Execution Copy

EXCHANGE AGREEMENT
by and between
CARVER BANCORP, INC.
and
THE UNITED STATES DEPARTMENT OF THE TREASURY
Dated as of June 29, 2011

    

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TABLE OF CONTENTS
 
 
 
 
 
Page

ARTICLE I THE CLOSING; CONDITIONS TO THE CLOSING
 
 
 
 
 
 
Section 1.1
The Closing.
 
 
2

Section 1.2
Interpretation.
 
 
5

 
 
 
 
 
 
ARTICLE II EXCHANGE
 
 
 
 
 
 
Section 2.1
Exchange.
 
 
5

Section 2.2
Exchange Documentation.
 
6

Section 2.3
Status of CDCI Preferred Shares after Closing.
6

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

Section 3.2
Authorization and Enforceability.
 
7

Section 3.3
Exchange Shares.
 
7

Section 3.4
Community Development Financial Institution Status;
8

 
Domestic Ownership.
 
 
Section 3.5
Non-Contravention.
 
8

Section 3.6
Anti-Takeover Provisions.
 
9

Section 3.7
No Company Material Adverse Effect.
9

Section 3.8
Offering of Securities.    
 
10

Section 3.9
Brokers and Finders.
 
10

Section 3.10
CDCI Preferred Shares.
 
10

 
 
 
 
 
 
ARTICLE IV COVENANTS
 
 
 
 
 
 
Section 4.1
Commercially Reasonable Efforts.
 
10

Section 4.2
Expenses and Further Assurances.
 
11

Section 4.3
Exchange Listing.
 
11

Section 4.4
Access, Information and Confidentiality.
12

Section 4.5
CDFI Requirements.    
 
14

Section 4.6
Executive Compensation.    
 
15

Section 4.7
Certain Notifications Until Closing.    
16

Section 4.8
Equity Investments.    
17

Section 4.9
Amendment of Agreements Relating to the Equity
17

 
Investments.
 
 
 
Section 4.10
Predominantly Financial.
17

Section 4.11
Capital Covenant.    
 
18

Section 4.12
Control by Foreign Bank or Company.
18

 
 
 
 
 
 
ARTICLE V ADDITIONAL AGREEMENTS
 
 
 
 
 
 
Section 5.1
Unregistered Exchange Shares.
 
18

Section 5.2
Legend.
 
 
18

Section 5.3
Certain Transactions
 
19

Section 5.4
Transfer of Exchange Shares.
 
19

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Section 5.5
Registration Rights.
 
19

Section 5.6
Voting Matters.
 
 
22

Section 5.7
Restriction on Dividends and Repurchases.
22

Section 5.8
Repurchase of Investor Securities.    
24

Section 5.9
Savings and Loan Holding Company Status.    
24

Section 5.10
Compliance with Employ American Workers Act.
24

Section 5.11
Observer to the Board of Directors.
24

 
 
 
 
 
 
ARTICLE VI MISCELLANEOUS
 
 
 
 
 
 
Section 6.1
Termination.
 
 
25

Section 6.2
Survival of Representations and Warranties.
25

Section 6.3
Amendment.    
 
 
25

Section 6.4
Waiver of Conditions.    
25

Section 6.5
Governing Law; Submission to Jurisdiction, etc.
26

Section 6.6
Notices.
 
 
26

Section 6.7
Definitions
 
 
27

Section 6.8
Assignment.
 
 
30

Section 6.9
Severability.
 
 
30

Section 6.10
No Third-Party Beneficiaries.
 
30

Section 6.11
Entire Agreement, etc. 
 
30

Section 6.12
Counterparts and Facsimile.
 
30

Section 6.13
Specific Performance.
 
31

 
 
 
 
 
 
LIST OF ANNEXES
 
 
 
 
 
 
ANNEX A:
FORM OF OFFICER'S CERTIFICATE
 
ANNEX B:
FORM OF OPINION
 
ANNEX C:
FORM OF OFFICER'S CERTIFICATE (CDFI REQUIREMENTS)
ANNEX D:
FORM OF WAIVER
 
 

 
LIST OF SCHEDULES
 
 
 
 
 
 
 
SCHEDULE 3.1(b):
CAPITALIZATION
 
 
 
SCHEDULE 3.5(c):
NON-CONTRAVENTION
 
 
 
SCHEDULE 3.7:
COMPANY MATERIAL ADVERSE EFFECT
 
 
SCHEDULE 3.10:
CDCI PREFERRED SHARES
 
 
 
 
 
 
 
 
LIST OF EXHIBITS
 
 
 
 
 
 
 
EXHIBIT A:
CERTIFICATE OF DESIGNATIONS FOR SERIES C AND SERIES D
 
 
PREFERRED STOCK
 
 
 
EXHIBIT B:
FORM OF CHARTER AMENDMENT
 

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Defined Terms
 
 
 
Affiliate
Section 6.7(b)
Agreement
Preamble
Benefit Plans
Section 1.1(d)(x)
Business Combination
Section 6.7(c)
Capitalization Date
Section 3.1(b)
CDCI Preferred Shares
Recitals
CDFI
Section 3.4(b)
CDFI Application
Section 1.1(d)(ix)
CDFI Application Update
Section 1.1(d)(ix)
Certificate of Designations
Section 6.7(f)
Certificate of Incorporation
Section 1.1(d)(i)
Charter Amendment
Section 1.1(d)(ii)
Closing
Section 1.1(a)
Closing Date
Section 1.1(a)
Closing Price
Section 6.7(d)
Code
Section 3.5(c)
Common Stock
Recitals
Common Stock Authorization
Section 1.1(d)(i)
Company
Preamble
Company Material Adverse Effect
Section 6.7(e)
Company Subsidiary
Section 3.5(a)
Company Subsidiaries
Section 3.5(a)
Compensation Regulations
Section 1.1(d)(x)
Conversion Price
Section 6.7(f)
CPP Preferred Shares
Recitals
Designated Matters
Section 6.7(g)
EAWA
Section 6.7(h)
EESA
Section 1.1(d)(x)
Equity Investments
Recitals
Equity Investors
Recitals
Exchange
Recitals
Exchange Act
Section 5.3(b)
Exchange Agreement
Recitals
Exchange Shares
Recitals
Fund
Section 1.1(d)(ix)
GAAP
Section 5.7(a)(ii)
Governmental Entities
Section 1.1(c)
Holders
Section 5.5(b)
Indemnitee
Section 5.5(c)
Information
Section 4.4(d)
Investor
Preamble
Junior Stock
Section 6.7(i)
Meeting
Section 4.1(b)
NASDAQ
Section 1.1(d)(viii)
Observer
Section 5.11
Parity Stock
Section 6.7(j)
Preferred Stock
Section 6.7(k)

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Preferred Stock Purchase Price
Recitals
Previously Disclosed
Section 6.7(l)
Private Placement
Recitals
Relevant Period
Section 1.1(d)(x)
SEC
Section 3.5(b)
Section 4.6 Employee
Section 4.6(b)
Securities Act
Recitals
Securities Purchase Agreement
Recitals
Senior Executive Officers
Section 1.1(d)(x)
Series C Conversion
Recitals
Series C Preferred Stock
Recitals
Series D Preferred Stock
Recitals
Share Dilution Amount
Section 5.7(a)(ii)
Status Report
Section 4.8
Stock Purchase Agreements
Recitals
Stockholder Approval
Section 1.1(d)(i)
Stockholder Proposals
Section 1.1(d)(i)
subsidiary
Section 6.7(a)
Targeted Completion Date
Section 4.8
Trading Day
Section 6.7(m)
Transfer
Section 5.4
Voting Authorization
Section 1.1(d)(i)

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EXCHANGE AGREEMENT, dated as of June 29, 2011 (this “Agreement”) by and between
Carver Bancorp, Inc., a Delaware corporation (the “Company”), and the United
States Department of the Treasury (the “Investor”). All capitalized terms used
herein and not otherwise defined shall have the respective meanings ascribed to
them in the Exchange Agreement.
BACKGROUND
WHEREAS, on January 16, 2009, the Company and the Investor entered into that
certain Securities Purchase Agreement - Standard Terms incorporated into a
Letter Agreement, as amended from time to time (the “Securities Purchase
Agreement”), pursuant to which the Company issued to the Investor 18,980 shares
of the Company's preferred stock designated as “Fixed Rate Cumulative Perpetual
Preferred Stock, Series A,” having a liquidation amount of $1,000 per share (the
“CPP Preferred Shares”);
WHEREAS, on August 27, 2010, the Company and the Investor entered into that
certain Exchange Agreement - Standard Terms incorporated into a Letter
Agreement, as amended from time to time (the “Exchange Agreement”), pursuant to
which the Company issued to the Investor in exchange for the CPP Preferred
Shares, and the Investor is, as of the date hereof, the beneficial owner of,
18,980 shares of the Company's preferred stock designated as “Fixed Rate
Cumulative Perpetual Preferred Stock, Series B,” having a liquidation amount of
$1,000 per share (the “CDCI Preferred Shares”);
WHEREAS, on or about June 28, 2011, the Company entered into stock purchase
agreements (the “Stock Purchase Agreements”) with certain qualified
institutional investors and accredited investors (the “Equity Investors”),
pursuant to which those investors agreed, subject to certain conditions, to
purchase from the Company an aggregate of 55,000 shares of Series C mandatorily
convertible non-voting participating preferred stock, the designations for which
are attached hereto as Exhibit A (the “Series C Preferred Stock”), at a price of
$1,000 per share (the “Preferred Stock Purchase Price”), yielding aggregate
gross proceeds to the Company that will equal no less than $55,000,000 (the
“Equity Investments”) in a private placement (the “Private Placement”) exempt
from registration under the Securities Act of 1933, as amended (the “Securities
Act”);
WHEREAS, upon receipt of the Stockholder Approval and filing of the Charter
Amendment, each share of Series C Preferred Stock will be converted (the “Series
C Conversion”) into shares of common stock, par value $0.01 per share, of the
Company (the “Common Stock”), subject to certain ownership limitations, and
Series D convertible non-cumulative, non-voting participating preferred stock,
the designations for which are attached hereto as Exhibit A (the “Series D
Preferred Stock”); and
WHEREAS, the Company and the Investor desire, in connection with the Series C
Conversion, and subject to the conditions set forth herein, to exchange (the
“Exchange”) all of the CDCI Preferred Shares beneficially owned and held by the
Investor, including all accrued and unpaid dividends on the CDCI Preferred
Shares as of the Closing Date, for shares of Common Stock (such shares of Common
Stock, the “Exchange Shares”).
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained in this Agreement, the receipt and sufficiency of which are hereby
acknowledged, and intending to be legally bound, the parties hereby agree as
follows:

1

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ARTICLE I
THE CLOSING; CONDITIONS TO THE CLOSING

Section 1.1 The Closing.

(a)The closing of the Exchange (the “Closing”) will take place at the offices of
Alston & Bird LLP, 950 F Street NW, Washington, DC 20004, or remotely via the
electronic or other exchange of documents and signature pages, as the parties
may agree. The Closing shall take place on the same day as the date on which the
Series C Conversion becomes effective; provided that the conditions set forth in
Section 1.1(c) and (d) shall have been satisfied or waived, 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 1.1, at the Closing (i) the Company will deliver the Exchange 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) (or if shares of
Common Stock are uncertificated, cause the transfer agent for the Common Stock
to register the Exchange Shares in the name of the Investor and deliver
reasonably satisfactory evidence of such registration to the Investor) and
(ii) the Investor will deliver the certificate representing the CDCI Preferred
Shares to the Company.

(c)The respective obligations of each of the Investor and the Company to
consummate the Exchange are subject to the fulfillment (or waiver by the Company
and the Investor, as applicable) prior to the Closing of the conditions that
(i) any approvals or authorizations of all United States and other governmental,
regulatory or judicial authorities (collectively, “Governmental Entities”)
required for the consummation of the 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 (ii) 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.

(d)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:

(i)the Company shall have obtained the necessary approval of the Company's
stockholders (the “Stockholder Approval”) authorizing (i) an amendment to the
Company's certificate of incorporation (the “Certificate of Incorporation”)
increasing the authorized Common Stock to a number at least sufficient to
support the issuance of the Exchange Shares and the issuance of Common Stock
upon conversion of the Series C Preferred Stock and Series D Preferred Stock
issuable only upon the receipt of the Stockholder Approval and mandatory
conversion of the Series C Preferred Stock (the “Common Stock Authorization”),
(ii) an amendment to the Certificate of Incorporation that would permit the
Investor to vote the shares of Common Stock the Investor will hold following the
Closing in excess of 9.9% of the outstanding shares of Common Stock (the “Voting
Authorization”), (iii) the conversion of the Series C Preferred Stock, (iv) the
issuance and conversion of Series D Preferred Stock, and (v) the exchange of the
CDCI Preferred Shares for Exchange Shares (collectively, clauses (i) through (v)
shall be the “Stockholder Proposals”);

2

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(ii)the Company shall have duly adopted and filed with the State of Delaware an
amendment to the Certificate of Incorporation (the “Charter Amendment”), in
substantially the form attached hereto as Exhibit B, reflecting the Common Stock
Authorization and the Voting Authorization, and the Company shall have delivered
to the Investor a copy of the filed Charter Amendment with appropriate evidence
from the Secretary of State that the filing has been accepted;

(iii)the Company shall have issued Series C Preferred Stock to the Equity
Investors in the Private Placement for aggregate gross proceeds to the Company
of not less than $55,000,000, and all conditions, if any, to the effectiveness
of the Series C Conversion shall have been satisfied or waived;

(iv)(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 material respects all
obligations required to be performed by it under this Agreement at or prior to
the Closing;

(v) the Investor shall have received a certificate, in substantially the form
attached hereto as Annex A, signed on behalf of the Company by a Senior
Executive Officer certifying to the effect that the conditions set forth in
Section 1.1(d)(iv) have been satisfied;

(vi)the Company shall have delivered certificates in proper form or, with the
prior consent of the Investor, evidence in book-entry form, evidencing the
Exchange Shares to the Investor or its designee(s);

(vii)the Company shall have delivered to the Investor written opinions from
counsel to the Company, addressed to the Investor and dated as of the Closing
Date, in substantially the form attached hereto as Annex B;

(viii)the Exchange Shares shall have been authorized for listing on the NASDAQ
Stock Market, LLC (“NASDAQ”);

(ix)the Company shall have delivered to the Investor prior to the date hereof
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 date
hereof 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 that is true, complete and correct as of
the date hereof (the CDFI Certification Application delivered to the Investor
pursuant to this Section 1.1(d)(ix), 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;

3

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(x)(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; (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 1.1(d)(x)(A) has been satisfied; “Senior Executive Officers” means the
Company's “senior executive officers” as defined in Section 111 of the EESA and
the Compensation Regulations; and (C) the Company shall have obtained waivers
from all relevant directors, officers and employees of the Company necessary 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; and

(xi)the Company shall have paid to Investor all accrued and unpaid dividends
and/or interest due on the CDCI Preferred Shares as of the Closing Date.

(e)Within two (2) business days following the receipt by the Company of the
Stockholder Approval, the Company shall provide a notice of the Exchange to the
Investor, which shall state (i) the Closing Date (which date shall not be
earlier than the later of (x) two (2) business days after the notice of the
Exchange is delivered to the Investor and (y) the Mandatory Conversion Date (as
defined in the Certificate of Designations), (ii) the Conversion Price and (iii)
the number of Exchange Shares to be issued upon the exchange for each CDCI
Preferred Share held by the Investor.

4

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Section 1.2 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 the product of negotiation between sophisticated parties advised by
counsel. All references to “$” or “dollars” mean the lawful currency of the
United States of America. Except as expressly stated in this Agreement, all
references to any statute, rule or regulation are to the statute, rule or
regulation as amended, modified, supplemented or replaced from time to time
(and, in the case of statutes, include any rules and regulations promulgated
under the statute) and to any section of any statute, rule or regulation include
any successor to the section. References to a “business day” shall mean any day
except Saturday, Sunday and any day on which banking institutions in the State
of New York generally are authorized or required by law or other governmental
actions to close.

ARTICLE II
EXCHANGE

Section 2.1 Exchange.
  
(a) On the terms and subject to the conditions set forth in this Agreement, upon
the Closing (i) the Company agrees to issue to the Investor, in exchange for its
18,980 CDCI Preferred Shares, a number of Exchange Shares equal to 18,980
multiplied by the quotient of which (x) the numerator is $1,000 and (y) the
denominator is the Conversion Price and (ii) the Investor agrees to deliver to
the Company the CDCI Preferred Shares in exchange for such number of Exchange
Shares. In lieu of any fractional Exchange Share otherwise issuable to the
Investor pursuant to this Section 2.1(a), the Company shall pay an amount in
cash (computed to the nearest cent) equal to the same fraction of the Closing
Price of the Common Stock determined as of the second Trading Day immediately
preceding the Closing Date.

(b) Following consummation of the Exchange, no further cash dividends shall be
payable in respect of the CDCI Preferred Shares outstanding immediately prior to
the Closing Date.

5

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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 CDCI Preferred Shares to the
Company or its designated agent and the Company will cause delivery of the
Exchange Shares (together with cash in lieu of any fractional shares) to the
Investor or its designated agent.

Section 2.3 Status of CDCI Preferred Shares after Closing.
The CDCI Preferred Shares exchanged for the Exchange Shares pursuant to this
Article II 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 CPP Preferred Shares or CDCI Preferred
Shares.

ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as Previously Disclosed, the Company represents and warrants to the
Investor as of the date hereof and as of the Closing Date that:  

Section 3.1 Existence and Power.

(a) Organization, Authority and Significant Subsidiaries. The Company is duly
organized, validly existing and in good standing under the laws of the State of
Delaware and has all necessary power and authority to own, operate and lease its
properties and to carry on 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 subsidiary of the Company that is a “significant
subsidiary” within the meaning of Rule 1-02(w) of Regulation S-X under the
Securities Act, including, without limitation, Carver Federal Savings Bank, has
been duly organized and is validly existing in good standing under the laws of
the jurisdiction of its respective incorporation or organization. The
Certificate of Incorporation and bylaws of the Company, copies of which have
been provided to the Investor prior to the date hereof, are true, complete and
correct copies of such documents as in full force and effect as of the date
hereof.

(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 date hereof (the “Capitalization
Date”) is set forth on Schedule 3.1(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 date hereof, the
Company does not have outstanding any securities or other obligations providing
the holder the right to acquire Common Stock that is not reserved for issuance
as specified on Schedule 3.1(b), and, except as disclosed on Schedule 3.1(b),
the Company has not made any other commitment to authorize, issue or sell any
Common Stock except pursuant to this Agreement and the Stock Purchase
Agreements. Since the Capitalization Date, except pursuant to this Agreement and
the Stock Purchase Agreements, the Company has not issued any shares of Common
Stock other than (i) shares issued upon the exercise of stock options or
delivered under other equity-based awards or other convertible securities or
warrants which were issued and outstanding on the Capitalization Date and
disclosed on Schedule 3.1(b) and (ii) shares disclosed on Schedule 3.1(b).
6

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Section 3.2 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, following
receipt of the Stockholder Approval and filing of the Charter Amendment,
includes the issuance of the Exchange Shares).

(b) 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, subject
to receipt of the Stockholder Approval, and no further approval or authorization
is required on the part of the Company or its stockholders, other than the
Stockholder Approval. This Agreement is a valid and binding obligation of the
Company enforceable against the Company in accordance with its terms, subject to
the Bankruptcy Exceptions.

(c) The Stock Purchase Agreements entered into with the Equity Investors, copies
of which have been provided to the Investor prior to the date hereof, are true,
complete and correct copies of such documents as in full force and effect as of
the date hereof.

Section 3.3 Exchange Shares.
When issued and delivered pursuant to this Agreement, the Exchange Shares will
be duly and validly authorized by all necessary action, will be duly and validly
issued and fully paid and nonassessable, will not be issued in violation of any
preemptive rights, and will not subject the holder thereof to personal
liability.

        

7

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Section 3.4 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.

Section 3.5 Non-Contravention.

(a) 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 (each, 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.

(b) Other than the filing of the Charter Amendment with the State of Delaware,
any current report on Form 8-K required to be filed with the Securities and
Exchange Commission (“SEC”), and the filing of the Notification for Listing of
Additional Shares with NASDAQ, 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 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, 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.

        

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(c) Except as would not, individually or in the aggregate, reasonably be
expected to have a Company Material Adverse Effect, (A) the execution, delivery
and performance by the Company of this Agreement and the consummation of the
transactions contemplated hereby (including for this purpose the consummation of
the Exchange) and compliance by the Company with the provisions hereof will not
(1) result in any payment (including any severance payment, payment of
unemployment compensation, “excess parachute payment” (within the meaning of the
Internal Revenue Code of 1986, as amended (the “Code”)), “golden parachute
payment” (as defined in the EESA, as implemented by the Compensation
Regulations) or forgiveness of indebtedness or otherwise) becoming due to any
current or former employee, officer or director of the Company or any Company
Subsidiary from the Company or any Company Subsidiary under any benefit plan or
otherwise, (2) increase any benefits otherwise payable under any benefit plan,
(3) except as disclosed on Schedule 3.5(c), result in any acceleration of the
time of payment or vesting of any such benefits, (4) require the funding or
increase in the funding of any such benefits or (5) result in any limitation on
the right of the Company or any Company Subsidiary to amend, merge, terminate or
receive a reversion of assets from any benefit plan or related trust and
(B) neither the Company nor any Company Subsidiary has taken, or permitted to be
taken, any action that required, and no circumstances exist that will require
the funding, or increase in the funding, of any benefits or resulted, or will
result, in any limitation on the right of the Company or any Company Subsidiary
to amend, merge, terminate or receive a reversion of assets from any benefit
plan or related trust.

Section 3.6 Anti-Takeover Provisions.
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 Certificate of Incorporation and bylaws, and
any other provisions of any applicable “moratorium”, “control share”, “fair
price”, “interested stockholder” or other anti-takeover laws and regulations of
any jurisdiction. The Company has not adopted any stockholder rights plan or
similar arrangement relating to accumulations of beneficial ownership of Common
Stock or a change in control of the Company.

Section 3.7 No Company Material Adverse Effect.
Since August 27, 2010, no fact, circumstance, event, change, occurrence,
condition or development has occurred that, individually or in the aggregate,
has had or would reasonably be likely to have a Company Material Adverse Effect,
except as disclosed on Schedule 3.7.

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Section 3.8 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
Exchange Shares under the Securities Act and the rules and regulations of the
SEC promulgated thereunder), which might subject the offering, issuance or sale
of the Exchange Shares to the Investor pursuant to this Agreement to the
registration requirements of the Securities Act.

Section 3.9 Brokers and Finders.
No broker, finder or investment banker is entitled to 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 for which the Investor could
have any liability.

Section 3.10 CDCI Preferred Shares.
    Except as disclosed on Schedule 3.10, the Company has not breached any
representation, warranty or covenant set forth in the Exchange Agreement or any
of the other documents governing the CDCI Preferred Shares.
ARTICLE IV        
COVENANTS

Section 4.1 Commercially Reasonable Efforts.
  
    (a) Subject to the terms and conditions of this Agreement, each of the
parties will use its commercially reasonable efforts in good faith to take, or
cause to be taken, all actions, and to do, or cause to be done, all things
necessary, proper or desirable, or advisable under applicable laws, so as to
permit consummation of the Exchange, including the consummation of the
investments contemplated by the Stock Purchase Agreements and the transactions
contemplated thereby, 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) The Company shall call a meeting (the “Meeting”) of its stockholders, to be
held no later than five months following the closing date of the Equity
Investments, to vote on the Stockholder Proposals. The Company's Board of
Directors shall recommend to the Company's stockholders that such stockholders
vote in favor of the Stockholder Proposals. In connection with the Meeting, the
Company shall prepare and file with the SEC, not more than forty-five (45) days
following the closing date of the Equity Investments, a preliminary proxy
statement, shall use its reasonable best efforts to respond to any comments of
the SEC or its staff thereon and to cause a definitive proxy statement related
to the Meeting to be mailed to the Company's stockholders not more than five
business days after clearance thereof by the SEC, and shall use its reasonable
best efforts to solicit proxies for such stockholder approval of the Stockholder
Proposals. If at any time prior to the Meeting there shall occur any event that
is required to be set forth in an amendment or supplement to the proxy
statement, the Company shall as promptly as practicable prepare and mail to its
stockholders such an amendment or supplement. In the event that the approval of
any of the Stockholder Proposals is not obtained at the Meeting, the Company
shall include a proposal to approve (and the Company's Board of Directors shall
recommend approval of) each such proposal at a meeting of its stockholders, to
be held no less than once in each subsequent four-month period following the
date on which the Meeting is held, until all such approvals are obtained or
made.
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(c) None of the information supplied by the Company or any of the Company
Subsidiaries for inclusion in any proxy statement in connection with the
Meeting, or any subsequent special stockholders' meetings referenced in Section
4.1(b), will, at the date it is filed with the SEC, when first mailed to the
Company's stockholders and at the time of any stockholders' meeting, and at the
time of any amendment or supplement thereof, contain any untrue statement of a
material fact or omit to state any material fact necessary in order to make the
statements therein, in light of the circumstances under which they are made, not
misleading.

(d) Within five business days following the receipt of the Stockholder Approval,
the Company shall have duly executed and filed the Charter Amendment with the
State of Delaware.

Section 4.2 Expenses and Further Assurances.
  
(a) If requested by the Investor, the Company shall pay all reasonable out of
pocket and documented costs and expenses associated with the Exchange,
including, but not limited to, the reasonable fees, disbursements and other
charges of the Investor's legal counsel and financial advisors.

(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
5.5 below, 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 Exchange Shares purchased
by the Investor, as the 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 4.3 Exchange Listing.
The Company shall, at its expense, use its reasonable best efforts to list the
Exchange Shares on the NASDAQ Global Market or, if the Company is unable to
maintain such listing despite its reasonable best efforts to do so, then on the
NASDAQ Capital Market, and, if such listing is approved, shall, at its expense,
use its reasonable best efforts to maintain such listing of the Exchange Shares
on the NASDAQ Global Market or the NASDAQ Capital Market.

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Section 4.4 Access, Information and Confidentiality.

(a) From the date hereof until the date when the Investor no longer holds any
debt or equity securities of the Company or an Affiliate of the Company acquired
pursuant to this Agreement, the Exchange Agreement or the Securities Purchase
Agreement (including, for the avoidance of doubt, the Exchange Shares, the CDCI
Preferred Shares and the CPP Preferred Shares), the Company will permit the
Investor and its agents, consultants, contractors and advisors (i) acting
through the Company's 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
attachments thereto) and other information reasonably requested by the 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 (ii) to review any
information material to the Investor's investment in the Company provided by the
Company to its Appropriate Federal Banking Agency.

(b) From the date hereof until the date when the Investor no longer holds any
debt or equity securities of the Company or an Affiliate of the Company acquired
pursuant to this Agreement, the Exchange Agreement or the Securities Purchase
Agreement (including, for the avoidance of doubt, the Exchange Shares, the CDCI
Preferred Shares and the CPP 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, (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.

(c) From the date hereof until the date when the Investor no longer holds any
debt or equity securities of the Company or an Affiliate of the Company acquired
pursuant to this Agreement, the Exchange Agreement or the Securities Purchase
Agreement (including, for the avoidance of doubt, the Exchange Shares, the CDCI
Preferred Shares and the CPP Preferred Shares), the Company will deliver, or
cause to be delivered, to the Investor:

(i)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;

(ii)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;

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(iii)as soon as available after the Company receives any assessment of the
Company's internal controls, a copy of such assessment;

(iv)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;

(v)as soon as such items become effective, any amendments to the Certificate of
Incorporation, bylaws or other organizational documents of the Company; and

(vi)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.

(d) The Investor will use reasonable best efforts to hold, and will use
reasonable best efforts to cause its agents, consultants, contractors, 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 (i) previously known by such party on a non-confidential
basis, (ii) in the public domain through no fault of such party or (iii) later
lawfully acquired from other sources by the party to which it was furnished (and
without violation of any other confidentiality obligation)); provided that
nothing herein shall prevent the Investor from disclosing any Information to the
extent required by applicable laws or regulations or by any subpoena or similar
legal process. The Investor understands that the Information may contain
commercially sensitive confidential information entitled to an exception from a
Freedom of Information Act request.

(e) 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.

(f) The Investor's information rights pursuant to Sections 4.4(c)(i), (ii),
(iii), (v) and (vi) and the Investor's right to receive certifications from the
Company pursuant to Section 4.5(b) may be assigned by the Investor to a
transferee or assignee holding at least 2% of the Exchange Shares.

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Section 4.5 CDFI Requirements.

(a) From the date hereof until the date when the Investor no longer holds any
debt or equity securities of the Company or an Affiliate of the Company acquired
pursuant to this Agreement, the Exchange Agreement or the Securities Purchase
Agreement (including, for the avoidance of doubt, the Exchange Shares, the CDCI
Preferred Shares and the CPP Preferred Shares), each Certified Entity shall (i)
be certified by the Fund as a CDFI; (ii) together with its Affiliates,
collectively meet the eligibility requirements of 12 C.F.R. 1805.200(b); (iii)
have a primary mission of promoting community development, as may be determined
by the Investor from time to time, based on criteria set forth in 12 C.F.R.
1805.201(b)(l); (iv) provide Financial Products, Development Services, and/or
other similar financing as a predominant business activity in arm's-length
transactions; (v) serve a Target Market by serving one or more Investment Areas
and/or Targeted Populations as may be determined by the Investor from time to
time, substantially in the manner set forth in 12 C.F.R. 1805.201(b)(3); (vi)
provide Development Services in conjunction with its Financial Products,
directly, through an Affiliate or through a contract with a third-party
provider; (vii) maintain accountability to residents of the applicable
Investment Area(s) or Targeted Population(s) through representation on its
governing Board of Directors or otherwise; and (viii) 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 4.5(a), 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.

(b) From the date hereof until the date when the Investor no longer holds any
debt or equity securities of the Company or an Affiliate of the Company acquired
pursuant to this Agreement, the Exchange Agreement or the Securities Purchase
Agreement (including, for the avoidance of doubt, the Exchange Shares, the CDCI
Preferred Shares and the CPP Preferred Shares), the Company shall deliver to the
Investor (i)(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 4.4(c)(i) to the Investor, a certificate signed on behalf
of the Company by a Senior Executive Officer, in substantially the form attached
hereto as Annex C, certifying (A) that the Company and each Certified Entity
remains in compliance with the covenants set forth in Section 4.5(a); (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 4.5(a)(ii)
and Section 4.5(a)(iv) 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 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;

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(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
5.9 and Section 4.12 and (ii) 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.

(c) The Company shall immediately notify the Investor upon the occurrence of any
breach of any of the covenants set forth in this Section 4.5.

Section 4.6 Executive Compensation.

(a) 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 the EESA, as implemented by the
Compensation Regulations, and neither the Company nor any Affiliate shall adopt
any new Benefit Plan (i) that does not comply therewith or (ii) 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 4.6(a)
(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.

(b) Additional Waivers. After the Closing Date, in connection with the hiring or
promotion of a Section 4.6 Employee and/or the promulgation of applicable
Compensation Regulations or otherwise, to the extent any Section 4.6 Employee
shall not have executed a waiver with respect to the application to such
Section 4.6 Employee of the Compensation Regulations, the Company shall use its
best efforts to (i) obtain from such Section 4.6 Employee a waiver in
substantially the form attached hereto as Annex D and (ii) deliver such waiver
to the Investor as promptly as possible, in each case, within sixty days of the
Closing Date or, if later, within sixty days of such Section 4.6 Employee
becoming subject to the requirements of this Section. “Section 4.6 Employee”
means (A) each Senior Executive Officer and (B) any other employee of the
Company or its Affiliates determined at any time to be subject to Section 111 of
EESA and the Compensation Regulations.

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(c) Clawback. In the event that any Section 4.6 Employee receives a payment in
contravention of the provisions of this Section 4.6, 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 (i) upon discovering that a
payment in contravention of this Section 4.6 has been made and (ii) 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.

(d) 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.

(e) Amendment to Prior Agreement. The parties agree that, effective as of the
date hereof, Section 4.1(e) of the Exchange Agreement shall be amended in its
entirety by replacing such Section 4.1(e) with the provisions set forth in this
Section 4.6 and any terms included in this Section 4.6 that are not otherwise
defined in the Exchange Agreement shall have the meanings ascribed to such terms
in this Agreement.
       

Section 4.7 Certain Notifications Until Closing.
    From the date hereof 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 likely 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 likely to have
a Company Material Adverse Effect; provided, however, that delivery of any
notice pursuant to this Section 4.7 shall not limit or affect any rights of or
remedies available to the Investor; provided, further, that a failure to comply
with this Section 4.7 shall not constitute a breach of this Agreement or the
failure of any condition set forth in Section 1.1 to be satisfied unless the
underlying Company Material Adverse Effect or material breach would
independently result in the failure of a condition set forth in Section 1.1 to
be satisfied.

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Section 4.8 Equity Investments.
     The Company has informed the Investor that the Company intends to pursue
the closings of the Equity Investments by June 7, 2011 (the “Targeted Completion
Date”). The Company will use its commercially reasonable efforts to consummate
the Equity Investments by the Targeted Completion Date. Until the Equity
Investments have been consummated (or the Company and the Investor agree that
the Equity Investments are no longer susceptible to consummation on terms and
conditions that are in the Company's best interest), the Company shall provide
the Investor with a reasonably detailed written report regarding the status of
the Equity Investments at least once every two weeks and more frequently if
reasonably requested by the Investor; provided, however, that if the Equity
Investments are not consummated by the time of its Targeted Completion Date, the
Company shall, with respect to the non-consummated Equity Investments,
(x) within five business days after the Targeted Completion Date provide to the
Investor a reasonably detailed written description of the status of such Equity
Investments including the Company's best estimate of the steps and timeline to
complete such Equity Investments (the “Status Report”) and (y) thereafter, no
less frequently than monthly and more frequently if reasonably requested by the
Investor until such Equity Investments have been consummated, provide to the
Investor an updated version of the Status Report.

Section 4.9 Amendment of Agreements Relating to the Equity Investments.
    The Company will not, without the prior written consent of the Investor,
(i) agree to any amendment, waiver or modification of the Stock Purchase
Agreements or any other documents governing the terms of the Equity Investments
(other than corrections of obvious errors, if any, or other ministerial
amendments) or (ii) enter into any new agreements relating to the Equity
Investments, in each case to the extent such amendment, waiver, modification or
new agreement is adverse to the Investor's interests under this Agreement.

Section 4.10 Predominantly Financial.
    From the date hereof until the date when the Investor no longer holds any
debt or equity securities of the Company or an Affiliate of the Company acquired
pursuant to this Agreement, the Exchange Agreement or the Securities Purchase
Agreement (including, for the avoidance of doubt, the Exchange Shares, the CDCI
Preferred Shares and the CPP 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.

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Section 4.11 Capital Covenant.
    From the date hereof until the date when the Investor no longer holds any
debt or equity securities of the Company or an Affiliate of the Company acquired
pursuant to this Agreement, the Exchange Agreement or the Securities Purchase
Agreement (including, for the avoidance of doubt, the Exchange Shares, the CDCI
Preferred Shares and the CPP Preferred Shares), 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.

Section 4.12 Control by Foreign Bank or Company.
    From the date hereof until the date when the Investor no longer holds any
debt or equity securities of the Company or an Affiliate of the Company acquired
pursuant to this Agreement, the Exchange Agreement or the Securities Purchase
Agreement (including, for the avoidance of doubt, the Exchange Shares, the CDCI
Preferred Shares and the CPP Preferred Shares), 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.

ARTICLE V
ADDITIONAL AGREEMENTS

Section 5.1 Unregistered Exchange Shares.
The Investor acknowledges that the Exchange Shares have not been registered
under the Securities Act or under any state securities laws. The Investor (a) is
acquiring the Exchange 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
Exchange 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 Legend.

(a) The Investor agrees that all certificates or other instruments representing
the Exchange Shares will bear a legend substantially to the following effect:
“THE SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND
MAY NOT BE TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF EXCEPT WHILE A
REGISTRATION STATEMENT RELATING THERETO IS IN EFFECT UNDER SUCH ACT AND
APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN EXEMPTION FROM REGISTRATION
UNDER SUCH ACT OR SUCH LAWS.”
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(b) In the event that any Exchange 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 Exchange Shares, which shall not contain
the applicable legend in Section 5.2(a) above; provided that the Investor
surrenders to the Company the previously issued certificates or other
instruments.

Section 5.3 Certain Transactions.

(a) The Company will not merge or consolidate with, or sell, transfer or lease
all or substantially all of its property or assets to, any other party unless
the successor, transferee or lessee party (or its ultimate parent entity), as
the case may be (if not the Company), expressly assumes the due and punctual
performance and observance of each and every covenant, agreement and condition
of this Agreement to be performed and observed by the Company.

(b) Without the prior written consent of the Investor, until such time as the
Investor shall cease to own any securities of the Company acquired pursuant to
this Agreement, the Exchange Agreement or the Securities Purchase Agreement
(including, for the avoidance of doubt, the Exchange Shares, the CDCI Preferred
Shares and the CPP Preferred Shares), the Company shall not permit any of its
“significant subsidiaries” (as such term is defined in Rule 12b-2 promulgated
under the Securities Exchange Act of 1934, as amended (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.

Section 5.4 Transfer of Exchange 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 Exchange 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 Exchange Shares.

Section 5.5 Registration Rights.

(a) The Exchange Shares shall be Registrable Securities under the Exchange
Agreement and, upon their issuance, the provisions of Section 4.1(j) and Annex E
of the Exchange Agreement shall be applicable to them, including with the
benefit, to the extent available, of the tacking of any holding period from the
date of issuance of the CDCI Preferred Shares and the CPP Preferred Shares;
provided, that, notwithstanding anything to the contrary in Section 1.3 of Annex
E of the Exchange Agreement, all Selling Expenses incurred by the Investor or
any other Holder in connection with any registration thereunder or any other
sale or other transfer of Exchange Shares under this Section 5.5 shall be borne
by the Company. From and after the Closing Date, all references in Section 1.10
of Annex E of the Exchange Agreement to “preferred stock” shall mean and refer
to Common Stock (as defined herein) and, with respect to any underwritten
offering of Registrable Securities (as defined in Annex E of the Exchange
Agreement) by the Investor or other Holders (as defined in Annex E of the
Exchange Agreement) pursuant to Annex E of the Exchange Agreement,
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the Company further agrees to cause any of its stockholders holding in excess of
4.0% of its Common Stock (assuming full exercise of any rights to convert or
exchange any other securities into or for shares of Common Stock, in each case
without regard for the limitations (i) set forth in Section 8 of the Certificate
of Designations or in Article V of the Certificate of Incorporation or (ii)
imposed by any regulatory requirement, rule, or regulation, including any
commitment, arrangement or agreement made by any such stockholder pursuant to
any regulatory requirement, rule, regulation, order or filing) 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. From and after the
Closing Date, Section 1.2(f) of Annex E shall be deleted in its entirety and
restated as follows: “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, and in either case, following
consultations with the Investor, the managing underwriters advise the Company
and the Investor 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 either case, the Registrable Securities of the Investor,
(B) second, in the case of a Piggyback Registration under Section 1.2(d) of this
Annex E, the securities the Company proposes to sell, (C) third, the Registrable
Securities of 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 (D) fourth, any other securities of the
Company that have been requested to be so included, subject to the terms of this
Agreement.” The Investor acknowledges that, on the date hereof, the Company is
not eligible to file a registration statement on Form S-3 covering the Exchange
Shares, and the Company shall not be obligated to file a Shelf Registration
Statement (as defined in Annex E of the Exchange Agreement) unless and until
requested to do so in writing by the Investor.

(b) At all times after the Closing, the Company covenants that (1) it will, upon
the request of the Investor or any subsequent holders of the Exchange 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 Exchange 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, or (y), to the extent any Holder
is relying on the so-called “Section 4(1½)” exemption to sell any of its
Exchange 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
Exchange Shares pursuant to such exemption, and (2) it will take such further
action as any Holder may reasonably request from time to time to enable such
Holder to sell the Exchange 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 under the Securities Act, as such rule 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 5.5(b) 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.

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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.

(c) The Company agrees to indemnify the Investor, the Investor's officers,
directors, employees, agents, representatives and Affiliates, and each person,
if any, that controls the 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 5.5 or any omission to state therein a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading.

(d) If the indemnification provided for in Section 5.5(c) is unavailable to an
Indemnitee with respect to any losses, claims, damages, actions, liabilities,
costs or expenses referred to therein or is insufficient to hold the Indemnitee
harmless as contemplated therein, then the 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 5.5(d) were determined by pro rata
allocation or by any other method of allocation that does not take account of
the equitable considerations referred to in Section 5.5(c). 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.

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Section 5.6 Voting Matters.

(a) The Investor agrees that it will vote, or cause to be voted, or exercise its
right to consent (or cause its right to consent to be exercised) with respect
to, all Exchange Shares beneficially owned by it and its controlled Affiliates
(and which are entitled to vote on such matter) with respect to each matter on
which holders of Common Stock are entitled to vote or consent, other than a
Designated Matter, in the same proportion (for, against or abstain) as all other
shares of the Company's Common Stock are voted or consents are given with
respect to each such matter. The Investor agrees to attend all meetings of the
Company's stockholders in person or by proxy for purposes of obtaining a quorum.
In order to effectuate the foregoing agreements, to the maximum extent permitted
by applicable law, the Investor hereby grants a proxy appointing each of the
Chairman of the Board and General Counsel of the Company attorney-in-fact and
proxy for it and its controlled Affiliates with full power of substitution, for
and in the name of it and its controlled Affiliates, to vote, express consent or
dissent, or otherwise to utilize such voting power in the manner and solely on
the terms provided by this Section 5.6 with respect to the Exchange Shares and
the Investor hereby revokes any and all previous proxies granted with respect to
the Exchange Shares for purposes of the matters contemplated in this
Section 5.6; provided that such proxy may only be exercised if the Investor
fails to comply with the terms of this Section 5.6. The proxy granted hereby is
irrevocable prior to the termination of this Agreement, is coupled with an
interest and is granted in consideration of the Company entering into this
Agreement and issuing the Exchange Shares to the Investor.

(b) The Investor shall retain the right to vote in its sole discretion all
Exchange Shares beneficially owned by it and its controlled Affiliates (and
which are entitled to vote on such matter) on any Designated Matter.

Section 5.7 Restriction on Dividends and Repurchases.

(a) Until the earlier of (i) January 16, 2012, or (ii) such time as the Investor
ceases to own any debt or equity securities of the Company or an Affiliate of
the Company acquired pursuant to this Agreement, the Exchange Agreement or the
Securities Purchase Agreement (including, for the avoidance of doubt, the
Exchange Shares, the CDCI Preferred Shares and the CPP Preferred Shares),
neither the Company nor any Company Subsidiary shall, without the consent of the
Investor:

(i) declare or pay any dividend or make any distribution on the Common Stock
(other than (A) regular quarterly cash dividends of not more than the amount of
the last quarterly cash dividend per share declared or, if lower, publicly
announced an intention to declare, on the Common Stock prior to October 14,
2008, as adjusted for any stock split, stock dividend, reverse stock split,
reclassification or similar transaction, (B) dividends payable solely in shares
of Common Stock and (C) dividends or distributions of rights or Junior Stock in
connection with a stockholders' rights plan); or

(ii) redeem, purchase or acquire any shares of Common Stock or other capital
stock or other equity securities of any kind of the Company, or any trust
preferred securities issued by the Company or any Affiliate of the Company,
other than (A) redemptions, purchases or other acquisitions of shares of Common
Stock or other Junior Stock, in each case in this clause (A) in connection with
the administration of any employee benefit plan in the ordinary course of
business (including purchases to offset the Share Dilution Amount (as defined
below) pursuant to a publicly announced repurchase plan) and consistent with
past practice; provided that any purchases to offset the Share Dilution Amount
shall in no event exceed the Share Dilution Amount,
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(B) purchases or other acquisitions by a broker-dealer subsidiary of the Company
solely for the purpose of market-making, stabilization or customer facilitation
transactions in trust preferred securities of the Company or an Affiliate of the
Company, Junior Stock or Parity Stock in the ordinary course of its business,
(C) purchases by a broker-dealer subsidiary of the Company of trust preferred
securities or capital stock of the Company or an Affiliate of the Company for
resale pursuant to an offering by the Company of such trust preferred securities
or capital stock underwritten by such broker-dealer subsidiary, (D) any
redemption or repurchase of rights pursuant to any stockholders' rights plan,
(E) the acquisition by the Company or any of the Company Subsidiaries of record
ownership in Junior Stock, Parity Stock or trust preferred securities of the
Company or an Affiliate of the Company for the beneficial ownership of any other
persons (other than the Company or any other Company Subsidiary), including as
trustees or custodians, and (F) the exchange or conversion of Junior Stock for
or into other Junior Stock or of Parity Stock or of trust preferred securities
of the Company or an Affiliate of the Company for or into other Parity Stock
(with the same or lesser aggregate liquidation amount) or Junior Stock, in each
case set forth in this clause (F), solely to the extent required pursuant to
binding contractual agreements entered into prior to January 16, 2009, or any
subsequent agreement for the accelerated exercise, settlement or exchange
thereof for Common Stock. “Share Dilution Amount” means the increase in the
number of diluted shares outstanding (determined in accordance with United
States generally accepted accounting principles (“GAAP”), and as measured from
the date of the Company's most recently filed 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.

(b) The parties agree that, effective as of the Closing Date, Section 4.2(b) of
the Exchange Agreement shall be amended in its entirety by replacing such
Section 4.2(b) with the provisions set forth in this Section 5.7 and any terms
included in this Section 5.7 that are not otherwise defined in the Exchange
Agreement shall have the meanings ascribed to such terms in this Agreement.

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Section 5.8 Repurchase of Investor Securities.
    From and after the date of this Agreement, the agreements set forth in
Section 5.7 of the Exchange Agreement shall be applicable following the Transfer
by the Investor of all of the Exchange Shares held by the Investor to one or
more third parties not affiliated with the Investor. For the avoidance of doubt,
the Exchange Shares may not be repurchased by the Company pursuant to this
Section 5.8 or Section 5.7 of the Exchange Agreement.

Section 5.9 Savings and Loan Holding Company Status.
    The Company shall maintain its status as a Savings and Loan Holding Company
for as long as the Investor owns any debt or equity securities of the Company or
an Affiliate of the Company acquired pursuant to this Agreement, the Exchange
Agreement or the Securities Purchase Agreement (including, for the avoidance of
doubt, the Exchange Shares, the CDCI Preferred Shares and the CPP Preferred
Shares).

Section 5.10 Compliance with Employ American Workers Act.
Until the Company is no longer deemed a recipient of funding under Title I of
EESA or Section 13 of the Federal Reserve Act for purposes of the EAWA, as the
same may be determined pursuant to any regulations or other legally binding
guidance promulgated under EAWA, the Company shall comply, and the Company shall
take all necessary action to ensure that its Subsidiaries comply, in all
respects with the provisions of the EAWA and any regulations or other legally
binding guidance promulgated under the EAWA.

Section 5.11 Observer to the Board of Directors.
    So long as the Investor and its Affiliates beneficially own at least 5% of
the issued and outstanding Common Stock (treating all securities beneficially
owned by the Investor and its Affiliates that are convertible into or
exchangeable or exercisable for Common Stock as converted, exchanged or
exercised), the Investor shall be entitled to designate one individual to serve
as an observer (the “Observer”) to the Board of Directors of the Company, which
designation may be changed from time to time in the sole discretion of the
Investor. The Observer shall be entitled to (i) attend all meetings of the Board
of Directors of the Company and the board of directors of each subsidiary of the
Company, including any committee meetings of such boards of directors,
(ii) receive notices of such meetings concurrently with the members of the Board
of Directors of the Company or such boards of directors or committees thereof
and (iii) receive all information provided to members of the Board of Directors
of the Company or such boards of directors or committees thereof at such
meetings.
The Observer shall have no voting rights and his or her presence shall not be
required for determining a quorum at any meeting he or she is entitled to attend
pursuant to this Section 5.11.

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ARTICLE VI
MISCELLANEOUS

SECTION 6.1 Termination.
This Agreement may be terminated at any time prior to the Closing:

(a) by either the Investor or the Company if the Closing shall not have occurred
by November 7, 2011; provided, however, that in the event the Closing has not
occurred by such date, the parties will consult in good faith to determine
whether to extend the term of this Agreement, it being understood that the
parties shall be required to consult only until the fifth day after such date
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) 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;

(b) by either the Investor or the Company in the event that any Governmental
Entity shall have issued an order, decree or ruling or taken any other action
restraining, enjoining or otherwise prohibiting the transactions contemplated by
this Agreement and such order, decree, ruling or other action shall have become
final and nonappealable; or

(c) by the mutual written consent of the Investor and the Company.
In the event of termination of this Agreement as provided in this 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 of Representations and Warranties.
The representations and warranties of the Company made herein or in any
certificates delivered in connection with the Closing shall survive the Closing
without limitation.

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 the Investor may unilaterally amend
any provision of this Agreement to the extent required to comply with any
changes after the date hereof in applicable federal statutes. No failure or
delay by any party in exercising any right, power or privilege hereunder shall
operate as a waiver thereof nor shall any single or partial exercise thereof
preclude any other or further 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.
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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.

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:

Carver Bancorp, Inc.
75 West 125th Street
New York, NY 10027
Attention: Mark A. Ricca
Executive Vice President, Chief Risk Officer and General Counsel
Telephone: (212) 360-8820
Facsimile: (212) 426-6213
With a copy to:
Luse Gorman Pomerenk & Schick, P.C.
5335 Wisconsin Avenue, NW
Suite 780
Washington, D.C. 20015
Attention: Lawrence M.F. Spaccasi
Telephone: (202) 274-2037
Facsimile: (202) 362-2902

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If to the Investor:

United States Department of the Treasury
1500 Pennsylvania Avenue, NW
Washington, DC 20220
Attention: Chief Counsel Office of Financial Stability
Facsimile: (202) 927-9225
Email: OFSChiefCounselNotices@do.treas.gov
With a copy to:

Alston & Bird LLP
950 F Street NW
Washington, DC 20004
Attention: David E. Brown, Jr.
Telephone: (202) 239-3345
Facsimile: (202) 654-4945

Section 6.7 Definitions.

(a) When a reference is made in this Agreement to a subsidiary of a person, the
term “subsidiary” means any corporation, partnership, joint venture, limited
liability company or other entity (x) of which such person or a subsidiary of
such person is a general partner or (y) of which a majority of the voting
securities or other voting interests, or a majority of the securities or other
interests of which having by their terms ordinary voting power to elect a
majority of the board of directors or persons performing similar functions with
respect to such entity, is directly or indirectly owned by such person and/or
one or more subsidiaries thereof.

(b) The term “Affiliate” means, with respect to any person, any person directly
or indirectly controlling, controlled by or under common control with, such
other person. For purposes of this definition, “control” (including, with
correlative meanings, the terms “controlled by” and “under common control with”)
when used with respect to any person, means the possession, directly or
indirectly, of the power to cause the direction of management and/or policies of
such person, whether through the ownership of voting securities by contract or
otherwise.

(c) The term “Business Combination” means a merger, consolidation, statutory
share exchange or similar transaction that requires the approval of the
Company's stockholders.

(d) The term “Closing Price” means the closing sale price or, if no closing sale
price is reported, the last reported sale price of the shares of the Common
Stock on The NASDAQ Global Market on such date. If the Common Stock is not
traded on The NASDAQ Global Market on any date of determination, the Closing
Price of the Common Stock on such date of determination means the closing sale
price as reported in the composite transactions for the principal U.S. national
or regional securities exchange on which the Common Stock is so listed or
quoted, or, if no closing sale price is reported, the last reported sale price
on the principal U.S. national or regional securities exchange on which the
Common Stock is so listed or quoted,

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or if the Common Stock is not so listed or quoted on a U.S. national or regional
securities exchange, the last quoted bid price for the Common Stock in the
over-the-counter market as reported by Pink OTC Markets Inc. or a similar
organization, or, if that bid price is not available, the market price of the
Common Stock on that date as determined by a nationally recognized independent
investment banking firm retained by the Company for this purpose.

(e) 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 taken as a whole; provided, however, that
Company Material Adverse Effect shall not be deemed to include: the effects of
(A) changes after the date hereof 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 or geographic areas
in which the Company and its subsidiaries operate, (B) changes or proposed
changes after the date hereof in GAAP or regulatory accounting requirements, or
authoritative interpretations thereof, (C) changes or proposed changes after the
date hereof 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), (D) changes in the market price or trading
volume of the Common Stock or any other equity, equity-related or debt
securities of the Company or its consolidated subsidiaries (it being understood
and agreed that the exception set forth in this clause (D) does not apply to the
underlying reason giving rise to or contributing to any such change); or (E)
actions or omissions of the Company or any Company Subsidiary expressly required
by the terms of the Exchange; or (ii) the ability of the Company to consummate
the Exchange and the other transactions contemplated by this Agreement and
perform its obligations hereunder on a timely basis.

    (f) The term “Conversion Price” means for each CDCI Preferred Share, for
purposes of calculating the Exchange into Exchange Shares, $0.5451, subject to
adjustment at the same time and in the same manner as adjustments are made to
the “Applicable Conversion Rate” pursuant to Section 10 of the Certificate of
Designations for Series C and Series D of Preferred Stock (the “Certificate of
Designations”) attached as Exhibit A hereto; provided, however, that adjustments
to the Conversion Price shall be made notwithstanding the last sentence of
Section 4(a)(i) of the Certificate of Designations and Section 10(d) of the
Certificate of Designations.

(g) 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 Certificate of
Incorporation or bylaws of the Company on which holders of Common Stock are
entitled to vote, and (vii) the approval of any other matters reasonably
incidental to the foregoing subclauses (i) through (vi) as determined by the
Investor.

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(h) 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.

(i) The term “Junior Stock” means Common Stock and any other class or series of
stock of the Company the terms of which expressly provide that it ranks junior
to the CDCI Preferred Shares as to dividend rights and/or as to rights on
liquidation, dissolution or winding up of the Company.

(j) 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).

(k) The term “Preferred Stock” means any and all series of preferred stock of
the Company.

    (l) The term “Previously Disclosed” means information set forth or
incorporated in the Company's Annual Report on Form 10-K for the most recently
completed fiscal year of the Company filed with the SEC prior to the date hereof
or in its other reports and forms filed with or furnished to the SEC under
Section 13(a), 14(a) or 15(d) of the Exchange Act on or after the last day of
the most recently completed fiscal year of the Company and prior to the date
hereof.

(m) The term “Trading Day” means a day on which the shares of Common Stock: (i)
are not suspended from trading on any national or regional securities exchange
or association or over-the-counter market at the close of business; and (ii)
have traded at least once on the national or regional securities exchange or
association or over-the-counter market that is the primary market for the
trading of the Common Stock.

(n) 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 1.1 or 6.8 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, Exchange Shares or Registrable Securities (and
any like variations thereof) shall be deemed to refer to the Investor, together
with such designees and/or Affiliates, holding or owning any debt or equity
securities, Exchange Shares or Registrable Securities (and any like variations
thereof), as applicable.

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Section 6.8 Assignment.
Neither this Agreement nor any right, remedy, obligation nor liability arising
hereunder or by reason hereof shall be assignable by any party hereto without
the prior written consent of each other party, and any attempt to assign any
right, remedy, obligation or liability hereunder without such consent shall be
void, except (a) an assignment, in the case of a Business Combination where such
party is not the surviving entity, or a sale of substantially all of its assets,
to the entity which is the survivor of such Business Combination or the
purchaser in such sale, (b) as provided in Sections 5.4 and 5.5 and (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 and exercisable by such Affiliate, and (ii) the Company's
obligations and liabilities hereunder shall continue to be outstanding.

Section 6.9 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 6.10 No Third-Party Beneficiaries.
    Nothing contained in this Agreement, expressed or implied, is intended to
confer upon any person or entity other than the Company and the Investor any
benefit, right or remedies, except that (i) the provisions of Section 4.4 shall
inure to the benefit of the persons referred to in that Section and (ii) the
provisions of Section 5.5 shall inure to the benefit of the persons holding
Exchange Shares during any tacked holding period, as contemplated by that
Section.

Section 6.11 Entire Agreement, etc.
    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. For the avoidance of doubt, the Exchange
Agreement shall remain in full force and effect, notwithstanding Sections 6.1(b)
or (c) of the Exchange Agreement, but shall be deemed amended hereby effective
as of the Closing, and any provisions in this Agreement that supplement,
duplicate or contradict any provision of the Exchange Agreement shall be deemed
to supersede the corresponding provision of the Exchange Agreement from and
after the Closing. For the further avoidance of doubt, the Securities Purchase
Agreement shall remain in full force and effect, other than as specifically
modified by the Exchange Agreement and herein.

Section 6.12 Counterparts and Facsimile.
    For the convenience of the parties hereto, this 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 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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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]

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their respective authorized officers as of the day and year first
above written.
CARVER BANCORP, INC.

By:    /s/ Mark A. Ricca    
Name: Mark A. Ricca
Title: Executive Vice President, Chief Financial Officer and General Counsel
UNITED STATES DEPARTMENT OF THE TREASURY

By: /s/ Timothy G. Massad    
Name: Timothy G. Massad
Title: Acting Assistant Secretary for Financial Stability