ex10-12.htm


    UNITED STATES OF AMERICA

    Before
the

    OFFICE
OF THRIFT SUPERVISION

    


    


    
      
        	 
      	
                )

              	 
      
	 
      	
                )

              	 
      
	
                In
      the Matter of

              	
                )

              	
                Order
      No.: CN09-13

              
	 
      	
                )

              	 
      
	
                MAINSTREET
      SAVINGS BANK, FSB

              	
                )

              	
                Effective
      Date: May 29, 2009

              
	 
      	
                )

              	 
      
	
                Hastings,
      Michigan

              	
                )

              	 
      
	
                OTS
      Docket No. 00966

              	
                )

              	 
      
	 
      	
                )

              	 
      


      

    

    


    STIPULATION AND CONSENT TO
ISSUANCE OF ORDER TO CEASE AND DESIST

    


    WHEREAS, the Office of Thrift
Supervision (OTS), acting by and through its Regional Director for the Central
Region (Regional Director), and based upon information derived from the exercise
of its regulatory and supervisory responsibilities, has informed MAINSTREET SAVINGS BANK, FSB, Hastings,
Michigan, OTS Docket No. 00966 (Association) that OTS is of the opinion that
grounds exist to initiate an administrative proceeding against the Association
pursuant to 12 USC § 1818(b);

    WHEREAS, the Regional
Director, pursuant to delegated authority, is authorized to issue Orders to
Cease and Desist where a savings association has consented to the issuance of an
order; and

    WHEREAS, the Association
desires to cooperate with OTS to avoid the time and expense of such
administrative cease and desist proceeding by entering into this Stipulation and
Consent to the Issuance of Order to Cease and Desist (Stipulation) and, without
admitting or denying that such grounds exist, but only admitting the statements
and conclusions in Paragraph I below concerning Jurisdiction, hereby stipulates
and agrees to the following terms:


    
      
         


      

      
         


         


      

      
         


      

    


    


    
      
        	
                1.

              	
                Jurisdiction

              
	 
      	
                a.

              	
                The
      Association is a "savings association" within the meaning of 12 USC §
      1813(b) and 12 USC § 1462(4). Accordingly, the Association is "an insured
      depository institution" as that term is defined in 12 USC § 1813(c);
      and

              
	 
      	
                b.

              	
                Pursuant
      to 12 USC § 18 13(q), the Director of OTS is the "appropriate Federal
      banking agency" with jurisdiction to maintain an administrative
      enforcement proceeding against a savings association. Therefore, the
      Association is subject to the authority of OTS to initiate and maintain an
      administrative cease and desist proceeding against it pursuant to 12 USC §
      1818(b).

              


      

    

    


     

    
      
        	
                2.

              	
                OTS Findings of Fact

              
	 
      	
                Based
      on a November 17, 2008 comprehensive examination of the Association, OTS
      finds that the Association has engaged in unsafe and unsound banking
      practices, that resulted in the Association operating with an inadequate
      level of capital for the kind and quality of assets held, a large volume
      of nonearning assets, and low
earnings.

              


      

    

    


     

    
      
        
          	
                  3.

                	
                  Consent

                
	 
      	
                  The
      Association consents to the issuance by OTS of the accompanying Order to
      Cease and Desist (Order). The Association further agrees to comply with
      the terms of the Order upon the Effective Date of the Order and stipulates
      that the Order complies with all requirements of law.

                
	
                  4.

                	
                  Finality

                
	 
      	
                  The
      Order is issued by OTS under 12 USC § 1818(b) and upon the Effective Date
      it shall be a final order, effective and fully enforceable by OTS under
      the provisions of 12 USC §
1818(i).

                


        

      

    


    
      
         


      

      
        2

         


      

      
         


      

    


    


    
      
        	
                5.

              	
                Waivers

              
	 
      	
                The
      Association waives the
following:

              


      

    

     

    
      	 
      	
              a.

            	
              The
      right to be served with a written notice of OTS's charges against it as
      provided by 12 USC § 1818(b) and 12 CFR Part 509;

            
	 
      	
              b.

            	
              The
      right to an administrative hearing of OTS's charges as provided by 12 USC
      § 1818(b) and 12 CFR Part 509;

            
	 
      	
              c.

            	
              The
      right to seek judicial review of the Order, including, without limitation,
      any such right provided by 12 USC § 1818(h), or otherwise to challenge the
      validity of the Order; and

            
	 
      	
              d.

            	
              Any
      and all claims against OTS, including its employees and agents, and any
      other governmental entity for the award of fees, costs, or expenses
      related to this OTS enforcement matter and/or the Order, whether arising
      under common law, federal statutes or
otherwise.

            


    

     

    
      
        
          	
                  6.

                	
                  OTS Authority Not
  Affected

                
	 
      	
                  Nothing
      in this Stipulation or accompanying Order shall inhibit, estop, bar or
      otherwise prevent OTS from taking any other action affecting the
      Association if at any time OTS deems it appropriate to do so to fulfill
      the responsibilities placed upon OTS by law.

                
	
                  7.

                	
                  Other Governmental Actions Not
      Affected

                
	 
      	
                  The
      Association acknowledges and agrees that its consent to the issuance of
      the Order is solely for the purpose of resolving the matters addressed
      herein, consistent with Paragraph 6 above, and does not otherwise release,
      discharge. compromise, settle, dismiss, resolve, or in any way affect any
      actions, charges against, or liability of the Association that arise
      pursuant to this action or otherwise, and that may be or have been brought
      by any governmental entity other than
OTS.

                


        

      

    

    


     


    
      
         


      

      
        3

         


      

      
         


      

    


    


     

    
      	
              8.

            	
              Miscellaneous

            
	 
      	
              a.

            	
              The
      laws of the United States of America shall govern the construction and
      validity of this Stipulation and of the Order;

            
	 
      	
              b.

            	
              If
      any provision of this Stipulation and/or the Order is ruled to be invalid.
      illegal, or unenforceable by the decision of any Court of competent
      jurisdiction, the validity, legality, and enforceability of the remaining
      provisions hereof shall not in any way be affected or impaired thereby,
      unless the Regional Director in his or her sole discretion determines
      otherwise;

            
	 
      	
              c.

            	
              All
      references to OTS in this Stipulation and the Order shall also mean any of
      the OTS's predecessors, successors, and assigns;

            
	 
      	
              d.

            	
              The
      section and paragraph headings in this Stipulation and
      the Order are for convenience only and shall not affect the interpretation
      of this
      Stipulation or the Order;

            
	 
      	
              e.

            	
              The
      terms of this Stipulation and of the Order represent the final agreement
      of the parties with respect to the subject matters thereof, and constitute
      the sole agreement of the parties with respect to such subject matters;
      and

            
	 
      	
              f.

            	
              The
      Stipulation and Order shall remain in effect until terminated, modified,
      or suspended in writing by OTS, acting through its Regional Director or
      other authorized representative.

            


    

     

    
      
        	
                9.

              	
                Signature of Directors/Board
      Resolution

              
	 
      	
                Each
      Director signing this Stipulation attests that he or she voted in favor of
      a Board Resolution authorizing the consent of the Association to the
      issuance of the Order and the execution of the
  Stipulation.

              


      

    

    


     


    
      
         


      

      
        4

         


      

      
         


      

    


    WHEREFORE,
the Association, by its directors, executes this Stipulation.

     

    
      	 
      	 
      	 
      	
              Accepted
      by:

            
	 
      	 
      	 
      	 
      
	
              MAINSTREET
      SAVINGS BANK, FSB

              Hastings,
      Michigan

            	 
      	
              OFFICE
      OF THRIFT SUPERVISION

            
	 
      	 
      	 
      	 
      
	
              By:

            	 /s/
      Gordon F. Fuhr 	
              By:

            	 
      /s/ Daniel T. McKee
	 
      	
              Gordon
      F. Fuhr, Chairman

            	 
      	
              Daniel
      T. McKee

              Acting
      Regional Director, Central Region

            
	 
      	 
      	 
      	 
      
	 
      	 /s/
      Eric T. Dreisbach 	 
      	
              Date:
      See Effective Date on page 1

            
	 
      	
              Eric
      T. Dreisbach, Director

            	 
      	 
      
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      
	 
      	 /s/
      David L. Hatfield 	 
      	 
      
	 
      	
              David
      L. Hatfield, Director

            	 
      	 
      
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      
	 
      	 /s/
      Mary Lou Hart 	 
      	 
      
	 
      	
              Mary
      Lou Hart, Director

            	 
      	 
      
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      
	 
      	 /s/
      David L. Jasperse 	 
      	 
      
	 
      	
              David
      L. Jasperse, Director

            	 
      	 
      
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      
	 
      	 /s/
      Carl A. Schoessel 	 
      	 
      
	 
      	
              Carl
      A. Schoessel, Director

            	 
      	 
      
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      
	 
      	 /s/
      James R. Toburen 	 
      	 
      
	 
      	
              James
      R. Toburen, Director

            	 
      	 
      
	 
      	 
      	 
      	 
      


    

    


    


    


    



    
      
         


      

      
        5

         


      

      
         


      

    



    UNITED
STATES OF AMERICA

    


    Before
the

    


    OFFICE
OF THRIFT SUPERVISION

    


    


    
      
        	 
      	
                )

              	 
      
	 
      	
                )

              	 
      
	
                In
      the Matter of

              	
                )

              	
                Order
      No.: CN09-13

              
	 
      	
                )

              	 
      
	
                MAINSTREET
      SAVINGS BANK, FSB

              	
                )

              	
                Effective
      Date:  May 29, 2009

              
	 
      	
                )

              	 
      
	
                Hastings,
      Michigan

              	
                )

              	 
      
	
                OTS
      Docket No. 00966

              	
                )

              	 
      
	 
      	
                )

              	 
      


      

    

    


     

    ORDER TO CEASE AND
DESIST

     

    WHEREAS, MAINSTREET SAVINGS BANK,
FSB, Hastings, Michigan, OTS Docket No. 00966 (Association), by and
through its Board of Directors (Board) has executed a Stipulation and Consent to
the Issuance of an Order to Cease and Desist (Stipulation); and

    WHEREAS, the Association, by
executing the Stipulation, has consented and agreed to the issuance of this
Order to Cease and Desist (Order) by the Office of Thrift Supervision (OTS)
pursuant to 12 USC § 1818(b); and

    WHEREAS, pursuant to delegated
authority, the OTS Regional Director for the Central Region (Regional Director),
is authorized to issue Orders to Cease and Desist where a savings association
has consented to the issuance of an order.

    NOW,
THEREFORE, IT IS ORDERED that:

    


    
      
        
          
            	
                    1.

                  	
                    The
      Association and its directors, officers, and employees shall cease and
      desist from any action (alone or with others) for or toward causing,
      bringing about, participating in or counseling, or the aiding and abetting
      of all unsafe or unsound practices that resulted in the Association
      operating with inadequate capital in relation to the kind and quality of
      assets held by the Association, a large volume of nonearning assets, and
      low earnings.

                  


          

        

      

    

    



    
      
         


      

      
         


         


      

      
         


      

    


    Capital

    


    
      
        
          	
                  2.

                	
                  a.

                	
                  Within
      ninety (90) days and at all times thereafter, the Association shall have
      and maintain: (a) a Tier 1 (Core) Capital Ratio of at least eight percent
      (8%) and (b) a Total Risk-Based Capital Ratio of at least twelve percent
      (12 %).

                


        

      

    

    


    
      
        	 
      	
                b.

              	
                Effective
      immediately, the Board shall review the Association's capital levels at
      each regular monthly Board meeting and ensure that the Association
      continually assesses the sufficiency of the Association's capital levels
      relative to its risk profile, including but not limited to, such risks as:
      classified asset levels and core earnings. The trends in such risks shall
      also be reviewed and monitored by the Board. The Board's review of capital
      adequacy and any actions to be taken shall be fully detailed in
      the Board meeting
minutes.

              


      

    

    


    
      
        	 
      	
                c.

              	
                Within
      thirty (30) days, the Association shall, pursuant to Board authorization,
      submit to the Regional Director a written contingency plan acceptable to
      the Regional Director that will be implemented by the Association in the
      event the Association falls below adequately capitalized as defined in 12
      CFR § 565.4(b)(2) (Contingency Plan). At a minimum, the Contingency Plan
      shall detail the actions to be taken within specific time frames to
      achieve one of the following results: (i) merger with or acquisition by
      another federally insured institution or holding company thereof, or (ii)
      voluntary liquidation by, among other things, filing the appropriate
      applications with OTS in conformity with federal laws and regulations. The
      Contingency Plan shall be implemented immediately if the Association falls
      below adequately capitalized or upon notification by the Regional Director
      of the requirement to implement the Contingency Plan. Once implemented,
      the Association shall submit to the Regional Director written status
      reports detailing the Association's actions taken and progress in
      implementing the Contingency Plan no later than the 1st and 15th days of
      each month.

              


      

    

    


    Asset
Ouality

    


    
      
        	
                3.

              	
                a.

              	
                Effective
      immediately, unless otherwise approved in writing by the Regional
      Director, the Association shall originate only the following types of
      loans pursuant to its current underwriting policies and
      procedures:

              


      

    

    


    
      
        	 
      	 
      	
                i.

              	
                one-to-four
      family residential real estate first lien, prime loans with a
      loan-to-value ratio of no more than 80% without private mortgage
      insurance, a principal amount of no more than $275,000, and conforming in
      all other respects with government-sponsored enterprise (GSE) or
      government agency purchase requirements;
and

              


      

    


    
      
         


      

      
        2

         


      

      
         


      

    

    


    
      
        	 
      	 
      	
                ii.

              	
                Fully
      collateralized savings account
loans.

              


      

    

    


    
      
        
          	 
      	
                  b.

                	
                  The
      Association shall not modify, renew, or restructure any existing loans if
      such modification, renewal, or restructuring results in new funds being
      disbursed to the borrower.

                
	 
      	
                  c.

                	
                  Within
      thirty (30) days, the Association shall provide
      to the Regional Director a list of all loans-in-process and legally
      binding loan commitments outstanding as of the Effective Date of this
      Order and may fund such obligations and
  commitments.

                


        

      

    

    


    
      
        
          
            	
                    4.

                  	
                    a.

                  	
                    On
      a quarterly basis, the Board shall prepare a classified asset report that
      includes, at a minimum, the
following:

                  


          

        

      

    

    


    
      
        
          
            	 
      	 
      	 
      	
                    i.

                  	
                    Identification
      of each asset classified under the Association's asset classification
      policy;

                  
	 
      	 
      	 
      	
                    ii.

                  	
                    A
      brief narrative summary outlining the current status of each classified
      asset, along with the specific identification of any change in the status
      of a classified asset from the prior reporting period;
  and

                  
	 
      	 
      	 
      	
                    iii.

                  	
                    Copies
      of Loan Review Committee minutes, for all meetings held during the
      previous quarter.

                  


          

        

      

    

    


    
      
        	 
      	
                b.

              	
                Within
      30 days of the close of each quarter, the Board shall provide the Regional
      Director with a copy of the classified asset report required by this
      paragraph.

              


      

    

    


    
      
        	
                5.

              	
                a.

              	
                Within
      forty-five (45) days, the Board shall adopt an internal asset review
      program for the Association in accordance with OTS CEO Ltr 140 (May 17,
      2001) that establishes a program of independent loan review that will
      provide for a regular review of the Association's loan portfolio and the
      independent identification and classification of problem credits and
      assets as required by 12 CFR § 560.160 (Internal Asset Review Program). At
      a minimum, the Internal Asset Review Program shall provide
      for:

              


      

    

    


    
      
        	 
      	 
      	
                i.

              	
                Prompt
      identification of loans with credit weaknesses that warrant the special
      attention of management, including the name of the borrower, amount of the
      loan, reason why the loan warrants special attention, and the assessment
      of the degree of risk that the loan will not be fully repaid according to
      its terms;

              


      

    


    
      
         


      

      
        3

         


      

      
         


      

    

    


    
      
        	 
      	 
      	
                ii.

              	
                Action
      plans to reduce the Association's risk exposure from each identified
      relationship;

              
	 
      	 
      	
                iii.

              	
                Assessment
      of the overall quality of the loan portfolio;

              
	 
      	 
      	
                iv.

              	
                Identification
      of credit and collateral documentation exceptions and an action plan to
      address the identified deficiencies;

              
	 
      	 
      	
                v.

              	
                Identification
      of any loans that are not in conformance with the Association's lending
      policy and an action plan to address the identified deficiencies;
      and

              
	 
      	 
      	
                vi.

              	
                A
      mechanism for reporting periodically, but in no event less than quarterly,
      the information developed in (i) through (v) above to the Board. The
      report shall also describe the action(s) taken by management with respect
      to criticized assets.

              


      

    

    


    
      
        	 
      	
                b.

              	
                Within
      five (5) days of Board approval of the Internal Asset Review Program, the
      Board shall forward a copy of the Internal Asset Review Program to the
      Regional Director for review and comment. Within ten (10) days of receipt
      of any comments from the Regional Director, the Board shall amend the
      Internal Asset Review Program to incorporate the comments. The Board shall
      adopt the amended Internal Asset Review Program and provide a copy of the
      amended Internal Asset Review Program to the Regional Director within five
      (5) days of Board approval of any
revisions.

              


      

    

    


    
      
        	
                6.

              	
                a.

              	
                Within
      thirty (30) days, the Board shall revise the Association's nonhomogeneous
      loan administration policies and procedures addressed on pages 10-14 of
      the OTS Report of Examination dated November 17, 2008
    (ROE).

              
	 
      	
                b.

              	
                Within
      five (5) days after Board adoption of the revisions required by
      subparagraph (a) above, the Board shall provide the revised loan
      administration policies and procedures to the Regional Director for review
      and comment. Within ten (10) days of receipt of any comments from the
      Regional Director, the Board shall amend the loan administration policies
      and procedures to incorporate any comments. The Board shall adopt the
      revised loan administration policies and procedures and provide a copy of
      such policies and procedures to the Regional Director within five (5) days
      of Board approval.

              


      

    

    



    
      
         


      

      
        4

         


      

      
         


      

    


    Business
Plan

    


    
      
        	
                7.

              	
                a.

              	
                The
      Board shall revise its current three-year business plan (Revised Business
      Plan), to include the requirements contained within this Order and the
      comments contained within the ROE, as well as ensuring, at a minimum,
      inclusion of the following:

              


      

    

    


    
      
        	 
      	 
      	
                (i)

              	
                Defined
      strategies for capital enhancement commensurate with the capital
      maintenance requirement of paragraph 2 above; and

              
	 
      	 
      	
                (ii)

              	
                Emphasis
      on reducing classified assets and operating
  expenses.

              


      

    

    


    
      
        	 
      	
                b.

              	
                By June
      30, 2009, the Board shall submit the Revised Business Plan to the Regional
      Director.

              
	 
      	
                c.

              	
                Once
      the Board has adopted the Revised Business Plan, the Association must
      operate within the parameters of its Revised Business Plan. Any proposed
      material deviations from the Revised Business Plan, including changes
      proposed by the Association, must be submitted for the prior, written
      non-objection of the Regional Director. Requests for any material
      deviations or changes must be submitted at least sixty (60) days before a
      proposed change is implemented.

              
	 
      	
                d.

              	
                On
      a quarterly basis, beginning with the first quarter following receipt of
      the Regional Director's comments on or non-objection to the Revised
      Business Plan, the Board shall compare projected operating results
      contained within the Revised Business Plan to actual results (variance
      analysis report).

              
	 
      	
                e.

              	
                The
      Board shall review the variance analysis reports each quarter and conduct
      a thorough and diligent review and assessment of management's
      implementation of and the Association's compliance with the approved
      Revised Business Plan. The Board's review of the variance report and
      assessment of management and the Association's compliance shall be fully
      documented in the appropriate Board meeting minutes. Within thirty (30)
      days of the close of each quarter, the Board shall provide the Regional
      Director with a copy of the variance analysis report required by this
      paragraph.

              


      

    

    


    Remediation of ROE
Comments

    


    
      
        	
                8.

              	 
      	
                Within
      sixty (60) days, the Board shall develop, adopt, and implement specific
      actions to ensure that the Association addresses all Matters Requiring
      Board Attention and corrective actions noted in the ROE. The minutes of
      Board meetings shall document each such action adopted and the measures
      implemented, if any, to prevent
recurrence.

              


      

    

     

    
      
         


      

      
        5

         


      

      
         


      

    


    Liquidity Management
Policy

    


    
      
        	
                9.

              	 
      	
                By
      June 30, 2009, the Board shall review and revise the Association's
      Liquidity Management Policy to address the comments and corrective actions
      on pages 27-32 of the ROE.

              


      

    

    


    Restriction on Asset
Growth

    


    
      
        	
                10.

              	 
      	
                Without
      the prior written approval of the Regional Director and consistent with
      the requirements and provisions of OTS Regulatory Bulletin 3b, the
      Association shall not increase its total assets during any quarter in
      excess of an amount equal to net interest credited on deposit liabilities
      during the quarter.

              


      

    

    


    Notice of Change of Director
or Senior Executive Officer

    


    
      
        	
                11.

              	 
      	
                The
      Association shall comply with the prior notification requirements for
      changes in directors and Senior Executive Officers set forth in 12 CFR
      Part 563, Subpart H. Specifically, the Association must notify OTS at
      least thirty (30) days before adding or replacing any member of its Board,
      employing any person as a Senior Executive Officer, or changing the
      responsibilities of any Senior Executive Officer so that the person would
      assume a different senior executive officer
  position.

              


      

    

    


    Brokered
Deposits

    


    
      
        	
                12.

              	 
      	
                The
      Association shall not accept brokered deposits except in compliance with
      12 CFR § 337.6(b)(2) without obtaining the prior written approval of the
      Federal Deposit Insurance Corporation (FDIC). The Association shall comply
      with applicable interest rate restrictions contained in 12 CFR § 337.6.
      The Association shall provide the OTS Regional Director with: (a) a copy
      of any waiver request from the Association to the FDIC and (b) a copy of
      the response received from the FDIC to any request for such a waiver by
      the Association.

              


      

    

    


    Severance and
Indemnification Payments

    


    
      
        	
                13.

              	 
      	
                The
      Association shall not make any golden parachute payment, as that term is
      defined in 12 CFR § 359.1(f), or any prohibited indemnification payment,
      as that term is defined in 12 CFR § 359.1(1), unless, with respect to
      each such payment, the Association has complied with the requirements of
      12 CFR Part 359 and, as to indemnification payments, 12 CFR §
      545.121.

              


      

    

    



    
      
         


      

      
        6

         


      

      
         


      

    


    Notice of Contractual
Arrangements Involving Compensation

    


    
      
        	
                14.

              	 
      	
                The
      Association shall not enter into, renew, extend or revise any contractual
      arrangement related to compensation or benefits with any director or
      Senior Executive Officer of the Association, unless it provides the
      Regional Director with not less than thirty (30) days prior written notice
      of the proposed transaction and receives a notice of written non-objection
      from the OTS pursuant to OTS Examination Handbook § 310. The notice to the
      Regional Director shall include a copy of the proposed employment contract
      or compensation arrangement, or a detailed, written description of the
      compensation arrangement to be offered to such officer or director,
      including all benefits and perquisites. The Board shall ensure that any
      contract, agreement, or arrangement submitted to OTS fully complies with
      the requirements of 12 CFR Part 359, 12 CFR §§ 563.39 and 563.161(b), and
      12 CFR Part 570-Appendix A.

              


      

    

    


    Contracts Outside of the
Normal Course of Business

    


    
      
        	
                15.

              	 
      	
                The
      Association and its subsidiaries shall not enter into any arrangement or
      contract with a third party service provider that is significant to the
      overall operation or financial condition of the Association or subsidiary
      or is outside the Association's or subsidiary's normal course of business
      unless, with respect to each such contract, the Association has: (i)
      provided OTS with a minimum of thirty (30) days prior written notice of
      such arrangement or contract; (ii) determined that the arrangement or
      contract complies with the standards and guidelines set forth in OTS
      Thrift Bulletin 82a; and (iii) received written notice of non-objection
      from the OTS.

              


      

    

    


    Dividend
Restriction

    


    
      
        	
                16.

              	 
      	
                The
      Association shall not declare or pay a dividend or make any other capital
      distribution, as that term is defined in 12 CFR § 563.141, without
      receiving the prior written approval of the Regional Director. The
      Association's written request for approval shall be submitted at least
      thirty (30) days prior to the proposed date of dividend declaration or
      payment.

              


      

    

    


    Transactions with
Affiliates

    


    
      
        	
                17.

              	 
      	
                The
      Association shall not engage in any new transaction with an affiliate
      unless, with respect to each such transaction, the Association has
      complied with the notice requirements set forth in 12 CFR § 563.41(c)(4),
      which shall include the information set forth in 12 CFR § 563.41 (c)(3).
      The Board shall ensure that any new transaction with an affiliate for
      which notice is submitted pursuant to this Paragraph, complies with the
      requirements of 12 CFR § 563.41 and Regulation W, 12 CFR
      Part 223.

              


      

    

    



    
      
         


      

      
        7

         


      

      
         


      

    


    Compliance
Monitoring

    


    
      	
              18.

            	 
      	
              By
      the last day of each succeeding month, the Board shall adopt and submit to
      the OTS certified copies of a Board resolution (Compliance
      Resolution) formally resolving that, following a diligent inquiry of
      relevant information (including a report from the Association's management
      regarding the Association's compliance with each provision of this Order),
      to the best of its knowledge and belief, during the immediately preceding
      month, the Association has complied with each provision of this Order
      currently in effect, except as otherwise stated. The Compliance Resolution
      shall: (1) specify in detail how, if at all, full compliance was found not
      to exist; and (2) identify all notices of exemption or non-objection
      issued by OTS that were outstanding as of the date of its adoption. In the
      event that one or more directors do not agree with the representations set
      forth in a Compliance Resolution, such a disagreement shall be noted in the Compliance
      Resolution.

            


    

    


    Effective Date,
Incorporation of Stipulation

    


    
      
        	
                19.

              	 
      	
                This
      Order is effective on the Effective Date as shown on
      the first page. The Stipulation is made a part hereof and is incorporated
      herein by this reference.

              


      

    

    


    Duration

    


    
      
        	
                20.

              	 
      	
                This
      Order shall remain in effect until terminated, modified or suspended, by
      written notice of such action by OTS, acting by and through its authorized
      representatives.

              


      

    

    


    Time
Calculations

    


    
      
        	
                21.

              	 
      	
                Calculation
      of time limitations for compliance with the terms of this Order run from
      the Effective Date and shall be based on calendar days, unless otherwise
      noted.

              
	
                22.

              	 
      	
                The
      Regional Director may extend any of the deadlines set forth in the
      provisions of this Order upon written request by the Association that
      includes reasons in support for any such extension. Any OTS extension
      shall be made in writing.

              


      

    

    


    Submissions and
Notices

    


    
      
        	
                23.

              	 
      	
                All
      submissions, including progress reports, to OTS that are required by or
      contemplated by this Order shall be submitted within the specified
      timeframes.

              


      

    


    
      
         


      

      
        8

         


      

      
         


      

    


    


    
      
        	
                24.

              	 
      	
                Except
      as otherwise provided herein, all submissions, requests, communications,
      consents or other documents relating to this Order shall be in writing and
      sent by first class U.S. mail (or by reputable overnight carrier,
      electronic facsimile transmission or hand delivery by messenger) addressed
      as follows:

              


      

    

    


    
      
        	 
      	 
      	
                a.

              	
                To
      OTS:

              
	 
      	 
      	 
      	
                Regional
      Director

              
	 
      	 
      	 
      	
                Office
      of Thrift Supervision

              
	 
      	 
      	 
      	
                One
      South Wacker Drive, Suite 2000

                Chicago,
      Illinois 60606

              
	 
      	 
      	 
      	
                Facsimile:
      (312) 917-5002

              
	 	 	 	 
	 
      	 
      	
                b.

              	
                To
      the Association:

              
	 
      	 
      	 
      	
                Chairman
      of the Bank

              
	 
      	 
      	 
      	
                Mainstreet
      Savings Bank, FSB

                629
      West State Street

              
	 
      	 
      	 
      	
                Hastings,
      Michigan 49058-1954

                Facsimile:
      (269) 945-0380

              


      

    

    


    No Violations
Authorized

    


    
      
        	
                25.

              	 
      	
                Nothing
      in this Order or the Stipulation shall be construed as allowing the
      Association, its Board, officers or employees to violate any law, rule, or
      regulation.

              


      

    

     

    IT
IS SO ORDERED.

    
      
        
          
            	 
      	 
      	
                    OFFICE OF THRIFT
      SUPERVISION

                  
	 	 	 
	 	 	 
	 
      	 
      	
                    By:

                  	 
      /s/ Daniel T. McKee
	 
      	 
      	 
      	
                    Daniel
      T. McKee

                  
	 
      	 
      	 
      	
                    Acting
      Regional Director, Central Region

                  
	 	 	 	 
	 
      	 
      	 
      	
                    Date:
      See Effective Date on page
1

                  


          

        

      

    

    



    
      
         


      

      
        9