EXHIBIT A 

(CDFI Mutual Depository Institutions 

Senior Securities) 

SECURITIES PURCHASE AGREEMENT 

STANDARD TERMS 
 -iTABLE OF CONTENTS 

Page

ARTICLE I 

Section 1.1 Definitions.............................................................................................................2 

Section 1.2 Interpretation.........................................................................................................5 

ARTICLE II 

PURCHASE; CLOSING 

Section 2.1 Purchase ................................................................................................................5 

Section 2.2 Closing ..................................................................................................................6 

Section 2.3 Closing Conditions ...............................................................................................6 

ARTICLE III 

REPRESENTATIONS AND WARRANTIES 

Section 3.1 Representations and Warranties of the Bank........................................................9 

ARTICLE IV 

COVENANTS 

Section 4.1 Affirmative Covenants........................................................................................17 

Section 4.2 Negative Covenants ............................................................................................24 

ARTICLE V 

REMEDIES OF THE HOLDERS UPON EVENT OF DEFAULT 

Section 5.1 Event of Default..................................................................................................26 

Section 5.2 Acceleration and Other Remedies ......................................................................26 

Section 5.3 Suits for Enforcement .........................................................................................26 

Section 5.4 Holders May File Proofs of Claim......................................................................27 

Section 5.5 Waiver of Past Defaults ......................................................................................27 
 -iiARTICLE VI 

ADDITIONAL AGREEMENTS 

Section 6.1 Purchase for Investment......................................................................................27 

Section 6.2 Form of Senior Subordinated Security ...............................................................28 

Section 6.3 Execution of Senior Subordinated Securities .....................................................28 

Section 6.4 Computation of Interest ......................................................................................28 

Section 6.5 Legends...............................................................................................................29 

Section 6.6 Transfer of Senior Subordinated Securities ........................................................32 

Section 6.7 Replacement of Senior Subordinated Securities.................................................33 

Section 6.8 Cancellation ........................................................................................................34 

Section 6.9 Rule 144; Rule 144A; 4(11⁄2) Transactions .........................................................34 

Section 6.10 Depository Senior Subordinated Securities ........................................................35 

Section 6.11 Redemption.........................................................................................................35 

Section 6.12 Voting Rights......................................................................................................37 

Section 6.13 Expenses .............................................................................................................39 

Section 6.14 Communications to Holders ...............................................................................39 

ARTICLE VII 

SUBORDINATION OF THE SENIOR SUBORDINATED SECURITIES 

Section 7.1 Agreement to Subordinate ..................................................................................40 

Section 7.2 Default on Senior Indebtedness ..........................................................................40 

Section 7.3 Liquidation; Dissolution .....................................................................................41 

Section 7.4 Subrogation.........................................................................................................42 

Section 7.5 Notice by the Bank..............................................................................................43 

Section 7.6 Subordination May Not Be Impaired..................................................................43 

ARTICLE VIII 

MISCELLANEOUS 

Section 8.1 Termination.........................................................................................................44 

Section 8.2 Survival...............................................................................................................44 

Section 8.3 Amendment.........................................................................................................45 

Section 8.4 Waiver of Conditions..........................................................................................45 

Section 8.5 Governing Law; Submission to Jurisdiction, etc ................................................45 

Section 8.6 Notices ................................................................................................................46 

Section 8.7 Assignment .........................................................................................................46 

Section 8.8 Severability .........................................................................................................47 

Section 8.9 No Third Party Beneficiaries ..............................................................................47 

Section 8.10 Tax Treatment of Senior Subordinated Securities..............................................47 

Section 8.11 Specific Performance..........................................................................................47 
 -iiiLIST OF ANNEXES 

ANNEX A: FORM OF SENIOR SUBORDINATED SECURITIES 

ANNEX B: FORM OF OFFICER’S CERTIFICATE 

ANNEX C: FORM OF WAIVER 

ANNEX D: FORM OF OPINION 

ANNEX E: REGISTRATION RIGHTS 

ANNEX F: FORM OF OFFICER’S CERTIFICATE (CDFI REQUIREMENTS) 
 -ivINDEX OF DEFINED TERMS 

Term 

Location of 

Definition 

Additional Dividend 4.2(b) 

Affiliate 1.1 

Agreement Recitals 

Appropriate Federal Banking Agency 1.1 

Bank Recitals 

Bank Financial Statements 2.3(m) 

Bank Material Adverse Effect 1.1 

Bank Reports 3.1(i) 

Bank Subsidiary; Bank Subsidiaries 3.1(a) 

Bankruptcy Exceptions 3.1(c) 

Benefit Plans 2.3(f) 

Board of Directors 3.1(f) 

Business Combination 8.7 

business day 1.2 

Capital Interests 3.1(b) 

Capitalization Date 3.1(b) 

CDCI Recitals 

CDFI 3.1(d) 

CDFI Application 2.3(l) 

CDFI Application Update 2.3(l) 

CDFI Events 1.1 

Certified Entities 4.1(d) 

Charter 2.3(d) 

Closing 2.2(a) 

Closing Date 2.2(a) 

Code 3.1(n) 

Compensation Regulations 2.3(f) 

control; controlled by; under common control with 1.1 

Controlled Group 3.1(n) 

CPP 3.1(y) 

CPP/CDCI Securities 3.1(y) 

Defaulted Interest 6.4(c) 

Disclosure Schedule 1.1 

Disclosure Update 2.3(k) 

EESA 2.3(f) 

ERISA 3.1(n) 

Event of Default 5.1 

Exchange Act 6.6(f) 

Fund 3.1(d) 

GAAP 1.1 
 -vTerm 

Location of 

Definition 

Governmental Entities 2.3(a) 

Holder 1.1 

Indebtedness 1.1 

Indemnitee 6.9(b) 

Indenture 6.1 

Indenture Act 6.1 

Information 4.1(c)(iii) 

Interest Holders 3.1(e) 

Interest Payment Date Face of Senior 

Subordinated 

Security 

Interest Period 6.4(b) 

Interest Rate Face of Senior 

Subordinated 

Security 

Investor Recitals 

Knowledge of the Bank; Bank’s knowledge 1.1 

Letter Agreement Recitals 

Majority Holders 5.3 

Maturity Date Face of Senior 

Subordinated 

Security 

Members 1.1 

MHA 4.1(i) 

Obligor 5.4 

Plan 3.1(n) 

Previously Disclosed 1.1 

[Private Capital 2.3(n)]

Proprietary Rights 3.1(u) 

Purchase Recitals 

Purchase Price 2.1 

Redemption Date 6.11 

Regular Record Date Face of Senior 

Subordinated 

Security 

Regulatory Agreement 3.1(s) 

Relevant Period 2.3(f) 

Schedules Recitals 

SEC 3.1(k) 

Section 4.1(e) Employee 4.1(e) 

Securities Act 3.1(a) 

Senior Executive Officers 1.1 
 -viTerm 

Location of 

Definition 

Senior Indebtedness 1.1 

Senior Subordinated Securities Recitals 

Senior Subordinated Securities Directors 6.12(b) 

Senior Subordinated Securities Register 6.6(a) 

Significant Subsidiary 3.1(a) 

Signing Date 1.1 

State Restrictions 1.1 

subsidiary 1.1 

Tax; Taxes 1.1 

Transaction Documents 1.1 

Transfer 6.6(f) 
SECURITIES PURCHASE AGREEMENT – STANDARD TERMS 

R E C I T A L S: 

WHEREAS, the United States Department of the Treasury (the “Investor”) may 

from time to time agree to purchase senior subordinated debentures from eligible financial 

institutions which elect to participate in the Community Development Capital Initiative 

(“CDCI”); 

WHEREAS, an eligible financial institution electing to participate in the CDCI 

and issue securities to the Investor shall enter into a letter agreement (the “Letter Agreement”) 

with the Investor which incorporates this Securities Purchase Agreement – Standard Terms (the 

eligible financial institution identified in the Letter Agreement, the “Bank”); 

WHEREAS, the Bank 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 Bank 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 Bank intends to issue in a private placement senior subordinated 

debentures (“Senior Subordinated Securities”), in an amount as set forth on Schedule A to the 

Letter Agreement and the Investor intends to purchase (the “Purchase”) from the Bank the 

Senior Subordinated Securities; and 

WHEREAS, the Purchase will be governed by this Securities Purchase 

Agreement – Standard Terms and the Letter Agreement, including the schedules thereto (the 

“Schedules”), specifying additional terms of the Purchase. This Securities Purchase Agreement 

– Standard Terms (including the Annexes hereto) and the Letter Agreement (including the 

Schedules thereto) are together referred to as this “Agreement”. All references in this Securities 

Purchase Agreement – Standard Terms to “Schedules” are to the Schedules attached to the Letter 

Agreement. 

NOW, THEREFORE, in consideration of the premises, and of the representations, 

warranties, covenants and agreements set forth herein, the parties agree as follows: 
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ARTICLE I 

Section 1.1 Definitions. Except as otherwise specified herein or as the context 

may otherwise require, the following terms have the respective meanings set forth below for all 

purposes of this Agreement. 

“Affiliate” means, with respect to any person, any person directly or indirectly 

controlling, controlled by or under common control with, such other person. For purposes of this 

definition, “control” (including, with correlative meanings, the terms “controlled by” and “under 

common control with”) when used with respect to any person, means the possession, directly or 

indirectly, of the power to cause the direction of management and/or policies of such person, 

whether through the ownership of voting securities by contract or otherwise. 

“Appropriate Federal Banking Agency” means the “appropriate Federal banking 

agency” with respect to the Bank or such Bank Subsidiaries, as applicable, as defined in 

Section 3(q) of the Federal Deposit Insurance Act (12 U.S.C. Section 1813(q)). 

“Bank Material Adverse Effect” means a material adverse effect on (i) the 

business, results of operation or financial condition of the Bank and its consolidated subsidiaries 

taken as a whole; provided, however, that Bank Material Adverse Effect shall not be deemed to 

include the effects of (A) changes after the date of the Letter Agreement (the “Signing Date”) in 

general business, economic or market conditions (including changes generally in prevailing 

interest rates, credit availability and liquidity, currency exchange rates and price levels or trading 

volumes in the United States or foreign securities or credit markets), or any outbreak or 

escalation of hostilities, declared or undeclared acts of war or terrorism, in each case generally 

affecting the industries in which the Bank and its subsidiaries operate, (B) changes or proposed 

changes after the Signing Date in generally accepted accounting principles in the United States 

(“GAAP”), or authoritative interpretations thereof, or (C) changes or proposed changes after the 

Signing Date in securities, banking and other laws of general applicability or related policies or 

interpretations of Governmental Entities (in the case of each of these clauses (A), (B) and (C), 

other than changes or occurrences to the extent that such changes or occurrences have or would 

reasonably be expected to have a materially disproportionate adverse effect on the Bank and its 

consolidated subsidiaries taken as a whole relative to comparable U.S. banking or financial 

services organizations); or (ii) the ability of the Bank to consummate the Purchase and other 

transactions contemplated by this Agreement and perform its obligations hereunder or thereunder 

on a timely basis. 

“CDFI Events” means the failure by the Bank at any time while the Senior 

Subordinated Securities are outstanding to (i) be certified by the Community Development 

Financial Institution Fund of the United States Department of the Treasury as a regulated 

community development financial institution; (ii) together with all of its Affiliates collectively 

meet the eligibility requirements of 12 C.F.R. 1805.200(b); (iii) have a primary mission of 

promoting community development, as may be determined by the 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) 
 -3- 

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. 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 Senior Subordinated Securities then outstanding. 

“Disclosure Schedule” means that certain schedule to this Agreement delivered to 

the Investor on or prior to the Signing Date, setting forth, among other things, items the 

disclosure of which is necessary or appropriate either in response to an express disclosure 

requirement contained in a provision hereof or as an exception to one or more representations or 

warranties contained in Section 3.1. 

 “Holder” means a holder of the Senior Subordinated Securities. 

“Indebtedness” shall mean, whether or not recourse is to all or a portion of the 

assets of the Bank and whether or not contingent, (i) the claims of the Bank’s secured and 

general creditors; (ii) every obligation of the Bank for money borrowed; (iii) every obligation of 

the Bank evidenced by bonds, debentures, notes or other similar instruments, including 

obligations incurred in connection with the acquisition of property, assets or businesses; 

(iv) every reimbursement obligation of the Bank, contingent or otherwise, with respect to letters 

of credit, bankers’ acceptances, security purchase facilities or similar facilities issued for the 

account of the Bank; (v) every obligation of the Bank issued or assumed as the deferred purchase 

price of property or services (but excluding trade accounts payable or accrued liabilities arising 

in the ordinary course of business); (vi) every capital lease obligation of the Bank; (vii) all 

indebtedness of the Bank for claims in respect of derivative products, including interest rate, 

foreign exchange rate and commodity forward contracts, options and swaps and similar 

arrangements; (viii) every obligation of the type referred to in clauses (i) through (vii) of another 

person and all dividends of another person the payment of which, in either case, the Bank has 

guaranteed or is responsible or liable for directly or indirectly, as obligor or otherwise, and (ix) 

every obligation of the type referred to in clauses (i) through (vii) of another person and all 

dividends of another person the payment of which, in either case, is secured by a lien on any 

property or assets of the Bank. 
 -4- 

“knowledge of the Bank” or “Bank’s knowledge” means the actual knowledge 

after reasonable and due inquiry of the “officers” (as such term is defined in Rule 3b-2 under the 

Exchange Act) of the Bank. 

“Members” means persons having ownership rights in the Bank by virtue of their 

ownership of a deposit at the Bank. The amount of the (A) Additional Dividends and (B) total 

dividends declared and paid in each case for the year ended December 31, 2009 are set forth on 

Schedule B. 

“Previously Disclosed” means information set forth on the Disclosure Schedule or 

the Disclosure Update, as applicable; provided, however, that disclosure in any section of such 

Disclosure Schedule or Disclosure Update, as applicable, shall apply only to the indicated 

section of this Agreement except to the extent that it is reasonably apparent from the face of such 

disclosure that such disclosure is relevant to another section of this Agreement; provided,

further, that the existence of Previously Disclosed information, pursuant to a Disclosure Update, 

shall neither obligate the Investor to consummate the Purchase nor limit or affect any rights of or 

remedies available to the Investor. 

“Senior Executive Officers” means the Bank’s “senior executive officers” as 

defined in Section 111 of EESA and the Compensation Regulations. 

 “Senior Indebtedness” means, with respect to the Senior Subordinated Securities, 

(i) all deposit liabilities of the Bank, (ii) the principal of (and premium, if any) and interest, if 

any (including interest accruing on or after the appointment of a receiver or conservator relating 

to the Bank, whether or not such claim for post appointment interest is allowed), on all 

Indebtedness, whether outstanding on the date of execution of this Agreement, or hereafter 

created, assumed or incurred, and any deferrals, renewals or extensions of such Indebtedness, 

provided, however, that Senior Indebtedness shall not include (A) any other subordinated debt of 

the Bank that by its terms ranks pari passu or junior to the Senior Subordinated Securities issued 

hereunder or (B) any obligation to holders of Capital Interests or shares of equity in the Bank (if 

and upon conversion of the Bank to a stock-based entity) arising as a result of their status as 

holders of such Capital Interests or shares of equity. 

“State Restrictions” means, if the Bank is organized under the laws of any state, 

any restrictions imposed by the laws of such state on voting rights of holders of the Senior 

Subordinated Securities that cannot be modified, waived or otherwise removed by the 

appropriate Governmental Entity of such state. 

“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. 
 -5- 

“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. 

“Transaction Documents” means this Agreement, the Senior Subordinated 

Securities, and all other instruments, documents and agreements executed by or on behalf of the 

Bank and delivered concurrently herewith or at any time hereafter to or for the benefit of any 

holder of any Senior Subordinated Security in connection with the transactions contemplated by 

this Agreement, all as amended, supplemented or modified from time to time. 

Section 1.2 Interpretation. When a reference is made in this Agreement to 

“Recitals”, “Articles”, “Sections”, or “Annexes” such reference shall be to a Recital, Article or 

Section of, or Annex to, this Securities Purchase Agreement – Standard Terms, and a reference 

to “Schedules” shall be to a Schedule to the Letter Agreement, in each case, unless otherwise 

indicated. The terms defined in the singular have a comparable meaning when used in the plural, 

and vice versa. References to “herein”, “hereof”, “hereunder” and the like refer to this 

Agreement as a whole and not to any particular section or provision, unless the context requires 

otherwise. The table of contents and headings contained in this Agreement are for reference 

purposes only and are not part of this Agreement. Whenever the words “include”, “includes” or 

“including” are used in this Agreement, they shall be deemed followed by the words “without 

limitation”. No rule of construction against the draftsperson shall be applied in connection with 

the interpretation or enforcement of this Agreement, as this Agreement is entered into between 

sophisticated parties advised by counsel. All references to “$” or “dollars” mean the lawful 

currency of the United States of America. Except as expressly stated in this Agreement, all 

references to any statute, rule or regulation are to the statute, rule or regulation as amended, 

modified, supplemented or replaced from time to time (and, in the case of statutes, include any 

rules and regulations promulgated under the statute) and to any section of any statute, rule or 

regulation include any successor to the section. References to a “business day” shall mean any 

day except Saturday, Sunday and any day on which banking institutions in the State of New 

York or the District of Columbia generally are authorized or required by law or other 

governmental actions to close. 

ARTICLE II 

PURCHASE; CLOSING 

Section 2.1 Purchase. On the terms and subject to the conditions set forth in 

this Agreement, the Bank agrees to sell to the Investor, and the Investor agrees to purchase from 

the Bank, at the Closing (as hereinafter defined), the Senior Subordinated Securities in the form 

attached hereto as Annex A, appropriately completed in conformity herewith and duly and 

validly issued, authorized and executed by the Bank, in the aggregate principal amount set forth 

on Schedule A for the purchase price set forth on Schedule A (the “Purchase Price”). The 

Senior Subordinated Securities, including the principal and interest, shall be unsecured and 
 -6- 

subordinate and junior in right of payment to Senior Indebtedness to the extent set forth in 

Article VII hereof. 

Section 2.2 Closing. (a) On the terms and subject to the conditions set forth in 

this Agreement, the closing of the Purchase (the “Closing”) will take place at the location 

specified in Schedule A, at the time and on the date set forth in Schedule A or as soon as 

practicable thereafter, or at such other place, time and date as shall be agreed between the Bank 

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 

Section 2.3, at the Closing the Bank will deliver the Senior Subordinated Securities, as evidenced 

by one or more debentures dated the Closing Date and bearing appropriate legends as hereinafter 

provided for, in exchange for payment in full of the Purchase Price by wire transfer of 

immediately available United States funds to a bank account designated by the Bank on 

Schedule A. 

Section 2.3 Closing Conditions. The obligation of the Investor to consummate 

the Purchase is subject to the fulfillment (or waiver by the Investor) at or prior to the Closing of 

each of the following conditions: 

(a) (i) any approvals or authorizations of all United States and other 

governmental, regulatory or judicial authorities (collectively, “Governmental Entities”) required 

for the consummation of the Purchase shall have been obtained or made in form and substance 

reasonably satisfactory to each party and shall be in full force and effect and all waiting periods 

required by United States and other applicable law, if any, shall have expired and (ii) no 

provision of any applicable United States or other law and no judgment, injunction, order or 

decree of any Governmental Entity shall prohibit the purchase and sale of the Senior 

Subordinated Securities as contemplated by this Agreement; 

(b) (i) the representations and warranties of the Bank set forth in Section 3.1 

shall be true and correct in all respects as though made on and as of the Closing Date (other than 

representations and warranties that by their terms speak as of another date, which representations 

and warranties shall be true and correct in all respects as of such other date) and (ii) the Bank 

shall have performed in all respects all obligations required to be performed by it under this 

Agreement at or prior to the Closing; 

(c) the Bank shall have delivered to the Investor a certificate signed on behalf 

of the Bank by a Senior Executive Officer certifying to the effect that the conditions set forth in 

Section 2.3(b) have been satisfied, in substantially the form attached hereto as Annex B; 

(d) if applicable, the Bank 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”) and its bylaws as in effect on the Closing Date; 
 -7- 

(e) the Bank shall have delivered to the Investor true, complete and correct 

certified copies of the Charter and bylaws of the Bank; 

(f) (i) the Bank 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 Bank or its Affiliates subject to Section 111 of 

the Emergency Economic Stabilization Act of 2008, as amended by the American Recovery and 

Reinvestment Act of 2009, or otherwise from time to time (“EESA”), as implemented by any 

guidance, rule or regulation thereunder, as the same shall be in effect from time to time 

(collectively, the “Compensation Regulations”) (and to the extent necessary for such changes to 

be legally enforceable, each of its Senior Executive Officers and other employees shall have duly 

consented in writing to such changes), as may be necessary, during the period in which any 

obligation of the Bank arising from financial assistance under the Troubled Asset Relief Program 

remains outstanding (such period, as it may be further described in the Compensation 

Regulations, the “Relevant Period”), in order to comply with Section 111 of EESA or the 

Compensation Regulations, and (ii) the Investor shall have received a certificate signed on behalf 

of the Bank by a Senior Executive Officer certifying to the effect that the condition set forth in 

Section 2.3(f)(i) has been satisfied, in substantially the form attached hereto as Annex B; 

(g) each of the Bank’s Senior Executive Officers and any other employee of 

the Bank or its Affiliates subject to Section 111 of EESA shall have delivered to the Investor a 

written waiver in the form attached hereto as Annex C releasing the Investor and the Bank 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 Bank hereunder to modify, the terms of any 

Benefit Plans with respect to its Senior Executive Officers or other employees to eliminate any 

provisions of such Benefit Plans that would not be in compliance with the requirements of 

Section 111 of EESA, as implemented by the Compensation Regulations; 

(h) the Bank shall have delivered to the Investor a written opinion from 

counsel to the Bank (which may be internal counsel), addressed to the Investor and dated as of 

the Closing Date, in substantially the form attached hereto as Annex D; 

(i) the Bank shall have delivered physical certificated debentures in proper 

form evidencing the Senior Subordinated Securities to the Investor or its designee(s) in the form 

attached hereto as Annex A; 

(j) the Bank shall have taken all necessary action to ensure that the Bank and 

its executive officers, respectively, are in compliance with (A) all guidelines put forth by the 

Investor with respect to transparency, reporting and monitoring and (B) 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; 
 -8- 

(k) the Bank shall have delivered to the Investor a copy of the Disclosure 

Schedule on or prior to the Signing Date and to the extent that any information set forth on the 

Disclosure Schedule needs to be updated or supplemented to make it true, complete and correct 

as of the Closing Date, (i) the Bank shall have delivered to the Investor an update to the 

Disclosure Schedule (the “Disclosure Update”), setting forth any information necessary to make 

the Disclosure Schedule true, correct and complete as of the Closing Date and (ii) the Investor, in 

its sole discretion, shall have approved the Disclosure Update, provided, however, that the 

delivery and acceptance of the Disclosure Update shall not limit or affect any rights of or 

remedies available to the Investor; 

(l) the Bank shall have delivered to the Investor prior to the Signing Date 

either (i) a true, complete and correct certified copy of the CDFI Certification Application that 

the Bank submitted to the Fund in connection with its certification as a CDFI along with any 

updates to the CDFI Certification Application necessary to make it true, complete and correct as 

of the Signing Date or (ii) to the extent a copy of the CDFI Certification Application that the 

Bank submitted to the Fund in connection with its certification as a CDFI is not available, a 

newly completed CDFI Certification Application true, complete and correct as of the Signing 

Date (the CDFI Certification Application, delivered to the Investor pursuant to this 

Section 2.3(l), 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 Bank 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]

(m) the Bank shall have delivered to the Investor each of the consolidated 

financial statements of the Bank and its consolidated subsidiaries for each of the last three (3) 

completed fiscal years of the Bank (which shall be audited to the extent audited financial 

statements are available prior to the Signing Date) and each completed quarterly period since the 

last completed fiscal year (collectively, the “Bank Financial Statements”) [.][and]

(n) [Insert for pro-forma viable bank: the Bank shall (i) have received capital 

(“Private Capital”) from one or more non-governmental investors (A) in an amount equal to or 

greater than the Purchase Price, (B) that is subordinate in right of payment of principal and 

interest to the Senior Subordinated Securities and (C) that is acceptable in form and substance to 

the Investor, in its sole discretion and (ii) have satisfied the following requirements reasonably in 

advance of the Closing Date: (A) delivery of copies of the definitive documentation for the 

Private Capital to Investor, (B) delivery of the organizational charts of such non-governmental 

investors to Investor, each certified by the applicable non-governmental investor and 

demonstrating that such non-governmental investor is not an Affiliate of the Bank, (C) delivery 

of any other documents or information as Investor may reasonably request, in its sole discretion 

and (D) any other terms and conditions imposed by the Appropriate Federal Banking Agency, in 

its sole discretion, as a condition to its recommendation.] 
 -9- 

ARTICLE III 

REPRESENTATIONS AND WARRANTIES 

Section 3.1 Representations and Warranties of the Bank. Except as Previously 

Disclosed, the Bank represents and warrants to the Investor that as of the Signing Date and as of 

the Closing Date (or such other date specified herein): 

(a) Organization, Authority and Significant Subsidiaries. The Bank has been 

duly formed and is validly existing and in good standing as a bank or savings association 

organized in mutual form of the type described in Schedule A under the laws of its jurisdiction of 

organization, with the necessary power and authority to own, operate and lease its properties and 

conduct its business in all material respects as it is being currently conducted, and has not, 

individually or in the aggregate, had and would not reasonably be expected to have a Bank 

Material Adverse Effect, has been duly qualified as a foreign entity for the transaction of 

business and is in good standing under the laws of each other jurisdiction in which it owns or 

leases properties or conducts any business so as to require such qualification; each subsidiary of 

the Bank (each a “Bank Subsidiary” and, collectively, the “Bank Subsidiaries”) 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”) (each such Bank Subsidiary, a 

“Significant Subsidiary”), has been duly formed and is validly existing in good standing under 

the laws of its jurisdiction of organization. The Charter and bylaws of the Bank, 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 and outstanding mutual capital certificates, 

other capital instruments authorized by law, non-withdrawable accounts and other mutual 

interests issued by the Bank, including rights of Members arising from their membership but 

excluding the rights of Members in respect of deposit liabilities of the Bank (collectively, the 

“Capital Interests”) and any authorized or outstanding securities convertible into, or exercisable 

or exchangeable for, Capital Interests, as of the most recent fiscal month-end preceding the 

Signing Date (the “Capitalization Date”) are set forth on Schedule B. The outstanding Capital 

Interests in the Bank 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 Bank does not have outstanding any securities or 

other obligations providing the holder the right to acquire its Capital Interests that are not 

reserved for issuance as specified on Schedule B, and the Bank has not made any other 

commitment to authorize, issue or sell any Capital Interests that is not specified on Schedule B. 

Since the Capitalization Date, the Bank has not issued any Capital Interests, other than (i) Capital 

Interests issued upon the exercise of 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 [,] (ii) as disclosed on Schedule B [Insert for pro-forma 

viable banks: and (iii) Capital Interests or other instruments representing the Private Capital 

disclosed on Schedule B]. Each holder of 5% or more of the Capital Interests in the Bank and 
 -10- 

such holder’s primary address are set forth on Schedule B. The amount of the (A) Additional 

Dividends and (B) total dividends declared and paid in each case for the year ended 

December 31, 2009 are set forth on Schedule B. 

(c) Senior Subordinated Securities. This Agreement has been duly 

authorized, executed and delivered and is, and the Senior Subordinated Securities, when 

executed and delivered, will be, the legal, valid and binding obligations of the Bank, each 

enforceable in accordance with their respective terms, except to the extent that the enforceability 

thereof may be limited by applicable bankruptcy, receivership, conservatorship, 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”). 

(d) Mutual Status; Community Development Financial Institution Status. 

(i) The Bank is a FDIC-insured depository institution organized in mutual 

form under the laws of the United States or any State of the United States, the District 

of Columbia, any territory or possession of the United States, Puerto Rico, Northern 

Mariana Islands, Guam, American Samoa or the Virgin Islands. 

(ii) The Bank (A), collectively with all of its “Affiliates” (within the 

meaning of 12 C.F.R. 1805.104) pursuant to 12 C.F.R. 1805.200(b), is a regulated 

community development financial institution (a “CDFI”) currently certified by the 

Community Development Financial Institution Fund (the “Fund”) of the United 

States Department of the Treasury pursuant to 12 C.F.R. 1805.201(a) as having 

satisfied the eligibility requirements of the Fund’s Community Development 

Financial Institutions Program and (B) satisfies the eligibility requirements for a 

CDFI set forth in 12 C.F.R. 1805.201(b)(1)-(6). 

(e) Authorization, Enforceability. (i) The Bank has the power and authority 

to execute and deliver this Agreement and to carry out its obligations hereunder (which includes 

the issuance of the Senior Subordinated Securities). The execution, delivery and performance by 

the Bank of this Agreement and the consummation of the transactions contemplated hereby and 

thereby have been duly authorized by all necessary action on the part of the Bank and its 

Members and other non-Member holders of Capital Interests (collectively, “Interest Holders”), 

and no further approval or authorization is required on the part of the Bank. This Agreement is a 

valid and binding obligation of the Bank enforceable against the Bank in accordance with its 

terms, subject to the Bankruptcy Exceptions. 

(ii) The execution, delivery and performance by the Bank of this 

Agreement and the consummation of the transactions contemplated hereby and 

compliance by the Bank with the provisions hereof, will not (A) violate, conflict 

with, or result in a breach of any provision of, or constitute a default (or an event 

which, with notice or lapse of time or both, would constitute a default) under, or 

result in the termination of, or accelerate the performance required by, or result in a 

right of termination or acceleration of, or result in the creation of, any lien, security 
 -11- 

interest, charge or encumbrance upon any of the properties or assets of the Bank or 

any Bank Subsidiary under any of the terms, conditions or provisions of (x) its 

organizational documents or (y) any note, debenture, bond, mortgage, indenture, 

deed of trust, license, lease, agreement or other instrument or obligation to which the 

Bank or any Bank Subsidiary is a party or by which it or any Bank Subsidiary may 

be bound, or to which the Bank or any Bank Subsidiary or any of the properties or 

assets of the Bank or any Bank 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 Bank or any Bank Subsidiary or any of their respective 

properties or assets except, in the case of clauses (A)(x) and (B), for those 

occurrences that, individually or in the aggregate, have not had and would not 

reasonably be expected to have a Bank Material Adverse Effect. 

(iii) Other than the filings with the applicable Governmental Entity, such 

filings and approvals as are required to be made or obtained under any state “blue 

sky” laws, if applicable, 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 Bank in connection 

with the consummation by the Bank of the Purchase except for any such notices, 

filings, exemptions, reviews, authorizations, consents and approvals the failure of 

which to make or obtain would not, individually or in the aggregate, reasonably be 

expected to have a Bank Material Adverse Effect. 

(f) Charter; Bylaws; Agreements Among Interest Holders; Anti-takeover 

Provisions and Rights Plan. The Board of Directors of the Bank (“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, (i) are not prohibited by the Bank’s 

Charter and bylaws or other organizational documents, or any operating agreement or agreement 

among the Interest Holders of the Bank, and has obtained all consents required by its Charter, 

bylaws or other organizational documents or by such operating agreement or agreements among 

Interest Holders of the Bank, or has amended the Charter and bylaws, as is necessary, in order to 

consummate the transactions contemplated by this Agreement and (ii) will be exempt from any 

anti-takeover or similar provisions of the Bank’s Charter and bylaws, and any other provisions of 

any applicable anti-takeover laws and regulations of any jurisdiction. 

(g) No Bank Material Adverse Effect. Since the last day of the last completed 

fiscal period for which financial statements are included in the Bank Financial Statements, no 

fact, circumstance, event, change, occurrence, condition or development has occurred that, 

individually or in the aggregate, has had or would reasonably be expected to have a Bank 

Material Adverse Effect, except as disclosed on Schedule C. 

(h) Bank Financial Statements. The Bank Financial Statements present fairly 

in all material respects the consolidated financial position of the Bank 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 (A) were 
 -12- 

prepared in conformity with GAAP applied on a consistent basis (except as may be noted 

therein) and (B) have been prepared from, and are in accordance with, the books and records of 

the Bank and the Bank Subsidiaries. 

(i) Reports. (i) Since December 31, 2008, the Bank and each Bank 

Subsidiary has filed all reports, registrations, documents, filings, statements and submissions, 

together with any amendments thereto, that it was required to file with any Governmental Entity 

(the foregoing, collectively, the “Bank Reports”) and has paid all fees and assessments due and 

payable in connection therewith, except, in each case, as would not, individually or in the 

aggregate, reasonably be expected to have a Bank Material Adverse Effect. As of their 

respective dates of filing, the Bank Reports complied in all material respects with all statutes and 

applicable rules and regulations of the applicable Governmental Entities. 

(ii) The records, systems, controls, data and information of the Bank and 

the Bank Subsidiaries are recorded, stored, maintained and operated under means 

(including any electronic, mechanical or photographic process, whether 

computerized or not) that are under the exclusive ownership and direct control of the 

Bank or the Bank Subsidiaries or their accountants (including all means of access 

thereto and therefrom), except for any non-exclusive ownership and non-direct 

control that would not reasonably be expected to have a material adverse effect on 

the system of internal accounting controls described below in this Section 3.1(i)(ii). 

The Bank (A) has implemented and maintains adequate disclosure controls and 

procedures to ensure that material information relating to the Bank, including the 

consolidated Bank Subsidiaries, is made known to the chief executive officer and the 

chief financial officer of the Bank by others within those entities, and (B) has 

disclosed, based on its most recent evaluation prior to the Signing Date, to the 

Bank’s outside auditors and the audit committee of the board of directors of the 

Bank (or other governing body of the Bank having similar powers and duties as a 

Board of Directors) (x) any significant deficiencies and material weaknesses in the 

design or operation of internal controls that are reasonably likely to adversely affect 

the Bank’s ability to record, process, summarize and report financial information and 

(y) any fraud, whether or not material, that involves management or other employees 

who have a significant role in the Bank’s internal controls over financial reporting. 

(j) No Undisclosed Liabilities. Neither the Bank nor any of the Bank 

Subsidiaries has any liabilities or obligations of any nature (absolute, accrued, contingent or 

otherwise) which are not properly reflected or reserved against in the Bank 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 Bank Material Adverse Effect. 

(k) Offering of Securities. Neither the Bank nor any person acting on its 

behalf has taken any action (including any offering of any securities of the Bank under 

circumstances which would require the integration of such offering with the offering of any of 

the Senior Subordinated Securities under the Securities Act, and the rules and regulations of the 
 -13- 

Securities and Exchange Commission (the “SEC”) promulgated thereunder), which might subject 

the offering, issuance or sale of any of the Senior Subordinated Securities to Investor pursuant to 

this Agreement to the registration requirements of the Securities Act. 

(l) Litigation and Other Proceedings. Except (i) as set forth on Schedule D or 

(ii) as would not, individually or in the aggregate, reasonably be expected to have a Bank 

Material Adverse Effect, there is no (A) pending or, to the knowledge of the Bank, threatened, 

claim, action, suit, investigation or proceeding, against the Bank or any Bank Subsidiary or to 

which any of their assets are subject nor is the Bank or any Bank 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 Bank or 

any Bank Subsidiaries. 

(m) Compliance with Laws. Except as would not, individually or in the 

aggregate, reasonably be expected to have a Bank Material Adverse Effect, the Bank and the 

Bank 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 Bank or such Bank 

Subsidiary. Except as set forth on Schedule E, the Bank and the Bank Subsidiaries have 

complied in all respects and are not in default or violation of, and none of them is, to the 

knowledge of the Bank, under investigation with respect to or, to the knowledge of the Bank, 

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 Bank 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 Bank or any 

Bank Subsidiary that would, individually or in the aggregate, reasonably be expected to have a 

Bank Material Adverse Effect. 

(n) Employee Benefit Matters. Except as would not reasonably be expected 

to have, either individually or in the aggregate, a Bank 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 Bank 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 Bank or any member of its Controlled Group and 

for which the Bank 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 Bank or any member of its Controlled 
 -14- 

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 Bank 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. 

(o) Taxes. Except as would not, individually or in the aggregate, reasonably 

be expected to have a Bank Material Adverse Effect, (i) the Bank and the Bank 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 Bank or any of the Bank Subsidiaries, nor does the Bank have any 

knowledge of any Tax deficiencies. 

(p) Properties and Leases. Except as would not, individually or in the 

aggregate, reasonably be expected to have a Bank Material Adverse Effect, the Bank and the 

Bank 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 Bank Material Adverse Effect, the Bank and the 

Bank Subsidiaries hold all leased real or personal property under valid and enforceable leases 

with no exceptions that would interfere with the use made or to be made thereof by them. 

(q) Environmental Liability. Except as would not, individually or in the 

aggregate, reasonably be expected to have a Bank Material Adverse Effect: 

(i) there is no legal, administrative or other proceeding, claim or action 

of any nature seeking to impose, or that would reasonably be expected to result in 

the imposition of, on the Bank or any Bank Subsidiary, any liability relating to the 
 -15- 

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 Bank’s knowledge, threatened against the Bank or any Bank Subsidiary; 

(ii) to the Bank’s knowledge, there is no reasonable basis for any such 

proceeding, claim or action; and 

(iii) neither the Bank nor any Bank Subsidiary is subject to any 

agreement, order, judgment or decree by or with any court, Governmental Entity or 

third party imposing any such environmental liability. 

(r) Risk Management Instruments. Except as would not, individually or in 

the aggregate, reasonably be expected to have a Bank Material Adverse Effect, all derivative 

instruments, including, swaps, caps, floors and option agreements, whether entered into for the 

Bank’s own account, or for the account of one or more of the Bank 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 Bank or 

one of the Bank Subsidiaries, enforceable in accordance with its terms, except as may be limited 

by the Bankruptcy Exceptions. Neither the Bank nor the Bank Subsidiaries, nor, to the 

knowledge of the Bank, 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 Bank Material Adverse Effect. 

(s) Agreements with Regulatory Agencies. Except as set forth on Schedule F, 

neither the Bank nor any Bank Subsidiary is subject to any material cease-and-desist or other 

similar order or enforcement action issued by, or is a party to any material written agreement, 

consent agreement or memorandum of understanding with, or is a party to any commitment letter 

or similar undertaking to, or is subject to any capital directive by, or since December 31, 2006, 

has adopted any board resolutions at the request of, any Governmental Entity (other than the 

Appropriate Federal Banking Agencies with jurisdiction over the Bank and the Bank 

Subsidiaries) 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 Bank or any Bank 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 Bank and each Bank 

Subsidiary are in compliance in all material respects with each Regulatory Agreement to which it 

is party or subject, and neither the Bank nor any Bank Subsidiary has received any notice from 

any Governmental Entity indicating that either the Bank or any Bank Subsidiary is not in 

compliance in all material respects with any such Regulatory Agreement. 
 -16- 

(t) Insurance. The Bank and the Bank Subsidiaries are insured with reputable 

insurers against such risks and in such amounts as the management of the Bank reasonably has 

determined to be prudent and consistent with industry practice. The Bank and the Bank 

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 Bank Material Adverse Effect. 

(u) Intellectual Property. Except as would not, individually or in the 

aggregate, reasonably be expected to have a Bank Material Adverse Effect, (i) the Bank and each 

Bank 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 Bank nor any of 

the Bank Subsidiaries is materially infringing, diluting, misappropriating or violating, nor has the 

Bank or any of the Bank Subsidiaries received any written (or, to the knowledge of the Bank, 

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 Bank Material 

Adverse Effect, to the Bank’s knowledge, no other person is infringing, diluting, 

misappropriating or violating, nor has the Bank or any or the Bank 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 Bank and the Bank 

Subsidiaries. 

(v) Brokers and Finders. The Investor has no liability for any amounts that 

any broker, finder or investment banker is entitled to for any financial advisory, brokerage, 

finder’s or other fee or commission in connection with this Agreement or the transactions 

contemplated hereby based upon arrangements made by or on behalf of the Bank or any Bank 

Subsidiary. 

(w) Amendment to Charter and Other Document to Effect Section 6.12(b). 

Except as set forth on Schedule G, the election, appointment, nomination or designation of 

Senior Subordinated Securities Directors by the Holders in accordance with, and upon the 

conditions set forth in Section 6.12(b) is permitted by the laws of the jurisdiction of organization 

of the Bank. If permitted by such laws, the Bank shall have taken all action necessary to permit 

the Holders to elect, appoint, nominate or designate the Senior Subordinated Securities Directors, 

as applicable, in accordance with, and upon the events set forth in, Section 6.12(b), including 

amending its Charter and any other applicable organizational documents, agreements or 

arrangements as necessary. 

(x) Disclosure Schedule. The Bank has delivered the Disclosure Schedule 

and, if applicable, the Disclosure Update to the Investor and the information contained in the 
 -17- 

Disclosure Schedule, as modified by the information contained in the Disclosure Update, if 

applicable, is true, complete and correct. 

(y) CPP/CDCI Securities. To the extent that the Bank participated in the 

Troubled Asset Relief Program Capital Purchase Program (“CPP”) or the CDCI prior to the 

Signing Date and the Bank has any subordinated debentures or other securities issued in 

connection with its participation in the CPP or the CDCI (the “CPP/CDCI Securities”) 

outstanding, the Bank has (i) not breached any representation, warranty or covenant set forth in 

any of the documents governing the CPP/CDCI Securities or its sale to Investor and (ii) paid to 

Investor all accrued and unpaid dividends and/or interest then due on the CPP/CDCI Securities. 

ARTICLE IV 

COVENANTS 

Section 4.1 Affirmative Covenants. The Bank hereby covenants and agrees 

with Investor that: 

(a) Commercially Reasonable Efforts. Subject to the terms and conditions of 

this Agreement, each of the parties will use its commercially reasonable efforts in good faith to 

take, or cause to be taken, all actions, and to do, or cause to be done, all things necessary, proper 

or desirable, or advisable under applicable laws, so as to permit consummation of the Purchase 

as promptly as practicable and otherwise to enable consummation of the transactions 

contemplated hereby and shall use commercially reasonable efforts to cooperate with the other 

party to that end. 

(b) Certain Notifications until Closing. From the Signing Date until the 

Closing, the Bank 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 Bank contained in this Agreement to be untrue or inaccurate in any material 

respect or to cause any covenant or agreement of the Bank 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 Bank is 

aware and which, individually or in the aggregate, has had or would reasonably be expected to 

have a Bank 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 Senior Subordinated Securities having an aggregate face value of less 

than 10% of the Purchase Price, the Bank will permit the Investor and its agents, 

consultants, contractors and advisors (x) acting through the Appropriate Federal 

Banking Agency, or otherwise to the extent necessary to evaluate, manage or 

transfer its investment in the Bank, to examine the Bank’s books, Tax returns 

(including all schedules and attached thereto) and other information reasonably 
 -18- 

requested by Investor relating to Taxes and make copies thereof and to discuss the 

affairs, finances and accounts of the Bank and the Bank Subsidiaries with the 

principal officers of the Bank, all upon reasonable notice and at such reasonable 

times and as often as the Investor may reasonably request and (y) to review any 

information material to the Investor’s investment in the Bank provided by the Bank 

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 Bank, and 

nothing herein shall require the Bank or any Bank Subsidiary to disclose any 

information to the Investor to the extent (A) prohibited by applicable law or 

regulation or (B) that such disclosure would reasonably be expected to cause a 

violation of any agreement to which the Bank or any Bank Subsidiary is a party or 

would cause a risk of a loss of privilege to the Bank or any Bank Subsidiary 

(provided that the Bank shall use commercially reasonable efforts to make 

appropriate substitute disclosure arrangements under circumstances where the 

restrictions in this clause (i) apply). 

(ii) From the Signing Date until the date on which all of the Senior 

Subordinated Securities have been redeemed in whole, the Bank 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 Bank, 

and in any event within 90 days thereafter, a consolidated balance sheet of the 

Bank as of the end of such fiscal year, and consolidated statements of income, 

retained earnings and cash flows of the Bank 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 Bank, and which shall be audited to the 

extent audited financial statements are available1; 

(B) as soon as available after the end of the first, second and third 

quarterly periods in each fiscal year of the Bank, a copy of any quarterly reports 

provided to Interest Holders of the Bank or Bank management; 

(C) as soon as available after the Bank receives any assessment of the 

Bank’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 Bank has utilized the funds the Bank received hereunder in connection 

with the sale of the Senior Subordinated Securities and the effects of such funds 

on the operations and status of the Bank; 

 

1

 To the extent that the Bank informed the Investor on the Signing Date that it does not prepare financial 

statements in accordance with GAAP in the ordinary course, the Investor may consider other annual 

financial reporting packages acceptable to it in its sole discretion. 
 -19- 

(E) as soon as such items become effective, any amendments to the 

Charter, bylaws or other organizational documents of the Bank; and 

(F) at the same time as such items are sent to all Members of the Bank, 

copies of any information or documents, excluding any general solicitations or 

advertisements for services and products, sent by the Bank to its Members. 

(iii) The Investor will use reasonable best efforts to hold, and will use 

reasonable best efforts to cause its agents, consultants, contractors and advisors and 

United States executive branch officials and employees, to hold, in confidence all 

non-public records, books, contracts, instruments, computer data and other data and 

information (collectively, “Information”) concerning the Bank furnished or made 

available to it by the Bank or its representatives pursuant to this Agreement (except 

to the extent that such information can be shown to have been (i) previously known 

by such party on a non-confidential basis, (ii) in the public domain through no fault 

of such party or (iii) later lawfully acquired from other sources by the party to which 

it was furnished (and without violation of any other confidentiality obligation)); 

provided that nothing herein shall prevent the Investor from disclosing any 

Information to the extent required by applicable laws or regulations or by any 

subpoena or similar legal process. The Investor understands that the Information 

may contain commercially sensitive confidential information entitled to an exception 

from a Freedom of Information Act request. 

(iv) The Investor’s information rights pursuant to Section 4.1(c)(ii)(A), 

(B), (C), (E) and (F) and the Investor’s right to receive certifications from the Bank 

pursuant to Section 4.1(d)(ii) may be assigned by the Investor to a transferee or 

assignee of the Senior Subordinated Securities with a face value of no less than an 

amount equal to 2% of the Purchase Price. 

(v) From the Signing Date until the date when the Investor no longer 

owns any Senior Subordinated Securities, the Bank shall permit, and shall cause 

each of the Bank’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 Bank as to 

information that should be afforded confidentiality, as appropriate. 
 -20- 

(vi) Nothing in this Section shall be construed to limit the authority that 

the Special Inspector General of the Troubled Asset Relief Program, the Comptroller 

General of the United States or any other applicable regulatory authority has under 

law. 

(d) CDFI Requirements. 

(i) From the Signing Date until the date on which all of the Senior 

Subordinated Securities have been redeemed in whole, the Bank shall (A) be 

certified by the Fund as a CDFI; (B) together with all of 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 Senior 

Subordinated Securities have been redeemed in whole, the Bank shall deliver to 

Investor (x) (A) on the date that is 180 days after the Closing Date and (B) annually 

on the same date on which the Bank delivers the documentation required under 

Section 4.1(c)(ii)(A) to the Investor, a certificate signed on behalf of the Bank by a 

Senior Executive Officer, in substantially the form attached hereto as Annex F

certifying (1) that the Bank remains in compliance with the covenants set forth in 

Section 4.1(d)(i); (2) that the information in the CDFI Application, as modified by 

any updates to the CDFI Application provided by the Bank 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 Bank to the Investor on or 

prior to the date of such certificate, with respect to such covenants needs to be 
 -21- 

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; (3) either (a) that the contracts and material agreements entered into 

by the Bank 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 Bank with respect to Development Services; (iv) a 

list of the names and addresses of the individuals which comprise the Board of 

Directors as of such date and, to the extent any of such individuals was not a 

member of the Board of Directors 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 the Bank 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; (v) that the Bank 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 (vi) that the Bank remains in compliance with the 

covenant set forth in Section 4.1(m) and (y) within five (5) business days of receipt, 

copies of any notices, correspondence or other written communication between the 

Bank and the Fund, including any form that the Bank is required to provide to the 

Fund due to the occurrence of a “Material Event” within the meaning of the Fund’s 

CDFI Certification Procedures. 

(iii) The Bank shall immediately notify the Investor upon the occurrence 

of any breach of any of the covenants set forth in Section 4.1(d). 

(iv) If at any time the Bank is no longer certified as a CDFI, but one or 

more Affiliates thereof are certified as CDFIs (such affiliates, the “Certified 

Entities”), the Bank shall (A) immediately notify the Investor of such status; 

(B) cause the Certified Entities to comply with the covenants set forth in 

Section 4.1(d)(i), (C) on an annual basis pursuant to Section 4.1(d)(ii), deliver to 

Investor, the certificates and documentation required by clauses (1), (2) and (3) in 

Section 4.1(d)(ii)(x)(B), with respect to the Certified Entities and (D) execute and 

deliver to Investor such amendments or documents or perform such other acts as the 

Investor may deem necessary, in its sole discretion, for the Bank and the Certified 

Entities to comply with the terms and conditions of this Agreement. 

(e) Executive Compensation. 

(i) Benefit Plans. During the Relevant Period, the Bank shall take all 

necessary action to ensure that the Benefit Plans of the Bank 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 
 -22- 

neither the Bank 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 Bank 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 Bank and its Affiliates shall take all necessary 

action, other than to the extent prohibited by applicable law or regulation applicable 

outside of the United States, to ensure that the consummation of the transactions 

contemplated by this Agreement will not accelerate the vesting, payment or 

distribution of any deferred cash awards or any nonqualified deferred compensation 

payable by the Bank or any of its Affiliates. 

(ii) Additional Waivers. After the Closing Date, in connection with the 

hiring or promotion of a Section 4.1(e) Employee and/or the promulgation of 

applicable Compensation Regulations or otherwise, to the extent any Section 4.1(e) 

Employee shall not have executed a waiver in a form satisfactory to the Investor 

with respect to the application to such Section 4.1(e) Employee of the Compensation 

Regulations, the Bank shall use its best efforts to (x) obtain from such Section 4.1(e) 

Employee a waiver in substantially the form attached hereto as Annex C and (y) 

deliver such waiver to the Investor as promptly as possible, in each case within sixty 

days of such Section 4.1(e) Employee’s becoming subject to the requirements of this 

section. “Section 4.1(e) Employee” means (A) each Senior Executive Officer and 

(B) any other employee of the Bank or any of its Affiliates determined at any time to 

be subject to Section 111 of EESA as implemented by the Compensation 

Regulations. 

(iii) Clawback. In the event that any Section 4.1(e) Employee receives a 

payment in contravention of the provisions of this Section 4.1(e), the Bank shall 

promptly provide such individual with written notice that the amount of such 

payment must be repaid to the Bank 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 Bank of such amount, and shall take such other actions as may be 

necessary to comply with the Compensation Regulations. 

(iv) Limitation on Deductions. During the Relevant Period, the Bank 

agrees that it shall not claim a deduction for remuneration for federal income tax 
 -23- 

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 Bank. 

(f) Payment of Principal and Interest. The Bank covenants and agrees for the 

benefit of the Holders of the Senior Subordinated Securities that it will duly and punctually pay 

or cause to be paid the principal of and interest on the Senior Subordinated Securities at the 

respective times and in the manner provided herein. Payment of the principal of and interest on 

the Senior Subordinated Securities due on the Maturity Date will be made by the Bank in 

immediately available funds against presentation and surrender of the Senior Subordinated 

Securities. Each installment of interest on the Senior Subordinated Securities due on an Interest 

Payment Date other than the Maturity Date shall be paid by wire transfer of immediately 

available funds to any account with a banking institution located in the United States designated 

by such Holder no later than the related Regular Record Date. 

(g) Capital Covenant. From the Signing Date, until the date on which all of 

the Senior Subordinated Securities have been redeemed in whole, the Bank and the Bank 

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 Bank shall take all necessary action to ensure 

that (A) from and after the date the Bank or any Bank 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 Bank or such Bank 

Subsidiary shall, to the extent such programs are open for participation, (1) participate in the 

United States Department of the Treasury’s Making Home Affordable (“MHA”) program, 

including MHA’s Second Lien Modification Program and (2) immediately execute a 

Commitment to Purchase Financial Instrument and Servicer Participation Agreement (in such 

form as may be set forth on the MHA website at www.hmpadmin.com from time to time) with 

Fannie Mae (acting as the United States Department of the Treasury’s fiscal agent) and (B) if the 

Bank or any Bank Subsidiary owns mortgage loans that are serviced by a non-affiliated mortgage 

servicer, the Bank or such Bank Subsidiary shall consent to any MHA modification request made 

by such mortgage servicer. 

(j) Compliance with Employ American Workers Act. The Bank shall agree 

to comply, and take all necessary action to ensure that any Bank Subsidiary complies, in all 

respects with the provisions of EESA and any federal law respecting EESA, including the 

Employ American Workers Act (Section 1611 of Division A, Title XVI of the American 

Recovery and Reinvestment Act of 2009), Public Law No. 111-5, effective as of February 17, 

2009, as implemented by any rules, regulation or guidance thereunder, as such may be amended 

or supplemented from time to time, and any applicable guidance of the United States Department 

of the Treasury with respect thereto. 

(k) Reporting Requirements. Prior to the date on which the Senior 

Subordinated Securities have been redeemed in whole, the Bank 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 
 -24- 

in Annex E or (ii) as soon as practicable after the date that the Bank 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. 

(l) Predominantly Financial. For as long as the Investor owns any Senior 

Subordinated Securities, the Bank, 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. 

(m) Control by Foreign Bank or Company. Prior to the date on which all of 

the Senior Subordinated Securities have been redeemed in whole, the Bank 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 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 associations) by a 

foreign bank or company. 

Section 4.2 Negative Covenants. The Bank hereby covenants and agrees with 

the Investor that: 

(a) Certain Transactions. The Bank 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 

Bank), expressly assumes the due and punctual performance and observance of each and every 

covenant, agreement and condition of this Agreement and the Senior Subordinated Securities to 

be performed and observed by the Bank. 

(b) Restriction on Dividends and Repurchases. 

(i) Prior to the date on which all of the Senior Subordinated Securities 

have been redeemed in whole, neither the Bank nor any Bank Subsidiary shall, (x) 

redeem, purchase, repay or acquire any equity or debt capital instruments of any 

kind of the Bank or any Bank Subsidiary, other than redemptions, purchases, 

repayments or other acquisitions of Capital Interests or other securities of any kind 

of the Bank or any Bank Subsidiary required pursuant to binding contractual 

agreements entered into prior to October 21, 2009, and (y) declare or pay any 

extraordinary or special dividends, unless all accrued and unpaid Interest for all past 

interest periods on the Senior Subordinated Securities is paid in full. 
 -25- 

(ii) The Bank may pay, on an annual basis consistent with past practice, 

dividends on Capital Interests in the amount of the “Additional Dividends” as set 

forth in Schedule B. 

(iii) Prior to the date on which all of the Senior Subordinated Securities 

have been redeemed in whole, the Bank shall not (A) pay any increase in the 

Additional Dividends paid on any annual basis, (B) pay any extraordinary dividends 

on deposit accounts (dividends in excess of the stated rate or that are in excess of the 

amount resulting from the stated method of calculating the rate on such an account), 

and (C) pay any Additional Dividend on any Capital Interests or other equity 

securities of any kind of any Bank Subsidiary, provided that, no increase in 

dividends shall be made as a result of any dividend paid in mutual capital 

certificates, or other capital instruments authorized under applicable law, any stock 

split or similar transaction. 

(iv) Notwithstanding anything contained in this Section 4.2(b), prior to 

the date on which all of the Senior Subordinated Securities have been redeemed in 

whole, neither the Bank nor any Bank Subsidiary shall, redeem, purchase, repay or 

acquire any Capital Interests or other equity securities of any kind of any Bank 

Subsidiary, other than (A) the exchange or conversion of Capital Interests for or into 

other Capital Interests in the Bank, 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 Capital 

Interests, (B) redemptions of securities held by the Bank or any wholly owned Bank 

Subsidiary or (C) redemptions, purchases, repayments or other acquisitions of 

Capital Interests or other securities of any kind of the Bank or any Bank Subsidiary 

required pursuant to binding contractual agreements entered into prior to October 21, 

2009. 

(v) Notwithstanding anything contained in this Section 4.2(b), from and 

after the eighth (8th) anniversary of the Closing Date and for so long as the Senior 

Subordinated Securities are outstanding, neither the Bank nor any Bank Subsidiary 

shall, without the consent of the Investor, pay any dividends or repurchase any 

Capital Interests or other securities of any kind of the Bank or any Bank Subsidiary 

authorized under applicable law. 

(c) Related Party Transactions. Until such time as the Investor ceases to own 

any debt or equity securities of the Bank, including the Senior Subordinated Securities, the Bank 

and the Bank 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 Bank and the Bank 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 Bank, 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). 
 -26- 

(d) Restriction on Repurchase of Senior Subordinated Securities Not Held by 

Investor. Prior to the date on which the Investor no longer owns any Senior Subordinated 

Securities, the Bank shall not repurchase, redeem, call or otherwise reacquire any Senior 

Subordinated Securities 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 Senior Subordinated Securities then held by the Investor on the 

same terms and conditions. 

ARTICLE V 

REMEDIES OF THE HOLDERS UPON EVENT OF DEFAULT 

Section 5.1 Event of Default. “Event of Default” shall mean the occurrence or 

existence of any one or more of the following: 

(a) Receivership or Conservatorship. (i) There shall be appointed a receiver, 

conservator, liquidator, assignee, custodian, trustee, sequestrator or other similar official of the 

Bank or for any substantial part of its property, and such appointment shall remain unstayed and 

in effect for a period of sixty (60) days; or 

(ii) The Bank shall consent to the appointment of a receiver, conservator, 

liquidator, assignee, custodian, trustee, sequestrator or other similar official for it or 

all or substantially all of its property in any liquidation, insolvency or similar 

proceeding with respect to it or all or substantially all of its property; or 

(b) Dissolution. Any order, judgment or decree is entered against the Bank 

decreeing the dissolution or split up of the Bank and such order remains undischarged or 

unstayed for a period in excess of thirty (30) days. 

Section 5.2 Acceleration and Other Remedies. When any Event of Default has 

occurred and is continuing, then the Senior Subordinated Securities, including both principal and 

interest, and all fees, charges and other obligations payable hereunder and under the Transaction 

Documents, shall immediately become due and payable without presentment, demand, protest or 

notice of any kind. In addition, the Holders may exercise any and all remedies available to it 

under the Transaction Documents or applicable law. 

Section 5.3 Suits for Enforcement. In case any one or more Events of Default 

shall have occurred and be continuing, unless such Events of Default shall have been waived in 

the manner provided in Section 5.5 hereof, the Holders holding more than fifty percent (50%) of 

the aggregate outstanding principal amount of the Senior Subordinated Securities (the “Majority 

Holders”), subject to the terms of Article VII hereof, may proceed to protect and enforce their 

rights under this Article V by suit in equity or action at law. It is agreed that in the event of such 

action, or any action between the Holders of the Senior Subordinated Securities and the Bank 

(including its officers and agents) in connection with a breach or enforcement of this Agreement, 

the Holders of the Senior Subordinated Securities shall be entitled to receive all reasonable fees, 

costs and expenses incurred, including without limitation such reasonable fees and expenses of 
 -27- 

attorneys (whether or not litigation is commenced) and reasonable fees, costs and expenses of 

appeals. 

Section 5.4 Holders May File Proofs of Claim. In case there shall be pending 

proceedings for the bankruptcy or for the reorganization of any obligor on the Senior 

Subordinated Securities (other than the Bank) under Title 11, United States Code, or any other 

applicable law, or in case a receiver, conservator or trustee shall have been appointed for the 

Bank or such other obligor (each, an “Obligor”) or a Significant Subsidiary, or in the case of any 

other similar judicial proceedings relative to an Obligor or a Significant Subsidiary, or to the 

creditors or property of an Obligor or a Significant Subsidiary, any Holder, irrespective of 

whether the principal of the Senior Subordinated Securities shall then be due and payable as 

therein expressed or by declaration or otherwise and irrespective of whether any such Holder 

shall have made any demand pursuant to the provisions of this Section 5.4, shall be entitled and 

empowered, by intervention in such proceedings or otherwise, to file and prove a claim or claims 

for the whole amount of principal and interest owing and unpaid in respect of the Senior 

Subordinated Securities held by any such Holder and, in case of any judicial proceedings, to file 

such proofs of claim and other papers or documents as may be necessary or advisable in order to 

have the claims of any such Holder allowed in such judicial proceedings relative to an Obligor or 

a Significant Subsidiary, or to the creditors or property of an Obligor, unless prohibited by 

applicable law and regulations, to vote in any election of a trustee or a standby trustee in 

arrangement, reorganization, liquidation or other bankruptcy or insolvency proceedings or person 

performing similar functions in comparable proceedings, and to collect and receive any moneys 

or other property payable or deliverable to any such Holder on any such claims. 

Section 5.5 Waiver of Past Defaults. The Holders of not less than a majority in 

aggregate principal amount of the outstanding Senior Subordinated Securities may on behalf of 

the Holders of all the Senior Subordinated Securities waive any past default hereunder with 

respect such Senior Subordinated Securities and its consequences. Upon any such waiver, such 

default shall cease to exist, and any Event of Default arising therefrom shall be deemed to have 

been cured, for every purpose of this Agreement; but no such waiver shall extend to any 

subsequent or other default or impair any right consequent thereon. 

ARTICLE VI 

ADDITIONAL AGREEMENTS 

Section 6.1 Purchase for Investment. The Investor acknowledges that the 

Senior Subordinated Securities have not been registered under the Securities Act, or under any 

state securities laws. The Investor acknowledges that the Senior Subordinated Securities are not 

being sold pursuant to an indenture (an “Indenture”) qualified under the Trust Indenture Act of 

1939, as amended (the “Indenture Act”). The Investor (a) is acquiring the Senior Subordinated 

Securities pursuant to an exemption from registration under the Securities Act and an exemption 

from qualification of an indenture under the Indenture Act, and is acquiring the Senior 

Subordinated Securities 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 
 -28- 

sell or otherwise dispose of any of the Senior Subordinated Securities, except in compliance with 

the registration requirements or exemption provisions of the Securities Act and any applicable 

U.S. state securities laws, and (c) has such knowledge and experience in financial and business 

matters and in investments of this type that it is capable of evaluating the merits and risks of the 

Purchase and of making an informed investment decision. 

Section 6.2 Form of Senior Subordinated Security. The Senior Subordinated 

Security shall be substantially in the form of Annex A hereto, the terms of which are 

incorporated in and made a part of this Agreement. The Senior Subordinated Securities shall be 

issued, and may be transferred, only in denominations having an aggregate principal amount of 

not less than $1,000 and integral multiples of $1,000 in excess thereof. The Senior Subordinated 

Securities shall be in registered form without coupons and shall be numbered, lettered or 

otherwise distinguished in such manner or in accordance with such plans as the officers 

executing the same may determine as evidenced by the execution thereof. 

Section 6.3 Execution of Senior Subordinated Securities. The Senior 

Subordinated Securities shall be executed in the name and on behalf of the Bank by the manual 

or facsimile signature of its President, Chief Executive Officer, Chief Financial Officer or one of 

its Executive Vice Presidents under its seal (if legally required) which may be affixed thereto or 

printed, engraved or otherwise reproduced thereon, by facsimile or otherwise, and which need 

not be attested, unless otherwise required by the Bank’s Charter or bylaws or applicable law. 

Every Senior Subordinated Security shall be dated the date of its execution and delivery. 

Section 6.4 Computation of Interest. (a) The amount of interest payable for 

any Interest Period (as defined below) will be computed as provided in the Senior Subordinated 

Securities. 

(b) Each Senior Subordinated Security will bear interest at the Interest Rate 

(i) in the case of the initial Interest Period, for the period from, and including, the date of original 

issuance of such Senior Subordinated Security to, but excluding, the initial Interest Payment 

Date and (ii) thereafter, for the period from, and including, the first day following the end of the 

preceding Interest Period to, but excluding, the applicable Interest Payment Date or, in the case 

of the last Interest Period, the Maturity Date (each such period, an “Interest Period”), on the 

principal thereof, on any overdue principal and (to the extent that payment of such interest is 

enforceable under applicable law) on any overdue installment of interest (including Defaulted 

Interest), payable on each Interest Payment Date or the Maturity Date, as the case may be. 

Interest on any Senior Subordinated Security that is payable, and is punctually paid or duly 

provided for by the Bank, on any Interest Payment Date shall be paid to the person in whose 

name such Senior Subordinated Security is registered at the close of business on the Regular 

Record Date for such interest installment. 

(c) Any interest on the Senior Subordinated Security that is payable, but is not 

punctually paid or duly provided for by the Bank, on any Interest Payment Date (herein called 

“Defaulted Interest”) shall forthwith cease to be payable to the Holder on the relevant Regular 

Record Date, and such Defaulted Interest shall be paid by the Bank to the persons in whose 

names such Senior Subordinated Securities are registered at the close of business on a special 
 -29- 

record date for the payment of such Defaulted Interest, which shall be fixed in the following 

manner: the Bank shall notify the Holder in writing of the amount of Defaulted Interest 

proposed to be paid on each such Senior Subordinated Security and the date of the proposed 

payment. Thereupon the Board of Directors shall fix a special record date for the payment of 

such Defaulted Interest, which shall not be more than 15 nor less than 10 days prior to the date of 

the proposed payment. The Bank shall cause notice of the proposed payment of such Defaulted 

Interest and the special record date therefor to be mailed, first class postage prepaid, to each 

Holder of a Senior Subordinated Security at his, her or its address as it appears in the Senior 

Subordinated Securities Register, not less than 10 days prior to such special record date. Notice 

of the proposed payment of such Defaulted Interest and the special record date therefor having 

been mailed as aforesaid, such Defaulted Interest shall be paid to the person in whose name such 

Senior Subordinated Security is registered at the close of business on such special record date 

and thereafter the Bank shall have no further payment obligation in respect of the Defaulted 

Interest. 

(d) The Bank may make payment of any Defaulted Interest on the Senior 

Subordinated Securities in any other lawful manner not inconsistent with the requirements of any 

securities exchange on which such Senior Subordinated Securities may be listed, and upon such 

notice as may be required by such exchange. 

(e) Subject to the foregoing provisions of this Section 6.4, each Senior 

Subordinated Security delivered under this Agreement upon registration of transfer of or in 

exchange for or in lieu of any other Senior Subordinated Security shall carry the rights to interest 

accrued and unpaid, and to accrue, that were carried by such other Senior Subordinated Security. 

Section 6.5 Legends. (a) The Investor agrees that all certificates or other 

instruments representing the Senior Subordinated Securities will bear a legend substantially to 

the following effect: 

“THIS SENIOR SUBORDINATED SECURITY WILL BE 

ISSUED AND MAY BE TRANSFERRED ONLY IN MINIMUM 

DENOMINATIONS OF $1,000 AND MULTIPLES OF $1,000 IN 

EXCESS THEREOF. ANY ATTEMPTED TRANSFER OF 

SUCH SECURITIES IN A DENOMINATION OF LESS THAN 

$1,000 AND MULTIPLES OF $1,000 IN EXCESS THEREOF 

SHALL BE DEEMED TO BE VOID AND OF NO LEGAL 

EFFECT WHATSOEVER. ANY SUCH PURPORTED 

TRANSFEREE SHALL BE DEEMED NOT TO BE THE 

HOLDER OF SUCH SECURITIES FOR ANY PURPOSE, 

INCLUDING, BUT NOT LIMITED TO, THE RECEIPT OF 

PAYMENTS ON SUCH SECURITIES, AND SUCH 

PURPORTED TRANSFEREE SHALL BE DEEMED TO HAVE 

NO INTEREST WHATSOEVER IN SUCH SECURITIES. 

THIS SECURITY IS SUBJECT TO THE TERMS AND 

CONDITIONS SET FORTH IN THE LETTER AGREEMENT 
 -30- 

BY AND BETWEEN THE BANK AND THE UNITED STATES 

DEPARTMENT OF THE TREASURY AND SECURITIES 

PURCHASE AGREEMENT – STANDARD TERMS (THE 

“AGREEMENT”), EACH OF WHICH ARE INCORPORATED 

INTO THIS SENIOR SUBORDINATED SECURITY. 

THIS SECURITY IS NOT A SAVINGS ACCOUNT OR 

DEPOSIT AND IT IS NOT INSURED BY THE UNITED 

STATES, ANY AGENCY OR FUND OF THE UNITED STATES 

OR THE FEDERAL DEPOSIT INSURANCE CORPORATION. 

THIS OBLIGATION IS SUBORDINATED AND JUNIOR IN 

RIGHT OF PAYMENT, AS TO PRINCIPAL, INTEREST AND 

PREMIUM, TO ALL CLAIMS AGAINST THE BANK HAVING 

THE SAME PRIORITY AS SAVINGS ACCOUNT HOLDERS 

OR OTHER DEPOSITORS, OR ANY HIGHER PRIORITY, 

INCLUDING GENERAL AND SECURED CREDITORS OF 

THE BANK. THIS OBLIGATION IS NOT SECURED BY THE 

BANK’S ASSETS OR THE ASSETS OF ANY OF ITS 

AFFILIATES. THIS OBLIGATION IS NOT ELIGIBLE AS 

COLLATERAL FOR ANY LOAN BY THE BANK. 

[PURSUANT TO 12 U.S.C. 1828(b), THE BANK MAY NOT 

PAY INTEREST ON THIS OBLIGATION (IF SUCH INTEREST 

IS REQUIRED TO BE PAID ONLY OUT OF NET PROFITS) 

WHILE IN DEFAULT IN THE PAYMENT OF ANY 

ASSESSMENT TO THE FEDERAL DEPOSIT INSURANCE 

CORPORATION, UNLESS SUCH DEFAULT IS DUE TO A 

DISPUTE BETWEEN THE BANK AND THE FEDERAL 

DEPOSIT INSURANCE CORPORATION OVER THE 

AMOUNT OF SUCH ASSESSMENT AND THE BANK 

DEPOSITS SECURITY SATISFACTORY TO THE FEDERAL 

DEPOSIT INSURANCE CORPORATION FOR PAYMENT 

UPON FINAL DETERMINATION OF THE ISSUE. to be 

included for OTS - regulated institutions only, per 12 C.F.R. 

563.81(C)(1)(I)(E)]

PURSUANT TO 12 U.S.C. 1831o(h), THE BANK MAY NOT 

MAKE ANY PAYMENT OF PRINCIPAL OR INTEREST ON 

THIS OBLIGATION BEGINNING 60 DAYS AFTER 

BECOMING CRITICALLY UNDERCAPITALIZED, UNLESS 

THE FEDERAL DEPOSIT INSURANCE CORPORATION HAS 

MADE AN EXCEPTION PURSUANT TO 12 U.S.C. 

1831o(h)(2)(B). 
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THE TERMS UNDER WHICH THE BANK MAY PREPAY 

THIS SENIOR SUBORDINATED SECURITY ARE SET 

FORTH IN THE AGREEMENT. 

THIS SECURITY HAS 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 THIS SECURITY 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 THIS SECURITY BY ITS ACCEPTANCE 

HEREOF (1) REPRESENTS THAT IT IS A “QUALIFIED 

INSTITUTIONAL BUYER” (AS DEFINED IN RULE 144A 

UNDER THE SECURITIES ACT), (2) AGREES THAT IT WILL 

NOT OFFER, SELL OR OTHERWISE TRANSFER THE 

SECURITIES REPRESENTED BY THIS INSTRUMENT 

EXCEPT (A) PURSUANT TO A REGISTRATION 

STATEMENT WHICH IS THEN EFFECTIVE UNDER THE 

SECURITIES ACT, (B) FOR SO LONG AS THE SECURITIES 

REPRESENTED BY THIS INSTRUMENT ARE ELIGIBLE FOR 

RESALE PURSUANT TO RULE 144A, TO A PERSON IT 

REASONABLY BELIEVES IS A “QUALIFIED 

INSTITUTIONAL BUYER” AS DEFINED IN RULE 144A 

UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS 

OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED 

INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN 

THAT THE TRANSFER IS BEING MADE IN RELIANCE ON 

RULE 144A, (C) TO THE BANK 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 THIS SECURITY IS TRANSFERRED A 

NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS 

LEGEND. 

[NOTWITHSTANDING THE FOREGOING, AN INDENTURE 

MEETING THE REQUIREMENTS OF 12 C.F.R. 563.81(c)(4)(i) 

MUST BE IN PLACE BEFORE THIS SECURITY IS 
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TRANSFERRED TO ANY PERSON WHO IS NOT AN 

“ACCREDITED INVESTOR” (AS DEFINED IN RULE 501(a) 

UNDER THE SECURITIES ACT). – to be included for OTSregulated institutions only, per 12 C.F.R. 563.81(c)(4)(ii)]

THIS INSTRUMENT IS ISSUED SUBJECT TO THE 

RESTRICTIONS ON TRANSFER AND OTHER PROVISIONS 

OF THE AGREEMENT BETWEEN THE BANK AND THE 

INVESTOR REFERRED TO THEREIN, A COPY OF WHICH IS 

ON FILE WITH THE BANK. THIS SECURITY 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 Senior Subordinated Securities (A) (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), and (B) (i) become subject to an Indenture qualified under the Indenture Act or 

(ii) are exempt from qualification under the Indenture Act, the Bank shall issue new certificates 

or other instruments representing such Senior Subordinated Securities, which shall not contain 

the applicable legends in Section 6.5(a) above; provided that the Investor surrenders to the Bank 

the previously issued certificates or other instruments. 

Section 6.6 Transfer of Senior Subordinated Securities. (a) The Bank or its 

duly appointed agent shall maintain a register (the “Senior Subordinated Securities Register”) for 

the Senior Subordinated Securities in which it shall register the issuance and transfer of the 

Senior Subordinated Securities. All transfers of the Senior Subordinated Securities shall be 

recorded on the Senior Subordinated Securities Register maintained by the Bank or its agent, and 

the Bank shall be entitled to regard the registered Holder of such Senior Subordinated Security as 

the actual owner of the Senior Subordinated Security so registered until the Bank or its agent is 

required to record a transfer of such Senior Subordinated Security on its Senior Subordinated 

Securities Register. The Bank or its agent shall, subject to applicable securities laws, be required 

to record any such transfer when it receives the Senior Subordinated Security to be transferred 

duly and properly endorsed by the registered Holder or by its attorney duly authorized in writing. 

(b) The Bank shall at any time, upon written request of the Holder of a Senior 

Subordinated Security and surrender of the Senior Subordinated Security for such purpose, at the 

expense of the Bank, issue new Senior Subordinated Securities in exchange therefor in such 

denominations of at least $1,000, as shall be specified by the Holder of such Senior Subordinated 

Security, in an aggregate principal amount equal to the then unpaid principal amount of the 

Senior Subordinated Securities surrendered and substantially in the form of Annex A, with 

appropriate insertions and variations, and bearing interest from the date to which interest has 

been paid on the Senior Subordinated Security surrendered. All Senior Subordinated Securities 

issued upon any registration of transfer of exchange pursuant to this Section 6.6(b) shall be valid 

obligations of the Bank, evidencing the same debt, and entitled to the same benefits under this 
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Agreement, as the Senior Subordinated Securities surrendered upon such registration of transfer 

or exchange. 

(c) All Senior Subordinated Securities presented for registration of transfer or 

for exchange or payment shall be duly endorsed by, or be accompanied by, a written instrument 

or instruments of transfer in a form satisfactory to the Bank duly executed by the Holder or such 

Holder’s attorney duly authorized in writing. 

(d) No service charge shall be incurred for any exchange or registration of 

transfer of Senior Subordinated Securities, but the Bank may require payment of a sum sufficient 

to cover any tax, fee or other governmental charge that may be imposed in connection therewith. 

(e) Prior to due presentment for the registration of a transfer of any Senior 

Subordinated Security, the Bank and any agent of the Bank may deem and treat the person in 

whose name such Senior Subordinated Security is registered as the absolute owner and Holder of 

such Senior Subordinated Security for the purpose of receiving payment of principal of and 

interest on such Senior Subordinated Security and none of the Bank or any agents of the Bank 

shall be affected by notice to the contrary. 

(f) Subject to compliance with applicable securities laws, the Holder shall be 

permitted to transfer, sell, assign or otherwise dispose of (“Transfer”) all or a portion of the 

Senior Subordinated Securities at any time, and the Bank shall take all steps as may be 

reasonably requested by the Investor to facilitate the Transfer of the Senior Subordinated 

Securities, including, without limitation, as set forth in Section 6.9; provided that the Investor 

shall not Transfer any Senior Subordinated Securities if such transfer would require the Bank 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 Bank was not already subject to such 

requirements. In furtherance of the foregoing, the Bank shall provide reasonable cooperation to 

facilitate any Transfers of the Senior Subordinated Securities, including, as is reasonable under 

the circumstances, by furnishing such information concerning the Bank and its business as a 

proposed transferee may reasonably request (including such information as is required by 

Section 4.1(c)(iv)) and making management of the Bank 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 6.7 Replacement of Senior Subordinated Securities. Upon receipt of 

evidence reasonably satisfactory to the Bank of the loss, theft, destruction or mutilation of any 

Senior Subordinated Security, and, in the case of any such loss, theft or destruction, upon 

delivery of a bond of indemnity reasonably satisfactory to the Bank (provided that the Investor or 

any institutional Holder of a Senior Subordinated Security may instead deliver to the Bank an 

indemnity agreement in form and substance reasonably satisfactory to the Bank), or, in the case 

of any such mutilation, upon surrender and cancellation of the Senior Subordinated Security, as 

the case may be, the Bank will issue a new Senior Subordinated Security of like tenor, in lieu of 

such lost, stolen, destroyed or mutilated Senior Subordinated Security. 
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Section 6.8 Cancellation. All Senior Subordinated Securities surrendered for 

the purpose of payment, exchange or registration of transfer, shall be surrendered to the Bank 

and promptly canceled by it, and no Senior Subordinated Securities shall be issued in lieu thereof 

except as expressly permitted by any of the provisions of this Agreement. The Bank shall 

destroy all canceled Senior Subordinated Securities. 

Section 6.9 Rule 144; Rule 144A; 4(11⁄2) Transactions. (a) At all times after 

the Signing Date, the Bank covenants that (1) it will, upon the request of the Investor or any 

Holder, 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 Senior Subordinated Securities, make “current public 

information” available, as provided in Section (c)(1) of Rule 144 (if the Bank is a “Reporting 

Issuer” within the meaning of Rule 144) or in Section (c)(2) of Rule 144 (if the Bank is a “NonReporting 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 socalled “Section 4(11⁄2)” exemption to sell any of its Senior Subordinated Securities, 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 Senior Subordinated Securities 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 Senior 

Subordinated Securities, 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 Senior Subordinated Securities 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(11⁄2)” 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 Bank shall 

not be required to take any action described in this Section 6.9(a) that would cause the Bank to 

become subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act if the 

Bank was not subject to such requirements prior to taking such action. Upon the request of any 

Holder, the Bank 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 Bank 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 

Bank pursuant to this Section 6.9 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. 
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(c) If the indemnification provided for in Section 6.9(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 Bank, 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 Bank, 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 Bank, 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 Bank or by the Indemnitee and the parties’ relative intent, 

knowledge, access to information and opportunity to correct or prevent such statement or 

omission; the Bank and Investor agree that it would not be just and equitable if contribution 

pursuant to this Section 6.9(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 6.9(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 Bank if the Bank was not guilty of such 

fraudulent misrepresentation. 

Section 6.10 Depository Senior Subordinated Securities. Upon request by the 

Investor at any time following the Closing Date, the Bank 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 Senior Subordinated 

Securities may be deposited. 

Section 6.11 Redemption. (a) The Senior Subordinated Securities at the time 

outstanding may be redeemed by the Bank at its option, subject to the approval of the 

Appropriate Federal Banking Agency, in whole or in part and subject to Section 6.11(e), at any 

time and from time to time, out of funds legally available therefor, upon notice given as provided 

in Section 6.11(d) below, on any Interest Payment Date (the “Redemption Date”) at a redemption 

price equal to the sum of (i) 100% of the principal amount thereof being called for redemption 

(provided that, if less than all of the outstanding Senior Subordinated Securities are then being 

redeemed, such amount shall not be less than 25% of the Purchase Price) and (ii) any accrued 

and unpaid interest. 

(b) The redemption price for any Senior Subordinated Securities shall be 

payable on the Redemption Date to the Holder of such Senior Subordinated Securities against 

surrender thereof to the Bank or its agent. Interest shall be paid at the then applicable Interest 

Rate from the date of the last Interest Payment Date up to but not including the Redemption 

Date. 

(c) No Sinking Fund. The Senior Subordinated Securities will not be subject 

to any mandatory redemption, sinking fund or other similar provisions. Holders of Senior 

Subordinated Securities will have no right to require redemption or repurchase of any of the 

Senior Subordinated Securities. 
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(d) Notice of Redemption. Notice of redemption of the Senior Subordinated 

Securities shall be given by first class mail, postage prepaid, addressed to the Holders of record 

of the Senior Subordinated Securities to be redeemed at their respective last addresses appearing 

on the Senior Subordinated Securities Register. Such mailing shall be at least 30 days and not 

more than 60 days before the Redemption Date. 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 Senior Subordinated Securities designated for 

redemption shall not affect the validity of the proceedings for the redemption of any other Senior 

Subordinated Securities. Notwithstanding the foregoing, if Senior Subordinated Securities 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 Senior Subordinated Securities 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 amount of Senior Subordinated Securities to be 

redeemed by such Holder; (3) the redemption price; and (4) the place or places where such 

Senior Subordinated Securities are to be surrendered for payment of the redemption price. 

(e) Partial Redemption. The Bank may redeem less than all of the 

outstanding Senior Subordinated Securities, provided that the amount called for redemption at 

any time is not less than 25% of the amount of the outstanding principal amount of the Senior 

Subordinated Securities. 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 Senior Subordinated Securities shall be redeemed from time to time. If 

less than the full aggregate principal amount of any Senior Subordinated Security is redeemed, 

the Bank shall issue a new Senior Subordinated Security in the unredeemed aggregate principal 

amount thereof without charge to the Holder thereof. Senior Subordinated Securities may be 

redeemed in part only on a pro rata basis and only in minimum denominations of $1,000 and 

integral multiples 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 Bank, in trust for the pro rata benefit of the Holders of 

the Senior Subordinated Securities called for redemption, with a bank or trust company doing 

business in 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 Senior Subordinated Security so called 

for redemption has not been surrendered for cancellation, on and after the Redemption Date 

interest shall cease to accrue on the aggregate principal amount of such Senior Subordinated 

Securities so called for redemption, the aggregate principal amount of such Senior Subordinated 

Securities so called for redemption shall no longer be deemed outstanding and shall cease to bear 

interest from and after the Redemption Date. All rights with respect to such Senior Subordinated 

Securities (or the portion thereof so called for redemption) shall forthwith on such Redemption 

Date cease and terminate, except only the right of the Holders thereof to receive the redemption 

price 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 
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applicable law, be released to the Bank, after which time the Holders of such Senior 

Subordinated Securities (or portion thereof so called for redemption) shall look only to the Bank 

for payment of the redemption price of such Senior Subordinated Securities. 

(g) Status of Redeemed Securities. Senior Subordinated Securities that are 

redeemed, repurchased or otherwise acquired by the Bank shall be cancelled and shall not 

thereafter be reissued by the Bank. 

Section 6.12 Voting Rights. 

(a) General. The Holders of Senior Subordinated Securities shall not have 

any voting rights except as set forth below or as otherwise from time to time required by law. 

(b) Senior Subordinated Securities Directors. Subject to the provisions of 

Section 3.1(w) and any applicable State Restrictions, whenever, at any time or times, interest 

payable on the Senior Subordinated Securities has not been paid in full for an aggregate of eight 

(8) quarterly Interest Periods or more, whether or not consecutive, the authorized number of 

directors of the Bank shall automatically be increased by two and the Holders of the Senior 

Subordinated Securities shall have the right, voting as a class, to elect or appoint two directors to 

fill such newly created directorships or, if applicable law does not permit the Holders to elect or 

appoint such directors, to designate or nominate two individuals for election or appointment to 

fill such directorships (such directors, hereinafter, the “Senior Subordinated Securities 

Directors” and each, a “Senior Subordinated Securities Director”) at the Bank’s next annual 

meeting of Members (or at a special meeting called for that purpose prior to such next annual 

meeting) and at each subsequent annual meeting of Members until all accrued and unpaid 

interest for four (4) consecutive Interest Periods, including the latest completed Interest Period 

(including, if applicable as provided in Section 6.4 above, interest on such amount), on all 

outstanding Senior Subordinated Securities has been paid in full at which time such right shall 

terminate with respect to the Senior Subordinated Securities, 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 Senior 

Subordinated Securities Director that the election of such Senior Subordinated Securities 

Director shall not cause the Bank to violate any corporate governance requirements of any 

securities exchange or other trading facility on which securities of the Bank 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 Senior Subordinated Securities as a class to vote for 

directors as provided above, the Senior Subordinated Securities Directors shall cease to be 

qualified as directors, the term of office of all Senior Subordinated Securities Directors then in 

office shall terminate immediately and the authorized number of directors shall be reduced by the 

number of Senior Subordinated Securities Directors elected pursuant hereto. Any Senior 

Subordinated Securities 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 Majority Holders of 

the Senior Subordinated Securities at the time outstanding voting separately as a class, to the 

extent the voting rights of such Holders described above are then exercisable. If the office of any 

Senior Subordinated Securities Director becomes vacant for any reason other than removal from 

office as aforesaid, the remaining Senior Subordinated Securities Director may choose a 
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successor who shall hold office for the unexpired term in respect of which such vacancy 

occurred. 

(c) Class Voting Rights as to Particular Matters. So long as any Senior 

Subordinated Securities are outstanding, in addition to any other vote or consent of Interest 

Holders required by law or by the Charter, but subject to any applicable State Restrictions, the 

vote or consent of the Holders of at least 66 2/3% of the Senior Subordinated Securities at the 

time outstanding, given in person or by proxy, either in writing without a meeting or by vote at 

any meeting of the Holders of Senior Subordinated Securities called for the purpose in 

accordance with Section 6.12(e), shall be necessary for effecting or validating: 

(i) Amendment of Senior Subordinated Securities. Any amendment, 

alteration or repeal of any provision of this Agreement or of the form of the Senior 

Subordinated Securities or the Charter (including, unless no vote on such merger or 

consolidation is required by Section 6.12(c)(ii) 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 Senior Subordinated 

Securities; 

(ii) Exchanges, Reclassifications, Mergers and Consolidations. Any 

consummation of a binding exchange or reclassification involving the Senior 

Subordinated Securities, or of a merger or consolidation of the Bank with another 

entity, unless in each case (x) the Senior Subordinated Securities remain outstanding 

or, in the case of any such merger or consolidation with respect to which the Bank is 

not the surviving or resulting entity, are converted into or exchanged for securities of 

the surviving or resulting entity or its ultimate parent, and (y) such remaining Senior 

Subordinated Securities outstanding or such 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 Senior Subordinated Securities immediately prior to such 

consummation, taken as a whole; or 

(iii) Creation of Senior Capital Instruments. Any authorization or 

issuance of any equity securities, mutual capital certificates or other capital 

instruments (other than the rights of Members in respect of deposit liabilities of 

Bank) of the Bank, or any securities convertible into or exchangeable or exercisable 

for any equity securities, mutual capital certificates or other capital instruments 

authorized by State law (other than the rights of Members in respect of deposit 

liabilities of the Bank) ranking senior to the Senior Subordinated Securities with 

respect to the payment of interest (whether or not such interest compounds) or 

principal and the distribution of assets upon liquidation, dissolution or winding up of 

the Bank; 

provided, however, that for all purposes of this Section 6.12(c), any increase in the amount of the 

Senior Subordinated Securities, or the creation and issuance of any other Indebtedness of the 
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Bank, or any securities convertible into or exchangeable or exercisable for any Senior 

Subordinated Securities, ranking senior to, equally with and/or subordinate to the Senior 

Subordinated Securities with respect to the payment of interest (whether or not such interest 

compounds) and the distribution of assets upon liquidation, dissolution or winding up of the 

Bank 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 Senior 

Subordinated Securities. 

(d) Changes after Provision for Redemption. No vote or consent of the 

Holders of Senior Subordinated Securities shall be required pursuant to Section 6.12(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 Senior Subordinated Securities 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 6.11 above. 

(e) Procedures for Voting and Consents. The rules and procedures for calling 

and conducting any meeting of the Holders of Senior Subordinated Securities (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/or 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 the Senior Subordinated Securities are listed or traded at the time. 

Section 6.13 Expenses. (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 Bank shall, at the Bank’s sole cost and expense, (i) furnish to the 

Investor all instruments, documents and other agreements required to be furnished by the Bank 

pursuant to the terms of this Agreement, including, without limitation, any documents required to 

be delivered pursuant to Section 6.9 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 Senior Subordinated Securities 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 6.14 Communications to Holders. Any Holder shall have the right, 

upon five (5) business days prior written notice to the Bank or its duly appointed agent to obtain 

a complete list of Holders. In addition, any Holder shall have the right to request that the Bank 

or its duly appointed agent send a notice on behalf of such Holder to all other Holders at the 
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addresses set forth on the Senior Subordinated Securities Register or, to the extent the Bank has 

entered into a depositary arrangement, by means of any procedures applicable to such depositary 

arrangement. 

ARTICLE VII 

SUBORDINATION OF THE SENIOR SUBORDINATED SECURITIES 

Section 7.1 Agreement to Subordinate. (a) The Bank covenants and agrees, 

and each Holder of Senior Subordinated Securities issued hereunder likewise covenants and 

agrees, that the Senior Subordinated Securities shall be issued subject to the provisions of this 

Article VII; and each Holder of a Senior Subordinated Security, whether upon original issue or 

upon transfer or assignment thereof, accepts and agrees to be bound by such provisions. 

(b) The payment by the Bank of the principal of and interest on all Senior 

Subordinated Securities issued hereunder shall, to the extent and in the manner hereinafter set 

forth, be subordinated and subject in right of payment to the prior payment in full of all amounts 

then due and payable in respect of Senior Indebtedness, whether outstanding at the date of this 

Agreement or thereafter incurred. 

(c) No provision of this Article VII shall prevent the occurrence of any Event 

of Default (or any event which, after notice or the lapse of time or both would become, an Event 

of Default) with respect to the Senior Subordinated Securities hereunder. 

Section 7.2 Default on Senior Indebtedness. (a) In the event and during the 

continuation of any default by the Bank in the payment of principal, premium, interest or any 

other payment due on any Senior Indebtedness, no payment shall be made by the Bank with 

respect to the principal or interest on the Senior Subordinated Securities or any other amounts 

which may be due on the Senior Subordinated Securities pursuant to the terms hereof or thereof. 

(b) In the event of the acceleration of the maturity of the Senior Indebtedness, 

then no payment shall be made by the Bank with respect to the principal or interest on the Senior 

Subordinated Securities or any other amounts which may be due on the Senior Subordinated 

Securities pursuant to the terms hereof or thereof until the holders of all Senior Indebtedness 

outstanding at the time of such acceleration shall receive payment, in full, of all amounts due on 

or in respect of such Senior Indebtedness (including any amounts due upon acceleration). 

(c) In the event that, notwithstanding the foregoing, any payment is received 

by any Holder of a Senior Subordinated Security, when such payment is prohibited by the 

preceding paragraphs of this Section 7.2, such payment shall be held in trust for the benefit of, 

and shall be paid over or delivered by the Holder of the Senior Subordinated Securities to the 

holders of Senior Indebtedness or their respective representatives, or to the trustee or trustees 

under any indenture pursuant to which any of such Senior Indebtedness may have been issued, as 

their respective interests may appear, but only to the extent of the amounts in respect of such 

Senior Indebtedness and to the extent that the holders of the Senior Indebtedness (or their 

representative or representatives or a trustee) notify the Bank in writing within 90 days of such 
 -41- 

payment of the amounts then due and owing on such Senior Indebtedness, and only the amounts 

specified in such notice to the Bank shall be paid to the holders of such Senior Indebtedness. 

The Bank shall, within ten (10) business days of receipt of such notice, provide Investor with (i) 

a copy of such notice delivered to the Bank and (ii) a certificate signed on behalf of the Bank by 

a Senior Executive Officer certifying that the information set forth in such notice is true and 

correct and confirming that the Holder of the Senior Subordinated Securities should pay or 

deliver the amounts specified in such notice in the manner specified therein. 

Section 7.3 Liquidation; Dissolution. (a) Upon any payment by the Bank or 

distribution of assets of the Bank of any kind or character, whether in cash, property or 

securities, to creditors upon any dissolution, winding-up, liquidation or reorganization of the 

Bank, whether voluntary or involuntary or in insolvency, receivership or other proceedings, the 

holders of all Senior Indebtedness of the Bank will first be entitled to receive payment in full of 

amounts due on or in respect of such Senior Indebtedness, before any payment is made by the 

Bank on account of the principal of or interest on the Senior Subordinated Securities or any other 

amounts which may be due on the Senior Subordinated Securities pursuant to the terms hereof or 

thereof); and upon any such dissolution, winding-up, liquidation or reorganization, any payment 

by the Bank, or distribution of assets of the Bank of any kind or character, whether in cash, 

property or securities, which the Holder of the Senior Subordinated Securities would be entitled 

to receive from the Bank, except for the provisions of this Article VII, shall be paid by the Bank 

or by any receiver, liquidating trustee, agent or other person making such payment or 

distribution, or by the Holder of the Senior Subordinated Securities under this Agreement if 

received by them or it, directly to the holders of Senior Indebtedness of the Bank (pro rata to 

such holders on the basis of the respective amounts of Senior Indebtedness held by such holders, 

as calculated by the Bank) or their representative or representatives, or to the trustee or trustees 

under any indenture pursuant to which any instruments evidencing such Senior Indebtedness 

may have been issued, as their respective interests may appear, to the extent necessary to pay all 

such amounts of Senior Indebtedness in full, in money or money’s worth, after giving effect to 

any concurrent payment or distribution to or for the holders of such Senior Indebtedness, before 

any payment or distribution is made to the Holder of the Senior Subordinated Securities. 

(b) In the event that, notwithstanding the foregoing, any payment or 

distribution of assets of the Bank of any kind or character prohibited by Section 7.3(a), whether 

in cash, property or securities, shall be received by any Holder of the Senior Subordinated 

Securities, before the amounts of all Senior Indebtedness is paid in full, or provision is made for 

such payment in money in accordance with its terms, such payment or distribution shall be held 

in trust for the benefit of and shall be paid over or delivered by any Holder of a Senior 

Subordinated Security, to the holders of such Senior Indebtedness or their representative or 

representatives, or to the trustee or trustees under any indenture pursuant to which any 

instruments evidencing such Senior Indebtedness may have been issued, as their respective 

interests may appear, as calculated by the Bank, for application to the payment of all amounts of 

Senior Indebtedness remaining unpaid to the extent necessary to pay all amounts due on or in 

respect of such Senior Indebtedness in full in money in accordance with its terms, after giving 

effect to any concurrent payment or distribution to or for the benefit of the holders of such Senior 

Indebtedness. In such event, the Bank shall provide Investor with a certificate signed on behalf 
 -42- 

of the Bank by a Senior Executive Officer confirming that the Holder of the Senior Subordinated 

Securities should pay or deliver such amounts to the holders of such Senior Indebtedness. 

(c) For purposes of this Article VII, the words “cash, property or securities” 

shall not be deemed to include Capital Interests in the Bank as reorganized or readjusted, or 

securities of the Bank or any other entity provided for by a plan of reorganization or 

readjustment, the payment of which is subordinated at least to the extent provided in this 

Article VII with respect to the Senior Subordinated Securities to the payment of Senior 

Indebtedness that may at the time be outstanding, provided that (i) such Senior Indebtedness is 

assumed by the new entity, if any, resulting from any such reorganization or readjustment, and 

(ii) the rights of the holders of such Senior Indebtedness are not, without the consent of such 

holders, altered by such reorganization or readjustment. The consolidation of the Bank with, or 

the merger of the Bank into, another person or the liquidation or dissolution of the Bank 

following the sale, conveyance, transfer or lease of its property as an entirety, or substantially as 

an entirety, to another person upon the terms and conditions provided for in Section 4.2(a) of this 

Agreement shall not be deemed a dissolution, winding-up, liquidation or reorganization for the 

purposes of this Section 7.3 if such other person shall, as a part of such consolidation, merger, 

sale, conveyance, transfer or lease, comply with the conditions stated in Section 4.2(a) of this 

Agreement. 

Section 7.4 Subrogation. (a) Subject to the payment in full of all of Senior 

Indebtedness, the rights of the Holders of the Senior Subordinated Securities shall be subrogated 

to the rights of the holders of such Senior Indebtedness to receive payments or distributions of 

cash, property or securities of the Bank, as the case may be, applicable to such Senior 

Indebtedness until the principal of and interest on the Senior Subordinated Securities shall be 

paid in full; and, for the purposes of such subrogation, no payments or distributions to the 

holders of such Senior Indebtedness of any cash, property or securities to which the Holders of 

the Senior Subordinated Securities would be entitled except for the provisions of this Article VII, 

and no payment pursuant to the provisions of this Article VII to or for the benefit of the holders 

of such Senior Indebtedness by the Holders of the Senior Subordinated Securities shall, as 

between the Bank, its creditors other than holders of Senior Indebtedness of the Bank, and the 

Holders of the Senior Subordinated Securities, be deemed to be a payment by the Bank to or on 

account of such Senior Indebtedness. It is understood that the provisions of this Article VII are 

intended solely for the purposes of defining the relative rights of the Holders of the Senior 

Subordinated Securities, on the one hand, and the holders of such Senior Indebtedness on the 

other hand. 

(b) Nothing contained in this Article VII or elsewhere in this Agreement or in 

the Senior Subordinated Securities is intended to or shall impair, as between the Bank, its 

creditors other than the holders of Senior Indebtedness of the Bank, and the Holders of the 

Senior Subordinated Securities, the obligation of the Bank, which is absolute and unconditional, 

to pay to the Holders of the Senior Subordinated Securities the principal of and interest on the 

Senior Subordinated Securities as and when the same shall become due and payable in 

accordance with their terms, or is intended to or shall affect the relative rights of the Holders of 

the Senior Subordinated Securities and creditors of the Bank, as the case may be, other than the 
 -43- 

holders of Senior Indebtedness of the Bank, as the case may be, nor shall anything herein or 

therein prevent the Holder of any Senior Subordinated Securities from exercising all remedies 

otherwise permitted by applicable law upon default under this Agreement, subject to the rights, if 

any, under this Article VII of the holders of such Senior Indebtedness in respect of cash, property 

or securities of the Bank, as the case may be, received upon the exercise of any such remedy. 

Section 7.5 Notice by the Bank. (a) The Bank shall give prompt written 

notice to the Holders of the Senior Subordinated Securities of any fact known to the Bank that 

would prohibit the making of any payment of monies in respect of the Senior Subordinated 

Securities pursuant to the provisions of this Article VII. 

(b) Upon any payment or distribution of assets of the Bank referred to in this 

Article VII, the Holders of the Senior Subordinated Securities shall be entitled to conclusively 

rely upon any order or decree entered by any court of competent jurisdiction in which such 

insolvency, receivership, liquidation, reorganization, dissolution, winding-up or similar case or 

proceeding is pending, or a certificate of the liquidating trustee, custodian, receiver, assignee for 

the benefit of creditors, agent or other person making such payment or distribution, delivered to 

the Holders of the Senior Subordinated Securities, for the purpose of ascertaining the persons 

entitled to participate in such payment or distribution, the holders of Senior Indebtedness and 

other indebtedness of the Bank, the amount thereof or payable thereon, the amount or amounts 

paid or distributed thereon and all other facts pertinent thereto or to this Article VII. 

Section 7.6 Subordination May Not Be Impaired. (a) No right of any present 

or future holder of any Senior Indebtedness of the Bank to enforce subordination as herein 

provided shall at any time in any way be prejudiced or impaired by any act or failure to act on 

the part of the Bank, as the case may be, or by any act or failure to act, in good faith, by any such 

holder, or by any noncompliance by the Bank, as the case may be, with the terms, provisions and 

covenants of this Agreement, regardless of any knowledge thereof that any such holder may have 

or otherwise be charged with. 

(b) Without in any way limiting the generality of the foregoing paragraph, the 

holders of Senior Indebtedness of the Bank may, at any time and from time to time, without the 

consent of or notice to the Holders of the Senior Subordinated Securities, without incurring 

responsibility to the Holders of the Senior Subordinated Securities and without impairing or 

releasing the subordination provided in this Article VII or the obligations hereunder of the 

Holders of the Senior Subordinated Securities to the holders of such Senior Indebtedness, do any 

one or more of the following: (i) change the manner, place or terms of payment or extend the 

time of payment of, or renew or alter, such Senior Indebtedness, or otherwise amend or 

supplement in any manner such Senior Indebtedness or any instrument evidencing the same or 

any agreement under which such Senior Indebtedness is outstanding; (ii) sell, exchange, release 

or otherwise deal with any property pledged, mortgaged or otherwise securing such Senior 

Indebtedness; (iii) release any person liable in any manner for the collection of such Senior 

Indebtedness; and (iv) exercise or refrain from exercising any rights against the Bank, as the case 

may be, and any other person. 
 -44- 

ARTICLE VIII 

MISCELLANEOUS 

Section 8.1 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 Bank 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 8.1(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 Bank 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 Bank; or 

(b) the date on which all of the Senior Subordinated Securities have been 

redeemed in whole; or 

(c) the date on which the Investor has transferred all of the Senior 

Subordinated Securities 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 8.1, this Agreement 

shall forthwith become void and there shall be no liability on the part of either party hereto 

except that nothing herein shall relieve either party from liability for any breach of this 

Agreement. 

Section 8.2 Survival. (a) This Agreement and all representations, warranties, 

covenants and agreements made herein shall survive the Closing without limitation. 
 -45- 

(b) The covenants set forth in Article IV and Annex E and the agreements set 

forth in Articles V and VI shall, to the extent such covenants do not explicitly terminate at such 

time as the Investor no longer owns any Senior Subordinated Securities, survive the termination 

of this Agreement pursuant to Section 8.1(c) hereof without limitation until the date on which all 

of the Senior Subordinated Securities have been redeemed in whole. 

Section 8.3 Amendment. Except as otherwise provided herein, no amendment, 

modification, termination or waiver of any provision of this Agreement, the Senior Subordinated 

Securities or any of the other Transaction Documents, or consent to any departure by the Bank 

therefrom, shall be effective unless made in writing and signed by an officer or a duly authorized 

representative of the Bank, and in the case of the Senior Subordinated Securities, the Majority 

Holders; provided that for so long as the Senior Subordinated Securities 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 of an entity as a CDFI by the 

Fund; provided, further, that notwithstanding anything else in this Section 8.3, no amendment, 

modification, termination or waiver with respect to the Senior Subordinated Securities shall, 

unless in writing and signed by all Holders, do any of the following: (A) change the principal of 

or the rate of interest on any Senior Subordinated Security; (B) extend any date fixed for any 

payment of principal or interest; (C) change the definition of the terms “Holders” 

 or “Majority Holders” or the percentage of Holders which shall be required for Holders to take 

any action hereunder; (D) amend or waive this Section 8.3 or the definitions of the terms used in 

this Section 8.3 insofar as the definitions affect the substance of this Section 8.3; or (E) consent 

to the assignment, delegation or other transfer by the Bank of any of its rights and obligations 

under any Transaction Documents. Any amendment, modification, termination, waiver or 

consent effected in accordance with this Section 8.3 shall be binding upon each Holder of the 

Senior Subordinated Securities at the time outstanding, each future Holder of the Senior 

Subordinated Securities and the Bank. 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 8.4 Waiver of Conditions. The conditions to each party’s obligation to 

consummate the Purchase are for the sole benefit of such party and may be waived by such party 

in whole or in part to the extent permitted by applicable law. No waiver will be effective unless 

it is in a writing signed by a duly authorized officer of the waiving party that makes express 

reference to the provision or provisions subject to such waiver. 

Section 8.5 Governing Law; Submission to Jurisdiction, etc. This Agreement 

and any claim, controversy or dispute arising under or related to this Agreement, the relationship 

of the parties, and/or the interpretation and enforcement of the rights and duties of the parties 

shall be enforced, governed, and construed in all respects (whether in contract or in tort) in 
 -46- 

accordance with the federal law of the United States if and to the extent such law is applicable, 

and otherwise in accordance with the laws of the State of New York applicable to contracts made 

and to be performed entirely within such State. Each of the parties hereto agrees (a) to submit to 

the exclusive jurisdiction and venue of the United States District Court for the District of 

Columbia and the United States Court of Federal Claims for any and all civil actions, suits or 

proceedings arising out of or relating to this Agreement or the Purchase contemplated hereby and 

(b) that notice may be served upon (i) the Bank at the address and in the manner set forth for 

notices to the Bank in Section 8.6 and (ii) the Investor at the address and in the manner set forth 

for notices to the Bank in Section 8.6, but otherwise in accordance with federal law. TO THE 

EXTENT PERMITTED BY APPLICABLE LAW, EACH OF THE PARTIES HERETO 

HEREBY UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY CIVIL LEGAL 

ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR THE PURCHASE 

CONTEMPLATED HEREBY. 

Section 8.6 Notices. Any notice, request, instruction or other document to be 

given hereunder by any party to the other will be in writing and will be deemed to have been 

duly given (a) on the date of delivery if delivered personally, or by facsimile, upon confirmation 

of receipt, or (b) on the second business day following the date of dispatch if delivered by a 

recognized next day courier service. All notices to the Bank shall be delivered as set forth in 

Schedule A, or pursuant to such other instruction as may be designated in writing by the Bank to 

the Investor. All notices to the Holders of Senior Subordinated Securities shall be delivered in 

writing, mailed first-class postage prepaid, to each Holder of a Senior Subordinated Security at 

the address of such Holder as it appears in the Senior Subordinated Securities Register. All 

notices to the Investor shall be delivered as set forth below, or pursuant to such other instructions 

as may be designated in writing by the Investor to the Bank. 

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 8.7 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 Bank’s Interest Holders or other equity 
 -47- 

securityholders (a “Business Combination”) where such party is not the surviving entity, or a sale 

of substantially all of its assets, to the entity which is the survivor of such Business Combination 

or the purchaser in such sale, (b) an assignment of certain rights as provided in Sections 4.1(c) or 

4.1(k) 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 Bank’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 8.8 Severability. If any provision of this Agreement, the Senior 

Subordinated Securities, 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 8.9 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 Bank, the Investor, any Holder of the Senior Subordinated 

Securities and any Indemnitee) any benefit, right or remedies. 

Section 8.10 Tax Treatment of Senior Subordinated Securities. The Investor and 

the Bank agree that, for all tax purposes, the Senior Subordinated Securities will be treated as 

debt instruments and not as stock or equity of the Bank. 

Section 8.11 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. 

* * * 
 A-1 

ANNEX A 

FORM OF SENIOR SUBORDINATED SECURITIES

[SEE ATTACHED]
 B-1 

ANNEX B 

FORM OF OFFICER’S CERTIFICATE 

OFFICER’S CERTIFICATE 

OF 

[BANK] 

In connection with that certain letter agreement, dated [____________], 2010 

(the “Agreement”) by and between [BANK] (the “Bank”) and the United States Department of 

the Treasury which incorporates that certain Securities Purchase Agreement –Standard Terms 

referred to therein (the “Standard Terms”), the undersigned does hereby certify as follows: 

1. I am a duly elected/appointed [____________] of the Bank. 

2. The representations and warranties of the Bank set forth in Section 3.1 of 

the Standard Terms are true and correct in all respects as though as of the date hereof (other than 

representations and warranties that by their terms speak as of another date, which representations 

and warranties shall be true and correct in all respects as of such other date) and the Bank has 

performed in all material respects all obligations required to be performed by it under the 

Agreement. 

3. The Bank has effected such changes to its Benefit Plans with respect to its 

Senior Executive Officers and any other employee of the Bank or its Affiliates subject to Section 

111 of EESA, as implemented by any Compensation Regulations (and to the extent necessary for 

such changes to be legally enforceable, each of its Senior Executive Officers and other 

employees has duly consented in writing to such changes), as may be necessary, during the 

Relevant Period, in order to comply with Section 111 of EESA or the Compensation 

Regulations. 

The foregoing certifications are made and delivered as of [_________] pursuant 

to Section 2.3 of the Standard Terms. 

Capitalized terms used and not otherwise defined herein shall have the meanings 

assigned to them in the Standard Terms. 

[SIGNATURE PAGE FOLLOWS] 
 B-2 

IN WITNESS WHEREOF, this Officer’s Certificate has been duly executed and 

delivered as of the [__] day of [__________], 20[__]. 

[BANK]

By: _________________________ 

Name: 

Title:
 C-1 

ANNEX C 

FORM OF WAIVER

In consideration for the benefits I will receive as a result of the participation of 

[NAME OF BANK] (together with its subsidiaries and affiliates, the “Bank”) in the United 

States Department of the Treasury’s (“Treasury”) Community Development Capital Initiative 

and/or any other economic stabilization program implemented by Treasury under the Emergency 

Economic Stabilization Act of 2008 (as amended, supplemented or otherwise modified, “EESA”) 

(any such initiative or program, including the Community Development Capital Initiative, a 

“Program”), I hereby voluntarily waive any claim against the United States (and each of its 

departments and agencies) or the Bank or any of its directors, officers, employees and agents for 

any changes to my compensation or benefits that are required to comply with the executive 

compensation and corporate governance requirements of Section 111 of EESA, as implemented 

by any guidance or regulation thereunder, including the rules set forth in 31 C.F.R. Part 30, or 

any other guidance or regulations under EESA, and the applicable requirements of the Securities 

Purchase Agreement by and between the Bank and Treasury dated as of [ ], 2010, as 

amended (such requirements, the “Limitations”). 

I acknowledge that the Limitations may require modification or termination of the 

employment, compensation, bonus, incentive, severance, retention and other benefit plans, 

arrangements, policies and agreements (including so-called “golden parachute” agreements), 

whether or not in writing, that I may have with the Bank or in which I may participate as they 

relate to the period the United States holds any equity or debt securities of the Bank acquired 

through a Program or for any other period applicable under such Program or Limitations, as the 

case may be, and I hereby consent to all such modifications. 

This waiver includes all claims I may have under the laws of the United States or 

any other jurisdiction (whether or not in existence as of the date hereof) related to the 

requirements imposed by the Limitations, including without limitation a claim for any 

compensation or other payments or benefits I would otherwise receive, any challenge to the 

process by which the Limitations are or were adopted and any tort or constitutional claim about 

the effect of the Limitations on my employment relationship and I hereby agree that I will not at 

any time initiate, or cause or permit to be initiated on my behalf, any such claim against the 

United States (or any of its departments or agencies) or the Bank or any of its directors, officers, 

employees or agents in or before any local, state, federal or other agency, court or body. 

I agree that, in the event and to the extent that the Compensation Committee of 

the Board of Directors of the Bank or similar governing body (the “Committee”) reasonably 

determines that any compensatory payment or benefit provided to me, including any bonus or 

incentive compensation based on materially inaccurate financial statements or performance 

criteria, would cause the Bank to fail to be in compliance with the Limitations (such payment or 

benefit, an “Excess Payment”), upon notification from the Bank, I shall repay such Excess 

Payment to the Bank within 15 business days. In addition, I agree that the Bank shall have the 
 C-2 

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 Bank to be in compliance with Section 111 of EESA and/or the Limitations shall 

be a final and conclusive determination of the Committee which shall be binding upon me. I 

further understand that the Bank is relying on this letter from me in connection with its 

participation in a Program. 

In witness whereof, I execute this waiver on my own behalf, thereby 

communicating my acceptance and acknowledgement to the provisions herein. 

Respectfully, 

By: ____________________________________ 

Name: 

Title: 

Date: 
 D-1 

ANNEX D 

FORM OF OPINION 

(a) The Bank has been duly formed and is validly existing as an organization 

mutual in nature of the type described in Schedule A and in good standing under the laws of the 

jurisdiction of its organization. The Bank 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 Bank 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 Senior Subordinated Securities have been duly and validly authorized, 

and, when executed and delivered pursuant to the Agreement, the Senior Subordinated Securities 

will be the legal, valid and binding obligations of the Bank, enforceable in accordance with their 

terms, except as the same may be limited by applicable receivership, 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, and will rank Senior to obligations to holders of Capital Interests arising as a 

result of their status as holders of such Capital Interests, but subordinate to deposit liabilities of 

the Bank and to the Bank’s other debt obligations to its general and secured creditors, unless 

such debt obligations are explicitly made pari passu or subordinated to the Senior Subordinated 

Securities, in accordance with applicable regulations of the Appropriate Federal Banking 

Agency. 

(d) The Bank has the power and authority to execute and deliver the 

Agreement and to carry out its obligations thereunder (which includes the issuance of the Senior 

Subordinated Securities). 

(e) The execution, delivery and performance by the Bank of the Agreement 

and the consummation of the transactions contemplated thereby have been duly authorized by all 

necessary entity action on the part of the Bank and its Interest Holders, and no further approval 

or authorization is required on the part of the Bank, including, without limitation, by any rule or 

requirement of any national stock exchange. 

(f) The Agreement is a legal, valid and binding obligation of the Bank 

enforceable against the Bank in accordance with its terms, except as the same may be limited by 

applicable receivership, 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 Bank of this Agreement and the 

performance by the Bank of its obligations thereunder (i) do not require any approval by any 

Governmental Entity to be obtained on the part of the Bank, except those that have been 
 D-2 

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 Bank or any Bank 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, 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 Bank and, pursuant to any applicable laws, is issued by any Governmental Entity having 

jurisdiction over the Bank. 

(h) Other than the filing of the amendment to the Charter 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 Bank in connection with the consummation by the Bank of the 

Purchase. 

(i) The Bank is not nor, after giving effect to the issuance of the Senior 

Subordinated Securities 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) The Bank (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. 
 E-1 

ANNEX E 

REGISTRATION RIGHTS

Section 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 Bank of its intent to register its 

Registrable Securities either pursuant to Section 1.2(b) or Section 1.2(d) of this Annex E prior to 

the date of such Holder’s forfeiture. 

(d) “Register”, “registered”, and “registration” shall refer to a registration 

effected by preparing and (A) filing a registration statement or amendment thereto in compliance 

with the Securities Act and applicable rules and regulations thereunder, and the declaration or 

ordering of effectiveness of such registration statement or amendment thereto or (B) filing a 

prospectus and/or prospectus supplement in respect of an appropriate effective registration 

statement on Form S-3. 

(e) “Registrable Securities” means (A) all Senior Subordinated Securities, and 

(B) any 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 in connection 

with a combination, 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 Bank 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 Bank, blue sky fees and expenses, expenses incurred in 

connection with any “road show”, the reasonable fees and disbursements of Holders’ Counsel, 
 E-2 

and expenses of the Bank’s independent accountants in connection with any regular or special 

reviews or audits incident to or required by any such registration, but shall not include Selling 

Expenses. 

(g) “Rule 144”, “Rule 144A”, “Rule 159A”, “Rule 405” and “Rule 415” mean, 

in each case, such rule promulgated under the Securities Act (or any successor provision), as the 

same shall be amended from time to time. 

(h) “Selling Expenses” mean all discounts, selling commissions and security 

transfer taxes applicable to the sale of Registrable Securities and fees and disbursements of 

counsel for any Holder (other than the fees and disbursements of Holders’ Counsel included in 

Registration Expenses). 

(i) “Special Registration” means the registration of (A) equity securities 

and/or options or other rights in respect thereof solely registered on Form S-4 or Form S-8 (or 

successor form) or (B) shares of equity securities and/or options or other rights in respect thereof 

to be offered to directors, members of management, employees, consultants, customers, lenders 

or vendors of the Bank or Bank Subsidiaries or in connection with dividend reinvestment plans. 

Section 1.2 Registration. (a) The Bank covenants and agrees that as promptly 

as practicable after the date that the Bank 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 

Bank shall (A) prepare and file with the SEC a Shelf Registration Statement covering all 

Registrable Securities (or otherwise designate an existing 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 

Bank 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), and (B) prepare an 

Indenture covering the Registrable Securities meeting the requirements of the Indenture Act and 

use its reasonable best efforts to cause such Indenture to be qualified under the Indenture Act. 

Notwithstanding the foregoing, if the Bank is not eligible to file a registration statement on Form 

S-3, then the Bank 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 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 Bank and the Bank 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 Bank 

shall not be required to facilitate an underwritten offering of Registrable Securities unless (i) the 

expected gross proceeds from such offering exceed $200,000 or (ii) such underwritten offering 
 E-3 

includes all of the outstanding Registrable Securities held by such Holder. The lead underwriters 

in any such distribution shall be selected by the Holders of a majority of the Registrable 

Securities to be distributed. 

(c) The Bank 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 Bank 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 Bank 

or its securityholders for such registration or underwritten offering to be effected at such time, in 

which event the Bank 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 Bank (1) only if the 

Bank has generally exercised (or is concurrently exercising) similar black-out rights against 

holders of similar securities that have registration rights and (2) not more than three times in any 

12-month period and not more than 90 days in the aggregate in any 12-month period. 

(d) If during any period when an effective Shelf Registration Statement is not 

available, the Bank 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 Bank will (A) 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 Bank has 

received written requests for inclusion therein within ten business days after the date of the 

Bank’s notice and (B) if requested by the Investor or a Holder, prepare an Indenture meeting the 

requirements of the Indenture Act and use its reasonable best efforts to cause such Indenture to 

be qualified under the Indenture Act (such registration and qualification, 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 Bank 

and the managing underwriter, if any, on or before the fifth (5th) business day prior to the 

planned effective date of such Piggyback Registration. The Bank may terminate or withdraw 

any registration or qualification under this Section 1.2(d) of this Annex E prior to the 

effectiveness of such registration or qualification, whether or not Investor or any other Holders 

have elected to include Registrable Securities in such registration or qualification. 

(e) If the registration referred to in Section 1.2(d) of this Annex E is proposed 

to be underwritten, the Bank 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 

Bank 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 
 E-4 

underwriting by the Bank; provided that the Investor (as opposed to other Holders) shall not be 

required to indemnify any person in connection with any registration. If any participating person 

disapproves of the terms of the underwriting, such person may elect to withdraw therefrom by 

written notice to the Bank, the managing underwriters and the Investor (if the Investor is 

participating in the underwriting). 

(f) If either (x) the Bank 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 Bank, and in 

either case the managing underwriters advise the Bank 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 security offering price), the Bank 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 

security 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 Bank 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 owned by each such person and (C) lastly, any other securities of the Bank that 

have been requested to be so included, subject to the terms of this Agreement; provided, 

however, that if the Bank 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. 

Section 1.3 Expenses of Registration. All Registration Expenses incurred in 

connection with any registration, qualification or compliance hereunder shall be borne by the 

Bank. 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. 

Section 1.4 Obligations of the Bank. 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 Bank shall, as expeditiously as 

reasonably practicable: 

(a) Prepare and file with the SEC: (A) a prospectus supplement or posteffective 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; and (B) an Indenture for qualification under the 

Indenture Act. 
 E-5 

(b) Prepare and file with the SEC such amendments and supplements: (A) to 

the applicable registration statement and the prospectus or prospectus supplement used in 

connection with such registration statement as may be necessary to comply with the provisions 

of the Securities Act; and (B) to the Indenture, with respect to the disposition of all securities 

covered by such registration statement and Indenture. 

(c) Furnish to the Holders and any underwriters such number of copies of the 

applicable registration statement and each such amendment and supplement thereto (including in 

each case all exhibits) and of a prospectus, including a preliminary prospectus, in conformity 

with the requirements of the Securities Act, the Indenture and such other documents as they may 

reasonably request in order to facilitate the disposition of Registrable Securities owned or to be 

distributed by them. 

(d) Use its reasonable best efforts to register and qualify the securities covered 

by such registration statement under such other securities or Blue Sky laws of such jurisdictions 

as shall be reasonably requested by the Holders or any managing underwriter(s), to keep such 

registration or qualification in effect for so long as such registration statement remains in effect, 

and to take any other action which may be reasonably necessary to enable such seller to 

consummate the disposition in such jurisdictions of the securities owned by such Holder; 

provided that the Bank shall not be required in connection therewith or as a condition thereto to 

qualify to do business or to file a general consent to service of process in any such states or 

jurisdictions. 

(e) Notify each Holder of Registrable Securities at any time when a 

prospectus relating thereto is required to be delivered under the Securities Act of the happening 

of any event as a result of which the applicable prospectus, as then in effect, includes an untrue 

statement of a material fact or omits to state a material fact required to be stated therein or 

necessary to make the statements therein not misleading in light of the circumstances then 

existing. 

(f) Give written notice to the Holders: 

(A) when any registration statement or Indenture filed pursuant to 

Section 4.1(k) 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; 

(B) of any request by the SEC for amendments or supplements to any 

registration statement or the prospectus included therein, or the Indenture or for 

additional information; 

(C) 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; 
 E-6 

(D) of the receipt by the Bank 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; 

(E) of the happening of any event that requires the Bank to make 

changes in any effective registration statement or the prospectus related to the 

registration statement or to the Indenture 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 

(F) if at any time the representations and warranties of the Bank 

contained in any underwriting agreement contemplated by Section 1.4(j) of this 

Annex E cease to be true and correct. 

(g) Use its reasonable best efforts to prevent the issuance or obtain the 

withdrawal of any order suspending the effectiveness of any registration statement referred to in 

Section 1.4(f)(C) of this Annex E at the earliest practicable time. 

(h) Upon the occurrence of any event contemplated by Section 1.4(e) or 

1.4(f)(E) of this Annex E, promptly prepare a post-effective amendment to such registration 

statement or a supplement to the related prospectus or the Indenture or file any other required 

document so that, as thereafter delivered to the Holders and any underwriters, the prospectus or 

the Indenture 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 Bank notifies the Holders in accordance with Section 1.4(f)(E) 

of this Annex E to suspend the use of the prospectus until the requisite changes to the prospectus 

or the Indenture 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 Bank all copies of such 

prospectus (at the Bank’s expense) other than permanent file copies then in such Holders’ or 

underwriters’ possession. The total number of days that any such suspension may be in effect in 

any 12-month period shall not exceed 90 days. 

(i) Use reasonable best efforts to procure the cooperation of the Bank’s 

transfer agent in settling any offering or sale of Registrable Securities, including with respect to 

the transfer of physical certificates into book-entry form in accordance with any procedures 

reasonably requested by the Holders or any managing underwriter(s). 

(j) If an underwritten offering is requested pursuant to Section 1.2(b) of this 

Annex E, enter into an underwriting agreement in customary form, scope and substance and take 

all such other actions reasonably requested by the Holders of a majority of the Registrable 

Securities being sold in connection therewith or by the managing underwriter(s), if any, to 

expedite or facilitate the underwritten disposition of such Registrable Securities, and in 

connection therewith in any underwritten offering (including making members of management 

and executives of the Bank available to participate in “road shows”, similar sales events and 

other marketing activities), (A) make such representations and warranties to the Holders that are 
 E-7 

selling securityholders and the managing underwriter(s), if any, with respect to the business of 

the Bank 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 Bank, 

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 Bank (and, if 

necessary, any other independent certified public accountants of any business acquired by the 

Bank 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 Bank. 

(k) Make available for inspection by a representative of selling Holders, 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 governance documents and properties of the Bank, and 

cause the officers, directors and employees of the Bank to supply all information in each case 

reasonably requested (and of the type customarily provided in connection with due diligence 

conducted in connection with a registered public offering of securities) by any such 

representative, managing underwriter(s), attorney or accountant in connection with such Shelf 

Registration Statement. 

(l)Use reasonable best efforts to cause all such Registrable Securities to be listed 

on each national securities exchange on which similar securities issued by the Bank are then 

listed or, if no similar securities issued by the Bank are then listed on any national securities 

exchange, use its reasonable best efforts to cause all such Registrable Securities to be listed on 

such securities exchange as the Investor may designate. 

(m) If requested by Holders of a majority of the Registrable Securities being 

registered and/or sold in connection therewith, or the managing underwriter(s), if any, promptly 

include in a prospectus supplement or amendment such information as the Holders of a majority 

of the Registrable Securities being registered and/or sold in connection therewith or managing 

underwriter(s), if any, may reasonably request in order to permit the intended method of 

distribution of such securities and make all required filings of such prospectus supplement or 

such amendment as soon as practicable after the Bank has received such request. 
 E-8 

(n) Timely provide to its security holders earning statements satisfying the 

provisions of Section 11(a) of the Securities Act and Rule 158 thereunder. 

Section 1.5 Suspension of Sales. Upon receipt of written notice from the Bank 

that a registration statement, prospectus or prospectus supplement, or Indenture contains or may 

contain an untrue statement of a material fact or omits or may omit to state a material fact 

required to be stated therein or necessary to make the statements therein not misleading or that 

circumstances exist that make inadvisable use of such registration statement, prospectus or 

prospectus supplement, or Indenture, 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 

Indenture, or until the Investor and/or such Holder is advised in writing by the Bank that the use 

of the prospectus and, if applicable, prospectus supplement or Indenture may be resumed, and, if 

so directed by the Bank, the Investor and/or such Holder shall deliver to the Bank (at the Bank’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 or Indenture 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. 

Section 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. 

Section 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 Bank. 

(b) It shall be a condition precedent to the obligations of the Bank 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 Bank 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. 

Section 1.8 Indemnification. (a) The Bank 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) or contained in any Indenture, prepared by the 

Bank or authorized by it in writing for use by such Holder (or any amendment or supplement 
 E-9 

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 Bank shall not be liable to such Indemnitee in any such case to the 

extent that any such loss, claim, damage, liability (or action or proceeding in respect thereof) or 

expense arises out of or is based upon (A) an untrue statement or omission made in such 

registration statement, including any such preliminary prospectus or final prospectus contained 

therein or any such amendments or supplements thereto or contained in any free writing 

prospectus (as such term is defined in Rule 405) or contained in any Indenture, prepared by the 

Bank 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 Bank 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 any Indenture 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 Bank. 

(b) If the indemnification provided for in Section 1.8(a) of this Annex E is 

unavailable to an Indemnitee with respect to any losses, claims, damages, actions, liabilities, 

costs or expenses referred to therein or is insufficient to hold the Indemnitee harmless as 

contemplated therein, then the Bank, 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 Bank, 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 

Bank, 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 Bank or by the Indemnitee and the 

parties’ relative intent, knowledge, access to information and opportunity to correct or prevent 

such statement or omission; the Bank 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 Bank if the Bank was not guilty of such fraudulent misrepresentation. 

Section 1.9 Assignment of Registration Rights. The rights of the Investor to 

registration of Registrable Securities pursuant to Section 1.2 of this Annex E may be assigned by 

the Investor to a transferee or assignee of Registrable Securities; provided, however, the 

transferor shall, within ten days after such transfer, furnish to the Bank written notice of the 

name and address of such transferee or assignee and the number and type of Registrable 

Securities that are being assigned. 
 E-10 

Section 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 Bank 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 subordinated debentures or equity securities 

of the Bank or any securities convertible into or exchangeable or exercisable for subordinated 

debentures or equity securities of the Bank, 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 Bank 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. 

Section 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. 

Section 1.12 Specific Performance. The parties hereto acknowledge that there 

would be no adequate remedy at law if the Bank 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 Bank under this Annex E in accordance with the terms and conditions of this 

Annex E. 

Section 1.13 No Inconsistent Agreements. The Bank 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 Bank 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 this Annex E) or that may otherwise conflict 

with the provisions hereof, the Bank shall use its reasonable best efforts to amend such 

agreements to ensure they are consistent with the provisions of this Annex E. 

Section 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 
 E-11 

include any offering document approved by the Bank and used in connection with such 

distribution. 
 F-1 

ANNEX F 

OFFICER’S CERTIFICATE 

OF 

[BANK] 

In connection with that certain letter agreement, dated [____________], 2010 

(the “Agreement”) by and between [BANK] (the “Bank”) and the United States Department of 

the Treasury (“Investor”) which incorporates that certain Securities Purchase Agreement –

Standard Terms referred to therein (the “Standard Terms”), the undersigned does hereby certify 

as follows: 

1. I am a duly elected/appointed [____________] of the Bank. 

2. The Bank (as defined in the Standard Terms) (A) is certified by the 

Community Development Financial Institution Fund (the “Fund”) of the United States 

Department of the Treasury as a regulated community development financial institution (a 

“CDFI”); (B) together with its Affiliates collectively meets the eligibility requirements of 12 

C.F.R. 1805.200(b); (C) has a primary mission of promoting community development, as may be 

determined by Investor from time to time, based on criteria set forth in 12 C.F.R. 1805.201(b)(1); 

(D) provides Financial Products, Development Services, and/or other similar financing as a 

predominant business activity in arm’s-length transactions; (E) serves a Target Market by 

serving one or more Investment Areas and/or Targeted Populations in the manner set forth in 12 

C.F.R. 1805.201(b)(3); (F) provides Development Services in conjunction with its Financial 

Products, directly, through an Affiliate or through a contract with a third-party provider; (G) 

maintains accountability to residents of the applicable Investment Area(s) or Targeted 

Population(s) through representation on its governing Board of Directors or otherwise; and (H) 

remains a non-governmental entity which is not an agency or instrumentality of the United States 

of America, or any State or political subdivision thereof, as described in 12 C.F.R. 

1805.201(b)(6) and within the meaning of any supplemental regulations or interpretations of 12 

C.F.R. 1805.201(b)(6) or such supplemental regulations published by the Fund. As used herein, 

the terms “Affiliates”; “Financial Products”; “Development Services”; “Target Market”; 

“Investment Areas”; and “Targeted Populations” have the meanings ascribed to such terms in 12 

C.F.R. 1805.104. 

3. The information set forth in the CDFI Certification Application delivered 

to the Investor pursuant to Section 2.3(l) of the Standard Terms (the “CDFI Application”), as 

modified by any updates to the CDFI Application provided on [Insert Date(s)] by the Bank 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. 
 F-2 

4. The contracts and material agreements entered into by the Bank 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 Bank 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 the Bank 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 the Bank 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. The Bank 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. The Bank 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: 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: 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] 
 F-3 

IN WITNESS WHEREOF, this Officer’s Certificate has been duly executed and 

delivered as of the [__] day of [__________], 20[__]. 

[BANK] 

By: ____________________________________ 

Name: 

Title: 
Exh. A-1 

EXHIBIT A 

NEW CONTRACTS AND MATERIAL AGREEMENTS 
Exh. B-1 

EXHIBIT B 

BOARD OF DIRECTORS 

NAME ADDRESS NARRATIVE1

 

 

1

 To the extent (x) any of the individuals was not a member of the board of directors of the Bank 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 the Bank 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.