Exhibit 10.2

 
 
(CDFI Bank/Thrifts
Senior Preferred Stock)

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supplemented or superseded by the terms set forth herein or in the Schedules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

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

 
 
 
 
By:________________________________________

 
      Name:

 
      Title:

 
 
 
COMPANY:  THE FIRST BANCSHARES, INC.

 
 
 
 
By:________________________________________     

 
      Name:
M. Ray Cole, Jr.

 
      Title:
Chief Executive Officer

 
Date:____________________________

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EXHIBIT A
(CDFI Bank/Thrifts
Senior Preferred Stock)

 
SECURITIES PURCHASE AGREEMENT
 
 
STANDARD TERMS
 

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TABLE OF CONTENTS
 
Page
 
ARTICLE I

 
1.1
Definitions 
2

1.2
Interpretation 
4

 
ARTICLE II
 
PURCHASE; CLOSING
 
2.1
Purchase 
4

2.2
Closing 
4

2.3
Closing Conditions 
5

 
ARTICLE III
 
REPRESENTATIONS AND WARRANTIES
 
3.1
Representations and Warranties of the Company 
7

 
ARTICLE IV
 
COVENANTS
 
4.1
Affirmative Covenants 
14

4.2
Negative Covenants 
21

 
ARTICLE V
 
ADDITIONAL AGREEMENTS
 
5.1
Purchase for Investment 
23

5.2
Legends 
23

5.3
Transfer of Preferred Shares 
24

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

5.5
Depositary Shares 
26

5.6
Expenses and Further Assurances 
26

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ARTICLE VI
 
MISCELLANEOUS
 
6.1
Termination 
26

6.2
Survival 
27

6.3
Amendment 
27

6.4
Waiver of Conditions 
28

6.5
Governing Law; Submission to Jurisdiction, etc 
28

6.6
Notices 
28

6.7
Assignment 
29

6.8
Severability 
29

6.9
No Third Party Beneficiaries 
29

6.10
Specific Performance 
29

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LIST OF ANNEXES
 
ANNEX A:                      FORM OF OFFICER’S CERTIFICATE
ANNEX B:                      FORM OF CERTIFICATE OF DESIGNATIONS FOR PREFERRED
STOCK
ANNEX C:                      FORM OF WAIVER
ANNEX D:                      FORM OF OPINION
ANNEX E:                      REGISTRATION RIGHTS
ANNEX F:                      FORM OF OFFICER’S CERTIFICATE (CDFI REQUIREMENTS)

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INDEX OF DEFINED TERMS
Term
Location of Definition
Affiliate
1.1
Agreement
Recitals
Appropriate Federal Banking Agency
1.1
Bank Holding Company
1.1
Bankruptcy Exceptions
3.1(e)
Benefit Plans
2.3(f)
Board of Directors
3.1(f)
Business Combination
6.7
business day
1.2
Capitalization Date
3.1(b)
CDCI
Recitals
CDFI
3.1(d)(ii)
CDFI Application
2.3(m)
CDFI Application Update
2.3(m)
Certificate of Designations
2.3(d)
Certified Entity
1.1
Charter
2.3(d)
Closing
2.2(a)
Closing Date
2.2(a)
Code
3.1(n)
Common Stock
3.1(b)
Company
Recitals
Company Financial Statements
2.3 (l)
Company Material Adverse Effect
1.1
Company Reports
3.1(i)(i)
Company Subsidiary; Company Subsidiaries
3.1(e)(ii)
Compensation Regulations
2.3(f)
control; controlled by; under common control with
1.1
Controlled Group
3.1(n)
CPP
3.1(x)
CPP/CDCI Securities
3.1(x)
Disclosure Schedule
1.1
Disclosure Update
2.3(k)
EESA
2.3(f)
ERISA
3.1(n)
Exchange Act
5.3
Federal Reserve
1.1
Fund
3.1(d)(ii)
GAAP
1.1
Governmental Entities
2.3(a)
Holders
5.4(a)

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Indemnitee
5.4(b)
Information
4.1(c)(iii)
Investor
Recitals
Junior Stock
1.1
knowledge of the Company; Company’s knowledge
1.1
Letter Agreement
Recitals
MHA
 4.1(i)
officers
1.1
Parity Stock
1.1
Plan
3.1(n)
Preferred Shares
Recitals
Preferred Stock
Recitals
Previously Disclosed
1.1
Proprietary Rights
3.1(u)
Purchase
Recitals
Purchase Price
2.1
Regulatory Agreement
3.1(s)
Relevant Period
2.3(f)
Savings and Loan Holding Company
1.1
Schedules
Recitals
SEC
3.1(k)
Section 4.1(e) Employee
4.1(e)(ii)
Securities Act
3.1(a)
Senior Executive Officers
1.1
Share Dilution Amount
1.1
Signing Date
1.1
subsidiary
1.1
Tax; Taxes
1.1
Transfer
5.3

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SECURITIES PURCHASE AGREEMENT – STANDARD TERMS
 
Recitals:
 
WHEREAS, the United States Department of the Treasury (the “Investor”) may from
time to time agree to purchase shares of preferred stock from eligible financial
institutions which elect to participate in the Community Development Capital
Initiative (“CDCI”);
 
WHEREAS, an eligible financial institution electing to participate in the CDCI
and issue securities to the Investor shall enter into a letter agreement (the
“Letter Agreement”) with the Investor which incorporates this Securities
Purchase Agreement – Standard Terms (the eligible financial institution
identified in the Letter Agreement, the “Company”);
 
WHEREAS, the Company agrees to support the availability of credit and financial
services to underserved populations and communities in the United States to
promote the expansion of small businesses and the creation of jobs in such
populations and communities;
 
WHEREAS, the Company agrees to work diligently, under existing and any future
programs, to modify the terms of residential mortgages as appropriate to
strengthen the health of the U.S. housing market;
 
WHEREAS, the Company intends to issue in a private placement the number of
shares of the series of its Preferred Stock (“Preferred Stock”) set forth on
Schedule A to the Letter Agreement (the “Preferred Shares”) and the Investor
intends to purchase (the “Purchase”) from the Company the Preferred Shares; and
 
WHEREAS, the Purchase will be governed by this Securities Purchase Agreement –
Standard Terms and the Letter Agreement, including the schedules thereto (the
“Schedules”), specifying additional terms of the Purchase. This Securities
Purchase Agreement – Standard Terms (including the Annexes hereto) and the
Letter Agreement (including the Schedules thereto) are together referred to as
this “Agreement”.  All references in this Securities Purchase Agreement –
Standard Terms to “Schedules” are to the Schedules attached to the Letter
Agreement.
 
NOW, THEREFORE, in consideration of the premises, and of the representations,
warranties, covenants and agreements set forth herein, the parties agree as
follows:

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ARTICLE I

1.1    Definitions.    Except as otherwise specified herein or as the context
may otherwise require, the following terms have the respective meanings set
forth below for all purposes of this Agreement.
 
“Affiliate” means, with respect to any person, any person directly or indirectly
controlling, controlled by or under common control with, such other person. For
purposes of this definition, “control” (including, with correlative meanings,
the terms “controlled by” and “under common control with”) when used with
respect to any person, means the possession, directly or indirectly, of the
power to cause the direction of management and/or policies of such person,
whether through the ownership of voting securities by contract or otherwise.
 
“Appropriate Federal Banking Agency” means the “appropriate Federal banking
agency” with respect to the Company or such Company Subsidiaries, as applicable,
as defined in Section 3(q) of the Federal Deposit Insurance Act (12 U.S.C.
Section 1813(q)).
 
“Bank Holding Company” means a company registered as such with the Board of
Governors of the Federal Reserve System (the “Federal Reserve”) pursuant to 12
U.S.C. §1842 and the regulations of the Federal Reserve promulgated thereunder.
 
“Certified Entity” means the Company or, if the Company itself has not been
certified by the Fund as a CDFI, each Affiliate of the Company that has been
certified by the CDFI  and is specified on Schedule A of the Letter Agreement.
 
“Company Material Adverse Effect” means a material adverse effect on (i) the
business, results of operation or financial condition of the Company and its
consolidated subsidiaries and each Certified Entity taken as a whole; provided,
however, that Company Material Adverse Effect shall not be deemed to include the
effects of (A) changes after the date of the Letter Agreement (the “Signing
Date”) in general business, economic or market conditions (including changes
generally in prevailing interest rates, credit availability and liquidity,
currency exchange rates and price levels or trading volumes in the United States
or foreign securities or credit markets), or any outbreak or escalation of
hostilities, declared or undeclared acts of war or terrorism, in each case
generally affecting the industries in which the Company and its subsidiaries
operate, (B) changes or proposed changes after the Signing Date in generally
accepted accounting principles in the United States (“GAAP”), or authoritative
interpretations thereof, or (C) changes or proposed changes after the Signing
Date in securities, banking and other laws of general applicability or related
policies or interpretations of Governmental Entities (in the case of each of
these clauses (A), (B) and (C), other than changes or occurrences to the extent
that such changes or occurrences have or would reasonably be expected to have a
materially disproportionate adverse effect on the Company and its consolidated
subsidiaries taken as a whole relative to comparable U.S. banking or financial
services organizations); or (ii) the ability of the Company to consummate the
Purchase and other transactions contemplated by this Agreement and perform its
obligations hereunder or thereunder on a timely basis.
 
“Disclosure Schedule” means that certain schedule to this Agreement delivered to
the Investor on or prior to the Signing Date, setting forth, among other things,
items the disclosure of which is necessary or appropriate either in response to
an express disclosure requirement contained in a provision hereof or as an
exception to one or more representations or warranties contained in Section 3.1.

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“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
Preferred Shares as to dividend rights and/or as to rights on liquidation,
dissolution or winding up of the Company.
 
“knowledge of the Company” or “Company’s knowledge” means the actual knowledge
after reasonable and due inquiry of the “officers” (as such term is defined in
Rule 3b-2 under the Exchange Act) of the Company.
 
“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 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).
 
“Previously Disclosed” means information set forth on the Disclosure Schedule or
the Disclosure Update, as applicable; provided, however, that disclosure in any
section of such Disclosure Schedule or Disclosure Update, as applicable, shall
apply only to the indicated section of this Agreement except to the extent that
it is reasonably apparent from the face of such disclosure that such disclosure
is relevant to another section of this Agreement; provided, further, that the
existence of Previously Disclosed information, pursuant to a Disclosure Update,
shall neither obligate the Investor to consummate the Purchase nor limit or
affect any rights of or remedies available to the Investor.
 
“Savings and Loan Holding Company” means a company registered as such with the
Office of Thrift Supervision pursuant to 12 U.S.C. §1467(a) and the regulations
of the Office of Thrift Supervision promulgated thereunder.
 
“Senior Executive Officers” means the Company’s “senior executive officers” as
defined in Section 111 of EESA and the Compensation Regulations.
 
“Share Dilution Amount” means the increase in the number of diluted shares
outstanding (determined in accordance with GAAP, and as measured from the date
of the Company’s most recent consolidated financial statements prior to the
Closing Date) resulting from the grant, vesting or exercise of equity-based
compensation to employees and equitably adjusted for any stock split, stock
dividend, reverse stock split, reclassification or similar transaction.
 
“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.

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“Tax” or “Taxes” means any federal, state, local or foreign income, gross
receipts, property, sales, use, license, excise, franchise, employment, payroll,
withholding, alternative or add-on minimum, ad valorem, transfer or excise tax,
or any other tax, custom, duty, governmental fee or other like assessment or
charge of any kind whatsoever, together with any interest, penalty or addition
imposed by any Governmental Entity.
 
1.2    Interpretation.    When a reference is made in this Agreement to
“Recitals”, “Articles”, “Sections”, or “Annexes” such reference shall be to a
Recital, Article or Section of, or Annex to, this Securities Purchase Agreement
– Standard Terms, and a reference to “Schedules” shall be to a Schedule to the
Letter Agreement, in each case, unless otherwise indicated.  The terms defined
in the singular have a comparable meaning when used in the plural, and vice
versa.  References to “herein”, “hereof”, “hereunder” and the like refer to this
Agreement as a whole and not to any particular section or provision, unless the
context requires otherwise. The table of contents and headings contained in this
Agreement are for reference purposes only and are not part of this Agreement.
Whenever the words “include”, “includes” or “including” are used in this
Agreement, they shall be deemed followed by the words “without limitation”.  No
rule of construction against the draftsperson shall be applied in connection
with the interpretation or enforcement of this Agreement, as this Agreement is
entered into between sophisticated parties 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 or the
District of Columbia generally are authorized or required by law or other
governmental actions to close.
 
 
ARTICLE II
 
PURCHASE; CLOSING
 
2.1     Purchase.    On the terms and subject to the conditions set forth in
this Agreement, the Company agrees to sell to the Investor, and the Investor
agrees to purchase from the Company, at the Closing (as hereinafter defined),
the Preferred Shares for the price set forth on Schedule A (the “Purchase
Price”).
 
2.2    Closing.    (a)  On the terms and subject to the conditions set forth in
this Agreement, the closing of the Purchase (the “Closing”) will take place at
the location specified in Schedule A, at the time and on the date set forth in
Schedule A or as soon as practicable thereafter, or at such other place, time
and date as shall be agreed between the Company and the Investor.  The time and
date on which the Closing occurs is referred to in this Agreement as the
“Closing Date”.

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        (b)    Subject to the fulfillment or waiver of the conditions to the
Closing in Section 2.3, at the Closing the Company will deliver the Preferred
Shares as evidenced by one or more certificates dated the Closing Date and
bearing appropriate legends as hereinafter provided for, in exchange for payment
in full of the Purchase Price by wire transfer of immediately available United
States funds to a bank account designated by the Company on Schedule A.
 
2.3    Closing Conditions.    The obligation of the Investor to consummate the
Purchase is subject to the fulfillment (or waiver by the Investor) at or prior
to the Closing of each of the following conditions:
 
(a)   (i) any approvals or authorizations of all United States and other
governmental, regulatory or judicial authorities (collectively, “Governmental
Entities”) required for the consummation of the Purchase shall have been
obtained or made in form and substance reasonably satisfactory to each party and
shall be in full force and effect and all waiting periods required by United
States and other applicable law, if any, shall have expired and (ii) no
provision of any applicable United States or other law and no judgment,
injunction, order or decree of any Governmental Entity shall prohibit the
purchase and sale of the Preferred Shares as contemplated by this Agreement;
 
(b)    (i) the representations and warranties of the Company set forth
in  Section 3.1 shall be true and correct in all respects as though made on and
as of the Closing Date (other than representations and warranties that by their
terms speak as of another date, which representations and warranties shall be
true and correct in all respects as of such other date) and (ii) the Company
shall have performed in all respects all obligations required to be performed by
it under this Agreement at or prior to the Closing;
 
(c)    the Company shall have delivered to the Investor a certificate signed on
behalf of the Company by a Senior Executive Officer certifying to the effect
that the conditions set forth in Section 2.3(b) have been satisfied, in
substantially the form attached hereto as Annex A;
 
(d)    the Company shall have duly adopted and filed with the Secretary of State
of its jurisdiction of organization or other applicable Governmental Entity an
amendment to its certificate or articles of incorporation, articles of
association, or similar organizational document (“Charter”) in substantially the
form attached hereto as Annex B (the “Certificate of Designations”) and the
Company shall have delivered to the Investor a copy of the filed Certificate of
Designations with appropriate evidence from the Secretary of State or other
applicable Governmental Entity that the filing has been accepted, or if a filed
copy is unavailable, a certificate signed on behalf of the Company by a Senior
Executive Officer certifying to the effect that the filing of the Certificate of
Designation has been accepted, in substantially the form attached hereto as
Annex A;
 
(e)    the Company shall have delivered to the Investor true, complete and
correct certified copies of the Charter and bylaws of the Company;

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(f)    (i) the Company shall have effected such changes to its compensation,
bonus, incentive and other benefit plans, arrangements and agreements (including
golden parachute, severance and employment agreements) (collectively, “Benefit
Plans”) with respect to its Senior Executive Officers and any other employee of
the Company or its Affiliates subject to Section 111 of the Emergency Economic
Stabilization Act of 2008, as amended by the American Recovery and Reinvestment
Act of 2009, or otherwise from time to time (“EESA”), as implemented by any
guidance, rule or regulation thereunder, as the same shall be in effect from
time to time (collectively, the “Compensation Regulations”) (and to the extent
necessary for such changes to be legally enforceable, each of its Senior
Executive Officers and other employees shall have duly consented in writing to
such changes), as may be necessary, during the period in which any obligation of
the Company arising from financial assistance under the Troubled Asset Relief
Program remains outstanding (such period, as it may be further described in the
Compensation Regulations, the “Relevant Period”), in order to comply with
Section 111 of EESA or the Compensation Regulations, and (ii) 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 2.3(f)(i) has been satisfied, in substantially the form attached hereto
as Annex A;
 
(g)    each of the Company’s Senior Executive Officers and any other employee of
the Company or its Affiliates subject to Section 111 of EESA shall have
delivered to the Investor a written waiver in the form attached hereto as Annex
C releasing the Investor and the Company from any claims that such Senior
Executive Officer or other employee may otherwise have as a result of the
modification of, or the agreement of the Company hereunder to modify, the terms
of any Benefit Plans with respect to its Senior Executive Officers or other
employees to eliminate any provisions of such Benefit Plans that would not be in
compliance with the requirements of Section 111 of EESA as implemented by the
Compensation Regulations;
 
(h)    the Company shall have delivered to the Investor a written opinion from
counsel to the Company (which may be internal counsel), addressed to the
Investor and dated as of the Closing Date, in substantially the form attached
hereto as Annex D;
 
(i)    the Company shall have delivered certificates in proper form or, with the
prior consent of the Investor, evidence of shares in book-entry form, evidencing
the Preferred Shares to Investor or its designee(s);
 
(j)    the Company and the Company Subsidiaries shall have taken all necessary
action to ensure that the Company and the Company Subsidiaries and their
executive officers, respectively, are in compliance with (i) all guidelines put
forth by the Investor with respect to transparency, reporting and monitoring and
(ii) the provisions of EESA and any federal law respecting EESA, including the
Employ American Workers Act (Section 1611 of Division A, Title XVI of the
American Recovery and Reinvestment Act of 2009), Public Law No. 111-5, effective
as of February 17, 2009, and all rules, regulations and guidance issued
thereunder;

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(k)    the Company shall have delivered to the Investor a copy of the Disclosure
Schedule on or prior to the Signing Date and, to the extent that any information
set forth on the Disclosure Schedule needs to be updated or supplemented to make
it true, complete and correct as of the Closing Date, (i) the Company shall have
delivered to the Investor an update to the Disclosure Schedule (the “Disclosure
Update”), setting forth any information necessary to make the Disclosure
Schedule true, correct and complete as of the Closing Date and (ii) the
Investor, in its sole discretion, shall have approved the Disclosure Update,
provided, however, that the delivery and acceptance of the Disclosure Update
shall not limit or affect any rights of or remedies available to the Investor;
 
(l)    the Company shall have delivered to the Investor on or prior to the
Signing Date each of the consolidated financial statements of the Company and
its consolidated subsidiaries for each of the last three completed fiscal years
of the Company (which shall be audited to the extent audited financial
statements are available prior to the Signing Date) and each completed quarterly
period since the last completed fiscal year (collectively, the “Company
Financial Statements”); and
 
(m)    the Company shall have delivered to the Investor prior to the Signing
Date either (i) a true, complete and correct certified copy of each CDFI
Certification Application that each Certified Entity submitted to the Fund in
connection with its certification as a CDFI along with any updates to the CDFI
Certification Application necessary to make it true, complete and correct as of
the Signing Date or (ii), to the extent a copy of the CDFI Certification
Application that any Certified Entity submitted to the Fund in connection with
its certification as a CDFI is not available, a newly completed CDFI
Certification Application with respect to such Certified Entity true, complete
and correct as of the Signing Date (the CDFI Certification Application delivered
to the Investor pursuant to this Section 2.3(m), 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.
 
ARTICLE III

REPRESENTATIONS AND WARRANTIES
 
3.1    Representations and Warranties of the Company.    Except as Previously
Disclosed, the Company represents and warrants to the Investor that as of the
Signing Date and as of the Closing Date (or such other date specified herein):
 
(a)    Organization, Authority and Significant Subsidiaries.  The Company has
been duly incorporated and is validly existing and in good standing under the
laws of its jurisdiction of organization, with the necessary power and authority
to own, operate and lease its properties and conduct its business in all
material respects as it is being currently conducted, and except as has not,
individually or in the aggregate, had and would not reasonably be expected to
have a Company Material Adverse Effect, has been duly qualified as a foreign
corporation for the transaction of business and is in good standing under the
laws of each other jurisdiction in which it owns or leases properties or
conducts any business so as to require such qualification; each Certified Entity
(if not the Company) and each subsidiary of the Company that would be considered
a “significant subsidiary” within the meaning of Rule 1-02(w) of Regulation S-X
under the Securities Act of 1933 (the “Securities Act”), has been duly organized
and is validly existing in good standing under the laws of its jurisdiction of
organization.  The Charter and bylaws of the Company and each Certified Entity
(if not the Company), copies of which have been provided to the Investor prior
to the Signing Date, are true, complete and correct copies of such documents as
in full force and effect as of the Signing Date and as of the Closing Date.
 

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(b)    Capitalization.  The authorized capital stock of the Company, and the
outstanding capital stock of the Company (including securities convertible into,
or exercisable or exchangeable for, capital stock of the Company) as of the most
recent fiscal month-end preceding the Signing Date (the “Capitalization Date”)
is set forth on Schedule B.  The outstanding shares of capital stock of the
Company have been duly authorized and are validly issued and outstanding, fully
paid and nonassessable, and subject to no preemptive rights (and were not issued
in violation of any preemptive rights). As of the Signing Date, the Company does
not have outstanding any securities or other obligations providing the holder
the right to acquire its common stock (“Common Stock”) or other capital stock
that is not reserved for issuance as specified on Schedule B, and the Company
has not made any other commitment to authorize, issue or sell any Common Stock
or other capital stock.  Since the Capitalization Date, the Company has not
issued any shares of Common Stock or other capital stock, other than (i) shares
issued upon the exercise of stock options or delivered under other equity-based
awards or other convertible securities or warrants which were issued and
outstanding on the Capitalization Date and disclosed on Schedule B, and (ii)
shares disclosed on Schedule B.  Each holder of 5% or more of any class of
capital stock of the Company and such holder’s primary address are set forth on
Schedule B.
 
(c)    Preferred Shares.  The Preferred Shares have been duly and validly
authorized, and, when issued and delivered pursuant to this Agreement, such
Preferred Shares will be duly and validly issued and fully paid and
non-assessable, will not be issued in violation of any preemptive rights, and
will rank pari passu with or senior to all other series or classes of Preferred
Stock, whether or not designated, issued or outstanding, with respect to the
payment of dividends and the distribution of assets in the event of any
dissolution, liquidation or winding up of the Company.
 
(d)    Community Development Financial Institution Status; Domestic Ownership.
 
(i)    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).
 
(ii)   Each Certified Entity (A) is a regulated community development financial
institution (a “CDFI”) currently certified by the Community Development
Financial Institution Fund (the “Fund”) of the United States Department of the
Treasury pursuant to 12 C.F.R. 1805.201(a) 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).
 
(iii)   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.
 

UST Sequence No. 511
 
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(e)    Authorization, Enforceability.
 
(i)  The Company has the corporate power and authority to execute and deliver
this Agreement and to carry out its obligations hereunder (which includes the
issuance of the Preferred Shares).  The execution, delivery and performance by
the Company of this Agreement and the consummation of the transactions
contemplated hereby have been duly authorized by all necessary corporate action
on the part of the Company and its stockholders, and no further approval or
authorization is required on the part of the Company.  This Agreement is a valid
and binding obligation of the Company enforceable against the Company in
accordance with its terms, subject to any limitations by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the enforcement
of creditors’ rights generally and general equitable principles, regardless of
whether such enforceability is considered in a  proceeding at law or in equity
(“Bankruptcy Exceptions”).
 
(ii)  The execution, delivery and performance by the Company of this Agreement
and the consummation of the transactions contemplated hereby and compliance by
the Company with the provisions hereof, will not (A) violate, conflict with, or
result in a breach of any provision of, or constitute a default (or an event
which, with notice or lapse of time or both, would constitute a default) under,
or result in the termination of, or accelerate the performance required by, or
result in a right of termination or acceleration of, or result in the creation
of, any lien, security interest, charge or encumbrance upon any of the
properties or assets of the Company or any subsidiary of the Company or
Certified Entity (if not the Company) (each subsidiary or Certified Entity, a
“Company Subsidiary” and, collectively, the “Company Subsidiaries”) under any of
the terms, conditions or provisions of (x) its organizational documents or (y)
any note, bond, mortgage, indenture, deed of trust, license, lease, agreement or
other instrument or obligation to which the 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)(y) 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.
 
(iii)  Other than the filing of the Certificate of Designations with the
Secretary of State of its jurisdiction of organization or other applicable
Governmental Entity, such filings and approvals as are required to be made or
obtained under any state “blue sky” laws and such as have been made or obtained,
no notice to, filing with, exemption or review by, or authorization, consent or
approval of, any Governmental Entity is required to be made or obtained by the
Company in connection with the consummation by the Company of the Purchase
except for any such notices, filings, exemptions, reviews, authorizations,
consents and approvals the failure of which to make or obtain would not,
individually or in the aggregate, reasonably be expected to have a Company
Material Adverse Effect.
 
(f)    Anti-takeover Provisions and Rights Plan.  The Board of Directors of the
Company (the “Board of Directors”) has taken all necessary action to ensure that
the transactions contemplated by this Agreement and the consummation of the
transactions contemplated hereby will be exempt from any anti-takeover or
similar provisions of the Company’s Charter and bylaws, and any other provisions
of any applicable “moratorium”, “control share”, “fair price”, “interested
stockholder” or other anti-takeover laws and regulations of any jurisdiction.
 
(g)    No Company Material Adverse Effect.  Since the last day of the last
completed fiscal period for which financial statements are included in the
Company Financial Statements, no fact, circumstance, event, change, occurrence,
condition or development has occurred that, individually or in the aggregate,
has had or would reasonably be expected to have a Company Material Adverse
Effect, except as disclosed on Schedule C.
 
(h)    Company Financial Statements.  The Company Financial Statements present
fairly in all material respects the consolidated financial position of the
Company and its consolidated subsidiaries as of the dates indicated therein and
the consolidated results of their operations for the periods specified therein;
and except as stated therein, such financial statements (i) were prepared in
conformity with GAAP applied on a consistent basis (except as may be noted
therein) and (ii) have been prepared from, and are in accordance with, the books
and records of the Company and the Company Subsidiaries.
 
(i)    Reports.
 
(i)  Since December 31, 2008, the Company and each Company Subsidiary has filed
all reports, registrations, documents, filings, statements and submissions,
together with any amendments thereto, that it was required to file with any
Governmental Entity (the foregoing, collectively, the “Company Reports”) and has
paid all fees and assessments due and payable in connection therewith, except,
in each case, as would not, individually or in the aggregate, reasonably be
expected to have a Company Material Adverse Effect.  As of their respective
dates of filing, the Company Reports complied in all material respects with all
statutes and applicable rules and regulations of the applicable Governmental
Entities.
 
(ii)  The records, systems, controls, data and information of the Company and
the Company Subsidiaries are recorded, stored, maintained and operated under
means (including any electronic, mechanical or photographic process, whether
computerized or not) that are under the exclusive ownership and direct control
of the Company or the Company Subsidiaries or their accountants (including all
means of access thereto and therefrom), except for any non-exclusive ownership
and non-direct control that would not reasonably be expected to have a material
adverse effect on the system of internal accounting controls described below in
this Section 3.1(i)(ii).  The Company (A) has implemented and maintains adequate
disclosure controls and procedures to ensure that material information relating
to the Company, including the consolidated Company Subsidiaries, is made known
to the chief executive officer and the chief financial officer of the Company by
others within those entities, and (B) has disclosed, based on its most recent
evaluation prior to the Signing Date, to the Company’s outside auditors and the
audit committee of the Board of Directors (x) any significant deficiencies and
material weaknesses in the design or operation of internal controls that are
reasonably likely to adversely affect the Company’s ability to record, process,
summarize and report financial information and (y) any fraud, whether or not
material, that involves management or other employees who have a significant
role in the Company’s internal controls over financial reporting.

UST Sequence No. 511
 
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(j)      No Undisclosed Liabilities.  Neither the Company nor any of the Company
Subsidiaries has any liabilities or obligations of any nature (absolute,
accrued, contingent or otherwise) which are not properly reflected or reserved
against in the Company Financial Statements to the extent required to be so
reflected or reserved against in accordance with GAAP, except for (i)
liabilities that have arisen since the last fiscal year end in the ordinary and
usual course of business and consistent with past practice and (ii) liabilities
that, individually or in the aggregate, have not had and would not reasonably be
expected to have a Company Material Adverse Effect.
 
(k)    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 any of the Preferred Shares under the Securities Act, and
the rules and regulations of the Securities and Exchange Commission (the “SEC”)
promulgated thereunder), which might subject the offering, issuance or sale of
any of the Preferred Shares to Investor pursuant to this Agreement to the
registration requirements of the Securities Act.
 
(l)    Litigation and Other Proceedings.  Except (i) as set forth on Schedule D
or (ii) as would not, individually or in the aggregate, reasonably be expected
to have a Company Material Adverse Effect, there is no (A) pending or, to the
knowledge of the Company, threatened, claim, action, suit, investigation or
proceeding, against the Company or any Company Subsidiary or to which any of
their assets are subject nor is the Company or any Company Subsidiary subject to
any order, judgment or decree or (B) unresolved violation, criticism or
exception by any Governmental Entity with respect to any report or relating to
any examinations or inspections of the Company or any Company Subsidiaries.
 
(m)    Compliance with Laws.  Except as would not, individually or in the
aggregate, reasonably be expected to have a Company Material Adverse Effect, the
Company and the Company Subsidiaries have all permits, licenses, franchises,
authorizations, orders and approvals of, and have made all filings, applications
and registrations with, Governmental Entities that are required in order to
permit them to own or lease their properties and assets and to carry on their
business as presently conducted and that are material to the business of the
Company or such Company Subsidiary.  Except as set forth on Schedule E, the
Company and the Company Subsidiaries have complied in all respects and are not
in default or violation of, and none of them is, to the knowledge of the
Company, under investigation with respect to or, to the knowledge of the
Company, have been threatened to be charged with or given notice of any
violation of, any applicable domestic (federal, state or local) or foreign law,
statute, ordinance, license, rule, regulation, policy or guideline, order,
demand, writ, injunction, decree or judgment of any Governmental Entity, other
than such noncompliance, defaults or violations that would not, individually or
in the aggregate, reasonably be expected to have a Company Material Adverse
Effect.  Except for statutory or regulatory restrictions of general application
or as set forth on Schedule E, no Governmental Entity has placed any restriction
on the business or properties of the Company or any Company Subsidiary that
would, individually or in the aggregate, reasonably be expected to have a
Company Material Adverse Effect.

UST Sequence No. 511
 
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(n)    Employee Benefit Matters.  Except as would not reasonably be expected to
have, either individually or in the aggregate, a Company Material Adverse
Effect: (i) each “employee benefit plan” (within the meaning of Section 3(3) of
the Employee Retirement Income Security Act of 1974, as amended (“ERISA”))
providing benefits to any current or former employee, officer or director of the
Company or any member of its “Controlled Group” (defined as any organization
which is a member of a controlled group of corporations within the meaning of
Section 414 of the Internal Revenue Code of 1986, as amended (the “Code”)) that
is sponsored, maintained or contributed to by the Company or any member of its
Controlled Group and for which the Company or any member of its Controlled Group
would have any liability, whether actual or contingent (each, a “Plan”) has been
maintained in compliance with its terms and with the requirements of all
applicable statutes, rules and regulations, including ERISA and the Code; (ii)
with respect to each Plan subject to Title IV of ERISA (including, for purposes
of this clause (ii), any plan subject to Title IV of ERISA that the Company or
any member of its Controlled Group previously maintained or contributed to in
the six years prior to the Signing Date), (1) no “reportable event” (within the
meaning of Section 4043(c) of ERISA), other than a reportable event for which
the notice period referred to in Section 4043(c) of ERISA has been waived, has
occurred in the three years prior to the Signing Date or is reasonably expected
to occur, (2) no “accumulated funding deficiency” (within the meaning of Section
302 of ERISA or Section 412 of the Code), whether or not waived, has occurred in
the three years prior to the Signing Date or is reasonably expected to occur,
(3) the fair market value of the assets under each Plan exceeds the present
value of all benefits accrued under such Plan (determined based on the
assumptions used to fund such Plan) and (4) neither the Company nor any member
of its Controlled Group has incurred in the six years prior to the Signing Date,
or reasonably expects to incur, any liability under Title IV of ERISA (other
than contributions to the Plan or premiums to the Pension Benefit Guaranty
Corporation in the ordinary course and without default) in respect of a Plan
(including any Plan that is a “multiemployer plan”, within the meaning of
Section 4001(c)(3) of ERISA); and (iii) each Plan that is intended to be
qualified under Section 401(a) of the Code has received a favorable
determination letter from the Internal Revenue Service with respect to its
qualified status that has not been revoked, or such a determination letter has
been timely applied for but not received by the Signing Date, and nothing has
occurred, whether by action or by failure to act, which could reasonably be
expected to cause the loss, revocation or denial of such qualified status or
favorable determination letter.

UST Sequence No. 511
 
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(o)    Taxes.  Except as would not, individually or in the aggregate, reasonably
be expected to have a Company Material Adverse Effect, (i) the Company and the
Company Subsidiaries have filed all federal, state, local and foreign income and
franchise Tax returns (together with any schedules and attached thereto)
required to be filed through the Signing Date, subject to permitted extensions,
and have paid all Taxes due thereon, (ii) all such Tax returns (together with
any schedules and attached thereto) are true, complete and correct in all
material respects and were prepared in compliance with all applicable laws and
(iii) no Tax deficiency has been determined adversely to the Company or any of
the Company Subsidiaries, nor does the Company have any knowledge of any Tax
deficiencies.
 
(p)    Properties and Leases.  Except as would not, individually or in the
aggregate, reasonably be expected to have a Company Material Adverse Effect, the
Company and the Company Subsidiaries have good and marketable title to all real
properties and all other properties and assets owned by them, in each case free
from liens (including, without limitation, liens for Taxes), encumbrances,
claims and defects that would affect the value thereof or interfere with the use
made or to be made thereof by them.  Except as would not, individually or in the
aggregate, reasonably be expected to have a Company Material Adverse Effect, the
Company and the Company Subsidiaries hold all leased real or personal property
under valid and enforceable leases with no exceptions that would interfere with
the use made or to be made thereof by them.
 
(q)    Environmental Liability.  Except as would not, individually or in the
aggregate, reasonably be expected to have a Company Material Adverse Effect:
 
(i)  there is no legal, administrative, or other proceeding, claim or action of
any nature seeking to impose, or that would reasonably be expected to result in
the imposition of, on the Company or any Company Subsidiary, any liability
relating to the release of hazardous substances as defined under any local,
state or federal environmental statute, regulation or ordinance, including the
Comprehensive Environmental Response, Compensation and Liability Act of 1980,
pending or, to the Company’s knowledge, threatened against the Company or any
Company Subsidiary;
 
(ii)  to the Company’s knowledge, there is no reasonable basis for any such
proceeding, claim or action; and
 
(iii)  neither the Company nor any Company Subsidiary is subject to any
agreement, order, judgment or decree by or with any court, Governmental Entity
or third party imposing any such environmental liability.
 
(r)    Risk Management Instruments.  Except as would not, individually or in the
aggregate, reasonably be expected to have a Company Material Adverse Effect, all
derivative instruments, including, swaps, caps, floors and option agreements,
whether entered into for the Company’s own account, or for the account of one or
more of the Company Subsidiaries or its or their customers, were entered into
(i) only in the ordinary course of business, (ii) in accordance with prudent
practices and in all material respects with all applicable laws, rules,
regulations and regulatory policies and (iii) with counterparties believed to be
financially responsible at the time; and each of such instruments constitutes
the valid and legally binding obligation of the Company or one of the Company
Subsidiaries, enforceable in accordance with its terms, except as may be limited
by the Bankruptcy Exceptions.  Neither the Company or the Company Subsidiaries,
nor, to the knowledge of the Company, any other party thereto, is in breach of
any of its obligations under any such agreement or arrangement other than such
breaches that would not, individually or in the aggregate, reasonably be
expected to have a Company Material Adverse Effect.

UST Sequence No. 511
 
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(s)    Agreements with Regulatory Agencies.  Except as set forth on Schedule F,
neither the Company nor any Company Subsidiary is subject to any material
cease-and-desist or other similar order or enforcement action issued by, or is a
party to any material written agreement, consent agreement or memorandum of
understanding with, or is a party to any commitment letter or similar
undertaking to, or is subject to any capital directive by, or since December 31,
2006, has adopted any board resolutions at the request of, any Governmental
Entity that currently restricts in any material respect the conduct of its
business or that in any material manner relates to its capital adequacy, its
liquidity and funding policies and practices, its ability to pay dividends, its
credit, risk management or compliance policies or procedures, its internal
controls, its management or its operations or business (each item in this
sentence, a “Regulatory Agreement”), nor has the Company or any Company
Subsidiary been advised since December 31, 2006, by any such Governmental Entity
that it is considering issuing, initiating, ordering, or requesting any such
Regulatory Agreement.  The Company and each Company Subsidiary is in compliance
in all material respects with each Regulatory Agreement to which it is party or
subject, and neither the Company nor any Company Subsidiary has received any
notice from any Governmental Entity indicating that either the Company or any
Company Subsidiary is not in compliance in all material respects with any such
Regulatory Agreement.
 
(t)    Insurance.  The Company and the Company Subsidiaries are insured with
reputable insurers against such risks and in such amounts as the management of
the Company reasonably has determined to be prudent and consistent with industry
practice.  The Company and the Company Subsidiaries are in material compliance
with their insurance policies and are not in default under any of the material
terms thereof, each such policy is outstanding and in full force and effect, all
premiums and other payments due under any material policy have been paid, and
all claims thereunder have been filed in due and timely fashion, except, in each
case, as would not, individually or in the aggregate, reasonably be expected to
have a Company Material Adverse Effect.
 
(u)    Intellectual Property.  Except as would not, individually or in the
aggregate, reasonably be expected to have a Company Material Adverse Effect, (i)
the Company and each Company Subsidiary owns or otherwise has the right to use,
all intellectual property rights, including all trademarks, trade dress, trade
names, service marks, domain names, patents, inventions, trade secrets,
know-how, works of authorship and copyrights therein, that are used in the
conduct of their existing businesses and all rights relating to the plans,
design and specifications of any of its branch facilities (“Proprietary Rights”)
free and clear of all liens and any claims of ownership by current or former
employees, contractors, designers or others and (ii) neither the Company nor any
of the Company Subsidiaries is materially infringing, diluting, misappropriating
or violating, nor has the Company or any of the Company Subsidiaries received
any written (or, to the knowledge of the Company, oral) communications alleging
that any of them has materially infringed, diluted, misappropriated or violated,
any of the Proprietary Rights owned by any other person.  Except as would not,
individually or in the aggregate, reasonably be expected to have a Company
Material Adverse Effect, to the Company’s knowledge, no other person is
infringing, diluting, misappropriating or violating, nor has the Company or any
or the Company Subsidiaries sent any written communications since January 1,
2007, alleging that any person has infringed, diluted, misappropriated or
violated, any of the Proprietary Rights owned by the Company and the Company
Subsidiaries.

UST Sequence No. 511
 
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(v)    Brokers and Finders.  The Investor has no liability for any amounts that
any broker, finder or investment banker is entitled to for any financial
advisory, brokerage, finder’s or other fee or commission in connection with this
Agreement or the transactions contemplated hereby based upon arrangements made
by or on behalf of the Company or any Company Subsidiary.
 
(w)    Disclosure Schedule.  The Company has delivered the Disclosure Schedule
and, if applicable, the Disclosure Update to the Investor and the information
contained in the Disclosure Schedule, as modified by the information contained
in the Disclosure Update, if applicable, is true, complete and correct.
 
(x)    CPP/CDCI Securities.  To the extent that the Company participated in the
Troubled Asset Relief Program Capital Purchase Program (“CPP”) or the CDCI prior
to the Signing Date and the Company has any Preferred Stock or other securities
issued in connection with its participation in the CPP or the CDCI (the
“CPP/CDCI Securities”) outstanding, the Company has (i) not breached any
representation, warranty or covenant set forth in any of the documents governing
the CPP/CDCI Securities or its sale to Investor and (ii) paid to Investor all
accrued and unpaid dividends and/or interest then due on the CPP/CDCI
Securities.
 
ARTICLE IV

COVENANTS
 
4.1    Affirmative Covenants.    The Company hereby covenants and agrees with
Investor that:
 
(a)    Commercially Reasonable Efforts.  Subject to the terms and conditions of
this Agreement, each of the parties will use its commercially reasonable efforts
in good faith to take, or cause to be taken, all actions, and to do, or cause to
be done, all things necessary, proper or desirable, or advisable under
applicable laws, so as to permit consummation of the Purchase as promptly as
practicable and otherwise to enable consummation of the transactions
contemplated hereby and shall use commercially reasonable efforts to cooperate
with the other party to that end.
 
(b)    Certain Notifications Until Closing.  From the Signing Date until the
Closing, the Company shall promptly notify the Investor of (i) any fact, event
or circumstance of which it is aware and which would reasonably be expected to
cause any representation or warranty of the Company contained in this Agreement
to be untrue or inaccurate in any material respect or to cause any covenant or
agreement of the Company contained in this Agreement not to be complied with or
satisfied in any material respect and (ii) except as Previously Disclosed, any
fact, circumstance, event, change, occurrence, condition or development of which
the Company is aware and which, individually or in the aggregate, has had or
would reasonably be expected to have a Company Material Adverse Effect;
provided, however, that delivery of any notice pursuant to this Section 4.1(b)
shall not limit or affect any rights of or remedies available to the Investor.

UST Sequence No. 511
 
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(c)    Access, Information and Confidentiality.
 
(i)  From the Signing Date until the date when the Investor owns an amount of
Preferred Shares having an aggregate liquidation value of less than 10% of the
Purchase Price, the Company will permit the Investor and its agents,
consultants, contractors and advisors (x) acting through the Appropriate Federal
Banking Agency, or otherwise to the extent necessary to evaluate, manage, or
transfer its investment in the Company, to examine the corporate books, Tax
returns (including all schedules and attached thereto) and other information
reasonably requested by Investor relating to Taxes and make copies thereof and
to discuss the affairs, finances and accounts of the Company and the Company
Subsidiaries with the principal officers of the Company, all upon reasonable
notice and at such reasonable times and as often as the Investor may reasonably
request and (y) to review any information material to the Investor’s investment
in the Company provided by the Company to its Appropriate Federal Banking
Agency.  Any investigation pursuant to this Section 4.1(c) shall be conducted
during normal business hours and in such manner as not to interfere unreasonably
with the conduct of the business of the Company, and nothing herein shall
require the Company or any Company Subsidiary to disclose any information to the
Investor to the extent (A) prohibited by applicable law or regulation, or (B)
that such disclosure would reasonably be expected to cause a violation of any
agreement to which the Company or any Company Subsidiary is a party or would
cause a risk of a loss of privilege to the Company or any Company Subsidiary
(provided that the Company shall use commercially reasonable efforts to make
appropriate substitute disclosure arrangements under circumstances where the
restrictions in this clause (i) apply).
 
(ii)  From the Signing Date until the date on which all of the Preferred Shares
have been redeemed in whole, the Company will deliver, or will cause to be
delivered, to the Investor:
 
    (A)  as soon as available after the end of each fiscal year of the Company,
and in any event within 90 days thereafter, a consolidated balance sheet of the
Company as of the end of such fiscal year, and consolidated statements of
income, retained earnings and cash flows of the Company for such year, in each
case prepared in accordance with GAAP and setting forth in each case in
comparative form the figures for the previous fiscal year of the Company and
which shall be audited to the extent audited financial statements are
available;1

UST Sequence No. 511
 
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    (B)  as soon as available after the end of the first, second and third
quarterly periods in each fiscal year of the Company, a copy of any quarterly
reports provided to other stockholders of the Company or Company management by
the Company;
 
    (C)  as soon as available after the Company receives any assessment of the
Company’s internal controls, a copy of such assessment;
 
    (D)  annually on a date specified by the Investor, a completed survey, in a
form specified by the Investor, providing, among other things, a description of
how the Company has utilized the funds the Company received hereunder in
connection with the sale of the Preferred Shares and the effects of such funds
on the operations and status of the Company;
 
    (E)  as soon as such items become effective, any amendments to the Charter,
bylaws or other organizational documents of the Company; and
 
    (F)  at the same time as such items are sent to any stockholders of the
Company, copies of any information or documents sent by the Company to its
stockholders.
 
(iii)  The Investor will use reasonable best efforts to hold, and will use
reasonable best efforts to cause its agents, consultants, contractors and
advisors and United States executive branch officials and employees, to hold, in
confidence all non-public records, books, contracts, instruments, computer data
and other data and information (collectively, “Information”) concerning the
Company furnished or made available to it by the Company or its representatives
pursuant to this Agreement (except to the extent that such information can be
shown to have been (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.
 

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 1 To the extent that the Company informed the Investor on the Signing Date that
it does not prepare financial statements in accordance with GAAP in the ordinary
course, the Investor may consider other annual financial reporting packages
acceptable to it in its sole discretion.

UST Sequence No. 511
 
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(iv)  The Investor’s information rights pursuant to Section 4.1(c)(ii)(A), (B),
(C), (E) and (F) and the Investor’s right to receive certifications from the
Company pursuant to Section 4.1(d)(ii) may be assigned by the Investor to a
transferee or assignee of the Preferred Shares with a liquidation preference of
no less than an amount equal to 2% of the initial aggregate liquidation
preference of the Preferred Shares.
 
(v)  From the Signing Date until the date when the Investor no longer owns any
Preferred Shares, the Company shall permit, and shall cause each of the
Company’s Subsidiaries to permit (A) the Investor and its agents, consultants,
contractors and advisors, (B) the Special Inspector General of the Troubled
Asset Relief Program, and (C) the Comptroller General of the United States
access to personnel and any books, papers, records or other data, in each case,
to the extent relevant to ascertaining compliance with the financing terms and
conditions; provided that prior to disclosing any information pursuant to clause
(B) or (C), the Special Inspector General of the Troubled Asset Relief Program
and the Comptroller General of the United States shall have agreed, with respect
to documents obtained under this Agreement in furtherance of its function, to
follow applicable law and regulation (and the applicable customary policies and
procedures) regarding the dissemination of confidential materials, including
redacting confidential information from the public version of its reports and
soliciting the input from the Company as to information that should be afforded
confidentiality, as appropriate.
 
(vi)  Nothing in this Section shall be construed to limit the authority that the
Special Inspector General of the Troubled Asset Relief Program, the Comptroller
General of the United States or any other applicable regulatory authority has
under law.
 
(d)    CDFI Requirements.
 
(i)  From the Signing Date until the date on which all of the Preferred Shares
have been redeemed in whole, each Certified Entity shall (A) be certified by the
Fund as a CDFI; (B) together with its Affiliates collectively meet the
eligibility requirements of 12 C.F.R. 1805.200(b); (C) have a primary mission of
promoting community development, as may be determined by Investor from time to
time, based on criteria set forth in 12 C.F.R. 1805.201(b)(1); (D) provide
Financial Products, Development Services, and/or other similar financing as a
predominant business activity in arm’s-length transactions; (E) serve a Target
Market by serving one or more Investment Areas and/or Targeted Populations as
may be determined by Investor from time to time, substantially in the manner set
forth in 12 C.F.R. 1805.201(b)(3); (F) provide Development Services in
conjunction with its Financial Products, directly, through an Affiliate or
through a contract with a third-party provider; (G) maintain accountability to
residents of the applicable Investment Area(s) or Targeted Population(s) through
representation on its governing Board of Directors or otherwise; and (H) remain
a non-governmental entity which is not an agency or instrumentality of the
United States of America, or any State or political subdivision thereof, as
described in 12 C.F.R. 1805.201(b)(6) and within the meaning of any supplemental
regulations or interpretations of 12 C.F.R. 1805.201(b)(6) or such supplemental
regulations published by the Fund.  Notwithstanding any other provision hereof,
as used in this Section 4.1(d), the terms “Affiliates”; “Financial Products”;
“Development Services”; “Target Market”; “Investment Areas”; and “Targeted
Populations” have the meanings ascribed to such terms in 12 C.F.R. 1805.104.

UST Sequence No. 511
 
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(ii)  From the Signing Date until the date on which all of the Preferred Shares
have been redeemed in whole, the Company shall deliver to Investor (1) (x) on
the date that is 180 days after the Closing Date and (y) annually on the same
date on which the Company delivers the documentation required under Section
4.1(c)(ii)(A) to the Investor, a certificate signed on behalf of the Company by
a Senior Executive Officer, in substantially the form attached hereto as Annex
F, certifying (A) that the Company and each Certified Entity remains in
compliance with the covenants set forth in Section 4.1(d)(i); (B) that the
information in the CDFI Application, as modified by any updates to the CDFI
Application provided by the Company to the Investor on or prior to the date of
such certificate, with respect to the covenants set forth in Section
4.1(d)(i)(B) and Section 4.1(d)(i)(D) remains true, correct and complete as of
such date or, to the extent any information set forth in the CDFI Application,
as modified by any updates to the CDFI Application provided by the Company to
the Investor on or prior to the date of such certificate, with respect to such
covenants needs to be updated or supplanted to make it true, complete and
correct as of such date, that an updated narrative to the CDFI Application
setting forth any information necessary to make the information set forth in the
CDFI Application is true, complete and correct as of such date; (C) either (a)
that the contracts and material agreements entered into by each Certified Entity
with respect to Development Services previously disclosed to the Investor remain
in effect or (b) that attached are any new contracts and material agreements
entered into by the Certified Entity with respect to Development Services; (D) a
list of the names and addresses of the individuals which comprise the board of
directors of each Certified Entity as of such date and, to the extent any of
such individuals was not a member of the board of directors of such Certified
Entity as of the last certification to the Investor, a narrative describing such
individual’s relationship to the applicable Investment Area(s) and Targeted
Population(s) or, if such Certified Entity maintains accountability to residents
of the applicable Investment Area(s) or Target Population(s) through means other
than representation on its governing board of directors and such means have
changed since the date of the last certification to the Investor, a narrative
describing such change; (E) that each Certified Entity is not an agency of the
United States of America, or any State or political subdivision thereof, as
described in 12 C.F.R. 1805.201(b)(6) and within the meaning of any supplemental
regulations or interpretations of 12 C.F.R. 1805.201(b)(6) or such supplemental
regulations published by the Fund and (F) that the Company remains in compliance
with the covenants set forth in Section 4.1(f) and Section 4.1(m) and (2) within
five (5) business days of receipt, copies of any notices, correspondence or
other written communication between each Certified Entity and the Fund,
including any form that such Certified Entity is required to provide to the Fund
due to the occurrence of a “Material Event” within the meaning of the Fund’s
CDFI Certification Procedures.

UST Sequence No. 511
 
18

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

UST Sequence No. 511
 
19

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(iv)  Limitation on Deductions.  During the Relevant Period, the Company agrees
that it shall not claim a deduction for remuneration for federal income tax
purposes in excess of $500,000 for each Senior Executive Officer that would not
be deductible if Section 162(m)(5) of the Code applied to the Company.
 
(f)    Bank and Thrift Holding Company Status.  If the Company is a Bank Holding
Company or a Savings and Loan Holding Company on the Signing Date, then the
Company shall maintain its status as a Bank Holding Company or Savings and Loan
Holding Company, as the case may be, for as long as the Investor owns any
Preferred Shares.  The Company shall redeem all Preferred Shares held by the
Investor prior to terminating its status as a Bank Holding Company or Savings
and Loan Holding Company, as applicable.
 
(g)    Predominantly Financial.  For as long as the Investor owns any Preferred
Shares, the Company, to the extent it is not itself an insured depository
institution, agrees to remain predominantly engaged in financial activities.  A
company is predominantly engaged in financial activities if the annual gross
revenues derived by the company and all subsidiaries of the company (excluding
revenues derived from subsidiary depository institutions), on a consolidated
basis, from engaging in activities that are financial in nature or are
incidental to a financial activity under subsection (k) of Section 4 of the Bank
Holding Company Act of 1956 (12 U.S.C. 1843(k)) represent at least 85 percent of
the consolidated annual gross revenues of the company.
 
(h)    Capital Covenant.  From the Signing Date until the date on which all of
the Preferred Shares have been redeemed in whole, the Company and the Company
Subsidiaries shall maintain such capital as may be necessary to meet the minimum
capital requirements of the Appropriate Federal Banking Agency, as in effect
from time to time.
 
(i)    HAMP Modifications.  The Company shall take all necessary action to
ensure that (A) from and after the date the Company or any Company Subsidiary
that services residential mortgage loans has 100 or more residential mortgage
loans not owned or guaranteed by Fannie Mae or Freddie Mac which have been past
due for 60 or more days, the Company or such Company Subsidiary shall, to the
extent such programs are open for participation, (1) participate in the United
States Department of the Treasury’s Making Home Affordable (“MHA”) program,
including MHA’s Second Lien Modification Program and (2) immediately execute a
Commitment to Purchase Financial Instrument and Servicer Participation Agreement
(in such form as may be set forth on the MHA website at www.hmpadmin.com from
time to time) with Fannie Mae (acting as the United States Department of the
Treasury’s fiscal agent) and (B) if the Company or any Company Subsidiary owns
mortgage loans that are serviced by a non-affiliated mortgage servicer, the
Company or such Company Subsidiary shall consent to any MHA modification request
made by such mortgage servicer.

UST Sequence No. 511
 
20

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(j)    Reporting Requirements.  Prior to the date on which all of the Preferred
Shares have been redeemed in whole, the Company covenants and agrees that, at
all times on or after the Closing Date, (i) to the extent it is subject to the
reporting requirements of Section 13 or 15(d) of the Exchange Act, it shall
comply with the terms and conditions set forth in Annex E or (ii) as soon as
practicable after the date that the Company becomes subject to the reporting
requirements of Section 13 or 15(d) of the Exchange Act, it shall comply with
the terms and conditions set forth in Annex E.
 
(k)    Compliance with Employ American Workers Act.  The Company shall agree to
comply, and take all necessary action to ensure that any Company Subsidiary
complies, in all respects with the provisions of EESA and any federal law
respecting EESA, including the Employ American Workers Act (Section 1611 of
Division A, Title XVI of the American Recovery and Reinvestment Act of 2009),
Public Law No. 111-5, effective as of February 17, 2009, as implemented by any
rules, regulation or guidance thereunder, as such may be amended or supplemented
from time to time, and any applicable guidance of the United States Department
of the Treasury with respect thereto.
 
(l)    Transfer of Proceeds to Certified Entities.  If the Company is not a
Certified Entity, the Company shall immediately transfer to its related
Certified Entities, as capital contributions, any proceeds it receives in
connection with the sale of Preferred Shares.
 
(m)    Control by Foreign Bank or Company.  Prior to the date on which all of
the Preferred Shares have been redeemed in whole, the Company shall not be
controlled (within the meaning of the Bank Holding Company Act of 1956 (12
U.S.C. 1841(a)(2)) and 12 C.F.R. 225(a)(i) in the case of Bank Holding Companies
and banks and the Home Owners’ Loan Act of 1933 (12 U.S.C. 1467a(a)(2)) and 12
C.F.R. 583.7 in the case of Savings and Loan Holding Companies and savings
associations) by a foreign bank or company.
 
4.2    Negative Covenants.  The Company hereby covenants and agrees with the
Investor that:
 
(a)    Certain Transactions.
 
(i)  The Company shall not merge or consolidate with, or sell, transfer or lease
all or substantially all of its property or assets to, any other party unless
the successor, transferee or lessee party (or its ultimate parent entity), as
the case may be (if not the Company), expressly assumes the due and punctual
performance and observance of each and every covenant, agreement and condition
of this Agreement to be performed and observed by the Company.
 
(ii)  Without the prior written consent of the Investor, until such time as the
Investor shall cease to own any Preferred Shares, the Company shall not permit
any of its “significant subsidiaries” (as such term is defined in Rule 12b-2
promulgated under the Exchange Act) to (i) engage in any merger, consolidation,
statutory share exchange or similar transaction following the consummation of
which such significant subsidiary is not wholly-owned by the Company, (ii)
dissolve or sell all or substantially all of its assets or property other than
in connection with an internal reorganization or consolidation involving
wholly-owned subsidiaries of the Company or (iii) issue or sell any shares of
its capital stock or any securities convertible or exercisable for any such
shares, other than issuances or sales in connection with an internal
reorganization or consolidation involving wholly-owned subsidiaries of the
Company.

UST Sequence No. 511
 
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(b)    Restriction on Dividends and Repurchases.
 
(i)  The Company covenants and agrees that it shall not violate any of the
restrictions on dividends, distributions, redemptions, repurchases, acquisitions
and related actions set forth in the Certificate of Designations, which are
incorporated by reference herein as if set forth in full.
 
(ii)  During the period beginning on the eighth anniversary of the Closing and
ending on the date on which the Investor no longer owns any of the 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 capital stock or other equity securities of any kind of the
Company or any Company Subsidiary; 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 Company Subsidiary, or any trust preferred securities
issued by the Company or any Affiliate of the Company, other than (A)
redemptions, purchases or other acquisitions of the Preferred Shares, (B)
regular dividends on shares of preferred stock in accordance with the terms
thereof and which are permitted under the terms of the Preferred Shares, or (C)
dividends or distributions by any wholly-owned Company Subsidiary.
 
(c)    Related Party Transactions.  Until such time as the Investor ceases to
own any debt or equity securities of the Company, including the Preferred
Shares, the Company and the Company Subsidiaries shall not enter into
transactions with Affiliates or related persons (within the meaning of Item 404
under the SEC’s Regulation S-K) unless (A) such transactions are on terms no
less favorable to the Company and the Company Subsidiaries than could be
obtained from an unaffiliated third party, and (B) have been approved by the
audit committee of the Board of Directors or comparable body of independent
directors of the Company, or if there are no independent directors, the Board of
Directors, provided that the Board of Directors shall maintain written
documentation which supports its determination that the transaction meets the
requirements of clause (A) of this Section 4.2(c).
 
(d)    Restriction on Repurchase of Preferred Shares Not Held by
Investor.  Prior to the date on which the Investor no longer owns any of the
Preferred Shares the Company shall not repurchase, redeem, call or otherwise
reacquire any Preferred Shares from any holder thereof, whether by means of open
market purchase, negotiated transaction, or otherwise, unless it offers to
repurchase, redeem, call or otherwise reacquire a ratable portion of the
Preferred Shares, as the case may be, then held by the Investor on the same
terms and conditions.
 

UST Sequence No. 511
 
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ARTICLE V

 
ADDITIONAL AGREEMENTS
 
5.1    Purchase for Investment.   The Investor acknowledges that the Preferred
Shares have not been registered under the Securities Act or under any state
securities laws. The Investor (a) is acquiring the Preferred Shares pursuant to
an exemption from registration under the Securities Act solely for investment
with no present intention to distribute them to any person in violation of the
Securities Act or any applicable U.S. state securities laws, (b) will not sell
or otherwise dispose of any of the Preferred Shares, except in compliance with
the registration requirements or exemption provisions of the Securities Act and
any applicable U.S. state securities laws, and (c) has such knowledge and
experience in financial and business matters and in investments of this type
that it is capable of evaluating the merits and risks of the Purchase and of
making an informed investment decision.
 
5.2    Legends.   (a)  The Investor agrees that all certificates or other
instruments representing the Preferred Shares will bear a legend substantially
to the following effect:
 
“THE SECURITIES REPRESENTED BY THIS INSTRUMENT ARE NOT SAVINGS ACCOUNTS,
DEPOSITS OR OTHER OBLIGATIONS OF A BANK AND ARE NOT INSURED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENTAL AGENCY.
 
THE SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR THE SECURITIES
LAWS OF ANY STATE AND MAY NOT BE TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF
EXCEPT WHILE A REGISTRATION STATEMENT RELATING THERETO IS IN EFFECT UNDER SUCH
ACT AND APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER SUCH ACT OR SUCH LAWS. EACH PURCHASER OF THE SECURITIES
REPRESENTED BY THIS INSTRUMENT IS NOTIFIED THAT THE SELLER MAY BE RELYING ON THE
EXEMPTION FROM SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A
THEREUNDER.  ANY TRANSFEREE OF THE SECURITIES REPRESENTED BY THIS INSTRUMENT BY
ITS ACCEPTANCE HEREOF (1) REPRESENTS THAT IT IS A “QUALIFIED INSTITUTIONAL
BUYER” (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT), (2) AGREES THAT IT
WILL NOT OFFER, SELL OR OTHERWISE TRANSFER THE SECURITIES REPRESENTED BY THIS
INSTRUMENT EXCEPT (A) PURSUANT TO A REGISTRATION STATEMENT WHICH IS THEN
EFFECTIVE UNDER THE SECURITIES ACT, (B) FOR SO LONG AS THE SECURITIES
REPRESENTED BY THIS INSTRUMENT ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO
A PERSON IT REASONABLY BELIEVES IS A “QUALIFIED INSTITUTIONAL BUYER” AS DEFINED
IN RULE 144A UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR
THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE
TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (C) TO THE ISSUER OR (D)
PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT AND (3) AGREES THAT IT WILL GIVE TO EACH PERSON TO WHOM THE
SECURITIES REPRESENTED BY THIS INSTRUMENT ARE TRANSFERRED A NOTICE SUBSTANTIALLY
TO THE EFFECT OF THIS LEGEND.

UST Sequence No. 511
 
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THIS INSTRUMENT IS ISSUED SUBJECT TO THE RESTRICTIONS ON TRANSFER AND OTHER
PROVISIONS OF A SECURITIES PURCHASE AGREEMENT BETWEEN THE ISSUER OF THESE
SECURITIES AND THE INVESTOR REFERRED TO THEREIN, A COPY OF WHICH IS ON FILE WITH
THE ISSUER.  THE SECURITIES REPRESENTED BY THIS INSTRUMENT MAY NOT BE SOLD OR
OTHERWISE TRANSFERRED EXCEPT IN COMPLIANCE WITH SAID AGREEMENT.  ANY SALE OR
OTHER TRANSFER NOT IN COMPLIANCE WITH SAID AGREEMENT WILL BE VOID.”
 
(b)    In the event that any Preferred Shares (i) become registered under the
Securities Act or (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 Preferred Shares, which shall not contain
the applicable legends in Section 5.2(a) above; provided that the Investor
surrenders to the Company the previously issued certificates or other
instruments.
 
5.3    Transfer of Preferred Shares.   Subject to compliance with applicable
securities laws, the Investor shall be permitted to transfer, sell, assign or
otherwise dispose of (“Transfer”) all or a portion of the Preferred Shares at
any time, and the Company shall take all steps as may be reasonably requested by
the Investor to facilitate the Transfer of the Preferred Shares, including
without limitation, as set forth in Section 5.4, provided that the Investor
shall not Transfer any Preferred Shares if such transfer would require the
Company to be subject to the periodic reporting requirements of Section 13 or
15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”) and the
Company was not already subject to such requirements.  In furtherance of the
foregoing, the Company shall provide reasonable cooperation to facilitate any
Transfers of the Preferred Shares, including, as is reasonable under the
circumstances, by furnishing such information concerning the Company and its
business as a proposed transferee may reasonably request and making management
of the Company reasonably available to respond to questions of a proposed
transferee in accordance with customary practice, subject in all cases to the
proposed transferee agreeing to a customary confidentiality agreement.
 
5.4    Rule 144; Rule 144A; 4(1½) Transactions.  (a) At all times after the
Signing Date, the Company covenants that (1) it will, upon the request of the
Investor or any subsequent holders of the Preferred Shares (“Holders”), use its
reasonable best efforts to (x), to the extent any Holder is relying on Rule 144
under the Securities Act to sell any of the Preferred Shares, make “current
public information” available, as provided in Section (c)(1) of Rule 144 (if the
Company is a “Reporting Issuer” within the meaning of Rule 144) or in Section
(c)(2) of Rule 144 (if the Company is a “Non-Reporting Issuer” within the
meaning of Rule 144), in either case for such time period as necessary to permit
sales pursuant to Rule 144, (y), to the extent any Holder is relying on the
so-called “Section 4(1½)” exemption to sell any of its Preferred Shares, prepare
and provide to such Holder such information, including the preparation of
private offering memoranda or circulars or financial information, as the Holder
may reasonably request to enable the sale of the Preferred Shares pursuant to
such exemption, or (z) to the extent any Holder is relying on Rule 144A under
the Securities Act to sell any of its Preferred Shares, prepare and provide to
such Holder the information required pursuant to Rule 144A(d)(4), and

UST Sequence No. 511
 
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(2) it will take such further action as any Holder may reasonably request from
time to time to enable such Holder to sell Preferred Shares without registration
under the Securities Act within the limitations of the exemptions provided by
(i) the provisions of the Securities Act or any interpretations thereof or
related thereto by the SEC, including transactions based on the so-called
“Section 4(1½)” and other similar transactions, (ii) Rule 144 or 144A under the
Securities Act, as such rules may be amended from time to time, or (iii) any
similar rule or regulation hereafter adopted by the SEC; provided that the
Company shall not be required to take any action described in this Section
5.4(a) that would cause the Company to become subject to the reporting
requirements of Section 13 or 15(d) of the Exchange Act if the Company was not
subject to such requirements prior to taking such action.  Upon the request of
any Holder, the Company will deliver to such Holder a written statement as to
whether it has complied with such requirements and, if not, the specifics
thereof.
 
(b)    The Company agrees to indemnify Investor, Investor’s officers, directors,
employees, agents, representatives and Affiliates, and each person, if any, that
controls Investor within the meaning of the Securities Act (each, an
“Indemnitee”), against any and all losses, claims, damages, actions,
liabilities, costs and expenses (including reasonable fees, expenses and
disbursements of attorneys and other professionals incurred in connection with
investigating, defending, settling, compromising or paying any such losses,
claims, damages, actions, liabilities, costs and expenses), joint or several,
arising out of or based upon any untrue statement or alleged untrue statement of
material fact contained in any document or report provided by the Company
pursuant to this Section 5.4 or any omission to state therein a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading.
 
(c)    If the indemnification provided for in Section 5.4(b) is unavailable to
an Indemnitee with respect to any losses, claims, damages, actions, liabilities,
costs or expenses referred to therein or is insufficient to hold the Indemnitee
harmless as contemplated therein, then the Company, in lieu of indemnifying such
Indemnitee, shall contribute to the amount paid or payable by such Indemnitee as
a result of such losses, claims, damages, actions, liabilities, costs or
expenses in such proportion as is appropriate to reflect the relative fault of
the Indemnitee, on the one hand, and the Company, on the other hand, in
connection with the statements or omissions which resulted in such losses,
claims, damages, actions, liabilities, costs or expenses as well as any other
relevant equitable considerations.  The relative fault of the Company, on the
one hand, and of the Indemnitee, on the other hand, shall be determined by
reference to, among other factors, whether the untrue statement of a material
fact or omission to state a material fact relates to information supplied by the
Company or by the Indemnitee and the parties’ relative intent, knowledge, access
to information and opportunity to correct or prevent such statement or
omission;  the Company and Investor agree that it would not be just and
equitable if contribution pursuant to this Section 5.4(c) were determined by pro
rata allocation or by any other method of allocation that does not take account
of the equitable considerations referred to in Section 5.4(b).  No Indemnitee
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from the Company if the
Company was not guilty of such fraudulent misrepresentation.

UST Sequence No. 511
 
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5.5    Depositary Shares.  Upon request by the Investor at any time following
the Closing Date, the Company shall promptly enter into a depositary
arrangement, pursuant to customary agreements reasonably satisfactory to the
Investor and with a depositary reasonably acceptable to the Investor, pursuant
to which the Preferred Shares may be deposited and depositary shares, each
representing a fraction of a Preferred Share, as specified by the Investor, may
be issued. From and after the execution of any such depositary arrangement, and
the deposit of any Preferred Shares, as applicable, pursuant thereto, the
depositary shares issued pursuant thereto shall be deemed “Preferred Shares”
and, as applicable, “Registrable Securities” for purposes of this Agreement.
 
5.6    Expenses and Further Assurances.  (a) Unless otherwise provided in this
Agreement, each of the parties hereto will bear and pay all costs and expenses
incurred by it or on its behalf in connection with the transactions contemplated
under this Agreement, including fees and expenses of its own financial or other
consultants, investment bankers, accountants and counsel.
 
(b)    The Company shall, at the Company’s sole cost and expense, (i) furnish to
the Investor all instruments, documents and other agreements required to be
furnished by the Company pursuant to the terms of this Agreement, including,
without limitation, any documents required to be delivered pursuant to Section
5.4 above, or which are reasonably requested by the Investor in connection
therewith; (ii) execute and deliver to the Investor such documents, instruments,
certificates, assignments and other writings, and do such other acts necessary
or desirable, to evidence, preserve and/or protect the Preferred Shares
purchased by the Investor, as Investor may reasonably require; and (iii) do and
execute all and such further lawful and reasonable acts, conveyances and
assurances for the better and more effective carrying out of the intents and
purposes of this Agreement, as the Investor shall reasonably require from time
to time.
 
ARTICLE VI

MISCELLANEOUS
 
6.1    Termination.  This Agreement shall terminate upon the earliest to occur
of:
 
(a)    termination at any time prior to the Closing:
 
(i)  by either the Investor or the Company if the Closing shall not have
occurred by the 30th calendar day following the Signing Date; provided, however,
that in the event the Closing has not occurred by such 30th calendar day, the
parties will consult in good faith to determine whether to extend the term of
this Agreement, it being understood that the parties shall be required to
consult only until the fifth calendar day after such 30th calendar day and not
be under any obligation to extend the term of this Agreement thereafter;
provided, further, that the right to terminate this Agreement under this Section
6.1(a)(i) shall not be available to any party whose breach of any representation
or warranty or failure to perform any obligation under this Agreement shall have
caused or resulted in the failure of the Closing to occur on or prior to such
date; or

UST Sequence No. 511
 
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(ii)  by either the Investor or the Company in the event that any Governmental
Entity shall have issued an order, decree or ruling or taken any other action
restraining, enjoining or otherwise prohibiting the transactions contemplated by
this Agreement, and such order, decree, ruling or other action shall have become
final and nonappealable; or
 
(iii)  by the mutual written consent of the Investor and the Company; or
 
(b)    the date on which all of the Preferred Shares have been redeemed in
whole; or
 
(c)    the date on which the Investor has transferred all of the Preferred
Shares to third parties which are not Affiliates of the Investor; or
 
(d)    if the Closing shall not have occurred by September 30, 2010, on such
date.
 
In the event of termination of this Agreement as provided in this Section 6.1,
this Agreement shall forthwith become void and there shall be no liability on
the part of either party hereto except that nothing herein shall relieve either
party from liability for any breach of this Agreement.
 
6.2    Survival.
 
(a)    This Agreement and all representations, warranties, covenants and
agreements made herein shall survive the Closing without limitation.
 
(b)    The covenants set forth in Article IV and Annex E and the agreements set
forth in Article V shall, to the extent such covenants do not explicitly
terminate at such time as the Investor no longer owns any Preferred Shares,
survive the termination of this Agreement pursuant to Section 6.1(c) hereof
without limitation until the date on which all of the Preferred Shares have been
redeemed in whole.
 
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 party; provided that for so long as the Preferred Shares
are outstanding, the Investor may at any time and from time to time unilaterally
amend Section 4.1(d) to the extent the Investor deems necessary, in its sole
discretion, to comply with, or conform to, any changes after the Signing Date in
any federal statutes, any rules and regulations promulgated thereunder and any
other publications or interpretative releases of the Fund governing CDFIs,
including, without limitation, any changes in the criteria for certification as
a CDFI by the Fund.  No failure or delay by any party in exercising any right,
power or privilege hereunder shall operate as a waiver thereof nor shall any
single or partial exercise thereof preclude any other or further exercise of any
other right, power or privilege.  The rights and remedies herein provided shall
be cumulative of any rights or remedies provided by law.

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6.4    Waiver of Conditions.  The conditions to each party’s obligation to
consummate the Purchase are for the sole benefit of such party and may be waived
by such party in whole or in part to the extent permitted by applicable law. No
waiver will be effective unless it is in a writing signed by a duly authorized
officer of the waiving party that makes express reference to the provision or
provisions subject to such waiver.
 
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 Purchase 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 PURCHASE CONTEMPLATED HEREBY.
 
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 to the Company shall be delivered as set forth in Schedule
A, or pursuant to such other instruction as may be designated in writing by the
Company to the Investor.  All notices to the Investor shall be delivered as set
forth below, or pursuant to such other instructions as may be designated in
writing by the Investor to the Company.
 

UST Sequence No. 511
 
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If to the Investor:

 
 
United States Department of the Treasury

 
1500 Pennsylvania Avenue, NW

 
Washington, D.C. 20220

Attention:  Chief Counsel, Office of Financial Stability
Facsimile:  (202) 927-9225
E-mail:  CDCINotice@do.treas.gov
 
 
with a copy to:

 
E-mail:  OFSChiefCounselNotices@do.treas.gov
 
6.7    Assignment.  Neither this Agreement nor any right, remedy, obligation nor
liability arising hereunder or by reason hereof shall be assignable by any party
hereto without the prior written consent of the other party, and any attempt to
assign any right, remedy, obligation or liability hereunder without such consent
shall be void, except (a) an assignment, in the case of a merger, consolidation,
statutory share exchange or similar transaction that requires the approval of
the Company’s stockholders (a “Business Combination”) where such party is not
the surviving entity, or a sale of substantially all of its assets, to the
entity which is the survivor of such Business Combination or the purchaser in
such sale, (b) an assignment of certain rights as provided in Sections 4.1(c) or
4.1(j) or Annex E or (c) an assignment by the Investor of this Agreement to an
Affiliate of the Investor; provided that if the Investor assigns this Agreement
to an Affiliate, the Investor shall be relieved of its obligations under this
Agreement but (i) all rights, remedies and obligations of the Investor hereunder
shall continue and be enforceable by such Affiliate, (ii) the Company’s
obligations and liabilities hereunder shall continue to be outstanding and (iii)
all references to the Investor herein shall be deemed to be references to such
Affiliate.
 
6.8    Severability.  If any provision of this Agreement, or the application
thereof to any person or circumstance, is determined by a court of competent
jurisdiction to be invalid, void or unenforceable, the remaining provisions
hereof, or the application of such provision to persons or circumstances other
than those as to which it has been held invalid or unenforceable, will remain in
full force and effect and shall in no way be affected, impaired or invalidated
thereby, so long as the economic or legal substance of the transactions
contemplated hereby is not affected in any manner materially adverse to any
party. Upon such determination, the parties shall negotiate in good faith in an
effort to agree upon a suitable and equitable substitute provision to effect the
original intent of the parties.
 
6.9    No Third Party Beneficiaries.  Other than as expressly provided herein,
nothing contained in this Agreement, expressed or implied, is intended to confer
upon any person or entity other than the Company and the Investor (and any
Indemnitee) any benefit, right or remedies.
 
6.10    Specific Performance.  The parties agree that irreparable damage would
occur in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms.  It is accordingly agreed
that the parties shall be entitled (without the necessity of posting a bond) to
specific performance of the terms hereof, this being in addition to any other
remedies to which they are entitled at law or equity.
 
 
 
*  *  *

UST Sequence No. 511
 
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ANNEX A
 
 
 
 
FORM OF OFFICER’S CERTIFICATE
 
OFFICER’S CERTIFICATE
 
OF
 
[COMPANY]
 
 In connection with that certain letter agreement, dated  [____________], 2010
(the “Agreement”) by and between [COMPANY] (the “Company”) and the United States
Department of the Treasury which incorporates that certain Securities Purchase
Agreement –Standard Terms referred to therein (the “Standard Terms”), the
undersigned does hereby certify as follows:
 
1. I am a duly elected/appointed [____________] of the Company.
 
2. The representations and warranties of the Company set forth in Section 3.1 of
the Standard Terms are true and correct in all respects as though as of the date
hereof (other than representations and warranties that by their terms speak as
of another date, which representations and warranties shall be true and correct
in all respects as of such other date) and the Company has performed in all
material respects all obligations required to be performed by it under the
Agreement.
 
3. The Certificate of Designations, a true, complete and correct copy of which
is attached as Exhibit A hereto, has been filed with, and accepted by, the
Secretary of State of the State of [___________].
 
4. The Company has effected such changes to its Benefit Plans with respect to
its Senior Executive Officers and any other employee of the Company or its
Affiliates subject to Section 111 of EESA, as implemented by any Compensation
Regulations (and to the extent necessary for such changes to be legally
enforceable, each of its Senior Executive Officers and other employees has duly
consented in writing to such changes), as may be necessary, during the Relevant
Period, in order to comply with Section 111 of EESA or the Compensation
Regulations.
 
The foregoing certifications are made and delivered as of [_________] pursuant
to Section 2.3 of the Standard Terms.

UST Sequence No. 511
 
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Capitalized terms used and not otherwise defined herein shall have the meanings
assigned to them in the Standard Terms.
 
[SIGNATURE PAGE FOLLOWS]

UST Sequence No. 511
 
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 IN WITNESS WHEREOF, this Officer’s Certificate has been duly executed and
delivered as of the [__] day of [__________], 20[__].
 
 
[COMPANY]

 
 
 
 
 By:___________________________________

 
       Name:

 
       Title:

UST Sequence No. 511
 
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EXHIBIT A
 

UST Sequence No. 511
Exh. A-1 
 

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ANNEX B
 
FORM OF CERTIFICATE OF DESIGNATIONS FOR PREFERRED STOCK
 
[SEE ATTACHED]

UST Sequence No. 511
B-1 
 

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ANNEX C
 
 
 
FORM OF WAIVER
 
In consideration for the benefits I will receive as a result of the
participation of [NAME OF COMPANY] (together with its subsidiaries and
affiliates, the “Company”) in the United States Department of the Treasury’s
(“Treasury”) Community Development Capital Initiative and/or any other economic
stabilization program implemented by Treasury under the Emergency Economic
Stabilization Act of 2008 (as amended, supplemented or otherwise modified,
“EESA”) (any such initiative or program, including the Community Development
Capital Initiative, a “Program”), I hereby voluntarily waive any claim against
the United States (and each of its departments and agencies) or the Company or
any of its directors, officers, employees and agents for any changes to my
compensation or benefits that are required to comply with the executive
compensation and corporate governance requirements of Section 111 of EESA, as
implemented by any guidance or regulation thereunder, including the rules set
forth in 31 C.F.R. Part 30, or any other guidance or regulations under EESA, and
the applicable requirements of the Securities Purchase Agreement by and between
the Company and Treasury dated as of [         ], 2010, as amended (such
requirements, the “Limitations”).
 
I acknowledge that the Limitations may require modification or termination of
the employment, compensation, bonus, incentive, severance, retention and other
benefit plans, arrangements, policies and agreements (including so-called
“golden parachute” agreements), whether or not in writing, that I may have with
the Company or in which I may participate as they relate to the period the
United States holds any equity or debt securities of the Company acquired
through a Program or for any other period applicable under such Program or
Limitations, as the case may be, and I hereby consent to all such modifications.
 
This waiver includes all claims I may have under the laws of the United States
or any other jurisdiction (whether or not in existence as of the date hereof)
related to the requirements imposed by the Limitations, including without
limitation a claim for any compensation or other payments or benefits I would
otherwise receive, any challenge to the process by which the Limitations are or
were adopted and any tort or constitutional claim about the effect of the
Limitations on my employment relationship and I hereby agree that I will not at
any time initiate, or cause or permit to be initiated on my behalf, any such
claim against the United States (or any of its departments or agencies) or the
Company or any of its directors, officers, employees or agents in or before any
local, state, federal or other agency, court or body.
 
I agree that, in the event and to the extent that the Compensation Committee of
the Board of Directors of the Company or similar governing body (the
“Committee”) reasonably determines that any compensatory payment or benefit
provided to me, including any bonus or incentive compensation based on
materially inaccurate financial statements or performance criteria, would cause
the Company to fail to be in compliance with the Limitations (such payment or
benefit, an “Excess Payment”), upon notification from the Company, I shall repay
such Excess Payment to the Company within 15 business days.  In addition, I
agree that the Company shall have the right to postpone any such payment or
benefit for a reasonable period of time to enable the Committee to determine
whether such payment or benefit would constitute an Excess Payment.

UST Sequence No. 511
 
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I understand that any determination by the Committee as to whether or not,
including the manner in which, a payment or benefit needs to be modified,
terminated or repaid in order for the Company to be in compliance with Section
111 of EESA and/or the Limitations shall be a final and conclusive determination
of the Committee which shall be binding upon me.  I further understand that the
Company is relying on this letter from me in connection with its participation
in a Program.
 
In witness whereof, I execute this waiver on my own behalf, thereby
communicating my acceptance and acknowledgement to the provisions herein.
 
 
Respectfully,

 
 
 
 
 By:_________________________________________

 
       Name:

 
       Title:

 
       Date:

UST Sequence No. 511
 
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ANNEX D
 
FORM OF OPINION
 
(a)           The Company has been duly formed and is validly existing as a
[TYPE OF ORGANIZATION] and is in good standing under the laws of the
jurisdiction of its organization.  The Company has all necessary power and
authority to own, operate and lease its properties and to carry on its business
as it is being conducted.
 
(b)           The Company has been duly qualified as a foreign entity for the
transaction of business and is in good standing under the laws of
[_____________], [_____________] and [_____________].
 
(c)           The Preferred Shares have been duly and validly authorized, and,
when issued and delivered pursuant to the Agreement, the Preferred Shares will
be duly and validly issued and fully paid and non-assessable, will not be issued
in violation of any preemptive rights, and will rank pari passu with or senior
to all other series or classes of Preferred Stock issued on the Closing Date
with respect to the payment of dividends and the distribution of assets in the
event of any dissolution, liquidation or winding up of the Company.
 
(d)           The Company has the corporate power and authority to execute and
deliver the Agreement and to carry out its obligations thereunder (which
includes the issuance of the Preferred Shares).
 
(e)           The execution, delivery and performance by the Company of the
Agreement and the consummation of the transactions contemplated thereby have
been duly authorized by all necessary corporate action on the part of the
Company and its stockholders, and no further approval or authorization is
required on the part of the Company, including, without limitation, by any rule
or requirement of any national stock exchange.
 
(f)           The Agreement is a valid and binding obligation of the Company
enforceable against the Company in accordance with its terms, except as the same
may be limited by applicable bankruptcy, insolvency, reorganization, moratorium
or similar laws affecting the enforcement of creditors’ rights generally and
general equitable principles, regardless of whether such enforceability is
considered in a proceeding at law or in equity.
 
(g)           The execution and delivery by the Company of this Agreement and
the performance by the Company of its obligations thereunder (i) do not require
any approval by any Governmental Entity to be obtained on the part of the
Company, except those that have been obtained, (ii) do not violate or conflict
with any provision of the Charter, (iii) do not violate, conflict with, or
result in a breach of any provision of, or constitute a default (or an event
which, with notice or lapse of time or both, would constitute a default) under,
or result in the termination of, or accelerate the performance required by, or
result in a right of termination or acceleration of, or result in the creation
of, any lien, security interest, charge or encumbrance upon any of the
properties or assets of the Company or any Company Subsidiary under any of the
terms, conditions or provisions of its organizational documents or under any
agreement, contract,

UST Sequence No. 511
 
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indenture, lease, mortgage, power of attorney, evidence of indebtedness, letter
of credit, license, instrument, obligation, purchase or sales order, or other
commitment, whether oral or written, to which it is a party or by which it or
any of its properties is bound or (iv) do not conflict with, breach or result in
a violation of, or default under any judgment, decree or order known to us that
is applicable to the Company and, pursuant to any applicable laws, is issued by
any Governmental Entity having jurisdiction over the Company.
 
(h)           Other than the filing of the Certificate of Designations with the
Secretary of State of its jurisdiction of organization or other applicable
Governmental Entity, such filings and approvals as are required to be made or
obtained under any state “blue sky” laws and such consents and approvals that
have been made or obtained, no notice to, filing with, exemption or review by,
or authorization, consent or approval of, any Governmental Entity is required to
be made or obtained by the Company in connection with the consummation by the
Company of the Purchase.
 
(i)           The Company is not nor, after giving effect to the issuance of the
Preferred Shares pursuant to the Agreement, would be on the date hereof an
“investment company” or an entity “controlled” by an “investment company,” as
such terms are defined in the Investment Company Act of 1940, as amended.
 
(j)           Each Certified Entity (A) is a regulated community development
financial institution (a “CDFI”) currently certified by the Community
Development Financial Institution Fund (the “Fund”) of the United States
Department of the Treasury pursuant to 12 C.F.R. 1805.201(a) and (B) satisfies
all of the eligibility requirements of the Fund’s Community Development
Financial Institutions Program for a CDFI.

UST Sequence No. 511
 
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ANNEX E
 
REGISTRATION RIGHTS
 
1.1           Definitions.  Terms not defined in this Annex shall have the
meaning ascribed to such terms in the Agreement. As used in this Annex E, the
following terms shall have the following respective meanings:
 
(a)           “Holder” means the Investor and any other holder of Registrable
Securities to whom the registration rights conferred by this Agreement have been
transferred in compliance with Section 1.9 hereof.
 
(b)           “Holders’ Counsel” means one counsel for the selling Holders
chosen by Holders holding a majority interest in the Registrable Securities
being registered.
 
(c)           “Pending Underwritten Offering” means, with respect to any Holder
forfeiting its rights pursuant to Section 1.11 of this Annex E, any underwritten
offering of Registrable Securities in which such Holder has advised the Company
of its intent to register its Registrable Securities either pursuant to Section
1.2(b) or Section 1.2(d) of this Annex E prior to the date of such Holder’s
forfeiture.
 
(d)           “Register”, “registered”, and “registration” shall refer to a
registration effected by preparing and (A) filing a registration statement or
amendment thereto in compliance with the Securities Act and applicable rules and
regulations thereunder, and the declaration or ordering of effectiveness of such
registration statement or amendment thereto or (B) filing a prospectus and/or
prospectus supplement in respect of an appropriate effective registration
statement on Form S-3.
 
(e)           “Registrable Securities” means (A) all Preferred Shares and (B)
any equity securities issued or issuable directly or indirectly with respect to
the securities referred to in the foregoing clause (A) by way of conversion,
exercise or exchange thereof, or share dividend or share split or in connection
with a combination of shares, recapitalization, reclassification, merger,
amalgamation, arrangement, consolidation or other reorganization, provided that,
once issued, such securities will not be Registrable Securities when (1) they
are sold pursuant to an effective registration statement under the Securities
Act, (2) they shall have ceased to be outstanding or (3) they have been sold in
any transaction in which the transferor’s rights under this Agreement are not
assigned to the transferee of the securities.  No Registrable Securities may be
registered under more than one registration statement at any one time.

UST Sequence No. 511
 
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(f)           “Registration Expenses” mean all expenses incurred by the Company
in effecting any registration pursuant to this Agreement (whether or not any
registration or prospectus becomes effective or final) or otherwise complying
with its obligations under this Annex E, including all registration, filing and
listing fees, printing expenses, fees and disbursements of counsel for the
Company, blue sky fees and expenses, expenses incurred in connection with any
“road show”, the reasonable fees and disbursements of Holders’ Counsel, and
expenses of the Company’s independent accountants in connection with any regular
or special reviews or audits incident to or required by any such registration,
but shall not include Selling Expenses.
 
(g)           “Rule 144”, “Rule 144A”, “Rule 159A”, “Rule 405” and “Rule 415”
mean, in each case, such rule promulgated under the Securities Act (or any
successor provision), as the same shall be amended from time to time.
 
(h)           “Selling Expenses” mean all discounts, selling commissions and
stock transfer taxes applicable to the sale of Registrable Securities and fees
and disbursements of counsel for any Holder (other than the fees and
disbursements of Holders’ Counsel included in Registration Expenses).
 
(i)           “Special Registration” means the registration of (A) equity
securities and/or options or other rights in respect thereof solely registered
on Form S-4 or Form S-8 (or successor form) or (B) shares of equity securities
and/or options or other rights in respect thereof to be offered to directors,
members of management, employees, consultants, customers, lenders or vendors of
the Company or Company Subsidiaries or in connection with dividend reinvestment
plans.
 
1.2           Registration.
 
(a)           The Company covenants and agrees that as promptly as practicable
after the date that the Company becomes subject to the reporting requirements of
Section 13 or 15(d) of the Exchange Act (and in any event no later than 30 days
thereafter), the Company shall prepare and file with the SEC a Shelf
Registration Statement covering all Registrable Securities (or otherwise
designate an existing shelf registration on an appropriate form under Rule 415
under the Securities Act (a “Shelf Registration Statement”) filed with the SEC
to cover the Registrable Securities), and, to the extent the Shelf Registration
Statement has not theretofore been declared effective or is not automatically
effective upon such filing, the Company shall use reasonable best efforts to
cause such Shelf Registration Statement to be declared or become effective and
to keep such Shelf Registration Statement continuously effective and in
compliance with the Securities Act and usable for resale of such Registrable
Securities for a period from the date of its initial effectiveness until such
time as there are no Registrable Securities remaining (including by refiling
such Shelf Registration Statement (or a new Shelf Registration Statement) if the
initial Shelf Registration Statement expires).  Notwithstanding the foregoing,
if the Company is not eligible to file a registration statement on Form S-3,
then the Company shall not be obligated to file a Shelf Registration Statement
unless and until requested to do so in writing by the Investor.

UST Sequence No. 511
 
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(b)           Any registration pursuant to Section 1.2(a) of this Annex E shall
be effected by means of a Shelf Registration Statement on an appropriate form
under Rule 415 under the Securities Act (a “Shelf Registration Statement”).  If
the Investor or any other Holder intends to distribute any Registrable
Securities by means of an underwritten offering it shall promptly so advise the
Company and the Company shall take all reasonable steps to facilitate such
distribution, including the actions required pursuant to Section 1.2(d) of this
Annex E; provided that the Company shall not be required to facilitate an
underwritten offering of Registrable Securities unless (i) the expected gross
proceeds from such offering exceed $200,000 or (ii) such underwritten offering
includes all of the outstanding Registrable Securities held by such
Holder.   The lead underwriters in any such distribution shall be selected by
the Holders of a majority of the Registrable Securities to be distributed.
 
(c)           The Company shall not be required to effect a registration
(including a resale of Registrable Securities from an effective Shelf
Registration Statement) or an underwritten offering pursuant to Section 1.2 of
this Annex E:  (A) with respect to securities that are not Registrable
Securities; or (B) if the Company has notified the Investor and all other
Holders that in the good faith judgment of the Board of Directors, it would be
materially detrimental to the Company or its securityholders for such
registration or underwritten offering to be effected at such time, in which
event the Company shall have the right to defer such registration for a period
of not more than 45 days after receipt of the request of the Investor or any
other Holder; provided that such right to delay a registration or underwritten
offering shall be exercised by the Company (1) only if the Company has generally
exercised (or is concurrently exercising) similar black-out rights against
holders of similar securities that have registration rights and (2) not more
than three times in any 12-month period and not more than 90 days in the
aggregate in any 12-month period.
 
(d)           If during any period when an effective Shelf Registration
Statement is not available, the Company proposes to register any of its equity
securities, other than a registration pursuant to Section 1.2(a) of this Annex E
or a Special Registration, and the registration form to be filed may be used for
the registration or qualification for distribution of Registrable Securities,
the Company will give prompt written notice to the Investor and all other
Holders of its intention to effect such a registration (but in no event less
than ten days prior to the anticipated filing date) and will include in such
registration all Registrable Securities with respect to which the Company has
received written requests for inclusion therein within ten business days after
the date of the Company’s notice (a “Piggyback Registration”).  Any such person
that has made such a written request may withdraw its Registrable Securities
from such Piggyback Registration by giving written notice to the Company and the
managing underwriter, if any, on or before the fifth business day prior to the
planned effective date of such Piggyback Registration.  The Company may
terminate or withdraw any registration under this Section 1.2(d) prior to the
effectiveness of such registration, whether or not Investor or any other Holders
have elected to include Registrable Securities in such registration.

UST Sequence No. 511
 
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(e)           If the registration referred to in Section 1.2(d) of this Annex E
is proposed to be underwritten, the Company will so advise Investor and all
other Holders as a part of the written notice given pursuant to Section 1.2(d)
of this Annex E.  In such event, the right of Investor and all other Holders to
registration pursuant to Section 1.2 of this Annex E will be conditioned upon
such persons’ participation in such underwriting and the inclusion of such
person’s Registrable Securities in the underwriting if such securities are of
the same class of securities as the securities to be offered in the underwritten
offering, and each such person will (together with the Company and the other
persons distributing their securities through such underwriting) enter into an
underwriting agreement in customary form with the underwriter or underwriters
selected for such underwriting by the Company; provided that the Investor (as
opposed to other Holders) shall not be required to indemnify any person in
connection with any registration. If any participating person disapproves of the
terms of the underwriting, such person may elect to withdraw therefrom by
written notice to the Company, the managing underwriters and the Investor (if
the Investor is participating in the underwriting).
 
(f)           If either (x) the Company grants “piggyback” registration rights
to one or more third parties to include their securities in an underwritten
offering under the Shelf Registration Statement pursuant to Section 1.2(b) of
this Annex E or (y) a Piggyback Registration under Section 1.2(d) of this Annex
E relates to an underwritten offering on behalf of the Company, and in either
case the managing underwriters advise the Company that in their reasonable
opinion the number of securities requested to be included in such offering
exceeds the number which can be sold without adversely affecting the
marketability of such offering (including an adverse effect on the per share
offering price), the Company will include in such offering only such number of
securities that in the reasonable opinion of such managing underwriters can be
sold without adversely affecting the marketability of the offering (including an
adverse effect on the per share offering price), which securities will be so
included in the following order of priority: (A) first, in the case of a
Piggyback Registration under Section 1.2(d) of this Annex E, the securities the
Company proposes to sell, (B) then the Registrable Securities of the Investor
and all other Holders who have requested inclusion of Registrable Securities
pursuant to Section 1.2(b) or Section 1.2(d) of this Annex E, as applicable, pro
rata on the basis of the aggregate number of such securities or shares owned by
each such person and (C) lastly, any other securities of the Company that have
been requested to be so included, subject to the terms of this Agreement;
provided, however, that if the Company has, prior to the Signing Date, entered
into an agreement with respect to its securities that is inconsistent with the
order of priority contemplated hereby then it shall apply the order of priority
in such conflicting agreement to the extent that it would otherwise result in a
breach under such agreement.
 
1.3           Expenses of Registration.  All Registration Expenses incurred in
connection with any registration, qualification or compliance hereunder shall be
borne by the Company.  All Selling Expenses incurred in connection with any
registrations hereunder shall be borne by the holders of the securities so
registered pro rata on the basis of the aggregate offering or sale price of the
securities so registered.

UST Sequence No. 511
 
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1.4           Obligations of the Company.  Whenever required to effect the
registration of any Registrable Securities or facilitate the distribution of
Registrable Securities pursuant to an effective Shelf Registration Statement,
the Company shall, as expeditiously as reasonably practicable:
 
(a)           Prepare and file with the SEC a prospectus supplement or
post-effective amendment with respect to a proposed offering of Registrable
Securities pursuant to an effective registration statement, subject to Section
1.4 of this Annex E, keep such registration statement effective and keep such
prospectus supplement current until the securities described therein are no
longer Registrable Securities.
 
(b)           Prepare and file with the SEC such amendments and supplements to
the applicable registration statement and the prospectus or prospectus
supplement used in connection with such registration statement as may be
necessary to comply with the provisions of the Securities Act with respect to
the disposition of all securities covered by such registration statement.
 
(c)           Furnish to the Holders and any underwriters such number of copies
of the applicable registration statement and each such amendment and supplement
thereto (including in each case all exhibits) and of a prospectus, including a
preliminary prospectus, in conformity with the requirements of the Securities
Act, and such other documents as they may reasonably request in order to
facilitate the disposition of Registrable Securities owned or to be distributed
by them.
 
(d)           Use its reasonable best efforts to register and qualify the
securities covered by such registration statement under such other securities or
Blue Sky laws of such jurisdictions as shall be reasonably requested by the
Holders or any managing underwriter(s), to keep such registration or
qualification in effect for so long as such registration statement remains in
effect, and to take any other action which may be reasonably necessary to enable
such seller to consummate the disposition in such jurisdictions of the
securities owned by such Holder; provided that the Company shall not be required
in connection therewith or as a condition thereto to qualify to do business or
to file a general consent to service of process in any such states or
jurisdictions.
 
(e)           Notify each Holder of Registrable Securities at any time when a
prospectus relating thereto is required to be delivered under the Securities Act
of the happening of any event as a result of which the applicable prospectus, as
then in effect, includes an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading in light of the circumstances then existing.

UST Sequence No. 511
 
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(f)           Give written notice to the Holders:
 
(i)           when any registration statement filed pursuant to Section 4.1(j)
of the Agreement or any amendment thereto has been filed with the SEC (except
for any amendment effected by the filing of a document with the SEC pursuant to
the Exchange Act) and when such registration statement or any post-effective
amendment thereto has become effective;
 
(ii)           of any request by the SEC for amendments or supplements to any
registration statement or the prospectus included therein or for additional
information;
 
(iii)           of the issuance by the SEC of any stop order suspending the
effectiveness of any registration statement or the initiation of any proceedings
for that purpose;
 
(iv)           of the receipt by the Company or its legal counsel of any
notification with respect to the suspension of the qualification of the
applicable Registrable Securities for sale in any jurisdiction or the initiation
or threatening of any proceeding for such purpose;
 
(v)           of the happening of any event that requires the Company to make
changes in any effective registration statement or the prospectus related to the
registration statement in order to make the statements therein not misleading
(which notice shall be accompanied by an instruction to suspend the use of the
prospectus until the requisite changes have been made); and
 
(vi)           if at any time the representations and warranties of the Company
contained in any underwriting agreement contemplated by Section 1.4(j) of this
Annex E cease to be true and correct.
 
(g)           Use its reasonable best efforts to prevent the issuance or obtain
the withdrawal of any order suspending the effectiveness of any registration
statement referred to in Section 1.4(f)(iii) of this Annex E at the earliest
practicable time.
 
(h)           Upon the occurrence of any event contemplated by Section 1.4(e) or
1.4(f)(v) of this Annex E, promptly prepare a post-effective amendment to such
registration statement or a supplement to the related prospectus or file any
other required document so that, as thereafter delivered to the Holders and any
underwriters, the prospectus will not contain an untrue statement of a material
fact or omit to state any material fact necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading.  If the Company notifies the Holders in accordance with Section
1.4(f)(v) to suspend the use of the prospectus until the requisite changes to
the prospectus have been made, then the Holders and any underwriters shall
suspend use of such prospectus and use their reasonable best efforts to return
to the Company all copies of such prospectus (at the Company’s expense) other
than permanent file copies then in such Holders’ or underwriters’
possession.  The total number of days that any such suspension may be in effect
in any 12-month period shall not exceed 90 days.

UST Sequence No. 511
 
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(i)           Use reasonable best efforts to procure the cooperation of the
Company’s transfer agent in settling any offering or sale of Registrable
Securities, including with respect to the transfer of physical stock
certificates into book-entry form in accordance with any procedures reasonably
requested by the Holders or any managing underwriter(s).
 
(j)           If an underwritten offering is requested pursuant to Section
1.2(b) of this Annex E, enter into an underwriting agreement in customary form,
scope and substance and take all such other actions reasonably requested by the
Holders of a majority of the Registrable Securities being sold in connection
therewith or by the managing underwriter(s), if any, to expedite or facilitate
the underwritten disposition of such Registrable Securities, and in connection
therewith in any underwritten offering (including making members of management
and executives of the Company available to participate in “road shows”, similar
sales events and other marketing activities), (A) make such representations and
warranties to the Holders that are selling stockholders and the managing
underwriter(s), if any, with respect to the business of the Company and its
subsidiaries, and the Shelf Registration Statement, prospectus and documents, if
any, incorporated or deemed to be incorporated by reference therein, in each
case, in customary form, substance and scope, and, if true, confirm the same if
and when requested, (B) use its reasonable best efforts to furnish the
underwriters with opinions of counsel to the Company, addressed to the managing
underwriter(s), if any, covering the matters customarily covered in such
opinions requested in underwritten offerings, (C) use its reasonable best
efforts to obtain “cold comfort” letters from the independent certified public
accountants of the Company (and, if necessary, any other independent certified
public accountants of any business acquired by the Company for which financial
statements and financial data are included in the Shelf Registration Statement)
who have certified the financial statements included in such Shelf Registration
Statement, addressed to each of the managing underwriter(s), if any, such
letters to be in customary form and covering matters of the type customarily
covered in “cold comfort” letters, (D) if an underwriting agreement is entered
into, the same shall contain indemnification provisions and procedures customary
in underwritten offerings (provided that the Investor shall not be obligated to
provide any indemnity), and (E) deliver such documents and certificates as may
be reasonably requested by the Holders of a majority of the Registrable
Securities being sold in connection therewith, their counsel and the managing
underwriter(s), if any, to evidence the continued validity of the
representations and warranties made pursuant to clause (A) above and to evidence
compliance with any customary conditions contained in the underwriting agreement
or other agreement entered into by the Company.
 
(k)           Make available for inspection by a representative of Holders that
are selling stockholders, the managing underwriter(s), if any, and any attorneys
or accountants retained by such Holders or managing underwriter(s), at the
offices where normally kept, during reasonable business hours, financial and
other records, pertinent corporate documents and properties of the Company, and
cause the officers, directors and employees of the Company to supply all
information in each case reasonably requested (and of the type customarily
provided in connection with due diligence conducted in connection with a
registered public offering of securities) by any such representative, managing
underwriter(s), attorney or accountant in connection with such Shelf
Registration Statement.

UST Sequence No. 511
 
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(l)           Use reasonable best efforts to cause all such Registrable
Securities to be listed on each national securities exchange on which similar
securities issued by the Company are then listed or, if no similar securities
issued by the Company are then listed on any national securities exchange, use
its reasonable best efforts to cause all such Registrable Securities to be
listed on such securities exchange as the Investor may designate.
 
(m)           If requested by Holders of a majority of the Registrable
Securities being registered and/or sold in connection therewith, or the managing
underwriter(s), if any, promptly include in a prospectus supplement or amendment
such information as the Holders of a majority of the Registrable Securities
being registered and/or sold in connection therewith or managing underwriter(s),
if any, may reasonably request in order to permit the intended method of
distribution of such securities and make all required filings of such prospectus
supplement or such amendment as soon as practicable after the Company has
received such request.
 
(n)           Timely provide to its security holders earning statements
satisfying the provisions of Section 11(a) of the Securities Act and Rule 158
thereunder.
 
1.5           Suspension of Sales.  Upon receipt of written notice from the
Company that a registration statement, prospectus or prospectus supplement
contains or may contain an untrue statement of a material fact or omits or may
omit to state a material fact required to be stated therein or necessary to make
the statements therein not misleading or that circumstances exist that make
inadvisable use of such registration statement, prospectus or prospectus
supplement, the Investor and each Holder of Registrable Securities shall
forthwith discontinue disposition of Registrable Securities until the Investor
and/or Holder has received copies of a supplemented or amended prospectus or
prospectus supplement, or until the Investor and/or such Holder is advised in
writing by the Company that the use of the prospectus and, if applicable,
prospectus supplement may be resumed, and, if so directed by the Company, the
Investor and/or such Holder shall deliver to the Company (at the Company’s
expense) all copies, other than permanent file copies then in the Investor
and/or such Holder’s possession, of the prospectus and, if applicable,
prospectus supplement covering such Registrable Securities current at the time
of receipt of such notice.  The total number of days that any such suspension
may be in effect in any 12-month period shall not exceed 90 days.
 
1.6           Termination of Registration Rights.  A Holder’s registration
rights as to any securities held by such Holder (and its Affiliates, partners,
members and former members) shall not be available unless such securities are
Registrable Securities.
 
1.7           Furnishing Information.
 
(a)           Neither the Investor nor any Holder shall use any free writing
prospectus (as defined in Rule 405) in connection with the sale of Registrable
Securities without the prior written consent of the Company.

UST Sequence No. 511
 
E-8

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(b)           It shall be a condition precedent to the obligations of the
Company to take any action pursuant to Section 1.4 of this Annex E that Investor
and/or the selling Holders and the underwriters, if any, shall furnish to the
Company such information regarding themselves, the Registrable Securities held
by them and the intended method of disposition of such securities as shall be
required to effect the registered offering of their Registrable Securities.
 
1.8           Indemnification.
 
(a)           The Company agrees to indemnify each Holder and, if a Holder is a
person other than an individual, such Holder’s officers, directors, employees,
agents, representatives and Affiliates, and each person, if any, that controls a
Holder within the meaning of the Securities Act (each, an “Indemnitee”), against
any and all losses, claims, damages, actions, liabilities, costs and expenses
(including reasonable fees, expenses and disbursements of attorneys and other
professionals incurred in connection with investigating, defending, settling,
compromising or paying any such losses, claims, damages, actions, liabilities,
costs and expenses), joint or several, arising out of or based upon any untrue
statement or alleged untrue statement of material fact contained in any
registration statement, including any preliminary prospectus or final prospectus
contained therein or any amendments or supplements thereto or any documents
incorporated therein by reference or contained in any free writing prospectus
(as such term is defined in Rule 405) prepared by the Company or authorized by
it in writing for use by such Holder (or any amendment or supplement thereto);
or any omission to state therein a material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading; provided, that the Company shall not be
liable to such Indemnitee in any such case to the extent that any such loss,
claim, damage, liability (or action or proceeding in respect thereof) or expense
arises out of or is based upon (A) an untrue statement or omission made in such
registration statement, including any such preliminary prospectus or final
prospectus contained therein or any such amendments or supplements thereto or
contained in any free writing prospectus (as such term is defined in Rule 405)
prepared by the Company or authorized by it in writing for use by such Holder
(or any amendment or supplement thereto), in reliance upon and in conformity
with information regarding such Indemnitee or its plan of distribution or
ownership interests which was furnished in writing to the Company by such
Indemnitee for use in connection with such registration statement, including any
such preliminary prospectus or final prospectus contained therein or any such
amendments or supplements thereto, or (B)  offers or sales effected by or on
behalf of such Indemnitee “by means of” (as defined in Rule 159A) a “free
writing prospectus” (as defined in Rule 405) that was not authorized in writing
by the Company.
 
(b)           If the indemnification provided for in Section 1.8(a) of this
Annex E is unavailable to an Indemnitee with respect to any losses, claims,
damages, actions, liabilities, costs or expenses referred to therein or is
insufficient to hold the Indemnitee harmless as contemplated therein, then the
Company, in lieu of indemnifying such Indemnitee, shall contribute to the amount
paid or payable by such Indemnitee as a result of such losses, claims, damages,
actions, liabilities, costs or expenses in such proportion as is appropriate to
reflect the relative fault of the Indemnitee, on the one hand, and the Company,
on the other hand, in connection with the statements or omissions which resulted
in such losses, claims, damages, actions, liabilities, costs or expenses as well
as any other relevant equitable considerations.  The relative fault of the
Company, on the one hand, and of the Indemnitee, on the other hand, shall be
determined by reference to, among other factors, whether the untrue statement of
a material fact or omission to state a material fact relates to information
supplied by the Company or by the Indemnitee and the parties’ relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission;  the Company and each Holder agree that it would not be
just and equitable if contribution pursuant to this Section 1.8(b) of this Annex
E were determined by pro rata allocation or by any other method of allocation
that does not take account of the equitable considerations referred to in
Section 1.8(a) of this Annex E.  No Indemnitee guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from the Company if the Company was not guilty
of such fraudulent misrepresentation.

UST Sequence No. 511
 
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1.9           Assignment of Registration Rights.  The rights of the Investor to
registration of Registrable Securities pursuant to Section 1.2 of this Annex E
may be assigned by the Investor to a transferee or assignee of Registrable
Securities; provided, however, the transferor shall, within ten days after such
transfer, furnish to the Company written notice of the name and address of such
transferee or assignee and the number and type of Registrable Securities that
are being assigned.
 
1.10           Clear Market.  With respect to any underwritten offering of
Registrable Securities by the Investor or other Holders pursuant to this Annex
E, the Company agrees not to effect (other than pursuant to such registration or
pursuant to a Special Registration) any public sale or distribution, or to file
any Shelf Registration Statement (other than such registration or a Special
Registration) covering any preferred stock of the Company or any securities
convertible into or exchangeable or exercisable for preferred stock of the
Company, during the period not to exceed ten days prior and 60 days following
the effective date of such offering or such longer period up to 90 days as may
be requested by the managing underwriter for such underwritten offering.  The
Company also agrees to cause such of its directors and senior executive officers
to execute and deliver customary lock-up agreements in such form and for such
time period up to 90 days as may be requested by the managing underwriter.
 
1.11           Forfeiture of Rights.  At any time, any holder of Registrable
Securities (including any Holder) may elect to forfeit its rights set forth in
this Annex E from that date forward; provided, that a Holder forfeiting such
rights shall nonetheless be entitled to participate under Section 1.2(d) – (f)
of this Annex E in any Pending Underwritten Offering to the same extent that
such Holder would have been entitled to if the holder had not withdrawn; and
provided, further, that no such forfeiture shall terminate a Holder’s rights or
obligations under Section 1.7 of this Annex E with respect to any prior
registration or Pending Underwritten Offering.
 
1.12           Specific Performance.  The parties hereto acknowledge that there
would be no adequate remedy at law if the Company fails to perform any of its
obligations under this Annex E and that the Investor and the Holders from time
to time may be irreparably harmed by any such failure, and accordingly agree
that the Investor and such Holders, in addition to any other remedy to which
they may be entitled at law or in equity, to the fullest extent permitted and
enforceable under applicable law shall be entitled to compel specific
performance of the obligations of the Company under this Annex E in accordance
with the terms and conditions of this Annex E.

UST Sequence No. 511
 
E-10

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1.13           No Inconsistent Agreements.  The Company shall not, on or after
the Signing Date, enter into any agreement with respect to its securities that
may impair the rights granted to the Investor and the Holders under this Annex E
or that otherwise conflicts with the provisions hereof in any manner that may
impair the rights granted to the Investor and the Holders under this Annex
E.  In the event the Company has, prior to the Signing Date, entered into any
agreement with respect to its securities that is inconsistent with the rights
granted to the Investor and the Holders under this Annex E (including agreements
that are inconsistent with the order of priority contemplated by Section 1.2(f)
of Annex E) or that may otherwise conflict with the provisions hereof, the
Company shall use its reasonable best efforts to amend such agreements to ensure
they are consistent with the provisions of this Annex E.
 
1.14           Certain Offerings by the Investor.  An “underwritten” offering or
other disposition shall include any distribution of such securities on behalf of
the Investor by one or more broker-dealers, an “underwriting agreement” shall
include any purchase agreement entered into by such broker-dealers, and any
“registration statement” or “prospectus” shall include any offering document
approved by the Company and used in connection with such distribution.

UST Sequence No. 511
 
E-11

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ANNEX F
 
OFFICER’S CERTIFICATE
 
OF
 
[COMPANY]
 
 In connection with that certain letter agreement, dated  [____________], 2010
(the “Agreement”) by and between [COMPANY] (the “Company”) and the United States
Department of the Treasury (“Investor”) which incorporates that certain
Securities Purchase Agreement –Standard Terms referred to therein (the “Standard
Terms”), the undersigned does hereby certify as follows:
 
1. I am a duly elected/appointed [____________] of the Company.
 
2. Each Certified Entity (as defined in the Standard Terms) (A) is certified by
the Community Development Financial Institution Fund (the “Fund”) of the United
States Department of the Treasury as a regulated community development financial
institution (a “CDFI”); (B) together with its Affiliates collectively meets the
eligibility requirements of 12 C.F.R. 1805.200(b); (C) has a primary mission of
promoting community development, as may be determined by Investor from time to
time, based on criteria set forth in 12 C.F.R. 1805.201(b)(1); (D) provides
Financial Products, Development Services, and/or other similar financing as a
predominant business activity in arm’s-length transactions; (E) serves a Target
Market by serving one or more Investment Areas and/or Targeted Populations in
the manner set forth in 12 C.F.R. 1805.201(b)(3); (F) provides Development
Services in conjunction with its Financial Products, directly, through an
Affiliate or through a contract with a third-party provider; (G) maintains
accountability to residents of the applicable Investment Area(s) or Targeted
Population(s) through representation on its governing Board of Directors or
otherwise; and (H) remains a non-governmental entity which is not an agency or
instrumentality of the United States of America, or any State or political
subdivision thereof, as described in 12 C.F.R. 1805.201(b)(6) and within the
meaning of any supplemental regulations or interpretations of 12 C.F.R.
1805.201(b)(6) or such supplemental regulations published by the Fund.  As used
herein, the terms “Affiliates”; “Financial Products”; “Development Services”;
“Target Market”; “Investment Areas”; and “Targeted Populations” have the
meanings ascribed to such terms in 12 C.F.R. 1805.104.
 
3. The information set forth in the CDFI Certification Application delivered to
the Investor pursuant to Section 2.3(m) of the Standard Terms (the “CDFI
Application”), as modified by any updates to the CDFI Application provided on
[Insert Date(s)] by the Company to the Investor on or prior to the date hereof,
with respect to the covenants set forth in Section 4.1(d)(i)(B) and Section
4.1(d)(i)(D) of the Standard Terms remains true, correct and complete as of the
date hereof.

UST Sequence No. 511
 
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4. The contracts and material agreements entered into by each Certified Entity
with respect to Development Services previously disclosed to the Investor remain
in effect   and copies of any new contracts and material agreements entered into
by the Certified Entity with respect to Development Services are attached hereto
as Exhibit A.
 
5. Attached hereto as Exhibit B is (A) a list of the names and addresses of the
individuals which comprise the board of directors of each Certified Entity as of
the date hereof, (B) to the extent any member of the board of directors listed
on Exhibit B was not a member of the board of directors as of the last
certification provided to the Investor pursuant to Section 4.1(d)(ii) of the
Standard Terms, a narrative describing such individual’s relationship to the
applicable Investment Area(s) and Targeted Population(s) and (C) to the extent
any Certified Entity maintains accountability to residents of the applicable
Investment Area(s) or Target Population(s) through means other than
representation on its governing board of directors and such means have changed
since the date of the last certification provided to the Investor pursuant to
Section 4.1(d)(ii) of the Standard Terms on [Insert Date], a narrative
describing such change.
 
6. Each Certified Entity is not an agency of the United States of America, or
any State or political subdivision thereof, as described in 12 C.F.R.
1805.201(b)(6) and within the meaning of any supplemental regulations or
interpretations of 12 C.F.R. 1805.201(b)(6) or such supplemental regulations
published by the Fund.
 
7. [Insert if the Company was a Bank Holding Company or a Savings and Loan
Holding Company on the Signing Date:  The Company is and has been at all times
since the date of the last certification provided to the Investor pursuant to
Section 4.1(d)(ii) of the Standard Terms, a [Insert if the Company is a Bank
Holding Company: Bank Holding Company] [Insert if the Company is a Savings and
Loan Holding Company: Savings and Loan Holding Company].]  The Company is not,
and has not been at any time since the date of the last certification provided
to the Investor pursuant to Section 4.1(d)(ii) of the Standard Terms on [Insert
Date], controlled (within the meaning of [Insert for banks and Bank Holding
Companies: the Bank Holding Company Act of 1956 (12 U.S.C. 1841(a)(2)) and 12
C.F.R. 225(a)(i)][Insert for savings associations and Savings and Loan Holding
Companies: the Home Owners’ Loan Act of 1933 (12 U.S.C. 1467a (a)(2)) and 12
C.F.R. 583.7]) by a foreign bank or company.
 
The foregoing certifications are made and delivered as of [_________] pursuant
to Section 4.1(d)(ii) of the Standard Terms.
 
Capitalized terms used and not otherwise defined herein shall have the meanings
assigned to them in the Standard Terms.
 
[SIGNATURE PAGE FOLLOWS]

UST Sequence No. 511
 
F-2

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

 
 
 
 
 By:___________________________________

 
       Name:

 
       Title:

UST Sequence No. 511
 
F-3

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EXHIBIT A
 
NEW CONTRACTS AND MATERIAL AGREEMENTS

UST Sequence No. 511
Exh. A-1 
 

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EXHIBIT B
 
BOARD OF DIRECTORS
 
CERTIFIED ENTITY: [CERTIFIED ENTITY]2
NAME
ADDRESS
NARRATIVE3
                             

 
 

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

UST Sequence No. 511
Exh. B-1 
 

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

 
The First Bancshares, Inc.

 
P. O. Box 15549

 
Hattiesburg, MS  39404

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

 
Watkins Ludlam Winter & Stennis, P.A.

 
Post Office Box 427

 
Jackson, MS  39205-0427

 
Terms of the Purchase:
 
 
Series of Preferred Stock Purchased:
Fixed Rate Cumulative Perpetual Preferred Stock, Series CD

 
 
Per Share Liquidation Preference of

 
                Preferred Stock:
$1,000 per share

 
Number of Shares of Preferred Stock Purchased:                           12,123
shares
 
Dividend Payment Dates on the Preferred Stock: Payable quarterly in arrears on
February 15, May 15, August 15 and  November 15 of each year.

UST Sequence No. 511
 
 

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Purchase
Price:                                                                                     $12,123,000
 
Closing:
 
 
Location of Closing:
Cadwalader, Wickersham & Taft LLP

 
One World Financial Center

 
New York, NY 10281

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

 
 
Date of Closing:
September 29, 2010

UST Sequence No. 511
 
 

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Wire Information for Closing:
ABA Number:             065306192
 
Bank:                            Mississippi National Bankers Bank
 
Account Name:            The First, A National Banking
                                        Association
 
Account Number:        065303360
 
Beneficiary:                  The First Bancshares, Inc.
                                        (Acct. No. 2500262)
   
Contact for Confirmation of Wire Information:
 

 
Primary Contact:                 Alicia Foster
Title:                                      Wire Clerk
office phone:                          601.450.9829
cell phone:                              601.297.7295
email address:                        afoster@thefirstbank.com
 
Secondary Contact:               Valerie Rayborn
Title:                                        Assistant Vice President,
Operations
office phone:                           601.450.9826
cell phone:                               601.794.7209
email address:                         vrayborn@thefirstbank.com
 

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SCHEDULE B
 
CAPITALIZATION
 
Capitalization
Date:                                                                                                                          
August 31, 2010
 
Common Stock
 
Par
value:                                                                                                                                              
$1.00
 
Total
Authorized:                                                                                                           
10,000,000 shares
 
Outstanding:                                                                                                                     
3,019,869 shares
 
 
Subject to warrants, options, convertible

 
securities,
etc.:                                                                                                                        
54,705 shares

 
Reserved for benefit plans and other
issuances:                                                              12,353
shares
 
Remaining authorized but
unissued:                                                                             
6,913,073 shares
 
 
Shares issued after Capitalization Date (other

 
than pursuant to warrants, options,

 
convertible securities, etc. as set forth

 
above):                                                                                                                                          
None

 
Preferred Stock
 
Par
value:                                                                                                                                 
No par value
 
Total
Authorized:                                                                                                           
10,000,000 shares
 
Outstanding (by
series):                                                                                                        
5,000 shares
 
Reserved for
issuance:                                                                                                                      
None
 
Remaining authorized but
unissued:                                                                            
9,995,000 shares
 
Holders of 5% or more of any class of capital
stock                                       Primary Address
 
United States Department of the Treasury
Attention:  Chief Counsel, Office of Financial Stability

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

 
Washington, D.C.  20220

 
 
 

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SCHEDULE C
 
MATERIAL ADVERSE EFFECT
 
List any exceptions to the representation and warranty in Section 3.1(g) of the
Securities Purchase Agreement – Standard Terms.
 
 
 
If none, please so indicate by checking the box:  x

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SCHEDULE D
 
LITIGATION
 
List any exceptions to the representation and warranty in Section 3.1(l) of the
Securities Purchase Agreement – Standard Terms.
 
 
 
If none, please so indicate by checking the box:  o
 
 
 
Welch Litigation
 
The litigation described below has been disclosed previously in the Company’s
filings with the Securities and Exchange Commission, including the Company’s
September 30, 2008, Form 10-Q filing, which was filed on November 14,
2008.  However, the Company has not yet filed its Annual Report on Form 10-K for
the fiscal year ended December 31, 2008.  Because the definition of “Previously
Disclosed” in Section 2.1(b) of the Securities Purchase Agreement encompasses
only disclosures made in the Annual Report on Form 10-K for the Company’s most
recently completed fiscal year (or subsequent filings), the Company makes the
following disclosure pursuant to Section 2.2(l):
 
On October 8, 2007, The First Bancshares, Inc. (the “Company”) and its
subsidiary, The First, A National Banking Association (the “Bank”) were formally
named as defendants and served with a First Amended Complaint in litigation
styled Nick D. Welch v. Oak Grove Land Company, Inc., Fred McMurry, David E.
Johnson, J. Douglas Seidenburg, The First, a National Banking Association, The
First Bancshares, Inc., and John Does 1 through 10, Civil Action No.
2006-236-CV4, pending in the Circuit Court of Jones County, Mississippi, Second
Judicial District (the “First Amended Complaint”).  The First Amended Complaint
was filed against the named defendants by Nick D. Welch (“Welch”), a former
member of the Bank’s Advisory Board, and a shareholder of the Company who was
until February 2, 2006, the largest individual holder of Company stock.
 
The First Amended Complaint served upon the Company and Bank is similar to a
complaint filed by Welch against the other named defendants on April 11,
2006.  The other named defendants, each of whom deny any liability to Welch,
include Oak Grove Land Company, Inc., a shareholder of the Company; Fred
McMurry, Director of the Company and the Bank, and an affiliate of Oak Grove
Land Company, Inc.; David E. Johnson, Director and Chairman of the Company and
the Bank; and J. Douglas Seidenburg, Director of the Company and the Bank. The
First Amended Complaint contains allegations of fraud in connection with Welch’s
private sale of approximately

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69,000 shares (representing approximately 5%) of the Company’s common stock to
the named defendants (other than the Company or the Bank) in a privately
negotiated transaction.  In summary the First Amended Complaint alleges that one
or more of the named defendants withheld information concerning the Company’s
potential NASDAQ listing and its 2-for-1 stock split, both of which were
publicly announced by the Company on February 22, 2006.  The First Amended
Complaint further alleges that Welch would not have sold his stock, or at least
would not have sold his stock at the $2,005,785.00 ($29.00 per share) price
negotiated by Welch, had he been informed of these potential events.
 
Welch filed his Second Amended Complaint on January 29, 2010, adding as
defendant Kansas Bankers Surety Company, the insurance carrier providing
Directors, Officers, and Employees Indemnity coverage for Messrs. McMurry,
Johnson, and Seidenburg.  This Complaint requests a declaratory ruling that the
subject policy provided by the Bank to its Board Members provides coverage for
the claims made by Welch in the First and Second Amended Complaints.  The Second
Amended Complaint does not allege any additional allegations against the Company
or the Bank.
 
The allegations by Welch against the Company and the Bank include counts of 1)
Intentional Misrepresentation and Omission; 2) Negligent Misrepresentation
and/or Omission; 3) Breach of Fiduciary Duty; 4) Breach of Duty of Good Faith
and Fair Dealing; and 5) Civil Conspiracy.  The First Amended Complaint served
by Welch on October 8, 2007, added the Company and the Bank as defendants in
this ongoing litigation.  The First Amended Complaint seeks damages from all the
defendants, including $2,420,775.00 (representing the alleged difference between
the price at which Welch sold his stock and the “high price” of the Company’s
stock following the Company’s 2-for-1 stock split on March 15, 2006), annual
dividends for the year 2006 in the amount of $.30 per share, punitive damages,
and attorneys’ fees and costs.  Each of the Company and the Bank deny any
liability to Welch, and they intend to defend vigorously against this lawsuit.

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SCHEDULE E
 
COMPLIANCE WITH LAWS
 
List any exceptions to the representation and warranty in the second sentence of
Section 3.1(m) of the Securities Purchase Agreement – Standard Terms.
 
 
 
If none, please so indicate by checking the box:  x
 
 
 
List any exceptions to the representation and warranty in the last sentence of
Section 3.1(m) of the Securities Purchase Agreement – Standard Terms.
 
 
 
If none, please so indicate by checking the box:  x

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SCHEDULE F
 
REGULATORY AGREEMENTS
 
List any exceptions to the representation and warranty in Section 3.1(s) of the
Securities Purchase Agreement – Standard Terms.
 
 
 
If none, please so indicate by checking the box:  x
 
 
 
Safety and Soundness Plan
 
The Company is a party to a commitment letter in the form of a Safety and
Soundness Plan, the terms of which are confidential.
 
 

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