PURCHASE AND ASSUMPTION AGREEMENT

 WHOLE BANK 

 ALL DEPOSITS 

AMONG 

 FEDERAL DEPOSIT INSURANCE CORPORATION, 

RECEIVER OF CENTURY SECURITY BANK, 

DULUTH, GEORGIA 

 FEDERAL DEPOSIT INSURANCE CORPORATION 

and 

 BANK OF UPSON 

THOMASTON, GEORGIA 

DATED AS OF
 

March 19, 2010 

Module 1 – Whole Bank w/ Loss Share – P&A Century Security Bank 

Duluth, Georgia 

Version 2.01 

February 24, 2010 
 

 

 

 

 

TABLE OF CONTENTS
 

ARTICLE I 

ARTICLE II 

2.1 

2.2 

2.3 

2.4 

ARTICLE III 

3.1 

3.2 

3.3 

3.4 

3.5 

3.6 

ARTICLE IV 

4.1 

4.2 

4.3 

4.4 

4.5 

4.6 

4.7 

4.8 

4.9 

4.10 

4.11 

4.12 

4.13 

4.14 

4.15 

DEFINITIONS ...........................................................................................2
 

ASSUMPTION OF LIABILITIES...........................................................8

Liabilities Assumed by Assuming Institution..............................................8 

Interest on Deposit Liabilities....................................................................10 

 Unclaimed Deposits...................................................................................10 

 Employee Plans..........................................................................................11 

PURCHASE OF ASSETS .......................................................................11

Assets Purchased by Assuming Institution................................................11 

Asset Purchase Price ..................................................................................11 

Manner of Conveyance; Limited Warranty; 

 Nonrecourse; Etc............................................................................12 

Puts of Assets to the Receiver....................................................................12 

Assets Not Purchased by Assuming Institution.........................................14 

Assets Essential to Receiver ......................................................................16 

ASSUMPTION OF CERTAIN DUTIES AND OBLIGATIONS........17

Continuation of Banking Business.............................................................17 

Agreement with Respect to Credit Card Business.....................................17 

Agreement with Respect to Safe Deposit Business ...................................17 

Agreement with Respect to Safekeeping Business....................................17 

Agreement with Respect to Trust Business ...............................................18 

Agreement with Respect to Bank Premises...............................................18 

Agreement with Respect to Leased Data 

 Processing Equipment....................................................................22 

Agreement with Respect to Certain 

 Existing Agreements......................................................................23 

Informational Tax Reporting .....................................................................23 

Insurance ....................................................................................................24 

Office Space for Receiver and Corporation...............................................24 

Agreement with Respect to Continuation of Group 

Health Plan Coverage for Former Employees ...........................................24 

Agreement with Respect to Interim Asset Servicing ................................25 

Reserved ....................................................................................................25 

Agreement with Respect to Loss Sharing .................................................25 

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ARTICLE V 

5.1 

5.2 

5.3 

ARTICLE VI 

6.1 

6.2 

6.3 

6.4 

ARTICLE VII 

ARTICLE VIII 

8.1 

8.2 

8.3 

8.4 

8.5 

ARTICLE IX 

9.1 

9.2 

9.3 

9.4 

9.5 

9.6 

9.7 

ARTICLE X 

ARTICLE XI 

ARTICLE XII 

12.1 

12.2 

12.3 

12.4 

12.5 

DUTIES WITH RESPECT TO DEPOSITORS 

 OF THE FAILED BANK........................................................................26

Payment of Checks, Drafts and Orders......................................................26 

Certain Agreements Related to Deposits ...................................................26 

Notice to Depositors ..................................................................................26 

RECORDS................................................................................................27 

Transfer of Records....................................................................................27 

Delivery of Assigned Records ...................................................................27 

Preservation of Records .............................................................................28 

Access to Records; Copies.........................................................................28 

FIRST LOSS TRANCHE .......................................................................26 

ADJUSTMENTS......................................................................................29 

Pro Forma Statement..................................................................................29 

Correction of Errors and Omissions; Other Liabilities 

Payments....................................................................................................29 

Interest........................................................................................................30 

Subsequent Adjustments............................................................................30 

CONTINUING COOPERATION..........................................................30 

 General Matters..........................................................................................30 

 Additional Title Documents.......................................................................30 

Claims and Suits ........................................................................................30 

Payment of Deposits ..................................................................................31 

 Withheld Payments ....................................................................................31 

Proceedings with Respect to Certain Assets 

 and Liabilities.................................................................................31 

 Information ................................................................................................32 

CONDITION PRECEDENT ..................................................................32 

REPRESENTATIONS AND WARRANTIES OF THE 

 ASSUMING INSTITUTION ..................................................................32 

INDEMNIFICATION .............................................................................34 

Indemnification of Indemnitees .................................................................34 

Conditions Precedent to Indemnification...................................................37 

No Additional Warranty ............................................................................37 

Indemnification of Corporation and Receiver ...........................................38 

Obligations Supplemental..........................................................................38 

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 12.6 

12.7 

12.8 

ARTICLE XIII 

13.1 

13.2 

13.3 

13.4 

13.5 

13.6 

13.7 

13.8 

13.9 

13.10 

13.11 

13.12 

13.13 

SCHEDULES 

2.1 

2.1(a) 

3.1 

3.2 

3.5(l) 

4.15A 

4.15B 

7 

EXHIBITS 

2.3A 

2.3B 

4.13 

4.15A 

4.15B 

Criminal Claims.........................................................................................38 

Limited Guaranty of the Corporation ........................................................38 

Subrogation................................................................................................39 

MISCELLANEOUS ................................................................................39 

Entire Agreement.......................................................................................39 

Headings ....................................................................................................39 

Counterparts...............................................................................................39 

Governing Law ..........................................................................................39 

Successors..................................................................................................39 

Modification; Assignment .........................................................................40 

Notice ........................................................................................................40 

Manner of Payment....................................................................................41 

Costs, Fees and Expenses ..........................................................................41 

Waiver........................................................................................................41 

Severability ................................................................................................41 

Term of Agreement....................................................................................41 

Survival of Covenants, Etc. .......................................................................42 

Certain Liabilities Assumed.......................................................................44 

Excluded Deposit Liability Accounts ........................................................45 

Certain Assets Purchased...........................................................................46 

Purchase Price of Assets or Assets ............................................................47 

 Excluded Securities....................................................................................49 

Single Family Loss Share Loans................................................................50 

Non-Single Family Loss Share Loans .......................................................51 

Calculation of Deposit Premium................................................................52 

Final Notice Letter .....................................................................................54 

Affidavit of Mailing...................................................................................56 

Interim Asset Servicing Arrangement .......................................................59 

Single Family Loss Share Agreement........................................................61 

 Commercial Loss Share Agreement ..........................................................98 

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PURCHASE AND ASSUMPTION AGREEMENT 

 WHOLE BANK 

 ALL DEPOSITS 

 THIS AGREEMENT, made and entered into as of the 19th day of March, 2010, by and 

among the FEDERAL DEPOSIT INSURANCE CORPORATION, RECEIVER of 

CENTURY SECURITY BANK, DULUTH, GEORGIA (the "Receiver"), BANK OF 

UPSON, organized under the laws of the United States of America, and having its principal 

place of business in THOMASTON, GEORGIA (the "Assuming Institution"), and the 

FEDERAL DEPOSIT INSURANCE CORPORATION, organized under the laws of the 

United States of America and having its principal office in Washington, D.C., acting in its 

corporate capacity (the "Corporation"). 

 WITNESSETH: 

WHEREAS, on Bank Closing, the Chartering Authority closed CENTURY 

SECURITY BANK, DULUTH, GEORGIA (the "Failed Bank") pursuant to applicable law and 

the Corporation was appointed Receiver thereof; and 

WHEREAS, the Assuming Institution desires to purchase certain assets and assume 

certain deposit and other liabilities of the Failed Bank on the terms and conditions set forth in 

this Agreement; and 

WHEREAS, pursuant to 12 U.S.C. Section 1823(c)(2)(A), the Corporation may provide 

assistance to the Assuming Institution to facilitate the transactions contemplated by this 

Agreement, which assistance may include indemnification pursuant to Article XII; and

 WHEREAS, the Board of Directors of the Corporation (the "Board") has determined to 

provide assistance to the Assuming Institution on the terms and subject to the conditions set forth 

in this Agreement; and 

WHEREAS, the Board has determined pursuant to 12 U.S.C. Section 1823(c)(4)(A) that 

such assistance is necessary to meet the obligation of the Corporation to provide insurance 

coverage for the insured deposits in the Failed Bank. 

 NOW THEREFORE, in consideration of the mutual promises herein set forth and other 

valuable consideration, the parties hereto agree as follows: 

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ARTICLE I 

 DEFINITIONS
 

Capitalized terms used in this Agreement shall have the meanings set forth in this Article 

I, or elsewhere in this Agreement. As used herein, words imparting the singular include the 

plural and vice versa. 

"Accounting Records" means the general ledger and subsidiary ledgers and 

supporting schedules which support the general ledger balances. 

"Acquired Subsidiaries" means Subsidiaries of the Failed Bank acquired 

pursuant to Section 3.1. 

"Affiliate" of any Person means any director, officer, or employee of that Person 

and any other Person (i) who is directly or indirectly controlling, or controlled by, or under direct 

or indirect common control with, such Person, or (ii) who is an affiliate of such Person as the 

term "affiliate" is defined in Section 2 of the Bank Holding Company Act of 1956, as amended, 

12 U.S.C. Section 1841. 

"Agreement" means this Purchase and Assumption Agreement by and among 

the Assuming Institution, the Corporation and the Receiver, as amended or otherwise modified 

from time to time. 

"Assets" means all assets of the Failed Bank purchased pursuant to Section 3.1. 

Assets owned by Subsidiaries of the Failed Bank are not "Assets" within the meaning of this 

definition. 

"Assumed Deposits" means Deposits. 

"Bank Closing" means the close of business of the Failed Bank on the date on 

which the Chartering Authority closed such institution. 

“Bank Premises” means the banking houses, drive-in banking facilities, and 

teller facilities (staffed or automated) together with adjacent parking, storage and service 

facilities and structures connecting remote facilities to banking houses, and land on which the 

foregoing are located, and unimproved land that are owned or leased by the Failed Bank and that 

have formerly been utilized, are currently utilized, or are intended to be utilized in the future by 

the Failed Bank as shown on the Accounting Record of the Failed Bank as of Bank Closing. 

"Bid Valuation Date" means October 23, 2009. 

"Book Value" means, with respect to any Asset and any Liability Assumed, the 

dollar amount thereof stated on the Accounting Records of the Failed Bank. The Book Value of 

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any item shall be determined as of Bank Closing after adjustments made by the Receiver for 

differences in accounts, suspense items, unposted debits and credits, and other similar 

adjustments or corrections and for setoffs, whether voluntary or involuntary. The Book Value of 

a Subsidiary of the Failed Bank acquired by the Assuming Institution shall be determined from 

the investment in subsidiary and related accounts on the "bank only" (unconsolidated) balance 

sheet of the Failed Bank based on the equity method of accounting. Without limiting the 

generality of the foregoing, (i) the Book Value of a Liability Assumed shall include all accrued 

and unpaid interest thereon as of Bank Closing, and (ii) the Book Value of a Loan shall reflect 

adjustments for earned interest, or unearned interest (as it relates to the "rule of 78s" or add-oninterest loans, as applicable), if any, as of Bank Closing, adjustments for the portion of earned or 

unearned loan-related credit life and/or disability insurance premiums, if any, attributable to the 

Failed Bank as of Bank Closing, and adjustments for Failed Bank Advances, if any, in each case 

as determined for financial reporting purposes. The Book Value of an Asset shall not include any 

adjustment for loan premiums, discounts or any related deferred income, fees or expenses, or 

general or specific reserves on the Accounting Records of the Failed Bank. 

"Business Day" means a day other than a Saturday, Sunday, Federal legal 

holiday or legal holiday under the laws of the State where the Failed Bank is located, or a day on 

which the principal office of the Corporation is closed. 

"Chartering Authority" means (i) with respect to a national bank, the Office of 

the Comptroller of the Currency, (ii) with respect to a Federal savings association or savings 

bank, the Office of Thrift Supervision, (iii) with respect to a bank or savings institution chartered 

by a State, the agency of such State charged with primary responsibility for regulating and/or 

closing banks or savings institutions, as the case may be, (iv) the Corporation in accordance with 

12 U.S.C. Section 1821(c), with regard to self appointment, or (v) the appropriate Federal 

banking agency in accordance with 12 U.S.C. 1821(c)(9). 

"Commitment" means the unfunded portion of a line of credit or other 

commitment reflected on the books and records of the Failed Bank to make an extension of 

credit (or additional advances with respect to a Loan) that was legally binding on the Failed Bank 

as of Bank Closing, other than extensions of credit pursuant to the credit card business and 

overdraft protection plans of the Failed Bank, if any. 

"Credit Documents" mean the agreements, instruments, certificates or other 

documents at any time evidencing or otherwise relating to, governing or executed in connection 

with or as security for, a Loan, including without limitation notes, bonds, loan agreements, letter 

of credit applications, lease financing contracts, banker's acceptances, drafts, interest protection 

agreements, currency exchange agreements, repurchase agreements, reverse repurchase 

agreements, guarantees, deeds of trust, mortgages, assignments, security agreements, pledges, 

subordination or priority agreements, lien priority agreements, undertakings, security 

instruments, certificates, documents, legal opinions, participation agreements and intercreditor 

agreements, and all amendments, modifications, renewals, extensions, rearrangements, and 

substitutions with respect to any of the foregoing. 

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 "Credit File" means all Credit Documents and all other credit, collateral, or 

insurance documents in the possession or custody of the Assuming Institution, or any of its 

Subsidiaries or Affiliates, relating to an Asset or a Loan included in a Put Notice, or copies of 

any thereof. 

"Data Processing Lease" means any lease or licensing agreement, binding on 

the Failed Bank as of Bank Closing, the subject of which is data processing equipment or 

computer hardware or software used in connection with data processing activities. A lease or 

licensing agreement for computer software used in connection with data processing activities 

shall constitute a Data Processing Lease regardless of whether such lease or licensing agreement 

also covers data processing equipment. 

"Deposit" means a deposit as defined in 12 U.S.C. Section 1813(l), including 

without limitation, outstanding cashier's checks and other official checks and all uncollected 

items included in the depositors' balances and credited on the books and records of the Failed 

Bank; provided, that the term "Deposit" shall not include all or any portion of those deposit 

balances which, in the discretion of the Receiver or the Corporation, (i) may be required to 

satisfy it for any liquidated or contingent liability of any depositor arising from an unauthorized 

or unlawful transaction, or (ii) may be needed to provide payment of any liability of any 

depositor to the Failed Bank or the Receiver, including the liability of any depositor as a director 

or officer of the Failed Bank, whether or not the amount of the liability is or can be determined 

as of Bank Closing. 

"Deposit Secured Loan" means a loan in which the only collateral securing the 

loan is Assumed Deposits or deposits at other insured depository institutions 

"Equity Adjustment" means the dollar amount resulting by subtracting the Book 

Value, as of Bank Closing, of all Liabilities Assumed under this Agreement by the Assuming 

Institution from the purchase price, as determined in accordance with this Agreement, as of Bank 

Closing, of all Assets acquired under this Agreement by the Assuming Institution, which may be 

a positive or a negative number. 

"Failed Bank Advances" means the total sums paid by the Failed Bank to (i) 

protect its lien position, (ii) pay ad valorem taxes and hazard insurance, and (iii) pay credit life 

insurance, accident and health insurance, and vendor's single interest insurance. 

"Fair Market Value" means (i)(a) “Market Value” as defined in the regulation 

prescribing the standards for real estate appraisals used in federally related transactions, 12 

C.F.R. § 323.2(g), and accordingly shall mean the most probable price which a property should 

bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and 

seller each acting prudently and knowledgeably, and assuming the price is not affected by undue 

stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the 

passing of title from seller to buyer under conditions whereby: 

(1) Buyer and seller are typically motivated; 

(2) Both parties are well informed or well advised, and acting in what they consider their 

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own best interests; 

(3) A reasonable time is allowed for exposure in the open market; 

(4) Payment is made in terms of cash in U.S. dollars or in terms of financial arrangements 

comparable thereto; and 

(5) The price represents the normal consideration for the property sold unaffected by 

special or creative financing or sales concessions granted by anyone associated with the 

sale; 

as determined as of Bank Closing by an appraiser chosen by the Assuming Institution from a list 

of acceptable appraisers provided by the Receiver; any costs and fees associated with such 

determination shall be shared equally by the Receiver and the Assuming Institution, and (b) 

which, with respect to Bank Premises (to the extent, if any, that Bank Premises are purchased 

utilizing this valuation method), shall be determined not later than sixty (60) days after Bank 

Closing by an appraiser selected by the Receiver and the Assuming Institution within seven (7) 

days after Bank Closing; or (ii) with respect to property other than Bank Premises purchased 

utilizing this valuation method, the price therefore as established by the Receiver and agreed to 

by the Assuming Institution, or in the absence of such agreement, as determined in accordance 

with clause (i)(a) above. 

"First Loss Tranche" means the dollar amount of liability that the Assuming 

Institution will incur prior to the commencement of loss sharing, which is the sum of (i) the 

Assuming Institution’s asset premium (discount) bid, as reflected on the Assuming Institution’s 

bid form, plus (ii) the Assuming Institution’s Deposit premium bid, as reflected on the Assuming 

Institution’s bid form, plus (iii) the Equity Adjustment. The First Loss Tranche may be a 

positive or negative number. 

"Fixtures" means those leasehold improvements, additions, alterations and 

installations constituting all or a part of Bank Premises and which were acquired, added, built, 

installed or purchased at the expense of the Failed Bank, regardless of the holder of legal title 

thereto as of Bank Closing. 

"Furniture and Equipment" means the furniture and equipment, other than 

motor vehicles, leased or owned by the Failed Bank and reflected on the books of the Failed 

Bank as of Bank Closing and located on or at Bank Premises, including without limitation 

automated teller machines, carpeting, furniture, office machinery (including personal 

computers), shelving, office supplies, telephone, surveillance, security systems and artwork. 

Motor vehicles shall be considered other assets and pass at Book Value. Furniture and 

equipment located at a storage facility not adjacent to a Bank Premises are excluded from this 

definition. 

"Indemnitees" means, except as provided in paragraph (11) of Section 12.1, (i) 

the Assuming Institution, (ii) the Subsidiaries and Affiliates of the Assuming Institution other 

than any Subsidiaries or Affiliates of the Failed Bank that are or become Subsidiaries or 

Affiliates of the Assuming Institution, and (iii) the directors, officers, employees and agents of 

the Assuming Institution and its Subsidiaries and Affiliates who are not also present or former 

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directors, officers, employees or agents of the Failed Bank or of any Subsidiary or Affiliate of 

the Failed Bank. 

"Legal Balance" means the amount of indebtedness legally owed by an Obligor 

with respect to a Loan, including principal and accrued and unpaid interest, late fees, attorneys' 

fees and expenses, taxes, insurance premiums, and similar charges, if any.

 "Liabilities Assumed" has the meaning provided in Section 2.1. 

"Lien" means any mortgage, lien, pledge, charge, assignment for security 

purposes, security interest, or encumbrance of any kind with respect to an Asset, including any 

conditional sale agreement or capital lease or other title retention agreement relating to such 

Asset. 

"Loans" means all of the following owed to or held by the Failed Bank as of 

Bank Closing: 

(i) loans (including loans which have been charged off the Accounting 

Records of the Failed Bank in whole or in part prior to and including the Bid Valuation Date), 

participation agreements, interests in participations, overdrafts of customers (including but not 

limited to overdrafts made pursuant to an overdraft protection plan or similar extensions of credit 

in connection with a deposit account), revolving commercial lines of credit, home equity lines of 

credit, Commitments, United States and/or State-guaranteed student loans, and lease financing 

contracts; 

(ii) all Liens, rights (including rights of set-off), remedies, powers, privileges, 

demands, claims, priorities, equities and benefits owned or held by, or accruing or to accrue to or 

for the benefit of, the holder of the obligations or instruments referred to in clause (i) above, 

including but not limited to those arising under or based upon Credit Documents, casualty 

insurance policies and binders, standby letters of credit, mortgagee title insurance policies and 

binders, payment bonds and performance bonds at any time and from time to time existing with 

respect to any of the obligations or instruments referred to in clause (i) above; and 

(iii) all amendments, modifications, renewals, extensions, refinancings, and 

refundings of or for any of the foregoing. 

"Obligor" means each Person liable for the full or partial payment or 

performance of any Loan, whether such Person is obligated directly, indirectly, primarily, 

secondarily, jointly, or severally. 

"Other Real Estate" means all interests in real estate (other than Bank Premises 

and Fixtures), including but not limited to mineral rights, leasehold rights, condominium and 

cooperative interests, air rights and development rights that are owned by the Failed Bank. 

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 "Person" means any individual, corporation, partnership, joint venture, 

association, joint-stock company, trust, unincorporated organization, or government or any 

agency or political subdivision thereof, excluding the Corporation. 

"Primary Indemnitor" means any Person (other than the Assuming Institution 

or any of its Affiliates) who is obligated to indemnify or insure, or otherwise make payments 

(including payments on account of claims made against) to or on behalf of any Person in 

connection with the claims covered under Article XII, including without limitation any insurer 

issuing any directors and officers liability policy or any Person issuing a financial institution 

bond or banker's blanket bond. 

“Proforma” means producing a balance sheet that reflects a reasonably accurate 

financial statement of the Failed bank through the date of closing. The Proforma financial 

statements serve as a basis for the opening entries of both the Assuming Institution and the 

Receiver. 

"Put Date" has the meaning provided in Section 3.4. 

"Put Notice" has the meaning provided in Section 3.4. 

"Qualified Financial Contract" means a qualified financial contract as defined 

in 12 U.S.C. Section 1821(e)(8)(D). 

"Record" means any document, microfiche, microfilm and computer records 

(including but not limited to magnetic tape, disc storage, card forms and printed copy) of the 

Failed Bank generated or maintained by the Failed Bank that is owned by or in the possession of 

the Receiver at Bank Closing. 

"Related Liability" with respect to any Asset means any liability existing and 

reflected on the Accounting Records of the Failed Bank as of Bank Closing for (i) indebtedness 

secured by mortgages, deeds of trust, chattel mortgages, security interests or other liens on or 

affecting such Asset, (ii) ad valorem taxes applicable to such Asset, and (iii) any other obligation 

determined by the Receiver to be directly related to such Asset. 

"Related Liability Amount" with respect to any Related Liability on the books 

of the Assuming Institution, means the amount of such Related Liability as stated on the 

Accounting Records of the Assuming Institution (as maintained in accordance with generally 

accepted accounting principles) as of the date as of which the Related Liability Amount is being 

determined. With respect to a liability that relates to more than one asset, the amount of such 

Related Liability shall be allocated among such assets for the purpose of determining the Related 

Liability Amount with respect to any one of such assets. Such allocation shall be made by 

specific allocation, where determinable, and otherwise shall be pro rata based upon the dollar 

amount of such assets stated on the Accounting Records of the entity that owns such asset. 

"Repurchase Price" means, with respect to any Loan the Book Value, adjusted 

to reflect changes to Book Value after Bank Closing, plus (i) any advances and interest on such 

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Loan after Bank Closing, minus (ii) the total of amounts received by the Assuming Institution for 

such Loan, regardless of how applied, after Bank Closing, plus (iii) advances made by Assuming 

Institution, plus (iv) total disbursements of principal made by Receiver that are not included in 

the Book Value. 

"Safe Deposit Boxes" means the safe deposit boxes of the Failed Bank, if any, 

including the removable safe deposit boxes and safe deposit stacks in the Failed Bank's vault(s), 

all rights and benefits under rental agreements with respect to such safe deposit boxes, and all 

keys and combinations thereto. 

"Settlement Date" means the first Business Day immediately prior to the day 

which is three hundred sixty-five (365) days after Bank Closing, or such other date prior thereto 

as may be agreed upon by the Receiver and the Assuming Institution. The Receiver, in its 

discretion, may extend the Settlement Date. 

"Settlement Interest Rate" means, for the first calendar quarter or portion 

thereof during which interest accrues, the rate determined by the Receiver to be equal to the 

equivalent coupon issue yield on twenty-six (26)-week United States Treasury Bills in effect as 

of Bank Closing as published in The Wall Street Journal; provided, that if no such equivalent 

coupon issue yield is available as of Bank Closing, the equivalent coupon issue yield for such 

Treasury Bills most recently published in The Wall Street Journal prior to Bank Closing shall be 

used. Thereafter, the rate shall be adjusted to the rate determined by the Receiver to be equal to 

the equivalent coupon issue yield on such Treasury Bills in effect as of the first day of each 

succeeding calendar quarter during which interest accrues as published in The Wall Street 

Journal. 

"Subsidiary" has the meaning set forth in Section 3(w)(4) of the Federal Deposit 

Insurance Act, 12 U.S.C. Section 1813(w)(4), as amended. 

 ARTICLE II 

ASSUMPTION OF LIABILITIES

 2.1 Liabilities Assumed by Assuming Institution. The Assuming Institution 

expressly assumes at Book Value (subject to adjustment pursuant to Article VIII) and agrees to 

pay, perform, and discharge all of the following liabilities of the Failed Bank as of Bank Closing, 

except as otherwise provided in this Agreement (such liabilities referred to as "Liabilities 

Assumed"): 

(a) Assumed Deposits, except those Deposits specifically listed on Schedule 

2.1(a); provided, that as to any Deposits of public money which are Assumed 

Deposits, the Assuming Institution agrees to properly secure such Deposits with 

such Assets as appropriate which, prior to Bank Closing, were pledged as 

security by the Failed Bank, or with assets of the Assuming Institution, if such 

securing Assets, if any, are insufficient to properly secure such Deposits; 

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(b) liabilities for indebtedness secured by mortgages, deeds of trust, chattel 

mortgages, security interests or other liens on or affecting any Assets, if any; 

provided, that the assumption of any liability pursuant to this paragraph shall be 

limited to the market value of the Assets securing such liability as determined by 

the Receiver; 

(c) borrowings from Federal Reserve Banks and Federal Home Loan Banks, 

if any, provided, that the assumption of any liability pursuant to this paragraph 

shall be limited to the market value of the assets securing such liability as 

determined by the Receiver; and overdrafts, debit balances, service charges, 

reclamations, and adjustments to accounts with the Federal Reserve Banks as 

reflected on the books and records of any such Federal Reserve Bank within 

ninety (90) days after Bank Closing, if any; 

(d) ad valorem taxes applicable to any Asset, if any; provided, that the 

assumption of any ad valorem taxes pursuant to this paragraph shall be limited to 

an amount equal to the market value of the Asset to which such taxes apply as 

determined by the Receiver; 

(e) liabilities, if any, for federal funds purchased, repurchase agreements and 

overdrafts in accounts maintained with other depository institutions (including 

any accrued and unpaid interest thereon computed to and including Bank 

Closing); provided, that the assumption of any liability pursuant to this paragraph 

shall be limited to the market value of the Assets securing such liability as 

determined by the Receiver; 

(f) United States Treasury tax and loan note option accounts, if any; 

(g) liabilities for any acceptance or commercial letter of credit (other than 

"standby letters of credit" as defined in 12 C.F.R. Section 337.2(a)); provided, 

that the assumption of any liability pursuant to this paragraph shall be limited to 

the market value of the Assets securing such liability as determined by the 

Receiver; 

(h) duties and obligations assumed pursuant to this Agreement including 

without limitation those relating to the Failed Bank's Records, credit card 

business, overdraft protection plans, safe deposit business, safekeeping business 

or trust business, if any; 

(i) liabilities, if any, for Commitments; 

(j) liabilities, if any, for amounts owed to any Subsidiary of the Failed Bank 

acquired under Section 3.1; 

(k) liabilities, if any, with respect to Qualified Financial Contracts; 

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(l) duties and obligations under any contract pursuant to which the Failed 

Bank provides mortgage servicing for others, or mortgage servicing is provided to 

the Failed Bank by others; and 

(m) all asset-related offensive litigation liabilities and all asset-related 

defensive litigation liabilities, but only to the extent such liabilities relate to assets 

subject to a loss share agreement, and provided that all other defensive litigation 

and any class actions with respect to credit card business are retained by the 

Receiver. 

Schedule 2.1 attached hereto and incorporated herein sets forth certain categories of 

Liabilities Assumed and the aggregate Book Value of the Liabilities Assumed in such categories. 

Such schedule is based upon the best information available to the Receiver and may be adjusted 

as provided in Article VIII. 

2.2 Interest on Deposit Liabilities. The Assuming Institution agrees that, from and 

after Bank Closing, it will accrue and pay interest on Deposit liabilities assumed pursuant to 

Section 2.1 at a rate(s) it shall determine; provided, that for non-transaction Deposit liabilities 

such rate(s) shall not be less than the lowest rate offered by the Assuming Institution to its 

depositors for non-transaction deposit accounts. The Assuming Institution shall permit each 

depositor to withdraw, without penalty for early withdrawal, all or any portion of such 

depositor's Deposit, whether or not the Assuming Institution elects to pay interest in accordance 

with any deposit agreement formerly existing between the Failed Bank and such depositor; and 

further provided, that if such Deposit has been pledged to secure an obligation of the depositor or 

other party, any withdrawal thereof shall be subject to the terms of the agreement governing such 

pledge. The Assuming Institution shall give notice to such depositors as provided in Section 5.3 

of the rate(s) of interest which it has determined to pay and of such withdrawal rights. 

2.3 Unclaimed Deposits. Fifteen (15) months following the Bank Closing Date, the 

Assuming Institution will provide the Receiver a listing of all deposit accounts, including the 

type of account, not claimed by the depositor. The Receiver will review the list and authorize 

the Assuming Institution to act on behalf of the Receiver to send a “Final Legal Notice” in a 

form substantially similar to Exhibit 2.3A to the owner(s) of the unclaimed deposits reminding 

them of the need to claim or arrange to continue their account(s) with the Assuming Institution. 

The Assuming Institution will send the “Final Legal Notice” to the depositors within thirty (30) 

days following notification of the Receiver’s authorization. The Assuming Institution will 

prepare an Affidavit of Mailing and will forward the Affidavit of Mailing to the Receiver after 

mailing out the “Final Legal Notice” in a form substantially similar to Exhibit 2.3B to the 

owner(s) of unclaimed deposit accounts. 

If, within eighteen (18) months after Bank Closing, any depositor of the Failed Bank does 

not claim or arrange to continue such depositor’s Deposit assumed pursuant to Section 2.1 at the 

Assuming Institution, the Assuming Institution shall, within fifteen (15) Business Days after the 

end of such eighteen (18) month period, (i) refund to the Receiver the full amount of each such 

deposit (without reduction for service charges), (ii) provide to the Receiver a schedule of all such 

refunded Deposits in such form as may be prescribed by the Receiver, and (iii) assign, transfer, 

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convey, and deliver to the Receiver, all right, title, and interest of the Assuming Institution in and 

to the Records previously transferred to the Assuming Institution and other records generated or 

maintained by the Assuming Institution pertaining to such Deposits. During such eighteen (18) 

month period, at the request of the Receiver, the Assuming Institution promptly shall provide to 

the Receiver schedules of unclaimed deposits in such form as may be prescribed by the Receiver. 

2.4 Employee Plans. Except as provided in Section 4.12, the Assuming Institution 

shall have no liabilities, obligations or responsibilities under the Failed Bank's health care, 

bonus, vacation, pension, profit sharing, deferred compensation, 401K or stock purchase plans or 

similar plans, if any, unless the Receiver and the Assuming Institution agree otherwise 

subsequent to the date of this Agreement. 

ARTICLE III 

PURCHASE OF ASSETS

 3.1 Assets Purchased by Assuming Institution. With the exception of certain assets 

expressly excluded in Sections 3.5 and 3.6, the Assuming Institution hereby purchases from the 

Receiver, and the Receiver hereby sells, assigns, transfers, conveys, and delivers to the 

Assuming Institution, all right, title, and interest of the Receiver in and to all of the assets (real, 

personal and mixed, wherever located and however acquired) including all subsidiaries, joint 

ventures, partnerships, and any and all other business combinations or arrangements, whether 

active, inactive, dissolved or terminated, of the Failed Bank whether or not reflected on the 

books of the Failed Bank as of Bank Closing. Schedule 3.1 attached hereto and incorporated 

herein sets forth certain categories of Assets purchased hereunder. Such schedule is based upon 

the best information available to the Receiver and may be adjusted as provided in Article VIII. 

Assets are purchased hereunder by the Assuming Institution subject to all liabilities for 

indebtedness collateralized by Liens affecting such Assets to the extent provided in Section 2.1. 

Notwithstanding Section 4.8, the Assuming Institution specifically purchases all mortgage 

servicing rights and obligations of the Failed Bank. 

3.2 Asset Purchase Price. 

(a) All Assets and assets of the Failed Bank subject to an option to purchase by the 

Assuming Institution shall be purchased for the amount, or the amount resulting from the method 

specified for determining the amount, as specified on Schedule 3.2, except as otherwise may be 

provided herein. Any Asset, asset of the Failed Bank subject to an option to purchase or other 

asset purchased for which no purchase price is specified on Schedule 3.2 or otherwise herein 

shall be purchased at its Book Value. Loans or other assets charged off the Accounting Records 

of the Failed Bank before the Bid Valuation Date shall be purchased at a price of zero. 

(b) The purchase price for securities (other than the capital stock of any Acquired 

Subsidiary and FRB and FHLB stock) purchased under Section 3.1 by the Assuming Institution 

shall be the market value thereof as of Bank Closing, which market value shall be (i) the market 

price for each such security quoted at the close of the trading day effective on Bank Closing as 

published electronically by Bloomberg, L.P., or alternatively, at the discretion of the Receiver, 

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IDC/Financial Times (FT) Interactive Data; (ii) provided, that if such market price is not 

available for any such security, the Assuming Institution will submit a bid for each such security 

within three days of notification/bid request by the Receiver (unless a different time period is 

agreed to by the Assuming Institution and the Receiver) and the Receiver, in its sole discretion 

will accept or reject each such bid; and (iii) further provided in the absence of an acceptable bid 

from the Assuming Institution, each such security shall not pass to the Assuming Institution and 

shall be deemed to be an excluded asset hereunder. 

(c) Qualified Financial Contracts shall be purchased at market value determined in 

accordance with the terms of Exhibit 3.2(c). Any costs associated with such valuation shall be 

shared equally by the Receiver and the Assuming Institution. 

3.3 Manner of Conveyance; Limited Warranty; Nonrecourse; Etc. THE 

CONVEYANCE OF ALL ASSETS, INCLUDING REAL AND PERSONAL PROPERTY 

INTERESTS, PURCHASED BY THE ASSUMING INSTITUTION UNDER THIS 

AGREEMENT SHALL BE MADE, AS NECESSARY, BY RECEIVER'S DEED OR 

RECEIVER'S BILL OF SALE, "AS IS", "WHERE IS", WITHOUT RECOURSE AND, 

EXCEPT AS OTHERWISE SPECIFICALLY PROVIDED IN THIS AGREEMENT, 

WITHOUT ANY WARRANTIES WHATSOEVER WITH RESPECT TO SUCH ASSETS, 

EXPRESS OR IMPLIED, WITH RESPECT TO TITLE, ENFORCEABILITY, 

COLLECTIBILITY, DOCUMENTATION OR FREEDOM FROM LIENS OR 

ENCUMBRANCES (IN WHOLE OR IN PART), OR ANY OTHER MATTERS. 

3.4 Puts of Assets to the Receiver. 

(a) Puts Within 30 Days After Bank Closing. During the thirty (30)-day period 

following Bank Closing and only during such period (which thirty (30)-day period may be 

extended in writing in the sole absolute discretion of the Receiver for any Loan), in accordance 

with this Section 3.4, the Assuming Institution shall be entitled to require the Receiver to 

purchase any Deposit Secured Loan transferred to the Assuming Institution pursuant to Section 

3.1 which is not fully secured by Assumed Deposits or deposits at other insured depository 

institutions due to either insufficient Assumed Deposit or deposit collateral or deficient 

documentation regarding such collateral; provided with regard to any Deposit Secured Loan 

secured by an Assumed Deposit, no such purchase may be required until any Deposit setoff 

determination, whether voluntary or involuntary, has been made; and, 

at the end of the thirty (30)-day period following Bank Closing and at that time only, in 

accordance with this Section 3.4, the Assuming Institution shall be entitled to require the 

Receiver to purchase any remaining overdraft transferred to the Assuming Institution pursuant to 

3.1 which both was made after the Bid Valuation Date and was not made pursuant to an 

overdraft protection plan or similar extension of credit. 

Notwithstanding the foregoing, the Assuming Institution shall not have the right to require the 

Receiver to purchase any Loan if (i) the Obligor with respect to such Loan is an Acquired 

Subsidiary, or (ii) the Assuming Institution has: 

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(A) made any advance in accordance with the terms of a Commitment or 

otherwise with respect to such Loan; 

(B) taken any action that increased the amount of a Related Liability with 

respect to such Loan over the amount of such liability immediately prior to 

the time of such action; 

(C) created or permitted to be created any Lien on such Loan which secures 

indebtedness for money borrowed or which constitutes a conditional sales 

agreement, capital lease or other title retention agreement; 

(D) entered into, agreed to make, grant or permit, or made, granted or 

permitted any modification or amendment to, any waiver or extension 

with respect to, or any renewal, refinancing or refunding of, such Loan or 

related Credit Documents or collateral, including, without limitation, any 

act or omission which diminished such collateral; or 

(E) sold, assigned or transferred all or a portion of such Loan to a third party 

(whether with or without recourse). 

The Assuming Institution shall transfer all such Assets to the Receiver without recourse, and 

shall indemnify the Receiver against any and all claims of any Person claiming by, through or 

under the Assuming Institution with respect to any such Asset, as provided in Section 12.4. 

(b) Puts Prior to the Settlement Date. During the period from the Bank Closing 

Date to and including the Business Day immediately preceding the Settlement Date, the 

Assuming Bank shall be entitled to require the Receiver to purchase any Asset which the 

Assuming Bank can establish is evidenced by forged or stolen instruments as of the Bank 

Closing Date; provided, that, the Assuming Bank shall not have the right to require the Receiver 

to purchase any such Asset with respect to which the Assuming Bank has taken any action 

referred to in Section 3.4(a)(ii) with respect to such Asset. The Assuming Bank shall transfer all 

such Assets to the Receiver without recourse, and shall indemnify the Receiver against any and 

all claims of any Person claiming by, through or under the Assuming Bank with respect to any 

such Asset, as provided in Section 12.4. 

(c) Notices to the Receiver. In the event that the Assuming Institution elects to 

require the Receiver to purchase one or more Assets, the Assuming Institution shall deliver to the 

Receiver a notice (a "Put Notice") which shall include: 

(i) a list of all Assets that the Assuming Institution requires the Receiver to 

purchase; 

(ii)	 a list of all Related Liabilities with respect to the Assets identified 

pursuant to (i) above; and 

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 (iii) a statement of the estimated Repurchase Price of each Asset identified 

pursuant to (i) above as of the applicable Put Date. 

Such notice shall be in the form prescribed by the Receiver or such other form to which the 

Receiver shall consent. As provided in Section 9.6, the Assuming Institution shall deliver to the 

Receiver such documents, Credit Files and such additional information relating to the subject 

matter of the Put Notice as the Receiver may request and shall provide to the Receiver full access 

to all other relevant books and records. 

(d) Purchase by Receiver. The Receiver shall purchase Assets that are specified in 

the Put Notice and shall assume Related Liabilities with respect to such Assets, and the transfer 

of such Assets and Related Liabilities shall be effective as of a date determined by the Receiver 

which date shall not be later than thirty (30) days after receipt by the Receiver of the Put Notice 

(the "Put Date"). 

(e) Purchase Price and Payment Date. Each Asset purchased by the Receiver 

pursuant to this Section 3.4 shall be purchased at a price equal to the Repurchase Price of such 

Asset less the Related Liability Amount applicable to such Asset, in each case determined as of 

the applicable Put Date. If the difference between such Repurchase Price and such Related 

Liability Amount is positive, then the Receiver shall pay to the Assuming Institution the amount 

of such difference; if the difference between such amounts is negative, then the Assuming 

Institution shall pay to the Receiver the amount of such difference. The Assuming Institution or 

the Receiver, as the case may be, shall pay the purchase price determined pursuant to this Section 

3.4(d) not later than the twentieth (20th) Business Day following the applicable Put Date, 

together with interest on such amount at the Settlement Interest Rate for the period from and 

including such Put Date to and including the day preceding the date upon which payment is 

made. 

(f) Servicing. The Assuming Institution shall administer and manage any Asset 

subject to purchase by the Receiver in accordance with usual and prudent banking standards and 

business practices until such time as such Asset is purchased by the Receiver. 

(g) Reversals. In the event that the Receiver purchases an Asset (and assumes the 

Related Liability) that it is not required to purchase pursuant to this Section 3.4, the Assuming 

Institution shall repurchase such Asset (and assume such Related Liability) from the Receiver at 

a price computed so as to achieve the same economic result as would apply if the Receiver had 

never purchased such Asset pursuant to this Section 3.4. 

3.5 Assets Not Purchased by Assuming Institution. The Assuming Institution does 

not purchase, acquire or assume, or (except as otherwise expressly provided in this Agreement) 

obtain an option to purchase, acquire or assume under this Agreement: 

(a) any financial institution bonds, banker's blanket bonds, or public liability, fire, 

extended coverage insurance policy, bank owned life insurance or any other insurance policy of 

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the Failed Bank, or premium refund, unearned premium derived from cancellation, or any 

proceeds payable with respect to any of the foregoing; 

(b) any interest, right, action, claim, or judgment against (i) any officer, director, 

employee, accountant, attorney, or any other Person employed or retained by the Failed Bank or 

any Subsidiary of the Failed Bank on or prior to Bank Closing arising out of any act or omission 

of such Person in such capacity, (ii) any underwriter of financial institution bonds, banker's 

blanket bonds or any other insurance policy of the Failed Bank, (iii) any shareholder or holding 

company of the Failed Bank, or (iv) any other Person whose action or inaction may be related to 

any loss (exclusive of any loss resulting from such Person's failure to pay on a Loan made by the 

Failed Bank) incurred by the Failed Bank; provided, that for the purposes hereof, the acts, 

omissions or other events giving rise to any such claim shall have occurred on or before Bank 

Closing, regardless of when any such claim is discovered and regardless of whether any such 

claim is made with respect to a financial institution bond, banker's blanket bond, or any other 

insurance policy of the Failed Bank in force as of Bank Closing; 

(c) prepaid regulatory assessments of the Failed Bank, if any; 

(d) legal or equitable interests in tax receivables of the Failed Bank, if any, including 

any claims arising as a result of the Failed Bank having entered into any agreement or otherwise 

being joined with another Person with respect to the filing of tax returns or the payment of taxes; 

(e) amounts reflected on the Accounting Records of the Failed Bank as of Bank 

Closing as a general or specific loss reserve or contingency account, if any; 

(f) leased or owned Bank Premises and leased or owned Furniture and Equipment 

and Fixtures and data processing equipment (including hardware and software) located on leased 

or owned Bank Premises, if any; provided, that the Assuming Institution does obtain an option 

under Section 4.6, Section 4.7 or Section 4.8, as the case may be, with respect thereto; 

(g) owned Bank Premises which the Receiver, in its discretion, determines may 

contain environmentally hazardous substances; 

(h) any "goodwill," as such term is defined in the instructions to the report of 

condition prepared by banks examined by the Corporation in accordance with 12 C.F.R. Section 

304.3, and other intangibles; 

(i) any criminal restitution or forfeiture orders issued in favor of the Failed Bank; 

(j) reserved; 

(k) assets essential to the Receiver in accordance with Section 3.6; 

(l) the securities listed on the attached Schedule 3.5(l); and 

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(m) prepaid accounts associated with any contract or agreement that the Assuming 

Institution either does not directly assume pursuant to the terms of this Agreement nor has an 

option to assume under Section 4.8. 

3.6	 Retention or Repurchase of Assets Essential to Receiver. 

(a) The Receiver may refuse to sell to the Assuming Institution, or the Assuming 

Institution agrees, at the request of the Receiver set forth in a written notice to the Assuming 

Institution, to assign, transfer, convey, and deliver to the Receiver all of the Assuming 

Institution's right, title and interest in and to, any Asset or asset essential to the Receiver as 

determined by the Receiver in its discretion (together with all Credit Documents evidencing or 

pertaining thereto), which may include any Asset or asset that the Receiver determines to be: 

(i) made to an officer, director, or other Person engaging in the affairs of the 

Failed Bank, its Subsidiaries or Affiliates or any related entities of any of 

the foregoing; 

(ii) the subject of any investigation relating to any claim with respect to any 

item described in Section 3.5(a) or (b), or the subject of, or potentially the 

subject of, any legal proceedings; 

(iii) made to a Person who is an Obligor on a loan owned by the Receiver or 

the Corporation in its corporate capacity or its capacity as receiver of any 

institution; 

(iv) secured by collateral which also secures any asset owned by the Receiver; 

or 

(v)	 related to any asset of the Failed Bank not purchased by the Assuming 

Institution under this Article III or any liability of the Failed Bank not 

assumed by the Assuming Institution under Article II. 

(b) Each such Asset or asset purchased by the Receiver shall be purchased at a price 

equal to the Repurchase Price thereof less the Related Liability Amount with respect to any 

Related Liabilities related to such Asset or asset, in each case determined as of the date of the 

notice provided by the Receiver pursuant to Section 3.6(a). The Receiver shall pay the Assuming 

Institution not later than the twentieth (20th) Business Day following receipt of related Credit 

Documents and Credit Files together with interest on such amount at the Settlement Interest Rate 

for the period from and including the date of receipt of such documents to and including the day 

preceding the day on which payment is made. The Assuming Institution agrees to administer and 

manage each such Asset or asset in accordance with usual and prudent banking standards and 

business practices until each such Asset or asset is purchased by the Receiver. All transfers with 

respect to Asset or assets under this Section 3.6 shall be made as provided in Section 9.6. The 

Assuming Institution shall transfer all such Asset or assets and Related Liabilities to the Receiver 

without recourse, and shall indemnify the Receiver against any and all claims of any Person 

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claiming by, through or under the Assuming Institution with respect to any such Asset or asset, 

as provided in Section 12.4. 

 ARTICLE IV 

ASSUMPTION OF CERTAIN DUTIES AND OBLIGATIONS
 

The Assuming Institution agrees with the Receiver and the Corporation as follows: 

4.1 Continuation of Banking Business. For the period commencing the first banking 

Business Day after Bank Closing and ending no earlier than the first anniversary of Bank 

Closing, the Assuming Institution will provide full service banking in the trade area of the Failed 

Bank. Thereafter, the Assuming Institution may cease providing such banking services in the 

trade area of the Failed Bank, provided the Assuming Institution has received all necessary 

regulatory approvals. At the option of the Assuming Institution, such banking services may be 

provided at any or all of the Bank Premises, or at other premises within such trade area. The 

trade area shall be determined by the Receiver. For the avoidance of doubt, the foregoing shall 

not restrict the Assuming Institution from opening, closing or selling branches upon receipt of 

the necessary regulatory approvals, if the Assuming Institution or its successors continue to 

provide banking services in the trade area. Assuming Institution will pay to the Receiver, upon 

the sale of a branch or branches within the year following the date of this agreement, fifty 

percent (50%) of any franchise premium in excess of the franchise premium paid by the 

Assuming Institution with respect to such branch or branches. 

4.2 Agreement with Respect to Credit Card Business. The Assuming Institution 

agrees to honor and perform, from and after Bank Closing, all duties and obligations with respect 

to the Failed Bank's credit card business, and/or processing related to credit cards, if any, and 

assumes all outstanding extensions of credit with respect thereto. 

4.3 Agreement with Respect to Safe Deposit Business. The Assuming Institution 

assumes and agrees to discharge, from and after Bank Closing, in the usual course of conducting 

a banking business, the duties and obligations of the Failed Bank with respect to all Safe Deposit 

Boxes, if any, of the Failed Bank and to maintain all of the necessary facilities for the use of such 

boxes by the renters thereof during the period for which such boxes have been rented and the 

rent therefore paid to the Failed Bank, subject to the provisions of the rental agreements between 

the Failed Bank and the respective renters of such boxes; provided, that the Assuming Institution 

may relocate the Safe Deposit Boxes of the Failed Bank to any office of the Assuming Institution 

located in the trade area of the Failed Bank. The Safe Deposit Boxes shall be located and 

maintained in the trade area of the Failed Bank for a minimum of one year from Bank Closing. 

The trade area shall be determined by the Receiver. Fees related to the safe deposit business 

earned prior to the Bank Closing Date shall be for the benefit of the Receiver and fees earned 

after the Bank Closing Date shall be for the benefit of the Assuming Institution. 

4.4 Agreement with Respect to Safekeeping Business. The Receiver transfers, 

conveys and delivers to the Assuming Institution and the Assuming Institution accepts all 

securities and other items, if any, held by the Failed Bank in safekeeping for its customers as of 

Bank Closing. The Assuming Institution assumes and agrees to honor and discharge, from and 

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after Bank Closing, the duties and obligations of the Failed Bank with respect to such securities 

and items held in safekeeping. The Assuming Institution shall be entitled to all rights and 

benefits heretofore accrued or hereafter accruing with respect thereto. The Assuming Institution 

shall provide to the Receiver written verification of all assets held by the Failed Bank for 

safekeeping within sixty (60) days after Bank Closing. The assets held for safekeeping by the 

Failed Bank shall be held and maintained by the Assuming Institution in the trade area of the 

Failed Bank for a minimum of one year from Bank Closing. At the option of the Assuming 

Institution, the safekeeping business may be provided at any or all of the Bank Premises, or at 

other premises within such trade area. The trade area shall be determined by the Receiver. Fees 

related to the safekeeping business earned prior to the Bank Closing Date shall be for the benefit 

of the Receiver and fees earned after the Bank Closing Date shall be for the benefit of the 

Assuming Institution. 

4.5 Agreement with Respect to Trust Business. 

(a) The Assuming Institution shall, without further transfer, substitution, act or deed, 

to the full extent permitted by law, succeed to the rights, obligations, properties, assets, 

investments, deposits, agreements, and trusts of the Failed Bank under trusts, executorships, 

administrations, guardianships, and agencies, and other fiduciary or representative capacities, all 

to the same extent as though the Assuming Institution had assumed the same from the Failed 

Bank prior to Bank Closing; provided, that any liability based on the misfeasance, malfeasance 

or nonfeasance of the Failed Bank, its directors, officers, employees or agents with respect to the 

trust business is not assumed hereunder. 

(b) The Assuming Institution shall, to the full extent permitted by law, succeed to, 

and be entitled to take and execute, the appointment to all executorships, trusteeships, 

guardianships and other fiduciary or representative capacities to which the Failed Bank is or may 

be named in wills, whenever probated, or to which the Failed Bank is or may be named or 

appointed by any other instrument. 

(c) In the event additional proceedings of any kind are necessary to accomplish the 

transfer of such trust business, the Assuming Institution agrees that, at its own expense, it will 

take whatever action is necessary to accomplish such transfer. The Receiver agrees to use 

reasonable efforts to assist the Assuming Institution in accomplishing such transfer. 

(d) The Assuming Institution shall provide to the Receiver written verification of the 

assets held in connection with the Failed Bank's trust business within sixty (60) days after Bank 

Closing. 

4.6 Agreement with Respect to Bank Premises. 

(a) Option to Purchase. Subject to Section 3.5, the Receiver hereby grants to the 

Assuming Institution an exclusive option for the period of ninety (90) days commencing the day 

after Bank Closing to purchase any or all owned Bank Premises, including all Furniture, Fixtures 

and Equipment located on the Bank Premises. The Assuming Institution shall give written notice 

to the Receiver within the option period of its election to purchase or not to purchase any of the 

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owned Bank Premises. Any purchase of such premises shall be effective as of the date of Bank 

Closing and such purchase shall be consummated as soon as practicable thereafter, and in no 

event later than the Settlement Date. If the Assuming Institution gives notice of its election not 

to purchase one or more of the owned Bank Premises within seven (7) days of Bank Closing, 

then, not withstanding any other provision of this Agreement to the contrary, the Assuming 

Institution shall not be liable for any of the costs or fees associated with appraisals for such Bank 

Premises and associated Fixtures, Furniture and Equipment. 

(b) Option to Lease. The Receiver hereby grants to the Assuming Institution an 

exclusive option for the period of ninety (90) days commencing the day after Bank Closing to 

cause the Receiver to assign to the Assuming Institution any or all leases for leased Bank 

Premises, if any, which have been continuously occupied by the Assuming Institution from Bank 

Closing to the date it elects to accept an assignment of the leases with respect thereto to the 

extent such leases can be assigned; provided, that the exercise of this option with respect to any 

lease must be as to all premises or other property subject to the lease. If an assignment cannot be 

made of any such leases, the Receiver may, in its discretion, enter into subleases with the 

Assuming Institution containing the same terms and conditions provided under such existing 

leases for such leased Bank Premises or other property. The Assuming Institution shall give 

notice to the Receiver within the option period of its election to accept or not to accept an 

assignment of any or all leases (or enter into subleases or new leases in lieu thereof). The 

Assuming Institution agrees to assume all leases assigned (or enter into subleases or new leases 

in lieu thereof) pursuant to this Section 4.6. If the Assuming Institution gives notice of its 

election not to accept an assignment of a lease for one or more of the leased Bank Premises 

within seven (7) days of Bank Closing, then, not withstanding any other provision of this 

Agreement to the contrary, the Assuming Institution shall not be liable for any of the costs or 

fees associated with appraisals for the Fixtures, Furniture and Equipment located on such leased 

Bank Premises. 

(c) Facilitation. The Receiver agrees to facilitate the assumption, assignment or 

sublease of leases or the negotiation of new leases by the Assuming Institution; provided, that 

neither the Receiver nor the Corporation shall be obligated to engage in litigation, make 

payments to the Assuming Institution or to any third party in connection with facilitating any 

such assumption, assignment, sublease or negotiation or commit to any other obligations to third 

parties. 

(d) Occupancy. The Assuming Institution shall give the Receiver fifteen (15) days' 

prior written notice of its intention to vacate prior to vacating any leased Bank Premises with 

respect to which the Assuming Institution has not exercised the option provided in Section 

4.6(b). Any such notice shall be deemed to terminate the Assuming Institution's option with 

respect to such leased Bank Premises. 

(e) Occupancy Costs. 

(i) The Assuming Institution agrees to pay to the Receiver, or to appropriate 

third parties at the direction of the Receiver, during and for the period of any occupancy by it of 

(x) owned Bank Premises the market rental value, as determined by the appraiser selected in 

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accordance with the definition of Fair Market Value, and all operating costs, and (y) leased Bank 

Premises, all operating costs with respect thereto and to comply with all relevant terms of 

applicable leases entered into by the Failed Bank, including without limitation the timely 

payment of all rent. Operating costs include, without limitation all taxes, fees, charges, utilities, 

insurance and assessments, to the extent not included in the rental value or rent. If the Assuming 

Institution elects to purchase any owned Bank Premises in accordance with Section 4.6(a), the 

amount of any rent paid (and taxes paid to the Receiver which have not been paid to the taxing 

authority and for which the Assuming Institution assumes liability) by the Assuming Institution 

with respect thereto shall be applied as an offset against the purchase price thereof. 

(ii) The Assuming Institution agrees during the period of occupancy by it of 

owned or leased Bank Premises, to pay to the Receiver rent for the use of all owned or leased 

Furniture and Equipment and all owned or leased Fixtures located on such Bank Premises for the 

period of such occupancy. Rent for such property owned by the Failed Bank shall be the market 

rental value thereof, as determined by the Receiver within sixty (60) days after Bank Closing. 

Rent for such leased property shall be an amount equal to any and all rent and other amounts 

which the Receiver incurs or accrues as an obligation or is obligated to pay for such period of 

occupancy pursuant to all leases and contracts with respect to such property. If the Assuming 

Institution purchases any owned Furniture and Equipment or owned Fixtures in accordance with 

Section 4.6(f) or 4.6(h), the amount of any rents paid by the Assuming Institution with respect 

thereto shall be applied as an offset against the purchase price thereof. 

(f) Certain Requirements as to Furniture, Equipment and Fixtures. If the 

Assuming Institution purchases owned Bank Premises or accepts an assignment of the lease (or 

enters into a sublease or a new lease in lieu thereof) for leased Bank Premises as provided in 

Section 4.6(a) or 4.6(b), or if the Assuming Institution does not exercise such option but within 

twelve (12) months following Bank Closing obtains the right to occupy such premises (whether 

by assignment, lease, sublease, purchase or otherwise), other than in accordance with Section 

4.6(a) or (b), the Assuming Institution shall (i) effective as of the date of Bank Closing, purchase 

from the Receiver all Furniture and Equipment and Fixtures owned by the Failed Bank at Fair 

Market Value and located thereon as of Bank Closing, (ii) accept an assignment or a sublease of 

the leases or negotiate new leases for all Furniture and Equipment and Fixtures leased by the 

Failed Bank and located thereon, and (iii) if applicable, accept an assignment or a sublease of 

any ground lease or negotiate a new ground lease with respect to any land on which such Bank 

Premises are located; provided, that the Receiver shall not have disposed of such Furniture and 

Equipment and Fixtures or repudiated the leases specified in clause (ii) or (iii). 

(g) Vacating Premises. 

(i) If the Assuming Institution elects not to purchase any owned Bank 

Premises, the notice of such election in accordance with Section 4.6(a) shall specify the date 

upon which the Assuming Institution's occupancy of such premises shall terminate, which date 

shall not be later than ninety (90) days after the date of the Assuming Institution's notice not to 

exercise such option. The Assuming Institution promptly shall relinquish and release to the 

Receiver such premises and the Furniture and Equipment and Fixtures located thereon in the 

same condition as at Bank Closing, normal wear and tear excepted. By occupying any such 

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premises after the expiration of such ninety (90)-day period, the Assuming Institution shall, at 

the Receiver's option, (x) be deemed to have agreed to purchase such Bank Premises, and to 

assume all leases, obligations and liabilities with respect to leased Furniture and Equipment and 

leased Fixtures located thereon and any ground lease with respect to the land on which such 

premises are located, and (y) be required to purchase all Furniture and Equipment and Fixtures 

owned by the Failed Bank and located on such premises as of Bank Closing. 

(ii) If the Assuming Institution elects not to accept an assignment of the lease 

or sublease any leased Bank Premises, the notice of such election in accordance with Section 

4.6(b) shall specify the date upon which the Assuming Institution's occupancy of such leased 

Bank Premises shall terminate, which date shall not be later than ninety (90) days after the date 

of the Assuming Institution's notice not to exercise such option. Upon vacating such premises, 

the Assuming Institution shall relinquish and release to the Receiver such premises and the 

Fixtures and the Furniture and Equipment located thereon in the same condition as at Bank 

Closing, normal wear and tear excepted. By failing to provide notice of its intention to vacate 

such premises prior to the expiration of the option period specified in Section 4.6(b), or by 

occupying such premises after the one hundred eighty (180)-day period specified above in this 

paragraph (ii), the Assuming Institution shall, at the Receiver's option, (x) be deemed to have 

assumed all leases, obligations and liabilities with respect to such premises (including any 

ground lease with respect to the land on which premises are located), and leased Furniture and 

Equipment and leased Fixtures located thereon in accordance with this Section 4.6 (unless the 

Receiver previously repudiated any such lease), and (y) be required to purchase all Furniture and 

Equipment and Fixtures owned by the Failed Bank at Fair Market Value and located on such 

premises as of Bank Closing. 

(h) Furniture and Equipment and Certain Other Equipment. The Receiver 

hereby grants to the Assuming Institution an option to purchase all Furniture and Equipment 

and/or all telecommunications, data processing equipment (including hardware and software) 

and check processing and similar operating equipment owned by the Failed Bank at Fair Market 

Value and located at any leased Bank Premises that the Assuming Institution elects to vacate or 

which it could have, but did not occupy, pursuant to this Section 4.6; provided, that, the 

Assuming Institution shall give the Receiver notice of its election to purchase such property at 

the time it gives notice of its intention to vacate such Bank Premises or within ten (10) days after 

Bank Closing for Bank Premises it could have, but did not, occupy. 

(i) Option to Put Bank Premises and Related Fixtures, Furniture and 

Equipment. 

(i) For a period of ninety (90) days following Bank Closing, the Assuming 

Institution shall be entitled to require the Receiver to purchase any Bank Premises that is owned, 

directly or indirectly, by an Acquired Subsidiary and the purchase price paid by the Receiver 

shall be the Fair Market Value of the Bank Premises. 

(ii) If the Assuming Institution elects to require the Receiver to purchase any 

Bank Premises that is owned, directly or indirectly, by an Acquired Subsidiary, the Assuming 

Institution shall also have the option, exercisable within the same ninety (90) day time period, to 

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require the Receiver to purchase any Fixtures, Furniture and Equipment that is owned, directly or 

indirectly, by an Acquired Subsidiary and which is located on such Bank Premises. The 

purchase price paid by the Receiver shall be the Fair Market Value of the Fixtures, Furniture and 

Equipment. 

(iii) In the event the Assuming Institution elects to exercise its option under 

this subparagraph, the Assuming Institution shall pay to the Receiver occupancy costs in 

accordance with Section 4.6(e) and shall vacate the Bank Premises in accordance with Section 

4.6(g)(i). 

(iv) Regardless of whether the Assuming Institution exercises any of its option 

under this subparagraph, the purchase price for the Acquired Subsidiary shall be adjusted by the 

difference between the Fair Market Value of the Bank Premises and Fixtures, Furniture and 

Equipment and their respective Book Value as reflected of the books and records of the Acquired 

Subsidiary. Such adjustment shall be made in accordance with Article VIII of this Agreement. 

4.7 Agreement with Respect to Leased Data Processing Equipment 

(a) The Receiver hereby grants to the Assuming Institution an exclusive option for 

the period of ninety (90) days commencing the day after Bank Closing to accept an assignment 

from the Receiver of any or all Data Processing Leases to the extent that such Data Processing 

Leases can be assigned. 

(b) The Assuming Institution shall (i) give written notice to the Receiver within the 

option period specified in Section 4.7(a) of its intent to accept or decline an assignment or 

sublease of any or all Data Processing Leases and promptly accept an assignment or sublease of 

such Data Processing Leases, and (ii) give written notice to the appropriate lessor(s) that it has 

accepted an assignment or sublease of any such Data Processing Leases. 

(c) The Receiver agrees to facilitate the assignment or sublease of Data Processing 

Leases or the negotiation of new leases or license agreements by the Assuming Institution; 

provided, that neither the Receiver nor the Corporation shall be obligated to engage in litigation 

or make payments to the Assuming Institution or to any third party in connection with 

facilitating any such assumption, assignment, sublease or negotiation. 

(d) The Assuming Institution agrees, during its period of use of any property subject 

to a Data Processing Lease, to pay to the Receiver or to appropriate third parties at the direction 

of the Receiver all operating costs with respect thereto and to comply with all relevant terms of 

the applicable Data Processing Leases entered into by the Failed Bank, including without 

limitation the timely payment of all rent, taxes, fees, charges, utilities, insurance and 

assessments. 

(e) The Assuming Institution shall, not later than fifty (50) days after giving the 

notice provided in Section 4.7(b), (i) relinquish and release to the Receiver all property subject to 

the relevant Data Processing Lease, in the same condition as at Bank Closing, normal wear and 

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tear excepted, or (ii) accept an assignment or a sublease thereof or negotiate a new lease or 

license agreement under this Section 4.7. 

4.8 Agreement with Respect to Certain Existing Agreements. 

(a) Subject to the provisions of Section 4.8(b), with respect to agreements existing as 

of Bank Closing which provide for the rendering of services by or to the Failed Bank, within 

thirty (30) days after Bank Closing, the Assuming Institution shall give the Receiver written 

notice specifying whether it elects to assume or not to assume each such agreement. Except as 

may be otherwise provided in this Article IV, the Assuming Institution agrees to comply with the 

terms of each such agreement for a period commencing on the day after Bank Closing and 

ending on: (i) in the case of an agreement that provides for the rendering of services by the 

Failed Bank, the date which is ninety (90) days after Bank Closing, and (ii) in the case of an 

agreement that provides for the rendering of services to the Failed Bank, the date which is thirty 

(30) days after the Assuming Institution has given notice to the Receiver of its election not to 

assume such agreement; provided, that the Receiver can reasonably make such service 

agreements available to the Assuming Institution. The Assuming Institution shall be deemed by 

the Receiver to have assumed agreements for which no notification is timely given. The Receiver 

agrees to assign, transfer, convey, and deliver to the Assuming Institution all right, title and 

interest of the Receiver, if any, in and to agreements the Assuming Institution assumes 

hereunder. In the event the Assuming Institution elects not to accept an assignment of any lease 

(or sublease) or negotiate a new lease for leased Bank Premises under Section 4.6 and does not 

otherwise occupy such premises, the provisions of this Section 4.8(a) shall not apply to service 

agreements related to such premises. The Assuming Institution agrees, during the period it has 

the use or benefit of any such agreement, promptly to pay to the Receiver or to appropriate third 

parties at the direction of the Receiver all operating costs with respect thereto and to comply with 

all relevant terms of such agreement. 

(b) The provisions of Section 4.8(a) regarding the Assuming Institution’s election to 

assume or not assume certain agreements shall not apply to (i) agreements pursuant to which the 

Failed Bank provides mortgage servicing for others or mortgage servicing is provided to the 

Failed Bank by others, (ii) agreements that are subject to Sections 4.1 through 4.7 and any 

insurance policy or bond referred to in Section 3.5(a) or other agreement specified in Section 3.5, 

and (iii) consulting, management or employment agreements, if any, between the Failed Bank 

and its employees or other Persons. Except as otherwise expressly set forth elsewhere in this 

Agreement, the Assuming Institution does not assume any liabilities or acquire any rights under 

any of the agreements described in this Section 4.8(b). 

4.9 Informational Tax Reporting. The Assuming Institution agrees to perform all 

obligations of the Failed Bank with respect to Federal and State income tax informational 

reporting related to (i) the Assets and the Liabilities Assumed, (ii) deposit accounts that were 

closed and loans that were paid off or collateral obtained with respect thereto prior to Bank 

Closing, (iii) miscellaneous payments made to vendors of the Failed Bank, and (iv) any other 

asset or liability of the Failed Bank, including, without limitation, loans not purchased and 

Deposits not assumed by the Assuming Institution, as may be required by the Receiver. 

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 4.10 Insurance. The Assuming Institution agrees to obtain insurance coverage 

effective from and after Bank Closing, including public liability, fire and extended coverage 

insurance acceptable to the Receiver with respect to owned or leased Bank Premises that it 

occupies, and all owned or leased Furniture and Equipment and Fixtures and leased data 

processing equipment (including hardware and software) located thereon, in the event such 

insurance coverage is not already in force and effect with respect to the Assuming Institution as 

the insured as of Bank Closing. All such insurance shall, where appropriate (as determined by 

the Receiver), name the Receiver as an additional insured. 

4.11 Office Space for Receiver and Corporation. For the period commencing on the 

day following Bank Closing and ending on the one hundred eightieth (180th) day thereafter, the 

Assuming Institution agrees to provide to the Receiver and the Corporation, without charge, 

adequate and suitable office space (including parking facilities and vault space), furniture, 

equipment (including photocopying and telecopying machines), email accounts, network access 

and technology resources (such as shared drive) and utilities (including local telephone service 

and fax machines) at the Bank Premises occupied by the Assuming Institution for their use in the 

discharge of their respective functions with respect to the Failed Bank. In the event the Receiver 

and the Corporation determine that the space provided is inadequate or unsuitable, the Receiver 

and the Corporation may relocate to other quarters having adequate and suitable space and the 

costs of relocation and any rental and utility costs for the balance of the period of occupancy by 

the Receiver and the Corporation shall be borne by the Assuming Institution. Additionally, the 

Assuming Institution agrees to pay such bills and invoices on behalf of the Receiver and 

Corporation as the Receiver or Corporation may direct for the period beginning on the date of 

Bank Closing and ending on Settlement Date. Assuming Institution shall submit it requests for 

reimbursement of such expenditures pursuant to Article VIII of this Agreement. 

4.12 Agreement with Respect to Continuation of Group Health Plan Coverage for 

Former Employees of the Failed Bank. 

(a) The Assuming Institution agrees to assist the Receiver, as provided in this Section 

4.12, in offering individuals who were employees or former employees of the Failed Bank, or 

any of its Subsidiaries, and who, immediately prior to Bank Closing, were receiving, or were 

eligible to receive, health insurance coverage or health insurance continuation coverage from the 

Failed Bank ("Eligible Individuals"), the opportunity to obtain health insurance coverage in the 

Corporation's FIA Continuation Coverage Plan which provides for health insurance continuation 

coverage to such Eligible Individuals who are qualified beneficiaries of the Failed Bank as 

defined in Section 607 of the Employee Retirement Income Security Act of 1974, as amended 

(respectively, "qualified beneficiaries" and "ERISA"). The Assuming Institution shall consult 

with the Receiver and not later than five (5) Business Days after Bank Closing shall provide 

written notice to the Receiver of the number (if available), identity (if available) and addresses (if 

available) of the Eligible Individuals who are qualified beneficiaries of the Failed Bank and for 

whom a "qualifying event" (as defined in Section 603 of ERISA) has occurred and with respect 

to whom the Failed Bank's obligations under Part 6 of Subtitle B of Title I of ERISA have not 

been satisfied in full, and such other information as the Receiver may reasonably require. The 

Receiver shall cooperate with the Assuming Institution in order to permit it to prepare such 

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notice and shall provide to the Assuming Institution such data in its possession as may be 

reasonably required for purposes of preparing such notice. 

(b) The Assuming Institution shall take such further action to assist the Receiver in 

offering the Eligible Individuals who are qualified beneficiaries of the Failed Bank the 

opportunity to obtain health insurance coverage in the Corporation's FIA Continuation Coverage 

Plan as the Receiver may direct. All expenses incurred and paid by the Assuming Institution (i) 

in connection with the obligations of the Assuming Institution under this Section 4.12, and (ii) in 

providing health insurance continuation coverage to any Eligible Individuals who are hired by 

the Assuming Institution and such employees' qualified beneficiaries shall be borne by the 

Assuming Institution. 

(c) No later than five (5) Business Days after Bank Closing, the Assuming Institution 

shall provide the Receiver with a list of all Failed Bank employees the Assuming Institution will 

not hire. Unless otherwise agreed, the Assuming Institution pays all salaries and payroll costs 

for all Failed Bank Employees until the list is provided to the Receiver. The Assuming 

Institution shall be responsible for all costs and expenses (i.e. salary, benefits, etc.) associated 

with all other employees not on that list from and after the date of delivery of the list to the 

Receiver. The Assuming Institution shall offer to the Failed Bank employees it retains 

employment benefits comparable to those the Assuming Institution offers its current employees. 

(d) This Section 4.12 is for the sole and exclusive benefit of the parties to this 

Agreement, and for the benefit of no other Person (including any former employee of the Failed 

Bank or any Subsidiary thereof or qualified beneficiary of such former employee). Nothing in 

this Section 4.12 is intended by the parties, or shall be construed, to give any Person (including 

any former employee of the Failed Bank or any Subsidiary thereof or qualified beneficiary of 

such former employee) other than the Corporation, the Receiver and the Assuming Institution 

any legal or equitable right, remedy or claim under or with respect to the provisions of this 

Section. 

4.13 Agreement with Respect to Interim Asset Servicing. At any time after Bank 

Closing, the Receiver may establish on its books an asset pool(s) and may transfer to such asset 

pool(s) (by means of accounting entries on the books of the Receiver) all or any assets and 

liabilities of the Failed Bank which are not acquired by the Assuming Institution, including, 

without limitation, wholly unfunded Commitments and assets and liabilities which may be 

acquired, funded or originated by the Receiver subsequent to Bank Closing. The Receiver may 

remove assets (and liabilities) from or add assets (and liabilities) to such pool(s) at any time in its 

discretion. At the option of the Receiver, the Assuming Institution agrees to service, administer, 

and collect such pool assets in accordance with and for the term set forth in Exhibit 4.13 "Interim 

Asset Servicing Arrangement". 

4.14	 Reserved. 

4.15	 Agreement with Respect to Loss Sharing. The Assuming Institution shall be 

entitled 

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to require reimbursement from the Receiver for loss sharing on certain loans in accordance with 

the Single Family Shared-Loss Agreement attached hereto as Exhibit 4.15A and the Non-SF 

Shared-Loss Agreement attached hereto as Exhibit 4.15B, collectively, the “Shared-Loss 

Agreements.” The Loans that shall be subject to the Shared-Loss Agreements are identified on 

the Schedule of Loans 4.15A and 4.15B attached hereto. 

 ARTICLE V 

DUTIES WITH RESPECT TO DEPOSITORS OF THE FAILED BANK

 5.1 Payment of Checks, Drafts and Orders. Subject to Section 9.5, the Assuming 

Institution agrees to pay all properly drawn checks, drafts and withdrawal orders of depositors of 

the Failed Bank presented for payment, whether drawn on the check or draft forms provided by 

the Failed Bank or by the Assuming Institution, to the extent that the Deposit balances to the 

credit of the respective makers or drawers assumed by the Assuming Institution under this 

Agreement are sufficient to permit the payment thereof, and in all other respects to discharge, in 

the usual course of conducting a banking business, the duties and obligations of the Failed Bank 

with respect to the Deposit balances due and owing to the depositors of the Failed Bank assumed 

by the Assuming Institution under this Agreement. 

5.2 Certain Agreements Related to Deposits. Subject to Section 2.2, the Assuming 

Institution agrees to honor the terms and conditions of any written escrow or mortgage servicing 

agreement or other similar agreement relating to a Deposit liability assumed by the Assuming 

Institution pursuant to this Agreement. 

5.3 Notice to Depositors. 

(a) Within seven (7) days after Bank Closing, the Assuming Institution shall give (i) 

notice to depositors of the Failed Bank of its assumption of the Deposit liabilities of the Failed 

Bank, and (ii) any notice required under Section 2.2, by mailing to each such depositor a notice 

with respect to such assumption and by advertising in a newspaper of general circulation in the 

county or counties in which the Failed Bank was located. The Assuming Institution agrees that it 

will obtain prior approval of all such notices and advertisements from counsel for the Receiver 

and that such notices and advertisements shall not be mailed or published until such approval is 

received. 

(b) The Assuming Institution shall give notice by mail to depositors of the Failed 

Bank concerning the procedures to claim their deposits, which notice shall be provided to the 

Assuming Institution by the Receiver or the Corporation. Such notice shall be included with the 

notice to depositors to be mailed by the Assuming Institution pursuant to Section 5.3(a). 

(c) If the Assuming Institution proposes to charge fees different from those charged 

by the Failed Bank before it establishes new deposit account relationships with the depositors of 

the Failed Bank, the Assuming Institution shall give notice by mail of such changed fees to such 

depositors. 

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 ARTICLE VI 

RECORDS

 6.1 Transfer of Records. 

(a) In accordance with Sections 2.1 and 3.1, the Receiver assigns, transfers, conveys 

and delivers to the Assuming Institution, whether located on Bank Premises occupied or not 

occupied by the Assuming Institution or at any other location, the following: 

(i) all Records pertaining to the Deposit liabilities of the Failed Bank 

assumed by the Assuming Institution under this Agreement, including, but not limited to, the 

following: 

(A) signature cards, orders, contracts between the Failed Bank and its 

depositors and Records of similar character; 

(B) passbooks of depositors held by the Failed Bank, deposit slips, cancelled 

checks and withdrawal orders representing charges to accounts of depositors; and 

following: 

(ii) all Records pertaining to the Assets, including, but not limited to, the 

companies; 

(A) records of deposit balances carried with other banks, bankers or trust 

(B) Loan and collateral records and Credit Files and other documents; 

(C) deeds, mortgages, abstracts, surveys, and other instruments or records of 

title pertaining to real estate or real estate mortgages; 

(D) signature cards, agreements and records pertaining to Safe Deposit Boxes, 

if any; and 

(E) records pertaining to the credit card business, trust business or safekeeping 

business of the Failed Bank, if any. 

(b) The Receiver, at its option, may assign and transfer to the Assuming Institution by 

a single blanket assignment or otherwise, as soon as practicable after Bank Closing, any other 

Records not assigned and transferred to the Assuming Institution as provided in this Agreement, 

whether located on Bank Premises occupied or not occupied by the Assuming Institution or at 

any other location, including but not limited to loan disbursement checks, general ledger tickets, 

official bank checks, proof transactions (including proof tapes) and paid out loan files. 

6.2 Delivery of Assigned Records. The Receiver shall deliver to the Assuming 

Institution all Records described in (i) Section 6.1(a) as soon as practicable on or after the date of 

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this Agreement, and (ii) Section 6.1(b) as soon as practicable after making any assignment 

described therein. 

6.3 Preservation of Records. The Assuming Institution agrees that it will preserve 

and maintain for the joint benefit of the Receiver, the Corporation and the Assuming Institution, 

all Records of which it has custody for such period as either the Receiver or the Corporation in 

its discretion may require, until directed otherwise, in writing, by the Receiver or Corporation. 

The Assuming Institution shall have the primary responsibility to respond to subpoenas, 

discovery requests, and other similar official inquiries and customer requests for lien releases 

with respect to the Records of which it has custody. 

6.4 Access to Records; Copies. The Assuming Institution agrees to permit the 

Receiver and the Corporation access to all Records of which the Assuming Institution has 

custody, and to use, inspect, make extracts from or request copies of any such Records in the 

manner and to the extent requested, and to duplicate, in the discretion of the Receiver or the 

Corporation, any Record in the form of microfilm or microfiche pertaining to Deposit account 

relationships; provided, that in the event that the Failed Bank maintained one or more duplicate 

copies of such microfilm or microfiche Records, the Assuming Institution hereby assigns, 

transfers, and conveys to the Corporation one such duplicate copy of each such Record without 

cost to the Corporation, and agrees to deliver to the Corporation all Records assigned and 

transferred to the Corporation under this Article VI as soon as practicable on or after the date of 

this Agreement. The party requesting a copy of any Record shall bear the cost (based on standard 

accepted industry charges to the extent applicable, as determined by the Receiver) for providing 

such duplicate Records. A copy of each Record requested shall be provided as soon as 

practicable by the party having custody thereof. 

ARTICLE VII 

FIRST LOSS TRANCHE

 The Assuming Institution has submitted to the Receiver an asset discount bid of 

($14,000,000) and a positive Deposit premium bid of 0.0%. The Deposit premium bid will be 

applied to the total of all Assumed Deposits except for brokered, CDARS, and any market place 

or similar subscription services Deposits. The First Loss Tranche shall be determined by adding 

(i) the asset premium (discount) bid, (ii) the Deposit premium bid, and (iii) the Equity 

Adjustment. If the First Loss Tranche is a positive number, then this is the Losses on Single 

Family Shared-Loss Loans and Net Charge-offs on Shared Loss Assets that the Assuming 

Institution will incur before loss-sharing commences under Exhibits 4.15A and 4.15B. If the 

First Loss Tranche is a negative number, the Corporation shall pay such amount by wire transfer 

to the Assuming Institution by the end of the first business day following Bank Closing, together 

with interest determined in accordance with Section 8.4, and loss sharing shall commence 

immediately. 

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ARTICLE VIII 

 ADJUSTMENTS 

8.1 Pro Forma Statement. The Receiver, as soon as practicable after Bank Closing, 

in accordance with the best information then available, shall provide to the Assuming Institution 

a pro forma statement reflecting any adjustments of such liabilities and assets as may be 

necessary. Such pro forma statement shall take into account, to the extent possible, (i) liabilities 

and assets of a nature similar to those contemplated by Section 2.1 or Section 3.1, respectively, 

which at Bank Closing were carried in the Failed Bank's suspense accounts, (ii) accruals as of 

Bank Closing for all income related to the assets and business of the Failed Bank acquired by the 

Assuming Institution hereunder, whether or not such accruals were reflected on the Accounting 

Records of the Failed Bank in the normal course of its operations, and (iii) adjustments to 

determine the Book Value of any investment in an Acquired Subsidiary and related accounts on 

the "bank only" (unconsolidated) balance sheet of the Failed Bank based on the equity method of 

accounting, whether or not the Failed Bank used the equity method of accounting for 

investments in subsidiaries, except that the resulting amount cannot be less than the Acquired 

Subsidiary's recorded equity as of Bank Closing as reflected on the Accounting Records of the 

Acquired Subsidiary. Any Loan purchased by the Assuming Institution pursuant to Section 3.1 

which the Failed Bank charged off during the period beginning the day after the Bid Valuation 

Date to the date of Bank Closing shall be deemed not to be charged off for the purposes of the 

pro forma statement, and the purchase price shall be determined pursuant to Section 3.2. 

8.2 Correction of Errors and Omissions; Other Liabilities. 

(a) In the event any bookkeeping omissions or errors are discovered in preparing any 

pro forma statement or in completing the transfers and assumptions contemplated hereby, the 

parties hereto agree to correct such errors and omissions, it being understood that, as far as 

practicable, all adjustments will be made consistent with the judgments, methods, policies or 

accounting principles utilized by the Failed Bank in preparing and maintaining Accounting 

Records, except that adjustments made pursuant to this Section 8.2(a) are not intended to bring 

the Accounting Records of the Failed Bank into accordance with generally accepted accounting 

principles. 

(b) If the Receiver discovers at any time subsequent to the date of this Agreement that 

any claim exists against the Failed Bank which is of such a nature that it would have been 

included in the liabilities assumed under Article II had the existence of such claim or the facts 

giving rise thereto been known as of Bank Closing, the Receiver may, in its discretion, at any 

time, require that such claim be assumed by the Assuming Institution in a manner consistent with 

the intent of this Agreement. The Receiver will make appropriate adjustments to the pro forma 

statement provided by the Receiver to the Assuming Institution pursuant to Section 8.1 as may 

be necessary. 

8.3 Payments. The Receiver agrees to cause to be paid to the Assuming Institution, 

or the Assuming Institution agrees to pay to the Receiver, as the case may be, on the Settlement 

Date, a payment in an amount which reflects net adjustments (including any costs, expenses and 

fees associated with determinations of value as provided in this Agreement) made pursuant to 

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Section 8.1 or Section 8.2, plus interest as provided in Section 8.4. The Receiver and the 

Assuming Institution agree to effect on the Settlement Date any further transfer of assets to or 

assumption of liabilities or claims by the Assuming Institution as may be necessary in 

accordance with Section 8.1 or Section 8.2. 

8.4 Interest. Any amounts paid under Section 8.3 or Section 8.5, shall bear interest 

for the period from and including the day following Bank Closing to and including the day 

preceding the payment at the Settlement Interest Rate. 

8.5 Subsequent Adjustments. In the event that the Assuming Institution or the 

Receiver discovers any errors or omissions as contemplated by Section 8.2 or any error with 

respect to the payment made under Section 8.3 after the Settlement Date, the Assuming 

Institution and the Receiver agree to promptly correct any such errors or omissions, make any 

payments and effect any transfers or assumptions as may be necessary to reflect any such 

correction plus interest as provided in Section 8.4. 

 ARTICLE IX 

 CONTINUING COOPERATION 

9.1 General Matters. The parties hereto agree that they will, in good faith and with 

their best efforts, cooperate with each other to carry out the transactions contemplated by this 

Agreement and to effect the purposes hereof. 

9.2 Additional Title Documents. The Receiver, the Corporation and the Assuming 

Institution each agree, at any time, and from time to time, upon the request of any party hereto, to 

execute and deliver such additional instruments and documents of conveyance as shall be 

reasonably necessary to vest in the appropriate party its full legal or equitable title in and to the 

property transferred pursuant to this Agreement or to be transferred in accordance herewith. The 

Assuming Institution shall prepare such instruments and documents of conveyance (in form and 

substance satisfactory to the Receiver) as shall be necessary to vest title to the Assets in the 

Assuming Institution. The Assuming Institution shall be responsible for recording such 

instruments and documents of conveyance at its own expense. 

9.3 Claims and Suits. 

(a) The Receiver shall have the right, in its discretion, to (i) defend or settle any claim 

or suit against the Assuming Institution with respect to which the Receiver has indemnified the 

Assuming Institution in the same manner and to the same extent as provided in Article XII, and 

(ii) defend or settle any claim or suit against the Assuming Institution with respect to any 

Liability Assumed, which claim or suit may result in a loss to the Receiver arising out of or 

related to this Agreement, or which existed against the Failed Bank on or before Bank Closing. 

The exercise by the Receiver of any rights under this Section 9.3(a) shall not release the 

Assuming Institution with respect to any of its obligations under this Agreement. 

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(b) In the event any action at law or in equity shall be instituted by any Person against 

the Receiver and the Corporation as codefendants with respect to any asset of the Failed Bank 

retained or acquired pursuant to this Agreement by the Receiver, the Receiver agrees, at the 

request of the Corporation, to join with the Corporation in a petition to remove the action to the 

United States District Court for the proper district. The Receiver agrees to institute, with or 

without joinder of the Corporation as coplaintiff, any action with respect to any such retained or 

acquired asset or any matter connected therewith whenever notice requiring such action shall be 

given by the Corporation to the Receiver. 

9.4 Payment of Deposits. In the event any depositor does not accept the obligation of 

the Assuming Institution to pay any Deposit liability of the Failed Bank assumed by the 

Assuming Institution pursuant to this Agreement and asserts a claim against the Receiver for all 

or any portion of any such Deposit liability, the Assuming Institution agrees on demand to 

provide to the Receiver funds sufficient to pay such claim in an amount not in excess of the 

Deposit liability reflected on the books of the Assuming Institution at the time such claim is 

made. Upon payment by the Assuming Institution to the Receiver of such amount, the Assuming 

Institution shall be discharged from any further obligation under this Agreement to pay to any 

such depositor the amount of such Deposit liability paid to the Receiver. 

9.5 Withheld Payments. At any time, the Receiver or the Corporation may, in its 

discretion, determine that all or any portion of any deposit balance assumed by the Assuming 

Institution pursuant to this Agreement does not constitute a "Deposit" (or otherwise, in its 

discretion, determine that it is the best interest of the Receiver or Corporation to withhold all or 

any portion of any deposit), and may direct the Assuming Institution to withhold payment of all 

or any portion of any such deposit balance. Upon such direction, the Assuming Institution agrees 

to hold such deposit and not to make any payment of such deposit balance to or on behalf of the 

depositor, or to itself, whether by way of transfer, set-off, or otherwise. The Assuming Institution 

agrees to maintain the "withheld payment" status of any such deposit balance until directed in 

writing by the Receiver or the Corporation as to its disposition. At the direction of the Receiver 

or the Corporation, the Assuming Institution shall return all or any portion of such deposit 

balance to the Receiver or the Corporation, as appropriate, and thereupon the Assuming 

Institution shall be discharged from any further liability to such depositor with respect to such 

returned deposit balance. If such deposit balance has been paid to the depositor prior to a demand 

for return by the Corporation or the Receiver, and payment of such deposit balance had not been 

previously withheld pursuant to this Section, the Assuming Institution shall not be obligated to 

return such deposit balance to the Receiver or the Corporation. The Assuming Institution shall be 

obligated to reimburse the Corporation or the Receiver, as the case may be, for the amount of 

any deposit balance or portion thereof paid by the Assuming Institution in contravention of any 

previous direction to withhold payment of such deposit balance or return such deposit balance 

the payment of which was withheld pursuant to this Section. 

9.6 Proceedings with Respect to Certain Assets and Liabilities. 

(a) In connection with any investigation, proceeding or other matter with respect to 

any asset or liability of the Failed Bank retained by the Receiver, or any asset of the Failed Bank 

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acquired by the Receiver pursuant to this Agreement, the Assuming Institution shall cooperate to 

the extent reasonably required by the Receiver. 

(b) In addition to its obligations under Section 6.4, the Assuming Institution shall 

provide representatives of the Receiver access at reasonable times and locations without other 

limitation or qualification to (i) its directors, officers, employees and agents and those of the 

Subsidiaries acquired by the Assuming Institution, and (ii) its books and records, the books and 

records of such Subsidiaries and all Credit Files, and copies thereof. Copies of books, records 

and Credit Files shall be provided by the Assuming Institution as requested by the Receiver and 

the costs of duplication thereof shall be borne by the Receiver. 

(c) Not later than ten (10) days after the Put Notice pursuant to Section 3.4 or the date 

of the notice of transfer of any Loan by the Assuming Institution to the Receiver pursuant to 

Section 3.6, the Assuming Institution shall deliver to the Receiver such documents with respect 

to such Loan as the Receiver may request, including without limitation the following: (i) all 

related Credit Documents (other than certificates, notices and other ancillary documents), (ii) a 

certificate setting forth the principal amount on the date of the transfer and the amount of 

interest, fees and other charges then accrued and unpaid thereon, and any restrictions on transfer 

to which any such Loan is subject, and (iii) all Credit Files, and all documents, microfiche, 

microfilm and computer records (including but not limited to magnetic tape, disc storage, card 

forms and printed copy) maintained by, owned by, or in the possession of the Assuming 

Institution or any Affiliate of the Assuming Institution relating to the transferred Loan. 

9.7 Information. The Assuming Institution promptly shall provide to the Corporation 

such other information, including financial statements and computations, relating to the 

performance of the provisions of this Agreement as the Corporation or the Receiver may request 

from time to time, and, at the request of the Receiver, make available employees of the Failed 

Bank employed or retained by the Assuming Institution to assist in preparation of the pro forma 

statement pursuant to Section 8.1. 

 ARTICLE X 

 CONDITION PRECEDENT
 

The obligations of the parties to this Agreement are subject to the Receiver and the 

Corporation having received at or before Bank Closing evidence reasonably satisfactory to each 

of any necessary approval, waiver, or other action by any governmental authority, the board of 

directors of the Assuming Institution, or other third party, with respect to this Agreement and the 

transactions contemplated hereby, the closing of the Failed Bank and the appointment of the 

Receiver, the chartering of the Assuming Institution, and any agreements, documents, matters or 

proceedings contemplated hereby or thereby. 

 ARTICLE XI 

REPRESENTATIONS AND WARRANTIES OF THE ASSUMING INSTITUTION
 

The Assuming Institution represents and warrants to the Corporation and the Receiver as 

follows: 

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 (a) Corporate Existence and Authority. The Assuming Institution (i) is duly 

organized, validly existing and in good standing under the laws of its Chartering Authority and 

has full power and authority to own and operate its properties and to conduct its business as now 

conducted by it, and (ii) has full power and authority to execute and deliver this Agreement and 

to perform its obligations hereunder. The Assuming Institution has taken all necessary corporate 

action to authorize the execution, delivery and performance of this Agreement and the 

performance of the transactions contemplated hereby. 

(b) Third Party Consents. No governmental authority or other third party consents 

(including but not limited to approvals, licenses, registrations or declarations) are required in 

connection with the execution, delivery or performance by the Assuming Institution of this 

Agreement, other than such consents as have been duly obtained and are in full force and effect. 

(c) Execution and Enforceability. This Agreement has been duly executed and 

delivered by the Assuming Institution and when this Agreement has been duly authorized, 

executed and delivered by the Corporation and the Receiver, this Agreement will constitute the 

legal, valid and binding obligation of the Assuming Institution, enforceable in accordance with 

its terms. 

(d) Compliance with Law. 

(i) Neither the Assuming Institution nor any of its Subsidiaries is in violation 

of any statute, regulation, order, decision, judgment or decree of, or any restriction imposed by, 

the United States of America, any State, municipality or other political subdivision or any agency 

of any of the foregoing, or any court or other tribunal having jurisdiction over the Assuming 

Institution or any of its Subsidiaries or any assets of any such Person, or any foreign government 

or agency thereof having such jurisdiction, with respect to the conduct of the business of the 

Assuming Institution or of any of its Subsidiaries, or the ownership of the properties of the 

Assuming Institution or any of its Subsidiaries, which, either individually or in the aggregate 

with all other such violations, would materially and adversely affect the business, operations or 

condition (financial or otherwise) of the Assuming Institution or the ability of the Assuming 

Institution to perform, satisfy or observe any obligation or condition under this Agreement. 

(ii) Neither the execution and delivery nor the performance by the Assuming 

Institution of this Agreement will result in any violation by the Assuming Institution of, or be in 

conflict with, any provision of any applicable law or regulation, or any order, writ or decree of 

any court or governmental authority. 

e) Representations Remain True. The Assuming Institution represents and 

warrants that it has executed and delivered to the Corporation a Purchaser Eligibility 

Certification and Confidentiality Agreement and that all information provided and 

representations made by or on behalf of the Assuming Institution in connection with this 

Agreement and the transactions contemplated hereby, including, but not limited to, the Purchaser 

Eligibility Certification and Confidentiality Agreement (which are affirmed and ratified hereby) 

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are and remain true and correct in all material respects and do not fail to state any fact required to 

make the information contained therein not misleading. 

 ARTICLE XII 

 INDEMNIFICATION 

12.1 Indemnification of Indemnitees. From and after Bank Closing and subject to 

the limitations set forth in this Section and Section 12.6 and compliance by the Indemnitees with 

Section 12.2, the Receiver agrees to indemnify and hold harmless the Indemnitees against any 

and all costs, losses, liabilities, expenses (including attorneys' fees) incurred prior to the 

assumption of defense by the Receiver pursuant to paragraph (d) of Section 12.2, judgments, 

fines and amounts paid in settlement actually and reasonably incurred in connection with claims 

against any Indemnitee based on liabilities of the Failed Bank that are not assumed by the 

Assuming Institution pursuant to this Agreement or subsequent to the execution hereof by the 

Assuming Institution or any Subsidiary or Affiliate of the Assuming Institution for which 

indemnification is provided hereunder in (a) of this Section 12.1, subject to certain exclusions as 

provided in (b) of this Section 12.1: 

(a) 

(1) claims based on the rights of any shareholder or former shareholder as such of 

(x) the Failed Bank, or (y) any Subsidiary or Affiliate of the Failed Bank; 

(2) claims based on the rights of any creditor as such of the Failed Bank, or any 

creditor as such of any director, officer, employee or agent of the Failed Bank, with respect to 

any indebtedness or other obligation of the Failed Bank arising prior to Bank Closing; 

(3) claims based on the rights of any present or former director, officer, employee 

or agent as such of the Failed Bank or of any Subsidiary or Affiliate of the Failed Bank; 

(4) claims based on any action or inaction prior to Bank Closing of the Failed 

Bank, its directors, officers, employees or agents as such, or any Subsidiary or Affiliate of the 

Failed Bank, or the directors, officers, employees or agents as such of such Subsidiary or 

Affiliate; 

(5) claims based on any malfeasance, misfeasance or nonfeasance of the Failed 

Bank, its directors, officers, employees or agents with respect to the trust business of the Failed 

Bank, if any; 

(6) claims based on any failure or alleged failure (not in violation of law) by the 

Assuming Institution to continue to perform any service or activity previously performed by the 

Failed Bank which the Assuming Institution is not required to perform pursuant to this 

Agreement or which arise under any contract to which the Failed Bank was a party which the 

Assuming Institution elected not to assume in accordance with this Agreement and which neither 

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the Assuming Institution nor any Subsidiary or Affiliate of the Assuming Institution has assumed 

subsequent to the execution hereof; 

(7) claims arising from any action or inaction of any Indemnitee, including for 

purposes of this Section 12.1(a)(7) the former officers or employees of the Failed Bank or of any 

Subsidiary or Affiliate of the Failed Bank that is taken upon the specific written direction of the 

Corporation or the Receiver, other than any action or inaction taken in a manner constituting bad 

faith, gross negligence or willful misconduct; and 

(8) claims based on the rights of any depositor of the Failed Bank whose deposit 

has been accorded "withheld payment" status and/or returned to the Receiver or Corporation in 

accordance with Section 9.5 and/or has become an "unclaimed deposit" or has been returned to 

the Corporation or the Receiver in accordance with Section 2.3; 

(b) provided, that, with respect to this Agreement, except for paragraphs (7) and (8) 

of Section 12.1(a), no indemnification will be provided under this Agreement for any: 

(1) judgment or fine against, or any amount paid in settlement (without the written 

approval of the Receiver) by, any Indemnitee in connection with any action that seeks damages 

against any Indemnitee (a "counterclaim") arising with respect to any Asset and based on any 

action or inaction of either the Failed Bank, its directors, officers, employees or agents as such 

prior to Bank Closing, unless any such judgment, fine or amount paid in settlement exceeds the 

greater of (i) the Repurchase Price of such Asset, or (ii) the monetary recovery sought on such 

Asset by the Assuming Institution in the cause of action from which the counterclaim arises; and 

in such event the Receiver will provide indemnification only in the amount of such excess; and 

no indemnification will be provided for any costs or expenses other than any costs or expenses 

(including attorneys' fees) which, in the determination of the Receiver, have been actually and 

reasonably incurred by such Indemnitee in connection with the defense of any such 

counterclaim; and it is expressly agreed that the Receiver reserves the right to intervene, in its 

discretion, on its behalf and/or on behalf of the Receiver, in the defense of any such 

counterclaim; 

(2) claims with respect to any liability or obligation of the Failed Bank that is 

expressly assumed by the Assuming Institution pursuant to this Agreement or subsequent to the 

execution hereof by the Assuming Institution or any Subsidiary or Affiliate of the Assuming 

Institution; 

(3) claims with respect to any liability of the Failed Bank to any present or former 

employee as such of the Failed Bank or of any Subsidiary or Affiliate of the Failed Bank, which 

liability is expressly assumed by the Assuming Institution pursuant to this Agreement or 

subsequent to the execution hereof by the Assuming Institution or any Subsidiary or Affiliate of 

the Assuming Institution; 

(4) claims based on the failure of any Indemnitee to seek recovery of damages 

from the Receiver for any claims based upon any action or inaction of the Failed Bank, its 

directors, officers, employees or agents as fiduciary, agent or custodian prior to Bank Closing; 

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(5) claims based on any violation or alleged violation by any Indemnitee of the 

antitrust, branching, banking or bank holding company or securities laws of the United States of 

America or any State thereof; 

(6) claims based on the rights of any present or former creditor, customer, or 

supplier as such of the Assuming Institution or any Subsidiary or Affiliate of the Assuming 

Institution; 

(7) claims based on the rights of any present or former shareholder as such of the 

Assuming Institution or any Subsidiary or Affiliate of the Assuming Institution regardless of 

whether any such present or former shareholder is also a present or former shareholder of the 

Failed Bank; 

(8) claims, if the Receiver determines that the effect of providing such 

indemnification would be to (i) expand or alter the provisions of any warranty or disclaimer 

thereof provided in Section 3.3 or any other provision of this Agreement, or (ii) create any 

warranty not expressly provided under this Agreement; 

(9) claims which could have been enforced against any Indemnitee had the 

Assuming Institution not entered into this Agreement; 

(10) claims based on any liability for taxes or fees assessed with respect to the 

consummation of the transactions contemplated by this Agreement, including without limitation 

any subsequent transfer of any Assets or Liabilities Assumed to any Subsidiary or Affiliate of the 

Assuming Institution; 

(11) except as expressly provided in this Article XII, claims based on any action 

or inaction of any Indemnitee, and nothing in this Agreement shall be construed to provide 

indemnification for (i) the Failed Bank, (ii) any Subsidiary or Affiliate of the Failed Bank, or (iii) 

any present or former director, officer, employee or agent of the Failed Bank or its Subsidiaries 

or Affiliates; provided, that the Receiver, in its discretion, may provide indemnification 

hereunder for any present or former director, officer, employee or agent of the Failed Bank or its 

Subsidiaries or Affiliates who is also or becomes a director, officer, employee or agent of the 

Assuming Institution or its Subsidiaries or Affiliates; 

(12) claims or actions which constitute a breach by the Assuming Institution of 

the representations and warranties contained in Article XI; 

(13) claims arising out of or relating to the condition of or generated by an Asset 

arising from or relating to the presence, storage or release of any hazardous or toxic substance, or 

any pollutant or contaminant, or condition of such Asset which violate any applicable Federal, 

State or local law or regulation concerning environmental protection; and 

(14) claims based on, related to or arising from any asset, including a loan, 

acquired or liability assumed by the Assuming Institution, other than pursuant to this Agreement. 

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 12.2 Conditions Precedent to Indemnification. It shall be a condition precedent to 

the obligation of the Receiver to indemnify any Person pursuant to this Article XII that such 

Person shall, with respect to any claim made or threatened against such Person for which such 

Person is or may be entitled to indemnification hereunder: 

(a) give written notice to the Regional Counsel (Litigation Branch) of the 

Corporation in the manner and at the address provided in Section 13.7 of such claim as soon as 

practicable after such claim is made or threatened; provided, that notice must be given on or 

before the date which is six (6) years from the date of this Agreement; 

(b) provide to the Receiver such information and cooperation with respect to such 

claim as the Receiver may reasonably require; 

(c) cooperate and take all steps, as the Receiver may reasonably require, to preserve 

and protect any defense to such claim; 

(d) in the event suit is brought with respect to such claim, upon reasonable prior 

notice, afford to the Receiver the right, which the Receiver may exercise in its sole discretion, to 

conduct the investigation, control the defense and effect settlement of such claim, including 

without limitation the right to designate counsel and to control all negotiations, litigation, 

arbitration, settlements, compromises and appeals of any such claim, all of which shall be at the 

expense of the Receiver; provided, that the Receiver shall have notified the Person claiming 

indemnification in writing that such claim is a claim with respect to which the Person claiming 

indemnification is entitled to indemnification under this Article XII; 

(e) not incur any costs or expenses in connection with any response or suit with 

respect to such claim, unless such costs or expenses were incurred upon the written direction of 

the Receiver; provided, that the Receiver shall not be obligated to reimburse the amount of any 

such costs or expenses unless such costs or expenses were incurred upon the written direction of 

the Receiver; 

(f) not release or settle such claim or make any payment or admission with respect 

thereto, unless the Receiver consents in writing thereto, which consent shall not be unreasonably 

withheld; provided, that the Receiver shall not be obligated to reimburse the amount of any such 

settlement or payment unless such settlement or payment was effected upon the written direction 

of the Receiver; and 

(g) take reasonable action as the Receiver may request in writing as necessary to 

preserve, protect or enforce the rights of the indemnified Person against any Primary Indemnitor. 

12.3 No Additional Warranty. Nothing in this Article XII shall be construed or 

deemed to (i) expand or otherwise alter any warranty or disclaimer thereof provided under 

Section 3.3 or any other provision of this Agreement with respect to, among other matters, the 

title, value, collectibility, genuineness, enforceability or condition of any (x) Asset, or (y) asset 

of the Failed Bank purchased by the Assuming Institution subsequent to the execution of this 

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Agreement by the Assuming Institution or any Subsidiary or Affiliate of the Assuming 

Institution, or (ii) create any warranty not expressly provided under this Agreement with respect 

thereto. 

12.4 Indemnification of Receiver and Corporation. From and after Bank Closing, 

the Assuming Institution agrees to indemnify and hold harmless the Corporation and the 

Receiver and their respective directors, officers, employees and agents from and against any and 

all costs, losses, liabilities, expenses (including attorneys' fees), judgments, fines and amounts 

paid in settlement actually and reasonably incurred in connection with any of the following: 

(a) claims based on any and all liabilities or obligations of the Failed Bank assumed 

by the Assuming Institution pursuant to this Agreement or subsequent to the execution hereof by 

the Assuming Institution or any Subsidiary or Affiliate of the Assuming Institution, whether or 

not any such liabilities subsequently are sold and/or transferred, other than any claim based upon 

any action or inaction of any Indemnitee as provided in paragraph (7) or (8) of Section 12.1(a); 

and 

(b) claims based on any act or omission of any Indemnitee (including but not limited 

to claims of any Person claiming any right or title by or through the Assuming Institution with 

respect to Assets transferred to the Receiver pursuant to Section 3.4 or 3.6), other than any action 

or inaction of any Indemnitee as provided in paragraph (7) or (8) of Section 12.1(a). 

12.5 Obligations Supplemental. The obligations of the Receiver, and the Corporation 

as guarantor in accordance with Section 12.7, to provide indemnification under this Article XII 

are to supplement any amount payable by any Primary Indemnitor to the Person indemnified 

under this Article XII. Consistent with that intent, the Receiver agrees only to make payments 

pursuant to such indemnification to the extent not payable by a Primary Indemnitor. If the 

aggregate amount of payments by the Receiver, or the Corporation as guarantor in accordance 

with Section 12.7, and all Primary Indemnitors with respect to any item of indemnification under 

this Article XII exceeds the amount payable with respect to such item, such Person being 

indemnified shall notify the Receiver thereof and, upon the request of the Receiver, shall 

promptly pay to the Receiver, or the Corporation as appropriate, the amount of the Receiver's (or 

Corporation's) payments to the extent of such excess. 

12.6 Criminal Claims. Notwithstanding any provision of this Article XII to the 

contrary, in the event that any Person being indemnified under this Article XII shall become 

involved in any criminal action, suit or proceeding, whether judicial, administrative or 

investigative, the Receiver shall have no obligation hereunder to indemnify such Person for 

liability with respect to any criminal act or to the extent any costs or expenses are attributable to 

the defense against the allegation of any criminal act, unless (i) the Person is successful on the 

merits or otherwise in the defense against any such action, suit or proceeding, or (ii) such action, 

suit or proceeding is terminated without the imposition of liability on such Person. 

12.7 Limited Guaranty of the Corporation. The Corporation hereby guarantees 

performance of the Receiver's obligation to indemnify the Assuming Institution as set forth in 

this Article XII. It is a condition to the Corporation's obligation hereunder that the Assuming 

Institution shall comply in all respects with the applicable provisions of this Article XII. The 

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Corporation shall be liable hereunder only for such amounts, if any, as the Receiver is obligated 

to pay under the terms of this Article XII but shall fail to pay. Except as otherwise provided 

above in this Section 12.7, nothing in this Article XII is intended or shall be construed to create 

any liability or obligation on the part of the Corporation, the United States of America or any 

department or agency thereof under or with respect to this Article XII, or any provision hereof, it 

being the intention of the parties hereto that the obligations undertaken by the Receiver under 

this Article XII are the sole and exclusive responsibility of the Receiver and no other Person or 

entity. 

12.8 Subrogation. Upon payment by the Receiver, or the Corporation as guarantor in 

accordance with Section 12.7, to any Indemnitee for any claims indemnified by the Receiver 

under this Article XII, the Receiver, or the Corporation as appropriate, shall become subrogated 

to all rights of the Indemnitee against any other Person to the extent of such payment. 

ARTICLE XIII 

MISCELLANEOUS 

13.1 Entire Agreement. This Agreement embodies the entire agreement of the parties 

hereto in relation to the subject matter herein and supersedes all prior understandings or 

agreements, oral or written, between the parties. 

13.2 Headings. The headings and subheadings of the Table of Contents, Articles and 

Sections contained in this Agreement, except the terms identified for definition in Article I and 

elsewhere in this Agreement, are inserted for convenience only and shall not affect the meaning 

or interpretation of this Agreement or any provision hereof. 

13.3 Counterparts. This Agreement may be executed in any number of counterparts 

and by the duly authorized representative of a different party hereto on separate counterparts, 

each of which when so executed shall be deemed to be an original and all of which when taken 

together shall constitute one and the same Agreement. 

13.4 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND 

OBLIGATIONS HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED IN 

ACCORDANCE WITH THE FEDERAL LAW OF THE UNITED STATES OF AMERICA, 

AND IN THE ABSENCE OF CONTROLLING FEDERAL LAW, IN ACCORDANCE WITH 

THE LAWS OF THE STATE IN WHICH THE MAIN OFFICE OF THE FAILED BANK IS 

LOCATED.

 13.5 Successors. All terms and conditions of this Agreement shall be binding on the 

successors and assigns of the Receiver, the Corporation and the Assuming Institution. Except as 

otherwise specifically provided in this Agreement, nothing expressed or referred to in this 

Agreement is intended or shall be construed to give any Person other than the Receiver, the 

Corporation and the Assuming Institution any legal or equitable right, remedy or claim under or 

with respect to this Agreement or any provisions contained herein, it being the intention of the 

parties hereto that this Agreement, the obligations and statements of responsibilities hereunder, 

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and all other conditions and provisions hereof are for the sole and exclusive benefit of the 

Receiver, the Corporation and the Assuming Institution and for the benefit of no other Person. 

13.6 Modification; Assignment. No amendment or other modification, rescission, 

release, or assignment of any part of this Agreement shall be effective except pursuant to a 

written agreement subscribed by the duly authorized representatives of the parties hereto. 

13.7 Notice. Any notice, request, demand, consent, approval or other communication 

to any party hereto shall be effective when received and shall be given in writing, and delivered 

in person against receipt therefore, or sent by certified mail, postage prepaid, courier service, 

telex, facsimile transmission or email to such party (with copies as indicated below) at its address 

set forth below or at such other address as it shall hereafter furnish in writing to the other parties. 

All such notices and other communications shall be deemed given on the date received by the 

addressee. 

Assuming Institution 

Bank of Upson 

108 South Church Street 

Thomaston, Georgia 30290 

Attention: James Douglas Head 

with a copy to: 

Kenneth M. Achenbach, Esq. 

Bryan Cave Powell Goldstein LLP 

Associate – Financial Institutions 

One Atlantic Center 

14th Floor 

1201 West Peachtree Street, NW 

Atlanta, GA 30309-3488 

Ken.Achenbach@BryanCave.com 

Receiver and Corporation 

Federal Deposit Insurance Corporation, 

Receiver of Century Security Bank, Duluth, Georgia 

7777 Baymeadows Way West, Suite 482e 

Jacksonville, Florida 32256 

Attention: Settlement Manager 

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and with respect to notice under Article XII: 

Federal Deposit Insurance Corporation 

Receiver of Century Security Bank, Duluth, Georgia 

7777 Baymeadows Way West 

Jacksonville, Florida 32256 

Attention: Managing Attorney 

13.8 Manner of Payment. All payments due under this Agreement shall be in lawful 

money of the United States of America in immediately available funds as each party hereto may 

specify to the other parties; provided, that in the event the Receiver or the Corporation is 

obligated to make any payment hereunder in the amount of $25,000.00 or less, such payment 

may be made by check. 

13.9 Costs, Fees and Expenses. Except as otherwise specifically provided herein, 

each party hereto agrees to pay all costs, fees and expenses which it has incurred in connection 

with or incidental to the matters contained in this Agreement, including without limitation any 

fees and disbursements to its accountants and counsel; provided, that the Assuming Institution 

shall pay all fees, costs and expenses (other than attorneys' fees incurred by the Receiver) 

incurred in connection with the transfer to it of any Assets or Liabilities Assumed hereunder or in 

accordance herewith. 

13.10 Waiver. Each of the Receiver, the Corporation and the Assuming Institution may 

waive its respective rights, powers or privileges under this Agreement; provided, that such 

waiver shall be in writing; and further provided, that no failure or delay on the part of the 

Receiver, the Corporation or the Assuming Institution to exercise any right, power or privilege 

under this Agreement shall operate as a waiver thereof, nor will any single or partial exercise of 

any right, power or privilege under this Agreement preclude any other or further exercise thereof 

or the exercise of any other right, power or privilege by the Receiver, the Corporation, or the 

Assuming Institution under this Agreement, nor will any such waiver operate or be construed as 

a future waiver of such right, power or privilege under this Agreement. 

13.11 Severability. If any provision of this Agreement is declared invalid or 

unenforceable, then, to the extent possible, all of the remaining provisions of this Agreement 

shall remain in full force and effect and shall be binding upon the parties hereto. 

13.12 Term of Agreement. This Agreement shall continue in full force and effect until 

the tenth (10th) anniversary of Bank Closing; provided, that the provisions of Section 6.3 and 6.4 

shall survive the expiration of the term of this Agreement. Provided, however, the receivership of 

the Failed Bank may be terminated prior to the expiration of the term of this Agreement; in such 

event, the guaranty of the Corporation, as provided in and in accordance with the provisions of 

Section 12.7 shall be in effect for the remainder of the term. Expiration of the term of this 

Agreement shall not affect any claim or liability of any party with respect to any (i) amount 

which is owing at the time of such expiration, regardless of when such amount becomes payable, 

and (ii) breach of this Agreement occurring prior to such expiration, regardless of when such 

breach is discovered. 

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13.13 Survival of Covenants, Etc. The covenants, representations, and warranties in 

this Agreement shall survive the execution of this Agreement and the consummation of the 

transactions contemplated hereunder. 

 [Signature Page Follows] 

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SCHEDULE 2.1 - Certain Liabilities Assumed by the Assuming Institution 

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Schedule 2.1a 

Exhibit to P&A Agreement 

Accounts Excluded from P&A Transaction 

Century Security Bank
 

Duluth, Georgia 

Century Security Bank has deposits associated with the Depository Organization (DO) Cede & Co as 

Nominee for DTC. The DO accounts do not pass to the Assuming Bank and are excluded from the 

transaction as described in section 2.1 of the P&A Agreement. The attached Schedule 2.1.a DO Detail 

Report identifies DO deposits consisting of 5 accounts with an outstanding balance of $10,262,900 of as 

of October 23, 2009. This schedule will be updated post closing with data as of Bank Closing date. 

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 SCHEDULE 3.1 - Certain Assets Purchased 

SEE ATTACHED LIST 

THE LIST(S) ATTACHED TO THIS SCHEDULE (OR SUBSCHEDULE(S)) AND THE 

INFORMATION THEREIN, IS AS OF THE DATE OF THE MOST RECENT 

PERTINENT DATA MADE AVAILABLE TO THE ASSUMING INSTITUTION AS 

PART OF THE INFORMATION PACKAGE. IT WILL BE ADJUSTED TO REFLECT 

THE COMPOSITION AND BOOK VALUE OF THE LOANS AND ASSETS AS OF THE 

DATE OF BANK CLOSING. THE LIST(S) MAY NOT INCLUDE ALL LOANS AND 

ASSETS (E.G., CHARGED OFF LOANS). THE LIST(S) MAY BE REPLACED WITH A 

MORE ACCURATE LIST POST CLOSING. 

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SCHEDULE 3.2 - Purchase Price of Assets or assets 

(a) cash and receivables from depository 

institutions, including cash items in the 

process of collection, plus 

 interest thereon: 

(b) securities (exclusive of the capital stock of 

Acquired Subsidiaries and FRB and FHLB 

stock), plus interest thereon: 

(c) federal funds sold and repurchase 

agreements, if any, including interest 

thereon: 

(d) Loans: 

(e) credit card business, if any, including all 

outstanding extensions of credit and 

offensive litigation, but excluding any class 

action lawsuits related to the credit card 

business: 

(f) Safe Deposit Boxes and related business, 

safekeeping business and trust business, if 

any: 

(g) Records and other documents: 

(h) Other Real Estate 

(i) boats, motor vehicles, aircraft, trailers, fire 

arms, repossessed collateral 

(j) capital stock of any Acquired Subsidiaries 

and FRB and FHLB stock: 

(k) amounts owed to the Failed Bank by any 

Acquired Subsidiary: 

(l) assets securing Deposits of public money, 

to the extent not otherwise purchased 

hereunder: 

Book Value 

As provided in Section 3.2(b) 

Book Value 

Book Value 

Book Value 

Book Value 

Book Value 

Book Value 

Book Value 

Book Value 

Book Value 

Book Value 

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(m) Overdrafts of customers: Book Value 

(n) rights, if any, with respect to Qualified As provided in Section 3.2(c) 

Financial Contracts. 

(o) rights of the Failed Bank to provide Book Value 

mortgage servicing for others and to have 

mortgage servicing provided to the Failed 

Bank by others and related contracts. 

assets subject to an option to purchase: 

(a) Bank Premises: Fair Market Value 

(b) Furniture and Equipment: Fair Market Value 

(c) Fixtures: Fair Market Value 

(d) Other Equipment: Fair Market Value 

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SCHEDULE 3.5(l) – Excluded Securities 

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SCHEDULE 4.15A 

LOANS SUBJECT TO LOSS SHARING UNDER THE 

SINGLE FAMILY SHARED-LOSS AGREEMENT 

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SCHEDULE 4.15B 

LOANS SUBJECT TO LOSS SHARING UNDER THE 

NON-SINGLE FAMILY SHARED-LOSS AGREEMENT 

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Schedule 7 

Exhibit to P&A Agreement 

Accounts Excluded from Calculation of Deposit Franchise Bid 

Premium
 

Century Security Bank
 

Duluth, Georgia 

The accounts identified below will pass to the Assuming Bank (unless otherwise noted). When calculating the premium 

to be paid on Assumed Deposits in a P&A transaction, the FDIC will exclude the following categories of deposit accounts: 

Category Description Amount 

I 

II 

III 

Non- DO Brokered Deposits 

CDARS 

Market Place Deposits (Quickrate) 

Total deposits excluded from Calculation of premium 

$401,061 

$24,509,979 

$24,911,040 

Category Description

 I Brokered Deposits 

Brokered deposit accounts are accounts for which the “depositor of record” is an agent, nominee, or custodian who 

deposits funds for a principal or principals to whom “pass-through” deposit insurance coverage may be extended. The 

FDIC separates brokered deposit accounts into 2 categories: 1) Depository Organization (DO) Brokered Deposits and 

2) Non-Depository Organization (Non-DO) Brokered Deposits. This distinction is made by the FDIC to facilitate our role 

as Receiver and Insurer. These terms will not appear on other “brokered deposit” reports generated by the institution. 

Non-DO Brokered Deposits pass to the Assuming Bank, but are excluded from Assumed Deposits when the deposit 

premium is calculated. Please see the attached “Schedule 7 Non-DO Broker Deposit Detail Report” for a listing of these 

accounts. This list will be updated post closing with balances as of Bank Closing date. 

DO Brokered Deposits (Cede & Co as Nominee for DTC), are typically excluded from Assumed Deposits in the P&A 

transaction. A list of these accounts is provided on “Schedule 2.1 DO Brokered Deposit Detail Report”. If, however, the 

terms of a particular transaction are altered and the DO Brokered Deposits pass to the Assuming Bank, they will not be 

included in Assumed Deposits for purposes of calculating the deposit premium. 

II CDARS 

CDARS deposits pass to the Assuming Bank, but are excluded from Assumed Deposits when the deposit premium is 

calculated. 

Century Security Bank did not participate in the CDARS program as of the date of the deposit download. If CDARS 

deposits are taken between the date of the deposit download and the Bank Closing Date, they will be identified post 

closing and made part of Schedule 7 to the P&A Agreement. 

III Market Place Deposits 

“Market Place Deposits” is a description given to deposits that may have been solicited via a money desk, internet 

subscription service (for example, Qwickrate), or similar programs. 

Century Security Bank does have Qwickrate deposits as identified above. The Qwickrate deposits are reported as time 

deposits in the Call Report. Please see the attached Schedule 7 – Qwickrate Deposit Detail Report for a listing of these 

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accounts as of October 23, 2009. This list will be updated post closing with balances as of Bank Closing date. 

This schedule provides a snapshot of account categories and balances as of October 23, 2009 which is the date of the 

deposit download. The deposit franchise bid premium will be calculated using account categories and balances as of 

Bank Closing Date that are reflected in the general ledger or subsystem as described above. The final numbers for 

Schedule 7 will be provided post closing. 

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EXHIBIT 2.3A 

FINAL NOTICE LETTER 

FINAL LEGAL NOTICE 

Claiming Requirements for Deposits 

Under 12 U.S.C. 1822(e) 

[Date] 

[Name of Unclaimed Depositor] 

[Address of Unclaimed Depositor] 

[Anytown, USA] 

Subject: [XXXXX – Name of Bank 

City, State] – In Receivership 

Dear [Sir/Madam]: 

As you may know, on [Date: Closing Date], the [Name of Bank (“The Bank”)] was 

closed and the Federal Deposit Insurance Corporation (“FDIC”) transferred [The Bank’s] accounts to 

[Name of Acquiring Institution]. 

According to federal law under 12 U.S.C., 1822(e), on [Date: eighteen months from the 

Closing Date], [Name of Acquiring Institution] must transfer the funds in your account(s) back to the 

FDIC if you have not claimed your account(s) with [Name of Acquiring Institution]. Based on the 

records recently supplied to us by [Name of Acquiring Institution], your account(s) currently fall into 

this category. 

This letter is your formal Legal Notice that you have until [Date: eighteen months from 

the Closing Date], to claim or arrange to continue your account(s) with [Name of Acquiring 

Institution]. There are several ways that you can claim your account(s) at [Name of Acquiring 

Institution]. It is only necessary for you to take any one of the following actions in order for your 

account(s) at [Name of Acquiring Institution] to be deemed claimed. In addition, if you have more than 

one account, your claim to one account will automatically claim all accounts: 

1.	 Write to [Name of Acquiring Institution] and notify them that you wish to keep your account(s) 

active with them. Please be sure to include the name of the account(s), the account number(s), the 

signature of an authorized signer on the account(s), name, and address. [Name of Acquiring 

Institution] address is: 

[123 Main Street 

Anytown, USA] 

2.	 Execute a new signature card on your account(s), enter into a new deposit agreement with [Name of 

Acquiring Institution], change the ownership on your account(s), or renegotiate the terms of your 

certificate of deposit account(s) (if any). 

3.	 Provide [Name of Acquiring Institution] with a change of address form. 

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4.	 Make a deposit to or withdrawal from your account(s). This includes writing a check on any account 

or having an automatic direct deposit credited to or an automatic withdrawal debited from an account. 

If you do not want to continue your account(s) with [Name of Acquiring Institution] for 

any reason, you can withdraw your funds and close your account(s). Withdrawing funds from one or 

more of your account(s) satisfies the federal law claiming requirement. If you have time deposits, such as 

certificates of deposit, [Name of Acquiring Institution] can advise you how to withdraw them without 

being charged an interest penalty for early withdrawal. 

If you do not claim ownership of your account(s) at [Name of Acquiring Institution by 

Date: eighteen months from the Closing Date] federal law requires [Name of Acquiring Institution] 

to return your deposits to the FDIC, which will deliver them as unclaimed property to the State indicated 

in your address in the Failed Institution’s records. If your address is outside of the United States, the 

FDIC will deliver the deposits to the State in which the Failed Institution had its main office. 12 U.S.C. § 

1822(e). If the State accepts custody of your deposits, you will have 10 years from the date of delivery to 

claim your deposits from the State. After 10 years you will be permanently barred from claiming your 

deposits. However, if the State refuses to take custody of your deposits, you will be able to claim them 

from the FDIC until the receivership is terminated. If you have not claimed your insured deposits before 

the receivership is terminated, and a receivership may be terminated at any time, all of your rights in those 

deposits will be barred. 

If you have any questions or concerns about these items, please contact [Bank 

Employee] at [Name of Acquiring Institution] by phone at [(XXX) XXX-XXXX]. 

Sincerely, 

[Name of Claims Specialist] 

[Title] 

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 ______________________________________ 

______________________ ________________________________ 

 

 

 

EXHIBIT 2.3B 

AFFIDAVIT OF MAILING 

AFFIDAVIT OF MAILING 

State of 

COUNTY OF 

I am employed as a [Title of Office] by the [Name of Acquiring Institution]. 

This will attest that on [Date of mailing], I caused a true and correct copy of the Final Legal Notice, 

attached hereto, to owners of unclaimed deposits of [Name of Failed Bank], City, State, to be prepared 

for deposit in the mail of the United States of America on behalf of the Federal Deposit Insurance 

Corporation. A list of depositors to whom the notice was mailed is attached. This notice was mailed to 

the depositor's last address as reflected on the books and records of the [Name of Failed Bank] as of the 

date of failure. 

[Name] 

[Title of Office] 

[Name of Acquiring Institution] 

Subscribed and sworn to before me this _______day of [Month, Year]. 

My commission expires: 

 [Name], Notary Public 

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[EXHIBIT 3.2(c) -- VALUATION OF CERTAIN 

QUALIFIED FINANCIAL CONTRACTS 

A. Scope 

Interest Rate Contracts - All interest rate swaps, forward rate agreements, interest rate 

futures, caps, collars and floors, whether purchased or written. 

Option Contracts - All put and call option contracts, whether purchased or written, on 

marketable securities, financial futures, foreign currencies, foreign exchange or foreign 

exchange futures contracts. 

Foreign Exchange Contracts - All contracts for future purchase or sale of foreign 

currencies, foreign currency or cross currency swap contracts, or foreign exchange 

futures contracts. 

B. Exclusions 

All financial contracts used to hedge assets and liabilities that are acquired by the 

Assuming Institution but are not subject to adjustment from Book Value. 

C. Adjustment 

The difference between the Book Value and market value as of Bank Closing. 

D. Methodology 

1. The price at which the Assuming Institution sells or disposes of Qualified 

Financial Contracts will be deemed to be the fair market value of such contracts, 

if such sale or disposition occurs at prevailing market rates within a predefined 

timetable as agreed upon by the Assuming Institution and the Receiver. 

2. In valuing all other Qualified Financial Contracts, the following principles will 

apply: 

(i) All known cash flows under swaps or forward exchange contracts shall be 

present valued to the swap zero coupon interest rate curve. 

(ii)	 All valuations shall employ prices and interest rates based on the actual 

frequency of rate reset or payment. 

(iii) Each tranche of amortizing contracts shall be separately valued. The total 

value of such amortizing contract shall be the sum of the values of its 

component tranches. 

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 (iv) For regularly traded contracts, valuations shall be at the midpoint of the 

bid and ask prices quoted by customary sources (e.g., The Wall Street 

Journal, Telerate, Reuters or other similar source) or regularly traded 

exchanges. 

(v)	 For all other Qualified Financial Contracts where published market quotes 

are unavailable, the adjusted price shall be the average of the bid and ask 

price quotes from three (3) securities dealers acceptable to the Receiver 

and Assuming Institution as of Bank Closing. If quotes from securities 

dealers cannot be obtained, an appraiser acceptable to the Receiver and the 

Assuming Institution will perform a valuation based on modeling, 

correlation analysis, interpolation or other techniques, as appropriate.] 

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 EXHIBIT 4.13
 

INTERIM ASSET SERVICING ARRANGEMENT
 

(a) With respect to each asset (or liability) designated from time to time by the 

Receiver to be serviced by the Assuming Institution pursuant to this Arrangement, including any 

Assets sold by the Receiver but with respect to which the Receiver has an obligation to service or 

provide servicing support. (such being designated as "Pool Assets"), during the term of this 

Arrangement, the Assuming Institution shall: 

(i) Promptly apply payments received with respect to any Pool Assets; 

(ii) Reverse and return insufficient funds checks; 

(iii) Pay (A) participation payments to participants in Loans, as and when 

received; and (B) tax and insurance bills on Pool Assets as they come due, out of escrow funds 

maintained for purposes; 

(iv) Maintain accurate records reflecting (A) the payment history of Pool Assets, 

with updated information received concerning changes in the address or identity of the obligors 

and (B) usage of data processing equipment and employee services with respect to servicing 

duties;

 (v) Send billing statements to obligors on Pool Assets to the extent that such 

statements were sent by the Failed Bank; 

(vi) Send notices to obligors who are in default on Loans (in the same manner as 

the Failed Bank); 

(vii) Send to the Receiver, Attn: Managing Liquidator, at the address provided in 

Section 13.7 of the Agreement, or to such other person at such address as the Receiver may 

designate, via overnight delivery: (A) on a weekly basis, weekly reports for the Pool Assets, 

including, without limitation, reports reflecting collections and the trial balances, transaction 

journals and loan histories for Pool Assets having activity, together with copies of (1) checks 

received, (2) insufficient funds checks returned, (3) checks for payment to participants or for 

taxes and insurance, (4) pay-off requests, (5) notices to defaulted obligors, and (6) data 

processing and employee logs and (B) any other reports, copies or information as may be 

periodically or from time to time requested; 

(viii) Remit on a weekly basis to the Receiver, Attn: Division of Finance, Cashier 

Unit, Operations, at the address in (vii), via wire transfer to the account designated by the 

Receiver, or to such other person at such address and/or account as the Receiver may designate, 

all payments received on Pool Assets managed by the Assuming Institution or at such time and 

place and in such manner as may be directed by the Receiver; 

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(ix) prepare and timely file all information reports with appropriate tax 

authorities, and, if required by the Receiver, prepare and file tax returns and pay taxes due on or 

before the due date, relating to the Pool Assets; and 

(x) provide and furnish such other services, operations or functions as may be 

required with regard to Pool Assets, including, without limitation, as may be required with 

regard to any business, enterprise or agreement which is a Pool Asset, all as may be required by 

the Receiver. 

Notwithstanding anything to the contrary in this Section, the Assuming Institution shall not be 

required to initiate litigation or other collection proceedings against any obligor or any collateral 

with respect to any defaulted Loan. The Assuming Institution shall promptly notify the Receiver, 

at the address provided above in subparagraph (a)(vii), of any claims or legal actions regarding 

any Pool Asset. 

(b) The Receiver agrees to reimburse the Assuming Institution for actual, reasonable 

and necessary expenses incurred in connection with the performance of duties pursuant to this 

Arrangement, including expenses of photocopying, postage and express mail, and data 

processing and employee services (based upon the number of hours spent performing servicing 

duties). 

(c) The Assuming Bank shall provide the services described herein for a period of up 

to three hundred sixty-five (365) days after Bank Closing. 

(d) At any time during the term of this Arrangement, the Receiver may, upon written 

notice to the Assuming Institution, remove one or more Pool Assets from the Pool, at which time 

the Assuming Institution's responsibility with respect thereto shall terminate. 

(e) At the expiration of this Agreement or upon the termination of the Assuming 

Institution's responsibility with respect to any Pool Asset pursuant to paragraph (d) hereof, the 

Assuming Institution shall: 

(i) deliver to the Receiver (or its designee) all of the Credit Documents and Pool 

Records relating to the Pool Assets; and 

(ii) cooperate with the Receiver to facilitate the orderly transition of managing the 

Pool Assets to the Receiver (or its designee). 

(f) At the request of the Receiver, the Assuming Institution shall perform such 

transitional services with regard to the Pool Assets as the Receiver may request. Transitional 

services may include, without limitation, assisting in any due diligence process deemed 

necessary by the Receiver and providing to the Receiver or its designee(s) (x) information and 

data regarding the Pool Assets, including, without limitation, system reports and data downloads 

sufficient to transfer the Pool Assets to another system or systems, and (y) access to employees 

of the Assuming Institution involved in the management of, or otherwise familiar with, the Pool 

Assets. 

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EXHIBIT 4.15A 

SINGLE FAMILY SHARED-LOSS AGREEMENT 

This agreement for the reimbursement of loss sharing on certain single family residential 

mortgage loans (the “Single Family Shared-Loss Agreement”) shall apply when the Assuming 

Institution purchases Single Family Shared-Loss Loans as that term is defined herein. The terms 

hereof shall modify and supplement, as necessary, the terms of the Purchase and Assumption 

Agreement to which this Single Family Shared-Loss Agreement is attached as Exhibit 4.15A and 

incorporated therein. To the extent any inconsistencies may arise between the terms of the 

Purchase and Assumption Agreement and this Single Family Shared-Loss Agreement with 

respect to the subject matter of this Single Family Shared-Loss Agreement, the terms of this 

Single Family Shared-Loss Agreement shall control. References in this Single Family SharedLoss Agreement to a particular Section shall be deemed to refer to a Section in this Single 

Family Shared-Loss Agreement, unless the context indicates that it is intended to be a reference 

to a Section of the Purchase and Assumption Agreement. 

ARTICLE I -- DEFINITIONS 

The capitalized terms used in this Single Family Shared-Loss Agreement that are not defined in 

this Single Family Shared-Loss Agreement are defined in the Purchase and Assumption 

Agreement. In addition to the terms defined above, defined below are certain additional terms 

relating to loss-sharing, as used in this Single Family Shared-Loss Agreement. 

“Accounting Records” means the subsidiary system of record on which the loan 

history and balance of each Single Family Shared-Loss Loan is maintained; individual loan files 

containing either an original or copies of documents that are customary and reasonable with 

respect to loan servicing, including management and disposition of Other Real Estate; the 

records documenting alternatives considered with respect to loans in default or for which a 

default is reasonably foreseeable; records of loss calculations and supporting documentation with 

respect to line items on the loss calculations; and, monthly delinquency reports and other 

performance reports customarily utilized by the Assuming Institution in management of loan 

portfolios. 

“Accrued Interest” means, with respect to Single Family Shared-Loss Loans, the 

amount of earned and unpaid interest at the note rate specified in the applicable loan documents, 

limited to 90 days. 

“Affiliate” shall have the meaning set forth in the Purchase and Assumption 

Agreement; provided, that, for purposes of this Single Family Shared-Loss Agreement, no Third 

Party Servicer shall be deemed to be an Affiliate of the Assuming Institution. 

“Commencement Date” means the first calendar day following the Bank 

Closing. 

“Commercial Shared-Loss Agreement” means the Commercial and Other 

Assets Shared-Loss Agreement attached to the Purchase and Assumption Agreement as Exhibit 

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4.15B. 

“Cumulative Loss Amount” means the sum of the Monthly Loss Amounts less 

the sum of all Recovery Amounts. 

“Cumulative Servicing Amount” means the sum of the Period Servicing 

Amounts for every consecutive twelve-month period prior to and ending on the True-Up 

Measurement Date in respect of each of the Shared-Loss Agreements during which the losssharing provisions of the applicable Shared-Loss Agreement is in effect. 

“Cumulative Shared-Loss Amount” means the excess, if any, of the 

Cumulative Loss Amount over the First Loss Tranche. 

“Cumulative Shared-Loss Payments” means (i) the aggregate of all of the 

payments made or payable to the Assuming Institution under the Shared-Loss Agreements minus 

(ii) the aggregate of all of the payments made or payable to the Receiver under the Shared-Loss 

Agreements. 

“Customary Servicing Procedures” means procedures (including collection 

procedures) that the Assuming Institution (or, to the extent a Third Party Servicer is engaged, the 

Third Party Servicer) customarily employs and exercises in servicing and administering 

mortgage loans for its own accounts and the servicing procedures established by FNMA or 

FHLMC (as in effect from time to time), which are in accordance with accepted mortgage 

servicing practices of prudent lending institutions. 

“Deficient Valuation” means the determination by a court in a bankruptcy 

proceeding that the value of the collateral is less than the amount of the loan in which case the 

loss will be the difference between the then unpaid principal balance (or the NPV of a modified 

loan that defaults) and the value of the collateral so established. 

“Examination Criteria” means the loan classification criteria employed by, or 

any applicable regulations of, the Assuming Institution’s Chartering Authority at the time such 

action is taken, as such criteria may be amended from time to time. 

“Home Equity Loans” means loans or funded portions of lines of credit secured 

by mortgages on one-to four-family residences or stock of cooperative housing associations, 

where the Failed Bank did not have a first lien on the same property as collateral. 

“Final Shared-Loss Month” means the calendar month in which the tenth 

anniversary of the Commencement Date occurs. 

“Final Shared-Loss Recovery Month” means the calendar month in which the 

tenth anniversary of the Commencement Date occurs. 

“Foreclosure Loss” means the loss realized when the Assuming Institution has 

completed the foreclosure on a Single Family Shared-Loss Loan and realized final recovery on 

the collateral through liquidation and recovery of all insurance proceeds. Each Foreclosure Loss 

shall be calculated in accordance with the form and methodology specified in Exhibit 2a or 

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Exhibit 2a(1). 

“Investor-Owned Residential Loans” means Loans, excluding advances made 

pursuant to Home Equity Loans, that are secured by mortgages on one- to four family residences 

or stock of cooperative housing associations that are not owner-occupied. These loans can be 

treated as Restructured Loans on a commercially reasonable basis and can be a restructured 

under terms separate from the Exhibit 5 standards. Please refer to Exhibit 2b for guidance in 

Calculation of Loss for Restructured Loans. 

“Loss” means a Foreclosure Loss, Restructuring Loss, Short Sale Loss, Portfolio 

Loss, Modification Default Loss or Deficient Valuation. 

“Loss Amount” means the dollar amount of loss incurred and reported on the 

Monthly Certificate for a Single Family Shared-Loss Loan. 

“Modification Default Loss” means the loss calculated in Exhibits 2a(1) and 

2c(1) for single family loans modified under this part of the agreement that default and result in a 

foreclosure or short sale. 

“Modification Guidelines” has the meaning provided in Section 2.1(a) of this 

Single Family Shared-Loss Agreement. 

“Monthly Certificate” has the meaning provided in Section 2.1(b) of this Single 

Family Shared-Loss Agreement. 

“Monthly Loss Amount” means the sum of all Foreclosure Losses, Restructuring 

Losses, Short Sale Losses, Portfolio Losses, Modification Default Losses and losses in 

connection with Deficient Valuations realized by the Assuming Institution for any Shared Loss 

Month. 

“Monthly Shared-Loss Amount” means the change in the Cumulative SharedLoss Amount from the beginning of each month to the end of each month. 

“Neutral Member” has the meaning provided in Section 2. 1(f)(ii) of this Single 

Family Shared-Loss Agreement. 

“Period Servicing Amount” means, for any twelve month period with respect to 

each of the Shared-Loss Agreements during which the loss-sharing provisions of the applicable 

Shared-Loss Agreement are in effect, the product of (i) the simple average of the principal 

amount of Shared-Loss Loans and Shared-Loss Assets (other than the Shared-Loss Securities) 

(in each case as defined in the Shared-Loss Agreements), as the case may be, at the beginning of 

such period and at the end of such period times (ii) one percent (1%). 

“Portfolio Loss” means the loss realized on either (i) a portfolio sale of Single 

Family Shared-Loss Loans in accordance with the terms of Article IV or (ii) the sale of a loan 

with the consent of the Receiver as provided in Section 2.7. 

“Recovery Amount” means, with respect to any period prior to the Termination 

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Date, the amount of collected funds received by the Assuming Institution that (i) are applicable 

against a Foreclosure Loss which has previously been paid to the Assuming Institution by the 

Receiver or (ii) gains realized from a Section 4.1 sale of Single Family Shared-Loss Loans for 

which the Assuming Institution has previously received a Restructuring Loss payment from the 

Receiver (iii) or any incentive payments from national programs paid to an investor or borrower 

on loans that have been modified or otherwise treated (short sale or foreclosure) in accordance 

with Exhibit 5. 

“Restructuring Loss” means the loss on a modified or restructured loan 

measured by the difference between (a) the principal, Accrued Interest, tax and insurance 

advances, third party or other fees due on a loan prior to the modification or restructuring, and 

(b) the net present value of estimated cash flows on the modified or restructured loan, discounted 

at the Then-Current Interest Rate. Each Restructuring Loss shall be calculated in accordance with 

the form and methodology attached as Exhibit 2b, as applicable. 

“Restructured Loan” means a Single Family Shared-Loss Loan for which the 

Assuming Institution has received a Restructuring Loss payment from the Receiver. This applies 

to owner occupied and investor owned residences. 

“Servicing Officer” has the meaning provided in Section 2.1(b) of this Single 

Family Shared-Loss Agreement. 

“Shared Loss Payment Trigger” means when the sum of the Cumulative Loss 

Amount under this Single Family Shared-Loss Agreement and the Shared-Loss Amount under 

the Commercial and Other Assets Shared-Loss Agreement, exceeds the First Loss Tranche. If 

the First Loss Tranche is zero or a negative number, the Shared Loss Payment Trigger shall be 

deemed to have been reached upon Bank Closing. 

“Shared-Loss Month” means each calendar month between the Commencement 

Date and the last day of the month in which the tenth anniversary of the Commencement Date 

occurs, provided that, the first Shared-Loss Month shall begin on the Commencement Date and 

end on the last day of that month. 

“Short-Sale Loss” means the loss resulting from the Assuming Institution’s 

agreement with the mortgagor to accept a payoff in an amount less than the balance due on the 

loan (including the costs of any cash incentives to borrower to agree to such sale or to maintain 

the property pending such sale), further provided, that each Short-Sale Loss shall be calculated in 

accordance with the form and methodology specified in Exhibit 2c or Exhibit 2c(1). 

“Single Family Shared-Loss Loans” means the single family one-to-four 

residential mortgage loans (whether owned by the Assuming Institution or any Subsidiary) 

identified on Schedule 4.15A of the Purchase and Assumption Agreement. 

“Stated Threshold” means total losses under the shared loss agreements in the 

amount of ($26,000,000.00). 

“Termination Date” means the last day of the Final Shared-Loss Recovery 

Month. 

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“Then-Current Interest Rate” means the most recently published Freddie Mac 

survey rate for 30-year fixed-rate loans. 

“Third Party Servicer” means any servicer appointed from time to time by the 

Assuming Institution or any Affiliate of the Assuming Institution to service the Shared-Loss 

Loans on behalf of the Assuming Institution, the identity of which shall be given to the Receiver 

prior to or concurrent with the appointment thereof. 

ARTICLE II -- SHARED-LOSS ARRANGEMENT 

2.1 Shared-Loss Arrangement. 

(a) Loss Mitigation and Consideration of Alternatives. For each Single 

Family Shared-Loss Loan in default or for which a default is reasonably foreseeable, the 

Assuming Institution shall undertake reasonable and customary loss mitigation efforts, in 

accordance with any of the following programs selected by Assuming Institution in its sole 

discretion, Exhibit 5 (FDIC Mortgage Loan Modification Program), the United States Treasury's 

Home Affordable Modification Program Guidelines or any other modification program approved 

by the United States Treasury Department, the Corporation, the Board of Governors of the 

Federal Reserve System or any other governmental agency (it being understood that the 

Assuming Institution can select different programs for the various Single Family Shared-Loss 

Loans) (such program chosen, the “Modification Guidelines”). After selecting the applicable 

Modification Guideline for any such Single Family Shared-Loss Loan, the Assuming Institution 

shall document its consideration of foreclosure, loan restructuring under such Modification 

Guideline chosen, and short-sale (if short-sale is a viable option) alternatives and shall select the 

alternative the Assuming Institution believes, based on its estimated calculations, will result in 

the least Loss. Losses on Home Equity Loans shall be shared under the charge-off policies of the 

Assuming Institution’s Examination Criteria as if they were Single Family Shared-Loss Loans 

with respect to the calculation of the Stated Threshold. Assuming Institution shall retain its 

calculations of the estimated loss under each alternative, such calculations to be provided to the 

Receiver upon request. For the avoidance of doubt and notwithstanding anything herein to the 

contrary, (i) the Assuming Institution is not required to modify or restructure any Single Family 

Shared-Loss Loan on more than one occasion and (ii) the Assuming Institution is not required to 

consider any alternatives with respect to any Shared-Loss Loan in the process of foreclosure as 

of the Bank Closing and shall be entitled to continue such foreclosure measures and recover the 

Foreclosure Loss as provided herein, and (iii) the Assuming Institution shall have a transition 

period of up to 90 days after Bank Closing to implement the Modification Guidelines, during 

which time, the Assuming Institution may submit claims under such guidelines as may be in 

place at the Failed Bank. 

(b) Monthly Certificates. 

Not later than fifteen (15) days after the end of each Shared-Loss Month, 

beginning with the month in which the Commencement Date occurs and ending in the month in 

which the tenth anniversary of the Commencement Date occurs, the Assuming Institution shall 

deliver to the Receiver a certificate, signed by an officer of the Assuming Institution involved in, 

or responsible for, the administration and servicing of the Single Family Shared-Loss Loans 

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whose name appears on a list of servicing officers furnished by the Assuming Institution to the 

Receiver, (a “Servicing Officer”) setting forth in such form and detail as the Receiver may 

reasonably specify (a “Monthly Certificate”): 

(i)	 (A) a schedule substantially in the form of Exhibit 1 listing: 

(i) each Single Family Shared-Loss Loan for which a Loss Amount 

(calculated in accordance with the applicable Exhibit) is being 

claimed, the related Loss Amount for each Single Family SharedLoss Loan, and the total Monthly Loss Amount for all Single 

Family Shared-Loss Loans; 

(ii) each Single Family Shared-Loss Loan for which a Recovery 

Amount was received, the Recovery Amount for each Single 

Family Shared-Loss Loan, and the total Recovery Amount for all 

Single Family Shared-Loss Loans; 

(iii) the total Monthly Loss Amount for all Single Family SharedLoss Loans minus the total monthly Recovery Amount for all 

Single Family Shared-Loss Loans; 

(iv) the Cumulative Shared-Loss Amount as of the beginning and 

end of the month; 

(v) the Monthly Shared Loss Amount; 

(vi) the result obtained in (v) times 80%, or times 95% if the Stated 

Threshold has been reached, which in either case is the amount to 

be paid under Section 2.1(d) of this Single Family Shared-Loss 

Agreement by the Receiver to the Assuming Institution if the 

amount is a positive number, or by the Assuming Institution to the 

Receiver if the amount is a negative number; 

(ii)	 (B) for each of the Single Family Shared-Loss Loans for which 

a Loss is claimed for that Shared-Loss Month, a schedule showing 

the calculation of the Loss Amount using the form and 

methodology shown in Exhibit 2a, Exhibit 2b, or Exhibit 2c, as 

applicable. 

(iii)	 (C) For each of the Restructured Loans where a gain or loss is 

realized in a sale under Section 4.1 or 4.2, a schedule showing the 

calculation using the form and methodology shown in Exhibit 2d. 

(iv)	 (D) a portfolio performance and summary schedule 

substantially in the form shown in Exhibit 3. 

(c) Monthly Data Download. Not later than fifteen (15) days after the end of 

each month, beginning with the month in which the Commencement Date occurs and ending 

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with the Final Shared-Loss Recovery Month, Assuming Institution shall provide Receiver: 

(v)	 (i) the servicing file in machine-readable format including but 

not limited to the following fields for each outstanding Single 

Family Shared-Loss Loan, as applicable: 

(A) Loan number 

(B) FICO score 

(C) Origination date 

(D) Original principal amount 

(E) Maturity date 

(F) Paid-to date 

(G) Last payment date 

(H) Loan status (bankruptcy, in foreclosure, etc.) 

(I) Delinquency counters 

(J) Current principal balance 

(K) Current escrow account balance 

(L) Current Appraisal/BPO value 

(M) Current Appraisal/BPO date 

(N) Interest rate 

(O) Monthly principal and interest payment amount 

(P) Monthly escrow payment for taxes and insurance 

(Q) Interest rate type (fixed or adjustable) 

(R) If adjustable: index, margin, next interest rate reset date 

(S) Payment/Interest rate cap and/or floor 

(T) Underwriting type (Full doc, Alt Doc, No Doc) 

(U) Lien type (1st, 2nd) 

(V) Amortization type (amortizing or I/O) 

(W) Property address, including city, state, zip code 

(X) A code indicating whether the Mortgaged Property is owner 

occupied 

(Y) Property type (single-family detached, condominium, duplex, etc.) 

(vi)	 (ii) An Excel file for ORE held as a result of foreclosure on a 

Single Family Shared-Loss Loan listing: 

(A) Foreclosure date 

(B) Unpaid loan principal balance 

(C) Appraised value or BPO value, as applicable 

(D) Projected liquidation date 

Notwithstanding the foregoing, the Assuming Institution shall not be required to provide 

any of the foregoing information to the extent it is unable to do so as a result of the Failed Bank’s 

or Receiver’s failure to provide information required to produce the information set forth in this 

Section 2.1(c); provided, that the Assuming Institution shall, consistent with Customary 

Servicing Procedures seek to produce any such missing information or improve any inaccurate 

information previously provided to it. 

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(d) Payments With Respect to Shared-Loss Assets. 

(i) Losses Under the Stated Threshold. After the Shared Loss Payment 

Trigger is reached, not later than fifteen (15) days after the date on which the Receiver receives 

the Monthly Certificate, the Receiver shall pay to the Assuming Institution, in immediately 

available funds, an amount equal to eighty percent (80%) of the Monthly Shared-Loss Amount 

reported on the Monthly Certificate. If the total Monthly Shared-Loss Amount reported on the 

Monthly Certificate is a negative number, the Assuming Institution shall pay to the Receiver in 

immediately available funds eighty percent (80%) of that amount. 

(ii) Losses in Excess of the Stated Threshold. In the event that the sum of 

the Cumulative Loss Amount under this Single Family Shared-Loss Agreement and the Stated 

Loss Amount under the Commercial Shared-Loss Agreement meets or exceeds the Stated 

Threshold, the loss/recovery sharing percentages set forth herein shall change from 80/20 to 95/5 

and thereafter the Receiver shall pay to the Assuming Institution, in immediately available funds, 

an amount equal to ninety-five percent (95%) of the Monthly Shared-Loss Amount reported on 

the Monthly Certificate. If the Monthly Shared-Loss Amount reported on the Monthly Certificate 

is a negative number, the Assuming Institution shall pay to the Receiver in immediately available 

funds ninety-five percent (95%) of that amount. 

(e) Limitations on Shared-Loss Payment. The Receiver shall not be 

required to make any payments pursuant to Section 2.1(d) with respect to any Foreclosure Loss, 

Restructuring Loss, Short Sale Loss or Portfolio Loss that the Receiver determines, based upon 

the criteria set forth in this Single Family Shared-Loss Agreement (including the analysis and 

documentation requirements of Section 2.1(a)) or Customary Servicing Procedures, should not 

have been effected by the Assuming Institution; provided, however, (x) the Receiver must 

provide notice to the Assuming Institution detailing the grounds for not making such payment, 

(y) the Receiver must provide the Assuming Institution with a reasonable opportunity to cure any 

such deficiency and (z) (1) to the extent curable, if cured, the Receiver shall make payment with 

respect to the properly effected Loss, and (2) to the extent not curable, notwithstanding the 

foregoing, the Receiver shall make a payment as to all Losses (or portion of Losses) that were 

effected which would have been payable as a Loss if the Assuming Institution had properly 

effected such Loss. In the event that the Receiver does not make any payment with respect to 

Losses claimed pursuant to Section 2.1(d), the Receiver and Assuming Institution shall, upon 

final resolution, make the necessary adjustments to the Monthly Shared-Loss Amount for that 

Monthly Certificate and the payment pursuant to Section 2.1(d) above shall be adjusted 

accordingly. 

(f) Payments by Wire-Transfer. All payments under this Single Family 

Shared-Loss Agreement shall be made by wire-transfer in accordance with the wire-transfer 

instructions on Exhibit 4. 

 (g) Payment in the Event Losses Fail to Reach Expected Level. On the 

date that is 45 days following the last day (such day, the “True-Up Measurement Date”) of the 

calendar month in which the tenth anniversary of the calendar day following the Bank Closing 

occurs, the Assuming Institution shall pay to the Receiver fifty percent (50%) of the excess, if 

any, of (i) twenty percent (20%) of the Stated Threshold less (ii) the sum of (A) twenty-five 

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percent (25%) of the asset premium (discount) plus (B) twenty-five percent (25%) of the 

Cumulative Shared-Loss Payments plus (C) the Cumulative Servicing Amount. The Assuming 

Institution shall deliver to the Receiver not later than 30 days following the True-Up 

Measurement Date, a schedule, signed by an officer of the Assuming Institution, setting forth in 

reasonable detail the calculation of the Cumulative Shared-Loss Payments and the Cumulative 

Servicing Amount. 

2.2 Auditor Report; Right to Audit. 

(a) Within ninety (90) days after the end of each fiscal year during which the 

Receiver makes any payment to the Assuming Institution under this Single Family Shared-Loss 

Agreement, the Assuming Institution shall deliver to the Corporation and to the Receiver a report 

signed by its independent public accountants stating that they have reviewed the terms of this 

Single Family Shared-Loss Agreement and that, in the course of their annual audit of the 

Assuming Institution’s books and records, nothing has come to their attention suggesting that 

any computations required to be made by the Assuming Institution during such year pursuant to 

this Article II were not made by the Assuming Institution in accordance herewith. In the event 

that the Assuming Institution cannot comply with the preceding sentence, it shall promptly 

submit to the Receiver corrected computations together with a report signed by its independent 

public accountants stating that, after giving effect to such corrected computations, nothing has 

come to their attention suggesting that any computations required to be made by the Assuming 

Institution during such year pursuant to this Article II were not made by the Assuming Institution 

in accordance herewith. In such event, the Assuming Institution and the Receiver shall make all 

such accounting adjustments and payments as may be necessary to give effect to each correction 

reflected in such corrected computations, retroactive to the date on which the corresponding 

incorrect computation was made. It is the intention of this provision to align the timing of the 

audit required under this Single-Family Shared-Loss Agreement with the examination audit 

required pursuant to 12 CFR Section 363. 

(b) The Receiver or the FDIC in its corporate capacity (“Corporation”) may 

perform an audit or audits to determine the Assuming Institution’s compliance with the 

provisions of this Single Family Shared-Loss Agreement, including this Article II, by providing 

not less than ten (10) Business Days’ prior written notice. Assuming Institution shall provide 

access to pertinent records and proximate working space in Assuming Institution’s facilities. The 

scope and duration of any such audit shall be within the reasonable discretion of the Receiver or 

the Corporation, but shall in no event be administered in a manner that unreasonably interferes 

with the operation of the Assuming Institution’s business. The Receiver or the Corporation, as 

the case may be, shall bear the expense of any such audit. In the event that any corrections are 

necessary as a result of such an audit or audits, the Assuming Institution and the Receiver shall 

make such accounting adjustments and payments as may be necessary to give retroactive effect 

to such corrections. 

2.3 Withholdings. Notwithstanding any other provision in this Article II, the 

Receiver, upon the direction of the Director (or designee) of the Federal Deposit Insurance 

Corporation’s Division of Resolutions and Receiverships, may withhold payment for any 

amounts included in a Monthly Certificate delivered pursuant to Section 2.1, if in its good faith 

and reasonable judgment there is a reasonable basis under the requirements of this Single Family 

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Shared-Loss Agreement for denying the eligibility of an item for which reimbursement or 

payment is sought under such Section. In such event, the Receiver shall provide a written notice 

to the Assuming Institution detailing the grounds for withholding such payment. At such time as 

the Assuming Institution demonstrates to the satisfaction of the Receiver, in its reasonable 

judgment, that the grounds for such withholding of payment, or portion of payment, no longer 

exist or have been cured, then the Receiver shall pay the Assuming Institution the amount 

withheld which the Receiver determines is eligible for payment, within fifteen (15) Business 

Days. 

2.4 Books and Records. The Assuming Institution shall at all times during the term 

of this Single Family Shared-Loss Agreement keep books and records sufficient to ensure and 

document compliance with the terms of this Single Family Shared-Loss Agreement, including 

but not limited to (a) documentation of alternatives considered with respect to defaulted loans or 

loans for which default is reasonably foreseeable, (b) documentation showing the calculation of 

loss for claims submitted to the Receiver, (c) retention of documents that support each line item 

on the loss claim forms, and (d) documentation with respect to the Recovery Amount on loans 

for which the Receiver has made a loss-share payment 

2.5 Information. The Assuming Institution shall promptly provide to the Receiver 

such other information, including but not limited to, financial statements, computations, and 

bank policies and procedures, relating to the performance of the provisions of this Single Family 

Shared-Loss Agreement, as the Receiver may reasonably request from time to time. 

2.6 Tax Ruling. The Assuming Institution shall not at any time, without the 

Receiver’s prior written consent, seek a private letter ruling or other determination from the 

Internal Revenue Service or otherwise seek to qualify for any special tax treatment or benefits 

associated with any payments made by the Receiver pursuant to this Single Family Shared-Loss 

Agreement. 

2.7 Sale of Single Family Shared-Loss Loans. The Receiver shall be relieved of its 

obligations with respect to a Single Family Shared-Loss Loan upon payment of a Foreclosure 

Loss amount or a Short Sale Loss amount with respect to such Single Family Shared-Loss Loan 

or upon the sale of a Single Family Shared-Loss Loan by Assuming Institution to a person or 

entity that is not an Affiliate; provided, however, that if the Receiver consents to the sale of any 

such Single Family Shared-Loss Loan, any loss on such sale shall be a Portfolio Loss. The 

Assuming Institution shall provide the Receiver with timely notice of any such sale. 

Notwithstanding the foregoing, a sale of the Single Family Shared-Loss Loan, for purposes of 

this Section 2.7, shall not be deemed to have occurred as the result of (i) any change in the 

ownership or control of Assuming Institution or the transfer of any or all of the Single Family 

Shared-Loss Loan(s) to any Affiliate of Assuming Institution, (ii) a merger by Assuming 

Institution with or into any other entity, or (iii) a sale by Assuming Institution of all or 

substantially all of its assets. 

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ARTICLE III - RULES REGARDING THE ADMINISTRATION OF SINGLE FAMILY 

SHARED-LOSS LOANS 

3.1 Agreement with Respect to Administration. The Assuming Institution shall 

(and shall cause any of its Affiliates to which the Assuming Institution transfers any Single 

Family Shared-Loss Loans to) manage, administer, and collect the Single Family Shared-Loss 

Loans while owned by the Assuming Institution or any Affiliate thereof during the term of this 

Single Family Shared-Loss Agreement in accordance with the rules set forth in this Article III. 

The Assuming Institution shall be responsible to the Receiver in the performance of its duties 

hereunder and shall provide to the Receiver such reports as the Receiver reasonably deems 

advisable, including but not limited to the reports required by Sections 2.1, 2.2 and 3.3 hereof, 

and shall permit the Receiver to monitor the Assuming Institution’s performance of its duties 

hereunder. 

3.2 Duties of the Assuming Institution. (a) In performance of its duties under this 

Article III, the Assuming Institution shall: 

(i) manage and administer each Single Family Shared-Loss Loan in accordance with 

Assuming Institution’s usual and prudent business and banking practices and Customary 

Servicing Procedures; 

(ii) exercise its best business judgment in managing, administering and collecting amounts 

owed on the Single Family Shared-Loss Loans; 

(iii) use commercially reasonable efforts to maximize Recoveries with respect to Losses on 

Single Family Shared-Loss Loans without regard to the effect of maximizing collections on 

assets held by the Assuming Institution or any of its Affiliates that are not Single Family 

Shared-Loss Loans; 

(iv) retain sufficient staff (in Assuming Institution’s discretion) to perform its duties 

hereunder; and 

(v) other than as provided in Section 2.1(a), comply with the terms of the Modification 

Guidelines for any Single Family Shared-Loss Loans meeting the requirements set forth 

therein. For the avoidance of doubt, the Assuming Institution may propose exceptions to 

Exhibit 5 (the FDIC Loan Modification Program) for a group of Loans with similar 

characteristics, with the objectives of (1) minimizing the loss to the Assuming Institution and 

the FDIC and (2) maximizing the opportunity for qualified homeowners to remain in their 

homes with affordable mortgage payments. 

(b) Any transaction with or between any Affiliate of the Assuming Institution 

with respect to any Single Family Shared-Loss Loan including, without limitation, the execution 

of any contract pursuant to which any Affiliate of the Assuming Institution will manage, 

administer or collect any of the Single Family Shared-Loss Loans will be provided to FDIC for 

informational purposes and if such transaction is not entered into on an arm’s length basis on 

commercially reasonable terms such transaction shall be subject to the prior written approval of 

the Receiver. 

3.3 Shared-Loss Asset Records and Reports. The Assuming Institution shall 

establish and maintain such records as may be appropriate to account for the Single Family 

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Shared-Loss Loans in such form and detail as the Receiver may reasonably require, and to enable 

the Assuming Institution to prepare and deliver to the Receiver such reports as the Receiver may 

from time to time request regarding the Single Family Shared-Loss Loans and the Monthly 

Certificates required by Section 2.1 of this Single Family Shared-Loss Agreement. 

3.4 Related Loans. 

(a) Assuming Institution shall use its best efforts to determine which loans are 

“Related Loans”, as hereinafter defined. The Assuming Institution shall not manage, administer 

or collect any “Related Loan” in any manner that would have the effect of increasing the amount 

of any collections with respect to the Related Loan to the detriment of the Single Family SharedLoss Loan to which such loan is related. A “Related Loan” means any loan or extension of credit 

held by the Assuming Institution at any time on or prior to the end of the Final Shared-Loss 

Month that is made to an Obligor of a Single Family Shared-Loss Loan. 

(b) The Assuming Institution shall prepare and deliver to the Receiver with 

the Monthly Certificates for the calendar months ending June 30 and December 31, a schedule of 

all Related Loans on the Accounting Records of the Assuming Institution as of the end of each 

such semi-annual period. 

3.5 Legal Action; Utilization of Special Receivership Powers. The Assuming 

Institution shall notify the Receiver in writing (such notice to be given in accordance with Article 

V below and to include all relevant details) prior to utilizing in any legal action any special legal 

power or right which the Assuming Institution derives as a result of having acquired an asset 

from the Receiver, and the Assuming Institution shall not utilize any such power unless the 

Receiver shall have consented in writing to the proposed usage. The Receiver shall have the right 

to direct such proposed usage by the Assuming Institution and the Assuming Institution shall 

comply in all respects with such direction. Upon request of the Receiver, the Assuming 

Institution will advise the Receiver as to the status of any such legal action. The Assuming 

Institution shall immediately notify the Receiver of any judgment in litigation involving any of 

the aforesaid special powers or rights. 

3.6 Third Party Servicer. The Assuming Institution may perform any of its 

obligations and/or exercise any of its rights under this Single Family Shared-Loss Agreement 

through or by one or more Third Party Servicers, who may take actions and make expenditures 

as if any such Third Party Servicer was the Assuming Institution hereunder (and, for the 

avoidance of doubt, such expenses incurred by any such Third Party Servicer on behalf of the 

Assuming Institution shall be included in calculating Losses to the extent such expenses would 

be included in such calculation if the expenses were incurred by Assuming Institution); provided, 

however, that the use thereof by the Assuming Institution shall not release the Assuming 

Institution of any obligation or liability hereunder. 

ARTICLE IV – PORTFOLIO SALE 

4.1 Assuming Institution Portfolio Sales of Remaining Single Family SharedLoss Loans. The Assuming Institution shall have the right with the concurrence of the Receiver 

to liquidate for cash consideration, from time to time in one or more transactions, all or a portion 

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of Single Family Shared-Loss Loans held by the Assuming Institution at any time prior to the 

Termination Date (“Portfolio Sales”). If the Assuming Institution exercises its option under this 

Section 4.1, it must give thirty (30) days notice in writing to the Receiver setting forth the details 

and schedule for the Portfolio Sale which shall be conducted by means of sealed bid sales to 

third parties, not including any of the Assuming Institution’s affiliates, contractors, or any 

affiliates of the Assuming Institution’s contractors. Sales of Restructured Loans shall be sold in a 

separate pool from Single Family Shared-Loss Loans not restructured. The Receiver’s review of 

the Assuming Institution’s proposed Portfolio Sale will be considered in a timely fashion and 

approval will not be unreasonably withheld, delayed or conditioned. 

4.2 Assuming Institution’s Liquidation of Remaining Single Family Shared-Loss 

Loans. In the event that the Assuming Institution does not conduct a Portfolio Sale pursuant to 

Section 4.1, the Receiver shall have the right, exercisable in its sole and absolute discretion, to 

require the Assuming Institution to liquidate for cash consideration, any Single Family SharedLoss Loans held by the Assuming Institution at any time after the date that is six months prior to 

the Termination Date. If the Receiver exercises its option under this Section 4.2, it must give 

notice in writing to the Assuming Institution, setting forth the time period within which the 

Assuming Institution shall be required to liquidate the Single Family Shared-Loss Loans. The 

Assuming Institution will comply with the Receiver’s notice and must liquidate the Single 

Family Shared-Loss Loans as soon as reasonably practicable by means of sealed bid sales to 

third parties, not including any of the Assuming Institution’s affiliates, contractors, or any 

affiliates of the Assuming Institution’s contractors. The selection of any financial advisor or 

other third party broker or sales agent retained for the liquidation of the remaining Single Family 

Shared-Loss Loans pursuant to this Section shall be subject to the prior approval of the Receiver, 

such approval not to be unreasonably withheld, delayed or conditioned. 

4.3 Calculation of Sale Gain or Loss. For Single Family Shared-Loss Loans that are 

not Restructured Loans gain or loss on the sales under Section 4.1 or Section 4.2 will be 

calculated as the sale price received by the Assuming Institution less the unpaid principal balance 

of the remaining Single Family Shared-Loss Loans. For any Restructured Loan included in the 

sale gain or loss on sale will be calculated as (a) the sale price received by the Assuming 

Institution less (b) the net present value of estimated cash flows on the Restructured Loan that 

was used in the calculation of the related Restructuring Loss plus (c) Loan principal payments 

collected by the Assuming Institution from the date the Loan was restructured to the date of sale. 

(See Exhibit 2d for example calculation). 

ARTICLE V -- LOSS-SHARING NOTICES GIVEN TO RECEIVER AND PURCHASER 

All notices, demands and other communications hereunder shall be in writing and shall 

be delivered by hand, or overnight courier, receipt requested, addressed to the parties as follows: 

If to Receiver, to: Federal Deposit Insurance Corporation as Receiver 

for Century Security Bank 

Division of Resolutions and Receiverships 

550 17th Street, N.W. 

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Washington, D.C. 20429 

Attention: Ralph Malami, Manager, Capital Markets 

with a copy to: Federal Deposit Insurance Corporation 

as Receiver for Century Security Bank, Duluth, 

Georgia Room E7056 

3501 Fairfax Drive, Arlington, VA 2226 

Attn: Special Issues Unit 

With respect to a notice under Section 3.5 of this Single Family Shared-Loss 

Agreement, copies of such notice shall be sent to: 

Federal Deposit Insurance Corporation 

Legal Division 7777 Baymeadows Way West 

Jacksonville, Florida 32256 

Attention: Managing Attorney 

If to Assuming Institution, to: 

Bank of Upson 

108 South Church Street 

Thomaston, Georgia 30286 

with a copy to: 

Kenneth M. Achenbach 

Bryan Cave Powel Goldstein LLP 

Associate – Financial Institutions 

One Atlantic Center 

14th Floor 

1201 West Peachtree Street, NW
 

Atlanta, GA 30309-3488 

Ken.Achenbach@BryanCave.com 

Such Persons and addresses may be changed from time to time by notice given 

pursuant to the provisions of this Article V. Any notice, demand or other 

communication delivered pursuant to the provisions of this Article V shall be 

deemed to have been given on the date actually received. 

ARTICLE VI -- MISCELLANEOUS 

6.1. Expenses. Except as otherwise expressly provided herein, all costs and expenses 

incurred by or on behalf of a party hereto in connection with this Single Family Shared-Loss 

Agreement shall be borne by such party whether or not the transactions contemplated herein 

shall be consummated. 

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6.2 Successors and Assigns; Specific Performance. All terms and provisions of 

this Single Family Shared-Loss Agreement shall be binding upon and shall inure to the benefit of 

the parties hereto only; provided, however, that, Receiver may assign or otherwise transfer this 

Single Family Shared-Loss Agreement (in whole or in part) to the Federal Deposit Insurance 

Corporation in its corporate capacity without the consent of Assuming Institution. 

Notwithstanding anything to the contrary contained in this Single Family Shared-Loss 

Agreement, except as is expressly permitted in this Section 6.2, Assuming Institution may not 

assign or otherwise transfer this Single Family Shared-Loss Agreement (in whole or in part) 

without the prior written consent of the Receiver, which consent may be granted or withheld by 

the Receiver in its sole discretion, and any attempted assignment or transfer in violation of this 

provision shall be void ab initio. For the avoidance of doubt, a merger or consolidation of the 

Assuming Institution with and into another financial institution, the sale of all or substantially all 

of the assets of the Assuming Institution to another financial institution constitutes the transfer of 

this Single Family Shared-Loss Agreement which requires the consent of the Receiver; and for a 

period of thirty-six (36) months after Bank Closing, a merger or consolidation shall also include 

the sale by any individual shareholder, or shareholders acting in concert, of more than 9% of the 

outstanding shares of the Assuming Institution, or of its holding company, or of any subsidiary 

holding Shared-Loss Assets, or the sale of shares by the Assuming Institution or its holding 

company or any subsidiary holding Shared-Loss Assets, in a public or private offering, that 

increases the number of shares outstanding by more than 9%, constitutes the transfer of this 

Single Family Shared-Loss Agreement which requires the consent of the Receiver. However, no 

Loss shall be recognized as a result of any accounting adjustments that are made due to any such 

merger, consolidation or sale consented to by the FDIC. The FDIC’s consent shall not be 

required if the aggregate outstanding principal balance of Shared-Loss Assets is less than twenty 

percent (20%) of the initial aggregate balance of Shared-Loss Assets. 

6.3 Governing Law. This Single Family Shared-Loss Agreement shall be construed 

in accordance with federal law, or, if there is no applicable federal law, the laws of the State of 

New York, without regard to any rule of conflict of law that would result in the application of the 

substantive law of any jurisdiction other than the State of New York. 

6.4 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY 

IRREVOCABLY AND UNCONDITIONALLY WAIVES ALL RIGHT TO TRIAL BY JURY 

IN OR TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, ACTION, 

PROCEEDING OR COUNTERCLAIM, WHETHER SOUNDING IN CONTRACT, TORT OR 

OTHERWISE, ARISING OUT OF OR RELATING TO OR IN CONNECTION WITH THIS 

SINGLE FAMILY SHARED-LOSS AGREEMENT OR ANY OF THE TRANSACTIONS 

CONTEMPLATED HEREBY. 

6.5 Captions. All captions and headings contained in this Single Family Shared-Loss 

Agreement are for convenience of reference only and do not form a part of, and shall not affect 

the meaning or interpretation of, this Single Family Shared-Loss Agreement. 

6.6 Entire Agreement; Amendments. This Single Family Shared-Loss Agreement, 

along with the Commercial Shared-Loss Agreement and the Purchase and Assumption 

Agreement, including the Exhibits and any other documents delivered pursuant hereto or thereto, 

embody the entire agreement of the parties with respect to the subject matter hereof, and 

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supersede all prior representations, warranties, offers, acceptances, agreements and 

understandings, written or oral, relating to the subject matter herein. This Single Family SharedLoss Agreement may be amended or modified or any provision thereof waived only by a written 

instrument signed by both parties or their respective duly authorized agents. 

6.7 Severability. Whenever possible, each provision of this Single Family SharedLoss Agreement shall be interpreted in such manner as to be effective and valid under applicable 

law, but if any provision of this Single Family Shared-Loss Agreement is held to be prohibited 

by or invalid, illegal or unenforceable under applicable law, such provision shall be construed 

and enforced as if it had been more narrowly drawn so as not to be prohibited, invalid, illegal or 

unenforceable, and the validity, legality and enforceability of the remainder of such provision 

and the remaining provisions of this Single Family Shared-Loss Agreement shall not in any way 

be affected or impaired thereby. 

6.8 No Third Party Beneficiary. This Single Family Shared-Loss Agreement and 

the Exhibits hereto are for the sole and exclusive benefit of the parties hereto and their respective 

permitted successors and permitted assigns and there shall be no other third party beneficiaries, 

and nothing in this Single Family Shared-Loss Agreement or the Exhibits shall be construed to 

grant to any other Person any right, remedy or Claim under or in respect of this Single Family 

Shared-Loss Agreement or any provision hereof. 

6.9 Counterparts. This Single Family Shared-Loss Agreement may be executed 

separately by Receiver and Assuming Institution in any number of counterparts, each of which 

when executed and delivered shall be an original, but such counterparts shall together constitute 

one and the same instrument. 

6.10 Consent. Except as otherwise provided herein, when the consent of a party is 

required herein, such consent shall not be unreasonably withheld or delayed. 

6.11 Rights Cumulative. Except as otherwise expressly provided herein, the rights of 

each of the parties under this Single Family Shared-Loss Agreement are cumulative, may be 

exercised as often as any party considers appropriate and are in addition to each such party’s 

rights under the Purchase and Sale Agreement and any of the related agreements or under law. 

Except as otherwise expressly provided herein, any failure to exercise or any delay in exercising 

any of such rights, or any partial or defective exercise of such rights, shall not operate as a 

waiver or variation of that or any other such right. 

ARTICLE VII 

DISPUTE RESOLUTION 

7.1 Dispute Resolution Procedures. 

(a) In the event a dispute arises about the interpretation, application, calculation of 

Loss, or calculation of payments or otherwise with respect to this Single Family Shared-Loss 

Agreement (“SF Shared-Loss Dispute Item”), then the Receiver and the Assuming Institution 

shall make every attempt in good faith to resolve such items within sixty (60) days following the 

Module 1 – Whole Bank w/ Loss Share – P&A Century Security Bank 

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February 24, 2010 76 
receipt of a written description of the SF Shared-Loss Dispute Item, with notification of the 

possibility of taking the matter to arbitration (the date on which such 60-day period expires, or 

any extension of such period as the parties hereto may mutually agree to in writing, herein called 

the “Resolution Deadline Date”). If the Receiver and the Assuming Institution resolve all such 

items to their mutual satisfaction by the Resolution Deadline Date, then within thirty (30) days 

following such resolution, any payment arising out such resolution shall be made arising from 

the settlement of the SF Shared-Loss Dispute. 

(b) If the Receiver and the Assuming Institution fail to resolve any outstanding SF 

Shared-Loss Dispute Items by the Resolution Deadline Date, then either party may notify the 

other of its intent to submit the SF Shared-Loss Dispute Item to arbitration pursuant to the 

provisions of this Article VII. Failure of either party to notify the other of its intent to submit any 

unresolved SF Shared-Loss Dispute Item to arbitration within thirty (30) days following the 

Resolution Deadline Date (the date on which such thirty (30) day period expires is herein called 

the “Arbitration Deadline Date”) shall be deemed an acceptance of such SF Shared-Loss Dispute 

not submitted to arbitration, as well as a waiver of the submitting party’s right to dispute such 

non-submitted SF Shared-Loss Dispute Item but not a waiver of any similar claim which may 

arise in the future. 

(c) If a SF Shared-Loss Dispute Item is submitted to arbitration, it shall be governed 

by the rules of the American Arbitration Association (the “AAA”), except as otherwise provided 

herein. Either party may submit a matter for arbitration by delivering a notice, prior to the 

Arbitration Deadline Date, to the other party in writing setting forth: 

(i) A brief description of each SF Shared-Loss Dispute Item submitted for 

arbitration; 

(ii) A statement of the moving party’s position with respect to each SF 

Shared-Loss Dispute Item submitted for arbitration; 

(iii) The value sought by the moving party, or other relief requested regarding 

each SF Shared-Loss Dispute Item submitted for arbitration, to the extent 

reasonably calculable; and 

(iv) The name and address of the arbiter selected by the moving party (the 

“Moving Arbiter”), who shall be a neutral, as determined by the AAA. 

Failure to adequately include any information above shall not be deemed to be a 

waiver of the parties right to arbitrate so long as after notification of such failure the moving 

party cures such failure as promptly as reasonably practicable. 

(d) The non-moving party shall, within thirty (30) days following receipt of a notice 

of arbitration pursuant to this Section 7.1, deliver a notice to the moving party setting forth: 

(i) The name and address of the arbiter selected by the non-moving party (the 

“Respondent Arbiter”), who shall be a neutral, as determined by the AAA; 

(ii) A statement of the position of the respondent with respect to each Dispute 

Item; and 

(iii) The ultimate resolution sought by the respondent or other relief, if any, the 

Module 1 – Whole Bank w/ Loss Share – P&A Century Security Bank 

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February 24, 2010 77 
respondent deems is due the moving party with respect to each SF Shared-Loss 

Dispute Item. 

Failure to adequately include any information above shall not be deemed to be a 

waiver of the non-moving party’s right to defend such arbitration so long as after notification of 

such failure the non-moving party cures such failure as promptly as reasonably practicable 

(e) The Moving Arbiter and Respondent Arbiter shall select a third arbiter from a list 

furnished by the AAA. In accordance with the rules of the AAA, the three (3) arbiters shall 

constitute the arbitration panel for resolution of each SF Loss-Share Dispute Item. The 

concurrence of any two (2) arbiters shall be deemed to be the decision of the arbiters for all 

purposes hereunder. The arbitration shall proceed on such time schedule and in accordance with 

the Rules of Commercial Arbitration of the AAA then in effect, as modified by this Section 7.1. 

The arbitration proceedings shall take place at such location as the parties thereto may mutually 

agree, but if they cannot agree, then they will take place at the offices of the Corporation in 

Washington, DC, or Arlington, Virginia. 

(f) The Receiver and Assuming Institution shall facilitate the resolution of each 

outstanding SF Shared-Loss Dispute Item by making available in a prompt and timely manner to 

one another and to the arbiters for examination and copying, as appropriate, all documents, 

books, and records under their respective control and that would be discoverable under the 

Federal Rules of Civil Procedure. 

(g) The arbiters designated pursuant to subsections (c), (d) and (e) hereof shall select, 

with respect to each Dispute Item submitted to arbitration pursuant to this Section 7.1, either (i) 

the position and relief submitted by the Assuming Institution with respect to each SF SharedLoss Dispute Item, or (ii) the position and relief submitted by the Receiver with respect to each 

SF Shared-Loss Dispute Item, in either case as set forth in its respective notice of arbitration. The 

arbiters shall have no authority to select a value for each Dispute Item other than the 

determination set forth in Section 7.1(c) and Section 7.1(d). The arbitration shall be final, 

binding and conclusive on the parties. 

(h) Any amounts ultimately determined to be payable pursuant to such award shall 

bear interest at the Settlement Interest Rate from and including the date specified for the arbiters 

decisions specified in this Section 7.1, without regard to any extension of the finality of such 

award, to but not including the date paid. All payments required to be made under this Section 

7.1 shall be made by wire transfer. 

(i) For the avoidance of doubt, to the extent any notice of a SF Shared-Loss Dispute 

Item(s) is provided prior to the Termination Date, the terms of this Single Family Shared-Loss 

Agreement shall remain in effect with respect to the Single Family Shared-Loss Loans that are 

the subject of such SF Shared-Loss Dispute Item(s) until such time as any such dispute is finally 

resolved. 

7.2 Fees and Expenses of Arbiters. The aggregate fees and expenses of the arbiters 

shall be borne equally by the parties. The parties shall pay the aggregate fees and expenses 

within thirty (30) days after receipt of the written decision of the arbiters (unless the arbiters 

agree in writing on some other payment schedule). 

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 Exhibit 1 

Monthly Certificate 

SEE FOLLOWING PAGE
 

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MONTH ENDED: 

Losses 

Loan No. 

[input report month] 

Loss 

Loss Type Amount 

TOTAL XX 

Recoveries 

Loan No. 

Recovery 

Amount 

TOTAL 

Net Losses 

(Recoveries) 

XX 

XX 

PART 1 - CURRENT MONTH NET LOSS
 

PART 2 - FIRST LOSS TEST 

Col. D 

Cumulative
 

Loss 

Amount 

Balance, beginning of month XX 

Current month Net Losses (from Part 1) XX 

Balance, end of month XX 

Shared Loss Amount 

Times Loss Share percentage 

Amount due from (to) FDIC as Receiver 

Specify loss type 

as Foreclosure, 

or Short-Sale. 

A 

Loss 

Amount 

B 

C = A - B 

Col. E 

First Loss 

Tranche 

XX
 

XX
 

Loss Amount 

is the amount 

of Loss 

incurred and 

reported on 

the loan in a 

Loss 

Month 

Col. D - Col. 

E 

Cumulative
 

Shared-Loss 

Amount 

XX 

XX 

XX 

80%
 

XX
 

Loss Month is 

the reporting 

month in 

which the 

Loss was 

reported. 

If Col. D minus Col. E is 

less than zero, enter zero. 

F 

G 

G - F 

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Pursuant to Section 2.1 of the Single Family Shared-Loss Agreement, the undersigned hereby certifies 

the information on this Certificate is true, complete and correct. 

OFFICER SIGNATURE 

OFFICER NAME: TITLE 

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February 24, 2010 81 
 

 

Exhibit 2a 

This exhibit contains three versions of the loss share calculation for foreclosure, plus explanatory 

notes. 

Exhibit 2a(1) 

CALCULATION OF FORECLOSURE LOSS 

Foreclosure Occurred Prior to Loss Share Agreement 

1 Shared-Loss Month May-09 

2 Loan no: 364574 

3 REO # 621 

4 Foreclosure date 12/18/08 

5 Liquidation date 4/12/09 

6 Note Interest rate 8.100% 

7 Most recent BPO 228,000 

8 Most recent BPO date 1/21/09 

Foreclosure Loss calculation 

9 Book value at date of Loss Share agreement 244,900 

Accrued interest, limited to 90 days or days from failure 

10 to sale, whichever is less 3,306 

11 Costs incurred after Loss Share agreement in place: 

12 Attorney's fees 0 

Foreclosure costs, including title search, filing fees, 

13 advertising, etc. 0 

14 Property protection costs, maint. and repairs 6,500 

15 Tax and insurance advances 0

 Other Advances 

16 Appraisal/Broker's Price Opinion fees 0 

17 Inspections 0 

18 Other 0 

19 Gross balance recoverable by Purchaser 254,706 

Cash Recoveries: 

20 Net liquidation proceeds (from HUD-1 settl stmt) 219,400 

21 Hazard Insurance proceeds 0 

22 Mortgage Insurance proceeds 0 

23 T & I escrow account balances, if positive 0 

24 Other credits, if any (itemize) 0 

25 Total Cash Recovery 219,400 

26 Loss Amount 35,306 

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Exhibit 2a(2) 

CALCULATION OF FORECLOSURE LOSS 

No Preceeding Loan Mod under Loss Share 

1 Shared-Loss Month May-09 

2 Loan no: 292334 

3 REO # 477 

4 Interest paid-to-date 4/30/08 

5 Foreclosure date 1/15/09 

6 Liquidation date 4/12/09 

7 Note Interest rate 8.000% 

8 Owner occupied? Yes 

9 If owner-occupied: 

10 Borrower current gross annual income 42,000 

11 Estimated NPV of loan mod 195,000 

12 Most recent BPO 235,000 

13 Most recent BPO date 1/21/09 

Foreclosure Loss calculation 

16 Loan Principal balance after last paid installment 300,000 

17 Accrued interest, limited to 90 days 6,000 

18 Attorney's fees 0 

Foreclosure costs, including title search, filing fees, 

19 advertising, etc. 4,000 

20 Property protection costs, maint. and repairs 5,500 

21 Tax and insurance advances 1,500

 Other Advances 

22 Appraisal/Broker's Price Opinion fees 0 

23 Inspections 50 

24 Other 0 

25 Gross balance recoverable by Purchaser 317,050 

Cash Recoveries: 

26 Net liquidation proceeds (from HUD-1 settl stmt) 205,000 

27 Hazard Insurance proceeds 0 

28 Mortgage Insurance proceeds 0 

29 T & I escrow account balances, if positive 0 

30 Other credits, if any (itemize) 0 

31 Total Cash Recovery 205,000 

32 Loss Amount 112,050 

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February 24, 2010 83 
 

 

Exhibit 2a(3) 

CALCULATION OF FORECLOSURE LOSS 

Foreclosure after a Covered Loan Mod 

1 Shared-Loss Month May-09 

2 Loan no: 138554 

3 REO # 843 

4 Loan mod date 1/17/08 

5 Interest paid-to-date 4/30/08 

6 Foreclosure date 1/15/09 

7 Liquidation date 4/12/09 

8 Note Interest rate 4.000% 

9 Most recent BPO 210,000 

10 Most recent BPO date 1/20/09 

Foreclosure Loss calculation 

11 NPV of projected cash flows at loan mod 285,000 

12 Less: Principal payments between loan mod and deliquency 2,500 

13 Plus: 

14 Attorney's fees 0 

Foreclosure costs, including title search, filing fees, advertising, 

15 etc. 4,000 

16 Property protection costs, maint. and repairs 7,000 

17 Tax and insurance advances 2,000 

18 Other Advances 

19 Appraisal/Broker's Price Opinion fees 0 

20 Inspections 0 

21 Other 0 

22 Gross balance recoverable by Purchaser 295,500 

Cash Recoveries: 

23 Net liquidation proceeds (from HUD-1 settl stmt) 201,000 

24 Hazard Insurance proceeds 0 

25 Mortgage Insurance proceeds 0 

26 T & I escrow account balances, if positive 0 

27 Other credits, if any (itemize) 0 

28 Total Cash Recovery 201,000 

29 Loss Amount 94,500 

Module 1 – Whole Bank w/ Loss Share – P&A Century Security Bank 

Version 2.01 Duluth, Georgia 

February 24, 2010 84 
 

Notes to Exhibit 2a (foreclosure) 

1.	 The data shown are for illustrative purpose. The figures will vary for actual 

restructurings. 

2.	 The covered loss is the difference between the gross balance recoverable by Purchaser 

and the total cash recovery. There are three methods of calculation for covered losses 

from foreclosures, depending upon the circumstances. They are shown below: 

a.	 If foreclosure occurred prior to the beginning of the Loss Share agreement, use 

Exhibit 2a(1). This version uses the book value of the REO as the starting point 

for the covered loss. 

b.	 If foreclosure occurred after the Loss Share agreement was in place, and if the 

loan was not restructured when the Loss Share agreement was in place, use 

Exhibit 2a(2). This version uses the unpaid balance of the loan as of the last 

payment as the starting point for the covered loss. 

c.	 If the loan was restructured when the Loss Share agreement was in place, and 

then foreclosure occurred, use Exhibit 2a(3). This version uses the Net Present 

Value (NPV) of the modified loan as the starting point for the covered loss. 

3.	 For Exhibit 2a(1), the gross balance recoverable by the purchaser is calculated as the sum 

of lines 9 – 18; it is shown in line 19. For Exhibit 2a(2), the gross balance recoverable by 

the purchaser is calculated as the sum of lines 16 – 24; it is shown in line 25. For Exhibit 

2a(3), the gross balance recoverable by the purchaser is calculated as line 11 minus line 

12 plus lines 13 – 21; it is shown in line 22. 

4.	 For Exhibit 2a(1), the total cash recovery is calculated as the sum of lines 20 – 24; it is 

shown in line 25. For Exhibit 2a(2), the total cash recovery is calculated as the sum of 

lines 26 – 30; it is shown in line 31. For Exhibit 2a(3), the total cash recovery is 

calculated as the sum of lines 23 – 27; it is shown in line 28. 

5.	 Reasonable and customary third party attorney’s fees and expenses incurred by or on 

behalf of Assuming Institution in connection with any enforcement procedures, or 

otherwise with respect to such loan, are reported under Attorney’s fees. 

6.	 Assuming Institution’s (or Third Party Servicer’s) reasonable and customary out-ofpocket costs paid to either a third party or an affiliate (if affiliate is pre-approved by the 

FDIC) for foreclosure, property protection and maintenance costs, repairs, assessments, 

taxes, insurance and similar items are treated as part of the gross recoverable balance, to 

the extent they are not paid from funds in the borrower’s escrow account. Allowable 

costs are limited to amounts per Freddie Mac and Fannie Mae guidelines (as in effect 

from time to time), where applicable, provided that this limitation shall not apply to costs 

or expenses relating to environmental conditions. 

7.	 Do not include late fees, prepayment penalties, or any similar lender fees or charges by 

the Failed Bank or Assuming Institution to the loan account, any allocation of Assuming 

Institution’s servicing costs, or any allocations of Assuming Institution’s general and 

administrative (G&A) or other operating costs. 

8.	 If Exhibit 2a(3) is used, then no accrued interest may be included as a covered loss. 

Otherwise, the amount of accrued interest that may be included as a covered loss is 

limited to the minimum of: 

a.	 90 days 

b.	 The number of days that the loan is delinquent when the property was sold 

Module 1 – Whole Bank w/ Loss Share – P&A Century Security Bank 

Version 2.01 Duluth, Georgia 

February 24, 2010 85 
 

c. The number of days between the resolution date and the date when the property 

was sold 

To calculate accrued interest, apply the note interest rate that would have been in effect if 

the loan were performing to the principal balance after application of the last payment 

made by the borrower. 

Module 1 – Whole Bank w/ Loss Share – P&A Century Security Bank 

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Exhibit 2b 

This exhibit contains the loss share calculation for restructuring (loan mod), plus explanatory 

notes. 

Exhibit 2b 

CALCULATION OF RESTRUCTURING LOSS 

1 Shared-Loss Month May-09 

2 Loan no: 123456 

Loan before Restructuring 

3 Original loan amount 500,000 

4 Current unpaid principal balance 450,000 

5 Remaining term 298 

6 Interest rate 7.500% 

7 Interest Paid-To-Date 2/29/08 

8 Monthly payment - P&I 3,333 

9 Monthly payment - T&I 1,000 

10 Total mon hly payment 4,333 

11 Loan type (fixed-rate, ARM, I/O, Option ARM, etc.) Option ARM 

12 Borrower current annual income 82,000 

Terms of Modified/Restructured Loan 

13 Closing date on modified/restructured loan 4/19/09 

14 New Principal balance 461,438 

15 Remaining term 313 

16 Interest rate 3.500% 

17 Monthly payment - P&I 1,346 

18 Monthly payment - T&I 800 

19 Total mon hly payment 2,146 

20 Loan type (fixed-rate, ARM, I/O, Option ARM, etc.) IO Hybrid 

21 Lien type (1st, 2nd) 1st

 If adjustable: 

22 Initial interest rate 3.500% 

23 Term - initial interest rate 60 Months 

24 Initial payment amount 2,146 

25 Term-ini ial payment amount 60 Months 

26 Negative amor ization? No 

27 Rate reset frequency after first adjustment 6 Months 

28 Next reset date 5/1/14 

29 Index LIBOR 

30 Margin 2.750% 

31 Cap per adjustment 2.000% 

32 Lifetime Cap 9.500% 

33 Floor 2.750% 

34 Front end DTI 31% 

35 Back end DTI 45% 

Restructuring Loss Calculation 

36 Loan Principal balance before restructuring 450,000 

37 Accrued interest, limited to 90 days 8,438 

38 Tax and insurance advances 3,000 

39 3rd party fees due -

40 Total loan balance due before restructuring 461,438 

Assumptions for NPV Calculation, Restructured Loan: 

41 Discount rate for projected cash flows 5.530% 

42 Loan prepayment in full 120 Months 

43 NPV of projected cash flows 403,000 

44 Loss Amount 58,438 

Module 1 – Whole Bank w/ Loss Share – P&A Century Security Bank 

Version 2.01 Duluth, Georgia 

February 24, 2010 87 
 

Notes to Exhibit 2b (restructuring) 

1.	 The data shown are for illustrative purpose. The figures will vary for actual 

restructurings. 

2.	 For purposes of loss sharing, losses on restructured loans are calculated as the difference 

between: 

a.	 The principal, accrued interest, advances due on the loan, and allowable 3rd party 

fees prior to restructuring (lines 36-39), and 

b.	 The Net Present Value (NPV) of the estimated cash flows (line 43). The cash 

flows should assume no default or prepayment for 10 years, followed by 

prepayment in full at the end of 10 years (120 months). 

3.	 For owner-occupied residential loans, the NPV is calculated using the most recently 

published Freddie Mac survey rate on 30-year fixed rate loans as of the restructure date. 

4.	 For investor owned or non-owner occupied residential loans, the NPV is calculated using 

commercially reasonable rate on 30-year fixed rate loans as of the restructure date. 

5.	 If the new loan is an adjustable-rate loan, interest rate resets and related cash flows 

should be projected based on the index rate in effect at the date of the loan restructuring. 

If the restructured loan otherwise provides for specific charges in monthly P&I payments 

over the term of the loan, those changes should be reflected in the projected cash flows. 

Assuming Institution must retain supporting schedule of projected cash flows as required 

by Section 2.1 of the Single Family Shared-Loss Agreement and provide it to the FDIC if 

requested for a sample audit. 

6.	 Do not include late fees, prepayment penalties, or any similar lender fees or charges by 

the Failed Bank or Assuming Institution to the loan account, any allocation of Assuming 

Institution’s servicing costs, or any allocations of Assuming Institution’s general and 

administrative (G&A) or other operating costs. 

7.	 The amount of accrued interest that may be added to the balance of the loan is limited to 

the minimum of: 

a.	 90 days 

b.	 The number of days that the loan is delinquent at the time of restructuring 

c. The number of days between the resolution date and the restructuring 

To calculate accrued interest, apply the note interest rate that would have been in effect if 

the loan were performing to the principal balance after application of the last payment 

made by the borrower. 

Module 1 – Whole Bank w/ Loss Share – P&A Century Security Bank 

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February 24, 2010 88 
 

 

 

 

Exhibit 2c 

This exhibit contains two versions of the loss share calculation for short sales, plus explanatory 

notes. 

Exhibit 2c(1) 

CALCULATION OF LOSS FOR SHORT SALE LOANS 

No Preceeding Loan Mod under Loss Share 

1 Shared-Loss Month: May-09 

2 Loan # 58776 

3 RO # 542 

4 Interest paid-to-date 7/31/08 

5 Short Payoff Date 4/17/09 

6 Note Interest rate 7.750% 

7 Owner occupied? Yes

 If so: 

8 Borrower current gross annual income 38,500 

9 Estimated NPV of loan mod 200,000 

10 Most recent BPO 380,000 

11 Most recent BPO date 1/31/06 

Short-Sale Loss calculation 

12 Loan Principal balance 375,000 

13 Accrued interest, limited to 90 days 7,266 

14 Attorney's fees 0 

15 Tax and insurance advances 0 

16 3rd party fees due 2,800 

17 Incentive to borrower 2,000 

18 Gross balance recoverable by Purchaser 387,066 

19 Amount accepted in Short-Sale 255,000 

20 Hazard Insurance 0 

21 Mortgage Insurance 0 

22 Total Cash Recovery 255,000 

23 Loss Amount 132,066 

Module 1 – Whole Bank w/ Loss Share – P&A Century Security Bank 

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February 24, 2010 89 
 

 

Exhibit 2c(2) 

CALCULATION OF LOSS FOR SHORT SALE LOANS 

Short Sale after a Covered Loan Mod 

1 Shared-Loss Month: May-09 

2 Loan # 20076 

3 REO # 345 

4 Loan mod date 5/12/08 

5 Interest paid-to-date 9/30/08 

6 Short Payoff Date 4/2/09 

7 Note Interest rate 7.500% 

8 Most recent BPO 230,000 

9 Most recent BPO date 1/21/09 

Short-Sale Loss calculation 

11 NPV of projected cash flows at loan mod 311,000 

12 Less: Principal payments between loan mod and deliquency 1,000

 Plus: 

13 Attorney's fees 0 

14 Tax and insurance advances 1,500 

15 3rd party fees due 2,600 

16 Incentive to borrower 3,500 

17 Gross balance recoverable by Purchaser 317,600 

18 Amount accepted in Short-Sale 234,000 

19 Hazard Insurance 0 

20 Mortgage Insurance 0 

21 Total Cash Recovery 234,000 

22 Loss Amount 83,600 

Module 1 – Whole Bank w/ Loss Share – P&A Century Security Bank 

Version 2.01 Duluth, Georgia 

February 24, 2010 90 
 

Notes to Exhibit 2c (short sale) 

1.	 The data shown are for illustrative purpose. The figures will vary for actual short sales. 

2.	 The covered loss is the difference between the gross balance recoverable by Purchaser 

and the total cash recovery. There are two methods of calculation for covered losses 

from short sales, depending upon the circumstances. They are shown below: 

a.	 If the loan was restructured when the Loss Share agreement was in place, and 

then the short sale occurred, use Exhibit 2c(2). This version uses the Net Present 

Value (NPV) of the modified loan as the starting point for the covered loss. 

b.	 Otherwise, use Exhibit 2c(1). This version uses the unpaid balance of the loan as 

of the last payment as the starting point for the covered loss. 

3.	 For Exhibit 2c(1), the gross balance recoverable by the purchaser is calculated as the sum 

of lines 12 – 17; it is shown in line 18. For Exhibit 2a(2), the gross balance recoverable 

by the purchaser is calculated as line 11 minus line 12 plus lines 13 – 16; it is shown in 

line 17. 

4.	 For Exhibit 2c(1), the total cash recovery is calculated as the sum of lines 19 – 21; it is 

shown in line 22. For Exhibit 2c(2), the total cash recovery is calculated as the sum of 

lines 18 – 20; it is shown in line 21. 

5.	 Reasonable and customary third party attorney’s fees and expenses incurred by or on 

behalf of Assuming Institution in connection with any enforcement procedures, or 

otherwise with respect to such loan, are reported under Attorney’s fees. 

6.	 Do not include late fees, prepayment penalties, or any similar lender fees or charges by 

the Failed Bank or Assuming Institution to the loan account, any allocation of Assuming 

Institution’s servicing costs, or any allocations of Assuming Institution’s general and 

administrative (G&A) or other operating costs. 

7.	 If Exhibit 2c(2) is used, then no accrued interest may be included as a covered loss. 

Otherwise, the amount of accrued interest that may be included as a covered loss is 

limited to the minimum of: 

d.	 90 days 

e.	 The number of days that the loan is delinquent when the property was sold 

f.	 The number of days between the resolution date and the date when the property 

was sold 

To calculate accrued interest, apply the note interest rate that would have been in effect if 

the loan were performing to the principal balance after application of the last payment 

made by the borrower. 

Module 1 – Whole Bank w/ Loss Share – P&A Century Security Bank 

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Exhibit 2d 

Shared-Loss Month: [input month] 

Loan no.: [input loan no.) 

NOTE 

The calculation of recovery on a loan for which a Restructuring Loss has been paid will only apply if the 

loan is sold. 

EXAMPLE CALCULATION 

Restructuring Loss Information 

Loan principal balance before restructuring $ 200,000 A 

NPV, restructured loan 165,000 B 

Loss on restructured loan $ 35,000 A – B 

Times FDIC applicable loss share % (80% or 95%) 80% 

Loss share payment to purchaser $ 28,000 C 

Calculation – Recovery amount due to Receiver 

Loan sales price $ 190,000 

NPV of restructured loan at mod date 165,000 

Gain - step 1 25,000 D 

PLUS 

Loan UPB after restructuring (1) 200,000 

Loan UPB at liquidation date 192,000 

Gain - step 2 (principal collections after restructuring) 8,000 E 

Recovery amount 33,000 D + E 

Times FDIC loss share % 80% 

Recovery due to FDIC $ 26,400 F 

Net loss share paid to purchaser (C – F) $ 1,600 

Proof Calculation (2) 

Loan principal balance $ 200,000 G 

Principal collections on loan 8,000 

Sales price for loan 190,000 

Total collections on loan 198,000 H 

Net loss on loan $ 2,000 G – H 

Times FDIC applicable loss share % (80% or 95%) 80% 

Loss share payment to purchaser $ 1,600 

(1) This example assumes that the FDIC loan modification program as shown in Exhibit 5 is applied and 

the loan restructuring does not result in a reduction in the loan principal balance due from the 

borrower. 

(2) This proof calculation is provided to illustrate the concept and the Assuming Institution is not required 

to provide this with its Recovery calculations. 

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Exhibit 3 

Portfolio Performance and Summary Schedule 

SHARED-LOSS LOANS 

PORTFOLIO PERFORMANCE AND SUMMARY SCHEDULE 

MONTH ENDED: [input report month] 

POOL SUMMARY 

# $ 

Loans at Sale Date xx xx 

Loans as of this month-end xx xx 

STATED THRESHOLD TRACKING # $ 

Stated Threshold amount A 

Cumulative loss payments, prior month 

Loss payment for current month 

Cumulative loss payment, this month 

Cumulative Commercial & Other Loans Net Charge-Offs 

B 

Remaining to Stated Threshold A - B 

Percent of Total 

PORTFOLIO PERFORMANCE STATUS # $ # 

Current 

30 – 59 days past due 

60 – 89 days past due 

90 – 119 days past due 

120 and over days past due 

In foreclosure 

ORE 

Total 

Memo Item: 

Loans in process of restructuring – total 

Loans in bankruptcy 

Loans in process of restructuring by delinquency status 

Current 

30 - 59 days past due 

60 - 89 days past due 

90 - 119 days past due 

120 and over days past due In foreclosure 

Total 

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List of Loans Paid Off During Month 

Loan # 

Principal 

Balance 

List of Loans Sold During Month 

Loan # 

Principal 

Balance 

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Exhibit 4 

Wire Transfer Instructions 

PURCHASER WIRING INSTRUCTIONS 

BANK RECEIVING WIRE 

9 DIGIT ABA ROUTING NUMBER 

ACCOUNT NUMBER 

NAME OF ACCOUNT 

ATTENTION TO WHOM 

PURPOSE OF WIRE 

FDIC RECEIVER WIRING INSTRUCTIONS 

BANK RECEIVING WIRE 

SHORT NAME 

ADDRESS OF BANK RECEIVING WIRE 

9 DIGIT ABA ROUTING NUMBER 

ACCOUNT NUMBER 

NAME OF ACCOUNT 

ATTENTION TO WHOM 

PURPOSE OF WIRE 

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EXHIBIT 5
 

FDIC MORTGAGE LOAN MODIFICATION PROGRAM
 

Objective 

The objective of this FDIC Mortgage Loan Modification Program (“Program”) is to modify the 

terms of certain residential mortgage loans so as to improve affordability, increase the 

probability of performance, allow borrowers to remain in their homes and increase the value of 

the loans to the FDIC and assignees. The Program provides for the modification of Qualifying 

Loans (as defined below) by reducing the borrower’s monthly housing debt to income ratio 

(“DTI Ratio”) to no more than 31% at the time of the modification and eliminating adjustable 

interest rate and negative amortization features. 

Qualifying Mortgage Loans 

In order for a mortgage loan to be a Qualifying Loan it must meet all of the following criteria, 

which must be confirmed by the lender: 

 The collateral securing the mortgage loan is owner-occupied and the owner’s primary 

residence; and 

 The mortgagor has a first priority lien on the collateral; and 

 Either the borrower is at least 60 days delinquent or a default is reasonably foreseeable. 

Modification Process 

The lender shall undertake a review of its mortgage loan portfolio to identify Qualifying Loans. 

For each Qualifying Loan, the lender shall determine the net present value of the modified loan 

and, if it will exceed the net present value of the foreclosed collateral upon disposition, then the 

Qualifying Loan shall be modified so as to reduce the borrower’s monthly DTI Ratio to no more 

than 31% at the time of the modification. To achieve this, the lender shall use a combination of 

interest rate reduction, term extension and principal forbearance, as necessary. 

The borrower’s monthly DTI Ratio shall be a percentage calculated by dividing the borrower’s 

monthly income by the borrower’s monthly housing payment (including principal, interest, taxes 

and insurance). For these purposes, (1) the borrower’s monthly income shall be the amount of 

the borrower’s (along with any co-borrowers’) documented and verified gross monthly income, 

and (2) the borrower’s monthly housing payment shall be the amount required to pay monthly 

principal and interest plus one-twelfth of the then current annual amount required to pay real 

property taxes and homeowner’s insurance with respect to the collateral. 

In order to calculate the monthly principal payment, the lender shall capitalize to the outstanding 

principal balance of the Qualifying Loan the amount of all delinquent interest, delinquent taxes, 

past due insurance premiums, third party fees and (without duplication) escrow advances (such 

amount, the “Capitalized Balance”). 

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In order to achieve the goal of reducing the DTI Ratio to 31%, the lender shall take the following 

steps in the following order of priority with respect to each Qualifying Loan: 

1.	 Reduce the interest rate to the then current Freddie Mac Survey Rate for 30-year fixed 

rate mortgage loans, and adjust the term to 30 years. 

2.	 If the DTI Ratio is still in excess of 31%, reduce the interest rate further, but no lower 

than 3%, until the DTI ratio of 31% is achieved. 

3.	 If the DTI Ratio is still in excess of 31% after adjusting the interest rate to 3%, extend 

the remaining term of the loan by 10 years. 

4.	 If the DTI Ratio is still in excess of 31%, calculate a new monthly payment (the 

“Adjusted Payment Amount”) that will result in the borrower’s monthly DTI Ratio 

not exceeding 31%. After calculating the Adjusted Payment Amount, the lender shall 

bifurcate the Capitalized Balance into two portions – the amortizing portion and the 

non-amortizing portion. The amortizing portion of the Capitalized Balance shall be 

the mortgage amount that will fully amortize over a 40-year term at an annual interest 

rate of 3% and monthly payments equal to the Adjusted Payment Amount. The nonamortizing portion of the Capitalized Balance shall be the difference between the 

Capitalized Balance and the amortizing portion of the Capitalized Balance. If the 

amortizing portion of the Capitalized Balance is less than 75% of the current 

estimated value of the collateral, then the lender may choose not to restructure the 

loan. If the lender chooses to restructure the loan, then the lender shall forbear on 

collecting the non-amortizing portion of the Capitalized Balance, and such amount 

shall be due and payable only upon the earlier of (i) maturity of the modified loan, (ii) 

a sale of the property or (iii) a pay-off or refinancing of the loan. No interest shall be 

charged on the non-amortizing portion of the Capitalized Balance, but repayment 

shall be secured by a first lien on the collateral. 

Special Note: 

The net present value calculation used to determine whether a loan should be modified based on 

the modification process above is distinct and different from the net present value calculation 

used to determine the covered loss if the loan is modified. Please refer only to the net present 

value calculation described in this exhibit for the modification process, with its separate 

assumptions, when determining whether to provide a modification to a borrower. Separate 

assumptions may include, without limitation, Assuming Institution’s determination of a 

probability of default without modification, a probability of default with modification, home 

price forecasts, prepayment speeds, and event timing. These assumptions are applied to different 

projected cash flows over the term of the loan, such as the projected cash flow of the loan 

performing or defaulting without modification and the projected cash flow of the loan 

performing or defaulting with modification. 

By contrast, the net present value for determining the covered loss is based on a 10 year period. 

While the assumptions in the net present value calculation used in the modification process may 

change, the net present value calculation for determining the covered loss remains constant. 

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EXHIBIT 4.15B 

COMMERCIAL AND OTHER ASSETS SHARED-LOSS AGREEMENT 

This agreement for reimbursement of loss sharing expenses on certain loans and other 

assets (the “Commercial Shared-Loss Agreement”) shall apply when the Assuming Institution 

purchases Shared-Loss Assets as that term is defined herein. The terms hereof shall modify and 

supplement, as necessary, the terms of the Purchase and Assumption Agreement to which this 

Commercial Shared-Loss Agreement is attached as Exhibit 4.15B and incorporated therein. To 

the extent any inconsistencies may arise between the terms of the Purchase and Assumption 

Agreement and this Commercial Shared-Loss Agreement with respect to the subject matter of 

this Commercial Shared-Loss Agreement, the terms of this Commercial Shared-Loss Agreement 

shall control. References in this Commercial Shared-Loss Agreement to a particular Section 

shall be deemed to refer to a Section in this Commercial Shared-Loss Agreement unless the 

context indicates that a Section of the Purchase and Assumption Agreement is intended. 

ARTICLE I -- DEFINITIONS 

Capitalized terms used in this Commercial Shared-Loss Agreement that are not defined in 

this Commercial Shared-Loss Agreement are defined in the Purchase and Assumption 

Agreement In addition to the terms defined above, defined below are certain additional terms 

relating to loss-sharing, as used in this Commercial Shared-Loss Agreement. 

“AAA” means the American Arbitration Association as provided in Section 

2.1(f)(iii) of this Commercial Shared-Loss Agreement. 

“Accrued Interest” means, with respect to any Shared-Loss Loan, Permitted 

Advance or Shared-Loss Loan Commitment Advance at any time, the amount of earned and 

unpaid interest, taxes, credit life and/or disability insurance premiums (if any) payable by the 

Obligor accrued on or with respect to such Shared-Loss Loan, Permitted Advance or SharedLoss Loan Commitment Advance, all as reflected on the Accounting Records of the Failed Bank 

or the Assuming Institution (as applicable); provided, that Accrued Interest shall not include any 

amount that accrues on or with respect to any Shared-Loss Loan, Permitted Advance or SharedLoss Loan Commitment Advance after that Asset has been placed on non-accrual or 

nonperforming status by either the Failed Bank or the Assuming Institution (as applicable). 

“Additional ORE” means Shared-Loss Loans that become Other Real Estate 

after Bank Closing Date. 

“Affiliate” shall have the meaning set forth in the Purchase and Assumption 

Agreement; provided, that, for purposes of this Commercial Shared-Loss Agreement, no Third 

Party Servicer shall be deemed to be an Affiliate of the Assuming Institution. 

“Applicable Anniversary of the Commencement Date” means the fifth (5th) 

anniversary of the Commencement Date. 

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“Calendar Quarter” means a quarterly period (a) for the first such period, 

beginning on the Commencement Date and ending on the last calendar day of either March, 

June, September or December, whichever is the first to occur after the Commencement Date, and 

(b) for quarterly periods thereafter, beginning on the first calendar day of the calendar month 

immediately after the month that ended the prior period and ending on the last calendar day of 

each successive three-calendar-month period thereafter (i.e., each March, June, September and 

December, starting in the applicable order depending on the ending date of first such period) of 

any year. 

“Capitalized Expenditures” means those expenditures that (i) would be 

capitalized under generally accepted accounting principles, and (ii) are incurred with respect to 

Shared-Loss Loans, Other Real Estate, Additional ORE or Subsidiary ORE. Capitalized 

Expenditures shall not include expenses related to environmental conditions including, but not 

limited to, remediation, storage or disposal of any hazardous or toxic substances or any pollutant 

or contaminant. 

“Charge-Offs” means, with respect to any Shared-Loss Assets for any period, an 

amount equal to the aggregate amount of loans or portions of loans classified as “Loss” under the 

Examination Criteria, including (a) charge-offs of (i) the principal amount of such assets net of 

unearned interest (including write-downs associated with Other Real Estate, Additional ORE, 

Subsidiary ORE or loan modification(s)) (ii) Accrued Interest, and (iii) Capitalized Expenditures 

plus (b) Pre-Charge-Off Expenses incurred on the respective Shared-Loss Loans, all as effected 

by the Assuming Institution during such period and reflected on the Accounting Records of the 

Assuming Institution; provided, that: (i) the aggregate amount of Accrued Interest (including any 

reversals thereof) for the period after Bank Closing that shall be included in determining the 

amount of Charge-Offs for any Shared-Loss Loan shall not exceed ninety (90) days’ Accrued 

Interest; (ii) no Charge-Off shall be taken with respect to any anticipated expenditure by the 

Assuming Institution until such expenditure is actually incurred; (iii) any financial statement 

adjustments made in connection with the purchase of any Assets pursuant to this Purchase and 

Assumption Agreement or any future purchase, merger, consolidation or other acquisition of the 

Assuming Institution shall not constitute “Charge-Offs”; and (iv) except for Portfolio Sales or 

any other sales or dispositions consented to by the Receiver, losses incurred on the sale or other 

disposition of Shared-Loss Assets to any Person (other than the sale or other disposition of Other 

Real Estate, Additional ORE or Subsidiary ORE to a Person other than an Affiliate of the 

Assuming Institution which is conducted in a commercially reasonable and prudent manner) 

shall not constitute Charge-Offs. 

“Commencement Date” means the first calendar day following Bank Closing. 

“Consumer Loans” means Loans to individuals for household, family and other 

personal expenditures (including United States and/or State-guaranteed student loans and 

extensions of credit pursuant to a credit card plan or debit card plan). 

“Cumulative Servicing Amount” means the sum of the Period Servicing 

Amounts for every consecutive twelve-month period prior to and ending on the True-Up 

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Measurement Date in respect of each of the Shared-Loss Agreements during which the losssharing provisions of the applicable Shared-Loss Agreement is in effect. 

“Cumulative Shared-Loss Payments” means (i) the aggregate of all of the 

payments made or payable to the Assuming Institution under the Shared-Loss Agreements minus 

(ii) the aggregate of all of the payments made or payable to the Receiver under the Shared-Loss 

Agreements. 

“Environmental Assessment” means an assessment of the presence, storage or 

release of any hazardous or toxic substance, pollutant or contaminant with respect to the 

collateral securing a Shared-Loss Loan that has been fully or partially charged off. 

“Examination Criteria” means the loan classification criteria employed by, or 

any applicable regulations of, the Assuming Institution’s Chartering Authority at the time such 

action is taken, as such criteria may be amended from time to time. 

“Failed Bank Charge-Offs/Write-Downs” means, with respect to any SharedLoss Asset, an amount equal to the aggregate amount of reversals or charge-offs of Accrued 

Interest and charge-offs and write-downs of principal effected by the Failed Bank with respect to 

that Shared-Loss Asset as reflected on the Accounting Records of the Failed Bank. 

“Fair Value” means the value of a Shared Loss MTM Asset as stated on the 

books and records of the Failed Bank as of Bank Closing, inclusive of all adjustments. 

“FDIC Party” has the meaning provided in Section 2.1(f)(ii) of this Commercial 

Shared-Loss Agreement. 

“Net Charge-Offs” means, with respect to any period, an amount equal to the 

aggregate amount of Charge-Offs for such period less the amount of Recoveries for such period. 

“Neutral Member” has the meaning provided in Section 2.1(f)(ii) of this 

Commercial Shared-Loss Agreement. 

“New Shared-Loss Loans” means loans that would otherwise be subject to loss 

sharing under this Commercial Shared-Loss Agreement that were originated after Bid Valuation 

Date and before Bank Closing. 

“Notice of Dispute” has the meaning provided in Section 2.1(f)(iii) of this 

Commercial Shared-Loss Agreement. 

“ORE Subsidiary” means any Subsidiary of the Assuming Institution that 

engages solely in holding, servicing, managing or liquidating interests of a type described in 

clause (A) of the definition of “Other Real Estate,” which interests have arisen from the 

collection or settlement of a Shared-Loss Loan. 

“Other Real Estate” means all of the following (including any of the following 

fully or partially charged off the books and records of the Failed Bank or the Assuming 

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Institution) that (i) are owned by the Failed Bank as of Bank Closing and are purchased pursuant 

to the Purchase and Assumption Agreement or (ii) have arisen subsequent to Bank Closing from 

the collection or settlement by the Assuming Institution of a Shared-Loss Loan: 

(A) all interests in real estate (other than Bank Premises and Fixtures), 

including but not limited to mineral rights, leasehold rights, condominium and 

cooperative interests, air rights and development rights; and 

(B) all other assets (whether real or personal property) acquired by foreclosure 

or in full or partial satisfaction of judgments or indebtedness. 

“Period Servicing Amount” means, for any twelve month period with respect to 

each of the Shared-Loss Agreements during which the loss-sharing provisions of the applicable 

Shared-Loss Agreement are in effect, the product of (i) the simple average of the principal 

amount of Shared-Loss Loans and Shared-Loss Assets (other than the Shared-Loss Securities) 

(in each case as defined in the Shared-Loss Agreements), as the case may be, at the beginning of 

such period and at the end of such period times (ii) one percent (1%). 

“Permitted Advance” means an advance of funds by the Assuming Institution 

with respect to a Shared-Loss Loan, or the making of a legally binding commitment by the 

Assuming Institution to advance funds with respect to a Shared-Loss Loan, that (i) in the case of 

such an advance, is actually made, and, in the case of such a commitment, is made and all of the 

proceeds thereof actually advanced, within one (1) year after the Commencement Date, (ii) does 

not cause the sum of (A) the book value of such Shared-Loss Loan as reflected on the 

Accounting Records of the Assuming Institution after any such advance has been made by the 

Assuming Institution plus (B) the unfunded amount of any such commitment made by the 

Assuming Institution related thereto, to exceed 110% of the Book Value of such Shared-Loss 

Loan, (iii) is not made with respect to a Shared-Loss Loan with respect to which (A) there exists 

a related Shared-Loss Loan Commitment or (B) the Assuming Institution has taken a Charge-Off 

and (iv) is made in good faith, is supported at the time it is made by documentation in the Credit 

Files and conforms to and is in accordance with the applicable requirements set forth in Article 

III of this Commercial Shared-Loss Agreement and with the then effective written internal credit 

policy guidelines of the Assuming Institution; provided, that the limitations in subparagraphs (i), 

(ii) and (iii) of this definition shall not apply to any such action (other than to an advance or 

commitment related to the remediation, storage or final disposal of any hazardous or toxic 

substance, pollutant or contaminant) that is taken by Assuming Institution in its reasonable 

discretion to preserve or secure the value of the collateral for such Shared-Loss Loan. 

“Permitted Amendment” means, with respect to any Shared-Loss Loan 

Commitment or Shared-Loss Loan, any amendment, modification, renewal or extension thereof, 

or any waiver of any term, right, or remedy thereunder, made by the Assuming Institution in 

good faith and otherwise in accordance with the applicable requirements set forth in Article III of 

this Commercial Shared-Loss Agreement and the then effective written internal credit policy 

guidelines of the Assuming Institution; provided, that: 

(i) with respect to a Shared-Loss Loan Commitment or a Shared-Loss Loan that is not a 

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revolving line of credit, no such amendment, modification, renewal, extension, or waiver, except 

as allowed under the definition of Permitted Advance, shall operate to increase the amount of 

principal (A) then remaining available to be advanced by the Assuming Institution under the 

Shared-Loss Loan Commitment or (B) then outstanding under the Shared-Loss Loan; 

(ii) with respect to a Shared-Loss Loan Commitment or a Shared-Loss Loan that is a 

revolving line of credit, no such amendment, modification, renewal, extension, or waiver, except 

as allowed under the definition of Permitted Advance, shall operate to increase the maximum 

amount of principal authorized as of Bank Closing to be outstanding at any one time under the 

underlying revolving line of credit relationship with the debtor (regardless of the extent to which 

such revolving line of credit may have been funded as of Bank Closing or may subsequently 

have been funded and/or repaid); and 

(iii) no such amendment, modification, renewal, extension or waiver shall extend the 

term of such Shared-Loss Loan Commitment or Shared-Loss Loan beyond the end of the final 

Shared-Loss Quarter unless the term of such Shared-Loss Loan Commitment or Shared-Loss 

Loan as existed on Bank Closing was beyond the end of the final Shared-Loss Quarter, in which 

event no such amendment, modification, renewal, extension or waiver shall extend such term 

beyond the term as existed as of Bank Closing. 

“Pre-Charge-Off Expenses” means those expenses incurred in the usual and 

prudent management of a Shared-Loss Loan that would qualify as a Reimbursable Expense or 

Recovery Expense if incurred after a Charge-Off of the related Shared-Loss Asset had occurred. 

“Quarterly Certificate” has the meaning provided in Section 2.1(a)(i) of this 

Commercial Shared-Loss Agreement. 

“Recoveries” (I)(A) In addition to any sums to be applied as Recoveries pursuant 

to subparagraph (II) below, “Recoveries” means, with respect to any period, the sum of (without 

duplication): 

(i) the amount of collections during such period by the Assuming Institution on 

Charge-Offs of Shared-Loss Assets effected by the Assuming Institution prior to the end of the 

final Shared-Loss Quarter; plus 

(ii) the amount of collections during such period by the Assuming Institution on 

Failed Bank Charge-Offs/Write-Downs; plus 

(iii) the amount of gain on any sale or other disposition during such period by the 

Assuming Institution of Shared Loss Loans, Other Real Estate, Additional ORE or Subsidiary 

ORE (provided, that the amount of any such gain included in Recoveries shall not exceed the 

aggregate amount of the related Failed Bank Charge-Offs/Write-Downs and Charge-Offs taken 

and any related Reimbursable Expenses and Recovery Expenses); plus 

(iv) the amount of collections during such period by the Assuming Institution of 

any Reimbursable Expenses or Recovery Expenses; plus 

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(v) the amount of any fee or other consideration received by the Assuming 

Institution during or prior to such period in connection with any amendment, modification, 

renewal, extension, refinance, restructure, commitment or other similar action taken by the 

Assuming Institution with respect to a Shared-Loss Asset with respect to which there exists a 

Failed Bank Charge-Off/Write-Down or a Shared-Loss Loan as to which a Charge-Off has been 

effected by the Assuming Institution during or prior to such period (provided, that the amount of 

any such fee or other consideration included in Recoveries shall not exceed the aggregate amount 

of the related Failed Bank Charge-Offs/Write-Downs and Charge-Offs taken and any related 

Reimbursable Expenses and Recovery Expenses). 

(I)(B) For the purpose of determining the amounts to be applied as Recoveries pursuant 

to subparagraph (I)(A) above, the Assuming Institution shall apply amounts received on the 

Assets that are not otherwise applied to reduce the book value of principal of a Shared-Loss Loan 

(or, in the case of Other Real Estate, Additional ORE, Subsidiary ORE and Capitalized 

Expenditures, that are not otherwise applied to reduce the book value thereof) in the following 

order: first to Charge-Offs and Failed Bank Charge-Offs/Write Downs; then to Reimbursable 

Expenses and Recovery Expenses; then to interest income; and then to other expenses incurred 

by the Assuming Institution. 

(II) If there occurs an amendment, modification, renewal, extension, refinance, 

restructure, commitment, sale or other similar action with respect to a Shared-Loss Loan as to 

which there exists a Failed Bank Charge-Off/Write Down or as to which a Charge-Off has been 

effected by the Assuming Institution during or prior to such period, and if, as a result of such 

occurrence, the Assuming Institution recognizes any interest income for financial accounting 

purposes on that Shared-Loss Loan, then “Recoveries” shall also include the portion of the total 

amount of any such interest income recognized by the Assuming Institution which is derived by 

multiplying: 

(A) the total amount of any such interest income recognized by the Assuming Institution 

during such period with respect to that Shared-Loss Loan as described above, by 

(B) a fraction, the numerator of which is the aggregate principal amount (excluding 

reversals or charge-offs of Accrued Interest) of all such Failed Bank Charge-Offs/WriteDowns and Charge-Offs effected by the Assuming Institution with respect to that SharedLoss Loan plus the principal amount of that Shared-Loss Loan that has not yet been 

charged-off but has been placed on nonaccrual status, all of which occurred at any time 

prior to or during the period in which the interest income referred to in subparagraph 

(II)(A) immediately above was recognized, and the denominator of which is the total 

amount of principal indebtedness (including all such prior Failed Bank ChargeOffs/Write-Downs and Charge-Offs as described above) due from the Obligor on that 

Shared-Loss Loan as of the end of such period; 

provided, however, that the amount of any interest income included as Recoveries for a 

particular Shared-Loss Loan shall not exceed the aggregate amount of (a) Failed Bank ChargeOffs/Write-Downs, (b) Charge-Offs effected by the Assuming Institution during or prior to the 

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period in which the amount of Recoveries is being determined, plus (c) any Reimbursable 

Expenses and Recovery Expenses paid to the Assuming Institution pursuant to this Commercial 

Shared-Loss Agreement during or prior to the period in which the amount of Recoveries is being 

determined, all with respect to that particular Shared-Loss Loan; and, provided, further, that any 

collections on any such Shared-Loss Loan that are not applied to reduce book value of principal 

or recognized as interest income shall be applied pursuant to subparagraph (I) above. 

(III) Notwithstanding subparagraphs (I) and (II) above, the term “Recoveries” shall not 

include: (a) any amounts paid to the Assuming Institution by the Receiver pursuant to Section 

2.1 of this Commercial Shared-Loss Agreement, (b) amounts received with respect to ChargeOffs effected by the Assuming Institution after the final Shared-Loss Quarter, (c) after the final 

Shared-Loss Quarter, income received by the Assuming Institution from the operation of, and 

any gains recognized by the Assuming Institution on the disposition of, Other Real Estate, 

Additional ORE or Subsidiary ORE (such income and gains being hereinafter together referred 

to as “ORE Income”), except to the extent that aggregate ORE Income exceeds the aggregate 

expenses paid to third parties by or on behalf of the Assuming Institution after the final SharedLoss Quarter to manage, operate and maintain Other Real Estate, Additional ORE or Subsidiary 

ORE (such expenses being hereinafter referred to as “ORE Expenses”). In determining the extent 

aggregate ORE Income exceeds aggregate ORE Expenses for any Recovery Quarter as set forth 

immediately above in subparagraph (c), the Assuming Institution will subtract (i) ORE Expenses 

paid to third parties during such Recovery Quarter (provided, that, in the case of the final 

Recovery Quarter only, the Assuming Institution will subtract ORE Expenses paid to third 

parties from the beginning of the final Recovery Quarter up to the date the Assuming Institution 

is required to deliver the final Quarterly Certificate pursuant to this Commercial Shared-Loss 

Agreement) from (ii) ORE Income received during such Recovery Quarter, to calculate net ORE 

income (“Net ORE Income”) for that Recovery Quarter. If the amount of Net ORE Income so 

calculated for a Recovery Quarter is positive, such amount shall be reported as Recoveries on the 

Quarterly Certificate for such Recovery Quarter. If the amount of Net ORE Income so calculated 

for a Recovery Quarter is negative (“Net ORE Loss Carryforward”), such amount shall be added 

to any ORE Expenses paid to third parties in the next succeeding Recovery Quarter, which sum 

shall then be subtracted from ORE Income for that next succeeding Recovery Quarter, for the 

purpose of determining the amount of Net ORE Income (or, if applicable, Net ORE Loss 

Carryforward) for that next succeeding Recovery Quarter. If, as of the end of the final Recovery 

Quarter, a Net ORE Loss Carryforward exists, then the amount of the Net ORE Loss 

Carryforward that does not exceed the aggregate amount of Net ORE Income reported as 

Recoveries on Quarterly Certificates for all Recovery Quarters may be included as a Recovery 

Expense on the Quarterly Certificate for the final Recovery Quarter. 

“Recovery Amount” has the meaning provided in Section 2.1(b)(ii) of this 

Commercial Shared-Loss Agreement. 

“Recovery Expenses” means, for any Recovery Quarter, the amount of actual, 

reasonable and necessary out-of-pocket expenses (other than Capitalized Expenditures) paid to 

third parties (other than Affiliates of the Assuming Institution) by or on behalf of the Assuming 

Institution, as limited by Sections 3.2(c) and (d) of Article III to this Commercial Shared-Loss 

Agreement, to recover amounts owed with respect to (i) any Shared-Loss Asset as to which a 

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Charge-Off was effected prior to the end of the final Shared-Loss Quarter (provided that such 

amounts were incurred no earlier than the date the first Charge-Off on such Shared-Loss Asset 

could have been reflected on the Accounting Records of the Assuming Institution), and (ii) 

Failed Bank Charge-Offs/Write-Downs (including, in each case, all costs and expenses related to 

an Environmental Assessment and any other costs or expenses related to any environmental 

conditions with respect to the Shared-Loss Assets (it being understood that any remediation 

expenses for any such pollutant or contaminant are not recoverable if in excess of $200,000 per 

Shared-Loss Asset, without the Assuming Institution having obtained the prior consent of the 

Receiver for such expenses); provided, that, so long as income with respect to a Shared-Loss 

Loan is being prorated pursuant to the arithmetical formula in subsection (II) of the definition of 

“Recoveries”, the term “Recovery Expenses” shall not include that portion of any such expenses 

paid during such Recovery Quarter to recover any amounts owed on that Shared-Loss Loan that 

is derived by: 

subtracting (1) the product derived by multiplying: 

(A) the total amount of any such expenses paid by or on behalf of the Assuming 

Institution during such Recovery Quarter with respect to that Shared-Loss Loan, 

by 

(B) a fraction, the numerator of which is the aggregate principal amount 

(excluding reversals or charge-offs of Accrued Interest) of all such Failed Bank 

Charge-Offs/Write-Downs and Charge-Offs effected by the Assuming Institution 

with respect to that Shared-Loss Loan plus the principal amount of that SharedLoss Loan that has not yet been charged-off but has been placed on nonaccrual 

status, all of which occurred at any time prior to or during the period in which the 

interest income referred to in subparagraph (II)(A) of the definition of 

“Recoveries” was recognized, and the denominator of which is the total amount 

of principal indebtedness (including all such prior Failed Bank ChargeOffs/Write-Downs and Charge-Offs as described above) due from the Obligor on 

that Shared-Loss Loan as of the end of such period; 

from (2) the total amount of any such expenses paid during that Recovery Quarter with 

respect to that Shared-Loss Loan. 

“Recovery Quarter” has the meaning provided in Section 2.1(a)(ii) of this 

Commercial Shared-Loss Agreement. 

“Reimbursable Expenses” means, for any Shared-Loss Quarter, the amount of 

actual, reasonable and necessary out-of-pocket expenses (other than Capitalized Expenditures), 

paid to third parties (other than Affiliates of the Assuming Institution) by or on behalf of the 

Assuming Institution, as limited by Sections 3.2(c) and (d) of Article III of this Commercial 

Shared-Loss Agreement, to: 

(i) recover amounts owed with respect to any Shared-Loss Asset as to which a 

Charge-Off has been effected prior to the end of the final Shared-Loss Quarter (provided that 

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such amounts were incurred no earlier than the date the first Charge-Off on such Shared-Loss 

Asset could have been reflected on the Accounting Records of the Assuming Institution) and 

recover amounts owed with respect to Failed Bank Charge-Offs/Write-Downs (including, in each 

case, all costs and expenses related to an Environmental Assessment and any other costs or 

expenses related to any environmental conditions with respect to the Shared-Loss Assets (it 

being understood that any such remediation expenses for any such pollutant or contaminant are 

not recoverable if in excess of $200,000 per Shared-Loss Asset, without the Assuming Institution 

having obtained the prior consent of the Receiver for such expenses); provided, that, so long as 

income with respect to a Shared-Loss Loan is being pro-rated pursuant to the arithmetical 

formula in subsection (II) of the definition of “Recoveries”, the term “Reimbursable Expenses” 

shall not include that portion of any such expenses paid during such Shared-Loss Quarter to 

recover any amounts owed on that Shared-Loss Loan that is derived by: 

subtracting (1) the product derived by multiplying: 

(A) the total amount of any such expenses paid by or on behalf of the Assuming 

Institution during such Shared-Loss Quarter with respect to that Shared-Loss 

Loan, by 

(B) a fraction, the numerator of which is the aggregate principal amount 

(excluding reversals or charge-offs of Accrued Interest) of all such Failed Bank 

Charge-Offs/Write-Downs and Charge-Offs effected by the Assuming Institution 

with respect to that Shared-Loss Loan plus the principal amount of that SharedLoss Loan that has not yet been charged-off but has been placed on nonaccrual 

status, all of which occurred at any time prior to or during the period in which the 

interest income referred to in subparagraph (II)(A) of the definition of 

“Recoveries” was recognized, and the denominator of which is the total amount 

of principal indebtedness (including all such prior Failed Bank ChargeOffs/Write-Downs and Charge-Offs as described above) due from the Obligor on 

that Shared-Loss Loan as of the end of such period; 

from (2) the total amount of any such expenses paid during that Shared-Loss Quarter with 

respect to that Shared-Loss Loan; and 

(ii) manage, operate or maintain Other Real Estate, Additional ORE or Subsidiary 

ORE less the amount of any income received by the Assuming Institution during such SharedLoss Quarter with respect to such Other Real Estate, Additional ORE or Subsidiary ORE (which 

resulting amount under this clause (ii) may be negative). 

“Review Board” has the meaning provided in Section 2.1(f)(i) of this 

Commercial Shared-Loss Agreement. 

“Shared-Loss Amount” has the meaning provided in Section 2.1(b)(i) of this 

Commercial Shared-Loss Agreement. 

“Shared-Loss Asset Repurchase Price” means, with respect to any Shared-Loss 

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Asset, the principal amount thereof plus any other fees or penalties due from an Obligor 

(including, subject to the limitations discussed below, the amount of any Accrued Interest) stated 

on the Accounting Records of the Assuming Institution, as of the date as of which the SharedLoss Asset Repurchase Price is being determined (regardless, in the case of a Shared-Loss Loan, 

of the Legal Balance thereof) plus all Reimbursable Expenses and Recovery Expenses incurred 

up to and through the date of consummation of purchase of such Shared-Loss Asset; provided, 

that (i) in the case of a Shared-Loss Loan there shall be excluded from such amount the amount 

of any Accrued Interest accrued on or with respect to such Shared-Loss Loan prior to the ninety 

(90)-day period ending on the day prior to the purchase date determined pursuant to Sections 

2.1(e)(i) or 2.1(e)(iii) of this Commercial Shared-Loss Agreement, except to the extent such 

Accrued Interest was included in the Book Value of such Shared-Loss Loan, and (ii) any 

collections on a Shared-Loss Loan received by the Assuming Institution after the purchase date 

applicable to such Shared-Loss Loan shall be applied (without duplication) to reduce the SharedLoss Asset Repurchase Price of such Shared-Loss Loan on a dollar-for-dollar basis. For purposes 

of determining the amount of unpaid interest which accrued during a given period with respect to 

a variable-rate Shared-Loss Loan, all collections of interest shall be deemed to be applied to 

unpaid interest in the chronological order in which such interest accrued. 

“Shared-Loss Assets” means Shared-Loss Loans, Other Real Estate purchased 

by the Assuming Institution, Additional ORE, Subsidiary ORE and Capitalized Expenditures, but 

does not include Shared Loss MTM Assets. 

“Shared-Loss Loan Commitment” means: 

(i) any Commitment to make a further extension of credit or to make a further advance 

with respect to an existing Shared-Loss Loan; and 

(ii) any Shared-Loss Loan Commitment (described in subparagraph (i) immediately 

preceding) with respect to which the Assuming Institution has made a Permitted Amendment. 

“Shared-Loss Loan Commitment Advance” means an advance pursuant to a 

Shared-Loss Loan Commitment with respect to which the Assuming Institution has not made a 

Permitted Advance. 

“Shared-Loss Loans” means: 

(i)(A) Loans purchased by the Assuming Institution pursuant to the Purchase and 

Assumption Agreement set forth on Exhibit 4.15(b) to the Purchase and Assumption Agreement, 

(B) New Shared-Loss Loans purchased by the Assuming Institution pursuant to the Purchase and 

Assumption Agreement, (C) Permitted Advances and (D) Shared-Loss Loan Commitment 

Advances, if any; provided, that Shared-Loss Loans shall not include Loans, New Shared-Loss 

Loans, Permitted Advances and Shared-Loss Loan Commitment Advances with respect to which 

an Acquired Subsidiary, or a constituent Subsidiary thereof, is an Obligor; (E) Loans owned by 

any Subsidiary which are not Shared-Loss Loans under the Single Family Shared-Loss 

Agreement; and (F) Consumer Loans; and 

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(ii) any Shared-Loss Loans (described in subparagraph (i) immediately preceding) 

with respect to which the Assuming Institution has made a Permitted Amendment. 

“Shared-Loss MTM Assets” means those securities and other assets listed on 

Exhibit 4.15(C). 

“Shared-Loss Payment Trigger” means when the sum of the Cumulative Loss 

Amount under the Single Family Shared-Loss Agreement and the cumulative Net Charge-Offs 

under this Commercial Shared-Loss Agreement, exceeds the First Loss Tranche. If the First 

Loss Tranche is zero or a negative number, the Shared-Loss Payment Trigger shall be deemed to 

have been reached upon Bank Closing. 

“Shared-Loss Quarter” has the meaning provided in Section 2.1(a)(i) of this 

Commercial Shared-Loss Agreement. 

“Stated Threshold” means total losses under the shared loss agreements in the 

amount of ($26,000,000.00). 

“Subsidiary ORE” means all assets owned by ORE Subsidiaries that would 

constitute Additional ORE if such assets were on the books of the Assuming Institution. 

“Termination Date” means the eighth (8th) anniversary of the Commencement 

Date. 

“Third Party Servicer” means any servicer appointed from time to time by the 

Assuming Institution or any Affiliate of the Assuming Institution to service the Shared-Loss 

Assets on behalf of the Assuming Institution, the identity of which shall be given to the Receiver 

prior to or concurrent with the appointment thereof. 

ARTICLE II -- SHARED-LOSS ARRANGEMENT 

2.1 Shared-Loss Arrangement. 

(a) Quarterly Certificates. (i) Not later than thirty (30) days after the end of 

each Calendar Quarter from and including the initial Calendar Quarter to and including the 

Calendar Quarter in which the Applicable Anniversary of the Commencement Date falls (each of 

such Calendar Quarters being referred to herein as a “Shared-Loss Quarter”), the Assuming 

Institution shall deliver to the Receiver a certificate, signed by the Assuming Institution’s chief 

executive officer and its chief financial officer, setting forth in such form and detail as the 

Receiver may specify (a “Quarterly Certificate”): 

(A) the amount of Charge-Offs, the amount of Recoveries and the 

amount of Net Charge-Offs (which amount may be negative) during such SharedLoss Quarter with respect to the Shared-Loss Assets (and for Recoveries, with 

respect to the Assets for which a charge-off was effected by the Failed Bank prior 

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to Bank Closing); and 

(B) the aggregate amount of Reimbursable Expenses (which amount 

may be negative) during such Shared-Loss Quarter; and 

(C) net realized loss on the Shared Loss MTM Assets determined 

pursuant to FAS 115, expressed as a positive number (MTM Net Realized Loss), 

or net realized gain on the Shared Loss MTM assets, expressed as a negative 

number (MTM Net Realized Gain); and 

(D) any other than temporary impairment of the Shared Loss MTM 

Assets, determined pursuant to FAS 115, expressed as a positive number (“OTTI 

Loss”) or reversals of OTTI Loss, expressed as a negative number (for the 

avoidance of doubt, normal and customary unrealized mark-to-market changes by 

reason of the application of fair value accounting do not qualify for loss sharing 

payments). 

(ii) Not later than thirty (30) days after the end of each Calendar Quarter from 

and including the first Calendar Quarter following the final Shared-Loss Quarter to and including 

the Calendar Quarter in which the Termination Date falls (each of such Calendar Quarters being 

referred to herein as a “Recovery Quarter”), the Assuming Institution shall deliver to the 

Receiver a Quarterly Certificate setting forth, in such form and detail as the Receiver may 

specify 

(A) the amount of Recoveries and Recovery Expenses during such 

Recovery Quarter. On the Quarterly Certificate for the first Recovery Quarter 

only, the Assuming Institution may report as a separate item, in such form and 

detail as the Receiver may specify, the aggregate amount of any Reimbursable 

Expenses that: (a) were incurred prior to or during the final Shared-Loss Quarter, 

and (b) had not been included in any Quarterly Certificate for any Shared-Loss 

Quarter because they had not been actually paid by or on behalf of the Assuming 

Institution (in accordance with the terms of this Commercial Shared-Loss 

Agreement) during any Shared-Loss Quarter and (c) were actually paid by or on 

behalf of the Assuming Institution (in accordance with the terms of this 

Commercial Shared-Loss Agreement) during the first Recovery Quarter; and 

(B) net realized gain on the Shared Loss MTM Assets. 

(b) Payments With Respect to Shared-Loss Assets. 

(i) For purposes of this Section 2.1(b), the Assuming Institution shall initially 

record the Shared-Loss Assets on its Accounting Records at Book Value, and initially record the 

Shared Loss MTM Assets on its Accounting Records at Fair Value, and adjust such amounts as 

such values may change after the Bank Closing. If the amount of all Net Charge-Offs during any 

Shared-Loss Quarter plus Reimbursable Expenses, plus MTM Net Realized Gain or MTM Net 

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Realized Loss, plus OTTI Loss during such Shared-Loss Quarter (the “Shared-Loss Amount”) is 

positive, then, except as provided in Sections 2.1(c) and (e) below, and subject to the provisions 

of Section 2.1(b)(vi) below, not later than fifteen (15) days after the date on which the Receiver 

receives the Quarterly Certificate with respect to such Shared-Loss Quarter, the Receiver shall 

pay to the Assuming Institution an amount equal to eighty percent (80%) of the Shared-Loss 

Amount for such Shared-Loss Quarter. If the Shared-Loss Amount during any Shared-Loss 

Quarter is negative, the Assuming Institution shall pay to the Receiver an amount equal to eighty 

percent (80%) of the Shared-Loss Amount for such Shared-Loss Quarter, which payment shall 

be delivered to the Receiver together with the Quarterly Certificate for such Shared-Loss 

Quarter. When the cumulative Shared-Loss Amounts for all Shared-Loss Quarters plus the 

Cumulative Loss Amount under the Single Family Shared-Loss Agreement equals or exceeds the 

Stated Threshold, the Receiver shall pay to the Assuming Institution an amount equal to ninetyfive percent ((95%) of the Shared-Loss Amount for each Shared-Loss Quarter, until such time as 

the cumulative Shared-Loss Amount for all Shared-Loss Quarters is less than the Stated 

Threshold, when the percentage shall revert back to eighty percent (80%). 

(ii) If the amount of gross Recoveries during any Recovery Quarter less 

Recovery Expenses during such Recovery Quarter plus net realized gains or reversals of OTTI 

Loss on Shared Loss MTM Assets (the “Recovery Amount”) is positive, then, simultaneously 

with its delivery of the Quarterly Certificate with respect to such Recovery Quarter, the 

Assuming Institution shall pay to the Receiver an amount equal to eighty percent (80%) of the 

Recovery Amount for such Recovery Quarter. If the Recovery Amount is negative, then such 

negative amount shall be subtracted from the amount of gross Recoveries during the next 

succeeding Recovery Quarter in determining the Recovery Amount in such next succeeding 

Recovery Quarter; provided, that this Section 2.1(b)(ii) shall operate successively in the event 

that the Recovery Amount (after giving effect to this Section 2.1(b)(ii)) in such next succeeding 

Recovery Quarter is negative. The Assuming Institution shall specify, in the Quarterly Certificate 

for the final Recovery Quarter, the aggregate amount for all Recovery Quarters only, as of the 

end of, and including, the final Recovery Quarter of (A) Recoveries plus net realized gains or 

reversals of OTTI Loss on Shared Loss MTM Assets (“Aggregate Recovery Period 

Recoveries”), (B) Recovery Expenses (“Aggregate Recovery Expenses”), and (C) only those 

Recovery Expenses that have been actually “offset” against Aggregate Recovery Period 

Recoveries (including those so “offset” in that final Recovery Quarter) (“Aggregate Offset 

Recovery Expenses”); as used in this sentence, the term “offset” means the amount that has been 

applied to reduce gross Recoveries in any Recovery Quarter pursuant to the methodology set 

forth in this Section 2.1(b)(ii). If, at the end of the final Recovery Quarter the amount of 

Aggregate Recovery Expenses exceeds the amount of Aggregate Recovery Period Recoveries, 

the Receiver shall have no obligation to pay to the Assuming Institution all or any portion of 

such excess. Subsequent to the Assuming Institution’s calculation of the Recovery Amount (if 

any) for the final Recovery Quarter, the Assuming Institution shall also show on the Quarterly 

Certificate for the final Recovery Quarter the results of the following three mathematical 

calculations: (i) Aggregate Recovery Period Recoveries minus Aggregate Offset Recovery 

Expenses; (ii) Aggregate Recovery Expenses minus Aggregate Offset Recovery Expenses; and 

(iii) the lesser of the two amounts calculated in (i) and (ii) immediately above (“Additional 

Recovery Expenses”) multiplied by 80% (the amount so calculated in (iii) being defined as the 

“Additional Recovery Expense Amount”). If the Additional Recovery Expense Amount is 

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greater than zero, then the Assuming Institution may request in the Quarterly Certificate for the 

final Recovery Quarter that the Receiver reimburse the Assuming Institution the amount of the 

Additional Recovery Expense Amount and the Receiver shall pay to the Assuming Institution the 

Additional Recovery Expense Amount within fifteen (15) days after the date on which the 

Receiver receives that Quarterly Certificate. On the Quarterly Certificate for the final Recovery 

Quarter only, the Assuming Institution may include, in addition to any Recovery Expenses for 

that Recovery Quarter that were paid by or on behalf of the Assuming Institution in that 

Recovery Quarter, those Recovery Expenses that: (a) were incurred prior to or during the final 

Recovery Quarter, and (b) had not been included in any Quarterly Certificate for any Recovery 

Quarter because they had not been actually paid by or on behalf of the Assuming Institution (in 

accordance with the terms of this Commercial Shared-Loss Agreement) during any Recovery 

Quarter, and (c) were actually paid by or on behalf of the Assuming Institution (in accordance 

with the terms of this Commercial Shared-Loss Agreement) prior to the date the Assuming 

Institution is required to deliver that final Quarterly Certificate to the Receiver under the terms of 

Section 2.1(a)(ii). 

(iii) With respect to each Shared-Loss Quarter and Recovery Quarter, 

collections by or on behalf of the Assuming Institution on any charge-off effected by the Failed 

Bank prior to Bank Closing on an Asset other than a Shared-Loss Asset or Shared-Loss MTM 

Assets shall be reported as Recoveries under this Section 2.1 only to the extent such collections 

exceed the Book Value of such Asset, if any. For any Shared-Loss Quarter or Recovery Quarter 

in which collections by or on behalf of the Assuming Institution on such Asset are applied to 

both Book Value and to a charge-off effected by the Failed Bank prior to Bank Closing, the 

amount of expenditures incurred by or on behalf of the Assuming Institution attributable to the 

collection of any such Asset, that shall be considered a Reimbursable Expense or a Recovery 

Expense under this Section 2.1 will be limited to a proportion of such expenditures which is 

equal to the proportion derived by dividing (A) the amount of collections on such Asset applied 

to a charge-off effected by the Failed Bank prior to Bank Closing, by (B) the total collections on 

such Assets. 

(iv) If the Assuming Institution has duly specified an amount of Reimbursable 

Expenses on the Quarterly Certificate for the first Recovery Quarter as described above in the 

last sentence of Section 2.1(a)(ii), then, not later than fifteen (15) days after the date on which the 

Receiver receives that Quarterly Certificate, the Receiver shall pay to the Assuming Institution 

an amount equal to eighty percent (80%) (or, if the Cumulative Loss Amount under the Single 

Family Shared-Loss Agreement plus the cumulative Shared-Loss Amount for all Shared-Loss 

Quarters equals or exceeds the Stated Threshold, ninety-five percent (95%)) of the amount of 

such Reimbursable Expenses. 

(v) If the First Loss Tranche as determined under the Purchase and 

Assumption Agreement is a positive number, Receiver has no obligation to make payment for 

any Shared Loss Quarters until the Shared-Loss Payment Trigger is satisfied. 

(vi) Payments from the Receiver with respect to this Commercial Shared-Loss 

Agreement are administrative expenses of the Receiver. To the extent the Receiver needs funds 

for shared-loss payments respect to this Commercial Shared-Loss Agreement, the Receiver shall 

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request funds under the Master Loan and Security Agreement, as amended (“MLSA”), from 

FDIC in its corporate capacity. The Receiver will not agree to any amendment of the MLSA that 

would prevent the Receiver from drawing on the MLSA to fund shared-loss payments. 

(c) Limitation on Shared-Loss Payment. The Receiver shall not be required 

to make any payments pursuant to this Section 2.1 with respect to any Charge-Off of a SharedLoss Asset that the Receiver or the Corporation determines, based upon the Examination 

Criteria, should not have been effected by the Assuming Institution; provided, (x) the Receiver 

must provide notice to the Assuming Institution detailing the grounds for not making such 

payment, (y) the Receiver must provide the Assuming Institution with a reasonable opportunity 

to cure any such deficiency and (z) (1) to the extent curable, if cured, the Receiver shall make 

payment with respect to any properly effected Charge-Off and (2) to the extent not curable, the 

Receiver shall make a payment as to all Charge-Offs (or portion of Charge-Offs) that were 

effected which would have been payable as a Charge-Off if the Assuming Institution had 

properly effected such Charge-Off. In the event that the Receiver does not make any payments 

with respect to any Charge-Off of a Shared-Loss Asset pursuant to this Section 2.1 or determines 

that a payment was improperly made, the Assuming Institution and the Receiver shall, upon final 

resolution, make such accounting adjustments and payments as may be necessary to give 

retroactive effect to such corrections. 

(d) Sale of, or Additional Advances or Amendments with Respect to, 

Shared-Loss Loans and Administration of Related Loans. No Shared-Loss Loan shall be 

treated as a Shared-Loss Asset pursuant to this Section 2.1 (i) if the Assuming Institution sells or 

otherwise transfers such Shared-Loss Loan or any interest therein (whether with or without 

recourse) to any Person, (ii) after the Assuming Institution makes any additional advance, 

commitment or increase in the amount of a commitment with respect to such Shared-Loss Loan 

that does not constitute a Permitted Advance or a Shared-Loss Loan Commitment Advance, (iii) 

after the Assuming Institution makes any amendment, modification, renewal or extension to such 

Shared-Loss Loan that does not constitute a Permitted Amendment, or (iv) after the Assuming 

Institution has managed, administered or collected any “Related Loan” (as such term is defined 

in Section 3.4 of Article III of this Commercial Shared-Loss Agreement) in any manner which 

would have the effect of increasing the amount of any collections with respect to the Related 

Loan to the detriment of such Shared-Loss Asset to which such loan is related; provided, that 

any such Shared-Loss Loan that has been the subject of Charge-Offs prior to the taking of any 

action described in clause (i), (ii), (iii) or (iv) of this Section 2.1(d) by the Assuming Institution 

shall be treated as a Shared-Loss Asset pursuant to this Section 2.1 solely for the purpose of 

treatment of Recoveries on such Charge-Offs until such time as the amount of Recoveries with 

respect to such Shared-Loss Asset equals such Charge-Offs. 

(e) Option to Purchase. 

(i) In the event that the Assuming Institution determines that there is a 

substantial likelihood that continued efforts to collect a Shared-Loss Asset or an Asset for which 

a charge-off was effected by the Failed Bank with, in either case, a Legal Balance of $500,000 or 

more on the Accounting Records of the Assuming Institution will result in an expenditure, after 

Bank Closing, of funds by on behalf of the Assuming Institution to a third party for a specified 

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purpose (the expenditure of which, in its best judgment, will maximize collections), which do not 

constitute Reimbursable Expenses or Recovery Expenses, and such expenses will exceed ten 

percent (10%) of the then book value thereof as reflected on the Accounting Records of the 

Assuming Institution, the Assuming Institution shall (i) promptly so notify the Receiver and (ii) 

request that such expenditure be treated as a Reimbursable Expense or Recovery Expense for 

purposes of this Section 2.1. (Where the Assuming Institution determines that there is a 

substantial likelihood that the previously mentioned situation exists with respect to continued 

efforts to collect a Shared-Loss Asset or an Asset for which a charge-off was effected by the 

Failed Bank with, in either case, a Legal Balance of less than $1,000,000 on the Accounting 

Records of the Assuming Institution, the Assuming Institution may so notify the Receiver and 

request that such expenditure be treated as a Reimbursable Expense or Recovery Expense.) 

Within thirty (30) days after its receipt of such a notice, the Receiver will advise the Assuming 

Institution of its consent or denial, that such expenditures shall be treated as a Reimbursable 

Expense or Recovery Expense, as the case may be. Notwithstanding the failure of the Receiver 

to give its consent with respect to such expenditures, the Assuming Institution shall continue to 

administer such Shared-Loss Asset in accordance with Section 2.2, except that the Assuming 

Institution shall not be required to make such expenditures. At any time after its receipt of such a 

notice and on or prior to the Termination Date the Receiver shall have the right to purchase such 

Shared-Loss Asset or Asset as provided in Section 2.1(e)(iii), notwithstanding any consent by the 

Receiver with respect to such expenditure. 

(ii) During the period prior to the Termination Date, the Assuming Institution 

shall notify the Receiver within fifteen (15) days after any of the following becomes fully or 

partially charged-off: 

(A) a Shared-Loss Loan having a Legal Balance (or, in the case of more 

than one (1) Shared-Loss Loan made to the same Obligor, a combined Legal 

Balance) of $500,000 or more in circumstances in which the legal claim against 

the relevant Obligor survives; or 

(B) a Shared-Loss Loan to a director, an “executive officer” as defined in 

12 C.F.R.  215.2(d), a “principal shareholder” as defined in 12 C.F.R.  215.2(l), or 

an Affiliate of the Assuming Institution. 

(iii) If the Receiver determines in its discretion that the Assuming Institution is 

not diligently pursuing collection efforts with respect to any Shared-Loss Asset which has been 

fully or partially charged-off or written-down (including any Shared-Loss Asset which is 

identified or required to be identified in a notice pursuant to Section 2.1(e)(ii)) or any Asset for 

which there exists a Failed Bank Charge-Off/Write-Down, the Receiver may at its option, 

exercisable at any time on or prior to the Termination Date, require the Assuming Institution to 

assign, transfer and convey such Shared-Loss Asset or Asset to and for the sole benefit of the 

Receiver for a price equal to the Shared-Loss Asset Repurchase Price thereof less the Related 

Liability Amount with respect to any Related Liabilities related to such Shared-Loss Asset or 

Asset. 

(iv) Not later than ten (10) days after the date upon which the Assuming 

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Institution receives notice of the Receiver’s intention to purchase or require the assignment of 

any Shared-Loss Asset or Asset pursuant to Section 2.1(e)(i) or (iii), the Assuming Institution 

shall transfer to the Receiver such Shared-Loss Asset or Asset and any Credit Files relating 

thereto and shall take all such other actions as may be necessary and appropriate to adequately 

effect the transfer of such Shared-Loss Asset or Asset from the Assuming Institution to the 

Receiver. Not later than fifteen (15) days after the date upon which the Receiver receives such 

Shared-Loss Asset or Asset and any Credit Files relating thereto, the Receiver shall pay to the 

Assuming Institution an amount equal to the Shared-Loss Asset Repurchase Price of such 

Shared-Loss Asset or Asset less the Related Liability Amount. 

(v) The Receiver shall assume all Related Liabilities with respect to any 

Shared-Loss Asset or Asset set forth in the notice described in Section 2.1(e)(iv). 

(f) Dispute Resolution. 

(i) (A) Any dispute as to whether a Charge-Off of a Shared-Loss Asset was made 

in accordance with Examination Criteria shall be resolved by the Assuming Institution’s 

Chartering Authority. (B) With respect to any other dispute arising under the terms of this 

Commercial Shared-Loss Agreement which the parties hereto cannot resolve after having 

negotiated such matter, in good faith, for a thirty (30) day period, other than a dispute the 

Corporation is not permitted to submit to arbitration under the Administrative Dispute Resolution 

Act of 1996 (“ADRA”), as amended, such other dispute shall be resolved by determination of a 

review board (a “Review Board”) established pursuant to Section 2.1(f). Any Review Board 

under this Section 2.1(f) shall follow the provisions of the Federal Arbitration Act and shall 

follow the provisions of the ADRA. (C) Any determination by the Assuming Institution’s 

Chartering Authority or by a Review Board shall be conclusive and binding on the parties hereto 

and not subject to further dispute, and judgment may be entered on said determination in 

accordance with applicable arbitration law in any court having jurisdiction thereof. 

(ii) A Review Board shall consist of three (3) members, each of whom shall 

have such expertise as the Corporation and the Assuming Institution agree is relevant. As 

appropriate, the Receiver or the Corporation (the “FDIC Party”) will select one member, one 

member will be selected by the Assuming Institution and the third member (the “Neutral 

Member”) will be selected by the other two members. The member of the Review Board selected 

by a party may be removed at any time by such party upon two (2) days’ written notice to the 

other party of the selection of a replacement member. The Neutral Member may be removed by 

unanimous action of the members appointed by the FDIC Party and the Assuming Institution 

after two (2) days’ prior written notice to the FDIC Party and the Assuming Institution of the 

selection of a replacement Neutral Member. In addition, if a Neutral Member fails for any 

reason to serve or continue to serve on the Review Board, the other remaining members shall so 

notify the parties to the dispute and the Neutral Member in writing that such Neutral Member 

will be replaced, and the Neutral Member shall thereafter be replaced by the unanimous action of 

the other remaining members within twenty (20) business days of that notification. 

(iii) No dispute may be submitted to a Review Board by any of the parties to 

this Commercial Shared-Loss Agreement unless such party has provided to the other party a 

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written notice of dispute (“Notice of Dispute”). During the forty-five (45)-day period following 

the providing of a Notice of Dispute, the parties to the dispute will make every effort in good 

faith to resolve the dispute by mutual agreement. As part of these good faith efforts, the parties 

should consider the use of less formal dispute resolution techniques, as judged appropriate by 

each party in its sole discretion. Such techniques may include, but are not limited to, mediation, 

settlement conference, and early neutral evaluation. If the parties have not agreed to a resolution 

of the dispute by the end of such forty-five (45)-day period, then, subject to the discretion of the 

Corporation and the written consent of the Assuming Institution as set forth in Section 

2.1(f)(i)(B) above, on the first day following the end of such period, the FDIC Party and the 

Assuming Institution shall notify each other of its selection of its member of the Review Board 

and such members shall be instructed to promptly select the Neutral Member of the Review 

Board. If the members appointed by the FDIC Party and the Assuming Institution are unable to 

promptly agree upon the initial selection of the Neutral Member, or a timely replacement Neutral 

Member as set forth in Section 2.1(f)(ii) above, the two appointed members shall apply to the 

American Arbitration Association (“AAA”), and such Neutral Member shall be appointed in 

accordance with the Commercial Arbitration Rules of the AAA. 

(iv) The resolution of a dispute pursuant to this Section 2.1(f) shall be 

governed by the Commercial Arbitration Rules of the AAA to the extent that such rules are not 

inconsistent with this Section 2.1(f). The Review Board may modify the procedures set forth in 

such rules from time to time with the prior approval of the FDIC Party and the Assuming 

Institution. 

(v) Within fifteen (15) days after the last to occur of the final written 

submissions of both parties, the presentation of witnesses, if any, and oral presentations, if any, 

the Review Board shall adopt the position of one of the parties and shall present to the parties a 

written award regarding the dispute. The determination of any two (2) members of a Review 

Board will constitute the determination of such Review Board. 

(vi) The FDIC Party and the Assuming Institution will each pay the fees and 

expenses of the member of the Review Board selected by it. The FDIC Party and Assuming 

Institution will share equally the fees and expenses of the Neutral Member. No such fees or 

expenses incurred by or on behalf of the Assuming Institution shall be subject to reimbursement 

by the FDIC Party under this Commercial Shared-Loss Agreement or otherwise. 

(vii) Each party will bear all costs and expenses incurred by it in connection 

with the submission of any dispute to a Review Board. No such costs or expenses incurred by or 

on behalf of the Assuming Institution shall be subject to reimbursement by the FDIC Party under 

this Commercial Shared-Loss Agreement or otherwise. The Review Board shall have no 

authority to award costs or expenses incurred by either party to these proceedings. 

(viii) Any dispute resolution proceeding held pursuant to this Section 2.1(f) 

shall not be public. In addition, each party and each member of any Review Board shall strictly 

maintain the confidentiality of all issues, disputes, arguments, positions and interpretations of 

any such proceeding, as well as all information, attachments, enclosures, exhibits, summaries, 

compilations, studies, analyses, notes, documents, statements, schedules and other similar items 

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associated therewith, except as the parties agree in writing or such disclosure is required pursuant 

to law, rule or regulation. Pursuant to ADRA, dispute resolution communications may not be 

disclosed either by the parties or by any member of the Review board unless: 

(1) all parties to the dispute resolution proceeding agree in writing; 

(2) the communication has already been made public; 

(3) the communication is required by statute, rule or regulation to be made public; 

or 

(4) a court determines that such testimony or disclosure is necessary to prevent a 

manifest injustice, help establish a violation of the law or prevent harm to the 

public health or safety, or of sufficient magnitude in the particular case to 

outweigh the integrity of dispute resolution proceedings in general by reducing 

the confidence of parties in future cases that their communications will remain 

confidential. 

(ix) Any dispute resolution proceeding pursuant to this Section 2.1(f) (whether 

as a matter of good faith negotiations, by resort to a Review Board, or otherwise) is a 

compromise negotiation for purposes of the Federal Rules of Evidence and state rules of 

evidence. The parties agree that all proceedings, including any statement made or document 

prepared by any party, attorney or other participants are privileged and shall not be disclosed in 

any subsequent proceeding or document or construed for any purpose as an admission against 

interest. Any document submitted and any statements made during any dispute resolution 

proceeding are for settlement purposes only. The parties further agree not to subpoena any of the 

members of the Review Board or any documents submitted to the Review Board. In no event 

will the Neutral Member voluntarily testify on behalf of any party. 

(x) No decision, interpretation, determination, analysis, statement, award or 

other pronouncement of any Review Board shall constitute precedent as regards any subsequent 

proceeding (whether or not such proceeding involves dispute resolution under this Commercial 

Shared-Loss Agreement) nor shall any Review Board be bound to follow any decision, 

interpretation, determination, analysis, statement, award or other pronouncement rendered by any 

previous Review Board or any other previous dispute resolution panel which may have convened 

in connection with a transaction involving other failed financial institutions or Federal assistance 

transactions. 

(xi) The parties may extend any period of time in this Section 2.1(f) by mutual 

agreement. Notwithstanding anything above to the contrary, no dispute shall be submitted to a 

Review Board until each member of the Review Board, and any substitute member, if applicable, 

agrees to be bound by the provisions of this Section 2.1(f) as applicable to members of a Review 

Board. Prior to the commencement of the Review Board proceedings, or, in the case of a 

substitute Neutral Member, prior to the re-commencement of such proceedings subsequent to 

that substitution, the Neutral Member shall provide a written oath of impartiality. 

(xii) For the avoidance of doubt, and notwithstanding anything herein to the 

contrary, in the event any notice of dispute is provided to a party under this Section 2.1(g) prior 

to the Termination Date, the terms of this Commercial Shared-Loss Agreement shall remain in 

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effect with respect to any such items set forth in such notice until such time as any such dispute 

with respect to such item is finally resolved. 

 (g) Payment in the Event Losses Fail to Reach Expected Level. On the 

date that is 45 days following the last day (such day, the “True-Up Measurement Date”) of the 

calendar month in which the tenth anniversary of the calendar day following the Bank Closing 

occurs, the Assuming Institution shall pay to the Receiver fifty percent (50%) of the excess, if 

any, of (i) twenty percent (20%) of the Stated Threshold less (ii) the sum of (A) twenty-five 

percent (25%) of the asset premium (discount) plus (B) twenty-five percent (25%) of the 

Cumulative Shared-Loss Payments plus (C) the Cumulative Servicing Amount. The Assuming 

Institution shall deliver to the Receiver not later than 30 days following the True-Up 

Measurement Date, a schedule, signed by an officer of the Assuming Institution, setting forth in 

reasonable detail the calculation of the Cumulative Shared-Loss Payments and the Cumulative 

Servicing Amount. 

2.2 Administration of Shared-Loss Assets. The Assuming Institution shall at all 

times prior to the Termination Date comply with the Rules Regarding the Administration of 

Shared-Loss Assets as set forth in Article III of this Commercial Shared-Loss Agreement. 

2.3 Auditor Report; Right to Audit. 

(a) Within ninety (90) days after the end of each fiscal year from and 

including the fiscal year during which Bank Closing falls to and including the calendar year 

during which the Termination Date falls, the Assuming Institution shall deliver to the 

Corporation and to the Receiver a report signed by its independent public accountants stating that 

they have reviewed the terms of this Commercial Shared-Loss Agreement and that, in the course 

of their annual audit of the Assuming Institution’s books and records, nothing has come to their 

attention suggesting that any computations required to be made by the Assuming Institution 

during such year by this Article II were not made by the Assuming Institution in accordance 

herewith. In the event that the Assuming Institution cannot comply with the preceding sentence, 

it shall promptly submit to the Receiver corrected computations together with a report signed by 

its independent public accountants stating that, after giving effect to such corrected 

computations, nothing has come to their attention suggesting that any computations required to 

be made by the Assuming Institution during such year by this Article II were not made by the 

Assuming Institution in accordance herewith. In such event, the Assuming Institution and the 

Receiver shall make all such accounting adjustments and payments as may be necessary to give 

effect to each correction reflected in such corrected computations, retroactive to the date on 

which the corresponding incorrect computation was made. It is the intention of this provision to 

align the timing of the audit required under this Commercial Shared-Loss Agreement with the 

examination audit required pursuant to 12 CFR Section 363. 

(b) The Assuming Institution shall perform on an annual basis an internal 

audit of its compliance with the provisions of this Article II and shall provide the Receiver and 

the Corporation with copies of the internal audit reports and access to internal audit workpapers 

related to such internal audit. 

(c) The Receiver or the Corporation may perform an audit to determine the 

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Assuming Institution’s compliance with the provisions of this Commercial Shared-Loss 

Agreement, including this Article II, at any time by providing not less than ten (10) Business 

Days prior written notice. The scope and duration of any such audit shall be within the discretion 

of the Receiver or the Corporation, as the case may be, but shall in no event be administered in a 

manner that unreasonably interferes with the operation of the Assuming Institution’s business. 

The Receiver or the Corporation, as the case may be, shall bear the expense of any such audit. In 

the event that any corrections are necessary as a result of such an audit, the Assuming Institution 

and the Receiver shall make such accounting adjustments and payments as may be necessary to 

give retroactive effect to such corrections. 

2.4 Withholdings. Notwithstanding any other provision in this Article II, the 

Receiver, upon the direction of the Director (or designee) of the Corporation’s Division of 

Resolutions and Receiverships, may withhold payment for any amounts included in a Quarterly 

Certificate delivered pursuant to Section 2.1, if, in its judgment, there is a reasonable basis under 

the terms of this Commercial Shared-Loss Agreement for denying the eligibility of an item for 

which reimbursement or payment is sought under such Section. In such event, the Receiver shall 

provide a written notice to the Assuming Institution detailing the grounds for withholding such 

payment. At such time as the Assuming Institution demonstrates to the satisfaction of the 

Receiver that the grounds for such withholding of payment, or portion of payment, no longer 

exist or have been cured, then the Receiver shall pay the Assuming Institution the amount 

withheld which the Receiver determines is eligible for payment, within fifteen (15) Business 

Days. In the event the Receiver or the Assuming Institution elects to submit the issue of the 

eligibility of the item for reimbursement or payment for determination under the dispute 

resolution procedures of Section 2.1(f), then (i) if the dispute is settled by the mutual agreement 

of the parties in accordance with Section 2.1(f)(iii), the Receiver shall pay the amount withheld 

(to the extent so agreed) within fifteen (15) Business Days from the date upon which the dispute 

is determined by the parties to be resolved by mutual agreement, and (ii) if the dispute is 

resolved by the determination of a Review Board, the Receiver shall pay the amount withheld (to 

the extent so determined) within fifteen (15) Business Days from the date upon which the 

Receiver is notified of the determination by the Review Board of its obligation to make such 

payment. Any payment by the Receiver pursuant to this Section 2.4 shall be made together with 

interest on the amount thereof from the date the payment was agreed or determined otherwise to 

be due, at the interest rate per annum determined by the Receiver to be equal to the coupon 

equivalent of the three (3)-month U.S. Treasury Bill Rate in effect as of the first Business Day of 

each Calendar Quarter during which such interest accrues as reported in the Federal Reserve 

Board’s Statistical Release for Selected Interest Rates H.15 opposite the caption “Auction 

Average - 3-Month” or, if not so reported for such day, for the next preceding Business Day for 

which such rate was so reported. 

2.5 Books and Records. The Assuming Institution shall at all times during the term 

of this Commercial Shared-Loss Agreement keep books and records which fairly present all 

dealings and transactions carried out in connection with its business and affairs. Except as 

otherwise provided for in the Purchase and Assumption Agreement or this Commercial SharedLoss Agreement, all financial books and records shall be kept in accordance with generally 

accepted accounting principles, consistently applied for the periods involved and in a manner 

such that information necessary to determine compliance with any requirement of the Purchase 

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and Assumption Agreement or this Commercial Shared-Loss Agreement will be readily 

obtainable, and in a manner such that the purposes of the Purchase and Assumption Agreement 

or this Commercial Shared-Loss Agreement may be effectively accomplished. Without the prior 

written approval of the Corporation, the Assuming Institution shall not make any change in its 

accounting principles adversely affecting the value of the Shared-Loss Assets except as required 

by a change in generally accepted accounting principles. The Assuming Institution shall notify 

the Corporation of any change in its accounting principles affecting the Shared-Loss Assets 

which it believes are required by a change in generally accepted accounting principles. 

2.6 Information. The Assuming Institution shall promptly provide to the 

Corporation such other information, including financial statements and computations, relating to 

the performance of the provisions of the Purchase and Assumption Agreement or otherwise 

relating to its business and affairs or this Commercial Shared-Loss Agreement, as the 

Corporation or the Receiver may request from time to time. 

2.7 Tax Ruling. The Assuming Institution shall not at any time, without the 

Corporation’s prior written consent, seek a private letter ruling or other determination from the 

Internal Revenue Service or otherwise seek to qualify for any special tax treatment or benefits 

associated with any payments made by the Corporation pursuant to the Purchase and Assumption 

Agreement or this Commercial Shared-Loss Agreement. 

ARTICLE III - RULES REGARDING THE ADMINISTRATION OF SHARED-LOSS 

ASSETS AND SHARED-LOSS MTM ASSETS
 

3.1 Agreement with Respect to Administration. The Assuming Institution shall 

(and shall cause any of its Affiliates to which the Assuming Institution transfers any Shared-Loss 

Assets or Shared-Loss MTM Assets) to, or a Third Party Servicer to, manage, administer, and 

collect the Shared-Loss Assets and Shared-Loss MTM Assets while owned by the Assuming 

Institution or any Affiliate thereof during the term of this Commercial Shared-Loss Agreement in 

accordance with the rules set forth in this Article III (“Rules”). The Assuming Institution shall be 

responsible to the Receiver and the Corporation in the performance of its duties hereunder and 

shall provide to the Receiver and the Corporation such reports as the Receiver or the Corporation 

reasonably deems advisable, including but not limited to the reports required by Section 3.3 

hereof, and shall permit the Receiver and the Corporation at all times to monitor the Assuming 

Institution’s performance of its duties hereunder. 

3.2 Duties of the Assuming Institution with Respect to Shared-Loss Assets. 

(a) In performance of its duties under these Rules, the Assuming Institution shall: 

(i) manage, administer, collect and effect Charge-Offs and Recoveries 

with respect to each Shared-Loss Asset in a manner consistent with (A) usual and prudent 

business and banking practices; (B) the Assuming Institution’s (or, in the case a Third Party 

Servicer is engaged, the Third Party Servicer’s) practices and procedures including, without 

limitation, the then-effective written internal credit policy guidelines of the Assuming Institution, 

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with respect to the management, administration and collection of and taking of charge-offs and 

write-downs with respect to loans, other real estate and repossessed collateral that do not 

constitute Shared Loss Assets; 

(ii) exercise its best business judgment in managing, administering, 

collecting and effecting Charge-Offs with respect to Shared-Loss Assets; 

(iii) use its best efforts to maximize collections with respect to SharedLoss Assets and, if applicable for a particular Shared-Loss Asset, without regard to the effect of 

maximizing collections on assets held by the Assuming Institution or any of its Affiliates that are 

not Shared-Loss Assets; 

(iv) adopt and implement accounting, reporting, record-keeping and 

similar systems with respect to the Shared-Loss Assets, as provided in Section 3.4 hereof; 

(v) retain sufficient staff to perform its duties hereunder; and 

(vi) provide written notification in accordance with Article IV of this 

Commercial Shared-Loss Agreement immediately after the execution of any contract pursuant to 

which any third party (other than an Affiliate of the Assuming Institution) will manage, 

administer or collect any of the Shared-Loss Assets, together with a copy of that contract. 

(b) Any transaction with or between any Affiliate of the Assuming Institution 

with respect to any Shared-Loss Asset including, without limitation, the execution of any 

contract pursuant to which any Affiliate of the Assuming Institution will manage, administer or 

collect any of the Shared-Loss Assets, or any other action involving self-dealing, shall be subject 

to the prior written approval of the Receiver or the Corporation. 

(c) The following categories of expenses shall not be deemed to be Reimbursable 

Expenses or Recovery Expenses: 

(i) Federal, State, or local income taxes and expenses related thereto; 

(ii) salaries or other compensation and related benefits of Assuming 

Institution employees and the employees of its Affiliates including, without limitation, any bonus, 

commission or severance arrangements, training, payroll taxes, dues, or travel- or relocationrelated expenses,; 

(iii) the cost of space occupied by the Assuming Institution, any Affiliate 

thereof and their staff, the rental of and maintenance of furniture and equipment, and expenses 

for data processing including the purchase or enhancement of data processing systems;
 

(iv) except as otherwise provided herein, fees for accounting and other 

independent professional consultants (other than consultants retained to assess the presence, 

storage or release of any hazardous or toxic substance, or any pollutant or contaminant with 

respect to the collateral securing a Shared-Loss Loan that has been fully or partially charged-off); 

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provided, that for purposes of this Section 3.2(c)(iv), fees of attorneys and appraisers engaged as 

necessary to assist in collections with respect to Shared-Loss Assets shall not be deemed to be 

fees of other independent consultants; 

(v) allocated portions of any other overhead or general and administrative 

expense other than any fees relating to specific assets, such as appraisal fees or environmental 

audit fees, for services of a type the Assuming Institution does not normally perform internally; 

(vi) any expense not incurred in good faith and with the same degree of 

care that the Assuming Institution normally would exercise in the collection of troubled assets in 

which it alone had an interest; and 

(vii) any expense incurred for a product, service or activity that is of an 

extravagant nature or design. 

(d) Subject to Section 3.7, the Assuming Institution shall not contract with third 

parties to provide services the cost of which would be a Reimbursable Expense or Recovery 

Expense if the Assuming Institution would have provided such services itself if the relevant 

Shared-Loss Assets were not subject to the loss-sharing provisions of Section 2.1 of this 

Commercial Shared-Loss Agreement. 

3.3 Duties of the Assuming Institution with Respect to Shared-Loss MTM Assets. 

(a) In performance of its duties under these Rules, the Assuming Institution shall: 

(i) manage, administer, collect and each Shared-Loss MTM Asset in a 

manner consistent with (A) usual and prudent business and banking practices; (B) the Assuming 

Institution’s practices and procedures including, without limitation, the then-effective written 

internal credit policy guidelines of the Assuming Institution, with respect to the management, 

administration and collection of similar assets that are not Shared-Loss MTM Assets; 

(ii) exercise its best business judgment in managing, administering, 

collecting and effecting Charge-Offs with respect to Shared-Loss MTM Assets; 

(iii) use its best efforts to maximize collections with respect to SharedLoss MTM Assets and, if applicable for a particular Shared-Loss MTM Asset, without regard to 

the effect of maximizing collections on assets held by the Assuming Institution or any of its 

Affiliates that are not Shared-Loss MTM Assets, provided that, any sale of a Shared-Loss MTM 

Asset shall only be made with the prior approval of the Receiver or the Corporation; 

(iv) adopt and implement accounting, reporting, record-keeping and 

similar systems with respect to the Shared-Loss MTM Assets, as provided in Section 3.4 hereof; 

(v) retain sufficient staff to perform its duties hereunder; and 

(vi) provide written notification in accordance with Article IV of this 

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Commercial Shared-Loss Agreement immediately after the execution of any contract pursuant to 

which any third party (other than an Affiliate of the Assuming Institution) will manage, 

administer or collect any of the Shared-Loss MTM Assets, together with a copy of that contract. 

(b) Any transaction with or between any Affiliate of the Assuming Institution 

with respect to any Shared-Loss MTM Asset including, without limitation, the execution of any 

contract pursuant to which any Affiliate of the Assuming Institution will manage, administer or 

collect any of the Shared-Loss Assets, or any other action involving self-dealing, shall be subject 

to the prior written approval of the Receiver or the Corporation. 

(c) The Assuming Institution shall not contract with third parties to provide 

services the cost of which would be a Reimbursable Expense or Recovery Expense if the 

Assuming Institution would have provided such services itself if the relevant Shared-Loss Assets 

were not subject to the loss-sharing provisions of Section 2.1 of this Commercial Shared-Loss 

Agreement. 

3.4 Records and Reports. The Assuming Institution shall establish and maintain 

records on a separate general ledger, and on such subsidiary ledgers as may be appropriate to 

account for the Shared-Loss Assets and the Shared-Loss MTM Assets, in such form and detail as 

the Receiver or the Corporation may require, to enable the Assuming Institution to prepare and 

deliver to the Receiver or the Corporation such reports as the Receiver or the Corporation may 

from time to time request regarding the Shared-Loss Assets, the Shared-Loss MTM Assets and 

the Quarterly Certificates required by Section 2.1 of this Commercial Shared-Loss Agreement. 

3.5 Related Loans. 

(a) The Assuming Institution shall not manage, administer or collect any 

“Related Loan” in any manner which would have the effect of increasing the amount of any 

collections with respect to the Related Loan to the detriment of the Shared-Loss Asset to which 

such loan is related. A “Related Loan” means any loan or extension of credit held by the 

Assuming Institution at any time on or prior to the end of the final Recovery Quarter that is: (i) 

made to the same Obligor with respect to a Loan that is a Shared-Loss Asset or with respect to a 

Loan from which Other Real Estate, Additional ORE or Subsidiary ORE derived, or (ii) 

attributable to the same primary Obligor with respect to any Loan described in clause (i) under 

the rules of the Assuming Institution’s Chartering Authority concerning the legal lending limits 

of financial institutions organized under its jurisdiction as in effect on the Commencement Date, 

as applied to the Assuming Institution. 

(b) The Assuming Institution shall prepare and deliver to the Receiver with 

the Quarterly Certificates for the Calendar Quarters ending June 30 and December 31 for all 

Shared-Loss Quarters and Recovery Quarters, a schedule of all Related Loans which are 

commercial loans or commercial real estate loans with Legal Balances of $500,000 or more on 

the Accounting Records of the Assuming Institution as of the end of each such semi-annual 

period, and all other commercial loans or commercial real estate loans attributable to the same 

Obligor on such loans of $500,000 or more. 

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3.6 Legal Action; Utilization of Special Receivership Powers. The Assuming 

Institution shall notify the Receiver in writing (such notice to be given in accordance with Article 

IV below and to include all relevant details) prior to utilizing in any legal action any special legal 

power or right which the Assuming Institution derives as a result of having acquired a SharedLoss Asset from the Receiver, and the Assuming Institution shall not utilize any such power 

unless the Receiver shall have consented in writing to the proposed usage. The Receiver shall 

have the right to direct such proposed usage by the Assuming Institution and the Assuming 

Institution shall comply in all respects with such direction. Upon request of the Receiver, the 

Assuming Institution will advise the Receiver as to the status of any such legal action. The 

Assuming Institution shall immediately notify the Receiver of any judgment in litigation 

involving any of the aforesaid special powers or rights. 

3.7 Third Party Servicer. The Assuming Institution may perform any of its 

obligations and/or exercise any of its rights under this Commercial Shared-Loss Agreement 

through or by one or more Third Party Servicers, who may take actions and make expenditures 

as if any such Third Party Servicer was the Assuming Institution hereunder (and, for the 

avoidance of doubt, such expenses incurred by any such Third Party Servicer on behalf of the 

Assuming Institution shall be Reimbursable Expenses or Recovery Expenses, as the case may be, 

to the same extent such expenses would so qualify if incurred by the Assuming Institution); 

provided, however, that the use thereof by the Assuming Institution shall not release the 

Assuming Institution of any obligation or liability hereunder. 

ARTICLE IV -- PORTFOLIO SALE 

4.1 Assuming Institution Portfolio Sales of Remaining Shared-Loss Assets. The 

Assuming Institution shall have the right with the concurrence of the Receiver, commencing as 

of the first day of the third to last Shared-Loss Quarter, to liquidate for cash consideration, in one 

or more transactions, all or a portion of Shared-Loss Assets held by the Assuming Institution 

(“Portfolio Sales”). If the Assuming Institution exercises its option under this Section 4.1, it 

must give thirty (30) days notice in writing to the Receiver setting forth the details and schedule 

for the Portfolio Sale which shall be conducted by means of sealed bid sales to third parties, not 

including any of the Assuming Institution’s affiliates, contractors, or any affiliates of the 

Assuming Institution’s contractors. 

4.2 Calculation of Sale Gain or Loss. For Shared-Loss Assets gain or loss on the 

sales under Section 4.1 will be calculated as the sale price received by the Assuming Institution 

less the book value of the remaining Shared-Loss Assets. 

ARTICLE V -- LOSS-SHARING NOTICES GIVEN TO CORPORATION AND/OR 

RECEIVER
 

As a supplement to the notice provisions contained in Section 13.7 of the Purchase and 

Assumption Agreement, any notice, request, demand, consent, approval, or other communication 

(a “Notice”) given to the Corporation and/or the Receiver in the loss-sharing context shall be 

given as follows: 

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5.1 With respect to a Notice under Section 2 and Sections 3.1-3.5 of this Commercial 

Shared-Loss Agreement: 

Federal Deposit Insurance Corporation 

Division of Resolutions and Receiverships 

550 17th Street, N.W. 

Washington, D.C. 20429 

Attention: Assistant Director, Franchise and Asset Marketing 

5.2 With respect to a Notice under Section 3.6 of this Commercial Shared-Loss 

Agreement: 

Federal Deposit Insurance Corporation Legal Division 

1601 Bryan Street 

Dallas, Texas 75201 

Attention: Regional Counsel 

with a copy to: 

Federal Deposit Insurance Corporation Legal Division 

550 17th Street, N.W. 

Washington, D.C. 20429 

Attention: Senior Counsel (Special Issues Group) 

ARTICLE VI – MISCELLANEOUS 

6.1 Expenses. Except as otherwise expressly provided herein, all costs and expenses 

incurred by a party hereto in connection with this Commercial Shared-Loss Agreement shall be 

borne by such party whether or not the transactions contemplated herein shall be consummated. 

6.2 Successors and Assigns; Specific Performance. All terms and provisions of 

this Commercial Shared-Loss Agreement shall be binding upon and shall inure to the benefit of 

the parties hereto only; provided, however, that, Receiver may assign or otherwise transfer this 

Commercial Shared-Loss Agreement (in whole or in part) to the Federal Deposit Insurance 

Corporation in its corporate capacity without the consent of Assuming Institution. 

Notwithstanding anything to the contrary contained in this Commercial Shared-Loss Agreement, 

except as is expressly permitted in this Section 6.2, Assuming Institution may not assign or 

otherwise transfer this Commercial Shared-Loss Agreement (in whole or in part) without the 

prior written consent of the Receiver, which consent may be granted or withheld by the Receiver 

in its sole discretion, and any attempted assignment or transfer in violation of this provision shall 

be void ab initio. For the avoidance of doubt, a merger or consolidation of the Assuming 

Institution with and into another financial institution, the sale of all or substantially all of the 

assets of the Assuming Institution to another financial institution constitutes the transfer of this 

Commercial Shared-Loss Agreement which requires the consent of the Receive; and for a period 

of thirty-six (36) months after Bank Closing, a merger or consolidation shall also include the 

sale by any individual shareholder, or shareholders acting in concert, of more than 9% of the 

outstanding shares of the Assuming Institution, or of its holding company, or of any subsidiary 

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holding Shared-Loss Assets, or the sale of shares by the Assuming Institution or its holding 

company or any subsidiary holding Shared-Loss Assets, in a public or private offering, that 

increases the number of shares outstanding by more than 9%, constitutes the transfer of this 

Commercial Shared-Loss Agreement which requires the consent of the Receiver. However, no 

Loss shall be recognized as a result of any accounting adjustments that are made due to any such 

merger, consolidation or sale consented to by the FDIC. The FDIC’s consent shall not be 

required if the aggregate outstanding principal balance of Shared-Loss Assets is less than twenty 

percent (20%) of the initial aggregate balance of Shared-Loss Assets. 

6.3 Governing Law. This Commercial Shared-Loss Agreement shall be construed in 

accordance with federal law, or, if there is no applicable federal law, the laws of the State of 

New York, without regard to any rule of conflict of law that would result in the application of the 

substantive law of any jurisdiction other than the State of New York. 

6.4 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY 

IRREVOCABLY AND UNCONDITIONALLY WAIVES ALL RIGHT TO TRIAL BY JURY 

IN OR TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, ACTION, 

PROCEEDING OR COUNTERCLAIM, WHETHER SOUNDING IN CONTRACT, TORT OR 

OTHERWISE, ARISING OUT OF OR RELATING TO OR IN CONNECTION WITH THIS 

COMMERCIAL SHARED-LOSS AGREEMENT OR ANY OF THE TRANSACTIONS 

CONTEMPLATED HEREBY. 

6.5 Captions. All captions and headings contained in this Commercial Shared-Loss 

Agreement are for convenience of reference only and do not form a part of, and shall not affect 

the meaning or interpretation of, this Commercial Shared-Loss Agreement. 

6.6 Entire Agreement; Amendments. This Commercial Shared-Loss Agreement, 

along with the Single Family Shared-Loss Agreement and the Purchase and Assumption 

Agreement, including the Exhibits and any other documents delivered pursuant hereto, embody 

the entire agreement of the parties with respect to the subject matter hereof, and supersede all 

prior representations, warranties, offers, acceptances, agreements and understandings, written or 

oral, relating to the subject matter herein. This Commercial Shared-Loss Agreement may be 

amended or modified or any provision thereof waived only by a written instrument signed by 

both parties or their respective duly authorized agents. 

6.7 Severability. Whenever possible, each provision of this Commercial Shared-Loss 

Agreement shall be interpreted in such manner as to be effective and valid under applicable law, 

but if any provision of this Commercial Shared-Loss Agreement is held to be prohibited by or 

invalid, illegal or unenforceable under applicable law, such provision shall be construed and 

enforced as if it had been more narrowly drawn so as not to be prohibited, invalid, illegal or 

unenforceable, and the validity, legality and enforceability of the remainder of such provision 

and the remaining provisions of this Commercial Shared-Loss Agreement shall not in any way 

be affected or impaired thereby. 

6.8 No Third Party Beneficiary. This Commercial Shared-Loss Agreement and the 

Exhibits hereto are for the sole and exclusive benefit of the parties hereto and their respective 

permitted successors and permitted assigns and there shall be no other third party beneficiaries, 

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and nothing in Commercial Shared-Loss Agreement or the Exhibits shall be construed to grant to 

any other Person any right, remedy or claim under or in respect of this Commercial Shared-Loss 

Agreement or any provision hereof. 

6.9 Consent. Except as otherwise provided herein, when the consent of a party is 

required herein, such consent shall not be unreasonably withheld or delayed. 

6.10 Rights Cumulative. Except as otherwise expressly provided herein, the rights of 

each of the parties under this Commercial Shared-Loss Agreement are cumulative, may be 

exercised as often as any party considers appropriate and are in addition to each such party’s 

rights under the Purchase and Sale Agreement and any of the related agreements or under law. 

Except as otherwise expressly provided herein, any failure to exercise or any delay in exercising 

any of such rights, or any partial or defective exercise of such rights, shall not operate as a 

waiver or variation of that or any other such right. 

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