exhibit10_4.htm


    EXHIBIT
10.4

    
 

    
      

      

    

     

    


    


    


    


    


    


    


    


    


    


    


    


    


    ADMINISTRATIVE
AND TECHNOLOGY SERVICES AGREEMENT

     

    by
and between

     

     

    Capitol
Bancorp Ltd.

     

     

    and

     

     

    Michigan
Commerce Bancorp Limited

     

    


    


    


    


    


    


    


    


    
      

      

    

    


    



    
      
         


      

      
         


        
          

        

      

      
         


      

    


    


     

    TABLE
OF CONTENTS

     

    
      
        	
                 
      

              	
                ARTICLE
      1 DEFINITIONS

              	
                1

              


      

    

     

    
      	
               
      

            	
              1.1

            	
              Definitions.

            	
              1

            


    

     

    
      
        	
                 
      

              	
                ARTICLE
      2 TERM OF AGREEMENT

              	
                2

              


      

    

     

    
      	
               
      

            	
              2.1

            	
              Term.

            	
              2

            


    

     

    
      
        	
                 
      

              	
                ARTICLE
      3 SERVICES

              	
                2

              


      

    

     

    
      	
               
      

            	
              3.1

            	
              Administrative
      Services.

            	
              2

            


    

     

    
      	
               
      

            	
              3.2

            	
              Technology
      Services.

            	
              3

            


    

     

    
      	
               
      

            	
              3.3

            	
              Term
      of Services.

            	
               3

            


    

     

    
      	
               
      

            	
              3.4

            	
              Termination
      of Administrative Services.

            	
               4

            


    

     

    
      	
               
      

            	
              3.5

            	
              Excluded
      Services.

            	
              4

            


    

     

    
      
        	
                 
      

              	
                ARTICLE
      4 ADDITIONAL AGREEMENTS

              	
                4

              


      

    

     

    
      	
               
      

            	
              4.1

            	
              Relationships
      Between Capitol and MCBL; Non-Exclusivity.

            	
              4

            


    

     

    
      
        	
                 
      

              	
                ARTICLE
      5 CHARGES AND SET-OFF

              	
                4

              


      

    

     

    
      	
               
      

            	
              5.1

            	
              Charges
      for Services.

            	
               4

            


    

     

    
      	
               
      

            	
              5.2

            	
              Set-off.

            	
               4

            


    

     

    
      	
               
      

            	
              5.3

            	
              Settlement.

            	
              5

            


    

     

    
      
        	
                 
      

              	
                ARTICLE
      6 TERMINATION

              	
                5

              


      

    

     

    
      	
               
      

            	
              6.1

            	
              Termination;
      Effect of Expiration or Termination; Survival.

            	
              5

            


    

     

    
      
        	
                 
      

              	
                ARTICLE
      7 PERSONNEL, FACILITIES AND ACCESS

              	
                5

              


      

    

     

    
      	
               
      

            	
              7.1

            	
              Personnel.

            	
              5

            


    

     

    
      	
               
      

            	
              7.2

            	
              Facilities.

            	
              5

            


    

     

    
      	
               
      

            	
              7.3

            	
              Changes.

            	
              5

            


    

     

    
      	
               
      

            	
              7.4

            	
              Capitol
      Access.

            	
              5

            


    

     

    
      
        
        

      

      
        i

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              7.5

            	
              MCBL
      Access.

            	
              5

            


    

     

    
      
        	
                 
      

              	
                ARTICLE
      8 RELATIONSHIP BETWEEN THE PARTIES

              	
                6

              


      

    

     

    
      
        	
                 
      

              	
                ARTICLE
      9 SUBCONTRACTORS

              	
                6

              


      

    

     

    
      	
               
      

            	
              9.1

            	
              Subcontractors.

            	
               6

            


    

     

    
      	
               
      

            	
              9.2

            	
              Assignment.

            	
               6

            


    

     

    
      
        	
                 
      

              	
                ARTICLE
      10 INTELLECTUAL PROPERTY

              	
                6

              


      

    

     

    
      	
               
      

            	
              10.1

            	
              Allocation
      of Rights by Ancillary Agreements.

            	
              7

            


    

     

    
      	
               
      

            	
              10.2

            	
              Existing
      Ownership Rights Unaffected.

            	
              7

            


    

     

    
      	
               
      

            	
              10.3

            	
              Third
      Party Software.

            	
              7

            


    

     

    
      	
               
      

            	
              10.4

            	
              Termination
      of Licenses.

            	
              7

            


    

     

    
      
        	
                 
      

              	
                ARTICLE
      11 NO OBLIGATION

              	
                7

              


      

    

     

    
      
        	
                 
      

              	
                ARTICLE
      12 CONFIDENTIALITY

              	
                7

              


      

    

     

    
      	
               
      

            	
              12.1

            	
              Confidentiality.

            	
               7

            


    

     

    
      	
               
      

            	
              12.2

            	
              Confidential
      Information.

            	
              7

            


    

     

    
      	
               
      

            	
              12.3

            	
              Permitted
      Purpose.

            	
              8

            


    

     

    
      	
               
      

            	
              12.4

            	
              Disclosure.

            	
              8

            


    

     

    
      	
               
      

            	
              12.5

            	
              Custody.

            	
              8

            


    

     

    
      	
               
      

            	
              12.6

            	
              Expiration
      of Confidentiality Provisions.

            	
              8

            


    

     

    
      
        	
                 
      

              	
                ARTICLE
      13 LIMITATION OF LIABILITY AND INDEMNIFICATION

              	
                8

              


      

    

     

    
      	
               
      

            	
              13.1

            	
              Indemnification.

            	
               8

            


    

     

    
      	
               
      

            	
              13.2

            	
              Limitation
      of Liability.

            	
              10

            


    

     

    
      	
               
      

            	
              13.3

            	
              Provisions
      Applicable with respect to Indemnification Obligations.

            	
              10

            


    

     

    
      	
               
      

            	
              13.4

            	
              Survival.

            	
              10

            


    

     

    
      
        	
                 
      

              	
                ARTICLE
      14 DISPUTE RESOLUTION

              	
                10

              


      

    

     

    
      
        	
                 
      

              	
                ARTICLE
      15 ASSIGNMENT

              	
                10

              


      

    

     

    
      
        
        

      

      
        ii

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              15.1

            	
              Prohibition
      of Assignment.

            	
              10

            


    

     

    
      	
               
      

            	
              15.2

            	
              Assignment
      to Capitol Group.

            	
              10

            


    

     

    
      
        	
                 
      

              	
                ARTICLE
      16 MISCELLANEOUS

              	
                11

              


      

    

     

    
      	
               
      

            	
              16.1

            	
              Notices.

            	
              11

            


    

     

    
      	
               
      

            	
              16.2

            	
              Governing
      Law; Consent to Jurisdiction.

            	
              11

            


    

     

    
      	
               
      

            	
              16.3

            	
              Judgment
      Currency.

            	
              11

            


    

     

    
      	
               
      

            	
              16.4

            	
              Entire
      Agreement.

            	
              11

            


    

     

    
      	
               
      

            	
              16.5

            	
              Conflicts.

            	
              11

            


    

     

    
      	
               
      

            	
              16.6

            	
              Force
      Majeure.

            	
              11

            


    

     

    
      	
               
      

            	
              16.7

            	
              Amendment
      and Waiver.

            	
              12

            


    

     

    
      	
               
      

            	
              16.8

            	
              Further
      Assurances.

            	
              12

            


    

     

    
      	
               
      

            	
              16.9

            	
              Severability.

            	
              12

            


    

     

    
      
        	 	
                16.10

              	
                Counterparts.

              	
                12

              


      

    

    


    


     

    SCHEDULES

     

    SCHEDULE
3.1 – Administrative Services

    SCHEDULE
3.2 – Technology Services

    SCHEDULE
3.3 – Excluded Activities

    SCHEDULE
5.1 – Fee Schedule

     

     

    EXHIBITS

     

    EXHIBIT 1
– Subleases

     

    


     


    
      
         


      

      
        iii

        
          

        

      

      
         


      

    


    ADMINISTRATIVE
AND TECHNOLOGY SERVICES AGREEMENT

     

    THIS
ADMINISTRATIVE AND TECHNOLOGY SERVICES AGREEMENT (“Agreement”)
is made and entered into as of _______, 2009 (the “Effective
Date”) by and between CAPITOL BANCORP LTD., a Michigan corporation
(together with its affiliated companies, “Capitol”),
and MICHIGAN COMMERCE BANCORP LIMITED, a Michigan corporation (together with is
affiliated companies, “MCBL”).  MCBL
and Capitol are each individually referred to herein as a “Party,”
and collectively, as the “Parties.”

     

     

    RECITALS

     

    WHEREAS,
Capitol and MCBL have entered into a Separation Agreement and Plan of
Distribution, dated _____________, 2009, pursuant to which the Parties set out
the terms and conditions relating to the separation of MCBL Business (such that
MCBL Business is to be held, as at the Effective Time, directly or indirectly,
by MCBL (such agreement, as amended, restated or modified from time to time, the
“Separation
Agreement”).

     

    WHEREAS,
in connection therewith, Capitol and the other members of Capitol Group, on the
one hand, and MCBL and the other members of MCBL Group, on the other hand, will
provide certain administrative services to each other following the Distribution
Date, subject to the terms and conditions of this Agreement.

     

    NOW,
THEREFORE, in consideration of the foregoing premises and the mutual agreements
and covenants contained in this Agreement and other good and valuable
consideration the receipt and sufficiency of which are hereby acknowledged, the
Parties agree as follows:

     

    ARTICLE
1

    DEFINITIONS

     

     1.1    Definitions.    The
capitalized terms set forth shall have the following meanings:

     

    “Administrative
Services” has the meaning set forth in Section 3.1.

     

    “Affiliate”
means, with respect to any Person, any other Person that, directly or indirectly
through one or more intermediaries, controls, or is controlled by, or is under
common control with, such Person, and the term “control” (including the terms
“controlled
by” and “under common
control with”) means the possession, directly or indirectly, of the power
to direct or cause the direction of the management and policies of such Person,
whether through ownership of voting securities, by contract or
otherwise.

     

    “Agreement”
has the meaning set forth in the preamble.

     

    “Business
Day” means any day other than a Saturday, Sunday or other day on which
banking institutions in the State of Michigan are authorized or required by law
to close.

     

    “Capitol”
has the meaning set forth in the preamble.

     

    “Commercially
Reasonable Efforts” means the efforts that a reasonable and prudent
Person desirous of achieving a business result would use in similar
circumstances to ensure that such result is achieved as expeditiously as
possible in the context of commercial relations of the type envisaged by this
Agreement; provided, however, that an
obligation to use Commercially

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

       

      Reasonable
Efforts under this Agreement does not require the Person subject to that
obligation to assume any material obligations or pay any material amounts to a
Third Party.

    

    
       

             
“Distribution”
has the meaning set forth in the recitals.

    

     

    “Dollars” or
“$” means the lawful currency of the United States of
America

     

    “Effective
Date” has the meaning set forth in the preamble.

     

    “Facilities”
has the meaning set forth in Section 7.2.

     

    “MCBL” has
the meaning set forth in the preamble.

     

    “Force
Majeure” has the meaning set forth in Section 16.6.

     

    “Person”
shall mean any individual, corporation, partnership, limited liability company,
association, trust or other entity or organization including a governmental or
political subdivision or agency or instrumentality thereof.

     

    “Personnel”
means the employees, or if applicable, agents, subcontractors or representatives
of Capitol or its Affiliates who provide any Services under this
Agreement.

     

    “Privacy
Policy” means the privacy policies of a Party or agreements or promises
with other Persons regarding privacy.

     

    “Services”
means the Administrative Services and the Technology Services.

     

    “Technology
Services” has the meaning set forth in Section 3.2.

     

    “Term” has
the meaning set forth in Section 2.1.

     

    ARTICLE
2

    TERM OF
AGREEMENT

     

     2.1    Term. 
The term
(the “Term”) of
this Agreement shall commence on the Effective Date and will terminate on
December 31, 2010, unless terminated earlier pursuant to the terms of Article VI
hereof.  This Agreement shall automatically renew for additional terms
of three (3) year unless either Party gives at least one hundred and twenty
(120) days notice of its intent not to renew.

     

    ARTICLE
3

    SERVICES

     

     3.1    Administrative
Services.

     

    (a)    Scope of Administrative
Services.  During the Term of this Agreement, Capitol agrees to
provide or cause its Affiliates to provide to MCBL the services set forth on
Schedule 3.1
which is attached hereto and made a part hereof for all purposes (the “Administrative
Services”).  Administrative Services shall be provided in
accordance with Capitol’s customary practices in effect at or immediately prior
to the Effective Date, subject to:  (a) any limitations imposed by
applicable laws; (b) professional standards and policies adopted by Capitol
and/or MCBL in their reasonable discretion; and (c) the limitations set forth in
this Agreement.  MCBL shall own all right, title and interest in all
data generated in connection with the Administrative Services.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    (b)    Change in Volume or Nature of
Administrative Services.  At any time during the Term of this
Agreement, MCBL may submit to Capitol a request that an Administrative Service
described on Schedule
3.1 that has not otherwise terminated in accordance with this Agreement
be provided to MCBL in the aggregate at a volume or nature materially different
than the volume or nature of services provided by Capitol in respect of MCBL on
or immediately prior to the Effective Date.  Provided MCBL has
submitted to Capitol any information required by Capitol, within a reasonable
period of time following receipt of such request, Capitol shall use Commercially
Reasonable Efforts to provide MCBL with such requested services and shall
provide MCBL with an estimated price and a schedule for any such change in
volume or nature of services.  If MCBL is in agreement with such
estimated price and schedule, MCBL shall so notify Capitol in writing within ten
(10) Business Days of receipt of such estimate from Capitol, and Capitol shall
thereafter make Commercially Reasonable Efforts to accommodate MCBL’s request
for a change in volume or nature of services in accordance with such estimated
price and schedule as soon as reasonably possible.

     

     3.2    Technology
Services.

     

    (a)    Scope of Technology
Services.  During the Term of this Agreement, Capitol agrees to
provide or cause its Affiliates and their respective employees to provide to
MCBL the services set forth on Schedule 3.2 which is
attached hereto and made a part hereof for all purposes (the “Technology
Services”).  Technology
Services shall be provided in a manner consistent with the provision of such
Technology Services at or immediately prior to the Effective Date, subject
to:  (a) any limitations imposed by applicable laws; (b) professional
standards and policies adopted by Capitol and/or MCBL in their reasonable
discretion; and (c) the limitations set forth in this Agreement.  MCBL
shall own all right, title and interest in all data generated in connection with
the Technology Services.

     

    (b)    Change in Volume or Nature of
Technology Services.  At any time during the Term of this
Agreement, MCBL may submit to Capitol a request that Technology Services
described on Schedule
3.2 be provided to MCBL in the aggregate at a volume or nature materially
different than the volume or nature of services provided on or immediately prior
to the Effective Date.  Provided MCBL has submitted to Capitol any
information required by Capitol, within a reasonable period of time following
receipt of such request, Capitol shall use Commercially Reasonable Efforts to
provide MCBL with such requested services and shall provide MCBL with an
estimated price and a schedule for any such change in volume or nature of
services.  If MCBL is in agreement with such estimated price and
schedule, MCBL shall so notify Capitol in writing within ten (10) Business Days
of receipt of such estimate from Capitol, and Capitol shall thereafter make
Commercially Reasonable Efforts to accommodate MCBL’s request for a change in
volume or nature of services in accordance with such estimated price and
schedule as soon as reasonably possible

     

     3.3    Term
of Services.   Unless
this Agreement is earlier terminated as provided herein, during the Term of said
Agreement including any renewal term, Capitol shall provide or 

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    cause to
be provided all Services, other than any Administrative or Technology Services
that are earlier terminated as provided herein.

     

     3.4    Termination
of Administrative Services.   MCBL
may terminate any Administrative or Technology Service by giving Capitol at
least ninety (90) days prior written notice of such termination, in which case,
with respect to such terminated Administrative or Technology Service: (a)
Capitol shall be responsible for providing such Service only through the
effective time of such termination; and (b) MCBL shall be responsible for paying
only the amounts described in Section 6.3 plus any costs incurred by Capitol as
a result of such early termination, including without limitation, any
termination fees, wind-down costs, fees associated with disentanglement services
or any other costs, fees or expenses actually incurred by Capitol as a result of
early termination of such Service.

     

     3.5    Excluded
Services.  The
Services hereunder shall exclude any Excluded Activities (as defined in Schedule
3.5).  In furtherance of the foregoing, Capitol shall not
engage in and MCBL shall not request that Capitol engage in, any of the Excluded
Activities in the course of providing Services hereunder.

     

    ARTICLE
4

    ADDITIONAL
AGREEMENTS

     

     4.1    Relationships
Between Capitol and MCBL; Non-Exclusivity.

     

    (a)    Capitol
acknowledges that maintenance of the relationship between itself and its
Affiliates, on the one hand, and MCBL, on the other hand, is a non-exclusive
arrangement and that MCBL is free to negotiate marketing and services agreements
with other entities to promote the business objectives of MCBL.

     

    (b)    Notwithstanding
any other provision of this Agreement to the contrary, during the Term of said
Agreement, MCBL shall not be obligated to purchase from Capitol any particular
Service or any amount of Services, and may terminate any such services pursuant
to Section 3.5 and purchase such services from one or more third
parties.

     

    (c)    MCBL and
Capitol shall negotiate in good faith if either Party desires to amend the
definition of Administrative Services or Technology Services for purposes of
this Agreement or enter into any new agreements between MCBL and
Capitol.

     

    ARTICLE
5

    CHARGES AND
SET-OFF

     

     5.1    Charges
for Services.  During
the Term of this Agreement, Capitol shall charge MCBL, and MCBL shall pay, the
mutually agreed upon amounts set forth on Schedule 5.1 (which
is attached hereto and made a part hereof for all purposes) for all Services
provided in accordance with the terms of said Agreement.

     

     5.2    Set-off. 
During
the Term of this Agreement, MCBL shall have the right to set off any amounts due
to MCBL from Capitol under any other Ancillary Agreement (as defined in the
Separation Agreement).

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    5.3    Settlement. 
During
the Term of this Agreement, MCBL shall remit to Capitol (or to one or more of
its Affiliates as designated by Capitol) by electronic funds transfer, the
amount due to Capitol for the Services provided under this Agreement, which
shall be equal to the amounts payable by MCBL in accordance with the attached
Schedule 5.1,
reduced by any amounts due to MCBL under Section 5.2 and increased by any
amounts of MCBL operating expenses paid by Capitol Accounts Payable, Tax, or
Payroll Departments.  Such settlement of the inter-company account
balance shall occur each month prior to the end of the succeeding
month.

     

    ARTICLE
6

    TERMINATION

     

     6.1    Termination;
Effect of Expiration or Termination; Survival.  MCBL
shall have the right to terminate this Agreement at any time upon one hundred
and twenty (120) days notice to
Capitol.  Capitol shall have the right to terminate this Agreement
immediately upon (i) a sale, transfer or other disposition of all or
substantially all of the assets of MCBL (including by way of merger,
liquidation, consolidation, corporate reorganization or similar transaction); or
(ii) a liquidation of MCBL.  In addition,  Capitol shall
have the right to terminate this Agreement if MCBL shall have breached or failed
to perform in any material respect any of its obligations, covenants or
agreements under this Agreement and such breach or failure is not cured within
90 days after Capitol has given MCBL written notice identifying such breach or
failure.  Upon expiration or termination of this Agreement: (a)
neither Party shall be relieved of any liability for the breach of any provision
of this Agreement; and (b) any amounts owed hereunder by one Party to another
Party shall be immediately due and payable and shall be made by wire transfer of
immediately available funds.

     

    ARTICLE
7

    PERSONNEL, FACILITIES AND
ACCESS

     

     7.1    Personnel.  Except
as otherwise provided in Schedules 3.1 and
3.2, Services may be provided by such Personnel as Capitol deems
appropriate in its reasonable discretion, subject to any required approval by
applicable governmental authority.

     

     7.2    Facilities. 
Subject
to Schedules 3.1 and
3.2, Services may be provided by Capitol using furniture, fixtures, and
equipment and other items or materials owned, licensed or leased by Capitol or
its Affiliates (collectively, the “Facilities”).  MCBL
acknowledges and agrees that MCBL shall not have any right, title, or interest
in or to the Facilities.

     

     7.3    Changes. 
MCBL
shall not change any procedure or method of operation that adversely affects
Capitol’s performance of its obligations under this Agreement without Capitol’s
prior written consent, which consent shall not be unreasonably withheld or
delayed.

     

     7.4    Capitol
Access.  To the
extent permitted by applicable laws, upon reasonable notice, MCBL shall provide
Capitol with all reasonable access to and right to use MCBL’s Facilities and any
other assets of MCBL (including all records in physical or electronic form) as
Capitol reasonably deems necessary to provide the Services and to perform its
obligations under this Agreement.

     

     7.5    MCBL
Access.  To the
extent permitted by applicable laws, upon reasonable notice, Capitol shall
provide MCBL with all reasonable access to and right to use Capitol’s


     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

       

      Personnel,
Facilities and any other assets of Capitol (including all records in physical or
electronic form) as MCBL reasonably deems necessary to MCBL to perform its
obligations under this Agreement.

    

     

    ARTICLE
8

    RELATIONSHIP BETWEEN THE
PARTIES

     

    Capitol
is and will remain at all times an independent contractor in the performance of
all Services hereunder.  In all matters relating to this Agreement,
Capitol will be solely responsible for the acts of its employees and agents, and
employees or agents of Capitol shall not be considered employees or agents of
MCBL.  Except as otherwise provided herein, Capitol will not have any
right, power or authority to create any obligation, express or implied, on
behalf of MCBL nor shall Capitol act or represent or hold itself out as having
authority to act as an agent or partner of MCBL, or in any way bind or commit
MCBL to any obligations.  Nothing in this Agreement is intended to
create or constitute a joint venture, partnership, agency, trust or other
association of any kind between the Parties or Persons referred to herein, and
each Party shall be responsible only for its respective obligations as set forth
in this Agreement.  Neither Capitol nor its employees shall be
considered an employee or agent of MCBL for any purpose, except as expressly
agreed by the Parties.  Capitol shall have sole responsibility for the
supervision, daily direction and control, payment of salary (including
withholding of income taxes and deductions at source), worker’s compensation,
disability benefits and the like of its employees.

     

    ARTICLE
9

    SUBCONTRACTORS

     

     9.1    Subcontractors.  
Capitol
may, subject to Section 9.2, engage a “Subcontractor”
to perform all or any portion of Capitol’s duties under this Agreement, provided that any
such Subcontractor agrees in writing to be bound by confidentiality obligations
at least as protective as the terms of Section [  ] of the
Separation Agreement regarding confidentiality and non-use of information, and
provided
further that Capitol remains responsible for the performance of such
Subcontractor and for paying the Subcontractor.  As used in this
Agreement, “Subcontractor”
will mean any Person or entity engaged to perform hereunder, other than
employees of Capitol or its Affiliates.

     

     9.2    Assignment. 
In the
event of any subcontracting by Capitol to a non-Affiliate of Capitol of all or
any portion of Capitol’s duties under this Agreement, Capitol shall assign and
transfer to MCBL the full benefit of all such non-Affiliate subcontractor’s
performance covenants, guarantees, warranties or indemnities (if any), to the
extent same are transferable or assignable, in respect of the portion of the
Services provided to MCBL pursuant to such subcontracting; and if any such
guarantees, warranties, indemnities and benefits are not assignable, Capitol
shall use Commercially Reasonable Efforts to procure the benefit of same for
MCBL through other legal permissible means.  Capitol will also
reasonably endeavor to permit the assignment of any Subcontractor engagement to
MCBL or its Affiliates at the request of MCBL upon termination of Service
hereunder.

     

    ARTICLE
10

    INTELLECTUAL
PROPERTY

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

     10.1    Allocation
of Rights by Ancillary Agreements.  This
Agreement and the performance of this Agreement will not affect the ownership of
any patent, trademark or copyright or other intellectual property rights
allocated in the Separation Agreement or any of the Ancillary
Agreements.

     

     10.2    Existing
Ownership Rights Unaffected.  Neither
Party will gain, by virtue of this Agreement, any rights of ownership of
copyrights, patents, trade secrets, trademarks or any other intellectual
property rights owned by the other.

     

    MCBL
agrees to reimburse Capitol for any reasonable out-of-pocket expenses arising
out of the obligations under this Section 10.2.  Capitol hereby
waives, and shall cause its employees to waive, the whole of its and their
rights to any copyright material developed under this Agreement.

     

     10.3    Third
Party Software.  In
addition to the consideration set forth elsewhere in this Agreement, MCBL shall
also pay any amounts (and applicable sales and use taxes) that are required to
be paid to any licensors of software that is used by Capitol (other than as a
part of its normal operations), to the extent that such software is used in
connection with the provision of any Service hereunder, and any amounts (and
applicable Sales Taxes) that are required to be paid by Capitol to any such
licensors to obtain the Consent of such licensors to allow Capitol to provide
any of the Services hereunder.  Subject to the immediately preceding
sentence and to the terms of the Separation Agreement, Capitol will use
Commercially Reasonable Efforts to obtain any Consent that may be required from
such licensors in order to provide any of the transition Services
hereunder.

     

     10.4    Termination
of Licenses.  Any
license granted hereunder by Capitol shall terminate ipso facto upon the
expiration or early termination of this Agreement.

     

    ARTICLE
11

    NO
OBLIGATION

     

    Neither
Party assumes any responsibility or obligation whatsoever, other than the
responsibilities and obligations expressly set forth in this Agreement
(including the exhibits and schedules hereto), in the Separation Agreement or in
a separate written agreement between the Parties.

     

    ARTICLE
12

    CONFIDENTIALITY

     

     12.1    Confidentiality. 
The terms
of the Confidentiality provisions set forth in Section [  ] of the
Separation Agreement shall apply to all confidential information disclosed in
the course of the Parties’ interactions under this Agreement.  This
Article 12 of the Agreement sets out additional requirements regarding
confidential information for the purposes of this Agreement.

     

     12.2    Confidential
Information.  The term
“Confidential
Information” means all business or operational information concerning
MCBL (including (i) earnings reports and forecasts,
(ii) macro-economic reports and forecasts, (iii) business and
strategic plans, (iv) general market evaluations and surveys,
(v) litigation presentations and risk assessments,

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

       

      (vi) budgets,
(vii) financing and credit-related information, (viii) specifications,
ideas and concepts for products and services, (ix) quality assurance
policies, procedures and specifications, (x) customer information,
(xi) software, (xii) training materials and information, and
(xiii) all other know-how, methodology, procedures, techniques and trade
secrets related to design, development and operational processes) which, prior
to or following the Effective Time, has been disclosed by such MCBL to Capitol,
in written, oral (including by recording), electronic, or visual form to, or
otherwise has come into the possession of, Capitol (except to the extent that
such information can be shown to have been (i) in the public domain through
no action of Capitol, (ii) lawfully acquired from other sources by Capitol
to which it was furnished or (iii) independently developed by Capitol;
provided, however, in the case
of clause (ii) that, to the knowledge of Capitol, such sources did not
provide such information in breach of any confidentiality
obligations).

    

     

     12.3    Permitted
Purpose.  The term
“Permitted
Purpose” means the provision of a Service by Capitol to MCBL under this
Agreement.

     

     12.4    Disclosure. 
Capitol
may use Confidential Information in connection with a Permitted Purpose, provided that for
purposes of this Agreement, Confidential Information shall not be used by
Capitol for any purpose other than a Permitted Purpose or in any way that is
detrimental to MCBL.  In particular,

     

    (a)    Capitol
shall not disclose any Confidential Information to any employee of Capitol who
does not have a need to know such Confidential Information in order to perform
the Permitted Purpose; and

     

    (b)    Capitol
shall not use the Confidential Information other than for such purposes as shall
be expressly permitted under this Agreement.

     

     12.5    Custody. 
The
Confidential Information, including any derivative documents prepared by
Capitol, will be held in safe custody and kept confidential on the terms set
forth in this Agreement.  Each employee of Capitol who is authorized
to have or be aware of Confidential Information will store that information in
his possession in separate paper and/or electronic files.

     

     12.6    Expiration
of Confidentiality Provisions.  The
obligations of the Parties under this Article 12 shall survive the expiration or
earlier termination of this Agreement; provided, however, that in any
event, the obligations of the Parties under this Article 12 shall expire on the
fifth anniversary of the expiration or earlier termination of this
Agreement.

     

    ARTICLE
13

    LIMITATION OF LIABILITY AND
INDEMNIFICATION

     

     13.1    Indemnification. 
Capitol
shall indemnify, defend and hold harmless MCBL, each other member of MCBL Group
and each of their respective directors, officers and employees, and each of the
heirs, executors, trustees, administrators, successors and assignors of any of
the foregoing (collectively, the “MCBL Indemnified
Parties”), from and against any and all Liabilities of MCBL Indemnified
Parties incurred by, borne by or asserted against any of them relating to,
arising out of or resulting from any of the following items (without
duplication):

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    (a)    the
breach or the failure of performance by Capitol of any of the covenants,
promises, undertakings or agreements which it is obligated to perform under this
Agreement;

     

    (b)    death of
or injury of any person whomsoever, including but not limited to directors,
officers, employees, servants or agents of MCBL, of another member of MCBL Group
or contractors, resulting from the acts or omissions of Capitol or its
Affiliates under or in connection with this Agreement, to the extent that such
Liabilities are not covered by worker’s compensation;

     

    (c)    loss of,
or damage to, or destruction of any property whatsoever, including without
limitation, property of MCBL or of another member of MCBL Group, resulting from
the acts or omissions of Capitol or its Affiliates under or in connection with
this Agreement, to the extent such liabilities are not covered by insurance;
or

     

    (d)    any claim
or assertion that the execution or performance by MCBL of its obligations under
this Agreement violates or interferes with any contractual or other right or
obligation or relationship of Capitol to or with any other Person, caused by,
arising out of, or in any way related to this Agreement, but subject however to
the limitations of liability provided in Section 13.2 of this
Agreement.

     

    MCBL
shall indemnify, defend and hold harmless Capitol, each other member of Capitol
Group and each of their respective directors, officers and employees, and each
of the heirs, executors, trustees, administrators, successors and assignors of
any of the foregoing (collectively, the "Capitol
Indemnified Parties"), from and against any and all Liabilities of
Capitol Indemnified Parties incurred by, borne by or asserted against any of
them relating to, arising out of or resulting from any of the following items
(without duplication):

     

    (a)    the
breach or the failure of performance by MCBL of any of the covenants, promises,
undertakings or agreements which it is obligated to perform under this
Agreement;

     

    (b)    death of
or injury of any person whomsoever, including but not limited to directors,
officers, employees, servants or agents of Capitol, of another member of Capitol
Group or contractors, resulting from the acts or omissions of MCBL or its
Affiliates under or in connection with this Agreement, to the extent that such
Liabilities are not covered by worker’s compensation;

     

    (c)    loss of,
or damage to, or destruction of any property whatsoever, including without
limitation, property of Capitol or of another member of Capitol Group, resulting
from the acts or omissions of MCBL or its Affiliates under or in connection with
this Agreement, to the extent such liabilities are not covered by insurance;
or

     

    (d)    any claim
or assertion that the execution or performance by Capitol of its obligations
under this Agreement violates or interferes with any contractual or other right
or obligation or relationship of MCBL to or with any other Person, caused by,
arising out of, or in any way related to this Agreement, but subject however to
the limitations of liability provided in Section 13.2 of this
Agreement.

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    13.2    Limitation
of Liability.  Notwithstanding
the provisions of Section 13.1, the total aggregate liability of a Party to
the other Party for all events, acts or omissions of such Party under or in
connection with this Agreement or the Services provided by such Party hereunder,
whether based on an action or claim in contract, warranty, equity, negligence,
tort or otherwise, shall not exceed an amount equal to the value of the Services
payable by such Party to the other Party under this Agreement; provided that the
foregoing limit shall not apply with respect to any liability arising out of or
relating to such Party’s gross negligence or willful misconduct or the gross
negligence or willful misconduct of its personnel, contractors, subcontractors
or agents or other Persons for which it is responsible under Applicable
Law.

     

    In no
event shall any member of Capitol Group or MCBL Group be liable to any member of
the other Group for any special, consequential, indirect, collateral, incidental
or punitive damages, lost profits, or failure to realize expected savings, or
other commercial or economic loss of any kind, however caused and on any theory
of liability (including negligence), arising in any way out of this Agreement,
whether or not such Person has been advised for the possibility of any such
damages; provided, however, that the
foregoing limitations shall not limit either Party’s indemnification obligations
for liabilities to with respect to Third Party Claims as set forth in Article 6
of the Separation Agreement.

     

     13.3    Provisions
Applicable with respect to Indemnification Obligations.  Article
6 of the Separation
Agreement shall apply mutatis
mutandis  with respect to any Liability subject to
indemnification or reimbursement pursuant to Article 13 of this
Agreement.

     

     13.4    Survival. 
The
rights and obligations of the Parties under this Article 13 shall survive the
expiration or earlier termination of this Agreement.

     

    ARTICLE
14

    DISPUTE
RESOLUTION

     

    The
Separation Agreement with respect to Dispute Resolution, effective as of the
Effective Time, among the Parties and other parties thereto shall govern all
disputes, controversies or claims (whether arising in contract, delict, tort or
otherwise) between the Parties that may arise out of, or relate to, or arise
under or in connection with, this Agreement or the transactions contemplated
hereby (including all actions taken in furtherance of the transactions
contemplated hereby), or the commercial or economic relationship of the Parties
relating hereto or thereto.

     

    ARTICLE
15

    ASSIGNMENT

     

     15.1    Prohibition
of Assignment.  Neither
Party shall assign or transfer this Agreement, in whole or in part, or any
interest or obligation arising under this Agreement except as permitted by
Section 7.7(a), Article 9 and Section 15.2, without the prior written
consent of the other Party.

     

     15.2    Assignment
to Capitol Group.  Capitol
may elect to have one or more of the members of Capitol Group assume the rights
and obligations of Capitol under this Agreement.

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    ARTICLE
16

    MISCELLANEOUS

     

     16.1    Notices. 
All
notices and other communications hereunder shall be given in the manner set
forth in Section 9.2 of the Separation
Agreement.

     

     16.2    Governing
Law; Consent to Jurisdiction.  This
Agreement shall be construed in accordance with, and governed by, the laws of
the State of Michigan, without regard to the conflicts of law rules of such
state. Each of the parties hereto (a) consents to submit itself to the
personal jurisdiction of the courts of the State of Michigan or any federal
court with subject matter jurisdiction located in the Western District of
Michigan (and any appeals court therefrom) in the event any dispute arises out
of this Agreement or any transaction contemplated hereby, (b) agrees that
it will not attempt to deny or defeat such personal jurisdiction by motion or
other request for leave from any such court, and (c) agrees that it will
not bring any action relating to this Agreement or any transaction contemplated
hereby in any court other than such courts

     

     16.3    Judgment
Currency.  The
obligations of a Party to make payments hereunder shall not be discharged by an
amount paid in any currency other than Dollars, whether pursuant to a court
order or judgment or arbitral award or otherwise, to the extent that the amount
so paid upon conversion to Dollars and transferred to an account indicated by
the Party to receive such funds under normal banking procedures does not yield
the amount of Dollars due; and each Party hereby, as a separate obligation and
notwithstanding any such judgment, agrees to indemnify each other Party against,
and to pay to such Party on demand, in Dollars, any difference between the sum
originally due in Dollars and the amount of Dollars received upon any such
conversion and transfer.

     

     16.4    Entire
Agreement.  This
Agreement, the other Ancillary Agreements, the Separation Agreement and
exhibits, schedules and appendices hereto, including the Transition Services
Schedules, and thereto and the specific agreements contemplated herein or
thereby, contain the entire agreement between the Parties with respect to the
subject matter hereof and supersedes all previous agreements, negotiations,
discussions, writings, understandings, commitments and conversations with
respect to such subject matter.  No agreements or understandings exist
between the Parties other than those set forth or referred to herein or
therein.

     

     16.5    Conflicts. 
In case
of any conflict or inconsistency between this Agreement and the Separation
Agreement, this Agreement shall prevail.  In case of any conflict or
inconsistency between the terms and conditions of this Agreement (excluding, for
the purpose of this Section 16.5, any Transition Service Schedule thereto)
and the terms of any Transition Service Schedule, the provisions of the
Transition Service Schedule shall prevail.

     

     16.6    Force
Majeure.  No Party
shall be deemed in default of this Agreement to the extent that any delay or
failure in the performance of its obligations under this Agreement results from
superior force (“Force
Majeure”) or any act, occurrence or omission beyond its reasonable
control and without its fault or negligence, such as fires, explosions,
accidents, strikes, lockouts or labor disturbances, floods, droughts,
earthquakes, epidemics, seizures of cargo, wars (whether

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

       

      or not
declared), civil commotion, acts of God or the public enemy, action of any
government, legislature, court or other Governmental Authority, action by any
authority, representative or organization exercising or claiming to exercise
powers of a government or Governmental Authority, compliance with Applicable
Law, blockades, power failures or curtailments, inadequacy or shortages or
curtailments or cessation of supplies of raw materials or other supplies,
failure or breakdown of equipment of facilities or, in the case of computer
systems, any failure in electrical or air conditioning equipment (a “Force Majeure
Event”).   If a Force Majeure Event has occurred and its
effects are continuing, then, upon notice by the Party who is delayed or
prevented from performing its obligations to the other Party, (i) the
affected provisions or other requirements of this Agreement shall be suspended
to the extent necessary during the period of such disability, (ii) the
Party which is delayed or prevented from performing its obligations by a Force
Majeure Event shall have the right to apportion its Services in an equitable
manner to all users and (iii) such Party shall have no liability to the
other Party or any other Person in connection therewith.  The Party
which is delayed or prevented from performing its obligations by the Force
Majeure Event shall resume full performance of this Agreement as soon as
reasonably practicable following the cessation of the Force Majeure Event (or
the consequences thereof).

    

     

     16.7    Amendment
and Waiver.  This
Agreement may not be altered or amended, nor may any rights hereunder be waived,
except by an instrument in writing executed by the Parties.  No waiver
of any terms, provision or condition of or failure to exercise or delay in
exercising any rights or remedies under this Agreement, in any one or more
instances, shall be deemed to be, or construed as, a further or continuing
waiver of any such term, provision, condition, right or remedy or as a waiver of
any other term, provision or condition of this Agreement.

     

     16.8    Further
Assurances.  Each
Party agrees to use Commercially Reasonable Efforts to execute any and all
documents and to perform such other acts as may be necessary or expedient to
further the purposes of this Agreement and the relations contemplated
hereby.  Without limiting the foregoing and the provisions of the
Separation Agreement, each Party shall make available during normal business
hours for inspection and copying by the other Party and such other Persons as
the other Party shall designate in writing, all books and records in the
possession which relate to the Services and which are necessary to confirm the
said Party’s compliance with its obligations under this Agreement.

     

     16.9    Severability. 
The
provisions of this Agreement are severable and should any provision hereof be
void, voidable or unenforceable under any applicable law, such provision shall
not affect or invalidate any other provision of this Agreement, which shall
continue to govern the relative rights and duties of the Parties as though such
void, voidable or unenforceable provision were not a part hereof.

     

     16.10    Counterparts. 
This
Agreement may be executed in one or more counterparts, each of which shall be
deemed an original instrument, but all of which together shall constitute but
one and the same Agreement.

     

    


     

    Signatures
on the following page

     


    
      
         


      

      
        12

        
          

        

      

      
         


      

    


    IN
WITNESS WHEREOF, the Parties, having caused this Agreement to be executed, do
hereby warrant and represent that their respective signatories, whose signatures
appear below, have been and are on the date of this document officers duly
authorized by all necessary and appropriate corporate action to execute this
Agreement.

     

    


     

    CAPITOL
BANCORP LTD.

    


    


    By:_________________________________

    


     

    Its:__________________________________

    


     

    


     

    MICHIGAN
COMMERCE BANCORP LIMITED

    


    


    By:___________________________________

    


    Its:____________________________________

    


     


    
      
        
          Signature
Page to Administrative Services Agreement

        

         


      

      
         


        
          

        

      

      
         


      

    

     

     

    SCHEDULE
3.1

     

    ADMINISTRATIVE
SERVICES

     

    1.    Provision
of Office Space to MCBL. Capitol
shall sublease to MCBL or its affiliates general office space, utilities, mail,
and other related services within offices located at 222 Washington Square North
and 200 Washington Square North, Lansing Michigan at the exact same terms and
conditions as are in place between Capitol and lessor.

     

    2.    Administrative
Services. Capitol
shall provide or cause to be provided to MCBL the services set forth in this
Schedule 3.1 at the same service level and type as Capitol provides for its own
account.

     

    3.    Legal
Services.  Capitol will provide the following legal and
compliance services to MCBL:

     

    
      	
              ·  

            	
              Review
      loan and other transaction documents, when
  needed.

            


    

     

    
      	
              ·  

            	
              Review
      of contracts.

            


    

     

    
      	
              ·  

            	
              Assist
      in litigation.

            


    

     

    
      	
              ·  

            	
              Review
      and assist in negotiations of leases and real estate purchase
      agreements.

            


    

     

    
      	
              ·  

            	
              Assist
      in employment related contracts or
litigation.

            


    

     

    
      	
              ·  

            	
              Assist
      in M&A activities.

            


    

     

    
      	
              ·  

            	
              Assist
      in insurance negotiations and
procurement.

            


    

     

    
      	
              ·  

            	
              Assist
      with adverse loan collection matters, foreclosures and other real estate
      owned.

            


    

     

    
      	
              ·  

            	
              Manage
      any external legal counsel engagements.  MCBL to pay charges
      incurred.

            


    

     

    
      	
              ·  

            	
              Provide
      legal counsel and advice on an as-needed
basis.

            


    

     

    4.    Finance
Services.  Capitol  will provide the following
finance, accounting and tax services to MCBL:

     

    
      	
              ·  

            	
              Provide
      general ledger system and transaction support
  services.

            


    

     

    
      	
              ·  

            	
              Maintain
      budget and financial reporting system
software.

            


    

     

    
      
        
        

      

      
        SCHEDULE
3.1 

        
          

        

      

      
        
        

      

    

     

    
      	
              ·  

            	
              Provide
      bill payment services, including employee expense reimbursement, and
      related tax reporting services (Use and Sales Tax and 1099
      reporting).

            


    

     

    
      	
              ·  

            	
              Preparation
      and filing of Regulatory Reports (call reports, FR2900,
    etc.).

            


    

     

    
      	
              ·  

            	
              Preparation
      of monthly financial reporting package for Board of
    Directors.

            


    

     

    
      	
              ·  

            	
              Remit
      backup withholding and file periodic IRS
  returns.

            


    

     

    
      	
              ·  

            	
              Maintain
      fixed asset and prepaids software and
records.

            


    

     

    
      	
              ·  

            	
              Assist
      in the computation of risk-based capital
ratios.

            


    

     

    
      	
              ·  

            	
              Provide
      financial analysis requested by MCBL consistent with customary
      practice.

            


    

     

    
      	
              ·  

            	
              Oversee
      the preparation of all federal, state and local corporate
      income/franchise/property tax filings and related estimated tax payments
      not covered by the Tax Separation Agreement effective ______________
      between Capitol and MCBL.

            


    

     

    
      	
              ·  

            	
              Provide
      SEC and NASDAQ reporting services, including Forms 10Q, 10K, S-3, S-4 and
      8-K.  Maintain files for insider ownership of
    stock.

            


    

     

    
      	
              ·  

            	
              Assist
      in the preparation of press releases and handling of inquiries from
      shareholders or analyst.

            


    

     

    
      	
              ·  

            	
              Assist
      with correspondence to shareholders, transfer agent, Reg O officers and
      other related items.

            


    

     

    5.    human
resource services.  Capitol  will
provide the following human resource services to MCBL:

     

    
      	
              ·  

            	
              Provide
      candidate screening including, credit check, criminal records search,
      motor vehicle record review, drug testing, prior employment references,
      educational review, personal reference check and administration of
      pre-employment testing.

            


    

     

    
      	
              ·  

            	
              Assist
      with compliance with EEOC regulations and employment
  law.

            


    

     

    
      	
              ·  

            	
              Maintain
      employee files.

            


    

     

    
      	
              ·  

            	
              Administer
      the process of bi-weekly payrolls, maintain electronic time keeping system
      and maintain the Human Resource Information System provided by third-party
      vendor.  MCBL is responsible for direct cost from third-party
      vendor.

            


    

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    
      	
              ·  

            	
              Provide
      consulting services to managers and supervisors on employee performance
      issues, dispute resolution, job specific training, compensation analysis,
      and market studies on compensation related
  practices.

            


    

     

    
      	
              ·  

            	
              Manage
      employee benefit programs, including all health related, 401k ESOP and
      ESPP.  This includes assistance in the negotiations with
      third-party vendors on the cost of such programs, open enrollment,
      employee education and claims resolution
  services.

            


    

     

    
      	
              ·  

            	
              Coordinate
      regulatory audits of employee benefit plans and
  programs.

            


    

     

    6.    Miscellaneous.  The
listing above may not be an all inclusive list of the Administrative Services
that Capitol will provide to MCBL during the normal course of
business.  Any minor services that have been omitted will be provided
at no incremental cost.

     


    
       

      
        3

        
          

        

      

      
         


      

    

    


     

    SCHEDULE
3.2

     

    TECHNOLOGY
SERVICES

     

    


     

          1.   Technology
services. Capitol
shall provide or cause to be provided to MCBL and affiliate banks (such
affiliates, collectively, “Bank”)
the services set forth in this Schedule 3.2 at the same service level and type
as Capitol provides for its own account.

     

     

        Data
& Proof Processing Services.  Capitol
agrees to provide Bank with the following services; provided that, in addition
to any further services listed herein and except as specifically provided to the
contrary in this Agreement, the parties intend for Capitol to provide the Bank
with the same or similar services it did under the Original
Agreement:

    


       a.           Repetitive
Services.  Exhibit A attached to this
schedule defines the Data Processing Services which Capitol shall provide to
Bank, and, when applicable, the due in and due out schedules for such Data
Processing Services.

    


       b.           Change in Data or Proof
Processing Services.  The intent of this agreement is to
continue to provide Technology Services to the Bank consistent with past
practice and consistent with the other Banks processed by
Capitol.  Capitol may be required by its vendors or choose to add new
services, change existing services or eliminate obsolete services during the
Term (“Change in
Service”).  Capitol shall provide advance written notice prior
to any material change in Data and/or Proof Processing Services and such change
shall be subject to approval by the Bank. Upon a Change in Service, the parties
to this Agreement may renegotiate the payment terms of this
Agreement.  Such renegotiation shall be conducted by both parties in
good faith.

    


    Capitol
does not intend to make changes to its Technology Services, including but not
limited to; adding systems, technology, applications, interfaces, supporting new
vendors, or having processes and procedures, that are dedicated only to support
the Bank.  Notwithstanding anything to the contrary, Bank acknowledges
and agrees to the conversion of its online banking systems from Digital Insight
to Jack Henry Net Teller.  Accordingly, Bank agrees to pay any and all
third-party costs associated with this conversion.

    


       c.           Obligations of
Bank.  In order to provide the Data Processing Services
contracted for under this Agreement, the Bank shall provide the information and
data set forth on Exhibit
B to Capitol in the frequency and manner as provided for in such Exhibit B.  The
information and data shall be conveyed to Capitol in a manner determined by
Capitol in its sole and absolute discretion.

    


       d.           Proof Processing.
Exhibit C attached to
this Agreement defines the Proof Processing Services which Capitol shall provide
to Bank.

    


    
      
        
        

      

      
        SCHEDULE
3.2

        
          

        

      

      
        
        

      

    

     

                      
e.           Technology and Security
Services.  In consideration for the Transaction Processing
Services outlined herein and the Technology Services (i.e. network and internet
connectivity, e-mail and other such technology systems), it is agreed
that:

    


        i)           Capitol
may implement network and other system isolation of the Bank from the Capitol
network as it deems advisable in its sole and absolute discretion;

    


        ii)           During
the Term, the Bank shall not make any changes to the technology infrastructure
maintained by Capitol or used to access Capitol systems;

    


        iii)           During
the Term, the Bank will not add equipment to the Capitol network or connect the
existing equipment to any other network; and

    


        iv)           During
the Term, the Bank will not change any vendor that could affect any interfaces
or operational processes.

    


       f.           Transportation and Condition
of Data and Programs.  Specifications, documentation, tapes,
disks, forms, data, equipment/hardware, systems and programs submitted by the
Bank to Capitol shall be
transported at the Bank’s expense between the Bank’s premises and Capitol, and must
be correct, complete and compatible with Capitol’s equipment
and systems and in good condition.  If late, incorrect, incomplete or
incompatible, Bank shall pay the rates in effect at the time for the additional
work performed by Capitol to correct,
complete or render compatible such data and to reschedule and process the Bank’s
work as promptly as possible, but the Bank agrees to extend and schedule for
this purpose.  All specifications, documentation, systems and programs
supplied by Bank to Capitol for use by
Capitol in
providing the services herein may be reviewed, documented and/or tested at the
Bank’s expense to determine and/or establish compatibility with Capitol equipment
and documentation standards.  Capitol shall provide appropriate
specifications and otherwise relevant information to Bank to facilitate Bank’s
compliance with its requirement to furnish Data and Programs as contemplated
herein.

    


       g.           Verification of Data and
Programs.  If Bank has not furnished controls to Capitol to permit
verification or checking of data and programs, Bank agrees to accept the
obtained results as complete and satisfactory performance by Capitol.

    


       
h.           Disposition of Data and
Programs.  Specifications, documentation, tapes, disks, forms,
data, equipment/hardware, systems and programs furnished to Capitol by Bank
pursuant to this Agreement may be retained by Capitol until the
services provided hereunder are complete and paid for.  In the event
of termination of this Agreement, Capitol shall
advise Bank of the property held for Bank and, unless otherwise instructed in
writing within thirty (30) days of such advice, Capitol may dispose
of such property and charge any expense incurred in disposing of such property
to the Bank.

    


       i.           Ownership of Data and
Programs.  Each party warrants and represents to the other
party that all specifications, documentation, tapes, discs, forms, data,
equipment/hardware, systems and programs provided by it which are used to
process data 

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    supplied
by Bank are held with good and complete title or are used under valid licenses
which authorize use in processing data supplied by Bank either for its benefit
or benefit of third parties.  Each party also covenants that it shall
defend in any threatened action and otherwise hold the other party free of any
liability for expense, including reasonable attorney’s fees, to any third party
or governmental body for the use of said programs and systems. All
specifications, documentation, tapes, discs, forms, data, equipment/hardware,
systems and programs furnished by Bank, or developed by Capitol for Bank at
Bank’s expense, are and shall remain the property of Bank.  All
specifications, documentation, tapes, discs, forms, data, equipment/hardware,
systems and programs furnished by Capitol, or developed and utilized by Capitol
in connection with this Agreement, other than the aforementioned specifications,
documentation, tapes, discs, forms, data, equipment/hardware, systems and
programs are and shall remain the property of Capitol.

    


       j.           Delivery.  Capitol
will be responsible for timely delivery, in accordance with the customary past
practices of Capitol and the Bank, of all input and output data to the Bank’s
facilities necessary to provide the services contemplated in this Schedule
3.2.

    


       k.           Third Party
Contracts. Bank recognizes that Capitol may contract with many third
parties who provide some of the services contemplated in this Schedule
3.2.  When applicable, these service providers are also subject to
performance standards.  Upon request and notice as provided herein,
Bank may review all such agreements, for any reason related to the business of
the Bank, including, but not limited to, determining the Bank’s or satisfaction
with the third party service providers’ performance standards.

    


       l.           Corrections.  Capitol
agrees to promptly correct any errors made by Capitol in the processing of any
of Bank’s data, including the rebuilding of any data files damages or destroyed
due to Capitol’s error.  Any such corrections or rebuilding will be
without charge to Bank, unless caused by the nature or lack of timeliness of
data submitted by Bank, in which case Bank will pay Capitol its reasonable
expenses and charges.

    


              m.           Malfunction.  Capitol
shall not be responsible or liable for any losses, direct or indirect, or any
consequential damages arising from any malfunction of processing equipment due
to Acts of God, natural disasters, power failures, third party processors or
equipment malfunction, causing the processing of services contemplated in this
Schedule 3.2 to Bank to be delayed.  Capitol warrants that it will
take all reasonable steps to avoid such interruptions, and shall make every
reasonable attempt to restore services contemplated in this Schedule 3.2 as
quickly as possible following any such interruptions.

     

                   n.           De-Conversion.  In
the event that MCBL chooses another Technology partner to provide the services
listed in this Schedule 3.2, Capitol agrees to work in good faith with MCBL in
the conversion of the services from Capitol’s system to MCBL’s new
system.  Additionally, Capitol agrees to provide such reasonable
assistance as requested by MCBL in furtherance of such
conversion.  The cost for any Capitol services used for the conversion
will be separately negotiated between the parties.  Cost incurred by
Capitol from third-party conversion service provider will be reimbursed by MCBL
within a reasonable time period after its receipt of such
documentation.  Upon the Conversion Date, Capitol agrees to maintain
and/or deliver to 

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    Bank any
and all pre-Effective Date data, materials and information related to Bank and
its customers.  The risk of loss of such data, materials and
information, if delivered to Bank, shall remain with Capitol until delivered to
Bank, at which point the Bank will assume such risk. Notwithstanding the above
provision, in the event that an isolated system and/or process is not
practicable to convert, or the parties otherwise agree not to convert a
particular system and/or process, Capitol agrees to provide research services to
the Bank at Capitol’s published research rates (not to exceed $35.00 per
hour).  Such systems and/or processes may include, but are not limited
to, report storage/COLD storage archives, check archives and other record
retention based systems.

    


     


    
      
         


      

      
        4

        
          

        

      

      
         


      

    

    


     

    EXHIBIT
A

    


    Repetitive
Services

    


    


    
      	
              1.

            	
              Proof
      Transaction Capture.

            


    

     

    
      	
               
      

            	
              a.

            	
              Image
      and balance transactions as they are presented into the Vertex teller
      system at each teller station.

            


    

     

    
      	
               
      

            	
              b.

            	
              Centralized
      location for remote check processing operation for additional review, if
      needed, and host system posting and
clearing.

            


    

     

    
      	
               
      

            	
              c.

            	
              Retrieval
      of items via eVision.

            


    

     

    


    
      	
              2.

            	
              Deposit
      Processing Systems.

            


    

     

    
      	
                   

            	
              a.    SilverLake
      Deposits - Demand Deposit and
Savings.

            


    

     

    
      
        	 	
                i.

              	
                Processing
      of all daily transactional
data.

              


      

    

     

    
      	
               
      

            	
              ii.

            	
              Calculation
      of daily interest accruals, services charges and sweep 

                    transactions.

              

            	
               

               

            


    

     

    
      
        	 	
                iii.

              	
                Creation
      of all customer notices.

              


      

    

     

    
      
        	 	
                iv.

              	
                Creation
      of periodic customer
Statements.

              


      

    

     

    
      
        	 	
                v.

              	
                Creation
      of daily, weekly, monthly, quarterly and year end
  reports.

              


      

    

     

    
      
        	 	
                b.

              	
                SilverLake
      Time Deposits - Certificate of Deposits and Retirement
      Accounts

              


      

    

     

    
      
        	 	
                i.

              	
                Processing
      of all daily transactional
data.

              


      

    

     

    
      
        	 	
                ii.

              	
                Calculation
      of daily interest accruals, penalties and interest

                    payments.

              	
                 

              


      

    

     

    
      
        	 	
                iii.

              	
                Creation
      of all customer notices.

              


      

    

     

    
      
        	 	
                iv.

              	
                Creation
      of daily, weekly, monthly, quarterly and year end
  reports.

              


      

    

     

    


     

    
      	
              3.

            	
              General
      Ledger

            


    

     

    
      
        	 	
                a.

              	
                Processing
      of all daily transactional
data.

              


      

    

     

    
      
        	 	
                b.

              	
                Creation
      of daily, weekly, monthly, quarterly and year end
  reports.

              


      

    

     

    
      
        	
                 4.

              	
                Loan
      Processing Systems

              


      

    

     

    
      	
               
      

            	
              a.

            	
              SilverLake
      Loan System

            


    

     

    
      
        	 	
                 
      

              	
                i.

              	
                Processing
      of all daily transactional
data.

              


      

    

     

    
      	
               
      

            	
              ii.

            	
              Calculation
      of daily interest accruals, penalties and interest
    payments.

            	
               

            


    

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              iii.

            	
              Creation
      of all customer notices.

            


    

     

    
      	
               
      

            	
              iv.

            	
              Creation
      of billing notices.

            


    

     

    
      	
               
      

            	
              v.

            	
              Creation
      of daily, weekly, monthly, quarterly and year end
  reports.

            


    

     

    
      	
               5.

            	
              
                Platform
      Automation Systems

              

            	
               

            


    

     

    
      	
               
      

            	
              a.

            	
              Streamline
      Deposit Interface System & LaserPro Online Interface System (where
      applicable)

            


    

     

    
      	
               
      

            	
              i.

            	
              Supply
      interface between platform tools and core software to allow for single
      throughput of data.

            


    

     

    
      	
               
      

            	
              ii.

            	
              Centralized
      updates for both the documents and
software.

            


    

     

    
      	
               
      

            	
              b.

            	
              Wire
      transfer platform.

            


    

     

    
      	
               6.

            	
              
                Automated
      Teller and Point of Sale Transaction Support

              

            	
               

            


    

     

    
      	
               
      

            	
              a.

            	
              Processing
      of all daily transactional data received from third party
      Processor.

            


    

     

    
      	
               
      

            	
              b.

            	
              Transmitting
      of positive balance file to third party
  Processor

            


    

     

    
      	
               
      

            	
              c.

            	
              Creation
      of daily, weekly, monthly, quarterly and year end
  reports

            


    

     

    
      	
              
                7.

              

            	
              
                Automated
      Clearing House (ACH)

              

            	
               

            


    

     

    
      	
               
      

            	
              a.

            	
              Multiple
      daily updates of all ACH daily transactional files received from EPN,
      third party processor.

            


    

     

    
      	
               
      

            	
              b.

            	
              Creation
      and transmission of daily origination files to third party
      processor.

            


    

     

    
      	
               
      

            	
              c.

            	
              Warehousing
      of future dated transactions.

            


    

     

    
      	
               
      

            	
              d.

            	
              Creation
      of daily reports.

            


    

     

    
      	
              8.

            	
              
                Customer
      Information File (CIF)

              

            	
               

            


    

     

    
      	
               
      

            	
              a.

            	
              Processing
      of all daily entry and maintenance
files.

            


    

     

    
      	
               
      

            	
              b.

            	
              Creation
      of all CIF notices.

            


    

     

    
      	
               
      

            	
              c.

            	
              Creation
      of daily, weekly, monthly, quarterly and year end
  reports.

            


    

     

    
      	
              
                9.

              

            	
              
                Electronic
      Report Storage (COLD)

              

            	
               

            


    

     

    
      	
               
      

            	
              a.

            	
              Interface
      between creation of reports and optical storage of those
      reports.

            


    

     

    
      	
               
      

            	
              b.

            	
              Centralized
      permanent storage of all daily, weekly, monthly, quarterly and year end
      reports.

            


    

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    
      	
               
      

            	
              c.

            	
              Online
      and near line access to all reports and
notices

            


    

     

    
      	
              
                10.

              

            	
              
                Lock
      Box

              

            	
               

            


    

     

    
      	
               
      

            	
              a.

            	
              Processing
      of all daily transactional data.

            


    

     

    
      	
               
      

            	
              b.

            	
              Creation
      of daily, weekly, monthly, quarterly and year end
  reports.

            


    

     

    
      	
              11.

            	
              Safe
      Deposit Box

            


    

     

    
      
        	 	
                a.

              	
                Processing
      of all daily transactional
data.

              


      

    

     

    
      
        	 	
                b.

              	
                Calculation
      of payments, annual fees and late
notices.

              


      

    

     

    
      
        	 	
                c.

              	
                Creation
      of all SDB customer notices.

              


      

    

     

    
      
        	 	
                d.

              	
                Creation
      of daily, weekly, monthly, quarterly and year end
  reports.

              


      

    

     

    
      	
              12.

            	
              Remote
      Merchant Capture

            


    

     

    
      
        	 	
                a.

              	
                Processing
      of all daily transactional
data.

              


      

    

     

    
      
        	 	
                b.

              	
                Creation
      of daily, weekly, monthly, quarterly and year end
  reports.

              


      

    

     

    
      	
              13.

            	
              Year
      End reporting

            


    

     

    
      	
               
      

            	
              a.

            	
              Creation
      of all appropriate year end notification, including but not limited to
      1098s, 1099s, INT-Notices, EE-bonds & IRA
    notifications.

            


    

     

    
      	
               
      

            	
              b.

            	
              Annual
      reporting of data to IRS for the various year end
      notifications.

            


    

     

    
      	
               
      

            	
              c.

            	
              Timely
      sensitive reporting of year end information to
  customers.

            


    

     

    
      	
               
      

            	
              d.

            	
              Storage
      of year end data for a minimum of 7
years.

            


    

     

    
      	
              14.

            	
              Data
      backups for Business Resumptions.

            


    

     

    
      
        	 	
                a.

              	
                Off
      site, secure storage of application and system
  data.

              


      

    

     

    
      
        	 	
                i.

              	
                Daily
      backup of Host Based application
data

              


      

    

     

    
      
        	 	
                ii.

              	
                Incremental
      Backup of User Data on
Servers

              


      

    

     

    
      
        	 	
                iii.

              	
                Incremental
      Backup of System Information

              


      

    

     

    
      
        	 	
                b.

              	
                Annual
      Business Resumption testing.

              


      

    

     

    
      	
              15.

            	
              Centralized
      user setups for both AS400 and Network
IDs.

            


    

     

    
      
        	 	
                a.

              	
                New
      user setup

              


      

    

     

    
      
        	 	
                b.

              	
                Changes
      to users IDs

              


      

    

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    
      
        	 	
                c.

              	
                Deletion
      of user IDs

              


      

    

     

    
      
        	 	
                d.

              	
                Semi-Annual
      user audits.

              


      

    

     

    


    16.          Electronic Banking
Services. Certain electronic customer banking services (“Service”)
such as Internet Banking, Bill Pay, ATM access and Cash Management, are
contracted with third party providers for use by the banks’
customers.  In these cases Capitol will facilitate the interface
between the core banking systems and such providers, allowing information to be
transferred from the Service to or from the customer account.

    



    
      
         


      

      
        8

        
          

        

      

      
         


      

    

     

    
EXHIBIT
B

    


    Processing
Schedule

    


    Except
for those conditions state in the agreement, the following processing schedule
will apply to bank processing:

    


    
      	
              1.

            	
              Capitol
      will celebrate a holiday only if all user institutions celebrate the same
      holiday.  MCBL will provide Capitol with their holiday schedule
      no later than October 1st of each year for the following calendar
      year.

            


    

    


    
      	
              2.

            	
              Bank
      application systems will be available to the banks for on-line access, no
      later than 7:30 AM (LOCAL TIME), Monday through
  Friday.

            


    

    


    
      	
              3.

            	
              The
      systems will be closed for on-line access when the nightly processing
      begins at 7:00 PM (LOCAL TIME) Monday through
  Friday.

            


    

    


    
      	
              4.

            	
              The
      final batch of transaction items for proof capture must arrive at the
      Capitol processing center no later than 7:00 PM (LOCAL
    TIME).

            


    

    


    
      	
              5.

            	
              Normal
      processing priorities are to run the incoming cash letters as they arrive,
      and process the teller proof items in the evening after the bank lobbies
      close within a reasonable time to meet the cash letter deadlines for funds
      availability.  If evening proof processing is delayed in an
      emergency until the following day, then the teller proof would take
      precedence over the next day’s incoming cash letter until normal
      scheduling was again resumed.

            


    

    


    
      	
              6.

            	
              If
      normal batch posting is interrupted by emergency conditions, the Demand
      Deposits would receive first priority for recovery since customers draw
      upon these funds daily. Other depository transactions would follow and the
      loan posting would be third since these payments can be backdated to the
      correct posting date with little long-term customer
      interruption.

            


    


    
      
         


      

      
        9

        
          

        

      

      
         


      

    


    


    EXHIBIT
C

    


    Proof
Processing

    


    


    Proof
services will be provided on a routine basis each Monday through Friday.
Exceptions to this processing schedule will occur on days where the institution
chooses to be closed for business or as otherwise noted in the
agreement.

    


    Services
provided are as follows:

    


    1.           
Proof document input

    2.           
Balancing of proof transactions

    3.           
In-clearing processing

    4.           
Deposit corrections

    5.           
Cash letter adjustments

    6.           
Returned deposit items

    7.           
On-line exception item system

    8.           
Unposted items handling

    9.           
Suspense item handling

    10.          Stop
payments

    11.          High
dollar notices

    12.          ACH
returns and NOC’s

    13.          Reconciliations

    14.          Customer
Account large research projects

    15.          Check
filing as needed

    16.          Customer
statement preparation and mailing

    



    
      
         


      

      
        10

        
          

        

      

      
         


      

    

    


     

    SCHEDULE
3.3

     

    EXCLUDED
ACTIVITIES

     

    Notwithstanding
anything to the contrary contained in this Agreement, the Services shall not
include the following activities (the “Excluded Activities”):

     

    
      	
              (a)  

            	
                  Entry
      by MCBL into any new line of
business;

            


    

     

    
      	
              (b)  

            	
                  Entry
      by MCBL into any new geographical
markets;

            


    

     

    
      	
              (c)  

            	
                  Request
      by MCBL for a capital contribution from any stockholder of MCBL;
      or

            


    

     

    
      	
              (d)  

            	
                  Sale or
      issuance by MCBL of any equity or debt instruments (whether to
      stockholders of MCBL or to a third
party).

            


    

     

    


     


    
      
         


      

      
        SCHEDULE
3.3

        
          

        

      

      
         


      

    

     

     

    SCHEDULE
5.1

     

    FEE
SCHEDULE

     

    Effective _______,
20__

     

    


     

    The
following fee schedule is in place from the Effective Date until changed by
mutual agreement by the Parties:

     

    Fees
Payable to Capitol by MCBL for Administrative Services as described in Schedule
3.1:

     

    
    

    Department /
Capitol                                                Monthly Fee        


    
      	Legal 	 	[_______] 
	Finance	 	[_______] 
	Human
      Resources	 	[_______] 
	 	 	 
	Total Monthly
      Fees 	 	[_______] 
	 	 	 
	 	 	 
	Fees Payable to
      Capitol by MCBL for Technology Services as described in Schedule 3.2: 	 	 
	 	 	[_______] 
	Total Monthly
      Fee 	 	 
	 	 	 
	 	 	 
	 	 	 


    

     

    


     

    



    
      
         


      

      
        SCHEDULE
5.1