ex10-2.htm


    EXHIBIT
10.2

    

      United
States Department of the Treasury

      1500
Pennsylvania Avenue, NW

      Washington,
D.C. 20220

       

       

      February
20, 2009

       

      Ladies
and Gentlemen:

       

      Reference
is made to that certain Letter Agreement incorporating the Securities Purchase
Agreement – Standard Terms dated of as of the date of this letter agreement (the
“Securities
Purchase Agreement”) between United States Department of Treasury (“Investor”)
and the company named on the signature page hereto (the “Company”).  Capitalized
terms used but not defined herein shall have the meanings assigned to them in
the Securities Purchase Agreement.

       

      The
American Recovery and Reinvestment Act of 2009, as it may be amended from time
to time (the “Act”),
includes provisions relating to executive compensation and other matters that
may be inconsistent with the Securities Purchase Agreement, the Warrant and the
Certificate[s] of Designation (the “Transaction
Documents”).  Accordingly, Investor and the Company desire to
confirm their understanding as follows:

       

      1.           Notwithstanding
anything in the Transaction Documents to the contrary, in the event that the Act
or any rules or regulations promulgated thereunder are inconsistent with any of
the terms of the Transaction Documents, the Act and such rules and regulations
shall control.

       

      2.           For
the avoidance of doubt (and without limiting the generality of Paragraph
1):

       

      (a)           the
provisions of Section 111 of the Emergency Economic Stabilization Act of 2008,
as amended by the Act or otherwise from time to time (“EESA”),
shall apply to the Company;

       

      (b)           the
waiver to be delivered by each of the Company’s Senior Executive Officers
pursuant to Section 1.2(d)(v) of the Securities Purchase Agreement shall, in
addition, be delivered by any additional highly compensated employees required
by the Act or any rules or regulations thereunder;

       

      (c)           the
Company’s chief executive officer and chief financial officer shall provide the
written certification of compliance by the Company with the requirements of
Section 111 of EESA, as amended by the Act, in the manner specified by Section
111(b)(4) thereunder or in any rules or regulations under EESA; and

       

      (d)           the
Company shall be permitted to repay preferred shares, and when such preferred
shares are repaid, the Investor shall liquidate warrants associated with such
preferred shares, all in accordance with the Act and any rules and regulations
thereunder.

       

      From and
after the date hereof, each reference in the Securities Purchase Agreement to
“this Agreement” or “this Securities Purchase Agreement” or words of like import
shall mean

       


      
        
           


        

        
           


          
            

          

        

        
           


        

      


      and be a
reference to the Agreement (as defined in the Securities Purchase Agreement) as
amended by this letter agreement.

       

      This
letter agreement will be governed by and construed in accordance with the
federal law of the United States if and to the extent such law is applicable,
and otherwise in accordance with the laws of the State of New York applicable to
contracts made and to be performed entirely within such State.

       

      This
letter agreement, the Securities Purchase Agreement, the Warrant, the
Certificate[s] of Designation and any other documents executed by the parties at
the Closing constitute the entire agreement of the parties with respect to the
subject matter hereof.

       

      Nothing
in this letter agreement shall be deemed an admission by Investor as to the
necessity of obtaining the consent of the Company in order to effect the changes
to the Transaction Documents contemplated by this letter agreement, nor shall
anything in this letter agreement be deemed to require Investor to obtain the
consent of any other TARP recipient (as defined in the Act) participating in the
Capital Purchase Program (the “CPP”)
in order to effect changes to their documentation under the CPP.

       

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

       

      [Remainder
of this page intentionally left blank]

       


      
        
           


        

        
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      In
witness whereof, the parties have duly executed this letter agreement as of the
date first written above.

       

      
        
          
            	 	
                    UNITED STATES DEPARTMENT OF
      THE
    TREASURY

                  	 
	 	 	 	 
	
                     

                  	
                    By:

                  	/s/Neel
      Kashkari 	 
	 	 	Name: 
      Neel Kashkari	 
	 	 	Title:   
      Interim Assistant Secretary for Financial Stability	 
	 	 	 	 
	 	 	 	 


          

        

      

      
        
          
            
              	 	
                      COMPANY:

                    	 
	 	 	 
	 	
                      NORTHERN
      STATES FINANCIAL CORPORATION

                    	 
	 	 	 	 
	
                       

                    	
                      By:
      

                    	/s/Fred
      Abdula  	 
	 	 	Name: 
      Fred Abdula	 
	 	 	Title:    Chairman of the Board and
      President