Exhibit 10.1

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  Except to the extent supplemented or superseded by the terms set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

 
 

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

 
 
By:
 

 
 
Name:

 
 
Title:

 
 
COMPANY: M&F BANCORP, INC.

 
 
By:
 

 
Name: Kim D. Saunders

 
Title: President and Chief Executive Officer

 
Date: August 20, 2010
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
 
 

 
 

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EXHIBIT A
(CDFI Bank/Thrifts
Senior Preferred Stock)

 
EXCHANGE AGREEMENT
 
 
STANDARD TERMS
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 

 
 

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

Section 1.2
The Closing 
2

 
ARTICLE II
 
EXCHANGE
 
Section 2.1
Exchange 
5

Section 2.2
Exchange Documentation 
5

 
ARTICLE III
 
REPRESENTATIONS AND WARRANTIES OF THE COMPANY

Section 3.1
Existence and Power
6
Section 3.2
CDCI Preferred Shares
6
Section 3.3
Community Development Financial Institution Status; Domestic Ownership
7
Section 3.4
Authorization and Enforceability
7
Section 3.5
Anti-Takeover Provisions and Rights Plan
8
Section 3.6
No Company Material Adverse Effect
8
Section 3.7
Company Financial Statements
8
Section 3.8
No Undisclosed Liabilities
8
Section 3.9
Offering of Securities
9
Section 3.10
Litigation and Other Proceedings
9
Section 3.11
Compliance with Laws
9
Section 3.12
Employee Benefit Matters
9
Section 3.13
Taxes
10
Section 3.14
Properties and Leases
10
Section 3.15
Environmental Liability
11
Section 3.16
Risk Management Instruments
11
Section 3.17
Agreements with Regulatory Agencies
11
Section 3.18
Insurance
12
Section 3.19
Intellectual Property
12
Section 3.20
Brokers and Finders
12
Section 3.21
Disclosure Schedule
12
Section 3.22
CPP Preferred Stock
13

 
ARTICLE IV
 
 
COVENANTS
 
Section 4.1
Affirmative Covenants 
13

Section 4.2
Negative Covenants 
19

 
ARTICLE V
 
ADDITIONAL AGREEMENTS
 
 
Section 5.1
Purchase for Investment
21
Section 5.2
Legends
21
Section 5.3
Transfer of CDCI Preferred Shares
23
Section 5.4
Rule 144; Rule 144A; 4(1½) Transactions
23
Section 5.5
Depositary Shares
24
Section 5.6
Expenses and Further Assurances
24
Section 5.7
Repurchase of Investor Securities
25

ARTICLE VI
 
MISCELLANEOUS
 
Section 6.1
Termination
25
Section 6.2
Survival
26
Section 6.3
Amendment
26
Section 6.4
Waiver of Conditions
26
Section 6.5
Governing Law; Submission to Jurisdiction, etc
26
Section 6.6
Notices
27
Section 6.7
Definitions, Interpretation
27
Section 6.8
Interpretation
30
Section 6.9
Assignment
31
Section 6.10
Severability
31
Section 6.11
No Third-Party Beneficiaries
31
Section 6.12
Entire Agreement, etc
31
Section 6.13
Specific Performance
32

 
 
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LIST OF ANNEXES
 

 
 
ANNEX A:  FORM OF OFFICER’S CERTIFICATE

 
 
ANNEX B:  FORM OF NEW CERTIFICATE OF DESIGNATIONS

 
 
ANNEX C:  FORM OF OPINION

 
 
ANNEX D:  FORM OF WAIVER

 
 
ANNEX E:  REGISTRATION RIGHTS

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

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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Defined Terms
 
Affiliate
Section 6.7(a)(ii)
Agreement
Recitals
Appropriate Federal Banking Agency
Section 6.7(a)(iii)
Bank Holding Company
Section 6.7(a)(iv)
Bankruptcy Exceptions
Section 3.4(a)
Benefit Plans
Section 1.2(c)(vi)
Board of Directors
Section 3.5
Business Combination
Section 6.7(a)(v)
Capitalization Date
Section 3.1(b)
CDCI
Recitals
CDCI Preferred Shares
Recitals
CDCI Preferred Stock
Recitals
CDFI
Section 3.3
CDFI Application
Section 1.2(c)(xii)
CDFI Application Update
Section 1.2(c)(xii)
Certified Entity
Section 6.7 (a)(vi)
Charter
Section 1.2(c)(iv)
Closing
Section 1.2(a)
Closing Date
Section 1.2(a)
Code
Section 3.12
Common Stock
Section 3.1(b)
Company
Recitals
Company Financial Statements
Section 6.7(a)(vii)
Company Material Adverse Effect
Section 6.7(a)(viii)
Company Subsidiaries
Section 3.4(b)
Compensation Regulations
Section 1.2(c)(vi)
Controlled Group
Section 3.12
CPP
Recitals
CPP Preferred Shares
Recitals
CPP Preferred Stock
Recitals
CPP Securities
Section 6.12(b)
CPP Securities Purchase Agreement
Recitals
CPP Signing Date
Recitals
CPP Waiver
Section 1.2(c)(vii)
Designated Matters
Section 6.7(a)(ix)
Development Services
Section 4.1(d)(i)
Disclosure Schedule
Section 6.7(a)(x)
Disclosure Update
Section 1.2(c)(xi)
EAWA
Section 6.7(a)(xi)
EESA
Section 1.2(c)(vi)
ERISA
Section 3.12
Exchange
Recitals
Exchange Act
Section 5.3
Federal Reserve
Section 6.7(a)(iv)
Financial Products
Section 4.1(d)(i)
Fund
Section 1.2(c)(xii)
Governmental Entities
Section 1.2(c)
Holder
Section 5.4
Indemnitee
Section 5.4(b)
Information
Section 4.1(c)(iii)
Investment Area
Section 4.1(d)(i)
Investor
Recitals
Junior Stock
Section 6.7(a)(xii)
Letter Agreement
Recitals
MHA
Section 4.1(i)
New Certificate of Designations
Section 1.2(c)(iv)
Parity Stock
Section 6.7(a)(xiii)
Plan
Section 3.12
Previously Disclosed
Section 6.7(a)(xiv)
Proprietary Rights
Section 3.19
Regulatory Agreement
Section 3.17
Relevant Period
Section 1.2(c)(vi)
Savings and Loan Holding Company
Section 6.7(a)(xv)
Schedules
Recitals
SEC
Section 3.9
Section 4.1(e) Employee
Section 4.1(e)(ii)
Securities Act
Section 3.1(a)
Senior Executive Officers
Section 6.7(a)(xvi)
Share Dilution Amount
Section 6.7(a)(xvii)
Signing Date
Section 1.2(c)(xi)
subsidiary
Section 6.7(a)(i)
Target Market
Section 4.1(d)(i)
Targeted Populations
Section 4.1(d)(i)
Tax
Section 6.7(xviii)
Transfer
Section 5.3

 
 
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EXCHANGE AGREEMENT – STANDARD TERMS
 

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

 
 

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WHEREAS, the Exchange will be governed by this Exchange Agreement – Standard
Terms and the Letter Agreement, including the schedules thereto (the
“Schedules”), specifying additional terms of the Exchange. This Exchange
Agreement – Standard Terms (including the Annexes hereto) and the Letter
Agreement (including the Schedules thereto) are together referred to as this
“Agreement”.  All references in this Exchange Agreement – Standard Terms to
“Schedules” are to the Schedules attached to the Letter Agreement.
 
NOW, THEREFORE, in consideration of the premises, and of the representations,
warranties, covenants and agreements set forth herein, the parties agree as
follows:
 
ARTICLE I                      
 

 
THE CLOSING; THE EXCHANGE OF CDCI PREFERRED STOCK FOR CPP PREFERRED STOCK
 
Section 1.1 The CDCI Preferred Stock.
 
  The CDCI Preferred Shares are being issued to the Investor in the Exchange
pursuant to Article II hereof.  The CPP Preferred Shares exchanged for the CDCI
Preferred Shares pursuant to Article II hereof are being reacquired by the
Company and shall have the status of authorized but unissued shares of preferred
stock of the Company undesignated as to series and may be designated or
redesignated and issued or reissued, as the case may be, as part of any series
of preferred stock of the Company; provided that such shares shall not be
reissued as shares of CPP Preferred Stock.
 
Section 1.2 The Closing.
 
  (a) On the terms and subject to the conditions set forth in this Agreement,
the closing of the Exchange (the “Closing”) will take place at the location
specified in Schedule A, at the time and on the date set forth in Schedule A or
as soon as practicable thereafter, or at such other place, time and date as
shall be agreed between the Company and the Investor.  The time and date on
which the Closing occurs is referred to in this Agreement as the “Closing Date”.
 
(b) Subject to the fulfillment or waiver of the conditions to the Closing in
this Section 1.2, at the Closing (i) the Company will deliver the CDCI Preferred
Shares to the Investor, as evidenced by one or more certificates dated the
Closing Date and registered in the name of the Investor or its designee(s) and
(ii) the Investor will deliver the certificate representing the CPP Preferred
Shares to the Company.
 
(c) The obligation of the Investor to consummate the Exchange is also subject to
the fulfillment (or waiver by the Investor) at or prior to the Closing of each
of the following conditions:
 
(i) (A) any approvals or authorizations of all United States and other
governmental, regulatory or judicial authorities (collectively, “Governmental
Entities”) required for the consummation of the Exchange shall have been
obtained or made in form and substance reasonably satisfactory to each party and
shall be in full force and effect

 
 
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(ii) and all waiting periods required by United States and other applicable law,
if any, shall have expired and (B) no provision of any applicable United States
or other law and no judgment, injunction, order or decree of any Governmental
Entity shall prohibit consummation of the Exchange as contemplated by this
Agreement;
 
(iii)  (A) the representations and warranties of the Company set forth
in Article III of this Agreement shall be true and correct in all respects as
though made on and as of the Closing Date (other than representations and
warranties that by their terms speak as of another date, which representations
and warranties shall be true and correct in all respects as of such other date)
and (B) the Company shall have performed in all respects all obligations
required to be performed by it under this Agreement at or prior to the Closing;
 
(iv) the Company shall have delivered to the Investor a certificate signed on
behalf of the Company by a Senior Executive Officer certifying to the effect
that the conditions set forth in Section 1.2(c)(ii) have been satisfied, in
substantially the form attached hereto as Annex A;
 
(v) the Company shall have duly adopted and filed with the Secretary of State of
its jurisdiction of organization or other applicable Governmental Entity an
amendment to its certificate or articles of incorporation, articles of
association, or similar organizational document (“Charter”) in substantially the
form attached hereto as Annex B (the “New Certificate of Designations”) and the
Company shall have delivered to the Investor a copy of the filed New Certificate
of Designations with appropriate evidence from the Secretary of State or other
applicable Governmental Entity that the filing has been accepted, or if a filed
copy is unavailable, a certificate signed on behalf of the Company by a Senior
Executive Officer certifying to the effect that the filing of the New
Certificate of Designation has been accepted, in substantially the form attached
hereto as Annex A;
 
(vi) the Company shall have delivered to the Investor, a certificate signed on
behalf of the Company by a Senior Executive Officer certifying to the effect
that the Charter and bylaws of the Company delivered to the Investor pursuant to
the CPP Securities Purchase Agreement remain true, complete and correct, in
substantially the form attached hereto as Annex A; to the extent that the
Charter and bylaws of the Company delivered to the Investor pursuant to the CPP
Securities Purchase Agreement are no longer true, correct and complete, prior to
the Closing Date, the Company shall deliver to Investor true, complete and
correct certified copies of any amendments or supplements to the Charter or
bylaws of the Company or the documentation necessary to make the Charter or
bylaws of the Company delivered to the Investor true, correct and complete as of
the Closing Date;
 
(vii) (A) the Company shall have effected such changes to its compensation,
bonus, incentive and other benefit plans, arrangements and agreements (including
golden parachute, severance and employment agreements) (collectively, “Benefit
Plans”) with respect to its Senior Executive Officers and any other employee of
the Company or its

 
 
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(viii) Affiliates subject to Section 111 of the Emergency Economic Stabilization
Act of 2008, as amended by the American Recovery and Reinvestment Act of 2009,
or otherwise from time to time (“EESA”), as implemented by any guidance, rule or
regulation thereunder, as the same shall be in effect from time to time
(collectively, the “Compensation Regulations”) (and to the extent necessary for
such changes to be legally enforceable, each of its Senior Executive Officers
and other employees shall have duly consented in writing to such changes), as
may be necessary, during the period in which any obligation of the Company
arising from financial assistance under the Troubled Asset Relief Program
remains outstanding (such period, as it may be further described in the
Compensation Regulations, the “Relevant Period”), in order to comply with
Section 111 of EESA or the Compensation Regulations and (B) the Investor shall
have received a certificate signed on behalf of the Company by a Senior
Executive Officer certifying to the effect that the condition set forth in
Section 1.2(c)(vi)(A) has been satisfied, in substantially the form attached
hereto as Annex A;
 
(ix) the Company shall have delivered to the Investor, a written waiver from
each of the Company’s Senior Executive Officers and any other employee of the
Company required to have delivered a waiver to Investor pursuant to Section
1.2(d)(v) of the CPP Securities Purchase Agreement (each, a “CPP Waiver”) and,
to the extent that any Senior Executive Officer or any other employee of the
Company or its Affiliates that are subject to Section 111 of EESA did not
deliver a CPP Waiver, the Company shall cause each such Senior Executive Officer
or other employee to have delivered to the Investor a written waiver in the form
attached hereto as Annex D releasing the Investor and the Company from any
claims that such Senior Executive Officer or other employee may otherwise have
as a result of the modification of, or the agreement of the Company hereunder to
modify, the terms of any Benefit Plans with respect to its Senior Executive
Officers or other employees to eliminate any provisions of such Benefit Plans
that would not be in compliance with the requirements of Section 111 of EESA as
implemented by the Compensation Regulations;
 
(x) the Company shall have delivered to the Investor a written opinion from
counsel to the Company (which may be internal counsel), addressed to the
Investor and dated as of the Closing Date, in substantially the form attached
hereto as Annex C;
 
(xi) the Company shall have delivered certificates in proper form or, with the
prior consent of the Investor, evidence of shares in book-entry form, evidencing
the CDCI Preferred Shares to the Investor or its designee(s);
 
(xii) 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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(xiii) the Company shall have delivered to the Investor, a copy of the
Disclosure Schedule on or prior to the date of the Letter Agreement (the
“Signing Date”) and, to the extent that any information set forth on the
Disclosure Schedule needs to be updated or supplemented to make it true,
complete and correct as of the Closing Date, (i) the Company shall have
delivered to the Investor an update to the Disclosure Schedule (the “Disclosure
Update”), setting forth any information necessary to make the Disclosure
Schedule true, correct and complete as of the Closing Date and (ii) the
Investor, in its sole discretion, shall have approved the Disclosure Update,
provided, however, that the delivery and acceptance of the Disclosure Update
shall not limit or affect any rights of or remedies available to the Investor;
 
(xiv) the Company shall have delivered to the Investor prior to the Signing Date
either (i) a true, complete and correct certified copy of each CDFI
Certification Application that each Certified Entity submitted to the Community
Development Financial Institution Fund (the “Fund”)  in connection with its
certification as a CDFI along with any updates to the CDFI Certification
Application necessary to make it true, complete and correct as of the Signing
Date or (ii), to the extent a copy of the CDFI Certification Application that
any Certified Entity submitted to the Fund in connection with its certification
as a CDFI is not available, a newly completed CDFI Certification Application
with respect to such Certified Entity true, complete and correct as of the
Signing Date (the CDFI Certification Application delivered to the Investor
pursuant to this Section 1.2(c)(xii), the “CDFI Application”), and, to the
extent any information set forth in the CDFI Application is not true, complete
and correct as of the Closing Date, the Company shall have delivered to the
Investor an update to the CDFI Application (the “CDFI Application Update”),
setting forth any information necessary to make the information set forth in the
CDFI Application true, correct and complete as of the Closing Date; and
 
(xv) CPP/CDCI Securities.  The Company shall have paid to Investor all accrued
and unpaid dividends or interest then due on the CPP Preferred Stock.
 
                              ARTICLE II                                
 

 
EXCHANGE
 
Section 2.1 Exchange.
 
  On the terms and subject to the conditions set forth in this Agreement, the
Company agrees to issue the CDCI Preferred Shares to the Investor in exchange
for CPP Preferred Shares, and the Investor agrees to deliver to the Company the
CPP Preferred Shares in exchange for the CDCI Preferred Shares.
 
Section 2.2 Exchange Documentation.
 
  Settlement of the Exchange will take place on the Closing Date, at which time
the Investor will cause delivery of the CPP Preferred Shares to the Company or
its designated agent and the Company will cause delivery of the CDCI Preferred
Shares to the Investor or its designated agent.

 
 
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Representations and Warranties of the Company
 
Except as Previously Disclosed, the Company represents and warrants to the
Investor that as of the Signing Date and as of the Closing Date (or such other
date specified herein) that:
 
Section 2.3 Existence and Power.
 
(a) Organization, Authority and Significant Subsidiaries.  The Company has been
duly incorporated and is validly existing and in good standing under the laws of
its jurisdiction of organization, with the necessary power and authority to own,
operate and lease its properties and to conduct its business in all material
respects as it is being currently conducted, and except as has not, individually
or in the aggregate, had and would not reasonably be expected to have a Company
Material Adverse Effect, has been duly qualified as a foreign corporation for
the transaction of business and is in good standing under the laws of each other
jurisdiction in which it owns or leases properties or conducts any business so
as to require such qualification; each Certified Entity (if not the Company) and
each subsidiary of the Company that would be considered a “significant
subsidiary” within the meaning of Rule 1-02(w) of Regulation S-X under the
Securities Act of 1933 (the “Securities Act”), has been duly organized and is
validly existing in good standing under the laws of its jurisdiction of
organization.  The Charter and bylaws of the Company and each Certified Entity
(if not the Company), copies of which have been provided to the Investor prior
to the Signing Date, are true, complete and correct copies of such documents as
in full force and effect as of the Signing Date and as of the Closing Date.
 
(b) Capitalization.  The authorized capital stock of the Company, and the
outstanding capital stock of the Company (including securities convertible into,
or exercisable or exchangeable for, capital stock of the Company) as of the most
recent fiscal month-end preceding the Signing Date (the “Capitalization Date”)
is set forth on Schedule B.  The outstanding shares of capital stock of the
Company have been duly authorized and are validly issued and outstanding, fully
paid and nonassessable, and subject to no preemptive rights (and were not issued
in violation of any preemptive rights).  As of the Signing Date, the Company
does not have outstanding any securities or other obligations providing the
holder the right to acquire common stock of the Company (“Common Stock”) or
other capital stock that is not reserved for issuance as specified on
Schedule B, and the Company has not made any other commitment to authorize,
issue or sell any Common Stock or other capital stock.  Since the Capitalization
Date, the Company has not issued any shares of Common Stock or other capital
stock other than (i) shares issued upon the exercise of stock options or
delivered under other equity-based awards or other convertible securities or
warrants which were issued and outstanding on the Capitalization Date and
disclosed on Schedule B and (ii) shares disclosed on Schedule B.  Each holder of
5% or more of any class of capital stock of the Company and such holder’s
primary address are set forth on Schedule B.

 
 
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Section 2.4 CDCI Preferred Shares.
 
  The CDCI Preferred Shares have been duly and validly authorized by all
necessary action, and, when issued and delivered pursuant to this Agreement,
such CDCI Preferred Shares will be duly and validly issued and fully paid and
nonassessable, will not be issued in violation of any preemptive rights, and
will rank pari passu or senior to all other series or classes of CDCI Preferred
Stock, whether or not designated, issued or outstanding, with respect to the
payment of dividends and the distribution of assets in the event of any
dissolution, liquidation or winding up of the Company.
 
Section 2.5 Community Development Financial Institution Status; Domestic
Ownership.
 
(a)  The Company, collectively with all of its “Affiliates” (within the meaning
of 12 C.F.R. 1805.104) satisfies the requirements of 12 C.F.R. 1805.200(b).
 
(b) Each Certified Entity (A) is a regulated community development financial
institution (a “CDFI”) currently certified by the Fund of the United States
Department of the Treasury pursuant to 12 C.F.R. 1805.201(a) as having satisfied
the eligibility requirements of the Fund’s Community Development Financial
Institutions Program and (B) satisfies the eligibility requirements for a CDFI
set forth in 12 C.F.R. 1805.201(b)(1) – (6).
 
(c) The Company is not a Bank Holding Company, Savings and Loan Holding Company,
bank or savings association controlled (within the meaning of the Bank Holding
Company Act of 1956 (12 U.S.C. 1841(a)(2)) and 12 C.F.R. 225(a)(i) in the case
of Bank Holding Companies and banks and the Home Owners’ Loan Act of 1933 (12
U.S.C. 1467a (a)(2)) and 12 C.F.R. 583.7 in the case of Savings and Loan Holding
Companies and savings associations) by a foreign bank or company.
 
Section 2.6 Authorization and Enforceability.
 
  (a) The Company has the corporate power and authority to execute and deliver
this Agreement and to carry out its obligations hereunder (which includes the
issuance of the CDCI Preferred Shares). The execution, delivery and performance
by the Company of this Agreement and the consummation of the transactions
contemplated hereby have been duly authorized by all necessary corporate action
on the part of the Company and its stockholders, and no further approval or
authorization is required on the part of the Company. This Agreement is a valid
and binding obligation of the Company enforceable against the Company in
accordance with its terms, subject to any limitations by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the enforcement
of creditors’ rights generally and general equitable principles, regardless of
whether such enforceability is considered in a proceeding at law or in equity
(“Bankruptcy Exceptions”).
 
(b) The execution, delivery and performance by the Company of this Agreement and
the consummation of the transactions contemplated hereby, and compliance by the
Company with the provisions hereof, will not (A) violate, conflict with, or
result in a breach of any provision of, or constitute a default (or an event
which, with notice or lapse of time or both, would constitute a default) under,
or result in the termination of, or accelerate the performance required by, or
result in a right of termination or acceleration of, or result in the

 
 
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(c) creation of, any lien, security interest, charge or encumbrance upon any of
the properties or assets of the Company or any subsidiary of the Company or
Certified Entity (if not the Company) (each subsidiary or Certified Entity, a
“Company Subsidiary” and, collectively, the “Company Subsidiaries”) under any of
the terms, conditions or provisions of (i) its organizational documents or
(ii) any note, bond, mortgage, indenture, deed of trust, license, lease,
agreement or other instrument or obligation to which the Company or any Company
Subsidiary is a party or by which it or any Company Subsidiary may be bound, or
to which the Company or any Company Subsidiary or any of the properties or
assets of the Company or any Company Subsidiary may be subject, or (B) subject
to compliance with the statutes and regulations referred to in the next
paragraph, violate any statute, rule or regulation or any judgment, ruling,
order, writ, injunction or decree applicable to the Company or any Company
Subsidiary or any of their respective properties or assets except, in the case
of clauses (A)(ii) and (B), for those occurrences that, individually or in the
aggregate, have not had and would not reasonably be expected to have a Company
Material Adverse Effect.
 
(d) Other than the filing of the New Certificate of Designations with the
Secretary of State of its jurisdiction of organization or other applicable
Governmental Entity, such filings and approvals as are required to be made or
obtained under any state “blue sky” laws and such as have been made or obtained,
no notice to, filing with, exemption or review by, or authorization, consent or
approval of, any Governmental Entity is required to be made or obtained by the
Company in connection with the consummation by the Company of the Exchange
except for any such notices, filings, exemptions, reviews, authorizations,
consents and approvals the failure of which to make or obtain would not,
individually or in the aggregate, reasonably be expected to have a Company
Material Adverse Effect.
 
Section 2.7 Anti-Takeover Provisions and Rights Plan.
 
  The Board of Directors of the Company (the “Board of Directors”) has taken all
necessary action to ensure that the transactions contemplated by this Agreement
and the consummation of the transactions contemplated hereby, will be exempt
from any anti-takeover or similar provisions of the Company’s Charter and
bylaws, and any other provisions of any applicable “moratorium”, “control
share”, “fair price”, “interested stockholder” or other anti-takeover laws and
regulations of any jurisdiction.
 
Section 2.8 No Company Material Adverse Effect.
 
  Since the CPP Signing Date, no fact, circumstance, event, change, occurrence,
condition or development has occurred that, individually or in the aggregate,
has had or would reasonably be expected to have a Company Material Adverse
Effect, except as disclosed on Schedule C.
 
Section 2.9 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.

 
 
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No Undisclosed Liabilities.
 
  Neither the Company nor any of the Company Subsidiaries has any liabilities or
obligations of any nature (absolute, accrued, contingent or otherwise) which are
not properly reflected or reserved against in the Company Financial Statements
to the extent required to be so reflected or reserved against in accordance with
GAAP, except for (i) liabilities that have arisen since the last fiscal year end
in the ordinary and usual course of business and consistent with past practice
and (ii) liabilities that, individually or in the aggregate, have not had and
would not reasonably be expected to have a Company Material Adverse Effect.
 
Section 2.10 Offering of Securities.
 
  Neither the Company nor any person acting on its behalf has taken any action
(including any offering of any securities of the Company under circumstances
which would require the integration of such offering with the offering of the
CDCI Preferred Shares under the Securities Act and the rules and regulations of
the Securities and Exchange Commission (the “SEC”) promulgated thereunder),
which might subject the issuance or acquisition of the CDCI Preferred Shares to
the Investor pursuant to this Agreement to the registration requirements of the
Securities Act.
 
Section 2.11 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.
 
Section 2.12 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.

 
 
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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.
 
Section 2.13 Taxes.
 
 Except as would not, individually or in the aggregate, reasonably be expected
to have a Company Material Adverse Effect, (i) the Company and the Company
Subsidiaries have filed all federal, state, local and foreign income and
franchise Tax returns (together with any schedules and attached thereto)
required to be filed through the Signing Date, subject to permitted extensions,
and have paid all Taxes due thereon, (ii) all such Tax returns (together with
any schedules and attached thereto) are true, complete and correct in all
material respects and were prepared in compliance with all applicable laws and
(iii) no Tax deficiency has been determined adversely to the Company or any of
the Company Subsidiaries, nor does the Company have any knowledge of any Tax
deficiencies.
 
Section 2.14 Properties and Leases.
 
 Except as would not, individually or in the aggregate, reasonably be expected
to have a Company Material Adverse Effect, the Company

 
 
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and the Company Subsidiaries have good and marketable title to all real
properties and all other properties and assets owned by them, in each case free
from liens (including, without limitation, liens for Taxes), encumbrances,
claims and defects that would affect the value thereof or interfere with the use
made or to be made thereof by them.  Except as would not, individually or in the
aggregate, reasonably be expected to have a Company Material Adverse Effect, the
Company and the Company Subsidiaries hold all leased real or personal property
under valid and enforceable leases with no exceptions that would interfere with
the use made or to be made thereof by them.
 
Section 2.15 Environmental Liability.
 
 Except as would not, individually or in the aggregate, reasonably be expected
to have a Company Material Adverse Effect:
 
(a) there is no legal, administrative, or other proceeding, claim or action of
any nature seeking to impose, or that would reasonably be expected to result in
the imposition of, on the Company or any Company Subsidiary, any liability
relating to the release of hazardous substances as defined under any local,
state or federal environmental statute, regulation or ordinance, including the
Comprehensive Environmental Response, Compensation and Liability Act of 1980,
pending or, to the Company’s knowledge, threatened against the Company or any
Company Subsidiary;
 
(b) to the Company’s knowledge, there is no reasonable basis for any such
proceeding, claim or action; and
 
(c) neither the Company nor any Company Subsidiary is subject to any agreement,
order, judgment or decree by or with any court, Governmental Entity or third
party imposing any such environmental liability.
 
Section 2.16 Risk Management Instruments.
 
 Except as would not, individually or in the aggregate, reasonably be expected
to have a Company Material Adverse Effect, all derivative instruments,
including, swaps, caps, floors and option agreements, whether entered into for
the Company’s own account, or for the account of one or more of the Company
Subsidiaries or its or their customers, were entered into (i) only in the
ordinary course of business, (ii) in accordance with prudent practices and in
all material respects with all applicable laws, rules, regulations and
regulatory policies and (iii) with counterparties believed to be financially
responsible at the time; and each of such instruments constitutes the valid and
legally binding obligation of the Company or one of the Company Subsidiaries,
enforceable in accordance with its terms, except as may be limited by the
Bankruptcy Exceptions.  Neither the Company or the Company Subsidiaries, nor, to
the knowledge of the Company, any other party thereto, is in breach of any of
its obligations under any such agreement or arrangement other than such breaches
that would not, individually or in the aggregate, reasonably be expected to have
a Company Material Adverse Effect.
 
Section 2.17 Agreements with Regulatory Agencies.
 
 Except as set forth on Schedule F, neither the Company nor any Company
Subsidiary is subject to any material cease-and-desist or other similar order or
enforcement action issued by, or is a party to any material written agreement,
consent agreement or memorandum of understanding with, or is a party to

 
 
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any commitment letter or similar undertaking to, or is subject to any capital
directive by, or since December 31, 2006, has adopted any board resolutions at
the request of, any Governmental Entity that currently restricts in any material
respect the conduct of its business or that in any material manner relates to
its capital adequacy, its liquidity and funding policies and practices, its
ability to pay dividends, its credit, risk management or compliance policies or
procedures, its internal controls, its management or its operations or business
(each item in this sentence, a “Regulatory Agreement”), nor has the Company or
any Company Subsidiary been advised since December 31, 2006 by any such
Governmental Entity that it is considering issuing, initiating, ordering, or
requesting any such Regulatory Agreement.  The Company and each Company
Subsidiary is in compliance in all material respects with each Regulatory
Agreement to which it is party or subject, and neither the Company nor any
Company Subsidiary has received any notice from any Governmental Entity
indicating that either the Company or any Company Subsidiary is not in
compliance in all material respects with any such Regulatory Agreement.
 
Section 2.18 Insurance.
 
 The Company and the Company Subsidiaries are insured with reputable insurers
against such risks and in such amounts as the management of the Company
reasonably has determined to be prudent and consistent with industry
practice.  The Company and the Company Subsidiaries are in material compliance
with their insurance policies and are not in default under any of the material
terms thereof, each such policy is outstanding and in full force and effect, all
premiums and other payments due under any material policy have been paid, and
all claims thereunder have been filed in due and timely fashion, except, in each
case, as would not, individually or in the aggregate, reasonably be expected to
have a Company Material Adverse Effect.
 
Section 2.19 Intellectual Property.
 
 Except as would not, individually or in the aggregate, reasonably be expected
to have a Company Material Adverse Effect, (i) the Company and each Company
Subsidiary owns or otherwise has the right to use, all intellectual property
rights, including all trademarks, trade dress, trade names, service marks,
domain names, patents, inventions, trade secrets, know-how, works of authorship
and copyrights therein, that are used in the conduct of their existing
businesses and all rights relating to the plans, design and specifications of
any of its branch facilities (“Proprietary Rights”) free and clear of all liens
and any claims of ownership by current or former employees, contractors,
designers or others and (ii) neither the Company nor any of the Company
Subsidiaries is materially infringing, diluting, misappropriating or violating,
nor has the Company or any of the Company Subsidiaries received any written (or,
to the knowledge of the Company, oral) communications alleging that any of them
has materially infringed, diluted, misappropriated or violated, any of the
Proprietary Rights owned by any other person.  Except as would not, individually
or in the aggregate, reasonably be expected to have a Company Material Adverse
Effect, to the Company’s knowledge, no other person is infringing, diluting,
misappropriating or violating, nor has the Company or any or the Company
Subsidiaries sent any written communications since January 1, 2007 alleging that
any person has infringed, diluted, misappropriated or violated, any of the
Proprietary Rights owned by the Company and the Company Subsidiaries.
 
Section 2.20 Brokers and Finders.
 
  The Investor has no liability for any amounts that any broker, finder or
investment banker is entitled to for any financial advisory,

 
 
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brokerage, finder’s or other fee or commission in connection with this Agreement
or the transactions contemplated hereby based upon arrangements made by or on
behalf of the Company or any Company Subsidiary.
 
Section 2.21 Disclosure Schedule.
 
  The Company has delivered the Disclosure Schedule and, if applicable, the
Disclosure Update to the Investor and the information contained in the
Disclosure Schedule, as modified by the information contained in the Disclosure
Update, if applicable, is true, complete and correct.
 
Section 2.22 CPP Preferred Stock.
 
  The Company has (i) not breached any representation, warranty or covenant set
forth in the CPP Securities Purchase Agreement or any of the other documents
governing the CPP Preferred Stock and (ii) paid to Investor all accrued and
unpaid dividends and/or interest then due on the CPP Preferred Stock.
 
        ARTICLE III                                
 

 
COVENANTS
 
Section 3.1 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 Exchange as promptly as
practicable and otherwise to enable consummation of the transactions
contemplated hereby and shall use commercially reasonable efforts to cooperate
with the other party to that end.
 
(b) Certain Notifications Until Closing.  From the Signing Date until the
Closing, the Company shall promptly notify the Investor of (i) any fact, event
or circumstance of which it is aware and which would reasonably be expected to
cause any representation or warranty of the Company contained in this Agreement
to be untrue or inaccurate in any material respect or to cause any covenant or
agreement of the Company contained in this Agreement not to be complied with or
satisfied in any material respect and (ii) except as Previously Disclosed, any
fact, circumstance, event, change, occurrence, condition or development of which
the Company is aware and which, individually or in the aggregate, has had or
would reasonably be expected to have a  Company Material Adverse Effect;
provided, however, that delivery of any notice pursuant to this Section 4.1(b)
shall not limit or affect any rights of or remedies available to the Investor.
 
(c) Access, Information and Confidentiality.
 
(i) From the Signing Date until the date when the Investor owns an amount of
CDCI Preferred Shares having an aggregate liquidation value of less than 10% of
the aggregate liquidation value of the CDCI Preferred Shares as of the Closing
Date, the

 
 
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(ii) Company will permit the Investor and its agents, consultants, contractors
and advisors (A) acting through the Appropriate Federal Banking Agency, or
otherwise to the extent necessary to evaluate, manage, or transfer its
investment in the Company, to examine the corporate books, Tax returns
(including all schedules and attached thereto) and other information reasonably
requested by Investor relating to Taxes and make copies thereof and to discuss
the affairs, finances and accounts of the Company and the Company Subsidiaries
with the principal officers of the Company, all upon reasonable notice and at
such reasonable times and as often as the Investor may reasonably request and
(B) to review any information material to the Investor’s investment in the
Company provided by the Company to its Appropriate Federal Banking Agency.  Any
investigation pursuant to this Section 4.1(c) shall be conducted during normal
business hours and in such manner as not to interfere unreasonably with the
conduct of the business of the Company, and nothing herein shall require the
Company or any Company Subsidiary to disclose any information to the Investor to
the extent (x) prohibited by applicable law or regulation, or (y) that such
disclosure would reasonably be expected to cause a violation of any agreement to
which the Company or any Company Subsidiary is a party or would cause a risk of
a loss of privilege to the Company or any Company Subsidiary (provided that the
Company shall use commercially reasonable efforts to make appropriate substitute
disclosure arrangements under circumstances where the restrictions in this
clause (i) apply).
 
(iii) From the Signing Date until the date on which all of the CDCI Preferred
Shares have been redeemed in whole, the Company will deliver, or will cause to
be delivered, to the Investor:
 
(A) as soon as available after the end of each fiscal year of the Company, and
in any event within 90 days thereafter, a consolidated balance sheet of the
Company as of the end of such fiscal year, and consolidated statements of
income, retained earnings and cash flows of the Company for such year, in each
case prepared in accordance with GAAP and setting forth in each case in
comparative form the figures for the previous fiscal year of the Company, and
which shall be audited to the extent audited financial statements are available;
 
(B) as soon as available after the end of the first, second and third quarterly
periods in each fiscal year of the Company, a copy of any quarterly reports
provided to other stockholders of the Company or Company management by the
Company;
 
(C) as soon as available after the Company receives any assessment of the
Company’s internal controls, a copy of such assessment;
 
(D) annually on a date specified by the Investor, a completed survey, in a form
specified by the Investor, providing, among other things, a description of how
the Company has utilized the funds the Company received in connection with the
sale of the CPP Preferred Shares and the effects of such funds on the operations
and status of the Company;

 
 
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(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.
 
(iv) The Investor will use reasonable best efforts to hold, and will use
reasonable best efforts to cause its agents, consultants, contractors and
advisors and United States executive branch officials and employees, to hold, in
confidence all non-public records, books, contracts, instruments, computer data
and other data and information (collectively, “Information”) concerning the
Company furnished or made available to it by the Company or its representatives
pursuant to this Agreement (except to the extent that such information can be
shown to have been (A) previously known by such party on a non-confidential
basis, (B) in the public domain through no fault of such party or (C) later
lawfully acquired from other sources by the party to which it was furnished (and
without violation of any other confidentiality obligation)); provided that
nothing herein shall prevent the Investor from disclosing any Information to the
extent 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.
 
(v) The Investor’s information rights pursuant to Section 4.1(c)(ii)(A), (B),
(C), (E) and (F) and the Investor’s right to receive certifications from the
Company pursuant to Section 4.1(d)(ii) may be assigned by the Investor to a
transferee or assignee of the CDCI Preferred Shares with a liquidation
preference of no less than an amount equal to 2% of the initial aggregate
liquidation preference of the CDCI Preferred Shares.
 
(vi) From the Signing Date until the date when the Investor no longer owns any
CDCI Preferred Shares, the Company shall permit, and shall cause each of the
Company’s Subsidiaries to permit (A) the Investor and its agents, consultants,
contractors and advisors, (B) the Special Inspector General of the Troubled
Asset Relief Program, and (C) the Comptroller General of the United States
access to personnel and any books, papers, records or other data, in each case,
to the extent relevant to ascertaining compliance with the financing terms and
conditions; provided that prior to disclosing any information pursuant to
clause (B) or (C), the Special Inspector General of the Troubled Asset Relief
Program and the Comptroller General of the United States shall have agreed, with
respect to documents obtained under this Agreement in furtherance of its
function, to follow applicable law and regulation (and the applicable customary
policies and procedures) regarding the dissemination of confidential materials,
including redacting confidential information from the public version of its
reports and soliciting the input from the Company as to information that should
be afforded confidentiality, as appropriate.

 
 
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(vii) Nothing in this Section shall be construed to limit the authority that the
Special Inspector General of the Troubled Asset Relief Program, the Comptroller
General of the United States or any other applicable regulatory authority has
under law.
 
(d) CDFI Requirements.
 
(i) From the Signing Date until the date on which all of the CDCI Preferred
Shares have been redeemed in whole, each Certified Entity shall (A) be certified
by the Fund as a CDFI; (B) together with its Affiliates collectively meet the
eligibility requirements of 12 C.F.R. 1805.200(b); (C) have a primary mission of
promoting community development, as may be determined by Investor from time to
time, based on criteria set forth in 12 C.F.R. 1805.201(b)(1); (D) provide
Financial Products, Development Services, and/or other similar financing as a
predominant business activity in arm’s-length transactions; (E) serve a Target
Market by serving one or more Investment Areas and/or Targeted Populations as
may be determined by Investor from time to time, substantially in the manner set
forth in 12 C.F.R. 1805.201(b)(3); (F) provide Development Services in
conjunction with its Financial Products, directly, through an Affiliate or
through a contract with a third-party provider; (G) maintain accountability to
residents of the applicable Investment Area(s) or Targeted Population(s) through
representation on its governing Board of Directors or otherwise; and (H) remain
a non-governmental entity which is not an agency or instrumentality of the
United States of America, or any State or political subdivision thereof, as
described in 12 C.F.R. 1805.201(b)(6) and within the meaning of any supplemental
regulations or interpretations of 12 C.F.R. 1805.201(b)(6) or such supplemental
regulations published by the Fund.  Notwithstanding any other provision hereof,
as used in this Section 4.1(d), the terms “Affiliates”; “Financial Products”;
“Development Services”; “Target Market”; “Investment Areas”; and “Targeted
Populations” have the meanings ascribed to such terms in 12 C.F.R. 1805.104.
 
(ii) From the Signing Date until the date on which all of the CDCI Preferred
Shares have been redeemed in whole, the Company shall deliver to Investor
(1)(x) on the date that is 180 days after the Closing Date and (y) annually on
the same date on which the Company delivers the documentation required under
Section 4.1(c)(ii)(A) to the Investor, a certificate signed on behalf of the
Company by a Senior Executive Officer, in substantially the form attached hereto
as Annex F, certifying (A) that the Company and each Certified Entity remains in
compliance with the covenants set forth in Section 4.1(d)(i); (B) that the
information in the CDFI Application, as modified by any updates to the CDFI
Application provided by the Company to the Investor on or prior to the date of
such certificate, with respect to the covenants set forth in
Section 4.1(d)(i)(B) and Section 4.1(d)(i)(D) remains true, correct and complete
as of such date or, to the extent any information set forth in the CDFI
Application, as modified by any updates to the CDFI Application provided by the
Company to the Investor on or prior to the date of such certificate, with
respect to such covenants needs to be updated or supplanted to make it true,
complete and correct as of such date, that an updated narrative to the CDFI
Application setting forth any information necessary to make the information set
forth in the CDFI Application is true, complete and correct as of such date;
(C) either (a) that the

 
 
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(iii) contracts and material agreements entered into by each Certified Entity
with respect to Development Services previously disclosed to the Investor remain
in effect or (b) that attached are any new contracts and material agreements
entered into by the Certified Entity with respect to Development Services; (D) a
list of the names and addresses of the individuals which comprise the board of
directors of each Certified Entity as of such date and, to the extent any of
such individuals was not a member of the board of directors of such Certified
Entity as of the last certification to the Investor, a narrative describing such
individual's relationship to the applicable Investment Area(s) and Targeted
Population(s) or, if such Certified Entity maintains accountability to residents
of the applicable Investment Area(s) or Target Population(s) through means other
than representation on its governing board of directors and such means have
changed since the date of the last certification to the Investor, a narrative
describing such change; (E) that each Certified Entity is not an agency of the
United States of America, or any State or political subdivision thereof, as
described in 12 C.F.R. 1805.201(b)(6) and within the meaning of any supplemental
regulations or interpretations of 12 C.F.R. 1805.201(b)(6) or such supplemental
regulations published by the Fund and (F) that the Company remains in compliance
with the covenants set forth in Section 4.1(f) and Section 4.1(l) and (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.
 
(iv) The Company shall immediately notify the Investor upon the occurrence of
any breach of any of the covenants set forth in Section 4.1(d).
 
(e) Executive Compensation.
 
(i) Benefit Plans.  During the Relevant Period, the Company shall take all
necessary action to ensure that the Benefit Plans of the Company and its
Affiliates comply in all respects with, and shall take all other actions
necessary to comply with, Section 111 of EESA, as implemented by the
Compensation Regulations, and neither the Company nor any of its Affiliates
shall adopt any new Benefit Plan (x) that does not comply therewith or (y) that
does not expressly state and require that such Benefit Plan and any compensation
thereunder shall be subject to any relevant Compensation Regulations adopted,
issued or released on or after the date any such Benefit Plan is adopted. To the
extent that EESA and/or the Compensation Regulations are amended or otherwise
change during the Relevant Period in a manner that requires changes to
then-existing Benefit Plans, or that requires other actions, the Company and its
Affiliates shall effect such changes to its or their Benefit Plans, and take
such other actions, as promptly as practicable after it has actual knowledge of
such amendments or changes in order to be in compliance with this Section 4.1(e)
(and shall be deemed to be in compliance for a reasonable period to effect such
changes).  In addition, the Company and its Affiliates shall take all necessary
action, other than to the extent prohibited by applicable law or regulation
applicable outside of the United States, to ensure that the consummation of the
transactions contemplated by this Agreement will not accelerate the vesting,
payment or

 
 
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(ii) distribution of any equity-based awards, deferred cash awards or any
nonqualified deferred compensation payable by the Company or any of its
Affiliates.
 
(iii) Additional Waivers.  After the Closing Date, in connection with the hiring
or promotion of a Section 4.1(e) Employee and/or the promulgation of applicable
Compensation Regulations or otherwise, to the extent any Section 4.1(e) Employee
shall not have executed a waiver in a form satisfactory to the Investor with
respect to the application to such Section 4.1(e) Employee of the Compensation
Regulations, the Company shall use its best efforts to (x) obtain from such
Section 4.1(e) Employee a waiver in substantially the form attached hereto as
Annex D and (y) deliver such waiver to the Investor as promptly as possible, in
each case within sixty days of such Section 4.1(e) Employee becoming subject to
the requirements of this Section. “Section 4.1(e) Employee” means (A) each
Senior Executive Officer and (B) any other employee of the Company or any of its
Affiliates determined at any time to be subject to Section 111 of  EESA as
implemented by the Compensation Regulations.
 
(iv) 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.
 
(v) 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.
 
(vi) Amendment to Prior Agreement.  The parties agree that, effective as of the
date hereof, Section 4.8 of the CPP Securities Purchase Agreement shall be
amended in its entirety by replacing such Section 4.8 with the provisions set
forth in this Section 4.1(e) and any terms included in this Section 4.1(e) that
are not otherwise defined in the CPP Securities Purchase Agreement shall have
the meanings ascribed to such terms in this Agreement.

 
 
17

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(f) Bank or Savings and Loan Holding Company Status.
 
 If the Company is a Bank Holding Company or a Savings and Loan Holding Company
on the Signing Date, then the Company shall maintain its status as a Bank
Holding Company or Savings and Loan Holding Company, as the case may be, for as
long as the Investor owns any CDCI Preferred Shares.  The Company shall redeem
all CDCI Preferred Shares held by the Investor prior to terminating its status
as a Bank Holding Company or Savings and Loan Holding Company, as applicable.
 
(g) Predominantly Financial.  For as long as the Investor owns any CDCI
Preferred Shares, the Company, to the extent it is not itself an insured
depository institution, agrees to remain predominantly engaged in financial
activities.  A company is predominantly engaged in financial activities if the
annual gross revenues derived by the company and all subsidiaries of the company
(excluding revenues derived from subsidiary depository institutions), on a
consolidated basis, from engaging in activities that are financial in nature or
are incidental to a financial activity under subsection (k) of Section 4 of the
Bank Holding Company Act of 1956 (12 U.S.C. 1843(k)) represent at least 85
percent of the consolidated annual gross revenues of the company.
 
(h) Capital Covenant.  From the Signing Date until the date on which all of the
CDCI Preferred Shares have been redeemed in whole, the Company and the Company
Subsidiaries shall maintain such capital as may be necessary to meet the minimum
capital requirements of the Appropriate Federal Banking Agency, as in effect
from time to time.
 
(i) HAMP Modifications.  The Company shall take all necessary action to ensure
that (i) from and after the date the Company or any Company Subsidiary that
services residential mortgage loans has 100 or more residential mortgage loans
not owned or guaranteed by Fannie Mae or Freddie Mac which have been past due
for 60 or more days, the Company or such Company Subsidiary shall, to the extent
such programs are open for participation, (A) participate in the United States
Department of the Treasury’s Making Home Affordable (“MHA”) program, including
MHA’s Second Lien Modification Program and, (B) immediately execute a Commitment
to Purchase Financial Instrument and Servicer Participation Agreement (in such
form as may be set forth on the MHA website at www.hmpadmin.com from time to
time) with Fannie Mae (acting as the United States Department of the Treasury’s
fiscal agent) and (ii) if the Company or any Company Subsidiary owns mortgage
loans that are serviced by a non-affiliated mortgage servicer, the Company or
such Company Subsidiary shall consent to any MHA modification request made by
such mortgage servicer.
 
(j) Reporting Requirements.  Prior to the date on which all of the CDCI
Preferred Shares have been redeemed in whole, the Company covenants and agrees
that, at all times on or after the Closing Date, (i) to the extent it is subject
to the reporting requirements of Section 13 or 15(d) of the Exchange Act, it
shall comply with the terms and conditions set forth in Annex E or (ii) as soon
as practicable after the date that the Company becomes subject to the reporting
requirements of Section 13 or 15(d) of the Exchange Act, it shall comply with
the terms and conditions set forth in Annex E.
 
(k) Compliance with Employ American Workers Act.  The Company shall agree to
comply, and take all necessary action to ensure that any Company Subsidiary
complies

 
 
18

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(l) 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.
 
(m) Control by Foreign Bank or Company.  Prior to the date on which all of the
CDCI Preferred Shares have been redeemed in whole, the Company shall not be
controlled (within the meaning of the Bank Holding Company Act of 1956 (12
U.S.C. 1841(a)(2)) and 12 C.F.R. 225(a)(i) in the case of Bank Holding Companies
and banks and the Home Owners’ Loan Act of 1933 (12 U.S.C. 1467a (a)(2)) and 12
C.F.R. 583.7 in the case of Savings and Loan Holding Companies and savings
associations) by a foreign bank or company.
 
Section 3.2 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 debt or equity securities of the Company
acquired pursuant to this Agreement or the CPP Securities Purchase Agreement
(including, for the avoidance of doubt, the CPP Preferred Shares or the CDCI
Preferred Shares), the Company shall not permit any of its “significant
subsidiaries” (as such term is defined in Rule 12b-2 promulgated under the
Exchange Act) to (i) engage in any merger, consolidation, statutory share
exchange or similar transaction following the consummation of which such
significant subsidiary is not wholly-owned by the Company, (ii) dissolve or sell
all or substantially all of its assets or property other than in connection with
an internal reorganization or consolidation involving wholly-owned subsidiaries
of the Company or (iii) issue or sell any shares of its capital stock or any
securities convertible or exercisable for any such shares, other than issuances
or sales in connection with an internal reorganization or consolidation
involving wholly-owned subsidiaries of the Company.
 
(b) Restriction on Dividends and Repurchases.
 
(i) The Company covenants and agrees that it shall not violate any of the
restrictions on dividends, distributions, redemptions, repurchases, acquisitions
and related

 
 
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(ii) actions set forth in the New Certificate of Designations, which are
incorporated by reference herein as if set forth in full.
 
(iii) During the period beginning on the eighth anniversary of the Closing and
ending on the date on which the Investor no longer owns any of the CDCI
Preferred Shares, neither the Company nor any Company Subsidiary shall, without
the consent of the Investor, (A) declare or pay any dividend or make any
distribution on capital stock or other equity securities of any kind of the
Company or any Company Subsidiary; or (B) redeem, purchase or acquire any shares
of Common Stock or other capital stock or other equity securities of any kind of
the Company or any Company Subsidiary, or any trust preferred securities issued
by the Company or any Affiliate of the Company, other than (1) redemptions,
purchases or other acquisitions of the CDCI Preferred Shares, (2) regular
dividends on shares of preferred stock in accordance with the terms thereof and
which are permitted under the terms of the CDCI Preferred Shares, or
(3) dividends or distributions by any wholly-owned Company Subsidiary.
 
(c) Related Party Transactions.  Until such time as the Investor ceases to own
any debt or equity securities of the Company, including the CDCI Preferred
Shares, the Company and the Company Subsidiaries shall not enter into
transactions with Affiliates or related persons (within the meaning of Item 404
under the SEC’s Regulation S-K) unless (A) such transactions are on terms no
less favorable to the Company and the Company Subsidiaries than could be
obtained from an unaffiliated third party, and (B) have been approved by the
audit committee of the Board of Directors or comparable body of independent
directors of the Company, or if there are no independent directors, the Board of
Directors, provided that the Board of Directors shall maintain written
documentation which supports its determination that the transaction meets the
requirements of clause (A) of this Section 4.2(c).
 
(d) Restriction on Repurchase of CDCI Preferred Shares Not Held by
Investor.  Prior to the date on which the Investor no longer owns any of the
CDCI Preferred Shares the Company shall not repurchase, redeem, call or
otherwise reacquire any CDCI Preferred Shares from any holder thereof, whether
by means of open market purchase, negotiated transaction, or otherwise, unless
it offers to repurchase, redeem, call or otherwise reacquire a ratable portion
of the CDCI Preferred Shares, as the case may be, then held by the Investor on
the same terms and conditions.
 
                            ARTICLE IV                                
 

 
ADDITIONAL AGREEMENTS
 
Section 4.1 Purchase for Investment.
 
  The Investor acknowledges that the CDCI Preferred Shares have not been
registered under the Securities Act or under any state securities laws. The
Investor (a) is acquiring the CDCI Preferred Shares pursuant to an exemption
from registration under the Securities Act solely for investment with no present
intention to distribute them to any person in violation of the Securities Act or
any applicable U.S. state securities laws, (b) will not sell or otherwise
dispose of any of the CDCI Preferred Shares,

 
 
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except in compliance with the registration requirements or exemption provisions
of the Securities Act and any applicable U.S. state securities laws, and (c) has
such knowledge and experience in financial and business matters and in
investments of this type that it is capable of evaluating the merits and risks
of the Exchange and of making an informed investment decision.
 
Section 4.2 Legends.
 
  (a) The Investor agrees that all certificates or other instruments
representing the CDCI Preferred Shares will bear a legend substantially to the
following effect:
 
“THE SECURITIES REPRESENTED BY THIS INSTRUMENT ARE NOT SAVINGS ACCOUNTS,
DEPOSITS OR OTHER OBLIGATIONS OF A BANK AND ARE NOT INSURED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENTAL AGENCY.
 
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

 
 
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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.
 
THIS INSTRUMENT IS ISSUED SUBJECT TO THE RESTRICTIONS ON TRANSFER AND OTHER
PROVISIONS OF AN EXCHANGE AGREEMENT BETWEEN THE ISSUER OF THESE SECURITIES AND
THE INVESTOR REFERRED TO THEREIN, A COPY OF WHICH IS ON FILE WITH THE
ISSUER.  THE SECURITIES REPRESENTED BY THIS INSTRUMENT MAY NOT BE SOLD OR
OTHERWISE TRANSFERRED EXCEPT IN COMPLIANCE WITH SAID AGREEMENT.  ANY SALE OR
OTHER TRANSFER NOT IN COMPLIANCE WITH SAID AGREEMENT WILL BE VOID.”
 
(b) In the event that any CDCI Preferred Shares (i) become registered under the
Securities Act or (ii) are eligible to be transferred without restriction in
accordance with Rule 144 or another exemption from registration under the
Securities Act (other than Rule 144A), the Company shall issue new certificates
or other instruments representing such CDCI Preferred Shares, which shall not
contain the applicable legends in Section 5.2(a) above; provided that the
Investor surrenders to the Company the previously issued certificates or other
instruments.
 
Section 4.3 Transfer of CDCI Preferred Shares.
 
  Subject to compliance with applicable securities laws, the Investor shall be
permitted to transfer, sell, assign or otherwise dispose of (“Transfer”) all or
a portion of the CDCI Preferred Shares at any time, and the Company shall take
all steps as may be reasonably requested by the Investor to facilitate the
Transfer of the CDCI Preferred Shares, including without limitation, as set
forth in Section 5.4, provided that the Investor shall not Transfer any CDCI
Preferred Shares if such transfer would require the Company to be subject to the
periodic reporting requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934 (the “Exchange Act”) and the Company was not already
subject to such requirements.  In furtherance of the foregoing, the Company
shall provide reasonable cooperation to facilitate any Transfers of the CDCI
Preferred Shares, including, as is reasonable under the circumstances, by
furnishing such information concerning the Company and its business as a
proposed transferee may reasonably request and making management of the Company
reasonably available to respond to questions of a proposed transferee in
accordance with customary practice, subject in all cases to the proposed
transferee agreeing to a customary confidentiality agreement.
 
Section 4.4 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

 
 
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any subsequent holders of the CDCI Preferred Shares (“Holders”), use its
reasonable best efforts to (x), to the extent any Holder is relying on Rule 144
under the Securities Act to sell any of the CDCI Preferred Shares, make “current
public information” available, as provided in Section (c)(1) of Rule 144 (if the
Company is a “Reporting Issuer” within the meaning of Rule 144) or in Section
(c)(2) of Rule 144 (if the Company is a “Non-Reporting Issuer” within the
meaning of Rule 144), in either case for such time period as necessary to permit
sales pursuant to Rule 144, (y), to the extent any Holder is relying on the
so-called “Section 4(1½)” exemption to sell any of its CDCI Preferred Shares,
prepare and provide to such Holder such information, including the preparation
of private offering memoranda or circulars or financial information, as the
Holder may reasonably request to enable the sale of the CDCI Preferred Shares
pursuant to such exemption, or (z) to the extent any Holder is relying on Rule
144A under the Securities Act to sell any of its CDCI Preferred Shares, prepare
and provide to such Holder the information required pursuant to Rule 144A(d)(4),
and (2) it will take such further action as any Holder may reasonably request
from time to time to enable such Holder to sell CDCI Preferred Shares without
registration under the Securities Act within the limitations of the exemptions
provided by (i) the provisions of the Securities Act or any interpretations
thereof or related thereto by the SEC, including transactions based on the
so-called “Section 4(1½)” and other similar transactions, (ii) Rule 144 or 144A
under the Securities Act, as such rules may be amended from time to time, or
(iii) any similar rule or regulation hereafter adopted by the SEC; provided that
the Company shall not be required to take any action described in this
Section 5.4(a) that would cause the Company to become subject to the reporting
requirements of Section 13 or 15(d) of the Exchange Act if the Company was not
subject to such requirements prior to taking such action.  Upon the request of
any Holder, the Company will deliver to such Holder a written statement as to
whether it has complied with such requirements and, if not, the specifics
thereof.
 
(b) The Company agrees to indemnify Investor, Investor’s officers, directors,
employees, agents, representatives and Affiliates, and each person, if any, that
controls Investor within the meaning of the Securities Act (each, an
“Indemnitee”), against any and all losses, claims, damages, actions,
liabilities, costs and expenses (including reasonable fees, expenses and
disbursements of attorneys and other professionals incurred in connection with
investigating, defending, settling, compromising or paying any such losses,
claims, damages, actions, liabilities, costs and expenses), joint or several,
arising out of or based upon any untrue statement or alleged untrue statement of
material fact contained in any document or report provided by the Company
pursuant to this Section 5.4 or any omission to state therein a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading.
 
(c) If the indemnification provided for in Section 5.4(b) is unavailable to an
Indemnitee with respect to any losses, claims, damages, actions, liabilities,
costs or expenses referred to therein or is insufficient to hold the Indemnitee
harmless as contemplated therein, then the Company, in lieu of indemnifying such
Indemnitee, shall contribute to the amount paid or payable by such Indemnitee as
a result of such losses, claims, damages, actions, liabilities, costs or
expenses in such proportion as is appropriate to reflect the relative fault of
the Indemnitee, on the one hand, and the Company, on the other hand, in
connection with the

 
 
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(d) 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.
 
Section 4.5 Depositary Shares.
 
  Upon request by the Investor at any time following the Closing Date, the
Company shall promptly enter into a depositary arrangement, pursuant to
customary agreements reasonably satisfactory to the Investor and with a
depositary reasonably acceptable to the Investor, pursuant to which the CDCI
Preferred Shares may be deposited and depositary shares, each representing a
fraction of a CDCI Preferred Share, as specified by the Investor, may be issued.
From and after the execution of any such depositary arrangement, and the deposit
of any CDCI Preferred Shares, as applicable, pursuant thereto, the depositary
shares issued pursuant thereto shall be deemed “CDCI Preferred Shares” and, as
applicable, “Registrable Securities” for purposes of this Agreement.
 
Section 4.6 Expenses and Further Assurances.
 
  (a) Unless otherwise provided in this Agreement, each of the parties hereto
will bear and pay all costs and expenses incurred by it or on its behalf in
connection with the transactions contemplated under this Agreement, including
fees and expenses of its own financial or other consultants, investment bankers,
accountants and counsel.
 
(b) The Company shall, at the Company’s sole cost and expense, (i) furnish to
the Investor all instruments, documents and other agreements required to be
furnished by the Company pursuant to the terms of this Agreement, including,
without limitation, any documents required to be delivered pursuant to
Section 5.4 above, or which are reasonably requested by the Investor in
connection therewith; (ii) execute and deliver to the Investor such documents,
instruments, certificates, assignments and other writings, and do such other
acts necessary or desirable, to evidence, preserve and/or protect the CDCI
Preferred Shares purchased by the Investor, as Investor may reasonably require;
and (iii) do and execute all and such further lawful and reasonable acts,
conveyances and assurances for the better and more effective carrying out of the
intents and purposes of this Agreement, as the Investor shall reasonably require
from time to time.
 
Section 4.7 Repurchase of Investor Securities.
 
  From and after the date of this Agreement, the agreements set forth in
Section 4.9 of the CPP Securities Purchase Agreement shall be applicable
following the redemption in whole of the CDCI Preferred Shares

 
 
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held by the Investor or the Transfer by the Investor of all of the CDCI
Preferred Shares held by the Investor to one or more third parties not
affiliated with the Investor.
 
                         ARTICLE V                                
 

 
MISCELLANEOUS
 
Section 5.1 Termination.
 
  This Agreement shall terminate upon the earliest to occur of:
 
(a) termination at any time prior to the Closing:
 
(i) by either the Investor or the Company if the Closing shall not have occurred
by the 30th calendar day following the Signing Date; provided, however, that in
the event the Closing has not occurred by such 30th calendar day, the parties
will consult in good faith to determine whether to extend the term of this
Agreement, it being understood that the parties shall be required to consult
only until the fifth calendar day after such 30th calendar day and not be under
any obligation to extend the term of this Agreement thereafter; provided,
further, that the right to terminate this Agreement under this Section 6.1(a)(i)
shall not be available to any party whose breach of any representation or
warranty or failure to perform any obligation under this Agreement shall have
caused or resulted in the failure of the Closing to occur on or prior to such
date; or
 
(ii) by either the Investor or the Company in the event that any Governmental
Entity shall have issued an order, decree or ruling or taken any other action
restraining, enjoining or otherwise prohibiting the transactions contemplated by
this Agreement, and such order, decree, ruling or other action shall have become
final and nonappealable; or
 
(iii) by the mutual written consent of the Investor and the Company; or
 
(b) the date on which all of the CDCI Preferred Shares have been redeemed in
whole; or
 
(c) the date on which the Investor has transferred all of the CDCI Preferred
Shares to third parties which are not Affiliates of the Investor; or
 
(d) if the Closing shall not have occurred by September 30, 2010, on such date.
 
In the event of termination of this Agreement as provided in this Section 6.1,
this Agreement shall forthwith become void and there shall be no liability on
the part of either party hereto except that nothing herein shall relieve either
party from liability for any breach of this Agreement.

 
 
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Survival.
 
  (e) This Agreement and all representations, warranties, covenants and
agreements made herein shall survive the Closing without limitation.
 
(f) The covenants set forth in Article IV and Annex E and the agreements set
forth in Article V shall, to the extent such covenants do not explicitly
terminate at such time as the Investor no longer owns any CDCI Preferred Shares,
survive the termination of this Agreement pursuant to Section 6.1(c) hereof
without limitation until the date on which all of the CDCI Preferred Shares have
been redeemed in whole.
 
Section 5.2 Amendment.
 
  No amendment of any provision of this Agreement will be effective unless made
in writing and signed by an officer or a duly authorized representative of each
of the Company and the Investor; provided that for so long as the CDCI Preferred
Shares are outstanding, the Investor may at any time and from time to time
unilaterally amend Section 4.1(d) to the extent the Investor deems necessary, in
its sole discretion, to comply with, or conform to, any changes after the
Signing Date in any federal statutes, any rules and regulations promulgated
thereunder and any other publications or interpretative releases of the Fund
governing CDFIs, including, without limitation, any changes in the criteria for
certification as a CDFI by the Fund.  No failure or delay by any party in
exercising any right, power or privilege hereunder shall operate as a waiver
thereof nor shall any single or partial exercise thereof preclude any other or
further exercise of any other right, power or privilege.  The rights and
remedies herein provided shall be cumulative of any rights or remedies provided
by law.
 
Section 5.3 Waiver of Conditions.
 
  The conditions to each party’s obligation to consummate the Exchange are for
the sole benefit of such party and may be waived by such party in whole or in
part to the extent permitted by applicable law.  No waiver will be effective
unless it is in a writing signed by a duly authorized officer of the waiving
party that makes express reference to the provision or provisions subject to
such waiver.
 
Section 5.4 Governing Law; Submission to Jurisdiction, etc.
 
  This Agreement and any claim, controversy or dispute arising under or related
to this Agreement, the relationship of the parties, and/or the interpretation
and enforcement of the rights and duties of the parties shall be enforced,
governed, and construed in all respects (whether in contract or in tort) in
accordance with the federal law of the United States if and to the extent such
law is applicable, and otherwise in accordance with the laws of the State of New
York applicable to contracts made and to be performed entirely within such
State.  Each of the parties hereto agrees (a) to submit to the exclusive
jurisdiction and venue of the United States District Court for the District of
Columbia and the United States Court of Federal Claims for any and all civil
actions, suits or proceedings arising out of or relating to this Agreement or
the Exchange contemplated hereby and (b) that notice may be served upon (i) the
Company at the address and in the manner set forth for notices to the Company in
Section 6.6 and (ii) the Investor at the address and in the manner set forth for
notices to the Company in Section 6.6, but otherwise in accordance with federal
law.  TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH OF THE PARTIES HERETO
HEREBY UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY CIVIL LEGAL ACTION OR
PROCEEDING RELATING TO THIS AGREEMENT OR THE EXCHANGE CONTEMPLATED HEREBY.
 
 
26

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

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

with a copy to:

E-mail:  OFSChiefCounselNotices@do.treas.gov
 
Section 5.5 Definitions, Interpretation.
 
(a) Definitions.
 
(i) When a reference is made in this Agreement to a subsidiary of a person, the
term “subsidiary” means any corporation, partnership, joint venture, limited
liability company or other entity (x) of which such person or a subsidiary of
such person is a general partner or (y) of which a majority of the voting
securities or other voting interests, or a majority of the securities or other
interests of which having by their terms ordinary voting power to elect a
majority of the board of directors or persons performing similar functions with
respect to such entity, is directly or indirectly owned by such person and/or
one or more subsidiaries thereof.
 
(ii) The term “Affiliate” means, with respect to any person, any person directly
or indirectly controlling, controlled by or under common control with, such
other person.  For purposes of this definition, “control” (including, with
correlative meanings, the terms “controlled by” and “under common control with”)
when used with respect to any person, means the possession, directly or
indirectly, of the power to cause the direction of management and/or policies of
such person, whether through the ownership of voting securities by contract or
otherwise.
 
(iii) The term “Appropriate Federal Banking Agency” means the “appropriate
Federal banking agency” with respect to the Company or such Company
Subsidiaries, as

 
 
27

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

 
 
28

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

 
 
29

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

 

 
(xvii) The term “Savings and Loan Holding Company” means a company registered as
such with the Office of Thrift Supervision pursuant to 12 U.S.C. §1467(a) and
the regulations of the Office of Thrift Supervision promulgated thereunder.
 
(xviii) The term “Senior Executive Officers” means the Company's “senior
executive officers” as defined in Section 111 of the EESA and the Compensation
Regulations.
 
(xix) The term “Share Dilution Amount” means the increase in the number of
diluted shares outstanding (determined in accordance with GAAP, and as measured
from the date of the Company’s most recent consolidated financial statements
prior to the Closing Date) resulting from the grant, vesting or exercise of
equity-based compensation to employees and equitably adjusted for any stock
split, stock dividend, reverse stock split, reclassification or similar
transaction.
 
(xx) The term “Tax” or “Taxes” means any federal, state, local or foreign
income, gross receipts, property, sales, use, license, excise, franchise,
employment, payroll, withholding, alternative or add on minimum, ad valorem,
transfer or excise tax, or any other tax, custom, duty, governmental fee or
other like assessment or charge of any kind whatsoever, together with any
interest, penalty or addition imposed by any Governmental Entity.
 
(xxi) To the extent any securities issued pursuant to this Agreement or the
transactions contemplated hereby are registered in the name of a designee of the
Investor pursuant to Section 1.2 or Section 6.9(c) or transferred to an
Affiliate of the Investor, all references herein to the Investor holding or
owning any debt or equity securities of the Company, CDCI Preferred Shares shall
be deemed to refer to the Investor, together with such designees and/or
Affiliates, holding or owning any debt or equity securities, CDCI Preferred
Shares (and any like variations thereof), as applicable.
 
Section 5.6 Interpretation.
 
  When a reference is made in this Agreement to “Recitals”, “Articles”,
“Sections”, “Annexes” or “Schedules” such reference shall be to a Recital,
Article or Section of, or Annex or Schedule to, this Agreement, unless otherwise
indicated.  The terms defined in the singular have a comparable meaning when
used in the plural, and vice versa.  References to “herein”, “hereof”,
“hereunder” and the like refer to this Agreement as a whole and not to any
particular section or provision, unless the context requires otherwise.  The
table of contents and headings contained in this Agreement are for reference
purposes only and are not part of this Agreement.  Whenever the words “include”,
“includes” or “including” are used in this Agreement, they shall be deemed
followed by the words “without limitation.” No rule of construction against the
draftsperson shall be applied in connection with the interpretation or
enforcement of this Agreement, as this Agreement is entered into between
sophisticated parties advised by counsel.  All references to “$” or “dollars”
mean the lawful currency of the United States of America.  Except as expressly
stated in this Agreement, all references to any statute, rule or regulation are
to the statute, rule or regulation as amended, modified, supplemented or
replaced from time to time (and, in the case of statutes, include any rules and
regulations promulgated under the statute) and to any section of any statute,
rule or
 
 
30

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

 

 
regulation include any successor to the section.  References to a “business day”
shall mean any day except Saturday, Sunday and any day on which banking
institutions in the State of New York or the District of Columbia generally are
authorized or required by law or other governmental actions to close.
 
Section 5.7 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 where such party is not the surviving entity, or a
sale of substantially all of its assets, to the entity which is the survivor of
such Business Combination or the purchaser in such sale, (b) an assignment of
certain rights as provided in Sections 4.1(c) or 4.1(j) or Annex E or (c) an
assignment by the Investor of this Agreement to an Affiliate of the Investor;
provided that if the Investor assigns this Agreement to an Affiliate, the
Investor shall be relieved of its obligations under this Agreement but (i) all
rights, remedies and obligations of the Investor hereunder shall continue and be
enforceable by such Affiliate, (ii) the Company’s obligations and liabilities
hereunder shall continue to be outstanding and (iii) all references to the
Investor herein shall be deemed to be references to such Affiliate.
 
Section 5.8 Severability.
 
  If any provision of this Agreement, or the application thereof to any person
or circumstance, is determined by a court of competent jurisdiction to be
invalid, void or unenforceable, the remaining provisions hereof, or the
application of such provision to persons or circumstances other than those as to
which it has been held invalid or unenforceable, will remain in full force and
effect and shall in no way be affected, impaired or invalidated thereby, so long
as the economic or legal substance of the transactions contemplated hereby is
not affected in any manner materially adverse to any party.  Upon such
determination, the parties shall negotiate in good faith in an effort to agree
upon a suitable and equitable substitute provision to effect the original intent
of the parties.
 
Section 5.9 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.
 
Section 5.10 Entire Agreement, etc.
 
  (a) This Agreement (including the Annexes and Schedules hereto) constitutes
the entire agreement, and supersedes all other prior agreements, understandings,
representations and warranties, both written and oral, between the parties, with
respect to the subject matter hereof.
 
(b) For the avoidance of doubt, for so long as the Investor holds any
outstanding CPP Preferred Stock or warrants issued by the Company to the
Investor pursuant to the CPP Securities Purchase Agreement or any securities
issuable upon the exercise thereof or exchanged therefor (collectively, the “CPP
Securities”), the CPP Securities Purchase Agreement

 
 
31

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

 

 
(c) and the CPP Securities shall remain in full force and effect, other than as
specifically modified herein.
 
Section 5.11 Specific Performance.
 
  The parties agree that irreparable damage would occur in the event that any of
the provisions of this Agreement were not performed in accordance with their
specific terms.  It is accordingly agreed that the parties shall be entitled
(without the necessity of posting a bond) to specific performance of the terms
hereof, this being in addition to any other remedies to which they are entitled
at law or equity.
 
[Remainder of Page Intentionally Left Blank]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
 
32

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ANNEX A
 

 
FORM OF OFFICER’S CERTIFICATE
 
OFFICER’S CERTIFICATE
 

 
OF
 

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

 
 
ANNEX A-1

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

 

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

 
 
By:
 

 
 
Name:

 
 
Title:

 
 
ANNEX A-2

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

 

 
EXHIBIT A
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 

 
 
ANNEX A-3

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

 

 
ANNEX B
 
CERTIFICATE
OF
DESIGNATIONS OF
PREFERENCES, LIMITATIONS AND
RELATIVE RIGHTS OF
FIXED RATE CUMULATIVE PERPETUAL
PREFERRED STOCK, SERIES B,
OF
M&F BANCORP, INC.
 
Part 1. Designation and Number of Shares.  There is hereby created out of the
authorized and unissued shares of preferred stock of the Corporation a series of
preferred stock designated as the “Fixed Rate Cumulative Perpetual Preferred
Stock, Series B” (the “Designated Preferred Stock”).  The authorized number of
shares of Designated Preferred Stock shall be ELEVEN THOUSAND SEVEN HUNDRED
THIRTY FIVE (11,735).
 
Part 2. Standard Provisions.  The Standard Provisions contained in Schedule A
attached hereto are incorporated herein by reference in their entirety and shall
be deemed to be a part of this Certificate of Designations to the same extent as
if such provisions had been set forth in full herein.
 
Part 3. Definitions.  The following terms are used in this Certificate of
Designations (including the Standard Provisions in Schedule A hereto) as defined
below:
 
(a) “Common Stock” means the common stock, no par value, of the Corporation.
 
(b) “Dividend Payment Date” means February 15, May 15, August 15 and November 15
of each year.
 
(c) “Junior Stock” means the Common Stock, and any other class or series of
stock of the Corporation the terms of which expressly provide that it ranks
junior to Designated Preferred Stock as to dividend rights and/or as to rights
on liquidation, dissolution or winding up of the Corporation.
 
(d) “Liquidation Amount” means $1,000 per share of Designated Preferred Stock.
 
(e) “Minimum Amount” means $2,933,750.
 
(f) “Parity Stock” means any class or series of stock of the Corporation (other
than Designated Preferred Stock) the terms of which do not expressly provide
that such class or series will rank senior or junior to Designated Preferred
Stock as to dividend rights and/or as to rights on liquidation, dissolution or
winding up of the Corporation (in each case without regard to whether dividends
accrue cumulatively or non-cumulatively).  Without limiting the foregoing,
Parity Stock shall include the Corporation’s Fixed Rate Cumulative Perpetual
Preferred Stock, Series A.
 
 
 
 
 
 
 
 
 
 

 
1

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“Signing Date” means Original Issue Date.
 
Part 4. Certain Voting Matters.  Holders of shares of Designated Preferred Stock
will be entitled to one vote for each such share on any matter on which holders
of Designated Preferred Stock are entitled to vote, including any action by
written consent.

[Remainder of Page Intentionally Left Blank]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
2

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Schedule A
 
STANDARD PROVISIONS
 
Section 1. General Matters. Each share of Designated Preferred Stock shall be
identical in all respects to every other share of Designated Preferred
Stock.  The Designated Preferred Stock shall be perpetual, subject to the
provisions of Section 5 of these Standard Provisions that form a part of the
Certificate of Designations.  The Designated Preferred Stock shall rank equally
with Parity Stock and shall rank senior to Junior Stock with respect to the
payment of dividends and the distribution of assets in the event of any
dissolution, liquidation or winding up of the Corporation.
 
Section 2. Standard Definitions. As used herein with respect to Designated
Preferred Stock:
 
(a) “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.
 
(b) “Applicable Dividend Rate” means (i) until the first day of the first
Dividend Period commencing on or after the eighth anniversary of the Original
Issue Date, 2% per annum, provided, however, that if a CDFI Event shall have
occurred and it or any other CDFI Event is continuing at all times, from and
after the 180th day after the date on which the first CDFI Event occurred until
the date on which no CDFI Events are continuing, the Applicable Dividend Rate
shall be 5% per annum, and (ii) for any other Dividend Period, 9% per annum.
 
(c) “Appropriate Federal Banking Agency” means the “appropriate Federal banking
agency” with respect to the Corporation as defined in Section 3(q) of the
Federal Deposit Insurance Act (12 U.S.C. Section 1813(q)), or any successor
provision.
 
(d) “Business Combination” means a merger, consolidation, statutory share
exchange or similar transaction that requires the approval of the Corporation’s
stockholders.
 
(e) “Business Day” means 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.
 
(f) “Bylaws” means the bylaws of the Corporation, as they may be amended from
time to time.
 
(g) “CDFI Events” means the failure by each Certified Entity at any time while
the Designated Preferred Stock is outstanding to (i) be certified by the
Community Development Financial Institution Fund of the United States Department
of Treasury as a regulated community development financial institution; (ii)
together with all of its Affiliates
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
A-1

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

 

 
(h) collectively meet the eligibility requirements of 12 C.F.R. 1805.200(b),
(iii) have a primary mission of promoting community development, as may be
determined by the United States Department of the Treasury from time to time,
based on criteria set forth in 12 C.F.R. 1805.201(b)(1); (iv) provide Financial
Products, Development Services, and/or other similar financing as a predominant
business activity in arm’s-length transactions; (v) serve a Target Market by
serving one or more Investment Areas and/or Targeted Populations as may be
determined by the United States Department of the Treasury from time to time,
substantially in the manner set forth in 12 C.F.R. 1805.201(b)(3); (vi) provide
Development Services in conjunction with its Financial Products, directly,
through an Affiliate or through a contract with a third-party provider; (vii)
maintain accountability to residents of the applicable Investment Area(s) or
Targeted Population(s) through representation on its governing board of
directors or otherwise; and (viii) remain a non-governmental entity which is not
an agency or instrumentality of the United States of America, or any State or
political subdivision thereof, as described in 12 C.F.R. 1805. 201(b)(6) and
within the meaning of any supplemental regulations or interpretations of 12
C.F.R. 1805.201(b)(6) or such supplemental regulations published by the
Fund.  For the avoidance of doubt, a CDFI Event shall not have occurred so long
as at least one Certified Entity satisfies the requirements set forth in clauses
(i) through (viii) of the preceding sentence, even if other Certified Entities
fail to satisfy such requirements.  Notwithstanding any other provision hereof,
as used in this definition, 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.  A
CDFI Event may be waived in writing by the holders of a majority of the
Designated Preferred Stock then outstanding.
 
(i) “Certificate of Designations” means the Certificate of Designations or
comparable instrument relating to the Designated Preferred Stock, of which these
Standard Provisions form a part, as it may be amended from time to time.
 
(j) “Certified Entity” means the Corporation or, if the Corporation itself has
not been certified by the Community Development Financial Institution Fund as a
regulated community development financial institution (“CDFI”), each Affiliate
of the Corporation that has been certified by the CDFI and is specified on
Schedule A of the that certain letter agreement by and between Corporation and
the United States Department of the Treasury.
 
(k) “Charter” means the Corporation’s certificate or articles of incorporation,
articles of association, or similar organizational document.
 
(l) “Dividend Period” has the meaning set forth in Section 3(a).
 
(m) “Dividend Record Date” has the meaning set forth in Section 3(a).
 
(n) “GAAP” means the generally accepted accounting principles in the United
States.
 
(o) “Corporation Subsidiary” means any subsidiary of the Corporation.
 
(p) “Liquidation Preference” has the meaning set forth in Section 4(a).
 
 
 
 
 
 
 
 
 
 
 
 
 

 
 
A-2

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(q) “Original Issue Date” means the date on which shares of Designated Preferred
Stock are first issued.
 
(r) “Preferred Director” has the meaning set forth in Section 7(b).
 
(s) “Preferred Stock” means any and all series of preferred stock of the
Corporation, including the Designated Preferred Stock.
 
(t) “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 Corporation’s most recent consolidated financial statements prior to the
Signing 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.
 
(u) “Standard Provisions” mean these Standard Provisions that form a part of the
Certificate of Designations relating to the Designated Preferred Stock.
 
(v) “Voting Parity Stock” means, with regard to any matter as to which the
holders of Designated Preferred Stock are entitled to vote as specified in
Sections 7(a) and 7(b) of these Standard Provisions that form a part of the
Certificate of Designations, any and all series of Parity Stock upon which like
voting rights have been conferred and are exercisable with respect to such
matter.
 
Section 3. Dividends.
 
(a) Rate. Holders of Designated Preferred Stock shall be entitled to receive, on
each share of Designated Preferred Stock if, as and when declared by the Board
of Directors or any duly authorized committee of the Board of Directors, but
only out of assets legally available therefor, cumulative cash dividends with
respect to each Dividend Period (as defined below) at a rate per annum equal to
the Applicable Dividend Rate on (i) the Liquidation Amount per share of
Designated Preferred Stock and (ii) the amount of accrued and unpaid dividends
for any prior Dividend Period on such share of Designated Preferred Stock, if
any.  Such dividends shall begin to accrue and be cumulative from the Original
Issue Date, shall compound on each subsequent Dividend Payment Date (i.e., no
dividends shall accrue on other dividends unless and until the first Dividend
Payment Date for such other dividends has passed without such other dividends
having been paid on such date) and shall be payable quarterly in arrears on each
Dividend Payment Date, commencing with the first such Dividend Payment Date to
occur at least 20 calendar days after the Original Issue Date.  In the event
that any Dividend Payment Date would otherwise fall on a day that is not a
Business Day, the dividend payment due on that date will be postponed to the
next day that is a Business Day and no additional dividends will accrue as a
result of that postponement. The period from and including any Dividend Payment
Date to, but excluding, the next Dividend Payment Date is a “Dividend Period”,
provided that the initial Dividend Period shall be the period from and including
the Original Issue Date to, but excluding, the next Dividend Payment Date.
 
Dividends that are payable on Designated Preferred Stock in respect of any
Dividend Period shall be computed on the basis of a 360-day year consisting of
twelve 30-day months. The amount of dividends payable on Designated Preferred
Stock on any date
 
 
 
 
 
 
 
 
 
 
 
 
 

 
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prior to the end of a Dividend Period, and for the initial Dividend Period,
shall be computed on the basis of a 360-day year consisting of twelve 30-day
months, and actual days elapsed over a 30-day month.
 
Dividends that are payable on Designated Preferred Stock on any Dividend Payment
Date will be payable to holders of record of Designated Preferred Stock as they
appear on the stock register of the Corporation on the applicable record date,
which shall be the 15th calendar day immediately preceding such Dividend Payment
Date or such other record date fixed by the Board of Directors or any duly
authorized committee of the Board of Directors that is not more than 60 nor less
than 10 days prior to such Dividend Payment Date (each, a “Dividend Record
Date”). Any such day that is a Dividend Record Date shall be a Dividend Record
Date whether or not such day is a Business Day.
 
Holders of Designated Preferred Stock shall not be entitled to any dividends,
whether payable in cash, securities or other property, other than dividends (if
any) declared and payable on Designated Preferred Stock as specified in this
Section 3 (subject to the other provisions of the Certificate of Designations).
 
(b) Priority of Dividends.  So long as any share of Designated Preferred Stock
remains outstanding, no dividend or distribution shall be declared or paid on
the Common Stock or any other shares of Junior Stock (other than dividends
payable solely in shares of Common Stock) or Parity Stock, subject to Section
3(c) below and the immediately following paragraph in the case of Parity Stock,
and no Common Stock, Junior Stock or Parity Stock shall be, directly or
indirectly, purchased, redeemed or otherwise acquired for consideration by the
Corporation or any of its subsidiaries unless all accrued and unpaid dividends
for all past Dividend Periods, including the latest completed Dividend Period
(including, if applicable as provided in Section 3(a) above, dividends on such
amount), on all outstanding shares of Designated Preferred Stock have been or
are contemporaneously declared and paid in full (or have been declared and a sum
sufficient for the payment thereof has been set aside for the benefit of the
holders of shares of Designated Preferred Stock on the applicable record date).
 
When dividends are not paid (or declared and a sum sufficient for payment
thereof set aside for the benefit of the holders thereof on the applicable
record date) on any Dividend Payment Date (or, in the case of Parity Stock
having dividend payment dates different from the Dividend Payment Dates, on a
dividend payment date falling within a Dividend Period related to such Dividend
Payment Date) in full upon Designated Preferred Stock and any shares of Parity
Stock, all dividends declared on Designated Preferred Stock and all such Parity
Stock and payable on such Dividend Payment Date (or, in the case of Parity Stock
having dividend payment dates different from the Dividend Payment Dates, on a
dividend payment date falling within the Dividend Period related to such
Dividend Payment Date) shall be declared pro rata so that the respective amounts
of such dividends declared shall bear the same ratio to each other as all
accrued and unpaid dividends per share on the shares of Designated Preferred
Stock (including, if applicable as provided in Section 3(a) above, dividends on
such amount) and all Parity Stock payable on such Dividend Payment Date (or, in
the case of Parity Stock having dividend payment dates different from the
Dividend Payment Dates, on a dividend payment date falling within the Dividend
Period related to such Dividend Payment Date) (subject to their having been
declared by the Board of Directors or a duly authorized committee of the Board
of Directors out of legally available funds and including, in the case of Parity
Stock that bears cumulative dividends, all accrued
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
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but unpaid dividends) bear to each other.  If the Board of Directors or a duly
authorized committee of the Board of Directors determines not to pay any
dividend or a full dividend on a Dividend Payment Date, the Corporation will
provide written notice to the holders of Designated Preferred Stock prior to
such Dividend Payment Date.
 
Subject to the foregoing and Section 3(c) below, and not otherwise, such
dividends (payable in cash, securities or other property) as may be determined
by the Board of Directors or any duly authorized committee of the Board of
Directors may be declared and paid on any securities, including Common Stock and
other Junior Stock, from time to time out of any funds legally available for
such payment, and holders of Designated Preferred Stock shall not be entitled to
participate in any such dividends.
 
(c) Restriction on Dividends.  So long as any share of Designated Preferred
Stock remains outstanding, neither the Corporation nor any Corporation
Subsidiary shall, declare or pay any dividend or make any distribution on Common
Stock, Junior Stock, Parity Stock or other capital stock or other equity
securities of any kind of the Corporation or any Corporation Subsidiary (other
than  (i) regular quarterly cash dividends of not more than the amount of the
last quarterly cash dividend per share declared or, if lower, announced to its
holders of Common Stock an intention to declare, on the Common Stock prior to
November 17, 2008, as adjusted for any stock split, stock dividend, reverse
stock split, reclassification or similar transaction, (ii) dividends payable
solely in shares of Common Stock, (iii) regular dividends on shares of preferred
stock in accordance with the terms thereof and which are permitted under the
terms of this Section 3, (iv) dividends or distributions by any wholly-owned
Corporation Subsidiary, (v) dividends or distributions by any Corporation
Subsidiary required pursuant to binding contractual agreements entered into
prior to November 17, 2008, or (vi) in the case of pari passu Preferred Stock,
dividends payable on a pro rata basis with Designated Preferred Stock), unless
all accrued and unpaid dividends for all past Dividend Periods, including the
latest completed Dividend Period (including, if applicable as provided in
Section 3(a) above, dividends on such amount), on all outstanding shares of
Designated Preferred Stock have been or are contemporaneously declared and paid
in full (or have been declared and a sum sufficient for the payment thereof has
been set aside for the benefit of the holders of shares of Designated Preferred
Stock on the applicable record date).
 
So long as any share of Designated Preferred Stock remains outstanding,  neither
the Corporation nor any Corporation Subsidiary shall, (x) pay any per share
dividend or distribution on Common Stock, Junior Stock, Parity Stock or other
capital stock or other equity securities of any kind of the Corporation at a
rate that is in excess of 100% of the aggregate per share dividends and
distributions for the immediately prior fiscal year (other than regular
dividends on shares of preferred stock in accordance with the terms thereof and
which are permitted under the terms of this Section 3); provided that no
increase in the aggregate amount of dividends or distributions on Common Stock
shall be permitted for any twelve (12) month period, including, without
limitation, as a result of any dividends or distributions paid in shares of
Common Stock, any stock split or any similar transaction or (y) pay aggregate
dividends or distributions on capital stock or other equity securities of any
kind of any Corporation Subsidiary that is in excess of 100% of the aggregate
dividends and distributions paid for the immediately prior fiscal year (other
than in the case of this clause (y), (1) regular dividends on shares of
preferred stock in accordance with the terms thereof and which are permitted
under the terms of this Section 3, (2) dividends or distributions by any
wholly-owned Corporation Subsidiary, (3) dividends or distributions by any
Corporation Subsidiary required pursuant to binding contractual agreements
entered into prior to
 
 
 
 
 
 
 
 
 
 
 

 
 
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November 17, 2008 or (4) dividends or distributions on newly issued shares of
capital stock for cash or other property).
 
Section 4. Liquidation Rights.
 
(a) Voluntary or Involuntary Liquidation. In the event of any liquidation,
dissolution or winding up of the affairs of the Corporation, whether voluntary
or involuntary, holders of Designated Preferred Stock shall be entitled to
receive for each share of Designated Preferred Stock, out of the assets of the
Corporation or proceeds thereof (whether capital or surplus) available for
distribution to stockholders of the Corporation, subject to the rights of any
creditors of the Corporation, before any distribution of such assets or proceeds
is made to or set aside for the holders of Common Stock and any other stock of
the Corporation ranking junior to Designated Preferred Stock as to such
distribution, payment in full in an amount equal to the sum of (i) the
Liquidation Amount per share and (ii) the amount of any accrued and unpaid
dividends (including, if applicable as provided in Section 3(a) above, dividends
on such amount), whether or not declared, to the date of payment (such amounts
collectively, the “Liquidation Preference”).
 
(b) Partial Payment. If in any distribution described in Section 4(a) above the
assets of the Corporation or proceeds thereof are not sufficient to pay in full
the amounts payable with respect to all outstanding shares of Designated
Preferred Stock and the corresponding amounts payable with respect of any other
stock of the Corporation ranking equally with Designated Preferred Stock as to
such distribution, holders of Designated Preferred Stock and the holders of such
other stock shall share ratably in any such distribution in proportion to the
full respective distributions to which they are entitled.
 
(c) Residual Distributions. If the Liquidation Preference has been paid in full
to all holders of Designated Preferred Stock and the corresponding amounts
payable with respect of any other stock of the Corporation ranking equally with
Designated Preferred Stock as to such distribution has been paid in full, the
holders of other stock of the Corporation shall be entitled to receive all
remaining assets of the Corporation (or proceeds thereof) according to their
respective rights and preferences.
 
(d) Merger, Consolidation and Sale of Assets Not Liquidation. For purposes of
this Section 4, the merger or consolidation of the Corporation with any other
corporation or other entity, including a merger or consolidation in which the
holders of Designated Preferred Stock receive cash, securities or other property
for their shares, or the sale, lease or exchange (for cash, securities or other
property) of all or substantially all of the assets of the Corporation, shall
not constitute a liquidation, dissolution or winding up of the Corporation.
 
Section 5. Redemption.
 
(a) Optional Redemption. The Corporation, at its option, subject to the approval
of the Appropriate Federal Banking Agency, may redeem, in whole or in part, at
any time and from time to time, out of funds legally available therefor, the
shares of Designated Preferred Stock at the time outstanding, upon notice given
as provided in Section 5(c) below, at a redemption price equal to the sum of (i)
the Liquidation Amount per share and (ii) any accrued and unpaid dividends
(including, if applicable as provided in Section 3(a) above,
 
 
 
 
 
 
 
 
 

 
 
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(b) dividends on such amount) (regardless of whether any dividends are actually
declared) to, but excluding, the date fixed for redemption.
 
The redemption price for any shares of Designated Preferred Stock shall be
payable on the redemption date to the holder of such shares against surrender of
the certificate(s) evidencing such shares to the Corporation or its agent. Any
declared but unpaid dividends payable on a redemption date that occurs
subsequent to the Dividend Record Date for a Dividend Period shall not be paid
to the holder entitled to receive the redemption price on the redemption date,
but rather shall be paid to the holder of record of the redeemed shares on such
Dividend Record Date relating to the Dividend Payment Date as provided in
Section 3 above.
 
(c) No Sinking Fund. The Designated Preferred Stock will not be subject to any
mandatory redemption, sinking fund or other similar provisions. Holders of
Designated Preferred Stock will have no right to require redemption or
repurchase of any shares of Designated Preferred Stock.
 
(d) Notice of Redemption. Notice of every redemption of shares of Designated
Preferred Stock shall be given by first class mail, postage prepaid, addressed
to the holders of record of the shares to be redeemed at their respective last
addresses appearing on the books of the Corporation. Such mailing shall be at
least 30 days and not more than 60 days before the date fixed for redemption.
Any notice mailed as provided in this Subsection shall be conclusively presumed
to have been duly given, whether or not the holder receives such notice, but
failure duly to give such notice by mail, or any defect in such notice or in the
mailing thereof, to any holder of shares of Designated Preferred Stock
designated for redemption shall not affect the validity of the proceedings for
the redemption of any other shares of Designated Preferred Stock.
Notwithstanding the foregoing, if shares of Designated Preferred Stock are
issued in book-entry form through The Depository Trust Company or any other
similar facility, notice of redemption may be given to the holders of Designated
Preferred Stock at such time and in any manner permitted by such facility. Each
notice of redemption given to a holder shall state:  (1) the redemption date;
(2) the number of shares of Designated Preferred Stock to be redeemed and, if
less than all the shares held by such holder are to be redeemed, the number of
such shares to be redeemed from such holder; (3) the redemption price; and (4)
the place or places where certificates for such shares are to be surrendered for
payment of the redemption price.
 
(e) Partial Redemption. In case of any redemption of part of the shares of
Designated Preferred Stock at the time outstanding, the shares to be redeemed
shall be selected either pro rata or in such other manner as the Board of
Directors or a duly authorized committee thereof may determine to be fair and
equitable. Subject to the provisions hereof, the Board of Directors or a duly
authorized committee thereof shall have full power and authority to prescribe
the terms and conditions upon which shares of Designated Preferred Stock shall
be redeemed from time to time. If fewer than all the shares represented by any
certificate are redeemed, a new certificate shall be issued representing the
unredeemed shares without charge to the holder thereof.
 
(f) Effectiveness of Redemption. If notice of redemption has been duly given and
if on or before the redemption date specified in the notice all funds necessary
for the redemption have been deposited by the Corporation, in trust for the pro
rata benefit of the holders of the shares called for redemption, with a bank or
trust company doing business in
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
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(g) the Borough of Manhattan, The City of New York, and having a capital and
surplus of at least $500 million and selected by the Board of Directors, so as
to be and continue to be available solely therefor, then, notwithstanding that
any certificate for any share so called for redemption has not been surrendered
for cancellation, on and after the redemption date dividends shall cease to
accrue on all shares so called for redemption, all shares so called for
redemption shall no longer be deemed outstanding and all rights with respect to
such shares shall forthwith on such redemption date cease and terminate, except
only the right of the holders thereof to receive the amount payable on such
redemption from such bank or trust company, without interest. Any funds
unclaimed at the end of three years from the redemption date shall, to the
extent permitted by law, be released to the Corporation, after which time the
holders of the shares so called for redemption shall look only to the
Corporation for payment of the redemption price of such shares.
 
(h) Status of Redeemed Shares. Shares of Designated Preferred Stock that are
redeemed, repurchased or otherwise acquired by the Corporation shall revert to
authorized but unissued shares of Preferred Stock (provided that any such
cancelled shares of Designated Preferred Stock may be reissued only as shares of
any series of Preferred Stock other than Designated Preferred Stock).
 
Section 6. Conversion. Holders of Designated Preferred Stock shares shall have
no right to exchange or convert such shares into any other securities.
 
Section 7. Voting Rights.
 
(a) General. The holders of Designated Preferred Stock shall not have any voting
rights except as set forth below or as otherwise from time to time required by
law.
 
(b) Preferred Stock Directors.  Whenever, at any time or times, dividends
payable on the shares of Designated Preferred Stock have not been paid for an
aggregate of eight quarterly Dividend Periods or more, whether or not
consecutive, the authorized number of directors of the Corporation shall
automatically be increased by two and the holders of the Designated Preferred
Stock shall have the right, with holders of shares of any one or more other
classes or series of Voting Parity Stock outstanding at the time, voting
together as a class, to elect two directors (hereinafter the “Preferred
Directors” and each a “Preferred Director”) to fill such newly created
directorships at the Corporation’s next annual meeting of stockholders (or at a
special meeting called for that purpose prior to such next annual meeting) and
at each subsequent annual meeting of stockholders until dividends payable on all
outstanding shares of Designated Preferred Stock have been declared and paid in
full for four consecutive quarterly Dividend Period (and which shall include all
accrued and unpaid dividends for all past Dividend Periods, including the latest
completed Dividend Period (including, if applicable as provided in Section 3(a)
above, dividends on such amount)), at which time such right shall terminate with
respect to the Designated Preferred Stock, except as herein or by law expressly
provided, subject to revesting in the event of each and every subsequent default
of the character above mentioned; provided that it shall be a qualification for
election for any Preferred Director that the election of such Preferred Director
shall not cause the Corporation to violate any corporate governance requirements
of any securities exchange or other trading facility on which securities of the
Corporation may then be listed or traded that listed or traded companies must
have a majority of independent directors.  Upon any termination of the right of
the holders of shares of Designated Preferred Stock and Voting Parity Stock as a
class to vote for directors as provided above, the Preferred Directors
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
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(c) shall cease to be qualified as directors, the term of office of all
Preferred Directors then in office shall terminate immediately and the
authorized number of directors shall be reduced by the number of Preferred
Directors elected pursuant hereto.  Any Preferred Director may be removed at any
time, with or without cause, and any vacancy created thereby may be filled, only
by the affirmative vote of the holders a majority of the shares of Designated
Preferred Stock at the time outstanding voting separately as a class together
with the holders of shares of Voting Parity Stock, to the extent the voting
rights of such holders described above are then exercisable.  If the office of
any Preferred Director becomes vacant for any reason other than removal from
office as aforesaid, the remaining Preferred Director may choose a successor who
shall hold office for the unexpired term in respect of which such vacancy
occurred.
 
(d) Class Voting Rights as to Particular Matters. So long as any shares of
Designated Preferred Stock are outstanding, in addition to any other vote or
consent of stockholders required by law or by the Charter, the vote or consent
of the holders of at least 66 2/3% of the shares of Designated Preferred Stock
at the time outstanding, voting as a separate class, given in person or by
proxy, either in writing without a meeting or by vote at any meeting called for
the purpose, shall be necessary for effecting or validating:
 
(i) Authorization of Senior Stock. Any amendment or alteration of the
Certificate of Designations for the Designated Preferred Stock or the Charter to
authorize or create or increase the authorized amount of, or any issuance of,
any shares of, or any securities convertible into or exchangeable or exercisable
for shares of, any class or series of capital stock of the Corporation ranking
senior to Designated Preferred Stock with respect to either or both the payment
of dividends and/or the distribution of assets on any liquidation, dissolution
or winding up of the Corporation;
 
(ii) Amendment of Designated Preferred Stock.  Any amendment, alteration or
repeal of any provision of the Certificate of Designations for the Designated
Preferred Stock or the Charter (including, unless no vote on such merger or
consolidation is required by Section 7(c)(iii) below, any amendment, alteration
or repeal by means of a merger, consolidation or otherwise) so as to adversely
affect the rights, preferences, privileges or voting powers of the Designated
Preferred Stock; or
 
(iii) Share Exchanges, Reclassifications, Mergers and Consolidations. Any
consummation of a binding share exchange or reclassification involving the
Designated Preferred Stock, or of a merger or consolidation of the Corporation
with another corporation or other entity, unless in each case (x) the shares of
Designated Preferred Stock remain outstanding or, in the case of any such merger
or consolidation with respect to which the Corporation is not the surviving or
resulting entity, are converted into or exchanged for preference securities of
the surviving or resulting entity or its ultimate parent, and (y) such shares
remaining outstanding or such preference securities, as the case may be, have
such rights, preferences, privileges and voting powers, and limitations and
restrictions thereof, taken as a whole, as are not materially less favorable to
the holders thereof than the rights, preferences, privileges and voting powers,
and limitations and restrictions thereof, of Designated Preferred Stock
immediately prior to such consummation, taken as a whole;
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
 
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(iv) provided, however, that for all purposes of this Section 7(c), any increase
in the amount of the authorized Preferred Stock, including any increase in the
authorized amount of Designated Preferred Stock necessary to satisfy preemptive
or similar rights granted by the Corporation to other persons prior to the
Signing Date, or the creation and issuance, or an increase in the authorized or
issued amount, whether pursuant to preemptive or similar rights or otherwise, of
any other series of Preferred Stock, or any securities convertible into or
exchangeable or exercisable for any other series of Preferred Stock, ranking
equally with and/or junior to Designated Preferred Stock with respect to the
payment of dividends (whether such dividends are cumulative or non-cumulative)
and the distribution of assets upon liquidation, dissolution or winding up of
the Corporation will not be deemed to adversely affect the rights, preferences,
privileges or voting powers, and shall not require the affirmative vote or
consent of, the holders of outstanding shares of the Designated Preferred Stock.
 
(e) Changes after Provision for Redemption. No vote or consent of the holders of
Designated Preferred Stock shall be required pursuant to Section 7(c) above if,
at or prior to the time when any such vote or consent would otherwise be
required pursuant to such Section, all outstanding shares of the Designated
Preferred Stock shall have been redeemed, or shall have been called for
redemption upon proper notice and sufficient funds shall have been deposited in
trust for such redemption, in each case pursuant to Section 5 above.
 
(f) Procedures for Voting and Consents. The rules and procedures for calling and
conducting any meeting of the holders of Designated Preferred Stock (including,
without limitation, the fixing of a record date in connection therewith), the
solicitation and use of proxies at such a meeting, the obtaining of written
consents and any other aspect or matter with regard to such a meeting or such
consents shall be governed by any rules of the Board of Directors or any duly
authorized committee of the Board of Directors, in its discretion, may adopt
from time to time, which rules and procedures shall conform to the requirements
of the Charter, the Bylaws, and applicable law and the rules of any national
securities exchange or other trading facility on which Designated Preferred
Stock is listed or traded at the time.
 
Section 8. Restriction on Repurchases. So long as any share of Designated
Preferred Stock remains outstanding, neither the Corporation nor any Corporation
Subsidiary shall, redeem, purchase or acquire any shares of Common Stock, Junior
Stock, Parity Stock or other capital stock or other equity securities of any
kind of the Corporation or any Corporation Subsidiary, or any trust preferred
securities issued by the Corporation or any Affiliate of the Corporation, (other
than (i) redemptions, purchases, repurchases or other acquisitions of the
Designated Preferred Stock and (ii) repurchases of Junior Stock or Common Stock
in connection with the administration of any employee benefit plan in the
ordinary course of business (including purchases to offset any Share Dilution
Amount pursuant to a publicly announced repurchase plan) and consistent with
past practice; provided that any purchases to offset the Share Dilution Amount
shall in no event exceed the Share Dilution Amount, (iii) the acquisition by the
Corporation or any of the Corporation Subsidiaries of record ownership in Junior
Stock or Parity Stock for the beneficial ownership of any other persons (other
than the Corporation or any other Corporation Subsidiary), including as trustees
or custodians, (iv) the exchange or conversion of Junior Stock for or into other
Junior Stock or of Parity Stock or trust preferred securities for or into other
Parity Stock
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
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Section 9. (with the same or lesser aggregate liquidation amount) or Junior
Stock, in each case set forth in this clause (iv), solely to the extent required
pursuant to binding contractual agreements entered into prior to the Signing
Date or any subsequent agreement for the accelerated exercise, settlement or
exchange thereof for Common Stock, (v) redemptions of securities held by the
Corporation or any wholly-owned Corporation Subsidiary or (vi) redemptions,
purchases or other acquisitions of capital stock or other equity securities of
any kind of any Corporation Subsidiary required pursuant to binding contractual
agreements entered into prior to November 17, 2008), unless all accrued and
unpaid dividends for all past Dividend Periods, including the latest completed
Dividend Period (including, if applicable as provided in Section 3(a) above,
dividends on such amount), on all outstanding shares of Designated Preferred
Stock have been or are contemporaneously declared and paid in full (or have been
declared and a sum sufficient for the payment thereof has been set aside for the
benefit of the holders of shares of Designated Preferred Stock on the applicable
record date).
 
Section 10. Record Holders.  To the fullest extent permitted by applicable law,
the Corporation and the transfer agent for Designated Preferred Stock may deem
and treat the record holder of any share of Designated Preferred Stock as the
true and lawful owner thereof for all purposes, and neither the Corporation nor
such transfer agent shall be affected by any notice to the contrary.
 
Section 11. Notices. All notices or communications in respect of Designated
Preferred Stock shall be sufficiently given if given in writing and delivered in
person or by first class mail, postage prepaid, or if given in such other manner
as may be permitted in this Certificate of Designations, in the Charter or
Bylaws or by applicable law. Notwithstanding the foregoing, if shares of
Designated Preferred Stock are issued in book-entry form through The Depository
Trust Company or any similar facility, such notices may be given to the holders
of Designated Preferred Stock in any manner permitted by such facility.
 
Section 12. No Preemptive Rights. No share of Designated Preferred Stock shall
have any rights of preemption whatsoever as to any securities of the
Corporation, or any warrants, rights or options issued or granted with respect
thereto, regardless of how such securities, or such warrants, rights or options,
may be designated, issued or granted.
 
Section 13. Replacement Certificates. The Corporation shall replace any
mutilated certificate at the holder’s expense upon surrender of that certificate
to the Corporation. The Corporation shall replace certificates that become
destroyed, stolen or lost at the holder’s expense upon delivery to the
Corporation of reasonably satisfactory evidence that the certificate has been
destroyed, stolen or lost, together with any indemnity that may be reasonably
required by the Corporation.
 
Section 14. Other Rights. The shares of Designated Preferred Stock shall not
have any rights, preferences, privileges or voting powers or relative,
participating, optional or other special rights, or qualifications, limitations
or restrictions thereof, other than as set forth herein or in the Charter or as
provided by applicable law.

 
 
 
 
 
 
 
 
 
 
 
 
 

 
 
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ANNEX C
 

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

 
 
ANNEX C-1

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

 
 
ANNEX C-2

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ANNEX D
 

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

 
 
ANNEX D-1

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

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

 

 
Name:
 
Title:
 
Date:

 
 
ANNEX D-3

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ANNEX E
 

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

 
 
ANNEX E-1

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

 
 
ANNEX E-2

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(c) 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.
 
(d) 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.
 
(e) 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.
 
(f) 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

 
 
ANNEX E-3

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(g) 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).
 
(h) If either (x) the Company grants “piggyback” registration rights to one or
more third parties to include their securities in an underwritten offering under
the Shelf Registration Statement pursuant to Section 1.2(b) of this Annex E or
(y) a Piggyback Registration under Section 1.2(d) of this Annex E relates to an
underwritten offering on behalf of the Company, and in either case the managing
underwriters advise the Company that in their reasonable opinion the number of
securities requested to be included in such offering exceeds the number which
can be sold without adversely affecting the marketability of such offering
(including an adverse effect on the per share offering price), the Company will
include in such offering only such number of securities that in the reasonable
opinion of such managing underwriters can be sold without adversely affecting
the marketability of the offering (including an adverse effect on the per share
offering price), which securities will be so included in the following order of
priority: (A) first, in the case of a Piggyback Registration under
Section 1.2(d) of this Annex E, the securities the Company proposes to sell,
(B) then the Registrable Securities of the Investor and all other Holders who
have requested inclusion of Registrable Securities pursuant to Section 1.2(b) or
Section 1.2(d) of this Annex E, as applicable, pro rata on the basis of the
aggregate number of such securities or shares owned by each such person and
(C) lastly, any other securities of the Company that have been requested to be
so included, subject to the terms of this Agreement; provided, however, that if
the Company has, prior to the Signing Date, entered into an agreement with
respect to its securities that is inconsistent with the order of priority
contemplated hereby then it shall apply the order of priority in such
conflicting agreement to the extent that it would otherwise result in a breach
under such agreement.
 
 1.3           Expenses of Registration.  All Registration Expenses incurred in
connection with any registration, qualification or compliance hereunder shall be
borne by the Company.  All Selling Expenses incurred in connection with any
registrations hereunder shall be borne by the holders of the securities so
registered pro rata on the basis of the aggregate offering or sale price of the
securities so registered.
 
 1.4           Obligations of the Company.  Whenever required to effect the
registration of any Registrable Securities or facilitate the distribution of
Registrable Securities pursuant to an effective Shelf Registration Statement,
the Company shall, as expeditiously as reasonably practicable:
 
(a) Prepare and file with the SEC a prospectus supplement or post-effective
amendment with respect to a proposed offering of Registrable Securities pursuant
to an effective registration statement, subject to Section 1.4 of this Annex E,
keep such registration statement effective and keep such prospectus supplement
current until the securities described therein are no longer Registrable
Securities.
 
(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

 
 
ANNEX E-4

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(c) Securities Act with respect to the disposition of all securities covered by
such registration statement.
 
(d) 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.
 
(e) 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.
 
(f) 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.
 
(g) 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

 
 
ANNEX E-5

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(vi) 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
 
(vii) 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.
 
(h) 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.
 
(i) 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.
 
(j) 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).
 
(k) 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

 
 
ANNEX E-6

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(l) 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.
 
(m) 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.
 
(n) 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.
 
(o) 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.
 
(p) 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

 
 
ANNEX E-7

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

 
 
ANNEX E-8

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(b) 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.
 
(c) If the indemnification provided for in Section 1.8(a) of this Annex E is
unavailable to an Indemnitee with respect to any losses, claims, damages,
actions, liabilities, costs or expenses referred to therein or is insufficient
to hold the Indemnitee harmless as contemplated therein, then the Company, in
lieu of indemnifying such Indemnitee, shall contribute to the amount paid or
payable by such Indemnitee as a result of such losses, claims, damages, actions,
liabilities, costs or expenses in such proportion as is appropriate to reflect
the relative fault of the Indemnitee, on the one hand, and the Company, on the
other hand, in connection with the statements or omissions which resulted in
such losses, claims, damages, actions, liabilities, costs or expenses as well as
any other relevant equitable considerations.  The relative fault of the Company,
on the one hand, and of the Indemnitee, on the other hand, shall be determined
by reference to, among other factors, whether the untrue statement of a material
fact or omission to state a material fact relates to information supplied by the
Company or by the Indemnitee and the parties’ relative intent, knowledge, access
to information and opportunity to correct or prevent such statement or
omission;  the Company and each Holder agree that it would not be just and
equitable if contribution pursuant to this Section 1.8(b) of this Annex E were
determined by pro rata allocation or by any other method of allocation that does
not take account of the equitable considerations referred to in Section 1.8(a)
of this Annex E.  No Indemnitee guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from the Company if the Company was not guilty of such fraudulent
misrepresentation.
 
 1.9           Assignment of Registration Rights.  The rights of the Investor to
registration of Registrable Securities pursuant to Section 1.2 of this Annex E
may be assigned by the Investor to any transferee or assignee of Registrable
Securities; provided, however, the transferor shall, within ten days after such
transfer, furnish to the Company written notice of the name and address of such
transferee or assignee and the number and type of Registrable Securities that
are being assigned.
 
 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

 
 
ANNEX E-9

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

 

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

 
 
ANNEX E-10

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ANNEX F
 
OFFICER’S CERTIFICATE
 

 
OF
 

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

 
 
ANNEX F-1

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

 

 
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]

 
 
ANNEX 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:

 
 
ANNEX F-3

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

 

 
EXHIBIT A
 
NEW CONTRACTS AND MATERIAL AGREEMENTS

EXHIBIT A-1
 
 

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

 

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

 
 

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

 
 
EXHIBIT B-1 

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

 
SCHEDULE A
 
ADDITIONAL TERMS AND CONDITIONS
 

Company Information:
   
Name of the Company:
M&F Bancorp, Inc.
 
Corporate or other organizational form of Company:
Corporation (bank holding company)
 
Jurisdiction of Organization of Company:
North Carolina
 
Appropriate Federal Banking Agency of Company:
Federal Reserve
 
Name of Certified Entities:
Mechanics and Farmers Bank
 
Corporate or other organizational form of each Certified Entity:
Corporation (bank)
 
Jurisdiction of Organization of each Certified Entity: North Carolina
   
Appropriate Federal Banking Agency of each Certified Entity:
Federal Deposit Insurance Corporation
with a copy to:
Notice Information:
Kim D. Saunders
Iain MacSween, Esq.
 
President and Chief Executive Officer
Brooks, Pierce, McLendon,
 
M & F Bancorp, Inc.
Humphrey & Leonard, L.L.P.
 
2634 Durham Chapel Hill Blvd.
P.O. Box 26000
 
Durham, NC  27707
Greensboro, NC 27420
     
Terms of the Exchange:
   
Series of CDCI Preferred Stock Exchanged:
Fixed Rate Cumulative Perpetual Preferred Stock, Series B
     
Per Share Liquidation Preference of CDCI Preferred Stock: $1,000 per share
   
Number of Shares of CDCI Preferred Stock Exchanged:
11,735
 
Dividend Payment Dates on the CDCI Preferred Stock:
Payable quarterly in arrears on February 15, May 15, August 15 and November 15
of each year.
Series of CPP Preferred Stock Exchanged:
Fixed Rate Cumulative Perpetual Preferred
   
Stock, Series A
 
Number of Shares of CPP Preferred Stock Exchanged:
11,735
 
Date of Letter Agreement pursuant to which CPP Preferred
   
Shares were purchased:
June 26, 2009
 

 
 
 

 
 

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Closing:
 
Location of Closing:                                           Cadwalader,
Wickersham & Taft, LLP
              One World Financial Center
              New York, NY  10281-0007
 
Time of Closing:                                       12:00 PM
 
Date of Closing:                                       August 20, 2010
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 

 
 

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SCHEDULE B
                                       

Capitalization Date:
7/31/2010
Common Stock
     
Par value:
No par value
Total Authorized:
10,000,000
Outstanding:
2,031,337
Subject to warrants, options, convertible securities, etc.:
0
   
Reserved for benefit plans and other issuances:
0
   
Remaining authorized but unissued:
7,968,663
   
Shares issued after Capitalization Date (other
 
than pursuant to warrants, options,
 
convertible securities, etc. as set forth above):
0
   
Preferred Stock
     
Par value:
$0.01
Total Authorized:
5,000,000
Outstanding (by series): Fixed Rate Cumulative Perpetual
 
Preferred Stock, Series A (CPP Preferred Stock):
11,735
Reserved for issuance:
0
Remaining authorized but unissued:
4,988,265
   
Holders of 5% or more of any class of capital stock
Primary Address
   
Dr. Vivian M. Sansom(1)   (8.9%)
1521 Cross Link Road
 
Raleigh, NC 27610
   
Mrs. Selena W. Wheeler  (8.0%)
2029 Heritage Pines Drive
 
Cary, NC 27519
   
North Carolina Mutual Life Insurance Company (9.2%)
411 West Chapel Hill Street
 
Durham, NC 27701
   
Ms. Julia W. Taylor(2)   (10.4%)
2029 Heritage Pines Drive
 
Cary, NC 27519
 (1) Pursuant to a Power of Attorney, Dr. Sansom’s sons, Joseph M. Sansom and
James E. Sansom, each have voting and investment powers over Dr. Sansom’s shares
of common stock.
(2) Ms. Taylor serves as attorney-in-fact for Ms. Wheeler and, as such, has
certain voting and investment powers over these shares. Excluding Mrs. Wheeler’s
shares, Ms. Taylor beneficially owns approximately 2.4% of the outstanding
common stock.