section 1.2 The Closing.
 
  (a) On the terms and subject to the conditions set forth in this Agreement,
the closing of the Exchange (the “Closing”) will take place at the location
specified in Schedule A, at the time and on the date set forth in Schedule A or
as soon as practicable thereafter, or at such other place, time and date as
shall be agreed between the Company and the Investor.  The time and date on
which the Closing occurs is referred to in this Agreement as the “Closing Date”.
 
(b) Subject to the fulfillment or waiver of the conditions to the Closing in
this Section 1.2, at the Closing (i) the Company will deliver the CDCI Preferred
Shares to the Investor, as evidenced by one or more certificates dated the
Closing Date and registered in the name of the Investor or its designee(s) and
(ii) the Investor will deliver the certificate representing the CPP Preferred
Shares to the Company.
 
(c) The obligation of the Investor to consummate the Exchange is also subject to
the fulfillment (or waiver by the Investor) at or prior to the Closing of each
of the following conditions:

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(i) (A) any approvals or authorizations of all United States and other
governmental, regulatory or judicial authorities (collectively, “Governmental
Entities”) required for the consummation of the Exchange shall have been
obtained or made in form and substance reasonably satisfactory to each party and
shall be in full force and effect and all waiting periods required by United
States and other applicable law, if any, shall have expired and (B) no provision
of any applicable United States or other law and no judgment, injunction, order
or decree of any Governmental Entity shall prohibit consummation of the Exchange
as contemplated by this Agreement;
 
(ii)  (A) the representations and warranties of the Company set forth in Article
III of this Agreement shall be true and correct in all respects as though made
on and as of the Closing Date (other than representations and warranties that by
their terms speak as of another date, which representations and warranties shall
be true and correct in all respects as of such other date) and (B) the Company
shall have performed in all respects all obligations required to be performed by
it under this Agreement at or prior to the Closing;
 
(iii) the Company shall have delivered to the Investor a certificate signed on
behalf of the Company by a Senior Executive Officer certifying to the effect
that the conditions set forth in Section 1.2(c)(ii) have been satisfied, in
substantially the form attached hereto as Annex A;
 
(iv) the Company shall have duly adopted and filed with the Secretary of State
of its jurisdiction of organization or other applicable Governmental Entity an
amendment to its certificate or articles of incorporation, articles of
association, or similar organizational document (“Charter”) in substantially the
form attached hereto as Annex B (the “New Certificate of Designations”) and the
Company shall have delivered to the Investor a copy of the filed New 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 Company by a Senior
Executive Officer certifying to the effect that the filing of the New
Certificate of Designation has been accepted, in substantially the form attached
hereto as Annex A;
 
(v) the Company shall have delivered to the Investor, a certificate signed on
behalf of the Company by a Senior Executive Officer certifying to the effect
that the Charter and bylaws of the Company delivered to the Investor pursuant to
the CPP Securities Purchase Agreement remain true, complete and correct, in
substantially the form attached hereto as Annex A; to the extent that the
Charter and bylaws of the Company delivered to the Investor pursuant to the CPP
Securities Purchase Agreement are no longer true, correct and complete, prior to
the Closing Date, the Company shall deliver to Investor true, complete and
correct certified copies of any amendments or supplements to the Charter or
bylaws of the Company or the documentation necessary to make the Charter or
bylaws of the Company delivered to the Investor true, correct and complete as of
the Closing Date;

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(vi) (A) the Company shall have effected such changes to its compensation,
bonus, incentive and other benefit plans, arrangements and agreements (including
golden parachute, severance and employment agreements) (collectively, “Benefit
Plans”) with respect to its Senior Executive Officers and any other employee of
the Company or its Affiliates subject to Section 111 of the Emergency Economic
Stabilization Act of 2008, as amended by the American Recovery and Reinvestment
Act of 2009, or otherwise from time to time (“EESA”), as implemented by any
guidance, rule or regulation thereunder, as the same shall be in effect from
time to time (collectively, the “Compensation Regulations”) (and to the extent
necessary for such changes to be legally enforceable, each of its Senior
Executive Officers and other employees shall have duly consented in writing to
such changes), as may be necessary, during the period in which any obligation of
the Company arising from financial assistance under the Troubled Asset Relief
Program remains outstanding (such period, as it may be further described in the
Compensation Regulations, the “Relevant Period”), in order to comply with
Section 111 of EESA or the Compensation Regulations and (B) the Investor shall
have received a certificate signed on behalf of the Company by a Senior
Executive Officer certifying to the effect that the condition set forth in
Section 1.2(c)(vi)(A) has been satisfied, in substantially the form attached
hereto as Annex A;
 
(vii) the Company shall have delivered to the Investor, a written waiver from
each of the Company’s Senior Executive Officers and any other employee of the
Company required to have delivered a waiver to Investor pursuant to Section
1.2(d)(v) of the CPP Securities Purchase Agreement (each, a “CPP Waiver”) and,
to the extent that any Senior Executive Officer or any other employee of the
Company or its Affiliates that are subject to Section 111 of EESA did not
deliver a CPP Waiver, the Company shall cause each such Senior Executive Officer
or other employee to have delivered to the Investor a written waiver in the form
attached hereto as Annex D releasing the Investor and the Company from any
claims that such Senior Executive Officer or other employee may otherwise have
as a result of the modification of, or the agreement of the Company hereunder to
modify, the terms of any Benefit Plans with respect to its Senior Executive
Officers or other employees to eliminate any provisions of such Benefit Plans
that would not be in compliance with the requirements of Section 111 of EESA as
implemented by the Compensation Regulations;
 
(viii) the Company shall have delivered to the Investor a written opinion from
counsel to the Company (which may be internal counsel), addressed to the
Investor and dated as of the Closing Date, in substantially the form attached
hereto as Annex C;
 
(ix) the Company shall have delivered certificates in proper form or, with the
prior consent of the Investor, evidence of shares in book-entry form, evidencing
the CDCI Preferred Shares to the Investor or its designee(s);

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(x) the Company and the Company Subsidiaries shall have taken all necessary
action to ensure that the Company and the Company Subsidiaries and their
executive officers, respectively, are in compliance with (i) all guidelines put
forth by the Investor with respect to transparency, reporting and monitoring and
(ii) the provisions of EESA and any federal law respecting EESA, including the
Employ American Workers Act (Section 1611 of Division A, Title XVI of the
American Recovery and Reinvestment Act of 2009), Public Law No. 111-5, effective
as of February 17, 2009, and all rules, regulations and guidance issued
thereunder;
 
(xi) the Company shall have delivered to the Investor, a copy of the Disclosure
Schedule on or prior to the date of the Letter Agreement (the “Signing Date”)
and, to the extent that any information set forth on the Disclosure
Schedule needs to be updated or supplemented to make it true, complete and
correct as of the Closing Date, (i) the Company shall have delivered to the
Investor an update to the Disclosure Schedule (the “Disclosure Update”), setting
forth any information necessary to make the Disclosure Schedule true, correct
and complete as of the Closing Date and (ii) the Investor, in its sole
discretion, shall have approved the Disclosure Update, provided, however, that
the delivery and acceptance of the Disclosure Update shall not limit or affect
any rights of or remedies available to the Investor;
 
(xii) the Company shall have delivered to the Investor prior to the Signing Date
either (i) a true, complete and correct certified copy of each CDFI
Certification Application that each Certified Entity submitted to the Community
Development Financial Institution Fund (the “Fund”)  in connection with its
certification as a CDFI along with any updates to the CDFI Certification
Application necessary to make it true, complete and correct as of the Signing
Date or (ii), to the extent a copy of the CDFI Certification Application that
any Certified Entity submitted to the Fund in connection with its certification
as a CDFI is not available, a newly completed CDFI Certification Application
with respect to such Certified Entity true, complete and correct as of the
Signing Date (the CDFI Certification Application delivered to the Investor
pursuant to this Section 1.2(c)(xii), the “CDFI Application”), and, to the
extent any information set forth in the CDFI Application is not true, complete
and correct as of the Closing Date, the Company shall have delivered to the
Investor an update to the CDFI Application (the “CDFI Application Update”),
setting forth any information necessary to make the information set forth in the
CDFI Application true, correct and complete as of the Closing Date; and
 
(xiii) CPP/CDCI Securities.  The Company shall have paid to Investor all accrued
and unpaid dividends or interest then due on the CPP Preferred Stock.

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ARTICLE II
 
EXCHANGE
 
Section 2.1 Exchange.
 
  On the terms and subject to the conditions set forth in this Agreement, the
Company agrees to issue the CDCI Preferred Shares to the Investor in exchange
for CPP Preferred Shares, and the Investor agrees to deliver to the Company the
CPP Preferred Shares in exchange for the CDCI Preferred Shares.
 
Section 2.2 Exchange Documentation.
 
  Settlement of the Exchange will take place on the Closing Date, at which time
the Investor will cause delivery of the CPP Preferred Shares to the Company or
its designated agent and the Company will cause delivery of the CDCI Preferred
Shares to the Investor or its designated agent.
 
ARTICLE III
 
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
 
Except as Previously Disclosed, the Company represents and warrants to the
Investor that as of the Signing Date and as of the Closing Date (or such other
date specified herein) that:
 
Section 3.1 Existence and Power.
 
(a) Organization, Authority and Significant Subsidiaries.  The Company has been
duly incorporated and is validly existing and in good standing under the laws of
its jurisdiction of organization, with the necessary power and authority to own,
operate and lease its properties and to conduct its business in all material
respects as it is being currently conducted, and except as has not, individually
or in the aggregate, had and would not reasonably be expected to have a Company
Material Adverse Effect, has been duly qualified as a foreign corporation for
the transaction of business and is in good standing under the laws of each other
jurisdiction in which it owns or leases properties or conducts any business so
as to require such qualification; each Certified Entity (if not the Company) and
each subsidiary of the Company that would be considered a “significant
subsidiary” within the meaning of Rule 1-02(w) of Regulation S-X under the
Securities Act of 1933 (the “Securities Act”), has been duly organized and is
validly existing in good standing under the laws of its jurisdiction of
organization.  The Charter and bylaws of the Company and each Certified Entity
(if not the Company), copies of which have been provided to the Investor prior
to the Signing Date, are true, complete and correct copies of such documents as
in full force and effect as of the Signing Date and as of the Closing Date.

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(b) Capitalization.  The authorized capital stock of the Company, and the
outstanding capital stock of the Company (including securities convertible into,
or exercisable or exchangeable for, capital stock of the Company) as of the most
recent fiscal month-end preceding the Signing Date (the “Capitalization Date”)
is set forth on Schedule B.  The outstanding shares of capital stock of the
Company have been duly authorized and are validly issued and outstanding, fully
paid and nonassessable, and subject to no preemptive rights (and were not issued
in violation of any preemptive rights).  As of the Signing Date, the Company
does not have outstanding any securities or other obligations providing the
holder the right to acquire common stock of the Company (“Common Stock”) or
other capital stock that is not reserved for issuance as specified on
Schedule B, and the Company has not made any other commitment to authorize,
issue or sell any Common Stock or other capital stock.  Since the Capitalization
Date, the Company has not issued any shares of Common Stock or other capital
stock other than (i) shares issued upon the exercise of stock options or
delivered under other equity-based awards or other convertible securities or
warrants which were issued and outstanding on the Capitalization Date and
disclosed on Schedule B and (ii) shares disclosed on Schedule B.  Each holder of
5% or more of any class of capital stock of the Company and such holder’s
primary address are set forth on Schedule B.
 
Section 3.2 CDCI Preferred Shares.
 
  The CDCI Preferred Shares have been duly and validly authorized by all
necessary action, and, when issued and delivered pursuant to this Agreement,
such CDCI Preferred Shares will be duly and validly issued and fully paid and
nonassessable, will not be issued in violation of any preemptive rights, and
will rank pari passu or senior to all other series or classes of CDCI 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 Company.
 
Section 3.3 Community Development Financial Institution Status; Domestic
Ownership.
 
(a)  The Company, collectively with all of its “Affiliates” (within the meaning
of 12 C.F.R. 1805.104) satisfies the requirements of 12 C.F.R. 1805.200(b).
 
(b) Each Certified Entity (A) is a regulated community development financial
institution (a “CDFI”) currently certified by the Fund of the United States
Department of the Treasury pursuant to 12 C.F.R. 1805.201(a) as having satisfied
the eligibility requirements of the Fund’s Community Development Financial
Institutions Program and (B) satisfies the eligibility requirements for a CDFI
set forth in 12 C.F.R. 1805.201(b)(1) – (6).
 
(c) The Company is not a Bank Holding Company, Savings and Loan Holding Company,
bank or savings association controlled (within the meaning of the Bank Holding
Company Act of 1956 (12 U.S.C. 1841(a)(2)) and 12 C.F.R. 225(a)(i) in the case
of Bank Holding Companies and banks and the Home Owners’ Loan Act of 1933 (12
U.S.C. 1467a (a)(2)) and 12 C.F.R. 583.7 in the case of Savings and Loan Holding
Companies and savings associations) by a foreign bank or company.

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Section 3.4 Authorization and Enforceability.
 
  (a) The Company has the corporate power and authority to execute and deliver
this Agreement and to carry out its obligations hereunder (which includes the
issuance of the CDCI Preferred Shares). The execution, delivery and performance
by the Company of this Agreement and the consummation of the transactions
contemplated hereby have been duly authorized by all necessary corporate action
on the part of the Company and its stockholders, and no further approval or
authorization is required on the part of the Company. This Agreement is a valid
and binding obligation of the Company enforceable against the Company in
accordance with its terms, subject to any limitations by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the enforcement
of creditors’ rights generally and general equitable principles, regardless of
whether such enforceability is considered in a proceeding at law or in equity
(“Bankruptcy Exceptions”).
 
(b) The execution, delivery and performance by the Company of this Agreement and
the consummation of the transactions contemplated hereby, and compliance by the
Company with the provisions hereof, will not (A) violate, conflict with, or
result in a breach of any provision of, or constitute a default (or an event
which, with notice or lapse of time or both, would constitute a default) under,
or result in the termination of, or accelerate the performance required by, or
result in a right of termination or acceleration of, or result in the creation
of, any lien, security interest, charge or encumbrance upon any of the
properties or assets of the Company or any subsidiary of the Company or
Certified Entity (if not the Company) (each subsidiary or Certified Entity, a
“Company Subsidiary” and, collectively, the “Company Subsidiaries”) under any of
the terms, conditions or provisions of (i) its organizational documents or
(ii) any note, bond, mortgage, indenture, deed of trust, license, lease,
agreement or other instrument or obligation to which the Company or any Company
Subsidiary is a party or by which it or any Company Subsidiary may be bound, or
to which the Company or any Company Subsidiary or any of the properties or
assets of the Company or any Company Subsidiary may be subject, or (B) subject
to compliance with the statutes and regulations referred to in the next
paragraph, violate any statute, rule or regulation or any judgment, ruling,
order, writ, injunction or decree applicable to the Company or any Company
Subsidiary or any of their respective properties or assets except, in the case
of clauses (A)(ii) and (B), for those occurrences that, individually or in the
aggregate, have not had and would not reasonably be expected to have a Company
Material Adverse Effect.
 
(c) Other than the filing of the New 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
Company in connection with the consummation by the Company of the Exchange
except for any such notices, filings, exemptions, reviews, authorizations,
consents and approvals the failure of which to make or obtain would not,
individually or in the aggregate, reasonably be expected to have a Company
Material Adverse Effect.

UST Sequence No.
511                                                                  --
 
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Section 3.5 Anti-Takeover Provisions and Rights Plan.
 
  The Board of Directors of the Company (the “Board of Directors”) has taken all
necessary action to ensure that the transactions contemplated by this Agreement
and the consummation of the transactions contemplated hereby, will be exempt
from any anti-takeover or similar provisions of the Company’s Charter and
bylaws, and any other provisions of any applicable “moratorium”, “control
share”, “fair price”, “interested stockholder” or other anti-takeover laws and
regulations of any jurisdiction.
 
Section 3.6 No Company Material Adverse Effect.
 
  Since the CPP Signing Date, no fact, circumstance, event, change, occurrence,
condition or development has occurred that, individually or in the aggregate,
has had or would reasonably be expected to have a Company Material Adverse
Effect, except as disclosed on Schedule C.
 
Section 3.7 Company Financial Statements.
 
  The Company Financial Statements present fairly in all material respects the
consolidated financial position of the Company and its consolidated subsidiaries
as of the dates indicated therein and the consolidated results of their
operations for the periods specified therein; and except as stated therein, such
financial statements (i) were prepared in conformity with GAAP applied on a
consistent basis (except as may be noted therein) and (ii) have been prepared
from, and are in accordance with, the books and records of the Company and the
Company Subsidiaries.
 
Section 3.8 No Undisclosed Liabilities.
 
  Neither the Company nor any of the Company Subsidiaries has any liabilities or
obligations of any nature (absolute, accrued, contingent or otherwise) which are
not properly reflected or reserved against in the Company Financial Statements
to the extent required to be so reflected or reserved against in accordance with
GAAP, except for (i) liabilities that have arisen since the last fiscal year end
in the ordinary and usual course of business and consistent with past practice
and (ii) liabilities that, individually or in the aggregate, have not had and
would not reasonably be expected to have a Company Material Adverse Effect.
 
Section 3.9 Offering of Securities.
 
  Neither the Company nor any person acting on its behalf has taken any action
(including any offering of any securities of the Company under circumstances
which would require the integration of such offering with the offering of the
CDCI 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 issuance or acquisition of the CDCI Preferred Shares to
the Investor pursuant to this Agreement to the registration requirements of the
Securities Act.
 
Section 3.10 Litigation and Other Proceedings.
 
  Except (i) as set forth on Schedule D or (ii) as would not, individually or in
the aggregate, reasonably be expected to have a Company Material Adverse Effect,
there is no (A) pending or, to the knowledge of the Company, threatened, claim,
action, suit, investigation or proceeding, against the Company or any Company
Subsidiary or to which any of their assets are subject, nor is the Company or
any Company Subsidiary subject to any order, judgment or decree or
(B) unresolved violation, criticism or exception by any Governmental Entity with
respect to any report or relating to any examinations or inspections of the
Company or any Company Subsidiaries.

UST Sequence No.
511                                                                  --
 
9

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Section 3.11 Compliance with Laws.
 
 Except as would not, individually or in the aggregate, reasonably be expected
to have a Company Material Adverse Effect, the Company and the Company
Subsidiaries have all permits, licenses, franchises, authorizations, orders and
approvals of, and have made all filings, applications and registrations with,
Governmental Entities that are required in order to permit them to own or lease
their properties and assets and to carry on their business as presently
conducted and that are material to the business of the Company or such Company
Subsidiary.  Except as set forth on Schedule E, the Company and the Company
Subsidiaries have complied in all respects and are not in default or violation
of, and none of them is, to the knowledge of the Company, under investigation
with respect to or, to the knowledge of the Company, have been threatened to be
charged with or given notice of any violation of, any applicable domestic
(federal, state or local) or foreign law, statute, ordinance, license, rule,
regulation, policy or guideline, order, demand, writ, injunction, decree or
judgment of any Governmental Entity, other than such noncompliance, defaults or
violations that would not, individually or in the aggregate, reasonably be
expected to have a Company Material Adverse Effect.  Except for statutory or
regulatory restrictions of general application or as set forth on Schedule E, no
Governmental Entity has placed any restriction on the business or properties of
the Company or any Company Subsidiary that would, individually or in the
aggregate, reasonably be expected to have a Company Material Adverse Effect.
 
Section 3.12 Employee Benefit Matters.
 
Except as would not reasonably be expected to have, either individually or in
the aggregate, a Company Material Adverse Effect: (i) each “employee benefit
plan” (within the meaning of Section 3(3) of the Employee Retirement Income
Security Act of 1974, as amended (“ERISA”)) providing benefits to any current or
former employee, officer or director of the Company or any member of its
“Controlled Group” (defined as any organization which is a member of a
controlled group of corporations within the meaning of Section 414 of the
Internal Revenue Code of 1986, as amended (the “Code”)) that is sponsored,
maintained or contributed to by the Company or any member of its Controlled
Group and for which the Company or any member of its Controlled Group would have
any liability, whether actual or contingent (each, a “Plan”) has been maintained
in compliance with its terms and with the requirements of all applicable
statutes, rules and regulations, including ERISA and the Code; (ii) with respect
to each Plan subject to Title IV of ERISA (including, for purposes of this
clause (ii), any plan subject to Title IV of ERISA that the Company or any
member of its Controlled Group previously maintained or contributed to in the
six years prior to the Signing Date), (1) no “reportable event” (within the
meaning of Section 4043(c) of ERISA), other than a reportable event for which
the notice period referred to in Section 4043(c) of ERISA has been waived, has
occurred in the three years prior to the Signing Date or is reasonably expected
to occur, (2) no “accumulated funding deficiency” (within the meaning of
Section 302 of ERISA or Section 412 of the Code), whether or not waived, has
occurred in the three years prior to the Signing Date or is reasonably expected
to occur, (3) the fair market value of the assets under each Plan exceeds the
present value of all benefits accrued under such Plan (determined based on the
assumptions used to fund such Plan) and (4) neither the Company nor any member
of its Controlled Group has incurred in the six years prior to the Signing Date,
or reasonably expects to incur, any liability under Title IV of

UST Sequence No.
511                                                                  --
 
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ERISA (other than contributions to the Plan or premiums to the Pension Benefit
Guaranty Corporation in the ordinary course and without default) in respect of a
Plan (including any Plan that is a “multiemployer plan”, within the meaning of
Section 4001(c)(3) of ERISA); and (iii) each Plan that is intended to be
qualified under Section 401(a) of the Code has received a favorable
determination letter from the Internal Revenue Service with respect to its
qualified status that has not been revoked, or such a determination letter has
been timely applied for but not received by the Signing Date, and nothing has
occurred, whether by action or by failure to act, which could reasonably be
expected to cause the loss, revocation or denial of such qualified status or
favorable determination letter.
 
Section 3.13 Taxes.
 
 Except as would not, individually or in the aggregate, reasonably be expected
to have a Company Material Adverse Effect, (i) the Company and the Company
Subsidiaries have filed all federal, state, local and foreign income and
franchise Tax returns (together with any schedules and attached thereto)
required to be filed through the Signing Date, subject to permitted extensions,
and have paid all Taxes due thereon, (ii) all such Tax returns (together with
any schedules and attached thereto) are true, complete and correct in all
material respects and were prepared in compliance with all applicable laws and
(iii) no Tax deficiency has been determined adversely to the Company or any of
the Company Subsidiaries, nor does the Company have any knowledge of any Tax
deficiencies.
 
Section 3.14 Properties and Leases.
 
 Except as would not, individually or in the aggregate, reasonably be expected
to have a Company Material Adverse Effect, the Company and the Company
Subsidiaries have good and marketable title to all real properties and all other
properties and assets owned by them, in each case free from liens (including,
without limitation, liens for Taxes), encumbrances, claims and defects that
would affect the value thereof or interfere with the use made or to be made
thereof by them.  Except as would not, individually or in the aggregate,
reasonably be expected to have a Company Material Adverse Effect, the Company
and the Company Subsidiaries hold all leased real or personal property under
valid and enforceable leases with no exceptions that would interfere with the
use made or to be made thereof by them.
 
Section 3.15 Environmental Liability.
 
 Except as would not, individually or in the aggregate, reasonably be expected
to have a Company Material Adverse Effect:
 
(a) there is no legal, administrative, or other proceeding, claim or action of
any nature seeking to impose, or that would reasonably be expected to result in
the imposition of, on the Company or any Company Subsidiary, any liability
relating to the release of hazardous substances as defined under any local,
state or federal environmental statute, regulation or ordinance, including the
Comprehensive Environmental Response, Compensation and Liability Act of 1980,
pending or, to the Company’s knowledge, threatened against the Company or any
Company Subsidiary;
 
(b) to the Company’s knowledge, there is no reasonable basis for any such
proceeding, claim or action; and

UST Sequence No.
511                                                                  --
 
11

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(c) neither the Company nor any Company Subsidiary is subject to any agreement,
order, judgment or decree by or with any court, Governmental Entity or third
party imposing any such environmental liability.
 
Section 3.16 Risk Management Instruments.
 
 Except as would not, individually or in the aggregate, reasonably be expected
to have a Company Material Adverse Effect, all derivative instruments,
including, swaps, caps, floors and option agreements, whether entered into for
the Company’s own account, or for the account of one or more of the Company
Subsidiaries or its or their customers, were entered into (i) only in the
ordinary course of business, (ii) in accordance with prudent practices and in
all material respects with all applicable laws, rules, regulations and
regulatory policies and (iii) with counterparties believed to be financially
responsible at the time; and each of such instruments constitutes the valid and
legally binding obligation of the Company or one of the Company Subsidiaries,
enforceable in accordance with its terms, except as may be limited by the
Bankruptcy Exceptions.  Neither the Company or the Company Subsidiaries, nor, to
the knowledge of the Company, any other party thereto, is in breach of any of
its obligations under any such agreement or arrangement other than such breaches
that would not, individually or in the aggregate, reasonably be expected to have
a Company Material Adverse Effect.
 
Section 3.17 Agreements with Regulatory Agencies.
 
 Except as set forth on Schedule F, neither the Company nor any Company
Subsidiary is subject to any material cease-and-desist or other similar order or
enforcement action issued by, or is a party to any material written agreement,
consent agreement or memorandum of understanding with, or is a party to any
commitment letter or similar undertaking to, or is subject to any capital
directive by, or since December 31, 2006, has adopted any board resolutions at
the request of, any Governmental Entity that currently restricts in any material
respect the conduct of its business or that in any material manner relates to
its capital adequacy, its liquidity and funding policies and practices, its
ability to pay dividends, its credit, risk management or compliance policies or
procedures, its internal controls, its management or its operations or business
(each item in this sentence, a “Regulatory Agreement”), nor has the Company or
any Company Subsidiary been advised since December 31, 2006 by any such
Governmental Entity that it is considering issuing, initiating, ordering, or
requesting any such Regulatory Agreement.  The Company and each Company
Subsidiary is in compliance in all material respects with each Regulatory
Agreement to which it is party or subject, and neither the Company nor any
Company Subsidiary has received any notice from any Governmental Entity
indicating that either the Company or any Company Subsidiary is not in
compliance in all material respects with any such Regulatory Agreement.
 
Section 3.18 Insurance.
 
 The Company and the Company Subsidiaries are insured with reputable insurers
against such risks and in such amounts as the management of the Company
reasonably has determined to be prudent and consistent with industry
practice.  The Company and the Company Subsidiaries are in material compliance
with their insurance policies and are not in default under any of the material
terms thereof, each such policy is outstanding and in full force and effect, all
premiums and other payments due under any material policy have been paid, and
all claims thereunder have been filed in due and timely fashion, except, in each
case, as would not, individually or in the aggregate, reasonably be expected to
have a Company Material Adverse Effect.

UST Sequence No.
511                                                                  --
 
12

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Section 3.19 Intellectual Property.
 
 Except as would not, individually or in the aggregate, reasonably be expected
to have a Company Material Adverse Effect, (i) the Company and each Company
Subsidiary owns or otherwise has the right to use, all intellectual property
rights, including all trademarks, trade dress, trade names, service marks,
domain names, patents, inventions, trade secrets, know-how, works of authorship
and copyrights therein, that are used in the conduct of their existing
businesses and all rights relating to the plans, design and specifications of
any of its branch facilities (“Proprietary Rights”) free and clear of all liens
and any claims of ownership by current or former employees, contractors,
designers or others and (ii) neither the Company nor any of the Company
Subsidiaries is materially infringing, diluting, misappropriating or violating,
nor has the Company or any of the Company Subsidiaries received any written (or,
to the knowledge of the Company, oral) communications alleging that any of them
has materially infringed, diluted, misappropriated or violated, any of the
Proprietary Rights owned by any other person.  Except as would not, individually
or in the aggregate, reasonably be expected to have a Company Material Adverse
Effect, to the Company’s knowledge, no other person is infringing, diluting,
misappropriating or violating, nor has the Company or any or the Company
Subsidiaries sent any written communications since January 1, 2007 alleging that
any person has infringed, diluted, misappropriated or violated, any of the
Proprietary Rights owned by the Company and the Company Subsidiaries.
 
Section 3.20 Brokers and Finders.
 
  The Investor has no liability for any amounts that any broker, finder or
investment banker is entitled to for any financial advisory, brokerage, finder’s
or other fee or commission in connection with this Agreement or the transactions
contemplated hereby based upon arrangements made by or on behalf of the Company
or any Company Subsidiary.
 
Section 3.21 Disclosure Schedule.
 
  The Company has delivered the Disclosure Schedule and, if applicable, the
Disclosure Update to the Investor and the information contained in the
Disclosure Schedule, as modified by the information contained in the Disclosure
Update, if applicable, is true, complete and correct.
 
Section 3.22 CPP Preferred Stock.
 
  The Company has (i) not breached any representation, warranty or covenant set
forth in the CPP Securities Purchase Agreement or any of the other documents
governing the CPP Preferred Stock and (ii) paid to Investor all accrued and
unpaid dividends and/or interest then due on the CPP Preferred Stock.
 
ARTICLE IV
 
COVENANTS
 
Section 4.1 Affirmative Covenants.
 
  The Company hereby covenants and agrees with Investor that:

UST Sequence No.
511                                                                  --
 
13

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(a) Commercially Reasonable Efforts.  Subject to the terms and conditions of
this Agreement, each of the parties will use its commercially reasonable efforts
in good faith to take, or cause to be taken, all actions, and to do, or cause to
be done, all things necessary, proper or desirable, or advisable under
applicable laws, so as to permit consummation of the Exchange as promptly as
practicable and otherwise to enable consummation of the transactions
contemplated hereby and shall use commercially reasonable efforts to cooperate
with the other party to that end.
 
(b) Certain Notifications Until Closing.  From the Signing Date until the
Closing, the Company shall promptly notify the Investor of (i) any fact, event
or circumstance of which it is aware and which would reasonably be expected to
cause any representation or warranty of the Company contained in this Agreement
to be untrue or inaccurate in any material respect or to cause any covenant or
agreement of the Company contained in this Agreement not to be complied with or
satisfied in any material respect and (ii) except as Previously Disclosed, any
fact, circumstance, event, change, occurrence, condition or development of which
the Company is aware and which, individually or in the aggregate, has had or
would reasonably be expected to have a  Company Material Adverse Effect;
provided, however, that delivery of any notice pursuant to this Section 4.1(b)
shall not limit or affect any rights of or remedies available to the Investor.
 
(c) Access, Information and Confidentiality.
 
(i) From the Signing Date until the date when the Investor owns an amount of
CDCI Preferred Shares having an aggregate liquidation value of less than 10% of
the aggregate liquidation value of the CDCI Preferred Shares as of the Closing
Date, the Company will permit the Investor and its agents, consultants,
contractors and advisors (A) acting through the Appropriate Federal Banking
Agency, or otherwise to the extent necessary to evaluate, manage, or transfer
its investment in the Company, to examine the corporate books, Tax returns
(including all schedules and attached thereto) and other information reasonably
requested by Investor relating to Taxes and make copies thereof and to discuss
the affairs, finances and accounts of the Company and the Company Subsidiaries
with the principal officers of the Company, all upon reasonable notice and at
such reasonable times and as often as the Investor may reasonably request and
(B) to review any information material to the Investor’s investment in the
Company provided by the Company to its Appropriate Federal Banking Agency.  Any
investigation pursuant to this Section 4.1(c) shall be conducted during normal
business hours and in such manner as not to interfere unreasonably with the
conduct of the business of the Company, and nothing herein shall require the
Company or any Company Subsidiary to disclose any information to the Investor to
the extent (x) prohibited by applicable law or regulation, or (y) that such
disclosure would reasonably be expected to cause a violation of any agreement to
which the Company or any Company Subsidiary is a party or would cause a risk of
a loss of privilege to the Company or any Company Subsidiary (provided that the
Company shall use commercially reasonable efforts to make appropriate substitute
disclosure arrangements under circumstances where the restrictions in this
clause (i) apply).

UST Sequence No.
511                                                                  --
 
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(ii) From the Signing Date until the date on which all of the CDCI Preferred
Shares have been redeemed in whole, the Company will deliver, or will cause to
be delivered, to the Investor:
 
(A) as soon as available after the end of each fiscal year of the Company, and
in any event within 90 days thereafter, a consolidated balance sheet of the
Company as of the end of such fiscal year, and consolidated statements of
income, retained earnings and cash flows of the Company for such year, in each
case prepared in accordance with GAAP and setting forth in each case in
comparative form the figures for the previous fiscal year of the Company, and
which shall be audited to the extent audited financial statements are available;
 
(B) as soon as available after the end of the first, second and third quarterly
periods in each fiscal year of the Company, a copy of any quarterly reports
provided to other stockholders of the Company or Company management by the
Company;
 
(C) as soon as available after the Company receives any assessment of the
Company’s internal controls, a copy of such assessment;
 
(D) annually on a date specified by the Investor, a completed survey, in a form
specified by the Investor, providing, among other things, a description of how
the Company has utilized the funds the Company received in connection with the
sale of the CPP Preferred Shares and the effects of such funds on the operations
and status of the Company;
 
(E) as soon as such items become effective, any amendments to the Charter,
bylaws or other organizational documents of the Company; and
 
(F) at the same time as such items are sent to any stockholders of the Company,
copies of any information or documents sent by the Company to its stockholders.
 
(iii) The Investor will use reasonable best efforts to hold, and will use
reasonable best efforts to cause its agents, consultants, contractors and
advisors and United States executive branch officials and employees, to hold, in
confidence all non-public records, books, contracts, instruments, computer data
and other data and information (collectively, “Information”) concerning the
Company furnished or made available to it by the Company or its representatives
pursuant to this Agreement (except to the extent that such information can be
shown to have been (A) previously known by such party on a non-confidential
basis, (B) in the public domain through no fault of such party or (C) later
lawfully acquired from other sources by the party to which it was furnished (and
without violation of any other confidentiality obligation)); provided that
nothing herein shall prevent the Investor from disclosing any Information to the
extent

UST Sequence No.
511                                                                  --
 
15

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required by applicable laws or regulations or by any subpoena or similar legal
process.  The Investor understands that the Information may contain commercially
sensitive confidential information entitled to an exception from a Freedom of
Information Act request.
 
(iv) The Investor’s information rights pursuant to Section 4.1(c)(ii)(A), (B),
(C), (E) and (F) and the Investor’s right to receive certifications from the
Company pursuant to Section 4.1(d)(ii) may be assigned by the Investor to a
transferee or assignee of the CDCI Preferred Shares with a liquidation
preference of no less than an amount equal to 2% of the initial aggregate
liquidation preference of the CDCI Preferred Shares.
 
(v) From the Signing Date until the date when the Investor no longer owns any
CDCI Preferred Shares, the Company shall permit, and shall cause each of the
Company’s Subsidiaries to permit (A) the Investor and its agents, consultants,
contractors and advisors, (B) the Special Inspector General of the Troubled
Asset Relief Program, and (C) the Comptroller General of the United States
access to personnel and any books, papers, records or other data, in each case,
to the extent relevant to ascertaining compliance with the financing terms and
conditions; provided that prior to disclosing any information pursuant to
clause (B) or (C), the Special Inspector General of the Troubled Asset Relief
Program and the Comptroller General of the United States shall have agreed, with
respect to documents obtained under this Agreement in furtherance of its
function, to follow applicable law and regulation (and the applicable customary
policies and procedures) regarding the dissemination of confidential materials,
including redacting confidential information from the public version of its
reports and soliciting the input from the Company as to information that should
be afforded confidentiality, as appropriate.
 
(vi) Nothing in this Section shall be construed to limit the authority that the
Special Inspector General of the Troubled Asset Relief Program, the Comptroller
General of the United States or any other applicable regulatory authority has
under law.
 
(d) CDFI Requirements.
 
(i) From the Signing Date until the date on which all of the CDCI Preferred
Shares have been redeemed in whole, each Certified Entity shall (A) be certified
by the Fund as a CDFI; (B) together with its Affiliates collectively meet the
eligibility requirements of 12 C.F.R. 1805.200(b); (C) have a primary mission of
promoting community development, as may be determined by Investor from time to
time, based on criteria set forth in 12 C.F.R. 1805.201(b)(1); (D) provide
Financial Products, Development Services, and/or other similar financing as a
predominant business activity in arm’s-length transactions; (E) serve a Target
Market by serving one or more Investment Areas and/or Targeted Populations as
may be determined by Investor from time to time, substantially in the manner set
forth in 12 C.F.R. 1805.201(b)(3); (F) provide Development Services in
conjunction with its Financial Products, directly, through an Affiliate or
through a contract with a third-party provider; (G) maintain

UST Sequence No.
511                                                                  --
 
16

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accountability to residents of the applicable Investment Area(s) or Targeted
Population(s) through representation on its governing Board of Directors or
otherwise; and (H) remain a non-governmental entity which is not an agency or
instrumentality of the United States of America, or any State or political
subdivision thereof, as described in 12 C.F.R. 1805.201(b)(6) and within the
meaning of any supplemental regulations or interpretations of 12 C.F.R.
1805.201(b)(6) or such supplemental regulations published by the
Fund.  Notwithstanding any other provision hereof, as used in this
Section 4.1(d), the terms “Affiliates”; “Financial Products”; “Development
Services”; “Target Market”; “Investment Areas”; and “Targeted Populations” have
the meanings ascribed to such terms in 12 C.F.R. 1805.104.
 
(ii) From the Signing Date until the date on which all of the CDCI Preferred
Shares have been redeemed in whole, the Company shall deliver to Investor
(1)(x) on the date that is 180 days after the Closing Date and (y) annually on
the same date on which the Company delivers the documentation required under
Section 4.1(c)(ii)(A) to the Investor, a certificate signed on behalf of the
Company by a Senior Executive Officer, in substantially the form attached hereto
as Annex F, certifying (A) that the Company and each Certified Entity remains in
compliance with the covenants set forth in Section 4.1(d)(i); (B) that the
information in the CDFI Application, as modified by any updates to the CDFI
Application provided by the Company to the Investor on or prior to the date of
such certificate, with respect to the covenants set forth in
Section 4.1(d)(i)(B) and Section 4.1(d)(i)(D) remains true, correct and complete
as of such date or, to the extent any information set forth in the CDFI
Application, as modified by any updates to the CDFI Application provided by the
Company to the Investor on or prior to the date of such certificate, with
respect to such covenants needs to be updated or supplanted to make it true,
complete and correct as of such date, that an updated narrative to the CDFI
Application setting forth any information necessary to make the information set
forth in the CDFI Application is true, complete and correct as of such date;
(C) either (a) that the contracts and material agreements entered into by each
Certified Entity with respect to Development Services previously disclosed to
the Investor remain in effect or (b) that attached are any new contracts and
material agreements entered into by the Certified Entity with respect to
Development Services; (D) a list of the names and addresses of the individuals
which comprise the board of directors of each Certified Entity as of such date
and, to the extent any of such individuals was not a member of the board of
directors of such Certified Entity as of the last certification to the Investor,
a narrative describing such individual's relationship to the applicable
Investment Area(s) and Targeted Population(s) or, if such Certified Entity
maintains accountability to residents of the applicable Investment Area(s) or
Target Population(s) through means other than representation on its governing
board of directors and such means have changed since the date of the last
certification to the Investor, a narrative describing such change; (E) that each
Certified Entity is not an agency of the United States of America, or any State
or political subdivision thereof, as described in 12 C.F.R. 1805.201(b)(6) and
within the meaning of any supplemental regulations or interpretations of 12
C.F.R. 1805.201(b)(6) or such supplemental regulations published by the Fund and
(F) that the Company remains in compliance with the covenants set forth in
Section 4.1(f) and Section 4.1(l) and

UST Sequence No.
511                                                                  --
 
17

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(2) within five (5) business days of receipt, copies of any notices,
correspondence or other written communication between each Certified Entity and
the Fund, including any form that such Certified Entity is required to provide
to the Fund due to the occurrence of a “Material Event” within the meaning of
the Fund’s CDFI Certification Procedures.
 
(iii) The Company shall immediately notify the Investor upon the occurrence of
any breach of any of the covenants set forth in Section 4.1(d).
 
(e) Executive Compensation.
 
(i) Benefit Plans.  During the Relevant Period, the Company shall take all
necessary action to ensure that the Benefit Plans of the Company and its
Affiliates comply in all respects with, and shall take all other actions
necessary to comply with, Section 111 of EESA, as implemented by the
Compensation Regulations, and neither the Company nor any of its Affiliates
shall adopt any new Benefit Plan (x) that does not comply therewith or (y) that
does not expressly state and require that such Benefit Plan and any compensation
thereunder shall be subject to any relevant Compensation Regulations adopted,
issued or released on or after the date any such Benefit Plan is adopted. To the
extent that EESA and/or the Compensation Regulations are amended or otherwise
change during the Relevant Period in a manner that requires changes to
then-existing Benefit Plans, or that requires other actions, the Company and its
Affiliates shall effect such changes to its or their Benefit Plans, and take
such other actions, as promptly as practicable after it has actual knowledge of
such amendments or changes in order to be in compliance with this Section 4.1(e)
(and shall be deemed to be in compliance for a reasonable period to effect such
changes).  In addition, the Company and its Affiliates shall take all necessary
action, other than to the extent prohibited by applicable law or regulation
applicable outside of the United States, to ensure that the consummation of the
transactions contemplated by this Agreement will not accelerate the vesting,
payment or distribution of any equity-based awards, deferred cash awards or any
nonqualified deferred compensation payable by the Company or any of its
Affiliates.
 
(ii) Additional Waivers.  After the Closing Date, in connection with the hiring
or promotion of a Section 4.1(e) Employee and/or the promulgation of applicable
Compensation Regulations or otherwise, to the extent any Section 4.1(e) Employee
shall not have executed a waiver in a form satisfactory to the Investor with
respect to the application to such Section 4.1(e) Employee of the Compensation
Regulations, the Company shall use its best efforts to (x) obtain from such
Section 4.1(e) Employee a waiver in substantially the form attached hereto as
Annex D and (y) deliver such waiver to the Investor as promptly as possible, in
each case within sixty days of such Section 4.1(e) Employee becoming subject to
the requirements of this Section. “Section 4.1(e) Employee” means (A) each
Senior Executive Officer and (B) any other employee of the Company or any of its
Affiliates determined at any time to be subject to Section 111 of  EESA as
implemented by the Compensation Regulations.

UST Sequence No.
511                                                                  --
 
18

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(iii) Clawback.  In the event that any Section 4.1(e) Employee receives a
payment in contravention of the provisions of this Section 4.1(e), the Company
shall promptly provide such individual with written notice that the amount of
such payment must be repaid to the Company in full within fifteen business days
following receipt of such notice or such earlier time as may be required by the
Compensation Regulations and shall promptly inform the Investor (x) upon
discovering that a payment in contravention of this Section 4.1(e) has been made
and (y) following the repayment to the Company of such amount and shall take
such other actions as may be necessary to comply with the Compensation
Regulations.
 
(iv) Limitation on Deductions.  During the Relevant Period, the Company agrees
that it shall not claim a deduction for remuneration for federal income tax
purposes in excess of $500,000 for each Senior Executive Officer that would not
be deductible if Section 162(m)(5) of the Code applied to the Company.
 
(v) Amendment to Prior Agreement.  The parties agree that, effective as of the
date hereof, Section 4.10 of the CPP Securities Purchase Agreement shall be
amended in its entirety by replacing such Section 4.10 with the provisions set
forth in this Section 4.1(e) and any terms included in this Section 4.1(e) that
are not otherwise defined in the CPP Securities Purchase Agreement shall have
the meanings ascribed to such terms in this Agreement.
 
(f) Bank or Savings and Loan Holding Company Status.
 
 If the Company is a Bank Holding Company or a Savings and Loan Holding Company
on the Signing Date, then the Company shall maintain its status as a Bank
Holding Company or Savings and Loan Holding Company, as the case may be, for as
long as the Investor owns any CDCI Preferred Shares.  The Company shall redeem
all CDCI Preferred Shares held by the Investor prior to terminating its status
as a Bank Holding Company or Savings and Loan Holding Company, as applicable.
 
(g) Predominantly Financial.  For as long as the Investor owns any CDCI
Preferred Shares, the Company, to the extent it is not itself an insured
depository institution, agrees to remain predominantly engaged in financial
activities.  A company is predominantly engaged in financial activities if the
annual gross revenues derived by the company and all subsidiaries of the company
(excluding revenues derived from subsidiary depository institutions), on a
consolidated basis, from engaging in activities that are financial in nature or
are incidental to a financial activity under subsection (k) of Section 4 of the
Bank Holding Company Act of 1956 (12 U.S.C. 1843(k)) represent at least 85
percent of the consolidated annual gross revenues of the company.
 
(h) Capital Covenant.  From the Signing Date until the date on which all of the
CDCI Preferred Shares have been redeemed in whole, the Company and the Company
Subsidiaries shall maintain such capital as may be necessary to meet the minimum
capital requirements of the Appropriate Federal Banking Agency, as in effect
from time to time.

UST Sequence No.
511                                                                  --
 
19

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(i) HAMP Modifications.  The Company shall take all necessary action to ensure
that (i) from and after the date the Company or any Company Subsidiary that
services residential mortgage loans has 100 or more residential mortgage loans
not owned or guaranteed by Fannie Mae or Freddie Mac which have been past due
for 60 or more days, the Company or such Company Subsidiary shall, to the extent
such programs are open for participation, (A) participate in the United States
Department of the Treasury’s Making Home Affordable (“MHA”) program, including
MHA’s Second Lien Modification Program and, (B) immediately execute a Commitment
to Purchase Financial Instrument and Servicer Participation Agreement (in such
form as may be set forth on the MHA website at www.hmpadmin.com from time to
time) with Fannie Mae (acting as the United States Department of the Treasury’s
fiscal agent) and (ii) if the Company or any Company Subsidiary owns mortgage
loans that are serviced by a non-affiliated mortgage servicer, the Company or
such Company Subsidiary shall consent to any MHA modification request made by
such mortgage servicer.
 
(j) Reporting Requirements.  Prior to the date on which all of the CDCI
Preferred Shares have been redeemed in whole, the Company covenants and agrees
that, at all times on or after the Closing Date, (i) to the extent it is subject
to the reporting requirements of Section 13 or 15(d) of the Exchange Act, it
shall comply with the terms and conditions set forth in Annex E or (ii) as soon
as practicable after the date that the Company becomes subject to the reporting
requirements of Section 13 or 15(d) of the Exchange Act, it shall comply with
the terms and conditions set forth in Annex E.
 
(k) Compliance with Employ American Workers Act.  The Company shall agree to
comply, and take all necessary action to ensure that any Company Subsidiary
complies in all respects with the provisions of EESA and any federal law
respecting EESA, including the Employ American Workers Act (Section 1611 of
Division A, Title XVI of the American Recovery and Reinvestment Act of 2009),
Public Law No. 111-5, effective as of February 17, 2009, as implemented by any
rules, regulation or guidance thereunder, as such may be amended or supplemented
from time to time, and any applicable guidance of the United States Department
of the Treasury with respect thereto.
 
(l) Control by Foreign Bank or Company.  Prior to the date on which all of the
CDCI Preferred Shares have been redeemed in whole, the Company shall not be
controlled (within the meaning of the Bank Holding Company Act of 1956 (12
U.S.C. 1841(a)(2)) and 12 C.F.R. 225(a)(i) in the case of Bank Holding Companies
and banks and the Home Owners’ Loan Act of 1933 (12 U.S.C. 1467a (a)(2)) and 12
C.F.R. 583.7 in the case of Savings and Loan Holding Companies and savings
associations) by a foreign bank or company.
 
Section 4.2 Negative Covenants.
 
  The Company hereby covenants and agrees with the Investor that:

UST Sequence No.
511                                                                  --
 
20

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(a) Certain Transactions.
 
(i) The Company shall not merge or consolidate with, or sell, transfer or lease
all or substantially all of its property or assets to, any other party unless
the successor, transferee or lessee party (or its ultimate parent entity), as
the case may be (if not the Company), expressly assumes the due and punctual
performance and observance of each and every covenant, agreement and condition
of this Agreement to be performed and observed by the Company.
 
(ii) Without the prior written consent of the Investor, until such time as the
Investor shall cease to own any debt or equity securities of the Company
acquired pursuant to this Agreement or the CPP Securities Purchase Agreement
(including, for the avoidance of doubt, the CPP Preferred Shares or the CDCI
Preferred Shares), the Company shall not permit any of its “significant
subsidiaries” (as such term is defined in Rule 12b-2 promulgated under the
Exchange Act) to (i) engage in any merger, consolidation, statutory share
exchange or similar transaction following the consummation of which such
significant subsidiary is not wholly-owned by the Company, (ii) dissolve or sell
all or substantially all of its assets or property other than in connection with
an internal reorganization or consolidation involving wholly-owned subsidiaries
of the Company or (iii) issue or sell any shares of its capital stock or any
securities convertible or exercisable for any such shares, other than issuances
or sales in connection with an internal reorganization or consolidation
involving wholly-owned subsidiaries of the Company.
 
(b) Restriction on Dividends and Repurchases.
 
(i) The Company covenants and agrees that it shall not violate any of the
restrictions on dividends, distributions, redemptions, repurchases, acquisitions
and related actions set forth in the New Certificate of Designations, which are
incorporated by reference herein as if set forth in full.
 
(ii) During the period beginning on the eighth anniversary of the Closing and
ending on the date on which the Investor no longer owns any of the CDCI
Preferred Shares, neither the Company nor any Company Subsidiary shall, without
the consent of the Investor, (A) declare or pay any dividend or make any
distribution on capital stock or other equity securities of any kind of the
Company or any Company Subsidiary; or (B) redeem, purchase or acquire any shares
of Common Stock or other capital stock or other equity securities of any kind of
the Company or any Company Subsidiary, or any trust preferred securities issued
by the Company or any Affiliate of the Company, other than (1) redemptions,
purchases or other acquisitions of the CDCI Preferred Shares, (2) regular
dividends on shares of preferred stock in accordance with the terms thereof and
which are permitted under the terms of the CDCI Preferred Shares, or
(3) dividends or distributions by any wholly-owned Company Subsidiary.

UST Sequence No.
511                                                                  --
 
21

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(c) Related Party Transactions.  Until such time as the Investor ceases to own
any debt or equity securities of the Company, including the CDCI Preferred
Shares, the Company and the Company Subsidiaries shall not enter into
transactions with Affiliates or related persons (within the meaning of Item 404
under the SEC’s Regulation S-K) unless (A) such transactions are on terms no
less favorable to the Company and the Company Subsidiaries than could be
obtained from an unaffiliated third party, and (B) have been approved by the
audit committee of the Board of Directors or comparable body of independent
directors of the Company, or if there are no independent directors, the Board of
Directors, provided that the Board of Directors shall maintain written
documentation which supports its determination that the transaction meets the
requirements of clause (A) of this Section 4.2(c).
 
(d) Restriction on Repurchase of CDCI Preferred Shares Not Held by
Investor.  Prior to the date on which the Investor no longer owns any of the
CDCI Preferred Shares the Company shall not repurchase, redeem, call or
otherwise reacquire any CDCI Preferred Shares from any holder thereof, whether
by means of open market purchase, negotiated transaction, or otherwise, unless
it offers to repurchase, redeem, call or otherwise reacquire a ratable portion
of the CDCI Preferred Shares, as the case may be, then held by the Investor on
the same terms and conditions.
 
ARTICLE V
 
ADDITIONAL AGREEMENTS
 
Section 5.1 Purchase for Investment.
 
  The Investor acknowledges that the CDCI Preferred Shares have not been
registered under the Securities Act or under any state securities laws. The
Investor (a) is acquiring the CDCI Preferred Shares pursuant to an exemption
from registration under the Securities Act solely for investment with no present
intention to distribute them to any person in violation of the Securities Act or
any applicable U.S. state securities laws, (b) will not sell or otherwise
dispose of any of the CDCI 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 (c) has such knowledge and experience
in financial and business matters and in investments of this type that it is
capable of evaluating the merits and risks of the Exchange and of making an
informed investment decision.
 
Section 5.2 Legends.
 
  (a) The Investor agrees that all certificates or other instruments
representing the CDCI Preferred Shares will bear a legend substantially to the
following effect:
 
“THE SECURITIES REPRESENTED BY THIS INSTRUMENT ARE NOT SAVINGS ACCOUNTS,
DEPOSITS OR OTHER OBLIGATIONS OF A BANK AND ARE NOT INSURED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENTAL AGENCY.

UST Sequence No.
511                                                                  --
 
22

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THE SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR THE SECURITIES
LAWS OF ANY STATE AND MAY NOT BE TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF
EXCEPT WHILE A REGISTRATION STATEMENT RELATING THERETO IS IN EFFECT UNDER SUCH
ACT AND APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER SUCH ACT OR SUCH LAWS. EACH PURCHASER OF THE SECURITIES
REPRESENTED BY THIS INSTRUMENT IS NOTIFIED THAT THE SELLER MAY BE RELYING ON THE
EXEMPTION FROM SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A
THEREUNDER.  ANY TRANSFEREE OF THE SECURITIES REPRESENTED BY THIS INSTRUMENT BY
ITS ACCEPTANCE HEREOF (1) REPRESENTS THAT IT IS A “QUALIFIED INSTITUTIONAL
BUYER” (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT), (2) AGREES THAT IT
WILL NOT OFFER, SELL OR OTHERWISE TRANSFER THE SECURITIES REPRESENTED BY THIS
INSTRUMENT EXCEPT (A) PURSUANT TO A REGISTRATION STATEMENT WHICH IS THEN
EFFECTIVE UNDER THE SECURITIES ACT, (B) FOR SO LONG AS THE SECURITIES
REPRESENTED BY THIS INSTRUMENT ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO
A PERSON IT REASONABLY BELIEVES IS A “QUALIFIED INSTITUTIONAL BUYER” AS DEFINED
IN RULE 144A UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR
THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE
TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (C) TO THE ISSUER OR
(D) PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS
OF THE SECURITIES ACT AND (3) AGREES THAT IT WILL GIVE TO EACH PERSON TO WHOM
THE SECURITIES REPRESENTED BY THIS INSTRUMENT ARE TRANSFERRED A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.

UST Sequence No.
511                                                                  --
 
23

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THIS INSTRUMENT IS ISSUED SUBJECT TO THE RESTRICTIONS ON TRANSFER AND OTHER
PROVISIONS OF AN EXCHANGE 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 CDCI Preferred Shares (i) become registered under the
Securities Act or (ii) are eligible to be transferred without restriction in
accordance with Rule 144 or another exemption from registration under the
Securities Act (other than Rule 144A), the Company shall issue new certificates
or other instruments representing such CDCI Preferred Shares, which shall not
contain the applicable legends in Section 5.2(a) above; provided that the
Investor surrenders to the Company the previously issued certificates or other
instruments.
 
Section 5.3 Transfer of CDCI Preferred Shares.
 
  Subject to compliance with applicable securities laws, the Investor shall be
permitted to transfer, sell, assign or otherwise dispose of (“Transfer”) all or
a portion of the CDCI Preferred Shares at any time, and the Company shall take
all steps as may be reasonably requested by the Investor to facilitate the
Transfer of the CDCI Preferred Shares, including without limitation, as set
forth in Section 5.4, provided that the Investor shall not Transfer any CDCI
Preferred Shares if such transfer would require the Company to be subject to the
periodic reporting requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934 (the “Exchange Act”) and the Company was not already
subject to such requirements.  In furtherance of the foregoing, the Company
shall provide reasonable cooperation to facilitate any Transfers of the CDCI
Preferred Shares, including, as is reasonable under the circumstances, by
furnishing such information concerning the Company and its business as a
proposed transferee may reasonably request and making management of the Company
reasonably available to respond to questions of a proposed transferee in
accordance with customary practice, subject in all cases to the proposed
transferee agreeing to a customary confidentiality agreement.
 
Section 5.4 Rule 144; Rule 144A; 4(1½) Transactions.
 
  (a) At all times after the Signing Date, the Company covenants that (1) it
will, upon the request of the Investor or any subsequent holders of the CDCI
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 CDCI Preferred Shares, make “current public information” available, as
provided in Section (c)(1) of Rule 144 (if the Company is a “Reporting Issuer”
within the meaning of Rule 144) or in Section (c)(2) of Rule 144 (if the Company
is a “Non-Reporting Issuer” within the meaning of Rule 144), in either case for
such time period as necessary to permit sales pursuant to Rule 144, (y), to the
extent any Holder is relying on the so-called “Section 4(1½)” exemption to sell
any of its CDCI 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 CDCI

UST Sequence No.
511                                                                  --
 
24

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Preferred Shares pursuant to such exemption, or (z) to the extent any Holder is
relying on Rule 144A under the Securities Act to sell any of its CDCI 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 CDCI
Preferred Shares without registration under the Securities Act within the
limitations of the exemptions provided by (i) the provisions of the Securities
Act or any interpretations thereof or related thereto by the SEC, including
transactions based on the so-called “Section 4(1½)” and other similar
transactions, (ii) Rule 144 or 144A under the Securities Act, as such rules may
be amended from time to time, or (iii) any similar rule or regulation hereafter
adopted by the SEC; provided that the Company shall not be required to take any
action described in this Section 5.4(a) that would cause the Company to become
subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act
if the Company was not subject to such requirements prior to taking such
action.  Upon the request of any Holder, the Company will deliver to such Holder
a written statement as to whether it has complied with such requirements and, if
not, the specifics thereof.
 
(b) The Company agrees to indemnify Investor, Investor’s officers, directors,
employees, agents, representatives and Affiliates, and each person, if any, that
controls Investor within the meaning of the Securities Act (each, an
“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 Company
pursuant to this Section 5.4 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.
 
(c) If the indemnification provided for in Section 5.4(b) is unavailable to an
Indemnitee with respect to any losses, claims, damages, actions, liabilities,
costs or expenses referred to therein or is insufficient to hold the Indemnitee
harmless as contemplated therein, then the Company, in lieu of indemnifying such
Indemnitee, shall contribute to the amount paid or payable by such Indemnitee as
a result of such losses, claims, damages, actions, liabilities, costs or
expenses in such proportion as is appropriate to reflect the relative fault of
the Indemnitee, on the one hand, and the Company, on the other hand, in
connection with the statements or omissions which resulted in such losses,
claims, damages, actions, liabilities, costs or expenses as well as any other
relevant equitable considerations.  The relative fault of the Company, on the
one hand, and of the Indemnitee, on the other hand, shall be determined by
reference to, among other factors, whether the untrue statement of a material
fact or omission to state a material fact relates to information supplied by the
Company or by the Indemnitee and the parties’ relative intent, knowledge, access
to information and opportunity to correct or prevent such statement or
omission;  the Company and Investor agree that it would not be just and
equitable if contribution pursuant to this Section 5.4(c) were determined by pro
rata allocation or by any other method of allocation that does not take account
of the equitable considerations

UST Sequence No.
511                                                                  --
 
25

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referred to in Section 5.4(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 Company if the Company was not guilty
of such fraudulent misrepresentation.
 
Section 5.5 Depositary Shares.
 
  Upon request by the Investor at any time following the Closing Date, the
Company shall promptly enter into a depositary arrangement, pursuant to
customary agreements reasonably satisfactory to the Investor and with a
depositary reasonably acceptable to the Investor, pursuant to which the CDCI
Preferred Shares may be deposited and depositary shares, each representing a
fraction of a CDCI 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 CDCI Preferred Shares, as applicable, pursuant thereto, the depositary
shares issued pursuant thereto shall be deemed “CDCI Preferred Shares” and, as
applicable, “Registrable Securities” for purposes of this Agreement.
 
Section 5.6 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 contemplated under this Agreement, including
fees and expenses of its own financial or other consultants, investment bankers,
accountants and counsel.
 
(b) The Company shall, at the Company’s sole cost and expense, (i) furnish to
the Investor all instruments, documents and other agreements required to be
furnished by the Company pursuant to the terms of this Agreement, including,
without limitation, any documents required to be delivered pursuant to
Section 5.4 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 CDCI
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 5.7 Repurchase of Investor Securities.  From and after the date of this
Agreement, the agreements set forth in Section 4.9 of the CPP Securities
Purchase Agreement shall be applicable following the redemption in whole of the
CDCI Preferred Shares held by the Investor or the Transfer by the Investor of
all of the CDCI Preferred Shares held by the Investor to one or more third
parties not affiliated with the Investor.

UST Sequence No.
511                                                                  --
 
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ARTICLE VI
 
MISCELLANEOUS
 
Section 6.1 Termination.
 
  This Agreement shall terminate upon the earliest to occur of:
 
(a) termination at any time prior to the Closing:
 
(i) by either the Investor or the Company if the Closing shall not have occurred
by the 30th calendar day following the Signing Date; provided, however, that in
the event the Closing has not occurred by such 30th calendar day, the parties
will consult in good faith to determine whether to extend the term of this
Agreement, it being understood that the parties shall be required to consult
only until the fifth calendar day after such 30th calendar day and not be under
any obligation to extend the term of this Agreement thereafter; provided,
further, that the right to terminate this Agreement under this Section 6.1(a)(i)
shall not be available to any party whose breach of any representation or
warranty or failure to perform any obligation under this Agreement shall have
caused or resulted in the failure of the Closing to occur on or prior to such
date; or
 
(ii) by either the Investor or the Company in the event that any Governmental
Entity shall have issued an order, decree or ruling or taken any other action
restraining, enjoining or otherwise prohibiting the transactions contemplated by
this Agreement, and such order, decree, ruling or other action shall have become
final and nonappealable; or
 
(iii) by the mutual written consent of the Investor and the Company; or
 
(b) the date on which all of the CDCI Preferred Shares have been redeemed in
whole; or
 
(c) the date on which the Investor has transferred all of the CDCI Preferred
Shares to third parties which are not Affiliates of the Investor; or
 
(d) if the Closing shall not have occurred by September 30, 2010, on such date.
 
In the event of termination of this Agreement as provided in this Section 6.1,
this Agreement shall forthwith become void and there shall be no liability on
the part of either party hereto except that nothing herein shall relieve either
party from liability for any breach of this Agreement.
 
Section 6.2 Survival.
 
  (a) This Agreement and all representations, warranties, covenants and
agreements made herein shall survive the Closing without limitation.

UST Sequence No.
511                                                                  --
 
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(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 CDCI Preferred Shares,
survive the termination of this Agreement pursuant to Section 6.1(c) hereof
without limitation until the date on which all of the CDCI Preferred Shares have
been redeemed in whole.
 
Section 6.3 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
of the Company and the Investor; provided that for so long as the CDCI Preferred
Shares are outstanding, the Investor may at any time and from time to time
unilaterally amend Section 4.1(d) to the extent the Investor deems necessary, in
its sole discretion, to comply with, or conform to, any changes after the
Signing Date in any federal statutes, any rules and regulations promulgated
thereunder and any other publications or interpretative releases of the Fund
governing CDFIs, including, without limitation, any changes in the criteria for
certification as a CDFI by the Fund.  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 6.4 Waiver of Conditions.
 
  The conditions to each party’s obligation to consummate the Exchange are for
the sole benefit of such party and may be waived by such party in whole or in
part to the extent permitted by applicable law.  No waiver will be effective
unless it is in a writing signed by a duly authorized officer of the waiving
party that makes express reference to the provision or provisions subject to
such waiver.
 
Section 6.5 Governing Law; Submission to Jurisdiction, etc.
 
  This Agreement and any claim, controversy or dispute arising under or related
to this Agreement, the relationship of the parties, and/or the interpretation
and enforcement of the rights and duties of the parties shall be enforced,
governed, and construed in all respects (whether in contract or in tort) in
accordance with the federal law of the United States if and to the extent such
law is applicable, and otherwise in accordance with the laws of the State of New
York applicable to contracts made and to be performed entirely within such
State.  Each of the parties hereto agrees (a) to submit to the exclusive
jurisdiction and venue of the United States District Court for the District of
Columbia and the United States Court of Federal Claims for any and all civil
actions, suits or proceedings arising out of or relating to this Agreement or
the Exchange contemplated hereby and (b) that notice may be served upon (i) the
Company at the address and in the manner set forth for notices to the Company in
Section 6.6 and (ii) the Investor at the address and in the manner set forth for
notices to the Company in Section 6.6, but otherwise in accordance with federal
law.  TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH OF THE PARTIES HERETO
HEREBY UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY CIVIL LEGAL ACTION OR
PROCEEDING RELATING TO THIS AGREEMENT OR THE EXCHANGE CONTEMPLATED HEREBY.

UST Sequence No.
511                                                                  --
 
28

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Section 6.6 Notices.
 
  Any notice, request, instruction or other document to be given hereunder by
any party to the other will be in writing and will be deemed to have been duly
given (a) on the date of delivery if delivered personally, or by facsimile, upon
confirmation of receipt, or (b) on the second business day following the date of
dispatch if delivered by a recognized next day courier service.  All notices
hereunder shall be delivered as set forth below or pursuant to such other
instructions as may be designated in  writing by the party to receive such
notice.
 
If to the Company as set forth in Schedule A.
 
If to the Investor:

 
United States Department of the Treasury
1500 Pennsylvania Avenue, NW
Washington, D.C. 20220
Attention:  Chief Counsel, Office of Financial Stability
Facsimile: (202) 927-9225
E-mail: CDCINotice@do.treas.gov

with a copy to:

E-mail:  OFSChiefCounselNotices@do.treas.gov
 
Section 6.7 Definitions, Interpretation.
 
(a) Definitions.
 
(i) When a reference is made in this Agreement to a subsidiary of a person, the
term “subsidiary” means any corporation, partnership, joint venture, limited
liability company or other entity (x) of which such person or a subsidiary of
such person is a general partner or (y) of which a majority of the voting
securities or other voting interests, or a majority of the securities or other
interests of which having by their terms ordinary voting power to elect a
majority of the board of directors or persons performing similar functions with
respect to such entity, is directly or indirectly owned by such person and/or
one or more subsidiaries thereof.
 
(ii) The term “Affiliate” means, with respect to any person, any person directly
or indirectly controlling, controlled by or under common control with, such
other person.  For purposes of this definition, “control” (including, with
correlative meanings, the terms “controlled by” and “under common control with”)
when used with respect to any person, means the possession, directly or
indirectly, of the power to cause the direction of management and/or policies of
such person, whether through the ownership of voting securities by contract or
otherwise.

UST Sequence No.
511                                                                  --
 
29

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(iii) The term “Appropriate Federal Banking Agency” means the “appropriate
Federal banking agency” with respect to the Company or such Company
Subsidiaries, as applicable, as defined in Section 3(q) of the Federal Deposit
Insurance Act (12 U.S.C. Section 1813(q)).
 
(iv) The term “Bank Holding Company” means a company registered as such with the
Board of Governors of the Federal Reserve System (the “Federal Reserve”)
pursuant to 12 U.S.C. §1842 and the regulations of the Federal Reserve
promulgated thereunder.
 
(v) The term “Business Combination” means a merger, consolidation, statutory
share exchange or similar transaction that requires the approval of the
Company’s stockholders.
 
(vi) The term “Certified Entity” means the Company or, if the Company itself has
not been certified by the Fund as a CDFI, each Affiliate of the Company that has
been certified by the CDFI and is specified on Schedule A of the Letter
Agreement.
 
(vii) The term “Company Financial Statements” means the consolidated financial
statements of the Company and its consolidated subsidiaries for each of the last
three completed fiscal years of the Company (which shall be audited to the
extent audited financial statements are available) and each completed quarterly
period since the last completed fiscal year, required to be delivered to
Investor pursuant to the CPP Securities Purchase Agreement.
 
(viii) The term “Company Material Adverse Effect” means a material adverse
effect on (i) the business, results of operation or financial condition of the
Company and its consolidated subsidiaries and each Certified Entity taken as a
whole; provided, however, that Company Material Adverse Effect shall not be
deemed to include the effects of (A) changes after the Signing Date in general
business, economic or market conditions (including changes generally in
prevailing interest rates, credit availability and liquidity, currency exchange
rates and price levels or trading volumes in the United States or foreign
securities or credit markets), or any outbreak or escalation of hostilities,
declared or undeclared acts of war or terrorism, in each case generally
affecting the industries in which the Company and its subsidiaries operate, (B)
changes or proposed changes after the Signing Date in 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 (in the case of each of
these clauses (A), (B) and (C), other than changes or occurrences to the extent
that such changes or occurrences have or would reasonably be expected to have a
materially disproportionate adverse effect on the Company and its consolidated
subsidiaries taken as a whole relative to comparable U.S. banking or financial
services organizations); or (ii) the ability of the Company to consummate the
Exchange and the other transactions contemplated by this Agreement and perform
its obligations hereunder or thereunder on a timely basis.

UST Sequence No.
511                                                                  --
 
30

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(ix) The term “Designated Matters” means (i) the election and removal of
directors, (ii) the approval of any Business Combination, (iii) the approval of
a sale of all or substantially all of the assets or property of the Company,
(iv) the approval of a dissolution of the Company, (v) the approval of any
issuance of any securities of the Company on which holders of Common Stock are
entitled to vote, (vi) the approval of any amendment to the Charter or bylaws of
the Company on which holders of Common Stock are entitled to vote, (vii) any
matters which require stockholder approval under any applicable national stock
exchange rules and (viii) the approval of any other matters reasonably
incidental to the matters set forth in subclauses (i) through (vii) as
determined by the Investor.
 
(x) The term “Disclosure Schedule” means collectively, those certain schedules
delivered to the Investor on or prior to (i) the CPP Signing Date, with respect
to the “Disclosure Schedule” delivered in connection with the CPP Securities
Purchase Agreement and (ii) the Signing Date with respect to the schedules
required to be delivered under this Agreement, setting forth, among other
things, items the disclosure of which is necessary or appropriate either in
response to an express disclosure requirement contained in a provision hereof or
as an exception to one or more representations or warranties contained in
Section 2.2 of the CPP Securities Purchase Agreement or Article III hereof.
 
(xi) The term “EAWA” means the Employ American Workers Act (Section 1611 of
Division A, Title XVI of the American Recovery and Reinvestment Act of 2009),
Public Law No. 111-5, effective as of February 17, 2009, as may be amended and
in effect from time to time.
 
(xii) The term “Junior Stock” means the Common Stock and any other class or
series of stock of the Company the terms of which expressly provide that it
ranks junior to the CDCI Preferred Shares as to dividend rights and/or as to
rights on liquidation, dissolution or winding up of the Company.
 
(xiii) The term “Parity Stock” means any class or series of stock of the Company
the terms of which do not expressly provide that such class or series will rank
senior or junior to the CDCI Preferred Shares as to dividend rights and/or as to
rights on liquidation, dissolution or winding up of the Company (in each case
without regard to whether dividends accrue cumulatively or non-cumulatively).
 
(xiv) The term “Previously Disclosed” means information set forth on the
Disclosure Schedule or the Disclosure Update, as applicable; provided, however,
that disclosure in any section of such Disclosure Schedule or Disclosure Update,
as applicable, shall apply only to the indicated section of this Agreement
except to the extent that it is reasonably apparent from the face of such
disclosure that such disclosure is relevant to another section of this
Agreement; provided, further, that the existence of Previously Disclosed
information, pursuant to a Disclosure Update, shall neither obligate the
Investor to consummate the Exchange nor limit or affect any rights of or
remedies available to the Investor.

UST Sequence No.
511                                                                  --
 
31

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(xv) The term “Savings and Loan Holding Company” means a company registered as
such with the Office of Thrift Supervision pursuant to 12 U.S.C. §1467(a) and
the regulations of the Office of Thrift Supervision promulgated thereunder.
 
(xvi) The term “Senior Executive Officers” means the Company's “senior executive
officers” as defined in Section 111 of the EESA and the Compensation
Regulations.
 
(xvii) The term “Share Dilution Amount” means the increase in the number of
diluted shares outstanding (determined in accordance with GAAP, and as measured
from the date of the Company’s most recent consolidated financial statements
prior to the Closing Date) resulting from the grant, vesting or exercise of
equity-based compensation to employees and equitably adjusted for any stock
split, stock dividend, reverse stock split, reclassification or similar
transaction.
 
(xviii) The term “Tax” or “Taxes” means any federal, state, local or foreign
income, gross receipts, property, sales, use, license, excise, franchise,
employment, payroll, withholding, alternative or add on minimum, ad valorem,
transfer or excise tax, or any other tax, custom, duty, governmental fee or
other like assessment or charge of any kind whatsoever, together with any
interest, penalty or addition imposed by any Governmental Entity.
 
(xix) To the extent any securities issued pursuant to this Agreement or the
transactions contemplated hereby are registered in the name of a designee of the
Investor pursuant to Section 1.2 or Section 6.9(c) or transferred to an
Affiliate of the Investor, all references herein to the Investor holding or
owning any debt or equity securities of the Company, CDCI Preferred Shares shall
be deemed to refer to the Investor, together with such designees and/or
Affiliates, holding or owning any debt or equity securities, CDCI Preferred
Shares (and any like variations thereof), as applicable.
 
Section 6.8 Interpretation.
 
  When a reference is made in this Agreement to “Recitals”, “Articles”,
“Sections”, “Annexes” or “Schedules” such reference shall be to a Recital,
Article or Section of, or Annex or Schedule to, this Agreement, unless otherwise
indicated.  The terms defined in the singular have a comparable meaning when
used in the plural, and vice versa.  References to “herein”, “hereof”,
“hereunder” and the like refer to this Agreement as a whole and not to any
particular section or provision, unless the context requires otherwise.  The
table of contents and headings contained in this Agreement are for reference
purposes only and are not part of this Agreement.  Whenever the words “include”,
“includes” or “including” are used in this Agreement, they shall be deemed
followed by the words “without limitation.” No rule of construction against the
draftsperson shall be applied in connection with the interpretation or
enforcement of this Agreement, as this Agreement is entered into between
sophisticated parties advised by counsel.  All references to “$” or “dollars”
mean the lawful currency of the United States of America.  Except as expressly
stated in this Agreement, all references to any statute, rule or regulation are
to the statute, rule or regulation as amended, modified, supplemented or
replaced from time to time (and, in the case of statutes, include any rules and
regulations promulgated under the statute) and to any section of any statute,
rule or

UST Sequence No.
511                                                                  --
 
32

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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 6.9 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 Company’s stockholders where such party is not the surviving entity, or a
sale of substantially all of its assets, to the entity which is the survivor of
such Business Combination or the purchaser in such sale, (b) an assignment of
certain rights as provided in Sections 4.1(c) or 4.1(j) 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 Company’s obligations and liabilities
hereunder shall continue to be outstanding and (iii) all references to the
Investor herein shall be deemed to be references to such Affiliate.
 
Section 6.10 Severability.
 
  If any provision of this Agreement, or the application thereof to any person
or circumstance, is determined by a court of competent jurisdiction to be
invalid, void or unenforceable, the remaining provisions hereof, or the
application of such provision to persons or circumstances other than those as to
which it has been held invalid or unenforceable, will remain in full force and
effect and shall in no way be affected, impaired or invalidated thereby, so long
as the economic or legal substance of the transactions contemplated hereby is
not affected in any manner materially adverse to any party.  Upon such
determination, the parties shall negotiate in good faith in an effort to agree
upon a suitable and equitable substitute provision to effect the original intent
of the parties.
 
Section 6.11 No Third-Party Beneficiaries.
 
  Other than as expressly provided herein, nothing contained in this Agreement,
expressed or implied, is intended to confer upon any person or entity other than
the Company and the Investor (and any Indemnitee) any benefit, right or
remedies.
 
Section 6.12 Entire Agreement, etc.
 
  (a) This Agreement (including the Annexes and Schedules hereto) constitutes
the entire agreement, and supersedes all other prior agreements, understandings,
representations and warranties, both written and oral, between the parties, with
respect to the subject matter hereof.

UST Sequence No.
511                                                                  --
 
33

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(b) For the avoidance of doubt, for so long as the Investor holds any
outstanding CPP Preferred Stock or warrants issued by the Company to the
Investor pursuant to the CPP Securities Purchase Agreement or any securities
issuable upon the exercise thereof or exchanged therefor (collectively, the “CPP
Securities”), the CPP Securities Purchase Agreement and the CPP Securities shall
remain in full force and effect, other than as specifically modified herein.
 
Section 6.13 Specific Performance.
 
  The parties agree that irreparable damage would occur in the event that any of
the provisions of this Agreement were not performed in accordance with their
specific terms.  It is accordingly agreed that the parties shall be entitled
(without the necessity of posting a bond) to specific performance of the terms
hereof, this being in addition to any other remedies to which they are entitled
at law or equity.
 
[Remainder of Page Intentionally Left Blank]

UST Sequence No.
511                                                                  --
 
34 

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ANNEX A
 
FORM OF OFFICER’S CERTIFICATE
 
OFFICER’S CERTIFICATE
 
OF
 
[COMPANY]
 
 In connection with that certain letter agreement, dated [____________], 2010
(the “Agreement”) by and between [COMPANY] (the “Company”) and the United States
Department of the Treasury which incorporates that certain Exchange Agreement –
Standard Terms referred to therein (the “Standard Terms”), the undersigned does
hereby certify as follows:
 
1.  I am a duly elected/appointed [____________] of the Company.
 
2.  The representations and warranties of the Company set forth in Article III
of the Standard Terms are true and correct in all respects as though as of the
date hereof (other than representations and warranties that by their terms speak
as of another date, which representations and warranties shall be true and
correct in all respects as of such other date) and the Company has performed in
all material respects all obligations required to be performed by it under the
Agreement.
 
3.  The New 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 [___________].
 
4.  The Company has effected such changes to its Benefit Plans with respect to
its Senior Executive Officers and any other employee of the Company or its
Affiliates subject to Section 111 of EESA, as implemented by any Compensation
Regulations (and to the extent necessary for such changes to be legally
enforceable, each of its Senior Executive Officers and other employees has duly
consented in writing to such changes), as may be necessary, during the Relevant
Period, in order to comply with Section 111 of EESA or the Compensation
Regulations.
 
5.  The Charter and bylaws of the Company delivered to the Investor pursuant to
the CPP Securities Purchase Agreement are true, complete and correct as of the
date hereof.
 
The foregoing certifications are made and delivered as of [_________] pursuant
to Section 1.2 of the Standard Terms.
 
Capitalized terms used and not otherwise defined herein shall have the meanings
assigned to them in the Standard Terms.
 
[SIGNATURE PAGE FOLLOWS]

UST Sequence No.
511                                                             
  Annex A-1
 

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IN WITNESS WHEREOF, this Officer’s Certificate has been duly executed and
delivered as of the [__] day of [__________], 20[__].
 
 
[COMPANY]

 
 
 
 
 By:__________________________________

 
       Name:

 
       Title:

UST Sequence No.
511                                                             
Annex A-2
 

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EXHIBIT A
 

UST Sequence No.
511                                                             
Annex A-3
 

--------------------------------------------------------------------------------

 

 
ANNEX B
 
FORM OF NEW CERTIFICATE OF DESIGNATIONS
 

 
[SEE ATTACHED]

UST Sequence No.
511                                                             
Annex B-1
 

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ANNEX C
 
FORM OF OPINION
 
(a)           The Company has been duly formed and is validly existing as a
[TYPE OF ORGANIZATION] and is in good standing under the laws of the
jurisdiction of its organization.  The Company has all necessary power and
authority to own, operate and lease its properties and to carry on its business
as it is being conducted.
 
(b)           The Company has been duly qualified as a foreign entity for the
transaction of business and is in good standing under the laws of
[_____________], [_____________] and [_____________].
 
(c)           The CDCI Preferred Shares have been duly and validly authorized,
and, when issued and delivered pursuant to the Agreement, the CDCI 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 CDCI 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
Company.
 
(d)           The Company has the corporate power and authority to execute and
deliver the Agreement and to carry out its obligations thereunder (which
includes the issuance of the CDCI Preferred Shares).
 
(e)           The execution, delivery and performance by the Company of the
Agreement and the consummation of the transactions contemplated thereby have
been duly authorized by all necessary corporate action on the part of the
Company and its stockholders, and no further approval or authorization is
required on the part of the Company, including, without limitation, by any rule
or requirement of any national stock exchange.
 
(f)           The Agreement is a valid and binding obligation of the Company
enforceable against the Company in accordance with its terms, except as the same
may be limited by applicable bankruptcy, insolvency, reorganization, moratorium
or similar laws affecting the enforcement of creditors’ rights generally and
general equitable principles, regardless of whether such enforceability is
considered in a proceeding at law or in equity.
 
(g)           The execution and delivery by the Company of this Agreement and
the performance by the Company of its obligations thereunder (i) do not require
any approval by any Governmental Entity to be obtained on the part of the
Company, except those that have been obtained, (ii) do not violate or conflict
with any provision of the Charter, (iii) do not violate, conflict with, or
result in a breach of any provision of, or constitute a default (or an event
which, with notice or lapse of time or both, would constitute a default) under,
or result in the termination of, or accelerate the performance required by, or
result in a right of termination or acceleration of, or result in the creation
of, any lien, security interest, charge or encumbrance upon any of the
properties or assets of the Company or any Company Subsidiary under any of the
terms, conditions or provisions of its organizational documents or under any
agreement, contract,

UST Sequence No.
511                                                             
Annex C-1
 

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indenture, lease, mortgage, power of attorney, evidence of indebtedness, letter
of credit, license, instrument, obligation, purchase or sales order, or other
commitment, whether oral or written, to which it is a party or by which it or
any of its properties is bound or (iv) do not conflict with, breach or result in
a violation of, or default under any judgment, decree or order known to us that
is applicable to the Company and, pursuant to any applicable laws, is issued by
any Governmental Entity having jurisdiction over the Company.
 
(h)           Other than the filing of the New 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 Company in connection with the consummation by the
Company of the Exchange.
 
(i)           The Company is not nor, after giving effect to the issuance of the
CDCI 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, as amended.
 
(j)           Each Certified Entity (A) is a regulated community development
financial institution (a “CDFI”) currently certified by the Community
Development Financial Institution Fund (the “Fund”) of the United States
Department of the Treasury pursuant to 12 C.F.R. 1805.201(a) and (B) satisfies
all of the eligibility requirements of the Fund’s Community Development
Financial Institutions Program for a CDFI.
 

UST Sequence No.
511                                                             
Annex C-2
 

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ANNEX D
 
FORM OF WAIVER
 
In consideration for the benefits I will receive as a result of the
participation of [____________________] (together with its subsidiaries and
affiliates, the “Company”) in the United States Department of the Treasury’s
(the “Treasury”) Capital Purchase Program, Community Development Capital
Initiative and/or any other economic stabilization program implemented by the
Treasury under the Emergency Economic Stabilization Act of 2008 (as amended,
supplemented, or otherwise modified, the “EESA”) (any such program, including
the Capital Purchase Program and the Community Development Capital Initiative, a
“Program”), I hereby voluntarily waive any claim against the United States (and
each of its departments and agencies) or the Company or any of its directors,
officers, employees and agents for any changes to my compensation or benefits
that are required to comply with the executive compensation and corporate
governance requirements of Section 111 of the EESA, as implemented by any
guidance or regulations issued and/or to be issued thereunder, including without
limitation the provisions for the Capital Purchase Program, as implemented by
any guidance or regulation thereunder, including the rules set forth in 31
C.F.R. Part 30, or any other guidance or regulations under the EESA and the
applicable requirements of the Exchange Agreement by and among the Company and
the Treasury dated as of _______ __, 2010, as amended (such requirements, the
“Limitations”).
 
I acknowledge that the Limitations may require modification or termination of
the employment, compensation, bonus, incentive, severance, retention and other
benefit plans, arrangements, policies and agreements (including so-called
“golden parachute” agreements), whether or not in writing, that I may have with
the Company or in which I may participate as they relate to the period the
United States holds any equity or debt securities of the Company acquired
through a Program or for any other period applicable under such Program or
Limitations, as the case may be, and I hereby consent to all such modifications.
 
This waiver includes all claims I may have under the laws of the United States
or any other jurisdiction (whether or not in existence as of the date hereof)
related to the requirements imposed by the Limitations, including without
limitation, a claim for any compensation or other payments or benefits I would
otherwise receive, any challenge to the process by which the Limitations are or
were adopted and any tort or constitutional claim about the effect of these
Limitations on my employment relationship and I hereby agree that I will not at
any time initiate, or cause or permit to be initiated on my behalf, any such
claim against the United States, the Company or its directors, officers,
employees or agents in or before any local, state, federal or other agency,
court or body.
 
I agree that, in the event and to the extent that the Compensation Committee of
the Board of Directors of the Company or similar governing body (the
“Committee”) reasonably determines that any compensatory payment and benefit
provided to me, including any bonus or incentive compensation based on
materially inaccurate financial statements or performance criteria, would

UST Sequence No.
511                                                             
Annex D-1
 

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cause the Company to fail to be in compliance with the Limitations (such payment
or benefit, an “Excess Payment”), upon notification from the Company, I shall
repay such Excess Payment to the Company within 15 business days. In addition, I
agree that the Company shall have the right to postpone any such payment or
benefit for a reasonable period of time to enable the Committee to determine
whether such payment or benefit would constitute an Excess Payment.
 
I understand that any determination by the Committee as to whether or not,
including the manner in which, a payment or benefit needs to be modified,
terminated or repaid in order for the Company to be in compliance with
Section 111 of the EESA and/or the Limitations shall be a final and conclusive
determination of the Committee which shall be binding upon me. I further
understand that the Company is relying on this letter from me in connection with
its participation in a Program.

UST Sequence No.
511                                                             
Annex D-2
 

--------------------------------------------------------------------------------

 

 
IN WITNESS WHEREOF, I execute this waiver on my own behalf, thereby
communicating my acceptance and acknowledgement to the provisions herein.
 
 
Respectfully,

 

                                                                                                               
_____________________________________
        Name:
        Title:
        Date:

UST Sequence No.
511                                                             
Annex D-3
 

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ANNEX E
 
REGISTRATION RIGHTS
 
 1.1           Definitions.  Terms not defined in this Annex shall have the
meaning ascribed to such terms in the Agreement. As used in this Annex E, the
following terms shall have the following respective meanings:
 
(a)   “Holder” means the Investor and any other holder of Registrable Securities
to whom the registration rights conferred by this Agreement have been
transferred in compliance with Section 1.9 hereof.
 
(b)   “Holders’ Counsel” means one counsel for the selling Holders chosen by
Holders holding a majority interest in the Registrable Securities being
registered.
 
(c)   “Pending Underwritten Offering” means, with respect to any Holder
forfeiting its rights pursuant to Section 1.11 of this Annex E, any underwritten
offering of Registrable Securities in which such Holder has advised the Company
of its intent to register its Registrable Securities either pursuant to
Section 1.2(b) or 1.2(d) of this Annex E prior to the date of such Holder’s
forfeiture.
 
(d)   “Register,” “registered,” and “registration” shall refer to a registration
effected by preparing and (A) filing a registration statement or amendment
thereto in compliance with the Securities Act and applicable rules and
regulations thereunder, and the declaration or ordering of effectiveness of such
registration statement or amendment thereto or (B) filing a prospectus and/or
prospectus supplement in respect of an appropriate effective registration
statement on Form S-3.
 
(e)   “Registrable Securities” means (A) all CDCI 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, (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.
 
(f)   “Registration Expenses” mean all expenses incurred by the Company in
effecting any registration pursuant to this Agreement (whether or not any
registration or prospectus becomes effective or final) or otherwise complying
with its obligations under this Annex E, including all registration, filing and
listing fees, printing expenses, fees and disbursements of counsel for the
Company, blue sky fees and expenses, expenses incurred in connection with any
“road show”, the reasonable fees and disbursements of Holders’ Counsel,

UST Sequence No.
511                                                                  
  E-1
 

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and expenses of the Company’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.
 
(g)   “Rule 144”, “Rule 144A”, “Rule 159A”, “Rule 405” and “Rule 415” mean, in
each case, such rule promulgated under the Securities Act (or any successor
provision), as the same shall be amended from time to time.
 
(h)   “Selling Expenses” mean all discounts, selling commissions and 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).
 
(i)   “Special Registration” means the registration of (A) equity securities
and/or options or other rights in respect thereof solely registered on Form S-4
or Form S-8 (or successor form) or (B) shares of equity securities and/or
options or other rights in respect thereof to be offered to directors, members
of management, employees, consultants, customers, lenders or vendors of the
Company or Company Subsidiaries or in connection with dividend reinvestment
plans.
 
 1.2           Registration.
 
(a)   The Company covenants and agrees that as promptly as practicable after the
date that the Company becomes subject to the reporting requirements of
Section 13 or 15(d) of the Exchange Act (and in any event no later than 30 days
thereafter), the Company shall prepare and file with the SEC 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
to cover the Registrable Securities), and, to the extent the Shelf Registration
Statement has not theretofore been declared effective or is not automatically
effective upon such filing, the Company shall use reasonable best efforts to
cause such Shelf Registration Statement to be declared or become effective and
to keep such Shelf Registration Statement continuously effective and in
compliance with the Securities Act and usable for resale of such Registrable
Securities for a period from the date of its initial effectiveness until such
time as there are no Registrable Securities remaining (including by refiling
such Shelf Registration Statement (or a new Shelf Registration Statement) if the
initial Shelf Registration Statement expires).  Notwithstanding the foregoing,
if the Company is not eligible to file a registration statement on Form S-3,
then the Company shall not be obligated to file a Shelf Registration Statement
unless and until requested to do so in writing by the Investor.
 
(b)   Any registration pursuant to Section 1.2(a) of this Annex E shall be
effected by means of a Shelf Registration Statement on an appropriate form under
Rule 415 under the Securities Act (a “Shelf Registration Statement”).  If the
Investor or any other Holder intends to distribute any Registrable Securities by
means of an underwritten offering it shall promptly so advise the Company and
the Company shall take all reasonable steps to facilitate

UST Sequence No.
511                                                                  
E-2 
 

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such distribution, including the actions required pursuant to Section 1.2(d) of
this Annex E; provided that the Company shall not be required to facilitate an
underwritten offering of Registrable Securities unless (i) the expected gross
proceeds from such offering exceed $200,000 or (ii) such underwritten offering
includes all of the outstanding Registrable Securities held by such Holder.  The
lead underwriters in any such distribution shall be selected by the Holders of a
majority of the Registrable Securities to be distributed.
 
(c)   The Company shall not be required to effect a registration (including a
resale of Registrable Securities from an effective Shelf Registration Statement)
or an underwritten offering pursuant to Section 1.2 of this Annex E:  (A) with
respect to securities that are not Registrable Securities; or (B) if the Company
has notified the Investor and all other Holders that in the good faith judgment
of the Board of Directors, it would be materially detrimental to the Company or
its securityholders for such registration or underwritten offering to be
effected at such time, in which event the Company shall have the right to defer
such registration for a period of not more than 45 days after receipt of the
request of the Investor or any other Holder; provided that such right to delay a
registration or underwritten offering shall be exercised by the Company (1) only
if the Company has generally exercised (or is concurrently exercising) similar
black-out rights against holders of similar securities that have registration
rights and (2) not more than three times in any 12-month period and not more
than 90 days in the aggregate in any 12-month period.
 
(d)   If during any period when an effective Shelf Registration Statement is not
available, the Company proposes to register any of its equity securities, other
than a registration pursuant to Section 1.2(a) of this Annex E or a Special
Registration, and the registration form to be filed may be used for the
registration or qualification for distribution of Registrable Securities, the
Company will give prompt written notice to the Investor and all other Holders of
its intention to effect such a registration (but in no event less than ten days
prior to the anticipated filing date) and will include in such registration all
Registrable Securities with respect to which the Company has received written
requests for inclusion therein within ten business days after the date of the
Company’s notice (a “Piggyback Registration”).  Any such person that has made
such a written request may withdraw its Registrable Securities from such
Piggyback Registration by giving written notice to the Company and the managing
underwriter, if any, on or before the fifth business day prior to the planned
effective date of such Piggyback Registration. The Company may terminate or
withdraw any registration under this 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.
 
(e)   If the registration referred to in Section 1.2(d) of this Annex E is
proposed to be underwritten, the Company will so advise Investor and all other
Holders as a part of the written notice given pursuant to Section 1.2(d) of this
Annex E.  In such event, the right of Investor and all other Holders to
registration pursuant to Section 1.2 of this Annex E will be conditioned upon
such persons’ participation in such underwriting and the inclusion of such
person’s Registrable Securities in the underwriting if such securities are of
the same class of securities as the securities to be offered in the underwritten
offering, and each such person will (together with the Company and the other
persons distributing their securities through such underwriting) enter into an
underwriting agreement in customary form with the underwriter or

UST Sequence No.
511                                                                  
E-3 
 

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underwriters selected for such underwriting by the Company; provided that the
Investor (as opposed to other Holders) shall not be required to indemnify any
person in connection with any registration. If any participating person
disapproves of the terms of the underwriting, such person may elect to withdraw
therefrom by written notice to the Company, the managing underwriters and the
Investor (if the Investor is participating in the underwriting).
 
(f)   If either (x) the Company grants “piggyback” registration rights to one or
more third parties to include their securities in an underwritten offering under
the Shelf Registration Statement pursuant to Section 1.2(b) of this Annex E or
(y) a Piggyback Registration under Section 1.2(d) of this Annex E relates to an
underwritten offering on behalf of the Company, and in either case the managing
underwriters advise the Company that in their reasonable opinion the number of
securities requested to be included in such offering exceeds the number which
can be sold without adversely affecting the marketability of such offering
(including an adverse effect on the per share offering price), the Company will
include in such offering only such number of securities that in the reasonable
opinion of such managing underwriters can be sold without adversely affecting
the marketability of the offering (including an adverse effect on the per share
offering price), which securities will be so included in the following order of
priority: (A) first, in the case of a Piggyback Registration under
Section 1.2(d) of this Annex E, the securities the Company proposes to sell,
(B) then the Registrable Securities of the Investor and all other Holders who
have requested inclusion of Registrable Securities pursuant to Section 1.2(b) or
Section 1.2(d) of this Annex E, as applicable, pro rata on the basis of the
aggregate number of such securities or shares owned by each such person and
(C) lastly, any other securities of the Company that have been requested to be
so included, subject to the terms of this Agreement; provided, however, that if
the Company has, prior to the Signing Date, entered into an agreement with
respect to its securities that is inconsistent with the order of priority
contemplated hereby then it shall apply the order of priority in such
conflicting agreement to the extent that it would otherwise result in a breach
under such agreement.
 
 1.3           Expenses of Registration.  All Registration Expenses incurred in
connection with any registration, qualification or compliance hereunder shall be
borne by the Company.  All Selling Expenses incurred in connection with any
registrations hereunder shall be borne by the holders of the securities so
registered pro rata on the basis of the aggregate offering or sale price of the
securities so registered.
 
 1.4           Obligations of the Company.  Whenever required to effect the
registration of any Registrable Securities or facilitate the distribution of
Registrable Securities pursuant to an effective Shelf Registration Statement,
the Company shall, as expeditiously as reasonably practicable:
 
(a)   Prepare and file with the SEC 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.

UST Sequence No.
511                                                                  
E-4 
 

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(b)   Prepare and file with the SEC such amendments and supplements to the
applicable registration statement and the prospectus or prospectus supplement
used in connection with such registration statement as may be necessary to
comply with the provisions of the Securities Act with respect to the disposition
of all securities covered by such registration statement.
 
(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, 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 Company shall not be required in connection therewith
or as a condition thereto to qualify to do business or to file a general consent
to service of process in any such states or jurisdictions.
 
(e)   Notify each Holder of Registrable Securities at any time when a prospectus
relating thereto is required to be delivered under the Securities Act of the
happening of any event as a result of which the applicable prospectus, as then
in effect, includes an untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading in light of the circumstances then existing.
 
(f)   Give written notice to the Holders:
 
(i)   when any registration statement filed pursuant to Section 4.1(j) of the
Agreement or any amendment thereto has been filed with the SEC (except for any
amendment effected by the filing of a document with the SEC pursuant to the
Exchange Act) and when such registration statement or any post-effective
amendment thereto has become effective;
 
(ii)   of any request by the SEC for amendments or supplements to any
registration statement or the prospectus included therein or for additional
information;
 
(iii)   of the issuance by the SEC of any stop order suspending the
effectiveness of any registration statement or the initiation of any proceedings
for that purpose;
 
(iv)   of the receipt by the Company or its legal counsel of any notification
with respect to the suspension of the qualification of the applicable
Registrable Securities for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose;

UST Sequence No.
511                                                                  
E-5 
 

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(v)   of the happening of any event that requires the Company to make changes in
any effective registration statement or the prospectus related to the
registration statement in order to make the statements therein not misleading
(which notice shall be accompanied by an instruction to suspend the use of the
prospectus until the requisite changes have been made); and
 
(vi)   if at any time the representations and warranties of the Company
contained in any underwriting agreement contemplated by Section 1.4(j) of this
Annex E cease to be true and correct.
 
(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 Company notifies the Holders in accordance with
Section 1.4(f)(v) to suspend the use of the prospectus until the requisite
changes to the prospectus have been made, then the Holders and any underwriters
shall suspend use of such prospectus and use their reasonable best efforts to
return to the Company all copies of such prospectus (at the Company’s expense)
other than permanent file copies then in such Holders’ or underwriters’
possession.  The total number of days that any such suspension may be in effect
in any 12-month period shall not exceed 90 days.
 
(i)   Use reasonable best efforts to procure the cooperation of the Company’s
transfer agent in settling any offering or sale of Registrable Securities,
including with respect to the transfer of physical 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 Company available to participate in “road shows”, similar
sales events and other marketing activities), (A) make such representations and
warranties to the Holders that are selling stockholders and the managing
underwriter(s), if any, with respect to the business of the Company and its
subsidiaries, and the Shelf Registration Statement, prospectus and documents, if
any, incorporated or deemed to be incorporated by reference therein, in each
case, in customary form, substance and scope, and, if true, confirm the same if
and when requested, (B) use its reasonable best efforts to furnish the
underwriters with opinions of counsel to the Company, addressed to the managing
underwriter(s), if any, covering the matters customarily

UST Sequence No.
511                                                                  
E-6 
 

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covered in such opinions requested in underwritten offerings, (C) use its
reasonable best efforts to obtain “cold comfort” letters from the independent
certified public accountants of the Company (and, if necessary, any other
independent certified public accountants of any business acquired by the Company
for which financial statements and financial data are included in the Shelf
Registration Statement) who have certified the financial statements included in
such Shelf Registration Statement, addressed to each of the managing
underwriter(s), if any, such letters to be in customary form and covering
matters of the type customarily covered in “cold comfort” letters, (D) if an
underwriting agreement is entered into, the same shall contain indemnification
provisions and procedures customary in underwritten offerings (provided that the
Investor shall not be obligated to provide any indemnity), and (E) deliver such
documents and certificates as may be reasonably requested by the Holders of a
majority of the Registrable Securities being sold in connection therewith, their
counsel and the managing underwriter(s), if any, to evidence the continued
validity of the representations and warranties made pursuant to clause (A) above
and to evidence compliance with any customary conditions contained in the
underwriting agreement or other agreement entered into by the Company.
 
(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 Company, and cause
the officers, directors and employees of the Company to supply all information
in each case reasonably requested (and of the type customarily provided in
connection with due diligence conducted in connection with a registered public
offering of securities) by any such representative, managing underwriter(s),
attorney or accountant in connection with such Shelf Registration Statement.
 
(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 Company are then listed or, if no similar securities issued by the
Company are then listed on any national securities exchange, use its reasonable
best efforts to cause all such Registrable Securities to be listed on such
securities exchange as the Investor may designate.
 
(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 Company 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
Company that a registration statement, prospectus or prospectus supplement
contains or may contain an untrue statement of a material fact or omits or may
omit to state a material fact required to be

UST Sequence No.
511                                                                  
  E-7
 

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stated therein or necessary to make the statements therein not misleading or
that circumstances exist that make inadvisable use of such registration
statement, prospectus or prospectus supplement, the Investor and each Holder of
Registrable Securities shall forthwith discontinue disposition of Registrable
Securities until the Investor and/or Holder has received copies of a
supplemented or amended prospectus or prospectus supplement, or until the
Investor and/or such Holder is advised in writing by the Company that the use of
the prospectus and, if applicable, prospectus supplement may be resumed, and, if
so directed by the Company, the Investor and/or such Holder shall deliver to the
Company (at the Company’s expense) all copies, other than permanent file copies
then in the Investor and/or such Holder’s possession, of the prospectus and, if
applicable, prospectus supplement covering such Registrable Securities current
at the time of receipt of such notice.  The total number of days that any such
suspension may be in effect in any 12-month period shall not exceed 90 days.
 
 1.6           Termination of Registration Rights.  A Holder’s registration
rights as to any securities held by such Holder (and its Affiliates, partners,
members and former members) shall not be available unless such securities are
Registrable Securities.
 
 1.7           Furnishing Information.
 
(a)   Neither the Investor nor any Holder shall use any free writing prospectus
(as defined in Rule 405) in connection with the sale of Registrable Securities
without the prior written consent of the Company.
 
(b)   It shall be a condition precedent to the obligations of the Company to
take any action pursuant to Section 1.4 of this Annex E that Investor and/or the
selling Holders and the underwriters, if any, shall furnish to the Company such
information regarding themselves, the Registrable Securities held by them and
the intended method of disposition of such securities as shall be required to
effect the registered offering of their Registrable Securities.
 
 1.8           Indemnification.
 
(a)   The Company agrees to indemnify each Holder and, if a Holder is a person
other than an individual, such Holder’s officers, directors, employees, agents,
representatives and Affiliates, and each person, if any, that controls a Holder
within the meaning of the Securities Act (each, an “Indemnitee”), against any
and all losses, claims, damages, actions, liabilities, costs and expenses
(including reasonable fees, expenses and disbursements of attorneys and other
professionals incurred in connection with investigating, defending, settling,
compromising or paying any such losses, claims, damages, actions, liabilities,
costs and expenses), joint or several, arising out of or based upon any untrue
statement or alleged untrue statement of material fact contained in any
registration statement, including any preliminary prospectus or final prospectus
contained therein or any amendments or supplements thereto or any documents
incorporated therein by reference or contained in any free writing prospectus
(as such term is defined in Rule 405) prepared by the Company or authorized by
it in writing for use by such Holder (or any amendment or supplement thereto);
or any omission to state therein a material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading; provided, that the Company

UST Sequence No.
511                                                                  
E-8 
 

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shall not be liable to such Indemnitee in any such case to the extent that any
such loss, claim, damage, liability (or action or proceeding in respect thereof)
or expense arises out of or is based upon (A) an untrue statement or omission
made in such registration statement, including any such preliminary prospectus
or final prospectus contained therein or any such amendments or supplements
thereto or contained in any free writing prospectus (as such term is defined in
Rule 405) prepared by the Company or authorized by it in writing for use by such
Holder (or any amendment or supplement thereto), in reliance upon and in
conformity with information regarding such Indemnitee or its plan of
distribution or ownership interests which was furnished in writing to the
Company by such Indemnitee for use in connection with such registration
statement, including any such preliminary prospectus or final prospectus
contained therein or any such amendments or supplements thereto, or (B)  offers
or sales effected by or on behalf of such Indemnitee “by means of” (as defined
in Rule 159A) a “free writing prospectus” (as defined in Rule 405) that was not
authorized in writing by the Company.
 
(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 Company, in
lieu of indemnifying such Indemnitee, shall contribute to the amount paid or
payable by such Indemnitee as a result of such losses, claims, damages, actions,
liabilities, costs or expenses in such proportion as is appropriate to reflect
the relative fault of the Indemnitee, on the one hand, and the Company, on the
other hand, in connection with the statements or omissions which resulted in
such losses, claims, damages, actions, liabilities, costs or expenses as well as
any other relevant equitable considerations.  The relative fault of the Company,
on the one hand, and of the Indemnitee, on the other hand, shall be determined
by reference to, among other factors, whether the untrue statement of a material
fact or omission to state a material fact relates to information supplied by the
Company or by the Indemnitee and the parties’ relative intent, knowledge, access
to information and opportunity to correct or prevent such statement or
omission;  the Company and each Holder agree that it would not be just and
equitable if contribution pursuant to this Section 1.8(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 Company if the Company was not guilty of such fraudulent
misrepresentation.
 
 1.9           Assignment of Registration Rights.  The rights of the Investor to
registration of Registrable Securities pursuant to Section 1.2 of this Annex E
may be assigned by the Investor to any transferee or assignee of Registrable
Securities; provided, however, the transferor shall, within ten days after such
transfer, furnish to the Company written notice of the name and address of such
transferee or assignee and the number and type of Registrable Securities that
are being assigned.

UST Sequence No.
511                                                                  
E-9 
 

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 1.10           Clear Market.  With respect to any underwritten offering of
Registrable Securities by the Investor or other Holders pursuant to this
Annex E, the Company agrees not to 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
Company or any securities convertible into or exchangeable or exercisable for
preferred stock of the Company, during the period not to exceed ten days prior
and 60 days following the effective date of such offering or such longer period
up to 90 days as may be requested by the managing underwriter for such
underwritten offering.  The Company also agrees to cause such of its directors
and senior executive officers to execute and deliver customary lock-up
agreements in such form and for such time period up to 90 days as may be
requested by the managing underwriter.
 
 1.11           Forfeiture of Rights.        At any time, any holder of
Registrable Securities (including any Holder) may elect to forfeit its rights
set forth in this Annex E from that date forward; provided, that a Holder
forfeiting such rights shall nonetheless be entitled to participate under
Section 1.2(d) – (f) of this Annex E in any Pending Underwritten Offering to the
same extent that such Holder would have been entitled to if the holder had not
withdrawn; and provided, further, that no such forfeiture shall terminate a
Holder’s rights or obligations under Section 1.7 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 Company fails to perform any of its
obligations under this Annex E and that the Investor and the Holders from time
to time may be irreparably harmed by any such failure, and accordingly agree
that the Investor and such Holders, in addition to any other remedy to which
they may be entitled at law or in equity, to the fullest extent permitted and
enforceable under applicable law shall be entitled to compel specific
performance of the obligations of the Company under this Annex E in accordance
with the terms and conditions of this Annex E.
 
 1.13           No Inconsistent Agreements.  The Company shall not, on or after
the Signing Date, enter into any agreement with respect to its securities that
may impair the rights granted to the Investor and the Holders under this Annex E
or that otherwise conflicts with the provisions hereof in any manner that may
impair the rights granted to the Investor and the Holders under this
Annex E.  In the event the Company has, prior to the Signing Date, entered into
any agreement with respect to its securities that is inconsistent with the
rights granted to the Investor and the Holders under this Annex E (including
agreements that are inconsistent with the order of priority contemplated by
Section 1.2(f) of Annex E) or that may otherwise conflict with the provisions
hereof, the Company shall use its reasonable best efforts to amend such
agreements to ensure they are consistent with the provisions of this Annex E.
 
 1.14           Certain Offerings by the Investor.  An “underwritten” offering
or other disposition shall include any distribution of such securities on behalf
of the Investor by one or more broker-dealers, an “underwriting agreement” shall
include any purchase agreement entered into by such broker-dealers, and any
“registration statement” or “prospectus” shall include any offering document
approved by the Company and used in connection with such distribution.

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511                                                                  
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ANNEX F
 
OFFICER’S CERTIFICATE
 
OF
 
[COMPANY]
 
 In connection with that certain letter agreement, dated [____________], 2010
(the “Agreement”) by and between [COMPANY] (the “Company”) and the United States
Department of the Treasury (“Investor”) which incorporates that certain Exchange
Agreement –Standard Terms referred to therein (the “Standard Terms”), the
undersigned does hereby certify as follows:
 
1.  I am a duly elected/appointed [____________] of the Company.
 
2.  Each Certified Entity (as defined in the Standard Terms) (A) is certified by
the Community Development Financial Institution Fund (the “Fund”) of the United
States Department of the Treasury as a regulated community development financial
institution (a “CDFI”); (B) together with its Affiliates collectively meets the
eligibility requirements of 12 C.F.R. 1805.200(b); (C) has a primary mission of
promoting community development, as may be determined by Investor from time to
time, based on criteria set forth in 12 C.F.R. 1805.201(b)(1); (D) provides
Financial Products, Development Services, and/or other similar financing as a
predominant business activity in arm’s-length transactions; (E) serves a Target
Market by serving one or more Investment Areas and/or Targeted Populations in
the manner set forth in 12 C.F.R. 1805.201(b)(3); (F) provides Development
Services in conjunction with its Financial Products, directly, through an
Affiliate or through a contract with a third-party provider; (G) maintains
accountability to residents of the applicable Investment Area(s) or Targeted
Population(s) through representation on its governing Board of Directors or
otherwise; and (H) remains a non-governmental entity which is not an agency or
instrumentality of the United States of America, or any State or political
subdivision thereof, as described in 12 C.F.R. 1805.201(b)(6) and within the
meaning of any supplemental regulations or interpretations of 12 C.F.R.
1805.201(b)(6) or such supplemental regulations published by the Fund.  As used
herein, the terms “Affiliates”; “Financial Products”; “Development Services”;
“Target Market”; “Investment Areas”; and “Targeted Populations” have the
meanings ascribed to such terms in 12 C.F.R. 1805.104.
 
3.  The information set forth in the CDFI Certification Application delivered to
the Investor pursuant to Section 1.2(c)(xii) of the Standard Terms (the “CDFI
Application”), as modified by any updates to the CDFI Application provided on
[Insert Date(s)] by the Company to the Investor on or prior to the date hereof,
with respect to the covenants set forth in Section 4.1(d)(i)(B) and Section
4.1(d)(i)(D) of the Standard Terms remains true, correct and complete as of the
date hereof.

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4.  The contracts and material agreements entered into by each Certified Entity
with respect to Development Services previously disclosed to the Investor remain
in effect   and copies of any new contracts and material agreements entered into
by the Certified Entity with respect to Development Services are attached hereto
as Exhibit A.
 
5.  Attached hereto as Exhibit B is (A) a list of the names and addresses of the
individuals which comprise the board of directors of each Certified Entity as of
the date hereof, (B) to the extent any member of the board of directors listed
on Exhibit B was not a member of the board of directors as of the last
certification provided to the Investor pursuant to Section 4.1(d)(ii) of the
Standard Terms, a narrative describing such individual’s relationship to the
applicable Investment Area(s) and Targeted Population(s) and (C) to the extent
any Certified Entity maintains accountability to residents of the applicable
Investment Area(s) or Target Population(s) through means other than
representation on its governing board of directors and such means have changed
since the date of the last certification provided to the Investor pursuant to
Section 4.1(d)(ii) of the Standard Terms on [Insert Date], a narrative
describing such change.
 
6.  Each Certified Entity is not an agency of the United States of America, or
any State or political subdivision thereof, as described in 12 C.F.R.
1805.201(b)(6) and within the meaning of any supplemental regulations or
interpretations of 12 C.F.R. 1805.201(b)(6) or such supplemental regulations
published by the Fund.
 
7.  [Insert if the Company was a Bank Holding Company or a Savings and Loan
Holding Company on the Signing Date: The Company is and has been at all times
since the date of the last certification provided to the Investor pursuant to
Section 4.1(d)(ii) of the Standard Terms, a [Insert if the Company is a Bank
Holding Company: Bank Holding Company] [Insert if the Company is a Savings and
Loan Holding Company: Savings and Loan Holding Company].] The Company is not,
and has not been at any time since the date of the last certification provided
to the Investor pursuant to Section 4.1(d)(ii) of the Standard Terms on [Insert
Date], controlled (within the meaning of [Insert for banks and Bank Holding
Companies: the Bank Holding Company Act of 1956 (12 U.S.C. 1841(a)(2)) and 12
C.F.R. 225(a)(i)] [Insert for savings associations and Savings and Loan Holding
Companies: the Home Owners’ Loan Act of 1933 (12 U.S.C. 1467a (a)(2)) and 12
C.F.R. 583.7]) by a foreign bank or company.
 
The foregoing certifications are made and delivered as of [_________] pursuant
to Section 4.1(d)(ii) of the Standard Terms.
 
Capitalized terms used and not otherwise defined herein shall have the meanings
assigned to them in the Standard Terms.
 
[SIGNATURE PAGE FOLLOWS]

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511                                                                   
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IN WITNESS WHEREOF, this Officer’s Certificate has been duly executed and
delivered as of the [__] day of [__________], 20[__].
 
 
[COMPANY]

 
 
 
 
 By:_________________________________

 
       Name:

 
       Title:

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511                                                                   
F-3 
 

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EXHIBIT A
 
NEW CONTRACTS AND MATERIAL AGREEMENTS

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Exh. A-1
 

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EXHIBIT B
 
BOARD OF DIRECTORS
 
CERTIFIED ENTITY: [CERTIFIED ENTITY]1
NAME
ADDRESS
NARRATIVE2
                             

 
 

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1 Include chart for each Certified Entity.
 
2 To the extent (x) any of the individuals was not a member of the board of
directors of such Certified Entity as of the last certification to the Investor,
include a narrative describing such individual’s relationship to the applicable
Investment Area(s) and Targeted Population(s) or, (y) if such Certified Entity
maintains accountability to residents of the applicable Investment Area(s) or
Target Population(s) through means other than representation on its governing
board of directors and such means have changed since the date of the last
certification to the Investor, a narrative describing such change.

UST Sequence No.
511                                                              
Exh. B-1
 

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SCHEDULE A
 
ADDITIONAL TERMS AND CONDITIONS
 
Company Information:
 
Name of the
Company:                                                                                     The
First Bancshares, Inc.
 
Corporate or other organizational form of
Company:                                   Corporation
 
Jurisdiction of Organization of
Company:                                                      State of
Mississippi
 
Appropriate Federal Banking Agency of
Company:                                    Board of Governors of the Federal
Reserve System
 
Name of Certified
Entities:                                                                                 N/A
 
Corporate or other organizational form of each Certified Entity:
 
Jurisdiction of Organization of each Certified Entity:
 
Appropriate Federal Banking Agency of each Certified Entity:
 
 
Notice Information:
Dee Dee Lowery

 
The First Bancshares, Inc.

 
P. O. Box 15549

 
Hattiesburg, MS  39404

 
 
With a copy to:
Craig N. Landrum, Esq.

 
Watkins Ludlam Winter & Stennis, P.A.

 
Post Office Box 427

 
Jackson, MS  39205-0427

 
Terms of the Exchange:
 
 
Series of CDCI Preferred Stock Exchanged:
Fixed Rate Cumulative Perpetual Preferred Stock, Series CD

 
 
Per Share Liquidation Preference of

                    CDCI Preferred Stock:
$1,000 per share

 
Number of Shares of CDCI Preferred
Stock
Exchanged:                                                                  
 5,000 shares
 
Dividend Payment Dates on the CDCI Preferred Stock: Payable quarterly in arrears
on February 15, May 15, August 15 and  November 15 of each year.

UST Sequence No. 511
 
 

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Series of CPP Preferred Stock Exchanged:
Fixed Rate Cumulative Perpetual Preferred Stock, Series UST

 
Number of Shares of CPP Preferred
Stock
Exchanged:                                                                    
5,000 shares
 
 
Date of Letter Agreement pursuant to which

                    CPP Preferred Shares were purchased:
February 6, 2009

 
Closing:
 
 
Location of Closing:
Cadwalader, Wickersham & Taft LLP

 
One World Financial Center

 
New York, NY 10281

 
 
Time of Closing:
9:00 a.m. Eastern Daylight Time

 
 
Date of Closing:
September 29, 2010

UST Sequence No. 511
 
 

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SCHEDULE B
 
CAPITALIZATION
 
Capitalization Date: August 31, 2010
 
Common Stock
 
Par
value:                                                                                     
$1.00
 
Total
Authorized:                                                                       
10,000,000 shares
 
Outstanding:                                                                               
3,019,869 shares
 
Subject to warrants, options, convertible
securities,
etc.:                                                                            
54,705 warrants
 
Reserved for benefit plans and other issuances:                   12,353 shares
 
Remaining authorized but unissued:                                      
6,913,073 shares
 
 
Shares issued after Capitalization Date (other

 
than pursuant to warrants, options,

 
convertible securities, etc. as set forth

 
above):                                                                                
None

 
Preferred Stock
 
Par
value:                                                                                   
No par value
 
Total
Authorized:                                                                    
10,000,000 shares
 
Outstanding (by series):                                                        
5,000 shares
 
Reserved for issuance:                                                          
None
 
Remaining authorized but unissued:                                    9,995,000
shares
 
Holders of 5% or more of any class of capital
stock                          Primary Address

United States Department of the Treasury
Attention:  Chief Counsel, Office of Financial Stability

(100% of Preferred Stock)
1500 Pennsylvania Avenue, NW

 
Washington, D.C.  20220

 

UST Sequence No. 511
 
 

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SCHEDULE C
 
MATERIAL ADVERSE EFFECT
 
List any exceptions to the representation and warranty in Section 3.6 of the
Exchange Agreement – Standard Terms.
 

 
If none, please so indicate by checking the box:  x

UST Sequence No. 511
 
 

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UST Sequence No. 511
 
 

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SCHEDULE D
 
LITIGATION
 
List any exceptions to the representation and warranty in Section 3.10 of the
Exchange Agreement – Standard Terms.
 

 
If none, please so indicate by checking the box:  x
 

Welch Litigation

The litigation described below has been disclosed previously in the Company’s
filings with the Securities and Exchange Commission, including the Company’s
September 30, 2008, Form 10-Q filing, which was filed on November 14,
2008.  However, the Company has not yet filed its Annual Report on Form 10-K for
the fiscal year ended December 31, 2008.  Because the definition of “Previously
Disclosed” in Section 2.1(b) of the Securities Purchase Agreement encompasses
only disclosures made in the Annual Report on Form 10-K for the Company’s most
recently completed fiscal year (or subsequent filings), the Company makes the
following disclosure pursuant to Section 2.2(l):

On October 8, 2007, The First Bancshares, Inc. (the “Company”) and its
subsidiary, The First, A National Banking Association (the “Bank”) were formally
named as defendants and served with a First Amended Complaint in litigation
styled Nick D. Welch v. Oak Grove Land Company, Inc., Fred McMurry, David E.
Johnson, J. Douglas Seidenburg, The First, a National Banking Association, The
First Bancshares, Inc., and John Does 1 through 10, Civil Action No.
2006-236-CV4, pending in the Circuit Court of Jones County, Mississippi, Second
Judicial District (the “First Amended Complaint”).  The First Amended Complaint
was filed against the named defendants by Nick D. Welch (“Welch”), a former
member of the Bank’s Advisory Board, and a shareholder of the Company who was
until February 2, 2006, the largest individual holder of Company stock.

The First Amended Complaint served upon the Company and Bank is similar to a
complaint filed by Welch against the other named defendants on April 11,
2006.  The other named defendants, each of whom deny any liability to Welch,
include Oak Grove Land Company, Inc., a shareholder of the Company; Fred
McMurry, Director of the Company and the Bank, and an affiliate of Oak Grove
Land Company, Inc.; David E. Johnson, Director and Chairman of the Company and
the Bank; and J. Douglas Seidenburg, Director of the Company and the Bank. The
First Amended Complaint contains allegations of fraud in connection with Welch’s
private sale of approximately 69,000 shares (representing approximately 5%) of
the Company’s common stock to the

UST Sequence No. 511
 
 

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named defendants (other than the Company or the Bank) in a privately negotiated
transaction.  In summary the First Amended Complaint alleges that one or more of
the named defendants withheld information concerning the Company’s potential
NASDAQ listing and its 2-for-1 stock split, both of which were publicly
announced by the Company on February 22, 2006.  The First Amended Complaint
further alleges that Welch would not have sold his stock, or at least would not
have sold his stock at the $2,005,785.00 ($29.00 per share) price negotiated by
Welch, had he been informed of these potential events.

Welch filed his Second Amended Complaint on January 29, 2010, adding as
defendant Kansas Bankers Surety Company, the insurance carrier providing
Directors, Officers, and Employees Indemnity coverage for Messrs. McMurry,
Johnson, and Seidenburg.  This Complaint requests a declaratory ruling that the
subject policy provided by the Bank to its Board Members provides coverage for
the claims made by Welch in the First and Second Amended Complaints.  The Second
Amended Complaint does not allege any additional allegations against the Company
or the Bank.

The allegations by Welch against the Company and the Bank include counts of 1)
Intentional Misrepresentation and Omission; 2) Negligent Misrepresentation
and/or Omission; 3) Breach of Fiduciary Duty; 4) Breach of Duty of Good Faith
and Fair Dealing; and 5) Civil Conspiracy.  The First Amended Complaint served
by Welch on October 8, 2007, added the Company and the Bank as defendants in
this ongoing litigation.  The First Amended Complaint seeks damages from all the
defendants, including $2,420,775.00 (representing the alleged difference between
the price at which Welch sold his stock and the “high price” of the Company’s
stock following the Company’s 2-for-1 stock split on March 15, 2006), annual
dividends for the year 2006 in the amount of $.30 per share, punitive damages,
and attorneys’ fees and costs.  Each of the Company and the Bank deny any
liability to Welch, and they intend to defend vigorously against this lawsuit.

UST Sequence No. 511
 
 

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SCHEDULE E
 
COMPLIANCE WITH LAWS
 
List any exceptions to the representation and warranty in the second sentence of
Section 3.11 of the Exchange Agreement– Standard Terms.
 

 
If none, please so indicate by checking the box:  x
 

 
List any exceptions to the representation and warranty in the last sentence of
Section 3.11 of the Exchange Agreement – Standard Terms.
 

 
If none, please so indicate by checking the box:  x

UST Sequence No. 511
 
 

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SCHEDULE F
 
REGULATORY AGREEMENTS
 
List any exceptions to the representation and warranty in Section 3.17 of the
Exchange Agreement – Standard Terms.
 

 
If none, please so indicate by checking the box:  x
 

 
Safety and Soundness Plan
 
The Company is a party to a commitment letter in the form of a Safety and
Soundness Plan, the terms of which are confidential.

UST Sequence No. 511