ex10293010.htm


    Exhibit
10.2

    
 

    
      (CDFI
Bank/Thrifts

      Senior
Preferred Stock)

    

     

    


     

    UNITED
STATES DEPARTMENT OF THE TREASURY

    1500
PENNSYLVANIA AVENUE, NW

    WASHINGTON,
D.C. 20220

     

    Dear
Ladies and Gentlemen:

     

    The
company set forth on the signature page hereto (the “Company”) intends to issue in
a private placement the number of shares of a series of its preferred stock set
forth on Schedule
A hereto (the “Preferred Shares”) and the
United States Department of the Treasury (the “Investor”) intends to
purchase from the Company the Preferred Shares.

     

    The
purpose of this letter agreement is to confirm the terms and conditions of the
purchase by the Investor of the Preferred Shares.  Except to the
extent supplemented or superseded by the terms set forth herein or in the
Schedules hereto, the provisions contained in the Securities Purchase Agreement
– Standard Terms attached hereto as Exhibit A (the “Securities Purchase
Agreement”) are incorporated by reference herein.  Terms that
are defined in the Securities Purchase Agreement are used in this letter
agreement as so defined.  In the event of any inconsistency between
this letter agreement and the Securities Purchase Agreement, the terms of this
letter agreement shall govern.

     

    Each of
the Company and the Investor hereby confirms its agreement with the other party
with respect to the issuance by the Company of the Preferred Shares and the
purchase by the Investor of the Preferred Shares pursuant to this letter
agreement and the Securities Purchase Agreement on the terms specified on Schedule A
hereto.

     

    This
letter agreement (including the Schedules hereto), the Securities Purchase
Agreement (including the Annexes thereto) and the Disclosure
Schedules (as defined in the Securities Purchase Agreement) constitute the
entire agreement, and supersede all other prior agreements, understandings,
representations and warranties, both written and oral, between the parties, with
respect to the subject matter hereof. This letter agreement constitutes the
“Letter Agreement” referred to in the Securities Purchase
Agreement.

     

    This
letter agreement may be executed in any number of separate counterparts, each
such counterpart being deemed to be an original instrument, and all such
counterparts will together constitute the same agreement.  Executed
signature pages to this letter agreement may be delivered by facsimile and such
facsimiles will be deemed as sufficient as if actual signature pages had been
delivered.

     

    * *
*


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

     

    
    

     

    
      	 	
              UNITED
      STATES DEPARTMENT OF THE TREASURY

            
	 	 
	 	 
	 	 
	 	
              By: 
      /s/David N.
      Miller                                               
      

            
	 	
                    
      Name: David N. Miller

            
	 	
                    
      Title: Chief Investment Officer

            
	 	 
	 	 
	 	
              COMPANY:
      Security Federal Corporation

            
	 	 
	 	 
	 	 
	 	
              By: 
      /s/Timothy W.
      Simmons                                    
      

            
	 	
                    
      Name: Timothy W. Simmons

            
	 	
                    
      Title:  President and Chief Executive Officer

            
	 	 
	Date: September 29,
      2010	 


    

     

     


    
      
        
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    EXHIBIT
A

     

    SECURITIES PURCHASE
AGREEMENT


    
      
        
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      EXHIBIT
A

      (CDFI
Bank/Thrifts

      Senior
Preferred Stock)

      
        	 


      

       

    

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    SECURITIES
PURCHASE AGREEMENT

     

     

    STANDARD
TERMS

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    
      	 


    

    



    
      
        
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    TABLE
OF CONTENTS

     

    Page

     

    ARTICLE
I

     

    
    

     

    
      	1.1 	Definitions 	2 
	1.2 	Interpretation 	4 


    

     

    ARTICLE
II

     

    
      PURCHASE;
CLOSING

    

     

    
      	2.1	Purchase	4 
	2.2 	Closing 	4
	2.3 	Closing
      Conditions 	5 


    

     

    ARTICLE
III

     

    REPRESENTATIONS
AND WARRANTIES

     

    
      	
              3.1

            	Representations and
      Warranties of the Company	7 


    

     

    ARTICLE
IV

     

    COVENANTS

     

    
      	4.1	Affirmative
      Covenants	16 
	4.2 	Negative
      Covenants 	22 


    

     

    ARTICLE
V

     

    ADDITIONAL
AGREEMENTS

     

    
      	5.1	Purchase for
      Investment	24 
	5.2 	Legends 	24 
	5.3 	Transfer of
      Preferred Shares 	25 
	5.4 	Rule 144; Rule 144A;
      4(11⁄2) Transactions 	26 
	5.5 	Depositary
      Shares 	27 
	5.6 	Expenses and Further
      Assurances 	27 


    

     

     

    
      
        
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    ARTICLE
VI

     

    MISCELLANEOUS

     

    
      	6.1	Termination	28 
	6.2 	
              Survival 

            	29 
	6.3 	Amendment 	29 
	6.4 	Waiver of
      Conditions 	29 
	6.5 	Governing Law;
      Submission to Jurisdiction, etc 	29 
	6.6 	Notices 	30 
	6.7 	Assignment 	30 
	6.8 	Severability 	30 
	6.9 	No Third Party
      Beneficiaries 	31 
	6.10 	Specific
      Performance 	31 


    

     


    
      
        
        

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    LIST OF
ANNEXES

     

    ANNEX
A:                      FORM
OF OFFICER’S CERTIFICATE

    ANNEX
B:                      FORM
OF CERTIFICATE OF DESIGNATIONS FOR PREFERRED STOCK

    ANNEX
C:                      FORM
OF WAIVER

    ANNEX
D:                      FORM
OF OPINION

    ANNEX
E:                      REGISTRATION
RIGHTS

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

    



    
      
        
                          

        

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    INDEX
OF DEFINED TERMS

    
       

      
        	Term	
                 Location
      of  
      

                  Definition

                

              
	Affiliate 	
                1.1

              
	
                Agreement

              	Recitals 
	Appropriate Federal
      Banking Agency 	
                1.1

              
	Bank Holding
      Company 	1.1 
	Bankruptcy
      Exceptions 	
                3.1(e)

              
	Benefit
      Plans 	
                2.3(f)

              
	Board of
      Directors 	
                3.1(f)

              
	Business
      Combination 	6.7 
	business
      day 	1.2 
	Capitalization
      Date 	
                3.1(b)

              
	CDCI 	
                Recitals

              
	CDFI 	
                3.1(d)(ii)

              
	CDFI
      Application 	2.3(m) 
	CDFI Application
      Update 	
                2.3(m)

              
	Certificate of
      Designations 	
                2.3(d)

              
	Certified
      Entity 	1.1 
	Charter 	
                2.3(d)

              
	Closing 	2.2(a) 
	Closing
      Date 	
                2.2(a)

              
	Code 	
                3.1(n)

              
	Common
      Stock 	
                3.1(b)

              
	Company 	
                Recitals

              
	Company Financial
      Statements 	
                2.3
      (l)

              
	Company Material
      Adverse Effect 	1.1 
	Company
      Reports 	
                3.1(i)(i)

              
	Company Subsidiary;
      Company Subsidiaries 	
                3.1(e)(ii)

              
	Compensation
      Regulations 	
                2.3(f)

              
	control; controlled
      by; under common control with 	1.1 
	Controlled
      Group 	
                3.1(n)

              
	CPP 	
                3.1(x)

              
	CPP/CDCI
      Securities 	
                3.1(x)

              
	Disclosure
      Schedule	1.1 
	Disclosure
      Update 	
                2.3(k)

              
	EESA 	
                2.3(f)

              
	ERISA 	
                3.1(n)

              
	Exchange
      Act 	
                5.3

              
	Federal
      Reserve 	1.1 
	Fund 	
                3.1(d)(ii)

              
	GAAP 	1.1 
	Governmental
      Entities 	
                2.3(a)

              
	Holders 	
                5.4(a)

              
	Indemnitee 	
                5.4(b)

              


      

       

    

    
    

    
    

    
    

    
    

    
    

    
    

    
    

    
    

    
    

    
    

    
    

    
    

     

    
      
        
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      	Information	
              
                4.1(c)(iii)

              

            
	Investor 	
              Recitals

            
	Junior
      Stock 	1.1 
	knowledge of the
      Company; Company’s knowledge 	1.1 
	Letter
      Agreement 	Recitals 
	MHA 	4.1(i) 
	officers 	1.1 
	Parity
      Stock 	1.1 
	Plan 	
              3.1(n)

            
	Preferred
      Shares 	
              Recitals

            
	Preferred
      Stock 	
              Recitals

            
	Previously
      Disclosed 	1.1 
	Private
      Capital 	2.3(n) 
	Proprietary
      Rights 	
              3.1(u)

            
	Purchase 	
              Recitals

            
	Purchase
      Price 	2.1 
	Regulatory
      Agreement 	3.1(s) 
	Relevant
      Period 	
              2.3(f)

            
	Savings and Loan
      Holding Company 	1.1 
	Schedules 	
              Recitals

            
	SEC 	
              3.1(k)

            
	Section 4.1(e)
      Employee 	
              4.1(e)(ii)

            
	Securities
      Act 	
              3.1(a)

            
	Senior Executive
      Officers 	
              1.1

            
	Share Dilution
      Amount 	1.1 
	Signing
      Date 	1.1 
	subsidiary 	1.1 
	Tax;
      Taxes 	1.1 
	Transfer	
              5.3

            


    

    
    

    
    

     

    
    

    
    

    
    

    
    

    
    

    
    

    
    

    
    

    
    

    
    

    
    

    
    

    
    

    
    

    
    

    
    

    
    

    
    

    
    

    
    

    
    

    
    

    
    

    
    

    
    

    
       


        
          
            
            

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    SECURITIES
PURCHASE AGREEMENT – STANDARD TERMS


     

    Recitals:

     

    WHEREAS,
the United States Department of the Treasury (the “Investor”) may from time to
time agree to purchase shares of preferred stock from eligible financial
institutions which elect to participate in the Community Development Capital
Initiative (“CDCI”);

     

    WHEREAS,
an eligible financial institution electing to participate in the CDCI and issue
securities to the Investor shall enter into a letter agreement (the “Letter Agreement”) with the
Investor which incorporates this Securities Purchase Agreement – Standard Terms
(the eligible financial institution identified in the Letter Agreement, the
“Company”);

     

    WHEREAS,
the Company agrees to support the availability of credit and financial services
to underserved populations and communities in the United States to promote the
expansion of small businesses and the creation of jobs in such populations and
communities;

     

    WHEREAS,
the Company agrees to work diligently, under existing and any future programs,
to modify the terms of residential mortgages as appropriate to strengthen the
health of the U.S. housing market;

     

    WHEREAS,
the Company intends to issue in a private placement the number of shares of the
series of its Preferred Stock (“Preferred Stock”) set forth
on Schedule A
to the Letter Agreement (the “Preferred Shares”) and the
Investor intends to purchase (the “Purchase”) from the Company
the Preferred Shares; and

     

    WHEREAS,
the Purchase will be governed by this Securities Purchase Agreement – Standard
Terms and the Letter Agreement, including the schedules thereto (the “Schedules”), specifying
additional terms of the Purchase. This Securities Purchase Agreement – Standard
Terms (including the Annexes hereto) and the Letter Agreement (including the
Schedules thereto) are together referred to as this “Agreement”.  All
references in this Securities Purchase Agreement – Standard Terms to “Schedules” are to the
Schedules attached to the Letter Agreement.

     

    NOW, THEREFORE, in
consideration of the premises, and of the representations, warranties, covenants
and agreements set forth herein, the parties agree as follows:

     

    


     

    


    
      
        
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    1.1     Definitions.  Except
as otherwise specified herein or as the context may otherwise require, the
following terms have the respective meanings set forth below for all purposes of
this Agreement.

     

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

     

    “Appropriate Federal Banking
Agency” means the “appropriate Federal banking agency” with respect to
the Company or such Company Subsidiaries, as applicable, as defined in Section
3(q) of the Federal Deposit Insurance Act (12 U.S.C. Section
1813(q)).

     

    “Bank Holding Company” means a
company registered as such with the Board of Governors of the Federal Reserve
System (the “Federal
Reserve”) pursuant to 12 U.S.C. §1842 and the regulations of the Federal
Reserve promulgated thereunder.

     

    “Certified Entity” means the
Company or, if the Company itself has not been certified by the Fund as a CDFI,
each Affiliate of the Company that has been certified by the CDFI  and
is specified on Schedule A of the
Letter Agreement.

     

    “Company Material Adverse
Effect” means a material adverse effect on (i) the business, results of
operation or financial condition of the Company and its consolidated
subsidiaries and each Certified Entity taken as a whole; provided, however, that Company
Material Adverse Effect shall not be deemed to include the effects of (A)
changes after the date of the Letter Agreement (the “Signing Date”) in general
business, economic or market conditions (including changes generally in
prevailing interest rates, credit availability and liquidity, currency exchange
rates and price levels or trading volumes in the United States or foreign
securities or credit markets), or any outbreak or escalation of hostilities,
declared or undeclared acts of war or terrorism, in each case generally
affecting the industries in which the Company and its subsidiaries operate, (B)
changes or proposed changes after the Signing Date in generally accepted
accounting principles in the United States (“GAAP”), or authoritative
interpretations thereof, or (C) changes or proposed changes after the Signing
Date in securities, banking and other laws of general applicability or related
policies or interpretations of Governmental Entities (in the case of each of
these clauses (A), (B) and (C), other than changes or occurrences to the extent
that such changes or occurrences have or would reasonably be expected to have a
materially disproportionate adverse effect on the Company and its consolidated
subsidiaries taken as a whole relative to comparable U.S. banking or financial
services organizations); or (ii) the ability of the Company to consummate the
Purchase and other transactions contemplated by this Agreement and perform its
obligations hereunder or thereunder on a timely basis.

     

     

    
      
        
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    “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.

     

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

     

    “knowledge of the Company” or
“Company’s knowledge”
means the actual knowledge after reasonable and due inquiry of the “officers” (as such term is
defined in Rule 3b-2 under the Exchange Act) of the Company.

     

    “Parity Stock” means any class
or series of stock of the Company the terms of which do not expressly provide
that such class or series will rank senior or junior to the Preferred Shares as
to dividend rights and/or as to rights on liquidation, dissolution or winding up
of the Company (in each case without regard to whether dividends accrue
cumulatively or non-cumulatively).

     

    “Previously Disclosed” means
information set forth on the Disclosure Schedule or the Disclosure Update, as
applicable; provided, however, that disclosure in
any section of such Disclosure Schedule or Disclosure Update, as applicable,
shall apply only to the indicated section of this Agreement except to the extent
that it is reasonably apparent from the face of such disclosure that such
disclosure is relevant to another section of this Agreement; provided, further, that the existence
of Previously Disclosed information, pursuant to a Disclosure Update, shall
neither obligate the Investor to consummate the Purchase nor limit or affect any
rights of or remedies available to the Investor.

     

    “Savings and Loan Holding
Company” means a company registered as such with the Office of Thrift
Supervision pursuant to 12 U.S.C. §1467(a) and the regulations of the Office of
Thrift Supervision promulgated thereunder.

     

    “Senior Executive Officers”
means the Company’s “senior executive officers” as defined in Section 111 of
EESA and the Compensation Regulations.

     

    “Share Dilution Amount” means
the increase in the number of diluted shares outstanding (determined in
accordance with GAAP, and as measured from the date of the Company’s most recent
consolidated financial statements prior to the Closing Date) resulting from the
grant, vesting or exercise of equity-based compensation to employees and
equitably adjusted for any stock split, stock dividend, reverse stock split,
reclassification or similar transaction or the issuance of Private
Capital.

     

    “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 

     

     

    
      
        
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      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.

    

     

    “Tax” or “Taxes” means any federal,
state, local or foreign income, gross receipts, property, sales, use, license,
excise, franchise, employment, payroll, withholding, alternative or add-on
minimum, ad valorem,
transfer or excise tax, or any other tax, custom, duty, governmental fee or
other like assessment or charge of any kind whatsoever, together with any
interest, penalty or addition imposed by any Governmental Entity.

     

    1.2    Interpretation.  When
a reference is made in this Agreement to “Recitals”, “Articles”, “Sections”, or
“Annexes” such reference shall be to a Recital, Article or Section of, or Annex
to, this Securities Purchase Agreement – Standard Terms, and a reference to
“Schedules” shall be to a Schedule to the Letter Agreement, in each case, unless
otherwise indicated.  The terms defined in the singular have a
comparable meaning when used in the plural, and vice
versa.  References to “herein”, “hereof”, “hereunder” and the like
refer to this Agreement as a whole and not to any particular section or
provision, unless the context requires otherwise. The table of contents and
headings contained in this Agreement are for reference purposes only and are not
part of this Agreement. Whenever the words “include”, “includes” or “including”
are used in this Agreement, they shall be deemed followed by the words “without
limitation”.  No rule of construction against the draftsperson shall
be applied in connection with the interpretation or enforcement of this
Agreement, as this Agreement is entered into between sophisticated parties
advised by counsel.  All references to “$” or “dollars” mean the lawful
currency of the United States of America.  Except as expressly stated
in this Agreement, all references to any statute, rule or regulation are to the
statute, rule or regulation as amended, modified, supplemented or replaced from
time to time (and, in the case of statutes, include any rules and regulations
promulgated under the statute) and to any section of any statute, rule or
regulation include any successor to the section.  References to a
“business day” shall
mean any day except Saturday, Sunday and any day on which banking institutions
in the State of New York or the District of Columbia generally are authorized or
required by law or other governmental actions to close.

     

    ARTICLE II

     

    PURCHASE;
CLOSING

     

    2.1  Purchase.  On
the terms and subject to the conditions set forth in this Agreement, the Company
agrees to sell to the Investor, and the Investor agrees to purchase from the
Company, at the Closing (as hereinafter defined), the Preferred Shares for the
price set forth on Schedule A (the
“Purchase
Price”).

     

    2.2  Closing.  
(a)  On the terms and subject to the conditions set forth in this
Agreement, the closing of the Purchase (the “Closing”) will take place at
the location specified in Schedule A, at the
time and on the date set forth in Schedule A or as soon
as practicable thereafter, or at such other place, time and date as shall be
agreed between the Company and the Investor.  The time and date on
which the Closing occurs is referred to in this Agreement as the “Closing Date”.

     

     

    
      
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    (b)  Subject to the fulfillment or waiver of
the conditions to the Closing in Section 2.3, at the Closing the Company will
deliver the Preferred Shares as evidenced by one or more certificates dated the
Closing Date and bearing appropriate legends as hereinafter provided for, in
exchange for payment in full of the Purchase Price by wire transfer of
immediately available United States funds to a bank account designated by the
Company on Schedule
A.

     

    2.3  Closing Conditions.  The
obligation of the Investor to consummate the Purchase is subject to the
fulfillment (or waiver by the Investor) at or prior to the Closing of each of
the following conditions:

     

    (a)   
(i) any approvals or authorizations of all United States and other governmental,
regulatory or judicial authorities (collectively, “Governmental
Entities”) required for the consummation of the Purchase shall have been
obtained or made in form and substance reasonably satisfactory to each party and
shall be in full force and effect and all waiting periods required by United
States and other applicable law, if any, shall have expired and (ii) no
provision of any applicable United States or other law and no judgment,
injunction, order or decree of any Governmental Entity shall prohibit the
purchase and sale of the Preferred Shares as contemplated by this
Agreement;

     

    (b)   
(i) the representations and warranties of the Company set forth
in  Section 3.1 shall be true and correct in all respects as
though made on and as of the Closing Date (other than representations and
warranties that by their terms speak as of another date, which representations
and warranties shall be true and correct in all respects as of such other date)
and (ii) the Company shall have performed in all respects all obligations
required to be performed by it under this Agreement at or prior to the
Closing;

     

    (c)   
the Company shall have delivered to the Investor a certificate signed on behalf
of the Company by a Senior Executive Officer certifying to the effect that the
conditions set forth in Section 2.3(b) have been satisfied, in substantially the
form attached hereto as Annex A;

     

    (d)   
the Company shall have duly adopted and filed with the Secretary of State of its
jurisdiction of organization or other applicable Governmental Entity an
amendment to its certificate or articles of incorporation, articles of
association, or similar organizational document (“Charter”)
in substantially the form attached hereto as Annex
B (the “Certificate of
Designations”) and the Company shall have delivered to the Investor a
copy of the filed Certificate of Designations with appropriate evidence from the
Secretary of State or other applicable Governmental Entity that the filing has
been accepted, or if a filed copy is unavailable, a certificate signed on behalf
of the Company by a Senior Executive Officer certifying to the effect that the
filing of the Certificate of Designation has been accepted, in substantially the
form attached hereto as Annex
A;

     

    (e)   
the Company shall have delivered to the Investor true, complete and correct
certified copies of the Charter and bylaws of the Company;

     

    (f)   
(i) the Company shall have effected such changes to its compensation, bonus,
incentive and other benefit plans, arrangements and agreements (including golden


     

     

    
      
        
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      parachute,
severance and employment agreements) (collectively, “Benefit
Plans”) with respect to its Senior Executive Officers and any other
employee of the Company or its Affiliates subject to Section 111 of the
Emergency Economic Stabilization Act of 2008, as amended by the American
Recovery and Reinvestment Act of 2009, or otherwise from time to time (“EESA”),
as implemented by any guidance, rule or regulation thereunder, as the same shall
be in effect from time to time (collectively, the “Compensation
Regulations”) (and to the extent necessary for such changes to be legally
enforceable, each of its Senior Executive Officers and other employees shall
have duly consented in writing to such changes), as may be necessary, during the
period in which any obligation of the Company arising from financial assistance
under the Troubled Asset Relief Program remains outstanding (such period, as it
may be further described in the Compensation Regulations, the “Relevant
Period”), in order to comply with Section 111 of EESA or the Compensation
Regulations, and (ii) the Investor shall have received a certificate signed on
behalf of the Company by a Senior Executive Officer certifying to the effect
that the condition set forth in Section 2.3(f)(i) has been satisfied, in
substantially the form attached hereto as Annex
A;

    

     

    (g)   
each of the Company’s Senior Executive Officers and any other employee of the
Company or its Affiliates subject to Section 111 of EESA shall have delivered to
the Investor a written waiver in the form attached hereto as Annex
C releasing the Investor and the Company from any claims that such Senior
Executive Officer or other employee may otherwise have as a result of the
modification of, or the agreement of the Company hereunder to modify, the terms
of any Benefit Plans with respect to its Senior Executive Officers or other
employees to eliminate any provisions of such Benefit Plans that would not be in
compliance with the requirements of Section 111 of EESA as implemented by the
Compensation Regulations;

     

    (h)   
the Company shall have delivered to the Investor a written opinion from counsel
to the Company (which may be internal counsel), addressed to the Investor and
dated as of the Closing Date, in substantially the form attached hereto as Annex
D;

     

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

     

    (j)   
the Company and the Company Subsidiaries shall have taken all necessary action
to ensure that the Company and the Company Subsidiaries and their executive
officers, respectively, are in compliance with (i) all guidelines put forth by
the Investor with respect to transparency, reporting and monitoring and (ii) the
provisions of EESA and any federal law respecting EESA, including the Employ
American Workers Act (Section 1611 of Division A, Title XVI of the American
Recovery and Reinvestment Act of 2009), Public Law No. 111-5, effective as of
February 17, 2009, and all rules, regulations and guidance issued
thereunder;

     

    (k)   
the Company shall have delivered to the Investor a copy of the Disclosure
Schedule on or prior to the Signing Date and, to the extent that any information
set forth on the Disclosure Schedule needs to be updated or supplemented to make
it true, complete and correct as of the Closing Date, (i) the Company shall have
delivered to the Investor an update to the Disclosure Schedule (the “Disclosure
Update”), setting forth any information necessary to make the Disclosure
Schedule true, correct and complete as of the Closing Date and (ii) the
Investor, in 

     

     

    
      
        
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      its
sole discretion, shall have approved the Disclosure Update, provided,
however,
that the delivery and acceptance of the Disclosure Update shall not limit or
affect any rights of or remedies available to the Investor;

    

     

    (l)   
the Company shall have delivered to the Investor on or prior to the Signing Date
each of the consolidated financial statements of the Company and its
consolidated subsidiaries for each of the last three completed fiscal years of
the Company (which shall be audited to the extent audited financial statements
are available prior to the Signing Date) and each completed quarterly period
since the last completed fiscal year (collectively, the “Company
Financial Statements”);

     

    (m)   
the Company shall have delivered to the Investor prior to the Signing Date
either (i) a true, complete and correct certified copy of each CDFI
Certification Application that each Certified Entity submitted to the Fund in
connection with its certification as a CDFI along with any updates to the CDFI
Certification Application necessary to make it true, complete and correct as of
the Signing Date or (ii), to the extent a copy of the CDFI Certification
Application that any Certified Entity submitted to the Fund in connection with
its certification as a CDFI is not available, a newly completed CDFI
Certification Application with respect to such Certified Entity true, complete
and correct as of the Signing Date (the CDFI Certification Application delivered
to the Investor pursuant to this Section 2.3(m), the “CDFI
Application”), and, to the extent any information set forth in the CDFI
Application is not true, complete and correct as of the Closing Date, the
Company shall have delivered to the Investor an update to the CDFI Application
(the “CDFI
Application Update”), setting forth any information necessary to make the
information set forth in the CDFI Application true, correct and complete as of
the Closing Date; and

     

    (n)   
the Company shall (i) have received equity 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 dividends, liquidation preference and redemption rights to the
Preferred Shares 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
Company, (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.

     

    ARTICLE III

     

    REPRESENTATIONS
AND WARRANTIES

     

    3.1   Representations and Warranties of the
Company.  Except
as Previously Disclosed, the Company represents and warrants to the Investor
that as of the Signing Date and as of the Closing Date (or such other date
specified herein):

     

     

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

     

    (b)   Capitalization.  The
authorized capital stock of the Company, and the outstanding capital stock of
the Company (including securities convertible into, or exercisable or
exchangeable for, capital stock of the Company) as of the most recent fiscal
month-end preceding the Signing Date (the “Capitalization
Date”) is set forth on Schedule
B.  The outstanding shares of capital stock of the Company have
been duly authorized and are validly issued and outstanding, fully paid and
nonassessable, and subject to no preemptive rights (and were not issued in
violation of any preemptive rights). As of the Signing Date, the Company does
not have outstanding any securities or other obligations providing the holder
the right to acquire its common stock (“Common
Stock”) or other capital stock that is not reserved for issuance as
specified on Schedule
B, and the Company has not made any other commitment to authorize, issue
or sell any Common Stock or other capital stock.  Since the
Capitalization Date, the Company has not issued any shares of Common Stock or
other capital stock, other than (i) shares issued upon the exercise of
stock options or delivered under other equity-based awards or other convertible
securities or warrants which were issued and outstanding on the Capitalization
Date and disclosed on Schedule
B,
and (ii) shares disclosed on Schedule
B and (iii) shares or other capital stock representing Private Capital
disclosed on Schedule
B.  Each holder of 5% or more of any class of capital stock of
the Company and such holder’s primary address are set forth on Schedule
B.

     

    (c)    Preferred
Shares.  The Preferred Shares have been duly and validly
authorized, and, when issued and delivered pursuant to this Agreement, such
Preferred Shares will be duly and validly issued and fully paid and
non-assessable, will not be issued in violation of any preemptive rights, and
will rank pari
passu with or senior to all other series or classes of Preferred Stock,
whether or not designated, issued or outstanding, with respect to the payment of
dividends and the distribution of assets in the event of any dissolution,
liquidation or winding up of the Company.

     

     

    
      
        
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    (d)  Community Development Financial Institution
Status; Domestic Ownership.

     

    (i)   
The Company collectively with all of its “Affiliates” (within the meaning of 12
C.F.R. 1805.104) satisfies the requirements of 12 C.F.R.
1805.200(b).

     

    (ii)   
Each Certified Entity (A) is a regulated community development financial
institution (a “CDFI”)
currently certified by the Community Development Financial Institution Fund (the
“Fund”) of the United
States Department of the Treasury pursuant to 12 C.F.R. 1805.201(a) as having
satisfied the eligibility requirements of the Fund’s Community Development
Financial Institutions Program and (B) satisfies the eligibility requirements
for a CDFI set forth in 12 C.F.R. 1805.201 (b)(1) – (6).

     

    (iii)   
The Company is not a Bank Holding Company, Savings and Loan Holding Company,
bank or savings association controlled (within the meaning of the Bank Holding
Company Act of 1956 (12 U.S.C. 1841(a)(2)) and 12 C.F.R. 225(a)(i) in the case
of Bank Holding Companies and banks and the Home Owners’ Loan Act of 1933 (12
U.S.C. 1467a (a)(2)) and 12 C.F.R. 583.7 in the case of Savings and Loan Holding
Companies and savings associations) by a foreign bank or company.

     

    (e)   Authorization,
Enforceability.

     

    (i)   
The Company has the corporate power and authority to execute and deliver this
Agreement and to
carry out its obligations hereunder (which includes the issuance of the
Preferred Shares).  The execution, delivery and performance by the
Company of this Agreement and the consummation of the transactions contemplated
hereby have been duly authorized by all necessary corporate action on the part
of the Company and its stockholders, and no further approval or authorization is
required on the part of the Company.  This Agreement is a valid and
binding obligation of the Company enforceable against the Company in accordance
with its terms, subject to any limitations by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors’ rights generally and general equitable principles, regardless of
whether such enforceability is considered in a  proceeding at law or
in equity (“Bankruptcy
Exceptions”).

     

    (ii)   
The execution, delivery and performance by the Company of this Agreement and the
consummation of the transactions contemplated hereby and compliance by the
Company with the provisions hereof, will not (A) violate, conflict with, or
result in a breach of any provision of, or constitute a default (or an event
which, with notice or lapse of time or both, would constitute a default) under,
or result in the termination of, or accelerate the performance required by, or
result in a right of termination or acceleration of, or result in the creation
of, any lien, security interest, charge or encumbrance upon any of the
properties or assets of the Company or any subsidiary of the Company or
Certified Entity (if not the Company) (each subsidiary or Certified Entity, a
“Company Subsidiary”
and, collectively, the “Company Subsidiaries”) under
any of the terms, conditions or provisions of (x) its

     

     

    
      
        
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      organizational
documents or (y) any note, bond, mortgage, indenture, deed of trust, license,
lease, agreement or other instrument or obligation to which the Company or any
Company Subsidiary is a party or by which it or any Company Subsidiary may be
bound, or to which the Company or any Company Subsidiary or any of the
properties or assets of the Company or any Company Subsidiary may be subject, or
(B) subject to compliance with the statutes and regulations referred to in the
next paragraph, violate any statute, rule or regulation or any judgment, ruling,
order, writ, injunction or decree applicable to the Company or any Company
Subsidiary or any of their respective properties or assets except, in the case
of clauses (A)(y) and (B), for those occurrences that, individually or in the
aggregate, have not had and would not reasonably be expected to have a Company
Material Adverse Effect.

       

    

    (iii)   
Other than the filing of the Certificate of Designations with the Secretary of
State of its jurisdiction of organization or other applicable Governmental
Entity, such filings and approvals as are required to be made or obtained under
any state “blue sky” laws and such as have been made or obtained, no notice to,
filing with, exemption or review by, or authorization, consent or approval of,
any Governmental Entity is required to be made or obtained by the Company in
connection with the consummation by the Company of the Purchase except for any
such notices, filings, exemptions, reviews, authorizations, consents and
approvals the failure of which to make or obtain would not, individually or in
the aggregate, reasonably be expected to have a Company Material Adverse
Effect.

     

    (f)   Anti-takeover Provisions and Rights
Plan.  The Board of Directors of the Company (the “Board of
Directors”) has taken all necessary action to ensure that the
transactions contemplated by this Agreement and the consummation of the
transactions contemplated hereby will be exempt from any anti-takeover or
similar provisions of the Company’s Charter and bylaws, and any other provisions
of any applicable “moratorium”, “control share”, “fair price”, “interested
stockholder” or other anti-takeover laws and regulations of any
jurisdiction.

     

    (g)   No Company Material Adverse
Effect.  Since the last day of the last completed fiscal
period for which financial statements are included in the Company Financial
Statements, no fact, circumstance, event, change, occurrence, condition or
development has occurred that, individually or in the aggregate, has had or
would reasonably be expected to have a Company Material Adverse Effect, except
as disclosed on Schedule C.

     

    (h)    Company Financial
Statements.  The Company Financial Statements present
fairly in all material respects the consolidated financial position of the
Company and its consolidated subsidiaries as of the dates indicated therein and
the consolidated results of their operations for the periods specified therein;
and except as stated therein, such financial statements (i) were prepared in
conformity with GAAP applied on a consistent basis (except as may be noted
therein) and (ii) have been prepared from, and are in accordance with, the books
and records of the Company and the Company Subsidiaries.

     

     

    
      
        
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    (i)    Reports.

     

    (i)   
Since December 31, 2008, the Company and each Company Subsidiary has filed all
reports, registrations, documents, filings, statements and submissions, together
with any amendments thereto, that it was required to file with any Governmental
Entity (the foregoing, collectively, the “Company Reports”) and has
paid all fees and assessments due and payable in connection therewith, except,
in each case, as would not, individually or in the aggregate, reasonably be
expected to have a Company Material Adverse Effect.  As of their
respective dates of filing, the Company Reports complied in all material
respects with all statutes and applicable rules and regulations of the
applicable Governmental Entities.

     

    (ii)   
The records, systems, controls, data and information of the Company and the
Company Subsidiaries are recorded, stored, maintained and operated under means
(including any electronic, mechanical or photographic process, whether
computerized or not) that are under the exclusive ownership and direct control
of the Company or the Company Subsidiaries or their accountants (including all
means of access thereto and therefrom), except for any non-exclusive ownership
and non-direct control that would not reasonably be expected to have a material
adverse effect on the system of internal accounting controls described below in
this Section 3.1(i)(ii).  The Company (A) has implemented and
maintains adequate disclosure controls and procedures to ensure that material
information relating to the Company, including the consolidated Company
Subsidiaries, is made known to the chief executive officer and the chief
financial officer of the Company by others within those entities, and (B) has
disclosed, based on its most recent evaluation prior to the Signing Date, to the
Company’s outside auditors and the audit committee of the Board of Directors (x)
any significant deficiencies and material weaknesses in the design or operation
of internal controls that are reasonably likely to adversely affect the
Company’s ability to record, process, summarize and report financial information
and (y) any fraud, whether or not material, that involves management or other
employees who have a significant role in the Company’s internal controls over
financial reporting.

     

    (j)    No Undisclosed
Liabilities.  Neither the Company nor any of the Company
Subsidiaries has any liabilities or obligations of any nature (absolute,
accrued, contingent or otherwise) which are not properly reflected or reserved
against in the Company Financial Statements to the extent required to be so
reflected or reserved against in accordance with GAAP, except for (i)
liabilities that have arisen since the last fiscal year end in the ordinary and
usual course of business and consistent with past practice and (ii) liabilities
that, individually or in the aggregate, have not had and would not reasonably be
expected to have a Company Material Adverse Effect.

     

    (k)    Offering of
Securities.  Neither the Company nor any person acting
on its behalf has taken any action (including any offering of any securities of
the Company under circumstances which would require the integration of such
offering with the offering of any of the Preferred Shares under the Securities
Act, and the rules and regulations of the Securities and Exchange Commission
(the “SEC”)
promulgated thereunder), which might subject the offering, 

     

     

    
      
        
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issuance or sale of any of the Preferred Shares to
Investor pursuant to this Agreement to the registration requirements of the
Securities Act.

    

     

    (l)    Litigation and Other
Proceedings.  Except (i) as set forth on Schedule
D or (ii) as would not, individually or in the aggregate, reasonably be
expected to have a Company Material Adverse Effect, there is no (A) pending or,
to the knowledge of the Company, threatened, claim, action, suit, investigation
or proceeding, against the Company or any Company Subsidiary or to which any of
their assets are subject nor is the Company or any Company Subsidiary subject to
any order, judgment or decree or (B) unresolved violation, criticism or
exception by any Governmental Entity with respect to any report or relating to
any examinations or inspections of the Company or any Company
Subsidiaries.

     

    (m)    Compliance with
Laws.  Except as would not, individually or in the
aggregate, reasonably be expected to have a Company Material Adverse Effect, the
Company and the Company Subsidiaries have all permits, licenses, franchises,
authorizations, orders and approvals of, and have made all filings, applications
and registrations with, Governmental Entities that are required in order to
permit them to own or lease their properties and assets and to carry on their
business as presently conducted and that are material to the business of the
Company or such Company Subsidiary.  Except as set forth on Schedule
E, the Company and the Company Subsidiaries have complied in all respects
and are not in default or violation of, and none of them is, to the knowledge of
the Company, under investigation with respect to or, to the knowledge of the
Company, have been threatened to be charged with or given notice of any
violation of, any applicable domestic (federal, state or local) or foreign law,
statute, ordinance, license, rule, regulation, policy or guideline, order,
demand, writ, injunction, decree or judgment of any Governmental Entity, other
than such noncompliance, defaults or violations that would not, individually or
in the aggregate, reasonably be expected to have a Company Material Adverse
Effect.  Except for statutory or regulatory restrictions of general
application or as set forth on Schedule
E, no Governmental Entity has placed any restriction on the business or
properties of the Company or any Company Subsidiary that would, individually or
in the aggregate, reasonably be expected to have a Company Material Adverse
Effect.

     

    (n)    Employee Benefit
Matters.  Except as would not reasonably be expected to
have, either individually or in the aggregate, a Company Material Adverse
Effect: (i) each “employee benefit plan” (within the meaning of Section 3(3) of
the Employee Retirement Income Security Act of 1974, as amended (“ERISA”))
providing benefits to any current or former employee, officer or director of the
Company or any member of its “Controlled
Group” (defined as any organization which is a member of a controlled
group of corporations within the meaning of Section 414 of the Internal Revenue
Code of 1986, as amended (the “Code”))
that is sponsored, maintained or contributed to by the Company or any member of
its Controlled Group and for which the Company or any member of its Controlled
Group would have any liability, whether actual or contingent (each, a “Plan”)
has been maintained in compliance with its terms and with the requirements of
all applicable statutes, rules and regulations, including ERISA and the Code;
(ii) with respect to each Plan subject to Title IV of ERISA (including, for
purposes of this clause (ii), any plan subject to Title IV of ERISA that the
Company or any member of its Controlled Group previously maintained or
contributed to in the six years prior to the Signing Date), (1) no “reportable
event” (within the meaning of Section 4043(c) of ERISA), other than a


     

     

    
      
        
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      reportable event for which the notice period
referred to in Section 4043(c) of ERISA has been waived, has occurred in the
three years prior to the Signing Date or is reasonably expected to occur, (2) no
“accumulated funding deficiency” (within the meaning of Section 302 of ERISA or
Section 412 of the Code), whether or not waived, has occurred in the three years
prior to the Signing Date or is reasonably expected to occur, (3) the fair
market value of the assets under each Plan exceeds the present value of all
benefits accrued under such Plan (determined based on the assumptions used to
fund such Plan) and (4) neither the Company nor any member of its Controlled
Group has incurred in the six years prior to the Signing Date, or reasonably
expects to incur, any liability under Title IV of ERISA (other than
contributions to the Plan or premiums to the Pension Benefit Guaranty
Corporation in the ordinary course and without default) in respect of a Plan
(including any Plan that is a “multiemployer plan”, within the meaning of
Section 4001(c)(3) of ERISA); and (iii) each Plan that is intended to be
qualified under Section 401(a) of the Code has received a favorable
determination letter from the Internal Revenue Service with respect to its
qualified status that has not been revoked, or such a determination letter has
been timely applied for but not received by the Signing Date, and nothing has
occurred, whether by action or by failure to act, which could reasonably be
expected to cause the loss, revocation or denial of such qualified status or
favorable determination letter.

    

     

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

     

    (p)    Properties and
Leases.  Except as would not, individually or in the
aggregate, reasonably be expected to have a Company Material Adverse Effect, the
Company and the Company Subsidiaries have good and marketable title to all real
properties and all other properties and assets owned by them, in each case free
from liens (including, without limitation, liens for Taxes), encumbrances,
claims and defects that would affect the value thereof or interfere with the use
made or to be made thereof by them.  Except as would not, individually
or in the aggregate, reasonably be expected to have a Company Material Adverse
Effect, the Company and the Company Subsidiaries hold all leased real or
personal property under valid and enforceable leases with no exceptions that
would interfere with the use made or to be made thereof by
them.

     

    (q)    Environmental
Liability.  Except as would not, individually or in the
aggregate, reasonably be expected to have a Company Material Adverse
Effect:

     

    (i)   
there is no legal, administrative, or other proceeding, claim or action of any
nature seeking to impose, or that would reasonably be expected to result in the
imposition of, on the Company or any Company Subsidiary, any liability relating
to the release of hazardous substances as defined under any local, state or
federal environmental statute, regulation or ordinance, including the
Comprehensive 

     

     

    
      
        
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      Environmental
Response, Compensation and Liability Act of 1980, pending or, to the Company’s
knowledge, threatened against the Company or any Company
Subsidiary;

    

    (ii)   
to the Company’s knowledge, there is no reasonable basis for any such
proceeding, claim or action; and

     

    (iii)   
neither the Company nor any Company Subsidiary is subject to any agreement,
order, judgment or decree by or with any court, Governmental Entity or third
party imposing any such environmental liability.

     

    (r)    Risk Management
Instruments.  Except as would not, individually or in
the aggregate, reasonably be expected to have a Company Material Adverse Effect,
all derivative instruments, including, swaps, caps, floors and option
agreements, whether entered into for the Company’s own account, or for the
account of one or more of the Company Subsidiaries or its or their customers,
were entered into (i) only in the ordinary course of business, (ii) in
accordance with prudent practices and in all material respects with all
applicable laws, rules, regulations and regulatory policies and (iii) with
counterparties believed to be financially responsible at the time; and each of
such instruments constitutes the valid and legally binding obligation of the
Company or one of the Company Subsidiaries, enforceable in accordance with its
terms, except as may be limited by the Bankruptcy Exceptions.  Neither
the Company or the Company Subsidiaries, nor, to the knowledge of the Company,
any other party thereto, is in breach of any of its obligations under any such
agreement or arrangement other than such breaches that would not, individually
or in the aggregate, reasonably be expected to have a Company Material Adverse
Effect.

     

    (s)    Agreements with Regulatory
Agencies.  Except as set forth on Schedule
F, neither the Company nor any Company Subsidiary is subject to any
material cease-and-desist or other similar order or enforcement action issued
by, or is a party to any material written agreement, consent agreement or
memorandum of understanding with, or is a party to any commitment letter or
similar undertaking to, or is subject to any capital directive by, or since
December 31, 2006, has adopted any board resolutions at the request of, any
Governmental Entity that currently restricts in any material respect the conduct
of its business or that in any material manner relates to its capital adequacy,
its liquidity and funding policies and practices, its ability to pay dividends,
its credit, risk management or compliance policies or procedures, its internal
controls, its management or its operations or business (each item in this
sentence, a “Regulatory
Agreement”), nor has the Company or any Company Subsidiary been advised
since December 31, 2006, by any such Governmental Entity that it is considering
issuing, initiating, ordering, or requesting any such Regulatory
Agreement.  The Company and each Company Subsidiary is in compliance
in all material respects with each Regulatory Agreement to which it is party or
subject, and neither the Company nor any Company Subsidiary has received any
notice from any Governmental Entity indicating that either the Company or any
Company Subsidiary is not in compliance in all material respects with any such
Regulatory Agreement.

     

    (t)    Insurance.  The
Company and the Company Subsidiaries are insured with reputable insurers against
such risks and in such amounts as the management of the Company reasonably has
determined to be prudent and consistent with industry practice.  The
Company and the Company Subsidiaries are in material compliance with their
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      not in default under any of the material terms
thereof, each such policy is outstanding and in full force and effect, all
premiums and other payments due under any material policy have been paid, and
all claims thereunder have been filed in due and timely fashion, except, in each
case, as would not, individually or in the aggregate, reasonably be expected to
have a Company Material Adverse Effect.

    

     

    (u)    Intellectual
Property.  Except as would not, individually or in the
aggregate, reasonably be expected to have a Company Material Adverse Effect, (i)
the Company and each Company Subsidiary owns or otherwise has the right to use,
all intellectual property rights, including all trademarks, trade dress, trade
names, service marks, domain names, patents, inventions, trade secrets,
know-how, works of authorship and copyrights therein, that are used in the
conduct of their existing businesses and all rights relating to the plans,
design and specifications of any of its branch facilities (“Proprietary
Rights”) free and clear of all liens and any claims of ownership by
current or former employees, contractors, designers or others and (ii) neither
the Company nor any of the Company Subsidiaries is materially infringing,
diluting, misappropriating or violating, nor has the Company or any of the
Company Subsidiaries received any written (or, to the knowledge of the Company,
oral) communications alleging that any of them has materially infringed,
diluted, misappropriated or violated, any of the Proprietary Rights owned by any
other person.  Except as would not, individually or in the aggregate,
reasonably be expected to have a Company Material Adverse Effect, to the
Company’s knowledge, no other person is infringing, diluting, misappropriating
or violating, nor has the Company or any or the Company Subsidiaries sent any
written communications since January 1, 2007, alleging that any person has
infringed, diluted, misappropriated or violated, any of the Proprietary Rights
owned by the Company and the Company Subsidiaries.

     

    (v)    Brokers and
Finders.  The Investor has no liability for any amounts
that any broker, finder or investment banker is entitled to for any financial
advisory, brokerage, finder’s or other fee or commission in connection with this
Agreement or the transactions contemplated hereby based upon arrangements made
by or on behalf of the Company or any Company Subsidiary.

     

    (w)    Disclosure
Schedule.  The Company has delivered the Disclosure
Schedule and, if applicable, the Disclosure Update to the Investor and the
information contained in the Disclosure Schedule, as modified by the information
contained in the Disclosure Update, if applicable, is true, complete and
correct.

     

    (x)    CPP/CDCI
Securities.  To the extent that the Company participated
in the Troubled Asset Relief Program Capital Purchase Program (“CPP”) or
the CDCI prior to the Signing Date and the Company has any Preferred Stock or
other securities issued in connection with its participation in the CPP or the
CDCI (the “CPP/CDCI
Securities”) outstanding, the Company has (i) not breached any
representation, warranty or covenant set forth in any of the documents governing
the CPP/CDCI Securities or its sale to Investor and (ii) paid to Investor all
accrued and unpaid dividends and/or interest then due on the CPP/CDCI
Securities.

     

     

    
      
        
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    ARTICLE IV

     

    COVENANTS

     

    4.1    Affirmative
Covenants.  The
Company hereby covenants and agrees with Investor that:

     

    (a)    Commercially Reasonable
Efforts.  Subject to the terms and conditions of this
Agreement, each of the parties will use its commercially reasonable efforts in
good faith to take, or cause to be taken, all actions, and to do, or cause to be
done, all things necessary, proper or desirable, or advisable under applicable
laws, so as to permit consummation of the Purchase as promptly as practicable
and otherwise to enable consummation of the transactions contemplated hereby and
shall use commercially reasonable efforts to cooperate with the other party to
that end.

     

    (b)    Certain Notifications Until
Closing.  From the Signing Date until the Closing, the
Company shall promptly notify the Investor of (i) any fact, event or
circumstance of which it is aware and which would reasonably be expected to
cause any representation or warranty of the Company contained in this Agreement
to be untrue or inaccurate in any material respect or to cause any covenant or
agreement of the Company contained in this Agreement not to be complied with or
satisfied in any material respect and (ii) except as Previously Disclosed, any
fact, circumstance, event, change, occurrence, condition or development of which
the Company is aware and which, individually or in the aggregate, has had or
would reasonably be expected to have a Company Material Adverse Effect; provided,
however,
that delivery of any notice pursuant to this Section 4.1(b) shall not limit or
affect any rights of or remedies available to the Investor.

     

    (c)    Access, Information and
Confidentiality.

     

    (i)   
the Signing Date until the date when the Investor owns an amount of Preferred
Shares having an aggregate liquidation value of less than 10% of the Purchase
Price, the Company will permit the Investor and its agents, consultants,
contractors and advisors (x) acting through the Appropriate Federal Banking
Agency, or otherwise to the extent necessary to evaluate, manage, or transfer
its investment in the Company, to examine the corporate books, Tax returns
(including all schedules and attached thereto) and other information reasonably
requested by Investor relating to Taxes and make copies thereof and to discuss
the affairs, finances and accounts of the Company and the Company Subsidiaries
with the principal officers of the Company, all upon reasonable notice and at
such reasonable times and as often as the Investor may reasonably request and
(y) to review any information material to the Investor’s investment in the
Company provided by the Company to its Appropriate Federal Banking
Agency.  Any investigation pursuant to this Section 4.1(c) shall be
conducted during normal business hours and in such manner as not to interfere
unreasonably with the conduct of the business of the Company, and nothing herein
shall require the Company or any Company Subsidiary to disclose any information
to the Investor to the extent (A) prohibited by applicable law or regulation, or
(B) that such disclosure would 

     

     

    
      
        
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      reasonably
be expected to cause a violation of any agreement to which the Company or any
Company Subsidiary is a party or would cause a risk of a loss of privilege to
the Company or any Company Subsidiary (provided that the Company
shall use commercially reasonable efforts to make appropriate substitute
disclosure arrangements under circumstances where the restrictions in this
clause (i) apply).

    

     

    (ii) 
  From the Signing Date until the date on which all of the Preferred
Shares have been redeemed in whole, the Company will deliver, or will cause to
be delivered, to the Investor:

     

        (A)   
as soon as available after the end of each fiscal year of the Company, and in
any event within 90 days thereafter, a consolidated balance sheet of the Company
as of the end of such fiscal year, and consolidated statements of income,
retained earnings and cash flows of the Company for such year, in each case
prepared in accordance with GAAP and setting forth in each case in comparative
form the figures for the previous fiscal year of the Company and which shall be
audited to the extent audited financial statements are available;1

     

        (B)   
as soon as available after the end of the first, second and third quarterly
periods in each fiscal year of the Company, a copy of any quarterly reports
provided to other stockholders of the Company or Company management by the
Company;

     

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

     

        (D)   
annually on a date specified by the Investor, a completed survey, in a form
specified by the Investor, providing, among other things, a description of how
the Company has utilized the funds the Company received hereunder in connection
with the sale of the Preferred Shares and the effects of such funds on the
operations and status of the Company;

     

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

     

        (F)   
at the same time as such items are sent to any stockholders of the Company,
copies of any information or documents sent by the Company to its
stockholders.

     

    (iii)   
The Investor will use reasonable best efforts to hold, and will use reasonable
best efforts to cause its agents, consultants, contractors and advisors and
United States executive branch officials and employees, to hold, in confidence
all 

     

    
___________________________

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

       

    

    
      
        
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      non-public
records, books, contracts, instruments, computer data and other data and
information (collectively, “Information”) concerning the
Company furnished or made available to it by the Company or its representatives
pursuant to this Agreement (except to the extent that such information can be
shown to have been (i) previously known by such party on a non-confidential
basis, (ii) in the public domain through no fault of such party or (iii) later
lawfully acquired from other sources by the party to which it was furnished (and
without violation of any other confidentiality obligation)); provided that nothing herein
shall prevent the Investor from disclosing any Information to the extent
required by applicable laws or regulations or by any subpoena or similar legal
process.  The Investor understands that the Information may contain
commercially sensitive confidential information entitled to an exception from a
Freedom of Information Act request.

       

    

    (iv)   
The Investor’s information rights pursuant to Section 4.1(c)(ii)(A), (B), (C),
(E) and (F) and the Investor’s right to receive certifications from the Company
pursuant to Section 4.1(d)(ii) may be assigned by the Investor to a transferee
or assignee of the Preferred Shares with a liquidation preference of no less
than an amount equal to 2% of the initial aggregate liquidation preference of
the Preferred Shares.

     

    (v)   
From the Signing Date until the date when the Investor no longer owns any
Preferred Shares, the Company shall permit, and shall cause each of the
Company’s Subsidiaries to permit (A) the Investor and its agents, consultants,
contractors and advisors, (B) the Special Inspector General of the Troubled
Asset Relief Program, and (C) the Comptroller General of the United States
access to personnel and any books, papers, records or other data, in each case,
to the extent relevant to ascertaining compliance with the financing terms and
conditions; provided
that prior to disclosing any information pursuant to clause (B) or (C),
the Special Inspector General of the Troubled Asset Relief Program and the
Comptroller General of the United States shall have agreed, with respect to
documents obtained under this Agreement in furtherance of its function, to
follow applicable law and regulation (and the applicable customary policies and
procedures) regarding the dissemination of confidential materials, including
redacting confidential information from the public version of its reports and
soliciting the input from the Company as to information that should be afforded
confidentiality, as appropriate.

     

    (vi)   
Nothing in this Section shall be construed to limit the authority that the
Special Inspector General of the Troubled Asset Relief Program, the Comptroller
General of the United States or any other applicable regulatory authority has
under law.

     

    (d)    CDFI Requirements.

     

    (i)   
From the Signing Date until the date on which all of the Preferred Shares have
been redeemed in whole, each Certified Entity shall (A) be certified by the Fund
as a CDFI; (B) together with its Affiliates collectively meet the eligibility
requirements of 12 C.F.R. 1805.200(b); (C) have a primary mission of promoting


     

     

    
      
        
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      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 Preferred Shares have
been redeemed in whole, the Company shall deliver to Investor (1) (x) on the
date that is 180 days after the Closing Date and (y) annually on the same date
on which the Company delivers the documentation required under Section
4.1(c)(ii)(A) to the Investor, a certificate signed on behalf of the Company by
a Senior Executive Officer, in substantially the form attached hereto as Annex F, certifying
(A) that the Company and each Certified Entity remains in compliance with the
covenants set forth in Section 4.1(d)(i); (B) that the information in the CDFI
Application, as modified by any updates to the CDFI Application provided by the
Company to the Investor on or prior to the date of such certificate, with
respect to the covenants set forth in Section 4.1(d)(i)(B) and Section
4.1(d)(i)(D) remains true, correct and complete as of such date or, to the
extent any information set forth in the CDFI Application, as modified by any
updates to the CDFI Application provided by the Company to the Investor on or
prior to the date of such certificate, with respect to such covenants needs to
be updated or supplanted to make it true, complete and correct as of such date,
that an updated narrative to the CDFI Application setting forth any information
necessary to make the information set forth in the CDFI Application is true,
complete and correct as of such date; (C) either (a) that the contracts and
material agreements entered into by each Certified Entity with respect to
Development Services previously disclosed to the Investor remain in effect or
(b) that attached are any new contracts and material agreements entered into by
the Certified Entity with respect to Development Services; (D) a list of the
names and addresses of the individuals which comprise the board of directors of
each Certified Entity as of such date and, to the extent any of such individuals
was not a member of the board of directors of such Certified Entity as of the
last certification to the Investor, a narrative describing such individual’s
relationship to the applicable 

     

     

    
      
        
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      Investment
Area(s) and Targeted Population(s) or, if such Certified Entity maintains
accountability to residents of the applicable Investment Area(s) or Target
Population(s) through means other than representation on its governing board of
directors and such means have changed since the date of the last certification
to the Investor, a narrative describing such change; (E) that each Certified
Entity is not an agency of the United States of America, or any State or
political subdivision thereof, as described in 12 C.F.R. 1805.201(b)(6) and
within the meaning of any supplemental regulations or interpretations of 12
C.F.R. 1805.201(b)(6) or such supplemental regulations published by the Fund and
(F) that the Company remains in compliance with the covenants set forth in
Section 4.1(f) and Section 4.1(m) and (2) within five (5) business days of
receipt, copies of any notices, correspondence or other written communication
between each Certified Entity and the Fund, including any form that such
Certified Entity is required to provide to the Fund due to the occurrence of a
“Material Event” within the meaning of the Fund’s CDFI Certification
Procedures.

    

     

    (iii)   
The Company shall immediately notify the Investor upon the occurrence of any
breach of any of the covenants set forth in Section 4.1(d).

     

    (e)    Executive Compensation.

     

    (i)    Benefit
Plans.  During the Relevant Period, the Company shall
take all necessary action to ensure that the Benefit Plans of the Company and
its Affiliates comply in all respects with, and shall take all other actions
necessary to comply with, Section 111 of EESA as implemented by the Compensation
Regulations, and neither the Company nor any of its Affiliates shall adopt any
new Benefit Plan (x) that does not comply therewith or (y) that does not
expressly state and require that such Benefit Plan and any compensation
thereunder shall be subject to any relevant Compensation Regulations adopted,
issued or released on or after the date any such Benefit Plan is
adopted.  To the extent that EESA and/or the Compensation Regulations
are amended or otherwise change during the Relevant Period in a manner that
requires changes to then-existing Benefit Plans, or that requires other actions,
the Company and its Affiliates shall effect such changes to its or their Benefit
Plans, and take such other actions, as promptly as practicable after it has
actual knowledge of such amendments or changes in order to be in compliance with
this Section 4.1(e) (and shall be deemed to be in compliance for a reasonable
period to effect such changes).  In addition, the Company and its
Affiliates shall take all necessary action, other than to the extent prohibited
by applicable law or regulation applicable outside of the United States, to
ensure that the consummation of the transactions contemplated by this Agreement
will not accelerate the vesting, payment or distribution of any equity-based
awards, deferred cash awards or any nonqualified deferred compensation payable
by the Company or any of its Affiliates.

     

    (ii)    Additional
Waivers.  After the Closing Date, in connection with the
hiring or promotion of a Section 4.1(e) Employee and/or the promulgation of
applicable Compensation Regulations or otherwise, to the extent any Section
4.1(e) Employee shall not have executed a waiver in a form satisfactory to the
Investor 

     

     

    
      
        
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      with
respect to the application to such Section 4.1(e) Employee of the Compensation
Regulations, the Company shall use its best efforts to (x) obtain from such
Section 4.1(e) Employee a waiver in substantially the form attached hereto as
Annex C and (y) deliver such waiver to the Investor as promptly as possible, in
each case within sixty days of such Section 4.1(e) Employee’s becoming subject
to the requirements of this section.  “Section 4.1(e) Employee”
means (A) each Senior Executive Officer and (B) any other employee of the
Company or any of its Affiliates determined at any time to be subject to Section
111 of EESA as implemented by the Compensation Regulations.

    

     

    (iii)    Clawback.  In the
event that any Section 4.1(e) Employee receives a payment in contravention of
the provisions of this Section 4.1(e), the Company shall promptly provide such
individual with written notice that the amount of such payment must be repaid to
the Company in full within fifteen business days following receipt of such
notice or such earlier time as may be required by the Compensation Regulations
and shall promptly inform the Investor (x) upon discovering that a payment in
contravention of this Section 4.1(e) has been made and (y) following the
repayment to the Company of such amount, and shall take such other actions as
may be necessary to comply with the Compensation Regulations.

     

    (iv)    Limitation on
Deductions.  During the Relevant Period, the Company
agrees that it shall not claim a deduction for remuneration for federal income
tax purposes in excess of $500,000 for each Senior Executive Officer that would
not be deductible if Section 162(m)(5) of the Code applied to the
Company.

     

    (f)    Bank and Thrift Holding Company
Status.  If the Company is a Bank Holding Company or a
Savings and Loan Holding Company on the Signing Date, then the Company shall
maintain its status as a Bank Holding Company or Savings and Loan Holding
Company, as the case may be, for as long as the Investor owns any Preferred
Shares.  The Company shall redeem all Preferred Shares held by the
Investor prior to terminating its status as a Bank Holding Company or Savings
and Loan Holding Company, as applicable.

     

    (g)    Predominantly
Financial.  For as long as the Investor owns any
Preferred Shares, the Company, to the extent it is not itself an insured
depository institution, agrees to remain predominantly engaged in financial
activities.  A company is predominantly engaged in financial
activities if the annual gross revenues derived by the company and all
subsidiaries of the company (excluding revenues derived from subsidiary
depository institutions), on a consolidated basis, from engaging in activities
that are financial in nature or are incidental to a financial activity under
subsection (k) of Section 4 of the Bank Holding Company Act of 1956 (12 U.S.C.
1843(k)) represent at least 85 percent of the consolidated annual gross revenues
of the company.

     

    (h)    Capital
Covenant.  From the Signing Date until the date on which
all of the Preferred Shares have been redeemed in whole, the Company and the
Company Subsidiaries shall maintain such capital as may be necessary to meet the
minimum capital requirements of the Appropriate Federal Banking Agency, as in
effect from time to time.

     

     

    
      
        
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    (i)    HAMP
Modifications.  The Company shall take all necessary
action to ensure that (A) from and after the date the Company or any Company
Subsidiary that services residential mortgage loans has 100 or more residential
mortgage loans not owned or guaranteed by Fannie Mae or Freddie Mac which have
been past due for 60 or more days, the Company or such Company Subsidiary shall,
to the extent such programs are open for participation, (1) participate in the
United States Department of the Treasury’s Making Home Affordable (“MHA”)
program, including MHA’s Second Lien Modification Program and (2) immediately
execute a Commitment to Purchase Financial Instrument and Servicer Participation
Agreement (in such form as may be set forth on the MHA website at www.hmpadmin.com
from time to time) with Fannie Mae (acting as the United States Department of
the Treasury’s fiscal agent) and (B) if the Company or any Company Subsidiary
owns mortgage loans that are serviced by a non-affiliated mortgage servicer, the
Company or such Company Subsidiary shall consent to any MHA modification request
made by such mortgage servicer.

     

    (j)    Reporting
Requirements.  Prior to the date on which all of the
Preferred Shares have been redeemed in whole, the Company covenants and agrees
that, at all times on or after the Closing Date, (i) to the extent it is subject
to the reporting requirements of Section 13 or 15(d) of the Exchange Act, it
shall comply with the terms and conditions set forth in Annex
E or (ii) as soon as practicable after the date that the Company becomes
subject to the reporting requirements of Section 13 or 15(d) of the Exchange
Act, it shall comply with the terms and conditions set forth in Annex
E.

     

    (k)    Compliance with Employ American Workers
Act.  The Company shall agree to comply, and take all
necessary action to ensure that any Company Subsidiary complies, in all respects
with the provisions of EESA and any federal law respecting EESA, including the
Employ American Workers Act (Section 1611 of Division A, Title XVI of the
American Recovery and Reinvestment Act of 2009), Public Law No. 111-5, effective
as of February 17, 2009, as implemented by any rules, regulation or guidance
thereunder, as such may be amended or supplemented from time to time, and any
applicable guidance of the United States Department of the Treasury with respect
thereto.

     

     (l)    Transfer of Proceeds to Certified
Entities.  If the Company is not a Certified Entity, the
Company shall immediately transfer to its related Certified Entities, as capital
contributions, any proceeds it receives in connection with the sale of Preferred
Shares.

     

    (m)    Control by Foreign Bank or
Company.  Prior to the date on which all of the
Preferred Shares have been redeemed in whole, the Company shall not be
controlled (within the meaning of the Bank Holding Company Act of 1956 (12
U.S.C. 1841(a)(2)) and 12 C.F.R. 225(a)(i) in the case of Bank Holding Companies
and banks and the Home Owners’ Loan Act of 1933 (12 U.S.C. 1467a(a)(2)) and 12
C.F.R. 583.7 in the case of Savings and Loan Holding Companies and savings
associations) by a foreign bank or company.

     

    4.2    Negative
Covenants.  The
Company hereby covenants and agrees with the Investor that:

     

     

    
      
        
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    (a)    Certain Transactions.

     

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

     

    (ii)   
Without the prior written consent of the Investor, until such time as the
Investor shall cease to own any Preferred Shares, the Company shall not permit
any of its “significant subsidiaries” (as such term is defined in Rule 12b-2
promulgated under the Exchange Act) to (i) engage in any merger, consolidation,
statutory share exchange or similar transaction following the consummation of
which such significant subsidiary is not wholly-owned by the Company, (ii)
dissolve or sell all or substantially all of its assets or property other than
in connection with an internal reorganization or consolidation involving
wholly-owned subsidiaries of the Company or (iii) issue or sell any shares of
its capital stock or any securities convertible or exercisable for any such
shares, other than issuances or sales in connection with an internal
reorganization or consolidation involving wholly-owned subsidiaries of the
Company.

     

    (b)    Restriction on Dividends and
Repurchases.

     

    (i)   
The Company covenants and agrees that it shall not violate any of the
restrictions on dividends, distributions, redemptions, repurchases, acquisitions
and related actions set forth in the Certificate of Designations, which are
incorporated by reference herein as if set forth in full.

     

    (ii)   
During the period beginning on the eighth anniversary of the Closing and ending
on the date on which the Investor no longer owns any of the Preferred Shares,
neither the Company nor any Company Subsidiary shall, without the consent of the
Investor, (i) declare or pay any dividend or make any distribution on capital
stock or other equity securities of any kind of the Company or any Company
Subsidiary; or (ii) redeem, purchase or acquire any shares of Common Stock or
other capital stock or other equity securities of any kind of the Company or any
Company Subsidiary, or any trust preferred securities issued by the Company or
any Affiliate of the Company, other than (A) redemptions, purchases or other
acquisitions of the Preferred Shares, (B) regular dividends on shares of
preferred stock in accordance with the terms thereof and which are permitted
under the terms of the Preferred Shares, or (C) dividends or distributions by
any wholly-owned Company Subsidiary.

     

    (c)    Related Party
Transactions.  Until such time as the Investor ceases to
own any debt or equity securities of the Company, including the Preferred
Shares, the Company and the Company Subsidiaries shall not enter into
transactions with Affiliates or related persons (within the meaning of Item 404
under the SEC’s Regulation S-K) unless (A) such transactions are on terms no
less favorable to the Company and the Company Subsidiaries than could be


     

     

    
      
        
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      obtained from an unaffiliated third party, and (B)
have been approved by the audit committee of the Board of Directors or
comparable body of independent directors of the Company, or if there are no
independent directors, the Board of Directors, provided
that the Board of Directors shall maintain written documentation which
supports its determination that the transaction meets the requirements of clause
(A) of this Section 4.2(c).

    

     

    (d)    Restriction on Repurchase of Preferred Shares
Not Held by Investor.  Prior to the date on which the
Investor no longer owns any of the Preferred Shares the Company shall not
repurchase, redeem, call or otherwise reacquire any Preferred Shares from any
holder thereof, whether by means of open market purchase, negotiated
transaction, or otherwise, unless it offers to repurchase, redeem, call or
otherwise reacquire a ratable portion of the Preferred Shares, as the case may
be, then held by the Investor on the same terms and
conditions.

     

    ARTICLE V


    ADDITIONAL
AGREEMENTS

     

    5.1   Purchase for
Investment.  The
Investor acknowledges that the Preferred Shares have not been registered under
the Securities Act or under any state securities laws. The Investor (a) is
acquiring the Preferred Shares pursuant to an exemption from registration under
the Securities Act solely for investment with no present intention to distribute
them to any person in violation of the Securities Act or any applicable U.S.
state securities laws, (b) will not sell or otherwise dispose of any of the
Preferred Shares, except in compliance with the registration requirements or
exemption provisions of the Securities Act and any applicable U.S. state
securities laws, and (c) has such knowledge and experience in financial and
business matters and in investments of this type that it is capable of
evaluating the merits and risks of the Purchase and of making an informed
investment decision.

     

    5.2    Legends.  (a)  The
Investor agrees that all certificates or other instruments representing the
Preferred Shares will bear a legend substantially to the following
effect:

     

    “THE
SECURITIES REPRESENTED BY THIS INSTRUMENT ARE NOT SAVINGS ACCOUNTS, DEPOSITS OR
OTHER OBLIGATIONS OF A BANK AND ARE NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE
CORPORATION OR ANY OTHER GOVERNMENTAL AGENCY.

     

    THE
SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR THE SECURITIES
LAWS OF ANY STATE AND MAY NOT BE TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF
EXCEPT WHILE A REGISTRATION STATEMENT RELATING THERETO IS IN EFFECT UNDER SUCH
ACT AND APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER SUCH ACT OR SUCH LAWS. EACH PURCHASER OF THE SECURITIES
REPRESENTED BY 

     

     

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

     

    THIS
INSTRUMENT IS ISSUED SUBJECT TO THE RESTRICTIONS ON TRANSFER AND OTHER
PROVISIONS OF A SECURITIES PURCHASE AGREEMENT BETWEEN THE ISSUER OF THESE
SECURITIES AND THE INVESTOR REFERRED TO THEREIN, A COPY OF WHICH IS ON FILE WITH
THE ISSUER.  THE SECURITIES REPRESENTED BY THIS INSTRUMENT MAY NOT BE
SOLD OR OTHERWISE TRANSFERRED EXCEPT IN COMPLIANCE WITH SAID
AGREEMENT.  ANY SALE OR OTHER TRANSFER NOT IN COMPLIANCE WITH SAID
AGREEMENT WILL BE VOID.”

     

    (b)   
In the event that any Preferred Shares (i) become registered under the
Securities Act or (ii) are eligible to be transferred without restriction in
accordance with Rule 144 or another exemption from registration under the
Securities Act (other than Rule 144A), the Company shall issue new certificates
or other instruments representing such Preferred Shares, which shall not contain
the applicable legends in Section 5.2(a) above; provided
that the Investor surrenders to the Company the previously issued
certificates or other instruments.

     

    5.3    Transfer of Preferred
Shares.  Subject
to compliance with applicable securities laws, the Investor shall be permitted
to transfer, sell, assign or otherwise dispose of (“Transfer”) all or a portion
of the Preferred Shares at any time, and the Company shall take all steps as may
be reasonably requested by the Investor to facilitate the Transfer of the
Preferred Shares, including without limitation, as set forth in Section 5.4,
provided that the
Investor shall 

     

     

    
      
        
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      not
Transfer any Preferred Shares if such transfer would require the Company to be
subject to the periodic reporting requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934 (the “Exchange Act”) and the
Company was not already subject to such requirements.  In furtherance
of the foregoing, the Company shall provide reasonable cooperation to facilitate
any Transfers of the Preferred Shares, including, as is reasonable under the
circumstances, by furnishing such information concerning the Company and its
business as a proposed transferee may reasonably request and making management
of the Company reasonably available to respond to questions of a proposed
transferee in accordance with customary practice, subject in all cases to the
proposed transferee agreeing to a customary confidentiality
agreement.

    

     

    5.4    Rule 144; Rule 144A; 4(11⁄2)
Transactions.  (a) At
all times after the Signing Date, the Company covenants that (1) it will, upon
the request of the Investor or any subsequent holders of the Preferred Shares
(“Holders”), use its
reasonable best efforts to (x), to the extent any Holder is relying on Rule
144 under the Securities Act to sell any of the Preferred Shares, make “current
public information” available, as provided in Section (c)(1) of Rule 144 (if the
Company is a “Reporting Issuer” within the meaning of Rule 144) or in Section
(c)(2) of Rule 144 (if the Company is a “Non-Reporting Issuer” within the
meaning of Rule 144), in either case for such time period as necessary to permit
sales pursuant to Rule 144, (y), to the extent any Holder is relying on the
so-called “Section 4(11⁄2)” exemption to sell any of its Preferred Shares, prepare
and provide to such Holder such information, including the preparation of
private offering memoranda or circulars or financial information, as the Holder
may reasonably request to enable the sale of the Preferred Shares pursuant to
such exemption, or (z) to the extent any Holder is relying on Rule 144A under
the Securities Act to sell any of its Preferred Shares, prepare and provide to
such Holder the information required pursuant to Rule 144A(d)(4), and (2) it
will take such further action as any Holder may reasonably request from time to
time to enable such Holder to sell Preferred Shares without registration under
the Securities Act within the limitations of the exemptions provided by (i) the
provisions of the Securities Act or any interpretations thereof or related
thereto by the SEC, including transactions based on the so-called “Section
4(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 Company
shall not be required to take any action described in this Section 5.4(a) that
would cause the Company to become subject to the reporting requirements of
Section 13 or 15(d) of the Exchange Act if the Company was not subject to such
requirements prior to taking such action.  Upon the request of any
Holder, the Company will deliver to such Holder a written statement as to
whether it has complied with such requirements and, if not, the specifics
thereof.

     

    (b)   
The Company agrees to indemnify Investor, Investor’s officers, directors,
employees, agents, representatives and Affiliates, and each person, if any, that
controls Investor within the meaning of the Securities Act (each, an “Indemnitee”),
against any and all losses, claims, damages, actions, liabilities, costs and
expenses (including reasonable fees, expenses and disbursements of attorneys and
other professionals incurred in connection with investigating, defending,
settling, compromising or paying any such losses, claims, damages, actions,
liabilities, costs and expenses), joint or several, arising out of or based upon
any untrue statement or alleged untrue statement of material fact contained in
any document or report provided by the Company pursuant to this Section 5.4 or
any omission to state therein a material fact required to 

     

     

    
      
        
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      be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.

    

     

    (c)   
If the indemnification provided for in Section 5.4(b) is unavailable to an
Indemnitee with respect to any losses, claims, damages, actions, liabilities,
costs or expenses referred to therein or is insufficient to hold the Indemnitee
harmless as contemplated therein, then the Company, in lieu of indemnifying such
Indemnitee, shall contribute to the amount paid or payable by such Indemnitee as
a result of such losses, claims, damages, actions, liabilities, costs or
expenses in such proportion as is appropriate to reflect the relative fault of
the Indemnitee, on the one hand, and the Company, on the other hand, in
connection with the statements or omissions which resulted in such losses,
claims, damages, actions, liabilities, costs or expenses as well as any other
relevant equitable considerations.  The relative fault of the Company,
on the one hand, and of the Indemnitee, on the other hand, shall be determined
by reference to, among other factors, whether the untrue statement of a material
fact or omission to state a material fact relates to information supplied by the
Company or by the Indemnitee and the parties’ relative intent, knowledge, access
to information and opportunity to correct or prevent such statement or
omission;  the Company and Investor agree that it would not be just
and equitable if contribution pursuant to this Section 5.4(c) were determined by
pro
rata allocation or by any other method of allocation that does not take
account of the equitable considerations referred to in Section
5.4(b).  No Indemnitee guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from the Company if the Company was not guilty of such fraudulent
misrepresentation.

     

    5.5    Depositary
Shares.  Upon
request by the Investor at any time following the Closing Date, the Company
shall promptly enter into a depositary arrangement, pursuant to customary
agreements reasonably satisfactory to the Investor and with a depositary
reasonably acceptable to the Investor, pursuant to which the Preferred Shares
may be deposited and depositary shares, each representing a fraction of a
Preferred Share, as specified by the Investor, may be issued. From and after the
execution of any such depositary arrangement, and the deposit of any Preferred
Shares, as applicable, pursuant thereto, the depositary shares issued pursuant
thereto shall be deemed “Preferred Shares” and, as applicable, “Registrable
Securities” for purposes of this Agreement.

     

    5.6    Expenses and Further
Assurances.  (a)  Unless
otherwise provided in this Agreement, each of the parties hereto will bear and
pay all costs and expenses incurred by it or on its behalf in connection with
the transactions contemplated under this Agreement, including fees and expenses
of its own financial or other consultants, investment bankers, accountants and
counsel.

     

    (b)   
The Company shall, at the Company’s sole cost and expense, (i) furnish to the
Investor all instruments, documents and other agreements required to be
furnished by the Company pursuant to the terms of this Agreement, including,
without limitation, any documents required to be delivered pursuant to Section
5.4 above, or which are reasonably requested by the Investor in connection
therewith; (ii) execute and deliver to the Investor such documents, instruments,
certificates, assignments and other writings, and do such other acts necessary
or desirable, to evidence, preserve and/or protect the Preferred Shares
purchased by the Investor, as Investor may reasonably require; and (iii) do and
execute all and such further lawful and 

     

     

    
      
        
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reasonable
acts, conveyances and assurances for the better and more effective carrying out
of the intents and purposes of this Agreement, as the Investor shall reasonably
require from time to time.

    

     

    ARTICLE VI

     

    MISCELLANEOUS

     

    6.1    Termination.  This
Agreement shall terminate upon the earliest to occur of:

     

    (a) 
termination at any time prior to the Closing:

     

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

     

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

     

    (iii)   
by the mutual written consent of the Investor and the Company; or

     

    (b)   
the date on which all of the Preferred Shares have been redeemed in whole;
or

     

    (c)   
the date on which the Investor has transferred all of the Preferred Shares to
third parties which are not Affiliates of the Investor; or

     

    (d)   
if the Closing shall not have occurred by September 30, 2010, on such
date.

     

    In
the event of termination of this Agreement as provided in this Section 6.1, this
Agreement shall forthwith become void and there shall be no liability on the
part of either party hereto except that nothing herein shall relieve either
party from liability for any breach of this Agreement.

     

     

    
      
        
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    6.2    Survival.

     

    (a)   
This Agreement and all representations, warranties, covenants and agreements
made herein shall survive the Closing without limitation.

     

    (b)   
The covenants set forth in Article IV and Annex
E and the agreements set forth in Article V shall, to the extent such
covenants do not explicitly terminate at such time as the Investor no longer
owns any Preferred Shares, survive the termination of this Agreement pursuant to
Section 6.1(c) hereof without limitation until the date on which all of the
Preferred Shares have been redeemed in whole.

     

    6.3    Amendment.  No
amendment of any provision of this Agreement will be effective unless made in
writing and signed by an officer or a duly authorized representative of each
party; provided that
for so long as the Preferred Shares are outstanding, the Investor may at any
time and from time to time unilaterally amend Section 4.1(d) to the extent
the Investor deems necessary, in its sole discretion, to comply with, or conform
to, any changes after the Signing Date in any federal statutes, any rules and
regulations promulgated thereunder and any other publications or interpretative
releases of the Fund governing CDFIs, including, without limitation, any changes
in the criteria for certification as a CDFI by the Fund.  No failure
or delay by any party in exercising any right, power or privilege hereunder
shall operate as a waiver thereof nor shall any single or partial exercise
thereof preclude any other or further exercise of any other right, power or
privilege.  The rights and remedies herein provided shall be
cumulative of any rights or remedies provided by law.

     

    6.4    Waiver of
Conditions.  The
conditions to each party’s obligation to consummate the Purchase are for the
sole benefit of such party and may be waived by such party in whole or in part
to the extent permitted by applicable law. No waiver will be effective unless it
is in a writing signed by a duly authorized officer of the waiving party that
makes express reference to the provision or provisions subject to such
waiver.

     

    6.5    Governing Law; Submission to Jurisdiction,
etc.  This
Agreement and any claim, controversy or dispute arising under or related to this
Agreement, the relationship of the parties, and/or the interpretation and
enforcement of the rights and duties of the parties shall be enforced, governed,
and construed in all respects (whether in contract or in tort) in accordance
with the federal law of the United States if and to the extent such law is
applicable, and otherwise in accordance with the laws of the State of New York
applicable to contracts made and to be performed entirely within such State.
Each of the parties hereto agrees (a) to submit to the exclusive jurisdiction
and venue of the United States District Court for the District of Columbia and
the United States Court of Federal Claims for any and all civil actions, suits
or proceedings arising out of or relating to this Agreement or the Purchase
contemplated hereby and (b) that notice may be served upon (i) the Company at
the address and in the manner set forth for notices to the Company in Section
6.6 and (ii) the Investor at the address and in the manner set forth for notices
to the Company in Section 6.6, but otherwise in accordance with federal law. TO
THE EXTENT PERMITTED BY APPLICABLE LAW, EACH OF THE PARTIES HERETO HEREBY
UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY CIVIL LEGAL ACTION OR PROCEEDING
RELATING TO THIS AGREEMENT OR THE PURCHASE CONTEMPLATED HEREBY.

     

     

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

     

    
      	
               
      

            	
              If
      to the Investor:

            


    

     

    


     

    
      	
               
      

            	
              United
      States Department of the Treasury

            


    

    
      	
               
      

            	
              1500
      Pennsylvania Avenue, NW

            


    

    
      	
               
      

            	
              Washington,
      D.C. 20220

            


    

    Attention:  Chief
Counsel, Office of Financial Stability

    Facsimile:  (202)
927-9225

    E-mail:
CDCINotice@do.treas.gov

    


    
      	
               
      

            	
              with
      a copy to:

            


    

    


    E-mail:  OFSChiefCounselNotices@do.treas.gov

    


     

    6.7    Assignment.  Neither
this Agreement nor any right, remedy, obligation nor liability arising hereunder
or by reason hereof shall be assignable by any party hereto without the prior
written consent of the other party, and any attempt to assign any right, remedy,
obligation or liability hereunder without such consent shall be void, except (a)
an assignment, in the case of a merger, consolidation, statutory share exchange
or similar transaction that requires the approval of the Company’s stockholders
(a “Business
Combination”) where such party is not the surviving entity, or a sale of
substantially all of its assets, to the entity which is the survivor of such
Business Combination or the purchaser in such sale, (b) an assignment of certain
rights as provided in Sections 4.1(c) or 4.1(j) or Annex E or (c) an
assignment by the Investor of this Agreement to an Affiliate of the Investor;
provided that if the
Investor assigns this Agreement to an Affiliate, the Investor shall be relieved
of its obligations under this Agreement but (i) all rights, remedies and
obligations of the Investor hereunder shall continue and be enforceable by such
Affiliate, (ii) the Company’s obligations and liabilities hereunder shall
continue to be outstanding and (iii) all references to the Investor herein shall
be deemed to be references to such Affiliate.

     

    6.8    Severability.  If
any provision of this Agreement, or the application thereof to any person or
circumstance, is determined by a court of competent jurisdiction to be invalid,
void or unenforceable, the remaining provisions hereof, or the application of
such provision to persons or circumstances other than those as to which it has
been held invalid or unenforceable, will remain in full force and effect and
shall in no way be affected, impaired or invalidated thereby, so long as the
economic or legal substance of the transactions contemplated 

     

     

    
      
        
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      hereby is
not affected in any manner materially adverse to any party. Upon such
determination, the parties shall negotiate in good faith in an effort to agree
upon a suitable and equitable substitute provision to effect the original intent
of the parties.

    

     

    6.9    No Third Party
Beneficiaries.  Other
than as expressly provided herein, nothing contained in this Agreement,
expressed or implied, is intended to confer upon any person or entity other than
the Company and the Investor (and any Indemnitee) any benefit, right or
remedies.

     

    6.10    Specific
Performance.  The
parties agree that irreparable damage would occur in the event that any of the
provisions of this Agreement were not performed in accordance with their
specific terms.  It is accordingly agreed that the parties shall be
entitled (without the necessity of posting a bond) to specific performance of
the terms hereof, this being in addition to any other remedies to which they are
entitled at law or equity.

     

    


     

    *  *  *

     

     

     

    
      
        
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    ANNEX
A

     

    FORM
OF OFFICER’S CERTIFICATE

     

    


     

    OFFICER’S
CERTIFICATE


     

    OF


     

    [COMPANY]

     

     In
connection with that certain letter agreement, dated  [____________], 2010 (the “Agreement”) by and between
[COMPANY] (the “Company”) and the United
States Department of the Treasury which incorporates that certain Securities
Purchase Agreement –Standard Terms referred to therein (the “Standard Terms”), the
undersigned does hereby certify as follows:

     

    1. I am a
duly elected/appointed [____________] of the Company.

     

    2. The
representations and warranties of the Company set forth in Section 3.1 of the
Standard Terms are true and correct in all respects as though as of the date
hereof (other than representations and warranties that by their terms speak as
of another date, which representations and warranties shall be true and correct
in all respects as of such other date) and the Company has performed in all
material respects all obligations required to be performed by it under the
Agreement.

     

    3. The
Certificate of Designations, a true, complete and correct copy of which is
attached as Exhibit
A hereto, has been filed with, and accepted by, the Secretary of State of
the State of [___________].

     

    4. The
Company has effected such changes to its Benefit Plans with respect to its
Senior Executive Officers and any other employee of the Company or its
Affiliates subject to Section 111 of EESA, as implemented by any Compensation
Regulations (and to the extent necessary for such changes to be legally
enforceable, each of its Senior Executive Officers and other employees has duly
consented in writing to such changes), as may be necessary, during the Relevant
Period, in order to comply with Section 111 of EESA or the Compensation
Regulations.

     

    The
foregoing certifications are made and delivered as of [_________] pursuant to Section 2.3 of
the Standard Terms.

     

     

    
      
        
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    Capitalized
terms used and not otherwise defined herein shall have the meanings assigned to
them in the Standard Terms.

     

    [SIGNATURE
PAGE FOLLOWS]


    
      
        
        

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

     

    
      	
               
      

            	
              [COMPANY]

            


    

     

    
      	
               
      

            	
               

            	By: _____________________________ 


    

    
      	
               
      

            	
              Name:

            


    

    
      	
               
      

            	
              Title:

            


    


    
      
        
        

        
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    EXHIBIT
A

    



    
      
        
        

        
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        Exh.
A-1  

        
          

        

      

      
         


      

    


    


     

    ANNEX
B

     

    FORM OF CERTIFICATE OF
DESIGNATIONS FOR PREFERRED STOCK

     

    [SEE
ATTACHED]


    
      
        
        

        UST Sequence No. 208

      

      
        B-1 


        
          

        

      

      
         


      

    


    


     

    ANNEX
C

     

    


     

    FORM OF
WAIVER

     

    In
consideration for the benefits I will receive as a result of the participation
of [NAME OF COMPANY] (together with its
subsidiaries and affiliates, the “Company”) in the United
States Department of the Treasury’s (“Treasury”) Community
Development Capital Initiative and/or any other economic stabilization program
implemented by Treasury under the Emergency Economic Stabilization Act of 2008
(as amended, supplemented or otherwise modified, “EESA”) (any such initiative
or program, including the Community Development Capital Initiative, a “Program”), I hereby
voluntarily waive any claim against the United States (and each of its
departments and agencies) or the Company or any of its directors, officers,
employees and agents for any changes to my compensation or benefits that are
required to comply with the executive compensation and corporate governance
requirements of Section 111 of EESA, as implemented by any guidance or
regulation thereunder, including the rules set forth in 31 C.F.R. Part 30, or
any other guidance or regulations under EESA, and the applicable requirements of
the Securities Purchase Agreement by and between the Company and Treasury dated
as of [         ], 2010, as amended (such
requirements, the “Limitations”).

     

    I
acknowledge that the Limitations may require modification or termination of the
employment, compensation, bonus, incentive, severance, retention and other
benefit plans, arrangements, policies and agreements (including so-called
“golden parachute” agreements), whether or not in writing, that I may have with
the Company or in which I may participate as they relate to the period the
United States holds any equity or debt securities of the Company acquired
through a Program or for any other period applicable under such Program or
Limitations, as the case may be, and I hereby consent to all such
modifications.

     

    This
waiver includes all claims I may have under the laws of the United States or any
other jurisdiction (whether or not in existence as of the date hereof) related
to the requirements imposed by the Limitations, including without limitation a
claim for any compensation or other payments or benefits I would otherwise
receive, any challenge to the process by which the Limitations are or were
adopted and any tort or constitutional claim about the effect of the Limitations
on my employment relationship and I hereby agree that I will not at any time
initiate, or cause or permit to be initiated on my behalf, any such claim
against the United States (or any of its departments or agencies) or the Company
or any of its directors, officers, employees or agents in or before any local,
state, federal or other agency, court or body.

     

    I agree
that, in the event and to the extent that the Compensation Committee of the
Board of Directors of the Company or similar governing body (the “Committee”) reasonably
determines that any compensatory payment or benefit provided to me, including
any bonus or incentive compensation based on materially inaccurate financial
statements or performance criteria, would cause the Company to fail to be in
compliance with the Limitations (such payment or benefit, an “Excess Payment”), upon
notification from the Company, I shall repay such Excess Payment to the Company
within 15 business days.  In addition, I agree that the 

     

     

    
      
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        C-1

        
          

        

      

      
        
        
Company
shall have the right to postpone any such payment or benefit for a reasonable
period of time to enable the Committee to determine whether such payment or
benefit would constitute an Excess Payment.

    

     

    I
understand that any determination by the Committee as to whether or not,
including the manner in which, a payment or benefit needs to be modified,
terminated or repaid in order for the Company to be in compliance with Section
111 of EESA and/or the Limitations shall be a final and conclusive determination
of the Committee which shall be binding upon me.  I further understand
that the Company is relying on this letter from me in connection with its
participation in a Program.

     

    In
witness whereof, I execute this waiver on my own behalf, thereby communicating
my acceptance and acknowledgement to the provisions herein.

     

    
      	
               
      

            	
              Respectfully,

               

               

            


    

     

    
      	
               
      

            	
              By:

            	By: _____________________ 


    

    
      	
               
      

            	
              Name:

            


    

    
      	
               
      

            	
              Title:

            


    

    
      	
               
      

            	
              Date:

            


    


    
      
        
        

         
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    ANNEX
D

     

    FORM OF
OPINION

     

    (a)           The
Company has been duly formed and is validly existing as a [TYPE OF ORGANIZATION] and is
in good standing under the laws of the jurisdiction of its
organization.  The Company has all necessary power and authority to
own, operate and lease its properties and to carry on its business as it is
being conducted.

     

    (b)           The
Company has been duly qualified as a foreign entity for the transaction of
business and is in good standing under the laws of [_____________], [_____________] and [_____________].

     

    (c)           The
Preferred Shares have been duly and validly authorized, and, when issued and
delivered pursuant to the Agreement, the Preferred Shares will be duly and
validly issued and fully paid and non-assessable, will not be issued in
violation of any preemptive rights, and will rank pari passu with or senior to
all other series or classes of Preferred Stock issued on the Closing Date with
respect to the payment of dividends and the distribution of assets in the event
of any dissolution, liquidation or winding up of the Company.

     

    (d)           The
Company has the corporate power and authority to execute and deliver the
Agreement and to carry out its obligations thereunder (which includes the
issuance of the Preferred Shares).

     

    (e)           The
execution, delivery and performance by the Company of the Agreement and the
consummation of the transactions contemplated thereby have been duly authorized
by all necessary corporate action on the part of the Company and its
stockholders, and no further approval or authorization is required on the part
of the Company, including, without limitation, by any rule or requirement of any
national stock exchange.

     

    (f)           The
Agreement is a valid and binding obligation of the Company enforceable against
the Company in accordance with its terms, except as the same may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors’ rights generally and general equitable
principles, regardless of whether such enforceability is considered in a
proceeding at law or in equity.

     

    (g)           The
execution and delivery by the Company of this Agreement and the performance by
the Company of its obligations thereunder (i) do not require any approval by any
Governmental Entity to be obtained on the part of the Company, except those that
have been obtained, (ii) do not violate or conflict with any provision of the
Charter, (iii) do not violate, conflict with, or result in a breach of any
provision of, or constitute a default (or an event which, with notice or lapse
of time or both, would constitute a default) under, or result in the termination
of, or accelerate the performance required by, or result in a right of
termination or acceleration of, or result in the creation of, any lien, security
interest, charge or encumbrance upon any of the properties or assets of the
Company or any Company Subsidiary under any of the terms, conditions or
provisions of its organizational documents or under any agreement, contract,


     

     

    
      
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      indenture,
lease, mortgage, power of attorney, evidence of indebtedness, letter of credit,
license, instrument, obligation, purchase or sales order, or other commitment,
whether oral or written, to which it is a party or by which it or any of its
properties is bound or (iv) do not conflict with, breach or result in a
violation of, or default under any judgment, decree or order known to us that is
applicable to the Company and, pursuant to any applicable laws, is issued by any
Governmental Entity having jurisdiction over the Company.

    

     

    (h)           Other
than the filing of the Certificate of Designations with the Secretary of State
of its jurisdiction of organization or other applicable Governmental Entity,
such filings and approvals as are required to be made or obtained under any
state “blue sky” laws and such consents and approvals that have been made or
obtained, no notice to, filing with, exemption or review by, or authorization,
consent or approval of, any Governmental Entity is required to be made or
obtained by the Company in connection with the consummation by the Company of
the Purchase.

     

    (i)           The
Company is not nor, after giving effect to the issuance of the Preferred Shares
pursuant to the Agreement, would be on the date hereof an “investment company”
or an entity “controlled” by an “investment company,” as such terms are defined
in the Investment Company Act of 1940, as amended.

     

    (j)           Each
Certified Entity (A) is a regulated community development financial institution
(a “CDFI”) currently
certified by the Community Development Financial Institution Fund (the “Fund”) of the United States
Department of the Treasury pursuant to 12 C.F.R. 1805.201(a) and (B) satisfies
all of the eligibility requirements of the Fund’s Community Development
Financial Institutions Program for a CDFI.


    
      
        
        

         
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    ANNEX
E

     

    REGISTRATION
RIGHTS

     

    1.1           Definitions.  Terms
not defined in this Annex shall have the meaning ascribed to such terms in the
Agreement. As used in this Annex E, the
following terms shall have the following respective meanings:

     

    (a)           “Holder” means the Investor
and any other holder of Registrable Securities to whom the registration rights
conferred by this Agreement have been transferred in compliance with Section 1.9
hereof.

     

    (b)           “Holders’ Counsel” means one
counsel for the selling Holders chosen by Holders holding a majority interest in
the Registrable Securities being registered.

     

    (c)           “Pending Underwritten
Offering” means, with respect to any Holder forfeiting its rights
pursuant to Section 1.11 of this Annex E, any
underwritten offering of Registrable Securities in which such Holder has advised
the Company of its intent to register its Registrable Securities either pursuant
to Section 1.2(b) or Section 1.2(d) of this Annex E prior to the
date of such Holder’s forfeiture.

     

    (d)           “Register”, “registered”, and “registration” shall refer to
a registration effected by preparing and (A) filing a registration statement or
amendment thereto in compliance with the Securities Act and applicable rules and
regulations thereunder, and the declaration or ordering of effectiveness of such
registration statement or amendment thereto or (B) filing a prospectus and/or
prospectus supplement in respect of an appropriate effective registration
statement on Form S-3.

     

    (e)           “Registrable Securities” means (A) all Preferred
Shares and (B) any equity securities issued or issuable directly or indirectly
with respect to the securities referred to in the foregoing clause (A) by way of
conversion, exercise or exchange thereof, or share dividend or share split or in
connection with a combination of shares, recapitalization, reclassification,
merger, amalgamation, arrangement, consolidation or other reorganization, provided that, once issued,
such securities will not be Registrable Securities when (1) they are sold
pursuant to an effective registration statement under the Securities Act, (2)
they shall have ceased to be outstanding or (3) they have been sold in any
transaction in which the transferor’s rights under this Agreement are not
assigned to the transferee of the securities.  No Registrable
Securities may be registered under more than one registration statement at any
one time.

     

    (f)           “Registration Expenses” mean
all expenses incurred by the Company in effecting any registration pursuant to
this Agreement (whether or not any registration or prospectus becomes effective
or final) or otherwise complying with its obligations under this Annex E, including
all registration, filing and listing fees, printing expenses, fees and
disbursements of counsel for the Company, blue sky fees and expenses, expenses
incurred in connection with any “road show”, the reasonable fees and
disbursements of Holders’ Counsel, and expenses of the
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    special
reviews or audits incident to or required by any such registration, but shall
not include Selling Expenses.

     

    (g)           “Rule 144”, “Rule 144A”, “Rule 159A”, “Rule 405” and “Rule 415” mean, in each case,
such rule promulgated under the Securities Act (or any successor provision), as
the same shall be amended from time to time.

     

    (h)           “Selling Expenses” mean all
discounts, selling commissions and stock transfer taxes applicable to the sale
of Registrable Securities and fees and disbursements of counsel for any Holder
(other than the fees and disbursements of Holders’ Counsel included in
Registration Expenses).

     

    (i)           “Special Registration” means
the registration of (A) equity securities and/or options or other rights in
respect thereof solely registered on Form S-4 or Form S-8 (or successor form) or
(B) shares of equity securities and/or options or other rights in respect
thereof to be offered to directors, members of management, employees,
consultants, customers, lenders or vendors of the Company or Company
Subsidiaries or in connection with dividend reinvestment plans.

     

    1.2           Registration.

     

    (a)           The
Company covenants and agrees that as promptly as practicable after the date that
the Company becomes subject to the reporting requirements of Section 13 or 15(d)
of the Exchange Act (and in any event no later than 30 days thereafter), the
Company shall prepare and file with the SEC a Shelf Registration Statement
covering all Registrable Securities (or otherwise designate an existing shelf
registration on an appropriate form under Rule 415 under the Securities Act (a
“Shelf Registration
Statement”) filed with the SEC to cover the Registrable Securities), and,
to the extent the Shelf Registration Statement has not theretofore been declared
effective or is not automatically effective upon such filing, the Company shall
use reasonable best efforts to cause such Shelf Registration Statement to be
declared or become effective and to keep such Shelf Registration Statement
continuously effective and in compliance with the Securities Act and usable for
resale of such Registrable Securities for a period from the date of its initial
effectiveness until such time as there are no Registrable Securities remaining
(including by refiling such Shelf Registration Statement (or a new Shelf
Registration Statement) if the initial Shelf Registration Statement
expires).  Notwithstanding the foregoing, if the Company is not
eligible to file a registration statement on Form S-3, then the Company shall
not be obligated to file a Shelf Registration Statement unless and until
requested to do so in writing by the Investor.

     

    (b)           Any
registration pursuant to Section 1.2(a) of this Annex E shall be
effected by means of a Shelf Registration Statement on an appropriate form under
Rule 415 under the Securities Act (a “Shelf Registration
Statement”).  If the Investor or any other Holder intends to
distribute any Registrable Securities by means of an underwritten offering it
shall promptly so advise the Company and the Company shall take all reasonable
steps to facilitate such distribution, including the actions required pursuant
to Section 1.2(d) of this Annex E; provided that the Company
shall not be required to facilitate an underwritten offering of Registrable
Securities unless (i) the expected gross proceeds from such offering exceed
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      or (ii)
such underwritten offering includes all of the outstanding Registrable
Securities held by such Holder.   The lead underwriters in any
such distribution shall be selected by the Holders of a majority of the
Registrable Securities to be distributed.

    

     

    (c)           The
Company shall not be required to effect a registration (including a resale of
Registrable Securities from an effective Shelf Registration Statement) or an
underwritten offering pursuant to Section 1.2 of this Annex
E:  (A) with respect to securities that are not Registrable
Securities; or (B) if the Company has notified the Investor and all other
Holders that in the good faith judgment of the Board of Directors, it would be
materially detrimental to the Company or its securityholders for such
registration or underwritten offering to be effected at such time, in which
event the Company shall have the right to defer such registration for a period
of not more than 45 days after receipt of the request of the Investor or any
other Holder; provided
that such right to delay a registration or underwritten offering shall be
exercised by the Company (1) only if the Company has generally exercised (or is
concurrently exercising) similar black-out rights against holders of similar
securities that have registration rights and (2) not more than three times in
any 12-month period and not more than 90 days in the aggregate in any 12-month
period.

     

    (d)           If
during any period when an effective Shelf Registration Statement is not
available, the Company proposes to register any of its equity securities, other
than a registration pursuant to Section 1.2(a) of this Annex E or a Special
Registration, and the registration form to be filed may be used for the
registration or qualification for distribution of Registrable Securities, the
Company will give prompt written notice to the Investor and all other Holders of
its intention to effect such a registration (but in no event less than ten days
prior to the anticipated filing date) and will include in such registration all
Registrable Securities with respect to which the Company has received written
requests for inclusion therein within ten business days after the date of the
Company’s notice (a “Piggyback
Registration”).  Any such person that has made such a written
request may withdraw its Registrable Securities from such Piggyback Registration
by giving written notice to the Company and the managing underwriter, if any, on
or before the fifth business day prior to the planned effective date of such
Piggyback Registration.  The Company may terminate or withdraw any
registration under this Section 1.2(d) prior to the effectiveness of such
registration, whether or not Investor or any other Holders have elected to
include Registrable Securities in such registration.

     

    (e)           If
the registration referred to in Section 1.2(d) of this Annex E is proposed
to be underwritten, the Company will so advise Investor and all other Holders as
a part of the written notice given pursuant to Section 1.2(d) of this Annex
E.  In such event, the right of Investor and all other Holders
to registration pursuant to Section 1.2 of this Annex E will be
conditioned upon such persons’ participation in such underwriting and the
inclusion of such person’s Registrable Securities in the underwriting if such
securities are of the same class of securities as the securities to be offered
in the underwritten offering, and each such person will (together with the
Company and the other persons distributing their securities through such
underwriting) enter into an underwriting agreement in customary form with the
underwriter or underwriters selected for such underwriting by the Company; provided that the Investor
(as opposed to other Holders) shall not be required to indemnify any person in
connection with any registration. If any participating person disapproves of the
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      may elect
to withdraw therefrom by written notice to the Company, the managing
underwriters and the Investor (if the Investor is participating in the
underwriting).

    

     

    (f)           If
either (x) the Company grants “piggyback” registration rights to one or more
third parties to include their securities in an underwritten offering under the
Shelf Registration Statement pursuant to Section 1.2(b) of this Annex E or (y) a
Piggyback Registration under Section 1.2(d) of this Annex E relates to an
underwritten offering on behalf of the Company, and in either case the managing
underwriters advise the Company that in their reasonable opinion the number of
securities requested to be included in such offering exceeds the number which
can be sold without adversely affecting the marketability of such offering
(including an adverse effect on the per share offering price), the Company will
include in such offering only such number of securities that in the reasonable
opinion of such managing underwriters can be sold without adversely affecting
the marketability of the offering (including an adverse effect on the per share
offering price), which securities will be so included in the following order of
priority: (A) first, in the case of a Piggyback Registration under Section
1.2(d) of this Annex
E, the securities the Company proposes to sell, (B) then the Registrable
Securities of the Investor and all other Holders who have requested inclusion of
Registrable Securities pursuant to Section 1.2(b) or Section 1.2(d) of this
Annex E, as
applicable, pro rata on
the basis of the aggregate number of such securities or shares owned by each
such person and (C) lastly, any other securities of the Company that have been
requested to be so included, subject to the terms of this Agreement; provided, however, that if the Company
has, prior to the Signing Date, entered into an agreement with respect to its
securities that is inconsistent with the order of priority contemplated hereby
then it shall apply the order of priority in such conflicting agreement to the
extent that it would otherwise result in a breach under such
agreement.

     

    1.3           Expenses of
Registration.  All Registration Expenses incurred in connection
with any registration, qualification or compliance hereunder shall be borne by
the Company.  All Selling Expenses incurred in connection with any
registrations hereunder shall be borne by the holders of the securities so
registered pro rata on
the basis of the aggregate offering or sale price of the securities so
registered.

     

    1.4           Obligations of the
Company.  Whenever required to effect the registration of any
Registrable Securities or facilitate the distribution of Registrable Securities
pursuant to an effective Shelf Registration Statement, the Company shall, as
expeditiously as reasonably practicable:

     

    (a)           Prepare
and file with the SEC a prospectus supplement or post-effective amendment with
respect to a proposed offering of Registrable Securities pursuant to an
effective registration statement, subject to Section 1.4 of this Annex E, keep such
registration statement effective and keep such prospectus supplement current
until the securities described therein are no longer Registrable
Securities.

     

    (b)           Prepare
and file with the SEC such amendments and supplements to the applicable
registration statement and the prospectus or prospectus supplement used in
connection with such registration statement as may be necessary to comply with
the provisions of the Securities Act with respect to the disposition of all
securities covered by such registration statement.

     

     

    
      
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    (c)           Furnish
to the Holders and any underwriters such number of copies of the applicable
registration statement and each such amendment and supplement thereto (including
in each case all exhibits) and of a prospectus, including a preliminary
prospectus, in conformity with the requirements of the Securities Act, and such
other documents as they may reasonably request in order to facilitate the
disposition of Registrable Securities owned or to be distributed by
them.

     

    (d)           Use
its reasonable best efforts to register and qualify the securities covered by
such registration statement under such other securities or Blue Sky laws of such
jurisdictions as shall be reasonably requested by the Holders or any managing
underwriter(s), to keep such registration or qualification in effect for so long
as such registration statement remains in effect, and to take any other action
which may be reasonably necessary to enable such seller to consummate the
disposition in such jurisdictions of the securities owned by such Holder; provided that the Company
shall not be required in connection therewith or as a condition thereto to
qualify to do business or to file a general consent to service of process in any
such states or jurisdictions.

     

    (e)           Notify
each Holder of Registrable Securities at any time when a prospectus relating
thereto is required to be delivered under the Securities Act of the happening of
any event as a result of which the applicable prospectus, as then in effect,
includes an untrue statement of a material fact or omits to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading in light of the circumstances then existing.

     

    (f)           Give
written notice to the Holders:

     

    (i)           when
any registration statement filed pursuant to Section 4.1(j) of the Agreement or
any amendment thereto has been filed with the SEC (except for any amendment
effected by the filing of a document with the SEC pursuant to the Exchange Act)
and when such registration statement or any post-effective amendment thereto has
become effective;

     

    (ii)           of
any request by the SEC for amendments or supplements to any registration
statement or the prospectus included therein or for additional
information;

     

    (iii)           of
the issuance by the SEC of any stop order suspending the effectiveness of any
registration statement or the initiation of any proceedings for that
purpose;

     

    (iv)           of
the receipt by the Company or its legal counsel of any notification with respect
to the suspension of the qualification of the applicable Registrable Securities
for sale in any jurisdiction or the initiation or threatening of any proceeding
for such purpose;

     

    (v)           of
the happening of any event that requires the Company to make changes in any
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      registration
statement in order to make the statements therein not misleading (which notice
shall be accompanied by an instruction to suspend the use of the prospectus
until the requisite changes have been made); and

       

    

    (vi)           if
at any time the representations and warranties of the Company contained in any
underwriting agreement contemplated by Section 1.4(j) of this Annex E cease to be
true and correct.

     

    (g)           Use
its reasonable best efforts to prevent the issuance or obtain the withdrawal of
any order suspending the effectiveness of any registration statement referred to
in Section 1.4(f)(iii) of this Annex E at the
earliest practicable time.

     

    (h)           Upon
the occurrence of any event contemplated by Section 1.4(e) or 1.4(f)(v) of this
Annex E,
promptly prepare a post-effective amendment to such registration statement or a
supplement to the related prospectus or file any other required document so
that, as thereafter delivered to the Holders and any underwriters, the
prospectus will not contain an untrue statement of a material fact or omit to
state any material fact necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading.  If the
Company notifies the Holders in accordance with Section 1.4(f)(v) to suspend the
use of the prospectus until the requisite changes to the prospectus have been
made, then the Holders and any underwriters shall suspend use of such prospectus
and use their reasonable best efforts to return to the Company all copies of
such prospectus (at the Company’s expense) other than permanent file copies then
in such Holders’ or underwriters’ possession.  The total number of
days that any such suspension may be in effect in any 12-month period shall not
exceed 90 days.

     

    (i)           Use
reasonable best efforts to procure the cooperation of the Company’s transfer
agent in settling any offering or sale of Registrable Securities, including with
respect to the transfer of physical stock certificates into book-entry form in
accordance with any procedures reasonably requested by the Holders or any
managing underwriter(s).

     

    (j)           If
an underwritten offering is requested pursuant to Section 1.2(b) of this Annex E, enter into
an underwriting agreement in customary form, scope and substance and take all
such other actions reasonably requested by the Holders of a majority of the
Registrable Securities being sold in connection therewith or by the managing
underwriter(s), if any, to expedite or facilitate the underwritten disposition
of such Registrable Securities, and in connection therewith in any underwritten
offering (including making members of management and executives of the Company
available to participate in “road shows”, similar sales events and other
marketing activities), (A) make such representations and warranties to the
Holders that are selling stockholders and the managing underwriter(s), if any,
with respect to the business of the Company and its subsidiaries, and the Shelf
Registration Statement, prospectus and documents, if any, incorporated or deemed
to be incorporated by reference therein, in each case, in customary form,
substance and scope, and, if true, confirm the same if and when requested, (B)
use its reasonable best efforts to furnish the underwriters with opinions of
counsel to the Company, addressed to the managing underwriter(s), if any,
covering the matters customarily covered in such opinions requested in
underwritten offerings, (C) use its reasonable best efforts to obtain “cold
comfort” letters from the independent certified public accountants of the
Company (and, if necessary, any other independent certified public accountants
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      acquired
by the Company for which financial statements and financial data are included in
the Shelf Registration Statement) who have certified the financial statements
included in such Shelf Registration Statement, addressed to each of the managing
underwriter(s), if any, such letters to be in customary form and covering
matters of the type customarily covered in “cold comfort” letters, (D) if an
underwriting agreement is entered into, the same shall contain indemnification
provisions and procedures customary in underwritten offerings (provided that the Investor
shall not be obligated to provide any indemnity), and (E) deliver such documents
and certificates as may be reasonably requested by the Holders of a majority of
the Registrable Securities being sold in connection therewith, their counsel and
the managing underwriter(s), if any, to evidence the continued validity of the
representations and warranties made pursuant to clause (A) above and to evidence
compliance with any customary conditions contained in the underwriting agreement
or other agreement entered into by the Company.

    

     

    (k)           Make
available for inspection by a representative of Holders that are selling
stockholders, the managing underwriter(s), if any, and any attorneys or
accountants retained by such Holders or managing underwriter(s), at the offices
where normally kept, during reasonable business hours, financial and other
records, pertinent corporate documents and properties of the Company, and cause
the officers, directors and employees of the Company to supply all information
in each case reasonably requested (and of the type customarily provided in
connection with due diligence conducted in connection with a registered public
offering of securities) by any such representative, managing underwriter(s),
attorney or accountant in connection with such Shelf Registration
Statement.

     

    (l)           Use
reasonable best efforts to cause all such Registrable Securities to be listed on
each national securities exchange on which similar securities issued by the
Company are then listed or, if no similar securities issued by the Company are
then listed on any national securities exchange, use its reasonable best efforts
to cause all such Registrable Securities to be listed on such securities
exchange as the Investor may designate.

     

    (m)           If
requested by Holders of a majority of the Registrable Securities being
registered and/or sold in connection therewith, or the managing underwriter(s),
if any, promptly include in a prospectus supplement or amendment such
information as the Holders of a majority of the Registrable Securities being
registered and/or sold in connection therewith or managing underwriter(s), if
any, may reasonably request in order to permit the intended method of
distribution of such securities and make all required filings of such prospectus
supplement or such amendment as soon as practicable after the Company has
received such request.

     

    (n)           Timely
provide to its security holders earning statements satisfying the provisions of
Section 11(a) of the Securities Act and Rule 158 thereunder.

     

    1.5           Suspension of
Sales.  Upon receipt of written notice from the Company that a
registration statement, prospectus or prospectus supplement contains or may
contain an untrue statement of a material fact or omits or may omit to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading or that circumstances exist that make inadvisable use of
such registration statement, prospectus or prospectus supplement, the Investor
and each Holder of Registrable Securities shall forthwith discontinue
disposition of Registrable Securities until the Investor and/or Holder has
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      supplemented
or amended prospectus or prospectus supplement, or until the Investor and/or
such Holder is advised in writing by the Company that the use of the prospectus
and, if applicable, prospectus supplement may be resumed, and, if so directed by
the Company, the Investor and/or such Holder shall deliver to the Company (at
the Company’s expense) all copies, other than permanent file copies then in the
Investor and/or such Holder’s possession, of the prospectus and, if applicable,
prospectus supplement covering such Registrable Securities current at the time
of receipt of such notice.  The total number of days that any such
suspension may be in effect in any 12-month period shall not exceed 90
days.

    

     

    1.6           Termination of Registration
Rights.  A Holder’s registration rights as to any securities
held by such Holder (and its Affiliates, partners, members and former members)
shall not be available unless such securities are Registrable
Securities.

     

    1.7           Furnishing
Information.

     

    (a)           Neither
the Investor nor any Holder shall use any free writing prospectus (as defined in
Rule 405) in connection with the sale of Registrable Securities without the
prior written consent of the Company.

     

    (b)           It
shall be a condition precedent to the obligations of the Company to take any
action pursuant to Section 1.4 of this Annex E that Investor
and/or the selling Holders and the underwriters, if any, shall furnish to the
Company such information regarding themselves, the Registrable Securities held
by them and the intended method of disposition of such securities as shall be
required to effect the registered offering of their Registrable
Securities.

     

    1.8           Indemnification.

     

    (a)           The
Company agrees to indemnify each Holder and, if a Holder is a person other than
an individual, such Holder’s officers, directors, employees, agents,
representatives and Affiliates, and each person, if any, that controls a Holder
within the meaning of the Securities Act (each, an “Indemnitee”), against any and
all losses, claims, damages, actions, liabilities, costs and expenses (including
reasonable fees, expenses and disbursements of attorneys and other professionals
incurred in connection with investigating, defending, settling, compromising or
paying any such losses, claims, damages, actions, liabilities, costs and
expenses), joint or several, arising out of or based upon any untrue statement
or alleged untrue statement of material fact contained in any registration
statement, including any preliminary prospectus or final prospectus contained
therein or any amendments or supplements thereto or any documents incorporated
therein by reference or contained in any free writing prospectus (as such term
is defined in Rule 405) prepared by the Company or authorized by it in writing
for use by such Holder (or any amendment or supplement thereto); or any omission
to state therein a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading; provided, that the Company
shall not be liable to such Indemnitee in any such case to the extent that any
such loss, claim, 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 

     

     

    
      
        UST Sequence No. 208

      

      
        E-8

        
          

        

      

      
        
        

      

       

      405)
prepared by the Company or authorized by it in writing for use by such Holder
(or any amendment or supplement thereto), in reliance upon and in conformity
with information regarding such Indemnitee or its plan of distribution or
ownership interests which was furnished in writing to the Company by such
Indemnitee for use in connection with such registration statement, including any
such preliminary prospectus or final prospectus contained therein or any such
amendments or supplements thereto, or (B)  offers or sales effected by
or on behalf of such Indemnitee “by means of” (as defined in Rule 159A) a “free
writing prospectus” (as defined in Rule 405) that was not authorized in writing
by the Company.

    

     

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

     

    1.9           Assignment of Registration
Rights.  The rights of the Investor to registration of
Registrable Securities pursuant to Section 1.2 of this Annex E may be
assigned by the Investor to a transferee or assignee of Registrable Securities;
provided, however, the transferor
shall, within ten days after such transfer, furnish to the Company written
notice of the name and address of such transferee or assignee and the number and
type of Registrable Securities that are being assigned.

     

    1.10           Clear
Market.  With respect to any underwritten offering of
Registrable Securities by the Investor or other Holders pursuant to this Annex E, the Company
agrees not to effect (other than pursuant to such registration or pursuant to a
Special Registration) any public sale or distribution, or to file any Shelf
Registration Statement (other than such registration or a Special Registration)
covering any preferred stock of the Company or any securities convertible into
or exchangeable or exercisable for preferred stock of the Company, during the
period not to exceed ten days prior and 60 days following the effective date of
such offering or such longer period up to 90 days as may be requested by the
managing underwriter for such underwritten offering.  The Company also
agrees to cause such of its directors and senior executive officers to


     

     

    
      
        UST Sequence No. 208

      

      
        E-9

        
          

        

      

      
        
        

      

       

      execute
and deliver customary lock-up agreements in such form and for such time period
up to 90 days as may be requested by the managing
underwriter.

    

     

    1.11           Forfeiture of
Rights.  At any time, any holder of Registrable Securities
(including any Holder) may elect to forfeit its rights set forth in this Annex E from that
date forward; provided,
that a Holder forfeiting such rights shall nonetheless be entitled to
participate under Section 1.2(d) – (f) of this Annex E in any
Pending Underwritten Offering to the same extent that such Holder would have
been entitled to if the holder had not withdrawn; and provided, further, that no such
forfeiture shall terminate a Holder’s rights or obligations under Section 1.7 of
this Annex E
with respect to any prior registration or Pending Underwritten
Offering.

     

    1.12           Specific
Performance.  The parties hereto acknowledge that there would
be no adequate remedy at law if the Company fails to perform any of its
obligations under this Annex E and that the
Investor and the Holders from time to time may be irreparably harmed by any such
failure, and accordingly agree that the Investor and such Holders, in addition
to any other remedy to which they may be entitled at law or in equity, to the
fullest extent permitted and enforceable under applicable law shall be entitled
to compel specific performance of the obligations of the Company under this
Annex E in
accordance with the terms and conditions of this Annex E.

     

    1.13           No Inconsistent
Agreements.  The Company shall not, on or after the Signing
Date, enter into any agreement with respect to its securities that may impair
the rights granted to the Investor and the Holders under this Annex E or that
otherwise conflicts with the provisions hereof in any manner that may impair the
rights granted to the Investor and the Holders under this Annex
E.  In the event the Company has, prior to the Signing Date,
entered into any agreement with respect to its securities that is inconsistent
with the rights granted to the Investor and the Holders under this Annex E (including
agreements that are inconsistent with the order of priority contemplated by
Section 1.2(f) of Annex E) or that may
otherwise conflict with the provisions hereof, the Company shall use its
reasonable best efforts to amend such agreements to ensure they are consistent
with the provisions of this Annex E.

     

    1.14           Certain Offerings by the
Investor.  An “underwritten” offering or other disposition
shall include any distribution of such securities on behalf of the Investor by
one or more broker-dealers, an “underwriting agreement” shall include any
purchase agreement entered into by such broker-dealers, and any “registration
statement” or “prospectus” shall include any offering document approved by the
Company and used in connection with such distribution.


    
      
        
        

        UST Sequence No. 208

      

      
        E-10 


        
          

        

      

      
         


      

    


    


     

    ANNEX
F

     

    OFFICER’S
CERTIFICATE


     

    OF


     

    [COMPANY]

     

     In
connection with that certain letter agreement, dated  [____________], 2010 (the “Agreement”) by and between
[COMPANY] (the “Company”) and the United
States Department of the Treasury (“Investor”) which incorporates
that certain Securities Purchase Agreement –Standard Terms referred to therein
(the “Standard Terms”),
the undersigned does hereby certify as follows:

     

    1. I am a
duly elected/appointed [____________] of the Company.

     

    2. Each
Certified Entity (as defined in the Standard Terms) (A) is certified by the
Community Development Financial Institution Fund (the “Fund”) of the United States
Department of the Treasury as a regulated community development financial
institution (a “CDFI”);
(B) together with its Affiliates collectively meets the eligibility requirements
of 12 C.F.R. 1805.200(b); (C) has a primary mission of promoting community
development, as may be determined by Investor from time to time, based on
criteria set forth in 12 C.F.R. 1805.201(b)(1); (D) provides Financial Products,
Development Services, and/or other similar financing as a predominant business
activity in arm’s-length transactions; (E) serves a Target Market by serving one
or more Investment Areas and/or Targeted Populations in the manner set forth in
12 C.F.R. 1805.201(b)(3); (F) provides Development Services in conjunction with
its Financial Products, directly, through an Affiliate or through a contract
with a third-party provider; (G) maintains accountability to residents of the
applicable Investment Area(s) or Targeted Population(s) through representation
on its governing Board of Directors or otherwise; and (H) remains a
non-governmental entity which is not an agency or instrumentality of the United
States of America, or any State or political subdivision thereof, as described
in 12 C.F.R. 1805.201(b)(6) and within the meaning of any supplemental
regulations or interpretations of 12 C.F.R. 1805.201(b)(6) or such supplemental
regulations published by the Fund.  As used herein, the terms
“Affiliates”; “Financial
Products”; “Development
Services”; “Target
Market”; “Investment
Areas”; and “Targeted
Populations” have the meanings ascribed to such terms in 12 C.F.R.
1805.104.

     

    3. The
information set forth in the CDFI Certification Application delivered to the
Investor pursuant to Section 2.3(m) of the Standard Terms (the “CDFI Application”), as
modified by any updates to the CDFI Application provided on [Insert
Date(s)] by the
Company to the Investor on or prior to the date hereof, with respect to the
covenants set forth in Section 4.1(d)(i)(B) and Section 4.1(d)(i)(D) of the
Standard Terms remains true, correct and complete as of the date
hereof.

     

     

    
      
        UST Sequence No. 208

      

      
        F-1

        
          

        

      

      
        
        

      

    

     

    4. The
contracts and material agreements entered into by each Certified Entity with
respect to Development Services previously disclosed to the Investor remain in
effect   and
copies of any new contracts and material agreements entered into by the
Certified Entity with respect to Development Services are attached hereto as
Exhibit A.

     

    5. Attached
hereto as Exhibit B is (A) a list of the names and addresses of the individuals
which comprise the board of directors of each Certified Entity as of the date
hereof, (B) to the extent any member of the board of directors listed on Exhibit
B was not a member of the board of directors as of the last certification
provided to the Investor pursuant to Section 4.1(d)(ii) of the Standard Terms, a
narrative describing such individual’s relationship to the applicable Investment
Area(s) and Targeted Population(s) and (C) to the extent any Certified Entity
maintains accountability to residents of the applicable Investment Area(s) or
Target Population(s) through means other than representation on its governing
board of directors and such means have changed since the date of the last
certification provided to the Investor pursuant to Section 4.1(d)(ii) of the
Standard Terms on [Insert
Date], a
narrative describing such change.

     

    6. Each
Certified Entity is not an agency of the United States of America, or any State
or political subdivision thereof, as described in 12 C.F.R. 1805.201(b)(6) and
within the meaning of any supplemental regulations or interpretations of 12
C.F.R. 1805.201(b)(6) or such supplemental regulations published by the
Fund.

     

    7. [Insert if the
Company was a Bank Holding Company or a Savings and Loan Holding Company on the
Signing Date:  The Company is and has been at all times since
the date of the last certification provided to the Investor pursuant to Section
4.1(d)(ii) of the Standard Terms, a [Insert if the
Company is a Bank Holding Company: Bank Holding Company] [Insert if the
Company is a Savings and Loan Holding Company: Savings and Loan Holding
Company].]  The
Company is not, and has not been at any time since the date of the last
certification provided to the Investor pursuant to Section 4.1(d)(ii) of the
Standard Terms on [Insert
Date], controlled (within the meaning of [Insert for banks
and Bank Holding Companies: the Bank Holding Company Act
of 1956 (12 U.S.C. 1841(a)(2)) and 12 C.F.R. 225(a)(i)][Insert for
savings associations and Savings and Loan Holding Companies: the Home Owners’ Loan Act of
1933 (12 U.S.C. 1467a (a)(2)) and 12 C.F.R. 583.7]) by a foreign bank or
company.

     

    The
foregoing certifications are made and delivered as of [_________] pursuant to Section
4.1(d)(ii) of the Standard Terms.

     

    Capitalized
terms used and not otherwise defined herein shall have the meanings assigned to
them in the Standard Terms.

     

    [SIGNATURE
PAGE FOLLOWS]


    
      
        
        

        UST Sequence No. 208

      

      
        F-2 


        
          

        

      

      
         


      

    


     

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

     

    
      	
               
      

            	
              [COMPANY]

            


    

     

    
      	
               
      

            	
               

            	By: 
______________________________ 


    

    
      	
               
      

            	
              Name:

            


    

    
      	
               
      

            	
              Title:

            


    


    
      
        
        

        UST Sequence No. 208

      

      
        F-3 


        
          

        

      

      
         


      

    


    


     

    EXHIBIT
A

     

    NEW
CONTRACTS AND MATERIAL AGREEMENTS


    
      
        
        

        UST Sequence No. 208

      

      
        Exh.
A-1  

        
          

        

      

      
         


        
          .

          


          


        

      

    


    


     

    EXHIBIT
B

     

    BOARD
OF DIRECTORS

     

    CERTIFIED
ENTITY: [CERTIFIED
ENTITY]2

    
      	
               

              NAME

            	
              ADDRESS

            	
              NARRATIVE3

            
	
               
      

               

            	 
      	 
      
	
               

               
      

            	 
      	 
      
	
               

               
      

            	 
      	 
      
	
               

               
      

            	 
      	 
      
	
               

               
      

            	 
      	 
      


    

    


    


     

    


    


    

      

    

      
      


       

      2
Include chart for each Certified Entity.

    

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

       

       

       

       

       

       

      Exh.
B-1-

       

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

      

    


    


     

    SCHEDULE A

     

    ADDITIONAL TERMS AND
CONDITIONS

     

    Company
Information:

     

    Name of
the Company: Security Federal Corporation

     

    Corporate
or other organizational form of Company: Corporation

     

    Jurisdiction
of Organization of Company: South Carolina

     

    Appropriate
Federal Banking Agency of Company: Office of Thrift Supervision

     

    Name of
Certified Entities: Security Federal Bank

     

    Corporate
or other organizational form of each Certified Entity: Federal stock savings
bank

     

    Jurisdiction
of Organization of each Certified Entity: United States

     

    Appropriate
Federal Banking Agency of each Certified Entity: Office of Thrift
Supervision

     

    Notice
Information:

     

    
      	 	
              Timothy
      W. Simmons

              President
      and CEO

              Security
      Federal Corporation

              238
      Richland Avenue, West

              Aiken,
      South Carolina 29801

            	
              Roy
      G. Lindburg

              Executive
      Vice President and CFO

              Security
      Federal Corporation

              238
      Richland Avenue, West

              Aiken,
      South Carolina 29801

            


    

     

    Terms of the
Purchase:

     

    Series of
Preferred Stock Purchased: Fixed Rate Cumulative Preferred Stock, Series
B

     

    Per Share
Liquidation Preference of Preferred Stock: $1,000 per share

     

    Number of
Shares of Preferred Stock Purchased: 4,000

     

    Dividend
Payment Dates on the Preferred Stock: Payable quarterly in arrears on February
15, May 15, August 15 and November 15 of each year.

     

    Purchase
Price:                                $4,000,000


    
      
        
          UST Sequence No.
208

        

         


      

      
         


        
          

        

      

      
         


      

    


     

    Closing:

     

    Location
of Closing:      Cadwalader, Wickersham & Taft
LLP

                                             
One World Financial Center

                                             
New York, NY 10281

     

    Time of
Closing:             Noon,
New York Time

     

    Date of
Closing:             September
29, 2010

    


    


    
      	
              Wire
      Information for Closing:

            	
              ABA
      Number:  ____________

            
	 
      	
              Bank:  Security Federal
      Bank

            
	 
      	
              Account
      Name:  Security
      Federal Corporation

            
	 
      	
              Account
      Number:  ____________

            
	 
      	
              Beneficiary:  Security Federal
      Corporation

            
	 
      	 
      
	
              Contact
      for Confirmation of Wire Information:

            	
              Roy
      G. Lindburg, Executive Vice President and CFO, Security Federal
      Bank

              or

              John
      F. Breyer, Jr., Esquire

              Breyer
      & Associates PC

              (703)
      883-1100 (office)

            


    

    


    


    



    
      
        
          UST Sequence No.
208

        

         


      

      
         


        
          

        

      

      
         


      

    


    


     

    SCHEDULE
B

     

    CAPITALIZATION

     

    Capitalization Date:
August 31, 2010

     

    Common
Stock

     

    Par
value: $0.01

     

    Total
Authorized: 5,000,000

     

    Outstanding:
2,461,095

     

    
                     
Subject to warrants, options, convertible securities,
etc.:  533,066

    

     

    Reserved
for benefit plans and other issuances:  583,066

     

    Remaining
authorized but unissued: 2,538,905

     

    
      Shares
issued after Capitalization Date (other than
pursuant to warrants, options, convertible
securities, etc. as set forth above):
0

    

     

    Preferred
Stock

     

    Par
value: $0.01

     

    Total
Authorized: 200,000

     

    Outstanding
(by series): 18,000 shares of Fixed Rate Cumulative Perpetual Preferred Stock,
Series A (to be exchanged for 18,000 shares of Fixed Rate Cumulative Preferred
Stock, Series B)

     

    Reserved
for issuance: 0

     

    Remaining
authorized but unissued: 182,000

     

    Private
Capital

     

    Class of
securities representing Private Capital: Common Stock

     

    Par
value: $0.01 per share

     

    Date of
issuance of Private Capital:  September 29, 2010

     

     

    
      
        
          UST Sequence No.
208

        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Holders of 5% or more of any
class of capital
stock                                             Primary
Address

     

     

    


     

    
      	
              Common
      Stock

            	 
	 	 
	T. Clifton
      Weeks 	c/o Security Federal
      Corporation 
	 	
              238
      Richland Ave., West

            
	 	Aiken, SC
      29801 
	 	 
	Mr. and Mrs. Thomas
      W. Weeks 	3761 Dock Site
      Road 
	 	Edisto Island, SC
      29438 
	 	 
	Timothy W.
      Simmons 	c/o Security Federal
      Corporation 
	 	238 Richland Ave.,
      West 
	 	Aiken, SC
      29801 
	 	 
	Preferred
Stock	 
	 	 
	United States
      Department of the Treasury 	1500 Pennsylvania
      Ave., NW 
	 	Washington, DC
      20220 


    

     

     

    



    
      
        
          UST Sequence No.
208

        

         


      

      
         


        
          

        

      

      
         


      

    


    


     

    SCHEDULE
C

     

    MATERIAL ADVERSE
EFFECT

     

    List any
exceptions to the representation and warranty in Section 3.1(g) of the
Securities Purchase Agreement – Standard Terms.

     

    


     

    If none,
please so indicate by checking the box:  [X].


    
      
        
          UST Sequence No.
208

        

         


      

      
         


        
          

        

      

      
         


      

    


    


     

    SCHEDULE
D

     

    LITIGATION

     

    List any
exceptions to the representation and warranty in Section 3.1(l) of the
Securities Purchase Agreement – Standard Terms.

     

    


     

    If none,
please so indicate by checking the box:  [X].


    
      
        
          UST Sequence No.
208

        

         


      

      
         


        
          

        

      

      
         


      

    


    


     

    SCHEDULE
E

     

    COMPLIANCE WITH
LAWS

     

    List any
exceptions to the representation and warranty in the second sentence of Section
3.1(m) of the Securities Purchase Agreement – Standard Terms.

     

    


     

    If none,
please so indicate by checking the box:  [X].

     

    


     

    List any
exceptions to the representation and warranty in the last sentence of Section
3.1(m) of the Securities Purchase Agreement – Standard Terms.

     

    


     

    If none,
please so indicate by checking the box:  [X].


    
      
        
          UST Sequence No.
208

        

         


      

      
         


        
          

        

      

      
         


      

    


    


     

    SCHEDULE
F

     

    REGULATORY
AGREEMENTS

     

    List any
exceptions to the representation and warranty in Section 3.1(s) of the
Securities Purchase Agreement – Standard Terms.

     

    


     

    If none,
please so indicate by checking the box:  [X].

     

     

     

     

     

     

     

     

     

     

     

     

    
      UST Sequence No.
208