Document:

Exhibit 10.2

 

FOURTH AMENDMENT

 

to

 

the Collaboration, License and Supply
Agreement, dated July 6, 2004

 

by and between

 

Acusphere Inc. (“Acusphere”)

 

and

 

Nycomed Danmark ApS (“Nycomed”)

 

This Fourth Amendment (the “Fourth Amendment”), effective as of September 3,
2008, is entered into by and between Acusphere and Nycomed (the “Parties”).

 

WHEREAS, the Parties are parties to a
Collaboration, License and Supply Agreement, dated July 6, 2004, as
amended by the First Amendment to such agreement dated as of October 15,
2005, the Second Amendment to such agreement dated February 9, 2006 and
the Third Amendment to such agreement dated June 4, 2008,(as so amended, the “Agreement”);

 

NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the Parties agree as follows:

 

1.               Section 4.03(a) of the
Agreement is hereby amended by removing the milestone contained therein and
described as “receipt of the first Acceptance for Filing of an MAA for the
Product in any Primary Jurisdiction” and replacing it with “receipt by Nycomed
from Acusphere of the process validation summary for inclusion in Nycomed’s
initial MAA for the Product and a description of the changes in the
manufacturing process introduced prior to production of the three process
validation batches.” The remainder of the sentence started with “provided that...”
shall remain unchanged.  It is
acknowledged that all amounts due upon completion of the milestone described in
Section 4.03 (a) have previously been advanced by Nycomed in
accordance with previous amendments of the Agreement.

 

2.               This document is an amendment to the
terms of the Agreement as set out in Section 19.11 of the Agreement.
Except as otherwise set forth herein, all of the terms and conditions of the
Agreement shall remain in full force and effect between the Parties.

 

IN WITNESS WHEREOF, the
Parties hereto have caused this Fourth Amendment to be executed in duplicate by
their duly authorized officers as of the date first above stated.

 

 

	
  ACUSPHERE, INC., 

  	
  NYCOMED  DANMARK ApS  

  
	
  a Delaware corporation 

  	
  a Danish corporation 

  

 

1

 

	
  By:

  	
  /s/ Sherri C. Oberg 

  	
   

  	
  By:

  	
  /s/ Ghita Astrup 

  
	
  Name: Sherri C. Oberg 

  	
  Name:

  	
  Ghita Astrup 

  
	
  Title:   President and Chief
  Executive Officer

  	
  Title:

  	
  General Manager

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Kerstin Valinder 

  
	
   

  	
  Name: Kerstin Valinder 

  
	
   

  	
  Title: EVP Business Development

  
						

 

2Exhibit 10.32

 

UNITED
STATES OF AMERICA

DEPARTMENT
OF THE TREASURY

COMPTROLLER
OF THE CURRENCY

 

	
  In the
  Matter of:

  	
  )

  
	
  TeamBank, National
  Association

  	
  )

  
	
  Paola, Kansas

  	
  )

  

 

CONSENT
ORDER

 

The Comptroller of
the Currency of the United States of America (“Comptroller”), through his
National Bank Examiner, has supervisory authority over TeamBank, National
Association, Paola, Kansas (“Bank”).

 

The Bank, by and
through its duly elected and acting Board of Directors (“Board”), has executed
a “Stipulation and Consent to the Issuance of a Consent Order,” dated September 2,
2008, that is accepted by the Comptroller. 
By this Stipulation and Consent, which is incorporated by reference, the
Bank has consented to the issuance of this Consent Order (“Order”) by the
Comptroller.

 

Pursuant to the
authority vested in it by the Federal Deposit Insurance Act, as amended,
12 U.S.C. § 1818, the Comptroller hereby orders that:

 

ARTICLE I

 

COMPLIANCE
COMMITTEE

 

(1)           Within ten (10) days, the Board
shall appoint a Compliance Committee of at least three (3) directors, none
of whom shall be an employee or controlling shareholder of the Bank or any of
its affiliates (as the term “affiliate” is defined in 12 U.S.C.
§ 371c(b)(1)), or a family member of any such person.  Upon appointment, the names of the members of
the Compliance Committee and, in the event of a change of the membership, the
name of any new member shall be submitted in writing to the Director for
Special Supervision (“Director”).  The
Compliance 

 

 

Committee shall be
responsible for monitoring and coordinating the Bank’s adherence to the
provisions of this Order.

 

(2)           The Compliance Committee shall meet
at least monthly.

 

(3)           Within thirty (30) days of the date
of this Order and every thirty (30) days 
thereafter, the Compliance Committee shall submit a written progress
report to the Board setting forth in detail:

 

(a)                                  a description of the action needed to
achieve full compliance with each Article of this Order;

 

(b)                                 actions taken to comply with each Article of
this Order; and

 

(c)                                  the results and status of those actions.

 

(4)           The Board shall forward a copy of the
Compliance Committee’s report, with any additional comments by the Board, to
the Director within ten (10) days of receiving such report.

 

(5)           All reports or plans which the Bank
or Board has agreed to submit to the Director pursuant to this Order shall be
forwarded, by overnight mail, to the following:

 

Director for Special
Supervision

Comptroller of the
Currency

250 E Street, S.W.

Mail Stop 6-4

Washington, D.C.  20219

 

with a copy to:

 

Kansas
City-South Field Office

Comptroller
of the Currency

7101
College Boulevard, Suite 1600

Overland
Park, Kansas  66210-2007

 

(6)           The Board shall ensure that the Bank
has sufficient processes, personnel, and control systems to effectively
implement and adhere to all provisions of this Order, and that Bank personnel
are sufficiently trained to execute their duties and responsibilities under
this Order.

 

2

 

ARTICLE II

 

STRATEGIC PLAN

 

(1)           Within one hundred twenty (120) days,
the Board shall forward to the Director for his review pursuant to paragraph (4) of
this Article a written Strategic Plan for the Bank covering at least a
three-year period.  At the next Board
meeting following receipt of the Director’s determination of no supervisory
objection, the Board shall adopt and the Bank (subject to Board review and
ongoing monitoring) shall implement and thereafter ensure adherence to the
Strategic Plan.  The Strategic Plan shall
establish objectives for the Bank’s overall risk profile, earnings performance,
growth, balance sheet mix, off-balance sheet activities, liability structure,
capital adequacy, reduction in the volume of nonperforming assets, product line
development and market segments that the Bank intends to promote or develop,
together with strategies to achieve those objectives and, at a minimum,
include:

 

(a)                                  a mission statement that forms the
framework for the establishment of strategic goals and objectives;

 

(b)                                 a description of the Bank’s targeted
market(s) and an assessment of the current and projected risks and
competitive factors in its identified target market(s);

 

(c)                                  the strategic goals and objectives to be
accomplished and actions to be taken to achieve identified goals and objectives,
including specific time frames;

 

(d)                                 specific actions to improve Bank earnings
and asset quality, to reduce the level of concentrations of credit and funding
costs, and to reduce reliance on non-core funding;

 

(e)                                  a financial forecast to include
projections for major balance sheet and income statement accounts, targeted
financial ratios, and growth projections over the period covered by the
strategic plan;

 

3

 

(f)                                    a description of the assumptions used to
determine financial projections and growth targets;

 

(g)                                 an identification and risk assessment of
the Bank’s present product lines (assets and liabilities), and an
identification and risk assessment of future product lines prior to the
offering of such product lines that will be utilized to accomplish the
strategic goals and objectives established in (1)(c) of this Article;

 

(h)                                 control systems to mitigate risks
associated with planned new products, growth, or any proposed changes in the
Bank’s operating environment;

 

(i)                                     an evaluation of the Bank’s internal
operations, staffing requirements, board and management information systems and
policies and procedures for their adequacy and contribution to the
accomplishment of the goals and objectives developed under (1)(c) of this
Article;

 

(j)                                     an assessment of the skills and abilities
of senior management to successfully implement the strategic plan;

 

(k)                                  a management employment and succession
program to promote the retention and continuity of capable management;

 

(l)                                     assigned responsibilities and
accountability of Bank personnel for the strategic planning process, new
products, growth goals, or proposed changes in the Bank’s operating
environment; and

 

(m)                               a description of systems to monitor the
Bank’s progress in meeting the plan’s goals and objectives.

 

(2)           On at least a quarterly basis, the
Board shall evaluate the Bank’s performance against the Strategic Plan and
require the Bank to prepare written explanations of the reasons behind any
differences between actual performance and the Bank’s strategic goals and
objectives, 

 

4

 

and a description
of the actions the Board will require the Bank to take to address any
shortcomings, which shall be documented in the Board meeting minutes.  Upon completion, a copy of the evaluation
shall be submitted to the Director.

 

(3)           Prior to adoption by the Board, a
copy of the Strategic Plan, and any subsequent amendments or revisions, shall
be forwarded to the Director for review and prior written determination of no
supervisory objection.  Upon receiving a
determination of no supervisory objection from the Director, the Bank shall
immediately implement and adhere to the Strategic Plan.

 

(4)           The Bank may not initiate any action
which deviates significantly from the Board-approved Strategic Plan without a
written determination of no supervisory objection from the Director.  The Board must give the Director advance,
written notice of its intent to deviate significantly from the Strategic Plan,
along with an assessment of the impact of such change on the Bank’s condition,
including a profitability analysis and an evaluation of the adequacy of the
Bank’s organizational structure, staffing, management information systems,
internal controls, and written policies and procedures to identify, measure,
monitor, and control the risks associated with the change in the Strategic
Plan.

 

(5)           For the purposes of this Article,
changes that may constitute a significant deviation from the Strategic Plan
include, but are not limited to, a change in the Bank’s marketing strategies,
marketing partners, underwriting practices and standards, credit
administration, account management, collection strategies or operations, fee
structure or pricing, accounting processes and practices, or funding strategy,
any of which, alone or in aggregate, may have a material impact on the Bank’s
operations or financial performance; or any other changes in personnel,
operations, or external factors that may have a material impact on the Bank’s
operations or financial performance.  For
purposes of this paragraph (5) personnel shall include the president,
chief executive officer, chief operating officer, chief financial officer,
chief credit officer, chief compliance officer, risk 

 

5

 

manager, auditor,
member of the Bank’s board of directors, or any other position subsequently
identified in writing by the Director.

 

ARTICLE III

 

CAPITAL PLAN AND
HIGHER MINIMUMS

 

(1)           Within one hundred twenty (120) days
of the date of this Order, the Bank shall achieve and at all times maintain the
following minimum capital levels(1):

 

(a)                                  Tier 1 capital at least equal to eight
percent (8%) of adjusted total assets(2); and

 

(b)                                 Tier 1 capital at least equal to ten
percent (10%) of risk-weighted assets.

 

(2)           Within one hundred twenty (120) days,
the Board shall forward to the Director for his review pursuant to paragraph (3) of
this Article a written Capital Plan for the Bank, consistent with the Bank’s
Strategic Plan required by Article II, covering at least a three-year
period.  At the next Board meeting
following receipt of the Director’s determination of no supervisory objection,
the Board shall adopt and the Bank (subject to Board review and ongoing
monitoring) shall implement and thereafter ensure adherence to the Capital
Plan.  The Capital Plan shall include:

 

(a)                                  specific plans for the maintenance of
adequate capital that may in no event be less than the requirements of
paragraph (1);

 

(b)                                 projections for growth and capital
requirements based upon a detailed analysis of the Bank’s assets, liabilities,
earnings, fixed assets, and off-balance sheet activities;

 

(1)          The requirement in this Agreement to meet
and maintain a specific capital level means that the Bank may not be deemed to
be “well capitalized” for purposes of 12 U.S.C. § 1831o and
12 C.F.R. Part 6 pursuant to 12 C.F.R. § 6.4(b)(1)(iv).

 

(2)          Adjusted total assets is defined in
12 C.F.R. § 3.2(a) as the average total asset figure used for
call report purposes minus end-of-quarter intangible assets.

 

6

 

(c)                                  projections of the sources and timing of
additional capital to meet the Bank’s future needs as set forth in the
Strategic Plan;

 

(d)                                 the primary source(s) from which the
Bank will maintain an appropriate capital structure to meet the Bank’s future
needs as set forth in the Strategic Plan;

 

(e)                                  contingency plans that identify
alternative methods should the primary source(s) under (d) above not
be available; and

 

(f)                                    a dividend policy that permits the
declaration of a dividend only:

 

(i)                                     when the Bank is in compliance with its
approved Capital Plan and will remain in compliance with its approved Capital
Plan and paragraph (1) of this Article immediately following the
payment of any dividend;

 

(ii)                                  when the Bank is in compliance with
12 U.S.C. §§ 56 and 60; and

 

(iii)                               following the prior written determination of no
supervisory objection by the Director.

 

(3)           Prior to adoption by the Board, a
copy of the Capital Plan, and any subsequent amendments or revisions, shall be
forwarded to the Director for review and prior written determination of no
supervisory objection.  Upon receiving a
determination of no supervisory objection from the Director, the Bank shall
immediately implement and adhere to the Capital Plan

 

(4)           If the Director determines, in his
sole judgment, that the Bank failed to submit an acceptable Capital Plan as
required by paragraph (2) of this Article, or fails to implement or adhere
to a Capital Plan for which the Director has taken no supervisory objection
pursuant to paragraph (3) of this Article; then within thirty (30) days of
receiving written notice from the Director, the Bank shall develop and shall
submit to the Director for his review and prior written determination 

 

7

 

of no supervisory
objection a Disposition Plan, which shall detail the Board’s proposal to sell
or merge the Bank, or liquidate the Bank under 12 U.S.C. § 181.

 

(5)           In the event that the Disposition
Plan submitted by the Bank’s Board outlines a sale or merger of the Bank, the
Disposition Plan, at a minimum, shall address the steps that will be taken and
the associated timeline to ensure that a definitive agreement for the sale or
merger is executed not later than ninety (90) days after the receipt of the
Director’s written determination of no supervisory objection to the Disposition
Plan.  If the Disposition Plan outlines a
liquidation of the Bank, the Disposition Plan shall detail the actions and
steps necessary to accomplish the liquidation in conformance with 12 U.S.C.
§§ 181 and 182, and the dates by which each step of the liquidation shall
be completed, including the date by which the Bank will terminate the national
bank charter.  In the event of
liquidation, the Bank shall hold a shareholder vote pursuant to 12 U.S.C. §
181, and commence liquidation, within thirty (30) days of receiving the
Director’s written determination of no supervisory objection to the Disposition
Plan.

 

(6)           After the Director has advised the
Bank in writing that he does not take supervisory objection to the Disposition
Plan, the Board shall immediately implement, and shall thereafter ensure
adherence to, the terms of the Disposition Plan.  Failure to submit a timely, acceptable
Disposition Plan, or failure to implement and adhere to the Disposition Plan
after the Board obtains a written supervisory non-objection from the Director,
may be deemed a violation of this Order, in the exercise of the Director’s sole
discretion.

 

ARTICLE IV

 

NEW SENIOR LOAN
OFFICER

 

(1)           Within sixty (60) days, the Board
shall identify and submit to the Director, pursuant to paragraph (2) of
this Article, a proposed new, qualified and capable Senior Loan 

 

8

 

Officer who shall
be vested with sufficient executive authority to fulfill the duties and
responsibilities of the position and ensure the safe and sound operation of the
Bank.

 

(2)           Prior to the appointment of any
individual pursuant to paragraph (1), the Board shall submit to the Director
written notice as required by 12 C.F.R. § 5.51 and in accordance with the
Comptroller’s Licensing Manual.  The
Director shall have the power to disapprove the appointment of the proposed
officer.  However, the failure to
exercise such veto power shall not constitute an approval or endorsement of the
proposed officer.

 

(3)           The requirement to submit information
and the prior disapproval provisions of this Article are based upon the
authority of 12 U.S.C. § 1818(b) and do not require the Comptroller or the
Director to complete his review and act on any such information or authority
within ninety (90) days.

 

ARTICLE V

 

LIQUIDITY
MANAGEMENT PROGRAM

 

(1)           Within thirty (30) days, the Board
shall maintain a comprehensive liquidity management program which assesses, on
an ongoing basis, the Bank’s current and expected funding needs, and ensures
that sufficient funds or access to funds exist to meet those needs.  Such a program must include effective methods
to achieve and maintain sufficient liquidity, and to measure and monitor
liquidity risk, to include at a minimum:

 

(a)                                  a deposit maturity schedule by deposit
type, including brokered deposits and uninsured deposits, showing the balances that
can be withdrawn immediately, maturities on a weekly basis for the next two
months and monthly for the following ten months, which schedule shall be
updated at least weekly;

 

(b)                                 a funding obligation schedule including
outstanding lines of credit, unfunded loan commitments, and outstanding letters
of credit, showing the obligations that can be drawn immediately, on a weekly
basis for the next 

 

9

 

two
months and monthly for the following ten months, which schedule shall be
updated at least weekly;

 

(c)                                  a listing of funding sources, updated
weekly, including:

 

(i)                                     federal funds sold;

 

(ii)                                  borrowing lines by lender, including
original amount, remaining availability, type and book value of collateral
pledged, terms, and maturity date, if applicable;

 

(iii)                               unpledged assets and assets available for sale; and

 

(iv)                              other available sources of funds to meet
liquidity needs.

 

(d)                                 a sources and uses of funds report
covering each of the next four weeks, updated weekly, which reflects known and
projected changes in asset and liability accounts under best case and worst
case scenarios, and the assumptions used in developing the projections, to
incude:

 

(i)                                     projected additional funding requirements
from, a reduction in deposit accounts including uninsured and brokered
deposits, cancellation of unsecured borrowing lines or ability to acquire
federal funds purchased, or availability limitations or reductions associated
with secured borrowing relationships;

 

(ii)                                  projected additional funding sources,
including loan payments, loan sales/participations, or deposit increases; and

 

(iii)                               projected impact of reputation, economic and credit
conditions in the Bank’s market.

 

(e)                                  strategies to maintain sufficient
liquidity at reasonable costs including, but not limited to, the following:

 

10

 

(i)            better diversification
of funding sources, with particular emphasis on increasing traditional core
funding; and

 

(ii)           increasing liquidity
through such actions as obtaining additional capital, limits on asset growth,
aggressive collection of problem loans and recovery of charged-off assets, and
asset sales.

 

(f)            A contingency funding
plan that forecasts funding needs, and funding sources under a stressed
scenario which:

 

(i)            represents
management’s best estimate of balance sheet changes that may result from a
liquidity or credit event;

 

(ii)           identifies, quantifies,
establishes, and ranks all sources of funding by preference for best case and
worst case scenarios, including asset funding, liability funding and
off-balance sheet funding; and

 

(iii)          ensures that
administrative policies and procedures are consistent with the Board’s guidance
and risk tolerances.

 

(2)           The
Board shall submit a copy of the comprehensive liquidity management program,
along with the weekly schedules and reports required by this Article to
the Director for review.

 

ARTICLE VI

 

CRITICIZED ASSETS

 

(1)           The
Board shall take immediate and continuing action to protect the Bank’s interest
in those assets criticized in the most recent Report of Examination (“ROE”) and
any future ROE, by internal or external loan review, or in any list provided to
management by the National Bank Examiners during any examination.

 

11

 

(2)           The
Board’s compliance with paragraph (1) of this Article shall include
the development of Criticized Asset Reports (“CARs”) in a format similar to
that contained in Appendix A of this Order, on all credit relationships and
other assets totaling in aggregate five hundred thousand dollars ($500,000) or
more, criticized as “doubtful,” “substandard,” or “special mention.”  CARs must be updated and submitted to the
Board and the Director monthly.  Each CAR
shall cover an entire credit relationship, and include, at a minimum, analysis
and documentation of the following:

 

(a)           the origination date
and any renewal or extension dates, amount, purpose of the loan, and the
originating officer;

 

(b)           the expected primary
and secondary sources of repayment, and an analysis of the adequacy of the
repayment source;

 

(c)           the appraised value of
supporting collateral and the position of the Bank’s lien on such collateral,
where applicable, as well as other necessary documentation to support the
collateral valuation;

 

(d)           an analysis of current
and satisfactory credit information, including cash flow analysis where loans
are to be repaid from operations;

 

(e)           results of any FAS 114
impairment analysis performed pursuant to Article X, paragraph (1)(c) of
this Order;

 

(f)            significant
developments, including a discussion of changes since the prior CAR, if any;
and

 

(g)           the proposed action to
eliminate the basis of criticism and the time frame for its accomplishment,
including an appropriate exit strategy.

 

(3)           The
Bank may not extend credit, directly or indirectly, including renewals,
extensions, or capitalization of accrued interest, to a borrower whose loans or
other extensions of

 

12

 

credit are
criticized in any ROE, in any internal or external loan review, or in any list
provided to management by the National Bank Examiners during any examination,
unless each of the following conditions is met:

 

(a)           the Board, or a
designated committee thereof, finds that the extension of additional credit is
necessary to promote the best interests of the Bank and that prior to renewing,
extending or capitalizing any additional credit, a majority of the full Board
(or designated committee) approves the credit extension and records, in
writing, why such extension is necessary to promote the best interests of the
Bank.  A copy of the findings and
approval of the Board or designated committee shall be maintained in the credit
file of the affected borrower;

 

(b)           the Bank performs a
written credit and collateral analysis as required by paragraph (2)(d) of
this Article and, if necessary, the written program adopted pursuant to
paragraph (2)(f) of this Article is revised; and

 

(c)           the Board’s formal plan
to collect or strengthen the criticized asset will not be compromised by the
extension of additional credit.

 

ARTICLE VII

 

LOAN PORTFOLIO MANAGEMENT

 

(1)           The
Board shall, within sixty (60) days, adopt and the Bank (subject to Board
review and ongoing monitoring) shall implement and thereafter ensure adherence
to a written credit policy to improve the Bank’s loan portfolio management.  The credit policy shall include, but not be
limited to:

 

(a)           requirements that
extensions of credit are granted, by renewal or otherwise, to any borrower only
after obtaining current and sufficient credit

 

13

 

information to fully assess the borrower’s and
guarantor(s) cash flow, debt service requirements, contingent liabilities,
and liquidity on a global basis, and only after preparing a documented credit
analysis;

 

(b)           a description of the
types of credit information required on borrowers and guarantors including, but
not limited to, annual audited statements, interim financial statements,
personal financial statements, supporting schedules and tax returns.

 

(c)           procedures to validate
and analyze income and liquidity sources for extensions of credit to all
borrowers;

 

(d)           adequate training in
cash flow preparation and analysis, particularly from tax returns, for Bank
personnel performing credit analyses, and processes to ensure that additional
training is provided as needed;

 

(e)           procedures to ensure
that extensions of credit are granted, by renewal or otherwise, to any borrower
only after obtaining and documenting a current valuation of collateral, with
the exception of real estate collateral which is addressed in Article VIII;

 

(f)            procedures and
controls to periodically verify the existence and lien position of collateral;

 

(g)           procedures which
prohibit, on any loan renewal or extension, the establishment of an interest
reserve using any Bank loan proceeds to the same borrower or guarantor;

 

(h)           procedures which
prohibit, on any loan renewal or extension, the capitalization of accrued
interest;

 

14

 

(i)            procedures which
establish time frames to resolve credit and collateral documentation
exceptions;

 

(j)            early problem loan
identification to assure that credits are accurately risk rated on at least a
monthly basis, pursuant to the risk ratings definitions contained in the Bank’s
credit policy and consistent with regulatory guidance;

 

(k)           a performance appraisal
process, including performance appraisals, job descriptions, and incentive
programs for loan officers, which adequately consider their performance
relative to policy compliance, documentation standards, accuracy in credit
grading, and other loan administration matters; and

 

(l)            procedures to track
and analyze concentrations of credit, significant economic factors, and general
conditions and their impact on the credit quality of the Bank’s loan portfolio.

 

(2)           Where
the Bank deviates from the Bank’s credit policy, exceptions shall be clearly
documented on the loan offering sheet, problem loan report and other management
information systems, and these exceptions shall receive the prior written
approval by the Board or a committee thereof.

 

(3)           Upon
completion, a copy of the credit policy shall be forwarded to the Director for
review.

 

ARTICLE VIII

 

 APPRAISALS OF REAL PROPERTY

 

(1)           The
Board shall require the Bank to obtain a current independent appraisal on any
loan in excess of $500,000 that is secured by real property when the borrower
has failed to

 

15

 

comply with the
contractual terms of the loan agreement and an analysis of current financial
information does not demonstrate the ongoing ability of the borrower or
guarantor(s) to perform in accordance with the contractual terms of the
loan agreement.  Such appraisal shall be
ordered within thirty (30) days following the borrower’s failure to comply with
the contractual terms of the loan agreement, including those loans that are
sixty (60) days or more past due.

 

(2)           Within
ninety (90) days, the Board shall require and ensure the Bank develops and
implements an appraisal review and analysis process to ensure that appraisals
conform to appraisal standards and regulations. 
The appraisal review and analysis process shall ensure:

 

(a)           that appraisals are
performed in accordance with 12 C.F.R. Part 34;

 

(b)           are consistent with the
guidance in OCC Bulletin 2005-6,
“Appraisal Regulations and the Interagency Statement on Independent Appraisal
and Evaluation Functions: Frequently Asked Questions”, dated March 22,
2005; and

 

(c)           are consistent with Advisory Letter 2003-9, “Independent
Appraisal and Evaluation Function”, dated October 28, 2003.

 

(3)           Written
documentation supporting each appraisal review and analysis shall be retained
in the loan file along with the appraisal.

 

ARTICLE IX

 

EXTERNAL LOAN REVIEW

 

(1)           The
Board shall continue to employ a qualified individual or firm, independent of
the lending function, to perform a loan review of the Bank on at least an
annual basis.  The external loan review
engagement shall provide for a written report to be filed with the Board after each
review and shall use a loan and lease grading system consistent with the
guidelines set forth

 

16

 

in Rating Credit
Risk, A-RCR, of the Comptroller’s Handbook.  Such reports shall, at a minimum, include
comments and conclusions regarding the identification of the:

 

(a)           type, rating, and
amount of problem loans and other problem assets;

 

(b)           amount of delinquent
and nonaccrual loans;

 

(c)           status of credit
related violations of law or regulation;

 

(d)           loans not in
conformance with the Bank’s lending policies;

 

(e)           credit underwriting and
documentation exceptions;

 

(f)            quality of credit
analysis and documentation;

 

(g)           accuracy of internal
risk ratings;

 

(h)           overall credit
administration practices; and

 

(i)            completeness and
effectiveness of problem loan workout plans.

 

(2)           Prior
to making any changes to the engagement, or to the individual or firm employed
to perform the loan review, the Board shall submit the proposed engagement
contract and/or the name and qualifications of the proposed individual or firm
to the Director for a written determination of no supervisory objection.

 

(3)           The
Board or a designated committee thereof shall review the independent loan
review reports and ensure that immediate, adequate, and continuing remedial
action is taken upon the findings noted in the reports.

 

(4)           A
copy of the reports submitted to the Board, as well as the documentation of the
actions taken by the Bank to collect or strengthen assets identified as problem
credit, shall be maintained in the books and records of the Bank.  The Board shall forward a copy of the
reports, with any additional comments from the Board, to the Director within
thirty (30) days after completion of the review.

 

17

 

ARTICLE X

 

CONCENTRATIONS OF CREDIT

 

(1)           Within
sixty (60) days, the Board shall prepare and submit to the Director for a prior
written determination of no supervisory objection, a written program (including
appropriate revisions to policies and procedures) designed to manage the risk
in the Bank’s commercial real estate (“CRE”) loan portfolio in accordance with
the guidelines in OCC Bulletin 2006-46, Concentration in Commercial Real Estate
Lending, Sound Risk Management Practices (dated December 6, 2006), and the
Commercial Real Estate and Construction Lending, A-CRE, of the Comptroller’s Handbook, that, at a
minimum, includes:

 

(a)           the establishment of
CRE concentration limits stratified by type, market area and other meaningful
measures, including a written analysis supporting each established
concentration limit;

 

(b)           monthly monitoring of
concentration reports that stratify the CRE portfolio by product type, market
area and other meaningful measures;

 

(c)           strategies and
procedures to manage CRE concentrations to conform with established limits set
in Subparagraph (a) of this Article;

 

(d)           Stress testing and/or
sensitivity analysis of significant loans to quantify the impact of changing
economic conditions on asset quality, earnings, and capital; and

 

(e)           identification and reporting
to the Board of aggregate loans that exceed supervisory loan-to-value limits at
least quarterly.

 

(2)           Upon
receiving a written determination of no supervisory objection from the
Director, the Board shall immediately implement and thereafter ensure adherence
to the program, policies and procedures required by this Article.

 

18

 

ARTICLE XI

 

ALLOWANCE FOR LOAN AND
LEASE LOSSES

 

(1)           The
Board shall require the Bank to maintain a program for the maintenance of an
adequate Allowance for Loan and Lease Losses (“ALLL”) that is consistent with
the comments on maintaining a proper ALLL found in the FFIEC Interagency Policy
Statement on the ALLL contained in OCC Bulletin 2006-47 dated December 13,
2006, and the “Allowance for Loan and Lease Losses” booklet of the Comptroller’s
Handbook, and shall incorporate the following:

 

(a)           internal risk ratings
of loans;

 

(b)           results of the Bank’s
external loan review;

 

(c)           criteria for
determining which loans will be reviewed under Financial Accounting Standard
(“FAS”) 114, how impairment will be determined, and procedures to ensure that
the analysis of loans complies with FAS 114 requirements;

 

(d)           criteria for
determining FAS 5 loan pools and an analysis of those loan pools;

 

(e)           recognition of
non-accrual loans in conformance with GAAP and FFIEC policy;

 

(f)            loan loss experience;

 

(g)           trends of delinquent
and non-accrual loans;

 

(h)           concentrations of
credit in the Bank; and

 

(i)            present and
prospective economic and market conditions.

 

(2)           The
program shall provide for a review of the ALLL by the Board at least once each
calendar quarter.  Any deficiency in the
ALLL shall be remedied in the quarter it is discovered, prior to the filing of
the Consolidated Reports of Condition and Income, by additional

 

19

 

provisions from
earnings.  Written documentation shall be
maintained indicating the factors considered and conclusions reached by the
Board in determining the adequacy of the ALLL.

 

(3)           A
copy of the Board’s program, and any subsequent revisions to the program, shall
be submitted to the Director for review.

 

ARTICLE XII

 

CLOSING

 

(1)           Although
the Board is by this Order required to submit certain proposed actions and
programs for the review or prior written determination of no supervisory
objection of the Director, the Board has the ultimate responsibility for proper
and sound management of the Bank.

 

(2)           It
is expressly and clearly understood that if, at any time, the Comptroller deems
it appropriate in fulfilling the responsibilities placed upon it by the several
laws of the United States of America to undertake any action affecting the
Bank, nothing in this Order shall in any way inhibit, estop, bar or otherwise
prevent the Comptroller from so doing.

 

(3)           Any
time limitations imposed by this Order shall begin to run from the effective
date of this Order.  Such time
limitations may be extended in writing by the Director for good cause upon
written application by the Board.

 

(4)           The
provisions of this Order are effective upon issuance of this Order by the
Comptroller, through his authorized representative whose hand appears below,
and shall remain effective and enforceable, except to the extent that, and
until such time as, any provisions of this Order shall have been amended,
suspended, waived, or terminated in writing by the Comptroller.

 

(5)           In
each instance in this Order in which the Board is required to ensure adherence
to, and undertake to perform certain obligations of the Bank, it is intended to
mean that the Board shall:

 

20

 

(a)           authorize and adopt
such actions on behalf of the Bank as may be necessary for the Bank to perform
its obligations and undertakings under the terms of this Order;

 

(b)           require the timely
reporting by Bank management of such actions directed by the Board to be taken
under the terms of this Order;

 

(c)           follow-up on any
non-compliance with such actions in a timely and appropriate manner; and

 

(d)           require corrective
action be taken in a timely manner of any non-compliance with such actions.

 

(6)           This
Order is intended to be, and shall be construed to be, a final order issued
pursuant to 12 U.S.C. § 1818(b), and expressly does not form, and may not
be construed to form, a contract binding on the Comptroller or the United
States.

 

(7)           The
terms of this Order, including this paragraph, are not subject to amendment or
modification by any extraneous expression, prior agreements or prior
arrangements between the parties, whether oral or written.

 

IT IS SO ORDERED, this  2nd  day of September, 2008.

 

 

	
  /s/ Ronald G. Schneck

  	
   

  
	
  Ronald G. Schneck

  	
   

  
	
  Director

  	
   

  
	
  Special Supervision Division

  	
   

  

 

21

 

APPENDIX A

CRITICIZED ASSET REPORT

(Date)

 

	
  Borrower(s):

  	
   

  	
   

  	
   

  	
   

  
	
  Guarantor(s):

  	
   

  	
   

  	
   

  	
   

  
	
  Balance(s):

  	
   

  	
   

  	
  Bank Rating:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  OCC Rating:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Charged-Off to date:

  	
   

  	
   

  	
   

  	
   

  
	
  Potential charge-off:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Past Due Amount/#Days:

  	
   

  	
   

  	
  Nonaccrual:

  	
   

  
								

 

Collateral (description, lien position, appraised
value, valuation date):

 

Source of Repayment:

 

Summarize Financial Information on Borrower and
Guarantor:

 

PRESENT STATUS (Fully explain any increase in
outstanding balance, significant progress or deterioration, etc.)

 

ACTION PLAN TO ELIMINATE ASSET CRITICISM(S) AND
TIME FRAME FOR ITS ACCOMPLISHMENT:

 

22

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