Document:

exv10w1

Exhibit 10.1

QLT INC.

QLT 2000 INCENTIVE STOCK OPTION PLAN

(as amended and restated effective May 5, 2009)

	1.	 	PURPOSE OF THE PLAN
	 
	1.1	 	Purpose of the Plan. The purpose of the Plan is to promote the interests of the Company by:

	 	(a)	 	attracting and retaining persons of outstanding competence who are or will be important for the growth and success
of the Company;
	 
	 	(b)	 	furnishing Eligible Persons with greater incentive to develop and promote the growth and success of the Company; and
	 
	 	(c)	 	furthering the identity of interests of Eligible Persons with those of the shareholders of the Company.

The Company believes that these purposes may be accomplished by granting to Eligible Persons from
time to time Options to purchase Common Shares.

	2.	 	DEFINITIONS
	 
	2.1	 	Definitions. In this Plan, unless there is something in the subject matter or context
inconsistent therewith:

	 	(a)	 	“Affiliate” means, with respect to the Company, any corporation, partnership,
association, trust or other entity or organization directly or indirectly controlled
by, controlling or under common control with the Company, and, for the purposes of
this definition, “control” will mean (i) the possession, directly or indirectly, of
the power to direct the management or policies of any such entity or to veto any
material decision relating to the management or policies of such entity, in each case
whether through the ownership of voting securities, by contract or otherwise, or (ii)
direct or indirect beneficial ownership of 40% or more of the voting stock or other
securities of, or a 40% or greater interest in the income of, such entity, or such
other relationship as, in fact constitutes actual control.
	 
	 	(b)	 	“Board” means the board of directors of the Company as established from time to time.
	 
	 	(c)	 	“Committee” means the Executive Compensation Committee of the Board or such other
committee established or designated by the Board as responsible for the administration
of this Plan, or the Board, to the extent that the Board administers this Plan as
described in Article 5.
	 
	 	(d)	 	“Common Shares” mean the common shares without par value in the capital of the
Company as constituted on March 1, 2000, provided that if the rights of any Optionee
are subsequently adjusted pursuant to Article 15 hereof, “Common Shares” thereafter
means the shares or other securities or property which such Optionee is entitled to
purchase or receive subject to his or her Option after giving effect to such
adjustment.

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	 	(e)	 	“Company” means QLT Inc. and includes any successor corporation thereto.
	 
	 	(f)	 	“Consultant” means any individual, corporation or other person engaged to provide ongoing valuable
services to the Company or any Affiliate.
	 
	 	(g)	 	“Continuous Status as a director, officer, employee or Consultant” means the absence of any
interruption or termination of service as an officer or employee of the Company or in the
relationship as a director or Consultant of the Company, as determined by the Board in its sole
discretion, but no interruption or termination will be deemed to have occurred in the case of sick
leave or any other leave of absence approved of by the Board, provided that either such leave is for
a period of not more than 90 days or reemployment upon the expiration of such leave is provided or
guaranteed by contract or law.
	 
	 	(h)	 	“Eligible Person” means a director, officer, employee or Consultant of the Company or its
Affiliates, designated by the Committee as an Eligible Person pursuant to Article 6 hereof.
	 
	 	(i)	 	“Exchange” means, collectively, The Toronto Stock Exchange, any successor thereto and any other
exchange or trading facilities through which the Company’s Common Shares trade or are quoted from
time to time.
	 
	 	(j)	 	“Fair Market Value” means, as of any given date, the value of a Common Share determined as follows:

	 	(i)	 	If the Common Shares are listed on any established stock exchange
(such as The Toronto Stock Exchange) or national market system, its
Fair Market Value shall be the closing sales price for a Common
Share as quoted on such exchange or system for such date or, if
there is no closing sales price for a Common Share on the date in
question, the closing sales price for a Common Share on the last
preceding date for which such quotation exists, as reported in a
source as the Committee deems reliable;
	 
	 	(ii)	 	If the Common Shares are not listed on an established stock exchange
or national market system, but the Common Shares are regularly
quoted by a recognized securities dealer, its Fair Market Value
shall be the mean of the high bid and low asked prices for such date
or, if there are no high bid and low asked prices for a Common Share
on such date, the high bid and low asked prices for a Common Share
on the last preceding date for which such information exists, as
reported in a source as the Committee deems reliable; or
	 
	 	(iii)	 	If the Common Shares are neither listed on an established stock
exchange or a national market system nor regularly quoted by a
recognized securities dealer, its Fair Market Value shall be
established by the Committee in good faith.

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	 	(k)	 	“Incentive Stock Option” means an Option granted under the Plan that is intended to meet the requirements of Section
422 of the U.S. Code.
	 
	 	(l)	 	“insider” has the meaning ascribed to in the Securities Act (British Columbia).
	 
	 	(m)	 	“Key Person” means the person which may be designated by the Committee as the key person of a Consultant providing
ongoing valuable services under a consulting contract with the Company or any Affiliate.
	 
	 	(n)	 	“Nonqualified Stock Option” means an Option granted to an Optionee that does not qualify as an Incentive Stock Option.
	 
	 	(o)	 	“Option” means an option entitling the holder thereof to purchase Common Shares as described herein. An Option shall
be either a Nonqualified Stock Option or an Incentive Stock Option (provided, however, that Options granted to
non-employee directors and Consultants shall be Nonqualified Stock Options) and shall be granted to an Eligible Person
pursuant to the terms and conditions hereof and as evidenced by an Option Agreement.
	 
	 	(p)	 	“Option Agreement” means an agreement evidencing an Option, entered into by and between the Company and an Optionee.
	 
	 	(q)	 	“Option Exercise Price” means the price per Common Share at which an Optionee may purchase Common Shares pursuant to
an Option, provided that if such price is adjusted pursuant to Article 15 hereof, “Option Exercise Price” thereafter
means the price per Common Share at which such Optionee may purchase Common Shares pursuant to such Option after giving
effect to such adjustment.
	 
	 	(r)	 	“Optionee” means an Eligible Person who holds an Option under this Plan.
	 
	 	(s)	 	“Plan” means the amended and restated QLT 2000 Incentive Stock Option Plan, as it may be further amended, modified or
restated from time to time pursuant to and in accordance with the provisions hereof.
	 
	 	(t)	 	“Shareholder” means a holder of Common Shares.
	 
	 	(u)	 	“termination of service” means:

	 	(i)	 	as to a Consultant, the time when the engagement of an Optionee as a
Consultant to the Company or an Affiliate is terminated for any
reason, with or without cause, including, without limitation, by
resignation, discharge, death or retirement, but excluding
terminations where the Consultant simultaneously commences or remains
in employment or service with the Company or any Affiliate;
	 
	 	(ii)	 	as to a non-employee director, the time when an Optionee who is a
non-employee director ceases to be a director for any reason,
including, without limitation, a termination by resignation, failure
to be elected, death or retirement, but excluding terminations where
the Optionee simultaneously commences or remains in employment or
service with the Company or any Affiliate; and

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	 	(iii)	 	as to an employee, at the time the Optionee ceases to be an active
employee of the Company or any Affiliate for any reason, whether
such termination of employment is lawful or otherwise, and
specifically does not include any statutory or common law severance
period or period of reasonable notice that the Company or any
Affiliate may be required to provide to the Optionee under
applicable law.

The Committee, in its sole discretion, shall determine the effect of all matters and questions
relating to terminations of service, including, without limitation, the question of whether a
termination of service resulted from a discharge for cause and all questions of whether particular
leaves of absence constitute a termination of service; provided, however, that, with respect to
Incentive Stock Options, unless the Committee otherwise provides in the terms of the Option
Agreement or otherwise, a leave of absence, change in status from an employee to an independent
contractor or other change in the employee-employer relationship shall constitute a termination of
service only if, and to the extent that, such leave of absence, change in status or other change
interrupts employment for the purposes of Section 422(a)(2) of the U.S. Code and the then
applicable regulations and revenue rulings under said Section. For purposes of this Plan, an
Optionee’s employee-employer relationship or consultancy relations shall be deemed to be terminated
in the event that the Affiliate employing or contracting with such Optionee ceases to remain a
Affiliate following any merger, sale of stock or other corporate transaction or event (including,
without limitation, a spin-off).

	 	(a)	 	“U.S.” or “United States” means the United States of America (including each
of the States and the District of Columbia) and its territories and possessions
and other areas subject to its jurisdiction.
	 
	 	(b)	 	“U.S. Code” means the U.S. Internal Revenue Code of 1986, as amended.
	 
	 	(c)	 	“U.S. Exchange Act” means the U.S. Securities Exchange Act of 1934, as amended.
	 
	 	(d)	 	“U.S. Securities Act” means the Securities Act of 1933, as amended.

	3.	 	EFFECTIVE DATE OF THE PLAN

3.1    Effective Date of the Plan. The effective date of this Plan, subject to Shareholder approval
and approval of the Exchange, is March 1, 2000.

	4.	 	RESTRICTION ON NUMBER OF COMMON SHARES SUBJECT TO THE PLAN

4.1    Common Shares Subject to the Plan. Options may be granted in respect of authorized and
unissued Common Shares, provided that the aggregate number of Common Shares to be issued under this
Plan, subject to adjustment or increase of such number pursuant to the provisions of this Plan,
will be 7,800,000. The number of Common Shares issued hereunder may be increased or changed by the
Board, as approved by the Shareholders, the Exchange, and any relevant regulatory or statutory
authority having authority with respect hereto.

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4.2     Regranting of Shares. If any Option to acquire Common Shares under this Plan expires or is
cancelled without having been fully exercised, then the number of Common Shares subject to such
Option but as to which such Option was not exercised prior to its expiration or cancellation may
again be granted hereunder, subject to the limitations of Section 4.1. Furthermore, any shares
subject to Options which are adjusted pursuant to Article 15 and become exercisable with respect to
shares of stock of another corporation shall be considered cancelled and may again be granted
hereunder, subject to the limitations of Section 4.1. Common Shares which are delivered by the
Optionee or withheld by the Company upon the exercise of any Option under this Plan, in payment of
the exercise price thereof or tax withholding thereon, may not again be granted hereunder, subject
to the limitations of Section 4.1. Notwithstanding the provisions of this Section 4.2, no Options
may again be granted if such action would cause an Incentive Stock Option to fail to qualify as an
“incentive stock option” under Section 422 of the U.S. Code.

4.3     No Fractional Shares. No fractional Common Shares may be issued under this Plan and the
Committee shall determine, in its sole discretion, whether cash shall be given in lieu of
fractional shares or whether such fractional shares shall be eliminated by rounding down.

	5.	 	ADMINISTRATION OF THE PLAN

5.1     Administration of Plan. This Plan will be administered by the Committee, provided, however,
that the Board may from time to time establish any other committee of the Board consisting of not
less than two members of the Board to replace the Committee for the purposes of the administration
of this Plan. The members of the Committee will serve at the pleasure of the Board and vacancies
occurring in the Committee will be filled by the Board. In its sole discretion, the Board may at
any time and from time to time exercise any and all rights and duties of the Committee under this
Plan except with respect to matters which under Rule 16b-3 under the U.S. Exchange Act or any
successor rule, or Section 162(m) of the U.S. Code, or any regulations or rules issued thereunder,
are required to be determined in the sole discretion of the Committee.

5.2     Committee Governance. The Committee will be composed of not less than two individuals, all of
whom are directors of the Company. Further, if and so long as the Common Shares are registered
under Section 12(b) or 12(g) of the U.S. Exchange Act, the Board will consider in selecting the
members of the Committee who are intended to qualify as both a “non-employee director” as defined
by Rule 16b-3 of the U.S. Exchange Act or any successor rule and an “outside director” for purposes
of Section 162(m) of the U.S. Code; provided, that any action taken by the Committee shall be valid
and effective, whether or not members of the Committee at the time of such action are later
determined not to have satisfied the requirements for membership set forth in this Section 5.2 or
otherwise provided in any charter of the Committee. Notwithstanding the foregoing, the full Board,
acting by a majority of its members in office, shall conduct the general administration of this
Plan with respect to Options granted to “non-employee directors.”

5.3     Powers of Committee. The Committee is authorized, subject to the provisions of this Plan, to
establish from time to time such rules and regulations, make such determinations and to take such
steps in connection with this Plan as in the opinion of the Committee are necessary or desirable
for the proper administration of this Plan. For greater certainty, without limiting the generality
of the foregoing, the Committee will have the power, where consistent with the general purpose and
intent of this Plan and subject to the specific provisions of this Plan and any approval of the
Exchange, if applicable:

	 	(a)	 	to interpret and construe this Plan and to determine all questions
arising out of this Plan and any Option granted pursuant to this Plan,
and any such interpretation, construction or termination made by the
Committee will be final, binding and conclusive for all purposes;

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	 	(b)	 	to determine to which Eligible Persons Options are granted, and to grant, Options;
	 
	 	(c)	 	to determine the number of Common Shares underlying each Option;
	 
	 	(d)	 	to determine the Option Exercise Price for each Option;
	 
	 	(e)	 	to determine the time or times when Options will be granted, vest and be exercisable and to determine when it is appropriate to
accelerate when Options otherwise subject to vesting may be exercised;
	 
	 	(f)	 	to determine if the Common Shares that are subject to an Option will be subject to any restrictions upon the exercise of such
Option, as applicable;
	 
	 	(g)	 	to determine the expiration date for each Option and to extend the period of time for which any Option is to remain exercisable
in appropriate circumstances, including, without limitation, in the event of the Optionee’s cessation of service to the Company
or any Affiliate or in the event of a prolonged Company-mandated trading restriction period, provided in no event will an
Option be exercisable for more than five years from the date of grant;
	 
	 	(h)	 	to prescribe the form of the instruments relating to the grant, exercise and other terms of Options;
	 
	 	(i)	 	to enter into an Option Agreement evidencing each Option which will incorporate such terms as the Committee in its discretion
deems consistent with this Plan;
	 
	 	(j)	 	to determine, where necessary, the Key Person pursuant to a consulting contract as the person providing the services thereunder;
	 
	 	(k)	 	to adopt such modifications, procedures, rules, regulations and subplans as may be necessary or desirable to administer this
Plan or to comply with the provisions of the laws of Canada, the United States and other countries in which the Company or its
Affiliates may operate to assure the viability and maximization of the benefits from the Options granted to Optionees residing
in such countries and to meet the objectives of this Plan; and
	 
	 	(l)	 	to determine such other matters as provided for herein and to make all other decisions and determinations that may be required
pursuant to this Plan or as the Committee deems necessary or advisable to administer this Plan.

5.4     Interpretation of the Plan. Any questions arising as to interpretation of the Plan, any Option
or any Option Agreement will be determined by the Committee and such determination will be final,
conclusive and binding on all parties.

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	6.	 	ELIGIBILITY

6.1     Eligibility. The Committee may, subject to the provisions of this Plan, grant Options to any
Eligible Person who is or will be, in the opinion of the Committee, important for the growth and
success of the Company and whose participation in this Plan will, in the opinion of the Committee,
accomplish the purposes of this Plan.

	7.	 	GRANT OF OPTIONS

7.1     Grant of Options. Options may be granted pursuant to the terms of the Plan from time to time
by the Company acting through the Committee to the extent that such recommendations are approved by
the Board. The date on which any Option will be deemed to have been granted will be the date on
which the Committee authorizes the grant of such Option or such later date as may be determined by
the Committee at the time that the grant of such Option is authorized.

7.2     Option Agreement. Each Option granted pursuant to this Plan will be evidenced by an Option
Agreement executed on behalf of the Company by any officer of the Company, and each Option
Agreement will incorporate such terms and conditions as the Committee in its discretion deems
consistent with the terms of this Plan. The Committee may, with the written consent of the
Optionee, amend any Option Agreement to the extent that the Committee, acting in its discretion,
deems consistent with the terms of this Plan.

7.3     Number of Common Shares. The number of Common Shares for which any Option may be granted will
be determined by the Committee. The number of Common Shares which may be purchased on the exercise
of any Option will be subject to adjustment pursuant to Article 15 hereof.

7.4     Maximum Grant — Generally. The Committee will not grant to any Eligible Person any Option
which would result in that Eligible Person being the holder of Options granted under this Plan or
any other incentive equity plan of the Company or any Affiliates, which, in aggregate, exceed 5% of
the issued and outstanding Common Shares (on a non-diluted basis) on the date the Options are
granted.

7.5     Maximum Grant — Certain Directors. The Committee will not grant to any Eligible Person who is
a non-employee director any Option which would result in such Eligible Person being awarded Options
with an aggregate grant value in excess of CAD$100,000 in any one year. For the purposes of this
Section, “non-employee director” means a director of the Company who is not a full-time or
part-time employee of the Company or any Affiliates.

7.6     Option Exercise Price. The Option Exercise Price for each Option will be determined by the
Committee, but will in no event be less than Fair Market Value on the date of grant, which grant
will occur after the close of the Exchange on such date. The Option Exercise Price determined for
any Option will be subject to adjustment pursuant to Article 15 hereof.

7.7     Option Vesting.

	 	(a)	 	The period during which the right to exercise, in whole or in part, an
Option vests in the Optionee shall be set by the Committee and the
Committee may determine that an Option may not be exercised in whole
or in part for a specified period after it is granted. Such vesting
may be based on service with the Company or any Affiliate, or any
other criteria selected by the Committee. At any time after grant of
an Option, the Committee may, in its sole discretion and subject to
whatever terms and conditions it selects, accelerate the period during
which an Option vests.

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	 	(b)	 	No portion of an Option which is unexercisable at an Optionee’s
termination of service shall thereafter become exercisable, except as
may be otherwise provided by the Committee either in the Option
Agreement or by action of the Committee following the grant of the
Option.

	8.	 	TERM OF OPTIONS

8.1     Term of Options. Each Option granted pursuant to this Plan will, subject to early termination
in accordance with Article 10 hereof and subject to the provisions of this Plan, expire
automatically on the earlier of (i) the date on which such Option is exercised in respect of all of
the Common Shares that may be purchased thereunder, and (ii) the date fixed by the Committee as the
expiry date of such Option, which date will not be more than five years from the date of grant. The
Committee shall determine the time period, including the time period following a termination of
service, during which the Optionee has the right to exercise the vested Options, which time period
may not extend beyond the original expiry date. Except as limited by the requirements of applicable
law, including Section 409A or Section 422 of the U.S. Code and regulations and rulings thereunder,
the Committee may extend the term of any outstanding Option, and may extend the time period during
which vested Options may be exercised, in connection with any termination of service of the
Optionee, and may amend any other term or condition of such Option relating to such a termination
of service. In circumstances where the end of the term an Option falls within, or within two
business days after the end of, a “black out” or similar period imposed under any insider trading
policy or similar policy of the Company (but not, for greater certainty, a restrictive period
resulting from the Company or its insiders being the subject of a cease trade order of a securities
regulatory authority), the end of the term of such Option shall be the tenth business day after the
earlier of the end of such black out period or, provided the black out period has ended, the expiry
date.

	9.	 	INCENTIVE STOCK OPTION PROVISIONS

To the extent required by Section 422 of the U.S. Code, Incentive Stock Options will be subject to
the following additional terms and conditions:

9.1     Eligible Employees. Only individuals who are employees of the Company or one of its subsidiary
corporations (as defined in Section 424(f) of the U.S. Code) may be granted Incentive Stock
Options.

9.2     Dollar Limitation. To the extent the aggregate Fair Market Value (determined as at the grant
date of an Option) of Common Shares with respect to which Incentive Stock Options are exercisable
for the first time during any calendar year (under this Plan and all other incentive equity plans
of the Company and any parent or subsidiary corporation thereof (as defined in Sections 424(e) and
(f) of the U.S. Code)) exceeds US$100,000, such portion in excess of US$100,000 will be treated as
a Nonqualified Stock Option. In the event an Optionee holds two or more Options that become
exercisable for the first time in the same calendar year, this limitation will be applied on the
basis of the order in which the Options were granted.

9.3     More than 10% Shareholders. If an individual owns more than 10% of the total voting power of
all classes of the Company’s securities (as determined in accordance with Section 422 of the U.S.
Code), then the Option Exercise Price for each Incentive Stock Option will not be less than 110% of
the Fair Market Value on the grant date of an Option and the term of the Option will not exceed
five years. The determination of more than 10% ownership will be made in accordance with Section
422 of the U.S. Code.

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9.4     Exercisability. An Option designated as an Incentive Stock Option will cease to qualify for
favourable tax treatment as an Incentive Stock Option to the extent it is exercised (if permitted
by the terms of the Option):

	 	(a)	 	more than three months after termination of employment for reasons
other than death or disability (as defined for purposes of Section 422
of the U.S. Code);
	 
	 	(b)	 	more than one year after termination of employment by reason of
disability (as defined for purposes of Section 422 of the U.S. Code);
or
	 
	 	(c)	 	after the Optionee has been on a leave of absence for more than 90
days, unless the Optionee’s reemployment rights are guaranteed by
statute or contract.

9.5     Transferability. Incentive Stock Options may not be transferred by an Optionee other than by
will or the laws of descent and distribution and, during the Optionee’s lifetime, are exercisable
only by the Optionee.

9.6     Taxation of Incentive Stock Options. In order to obtain certain U.S. federal tax benefits
afforded to incentive stock options under Section 422 of the U.S. Code, the Optionee must hold the
Common Shares issued upon the exercise of an Incentive Stock Option for two years after the grant
date of the Option and one year from the date of exercise. An Optionee may be subject to the
alternative minimum tax at the time of exercise of an Incentive Stock Option. The Optionee will
give the Company prompt notice of any disposition of Common Shares acquired by the exercise of an
Incentive Stock Option prior to the expiration of such holding periods.

9.7     Conflict. In the case of any conflict between the terms of this Article 9 and the terms of any
other provision of this Plan with respect to the granting of Incentive Stock Options, this Article
will govern.

	10.	 	EARLY TERMINATION OF OPTIONS

10.1   Generally. Each Option will terminate on the 90th day after the date of an Optionee’s
termination of service, subject to the provisions of this Plan and subject to the terms of the
applicable Option Agreement as will have been determined by the Committee.

10.2   Exception. A change in the office, position or duties of an Optionee from the office,
position or duties held by such Optionee on the date on which the Option was granted to such
Optionee will not result in the termination of the Option granted to such Optionee provided that
such Optionee remains a director, officer, employee or Consultant of the Company or any Affiliate.

	11.	 	NON-TRANSFERABILITY OF OPTIONS

11.1   Non-Transferability of Options. Subject to the provisions of this Plan, no Option may be
transferred or assigned except by will or by operation of the laws of devolution or distribution
and descent or pursuant to a qualified domestic relations order, as defined by the U.S. Code and
may be exercised only by an individual Optionee during his or her lifetime and by a corporate
Optionee during the term of its existence.

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	12.	 	  EXERCISE OF OPTIONS

12.1   Exercise of Options. Subject to the terms and conditions of this Plan, each Option may from
time to time be exercised with respect to all or any of the Common Shares underlying such Option at
any time on or after the later of (i) the date of the grant of such Option, or (ii) such other date
as the Committee may in its discretion determine at the time of the grant of such Option, which
date will be set forth in the applicable Option Agreement. Each Option may be exercised by giving
three days’ written notice of exercise signed by the Optionee and dated the date of exercise, and
not postdated, stating that the Optionee elects to exercise his or her rights to purchase Common
Shares under such Option and specifying the number of Common Shares in respect of which such Option
is being exercised and the purchase price to be paid therefore. Such notice shall include
representations and documents as the Committee, in its sole discretion, deems necessary or
advisable to effect compliance with all applicable provisions of the U.S. Securities Act and any
other federal, state, provincial or foreign securities laws or regulations. The Committee may, in
its sole discretion, also take whatever additional actions it deems appropriate to effect such
compliance including, without limitation, placing legends on share certificates and issuing
stop-transfer notices to agents and registrars. In the event that the Option shall be exercised
pursuant to Section 11.1 by any person or persons other than the Optionee, such notice shall
include appropriate proof of the right of such person or persons to exercise the Option. Such
notice will be delivered to the Company at its principal office at 887 Great Northern Way,
Vancouver, Suite 101, British Columbia, Canada, V5T 4T5 (or at such other address as the principal
office of the Company may be located at the time of exercise) addressed to the attention of the
secretary or assistant secretary of the Company and be accompanied by full payment (payable at par
in Vancouver, British Columbia) of the exercise price in any combination of the following (subject
to all applicable laws and unless the Committee determines otherwise at the time of grant or before
the Option is exercised):

	 	(a)	 	cash, bank draft or certified cheque;
	 
	 	(b)	 	tendering (either actually or, if and so long as the Common Shares are registered
under Section 12(b) or 12(g) of the U.S. Exchange Act, by attestation) Common Shares
already owned by the Optionee for at least the period necessary to avoid a charge to
the Company’s earnings for financial reporting purposes having a Fair Market Value
on the exercise date equal to the aggregate Option Exercise Price;
	 
	 	(c)	 	if and so long as the Common Shares are registered under Section 12(b) or 12(g) of
the U.S. Exchange Act, delivery of a properly executed exercise notice, together
with irrevocable instructions, to (i) a brokerage firm designated by the Company to
deliver promptly to the Company the aggregate amount of sale or loan proceeds to pay
the Option Exercise Price and any withholding tax obligations that may arise in
connection with the exercise, and (ii) the Company to deliver the certificates for
such purchased shares directly to such brokerage firm, all in accordance with the
regulations of any relevant regulatory authorities; or
	 
	 	(d)	 	such other consideration as the Committee may permit consistent with applicable laws.

As soon as practicable after any exercise of an Option, a certificate or certificates representing
the Common Shares in respect of which such Option is exercised will be delivered by the Company to
the Optionee.

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12.2     Withholding Tax. The Optionee will be solely responsible for paying any applicable
withholding taxes arising from the grant, vesting or exercise of any Option and payment is to be
made in a manner satisfactory to the Company. Notwithstanding the foregoing, the Company will have
the right to withhold from any Option or any Common Shares issuable pursuant to an Option or from
any cash amounts otherwise due or to become due from the Company to the Optionee, an amount equal
to any such taxes.

12.3     Conditions. Notwithstanding any of the provisions contained in this Plan or in any Option,
the Company’s obligation to issue Common Shares to an Optionee pursuant to the exercise of an
Option will be subject to:

	 	(a)	 	completion of such registration or other qualification of such Common Shares or
obtaining approval of such governmental authority as the Company will determine
to be necessary or advisable in connection with the authorization, issuance or
sale thereof;
	 
	 	(b)	 	the admission of such Common Shares to listing or quotation on the Exchange; and
	 
	 	(c)	 	the receipt from the Optionee of such representations, agreements and
undertakings, including as to future dealings in such Common Shares, as the
Company or its counsel determines to be necessary or advisable in order to
safeguard against the violation of the securities laws of any jurisdiction.

	13.	 	NOTICE TO COMMISSIONS AND EXCHANGES

13.1   Notice to Commissions and Exchanges. The Company will give notice to all applicable
securities commissions and other regulatory bodies in Canada and the United States and all
applicable stock exchanges and other trading facilities upon which the Common Shares are listed or
traded from time to time, as may be required, of its adoption of this Plan and of its entering into
Option Agreements with Eligible Persons and the terms and conditions for the purchase of Common
Shares under such Option Agreements, and will use all reasonable efforts to obtain any requisite
approvals as may be required from such bodies, exchanges and trading facilities.

	14.	 	  SUSPENSION, AMENDMENT OR TERMINATION

14.1   Suspension, Amendment or Termination. This Plan will terminate on March 1, 2019 or on such
earlier date as the Committee may determine. The Committee will have the right at any time to
suspend or terminate this Plan in any manner, including without limitation, to reflect any
requirements of applicable regulatory bodies or stock exchanges, and on behalf of the Company to
enter into amendments to any Option Agreement and to amend this Plan without notice to the
Shareholders and without further Shareholder approval in such manner as the Committee, in its sole
discretion, determines appropriate, including, without limitation, to amend this Plan or enter into
amendments to any Option Agreement:

	 	(a)	 	to reflect any requirements of applicable regulatory bodies or stock exchanges;
	 
	 	(b)	 	for the purposes of making formal minor or technical modifications to any of the provisions of this Plan;
	 
	 	(c)	 	to correct any ambiguity, defective provisions, error or omission in the provisions of this Plan;

11

 

	 	(d)	 	to change any vesting provisions of Options;
	 
	 	(e)	 	to change the termination provisions of the Options or this Plan;
	 
	 	(f)	 	to change the persons who qualify as Eligible Persons under this Plan;
	 
	 	(g)	 	to change the exercise terms of the Options;
	 
	 	(h)	 	to add a cashless exercise feature to this Plan; and
	 
	 	(i)	 	to add or change provisions relating to any form of financial
assistance provided by the Company to Eligible Persons that would
facilitate the purchase of securities under this Plan, to the extent
permitted under applicable laws,

but will not have the right, without notice to the Shareholders and without further Shareholder
approval, to amend this Plan in any other manner, including, but not limited to:

	 	(a)	 	increasing the number of Common Shares reserved for issuance pursuant to the exercise of Options issued under this Plan;
	 
	 	(b)	 	extending the term of any Option beyond the original expiry date;
	 
	 	(c)	 	reducing the Option Exercise Price at which Common Shares may be purchased pursuant to any Option granted under this
Plan (subject to any necessary adjustment pursuant to Article 15 hereof);
	 
	 	(d)	 	cancelling and reissuing any Options granted under this Plan with a grant of Options having a lesser Option Exercise
Price per Common Share;
	 
	 	(e)	 	permitting the introduction or reintroduction of discretionary awards of Options to non-employee directors or amending
any limitation previously imposed on director participation;
	 
	 	(f)	 	permitting the transfer or assignment of any issued Options in any manner other than as described in Section 11.1 hereof;
	 
	 	(g)	 	granting any Option under this Plan if this Plan has been suspended or has been terminated; and
	 
	 	(h)	 	making any further amendments to this Article 14,

and will not have the right, without the consent of the applicable Optionee, to:

	 	(a)	 	increase the Option Exercise Price at which Common Shares may be
purchased pursuant to any Option granted under this Plan (subject to
any necessary adjustment pursuant to Article 15 hereof);
	 
	 	(b)	 	affect in a manner that is adverse or prejudicial to, or that impairs,
the benefits and/or rights of any Optionee under any Option previously
granted under this Plan; and

12

 

	 	(c)	 	decrease the number of Common Shares which may be issued pursuant to
any Option granted under this Plan (subject to any necessary
adjustment pursuant to Article 15 hereof).

14.2   Powers of the Committee Survive Termination. The full powers of the Committee as provided for
in this Plan will survive the termination of this Plan until all Options granted under this Plan
have been exercised in full or have otherwise expired.

	15.	 	ADJUSTMENTS

15.1   Adjustments. Appropriate adjustments in the number of Common Shares subject to this Plan, as
regards Options granted or to be granted, in the number of Common Shares awarded and any applicable
Option Exercise Price will be conclusively determined by the Committee to give effect to
adjustments in the number of Common Shares resulting from subdivisions, consolidations,
substitutions, or reclassifications of the Common Shares, the payment of stock dividends by the
Company (other than dividends in the ordinary course) or other relevant changes in the capital of
the Company or from a proposed merger, amalgamation or other corporate arrangement or
reorganization involving the exchange or replacement of Common Shares of the Company for those in
another corporation. Any dispute that arises at any time with respect to any such adjustment will
be conclusively determined by the Committee, and any such determination will be binding on the
Company, the Optionee and all other affected parties.

15.2   Further Adjustments. Subject to Section 15.1, if, because of a proposed merger, amalgamation
or other corporate arrangement or reorganization, the exchange or replacement of Common Shares of
the Company for those in another corporation is imminent, the Board may, in a fair and equitable
manner, determine the manner in which all unexercised or unvested Options granted under this Plan
will be treated including, without limitation, requiring the acceleration of the time for the
exercise and/or vesting of such rights by the Optionee and of the time for the fulfilment of any
conditions or restrictions on such exercise or vesting. All determinations of the Committee under
this Section will be final, binding and conclusive for all purposes subject to the approval of the
Exchange, if applicable.

15.3   Limitations. The grant of Options under this Plan will in no way affect the Company’s right
to adjust, reclassify, reorganize or otherwise change its capital or business structure or to
merge, amalgamate, reorganize, consolidate, dissolve, liquidate or sell or transfer all or any part
of its business or assets or engage in any like transaction.

15.4   No Fractional Shares. No adjustment or substitution provided for in this Article 15 will
require the Company to issue a fractional share in respect of any Option and the total substitution
or adjustment with respect to each Option will be limited accordingly.

	16.	 	SHAREHOLDER AND REGULATORY APPROVAL

16.1  Shareholder and Regulatory Approval. This Plan will be subject to the requisite approval of
the Shareholders to be given by a resolution passed at a meeting of the Shareholders, if required,
and to acceptance by the Exchange and any other regulatory authorities having jurisdiction. Any
Options granted prior to such approval and acceptance will be conditional upon such approval and
acceptance being given and no such Options may be exercised unless and until such approval and
acceptance is given.

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	17.	 	GENERAL

17.1   Rights of Optionees. The Optionee will not have any rights as a Shareholder with respect to
any of the Common Shares underlying such Option until such Optionee becomes the record owner of
such Common Shares.

17.2   No Effect on Employment. Nothing in this Plan or any Option will confer upon any Optionee any
right to continue in the employ of or under contract with the Company or any Affiliate or affect in
any way the right of the Company or any such Affiliate to terminate his or her employment at any
time or terminate his or her consulting contract; nor will anything in this Plan or any Option be
deemed or construed to constitute an agreement, or an expression of intent, on the part of the
Company or any such Affiliate to extend the employment of any Optionee beyond the time that he or
she would normally be retired pursuant to the provisions of any present or future retirement plan
of the Company or any Affiliate or any present or future retirement policy of the Company or any
Affiliate, or beyond the time at which he or she would otherwise be retired pursuant to the
provisions of any contract of employment with the Company or any Affiliate.

17.3   No Fettering of Directors’ Discretion. Nothing contained in this Plan will restrict or limit
or be deemed to restrict or limit the right or power of the Board in connection with any allotment
and issuance of Common Shares which are not allotted and issued under this Plan including, without
limitation, with respect to other compensation arrangements.

17.4   Compliance with Laws. This Plan, the granting and vesting of Options under this Plan and the
issuance and delivery of Common Shares hereunder are subject to compliance with all applicable
federal, state, provincial, local and foreign laws, rules and regulations (including but not
limited to state, provincial, federal and foreign securities law and margin requirements) and to
such approvals by any listing, regulatory or governmental authority as may, in the opinion of
counsel for the Company, be necessary or advisable in connection therewith. Any securities
delivered under this Plan shall be subject to such restrictions, and the person acquiring such
securities shall, if requested by the Company, provide such assurances and representations to the
Company as the Company may deem necessary or desirable to assure compliance with all applicable
legal requirements. To the extent permitted by applicable law, this Plan and Options granted
hereunder shall be deemed amended to the extent necessary to conform to such laws, rules and
regulations.

17.5   Section 409A. To the extent that the Committee determines that any Option granted under this
Plan is subject to Section 409A of the U.S. Code (“Section 409A”), including, without limitation, a
Nonqualified Stock Option which is subject to Section 409A and does not satisfy the exemption
requirements set forth in Treasury Regulation Section 1.409A-1(b)(5), the Option Agreement
evidencing such Option shall incorporate the terms and conditions required by Section 409A. To the
extent applicable, this Plan and Option Agreements shall be interpreted in accordance with Section
409A and U.S. Department of Treasury regulations and other interpretive guidance issued thereunder,
including without limitation any such regulations or other guidance that may be issued after the
effective date of this Plan. Notwithstanding any provision of this Plan to the contrary, in the
event that following the effective date of this Plan, the Committee determines that any Option may
be subject to Section 409A and related U.S. Department of Treasury guidance (including such U.S.
Department of Treasury guidance as may be issued after the effective date of this Plan), the
Committee may adopt such amendments to this Plan and the applicable Option Agreement or adopt other
policies and procedures (including amendments, policies and procedures with retroactive effect), or
take any other actions, that the Committee determines are necessary or appropriate to (a) exempt
the Option from Section 409A and/or preserve the intended tax treatment of the benefits provided
with respect to the Option, or (b) comply with the requirements of Section 409A and related U.S.
Department of Treasury guidance and thereby avoid the application of any penalty taxes under such
Section.

14

 

17.6   No Rights to Options. No Eligible Person or other person shall have any claim to be granted
any Option pursuant to this Plan, and neither the Company nor the Committee is obligated to treat
Eligible Persons, Optionees or any other persons uniformly.

17.7   Interpretation. References herein to any gender include all genders and to the plural includes
the singular and vice versa. The division of this Plan into Sections and Articles and the insertion
of headings are for convenience of reference only and will not affect the construction or
interpretation of this Plan.

	18.	 	REFERENCE

18.1   Reference. This Plan may be referred to as the “QLT 2000 Incentive Stock Option Plan”.

15Exhibit 10.8

Exhibit 10.8

AMENDED AND RESTATED NOTEHOLDER FORBEARANCE AGREEMENT

AMENDED AND RESTATED NOTEHOLDER FORBEARANCE AGREEMENT (this “Agreement”), dated as of November
16, 2009, among (i) National Consumer Cooperative Bank (d/b/a NCB), a banking corporation chartered
pursuant to the National Consumer Cooperative Bank Act, as amended 12 U.S.C. §§3001-3051 (the
“Company”), (ii) NCB Financial Corporation, as Guarantor (the “Guarantor”) and (iii) the
undersigned holders (the “Noteholders”) of the Notes (as defined below).

RECITALS:

A. Pursuant to that certain Note Purchase and Uncommitted Master Shelf Agreement, dated as of
December 28, 2001, among the Company and each of the Purchasers identified therein, as amended by
that certain First Amendment, dated as of December 9, 2003, that certain Second Amendment, dated as
of December 28, 2004, that certain Third Amendment, dated as of December 28, 2006, that certain
Fourth Amendment, dated as of December 31, 2007, that certain Fifth Amendment, dated as of February
25, 2008 and that certain Sixth Amendment and Limited Waiver (the “Sixth Amendment”), dated as of
March 31, 2009 (as so amended and in effect on the date hereof, the “Note Agreement”), the Company
issued (i) $55,000,000 in original principal amount of its 8.50% Senior Notes, due December 28,
2009 (as amended, restated, supplemented, replaced or otherwise modified hereby or from time to
time, collectively, the “2009 Notes”) and (ii) $50,000,000 in original principal amount of its
8.50% Senior Notes, due December 15, 2010 (as amended, restated, supplemented, replaced or
otherwise modified hereby or from time to time, collectively, the “2010 Notes” and, together with
the 2009 Notes, the “Notes”). The Noteholders hold 100% of the principal amount of the Notes.

B. The Company, the Guarantor and the Noteholders are party to that certain Noteholder
Forbearance Agreement, dated as of August 14, 2009 (the “Existing Forbearance Agreement”).

C. The Company entered into that certain Credit Agreement, dated as of May 1, 2006 (as
previously amended and in effect on the date hereof, the “Credit Agreement”),by and among the
Company, SunTrust Bank, as administrative agent (in such capacity, the “Bank Agent”), and the
lenders party thereto (collectively, the “Lenders”).

D. In connection with the Sixth Amendment and the corresponding amendment to the Credit
Agreement, (i) the Company, the Guarantor, SunTrust Bank, as collateral agent (in such capacity,
the “Collateral Agent”), the Lenders, the Bank Agent and the Noteholders entered into that certain
Intercreditor and Collateral Agency Agreement, dated as of April 30, 2009 (as amended, the
“Intercreditor Agreement”) and (ii) the Guarantor entered into that certain Guaranty Agreement (the
“Guaranty Agreement”), dated as of April 30, 2009, in favor of the Collateral Agent, for the
benefit of the Lenders and the Noteholders, to guaranty the Notes and the obligations of the
Company under the Credit Agreement.

 

 

 

E. The Company has informed the Noteholders that (i) it is in breach of (a) Section 6Q of the
Note Agreement (Asset Quality) beginning May 31, 2009, (b) Section 6H of the Note Agreement
(Consolidated Earnings Available for Fixed Charges) beginning June 30, 2009, (c) Section 6R of the
Note Agreement (Return on Average Assets) beginning June 30, 2009 (d) Section 6(E)(i) of the Note
Agreement (Limitations on Debt) beginning July 1, 2009 and (e) Section 6D(ix) of the Note Agreement
(Permitted Debt) beginning October 19, 2009, and as a result of each of the foregoing clauses,
Events of Default under Section 7A(iii) occurred and are continuing on the date hereof, (ii) it is
in breach of (a) Section 5Q (Minimum Liquidity Amount) beginning June 15, 2009 and (b) Sections
5H(vii) and (viii) (Notice of Event of Default and Notice of Claimed Default), in each case in
respect of the Events of Default specified in this paragraph, and as a result thereof Events of
Default under Section 7A(iv) occurred and are continuing on the date hereof, and (iii) as a result
of the Corresponding Defaults (as defined below) an Event of Default under Section 7A(vi) of the
Note Agreement has occurred and is continuing on the date hereof (collectively, the “Specified
Defaults”).

F. The Company has requested that the Noteholders temporarily forbear from exercising any
rights or remedies that the Noteholders may have under, or in respect of, the Notes and the Note
Agreement with respect to the Specified Defaults upon the terms and conditions set forth in this
Agreement.

G. The Company has requested that the Bank Agent and the Lenders temporarily forbear from
exercising any rights or remedies that the Bank Agent and the Lenders may have under, or in respect
of, the Credit Agreement with respect to any defaults or events of default that have arisen, or may
arise, as a result of the Company’s breach of (i) section 6.9(b) of the Credit Agreement (Ratio of
Consolidated Earnings Available for Fixed Charge to Consolidated Fixed Charges) beginning June 30,
2009, (ii) section 6.9(c) of the Credit Agreement (Ratio of Consolidated Debt to Consolidated
Adjusted Net Worth) beginning July 1, 2009, (iii) section 6.9(e) of the Credit Agreement (Ratio of
Nonperforming Assets to Total Loans) beginning May 31, 2009, (iv) section 6.9(g) of the Credit
Agreement (Return on Average Assets) beginning June 30, 2009, (v) section 2.9 (Revolving Credit
Exposure) as of September 30, 2009, (vi) section 7.1(g) (borrowings by the Thrift) beginning
October 19, 2009, (vii) section 6.7(a) (Failure to notify of Events of Default) in respect of the
breaches specified in this paragraph, and (viii) section 8.5 of the Credit Agreement (collectively,
the “Corresponding Defaults”), and the Bank Agent and the Lenders have agreed to do so as is more
particularly set forth in the Forbearance Agreement among the Bank Agent, the Lenders and the
Company, dated as of November 16, 2009, in substantially the form attached hereto as Exhibit
A (the “Amended and Restated Bank Forbearance Agreement”).

H. Subject to the terms and conditions hereinafter set forth, the Noteholders have agreed to
the Company’s request to temporarily suspend action in respect of the Specified Defaults.

AGREEMENT:

NOW THEREFORE, for valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree to amend and restate the Existing Forbearance Agreement in
its entirety and further agree as follows:

 

 

 

SECTION 1. DEFINED TERMS.

1.1 Defined Terms. As used herein, the following terms shall have the meanings set forth
below. The terms used herein and not defined herein shall have the respective meanings ascribed to
such terms in the Note Agreement or the Notes, as applicable.

“Applicable Rate” — means 13.50% per annum, provided that during any Investment Rated Period
the Applicable Rate shall be 11.50% per annum.

“Forbearance Period” — means the period from and after the Effective Date until the
Forbearance Termination Date.

“Forbearance Termination Date” — means the earlier to occur of (a) 5:00 p.m. (New York time)
on February 17, 2010, (b) the date of the first occurrence of any Forbearance Termination Event,
and (c) the execution and delivery of an amendment and waiver agreement by and among the Company
and the Noteholders, on terms and conditions satisfactory to the Noteholders, which agreement
includes a permanent waiver of the Specified Defaults and any other existing Events of Default.

“Forbearance Termination Event” — means the occurrence of any of the following:

(a) the failure by the Company or its Subsidiaries, as applicable, to comply with any
of the terms and provisions set forth in this Agreement or, to the extent not superseded by
this Agreement, the Note Agreement;

(b) the failure of any representation or warranty in Section 3 to be true and correct,
in all material respects;

(c) any Event of Default (other than a Specified Default) shall exist or occur;

(d) (i) the termination of the Credit Agreement; (ii) the failure by a Lender to renew
a letter of credit in accordance with the terms of the Credit Agreement; (iii) the
termination or reduction after the date hereof of any of the credit commitments under the
Credit Agreement other than reductions resulting from (a) the Notice of Irrevocable
Reduction and Termination dated as of March 30, 2009 or (b) any mandatory prepayment
required pursuant to the terms hereof or similar provision of the Amended and Restated Bank
Forbearance Agreement or as contemplated by the Credit Agreement; (iv) the termination of
the Amended and Restated Bank Forbearance Agreement or the forbearance represented thereby;
or (v) any remedies or enforcement action taken in respect of the Credit Agreement, the
Amended and Restated Bank Forbearance Agreement or otherwise; and

(e) any payment of principal by the Company or any of its Subsidiaries in respect of
any Debt that is expressly subordinated in any manner to the Notes.

“Noteholders’ Financial Advisor” — means Alvarez & Marsal North America, LLC or such other
financial advisor that the Required Holders shall designate from time to time.

 

 

 

“Noteholders’ Professionals” — is defined in Section 4.1 hereof.

“Retainer Letters” — means collectively, (a) the retainer letter dated August 4, 2009, signed
by Special Counsel and countersigned by the Company, (b) the retainer letter dated August 7, 2009,
signed by the Noteholders’ Financial Advisor and countersigned by the Company and Special Counsel
and (c) such other retainer letters as may hereinafter be signed by one of the Noteholders’
Professionals and countersigned by the Company in respect of fees and expenses payable by the
Company in accordance with the Note Agreement, the Notes and this Agreement.

“Special Counsel” — means Bingham McCutchen LLP or such other law firm as the Required
Holders may designate from time to time.

1.2 Rules of Construction. All definitions contained in this Agreement are equally applicable
to the singular and plural forms of the terms defined. The words “hereof,” “herein,” and
“hereunder” and words of similar import referring to this Agreement refer to this Agreement as a
whole and not to any particular provision of this Agreement. Unless otherwise specified, all
Section references pertain to this Agreement. All accounting terms not specifically defined herein
shall be construed in accordance with generally accepted accounting principles as in effect on the
Effective Date. All references herein to “this Agreement” or to any other agreement or document
shall, unless stated otherwise, be deemed to refer to this Agreement or such other agreement or
document as the same may be amended, restated or otherwise modified from time to time.
Notwithstanding the foregoing, all provisions of the Credit Agreement and the Amended and Restated
Bank Forbearance Agreement that are incorporated herein by reference or referred to herein in order
to establish obligations of the Company shall constitute reference to such provisions as in effect
on the date hereof, without regard to any amendments, modifications or waivers in respect thereof
that the parties to the Credit Agreement or the Amended and Restated Bank Forbearance Agreement may
agree to that are prohibited hereunder, unless the Required Holders also agree to such amendments,
modifications or waivers. All references herein to sections or clauses of any other agreement or
document shall, unless the context otherwise requires, be deemed to refer to such sections as they
may be renumbered from time to time in connection with any amendment of the type referred to in the
immediately preceding sentence of this Section. All references herein to any person shall be
deemed to refer to such person and its lawful successors and assigns.

SECTION 2. FORBEARANCE.

2.1 Forbearance Period. During the Forbearance Period, the Noteholders shall not exercise or
enforce any remedy against the Company or the Guarantor arising solely out of, or resulting solely
from, the Specified Defaults. Upon the termination or expiration of the Forbearance Period, the
Noteholders shall be entitled to exercise all of their rights and remedies, including, without
limitation, those arising under this Agreement and each Transaction Document, or at law or equity.
Nothing herein constitutes a waiver of the Specified Defaults or a waiver of any requirement that
the Company or the Guarantor pay the amounts owing in respect of the Notes and the Note Agreement
except as expressly set forth herein, and the Company acknowledges that no Noteholder has committed
to waive the Specified Defaults, any other Defaults or Events of Default, or any payments required
under the Notes or the Note Agreement,

 

 

 

nor shall any Noteholder be obligated to forbear from exercising any remedies with respect to
the Specified Defaults following the expiration or termination of the Forbearance Period. In
addition, notwithstanding any provision of this Agreement, none of the Noteholders is restricted
from asserting any action or position in any insolvency proceeding involving the Company or the
Guarantor, specifically including, without otherwise limiting, any pending or future proceeding
under Title 11 of the United States Code. Each of the parties hereto acknowledges and agrees that
(x) from and after the termination of the Forbearance Period, the Notes shall accrue interest at
the Applicable Rate, and (y) on and after the Forbearance Termination Date the Specified Defaults
are, and shall continue to remain, outstanding under the Note Agreement unless otherwise expressly
waived in writing by the Required Holders. The Noteholders reserve their respective rights, in
their discretion, to exercise any or all of their rights and remedies under this Agreement and each
Transaction Document as a result of the Specified Defaults on and after the Forbearance Termination
Date, provided that the Noteholders hereby agree to waive any right to apply a default rate of
interest in addition to the Applicable Rate provided herein.

2.2 Maturity Date of the 2009 Notes. Notwithstanding any notices provided by the Noteholders
to the Company prior to August 14, 2009 in connection with Section 4A of the Note Agreement (which
notices, for the avoidance of doubt, shall be considered rescinded as of August 14, 2009) and
notwithstanding anything to the contrary in that certain letter dated November 13, 2009 delivered
by the holders of the 2009 Notes (the “2009 Noteholders”) to the Company, the outstanding principal
amount of all of the 2009 Notes shall be automatically due and payable in full on the Forbearance
Termination Date, together with interest thereon, provided that if the Forbearance
Termination Date occurs solely by virtue of a Forbearance Termination Event other than a
Forbearance Termination Event arising from the failure of the Company to make any payment of
principal, interest or fees in respect of the Notes when due, then the outstanding principal amount
of all of the 2009 Notes shall be due and payable on the date specified in a written notice to the
Company from the 2009 Noteholders, which date shall be at least five (5) Business Days following
the Forbearance Termination Date, without any further action or notice by any Person, and provided
further that the foregoing shall not affect the right of the Noteholders to exercise any of their
rights and remedies in respect of such Forbearance Termination Event (including, without
limitation, their right to accelerate any or all of the Notes).

2.3 Limited Effect of Forbearance. Notwithstanding the forbearance set forth in Section 2.1,
in interpreting any covenants or other provisions in this Agreement and any Transaction Document
that provide greater restrictions or limitations on, or impose additional requirements on, the
Company and/or its Subsidiaries after the occurrence of an Event of Default, as opposed to when no
Event of Default exists, the Specified Defaults shall be deemed to exist and continue in effect for
the limited purpose of causing such greater restrictions and limitations and such additional
requirements to be in effect throughout the Forbearance Period. Notwithstanding anything else
herein to the contrary, during the Forbearance Period, the Company shall not be required to comply
with the terms of (a) the financial covenants set forth in Sections 5D, 5Q, 6E, 6H, 6Q and 6R of
the Note Agreement and (b) the covenants incorporated by reference pursuant to Section 5G of the
Note Agreement to the extent that the Company is not required to comply with such covenants
pursuant to the Amended and Restated Bank Forbearance Agreement.

 

 

 

SECTION 3. WARRANTIES AND REPRESENTATIONS.

To induce the Noteholders to enter into this Agreement, the Company hereby warrants and
represents to the Noteholders, as of the Effective Date:

3.1 Organization, Existence and Authority.

(a) The Company is a banking corporation chartered pursuant to the National Consumer
Cooperative Bank Act, as amended 12 U.S.C. §§3001-3051. The Company has the corporate power
and authority to execute and deliver this Agreement and to perform its obligations
hereunder.

(b) The Guarantor is a Delaware chartered savings and loan holding company duly
organized, validly existing and in good standing under the laws of Delaware. The Guarantor
has the corporate power and authority to execute and deliver this Agreement and to perform
its obligations hereunder.

(c) Each Subsidiary of the Company is a corporation or other legal entity duly
organized, validly existing and in good standing under the laws of its jurisdiction of
organization. Schedule 3.1 hereto sets forth complete and correct lists of the
Subsidiaries of the Company, showing, as to each Subsidiary, the correct name thereof, the
jurisdiction of its organization, and the owners (and percentage of ownership) of each class
of its capital stock outstanding.

3.2 Authorization, Execution and Enforceability. The execution and delivery by each of the
Company and the Guarantor of this Agreement and the Amended and Restated Bank Forbearance Agreement
and the performance by each of the Company and the Guarantor of its respective obligations
hereunder and thereunder have been duly authorized by all necessary action on the part of the
Company and the Guarantor, respectively. Each of this Agreement and the Amended and Restated Bank
Forbearance Agreement has been duly executed and delivered by each of the Company and the
Guarantor. Each of this Agreement and the Amended and Restated Bank Forbearance Agreement
constitutes a valid and binding obligation of each of the Company and the Guarantor, enforceable in
accordance with its terms, except that the enforceability thereof may be:

(a) limited by bankruptcy, insolvency or other similar laws affecting the
enforceability of creditors’ rights generally; and

(b) subject to the availability of equitable remedies.

3.3 No Conflicts or Defaults. Neither the execution and delivery by each of the Company and
the Guarantor of this Agreement or the Amended and Restated Bank Forbearance Agreement, nor the
performance by each of the Company and the Guarantor of its respective obligations hereunder or
thereunder, conflicts with, results in any breach in any of the provisions of, constitutes a
default under, violates or results in the creation of any Lien upon any property of the Company,
its Subsidiaries or the Guarantor under the provisions of:

(a) any charter document or bylaws of the Company, its Subsidiaries or the Guarantor;

 

 

 

(b) any material agreement, instrument or conveyance to which the Company, its
Subsidiaries or the Guarantor may be bound or affected; or

(c) any statute, rule or regulation or any order, judgment or award of any court,
tribunal or arbitrator by which the Company, its Subsidiaries or the Guarantor, or any of
their respective properties, may be bound or affected.

3.4 Governmental Consent. Neither the execution and delivery of this Agreement or the Amended
and Restated Bank Forbearance Agreement, nor the performance by each of the Company and the
Guarantor of its respective obligations hereunder or thereunder, is such as to require a consent,
approval or authorization of, or filing, registration or qualification with, any Governmental
Authority on the part of the Company or the Guarantor as a condition thereto under the
circumstances and conditions contemplated by this Agreement or the Amended and Restated Bank
Forbearance Agreement.

3.5 No Defaults or Events of Default. After giving effect to the transactions contemplated by
this Agreement and the Amended and Restated Bank Forbearance Agreement, no Default or Event of
Default (other than the Specified Defaults) will exist under the Note Agreement, this Agreement,
the Credit Agreement (other than the Corresponding Defaults as to which Lender action has been
suspended pursuant to the Amended and Restated Bank Forbearance Agreement) or any other credit
agreement to which the Company, its Subsidiaries or the Guarantor is a party. Immediately prior to
giving effect to the transactions contemplated by this Agreement, (i) those Defaults or Events of
Default identified as “Specified Defaults” or “Corresponding Defaults” constituted the only
Defaults or Events of Default that existed or may have existed at such time and (ii) no defaults or
events of defaults (other than the Corresponding Defaults) existed with respect to the Credit
Agreement or any other credit agreement to which the Company, its Subsidiaries or the Guarantor is
an obligor.

3.6 Disclosure. Except for (a) the Specified Defaults, (b) the Corresponding Defaults and (c)
the transactions contemplated by this Agreement, there is no fact known to the Company or the
Guarantor, as of the date hereof, that could reasonably be expected to have a Material Adverse
Effect that has not been disclosed to the Noteholders.

3.7 True and Correct Copies. The Company has delivered to the Noteholders or Special Counsel
true and correct copies of the Credit Agreement and the amendments thereto (including the Amended
and Restated Bank Forbearance Agreement) and each other credit agreement to which the Company, its
Subsidiaries or the Guarantor is a party, as each is in effect on the Effective Date.

3.8 No Undisclosed Consideration. Except as expressly set forth herein or in the Amended and
Restated Bank Forbearance Agreement, none of the Company, its Subsidiaries, the Guarantor and any
of their respective subsidiaries or affiliates has paid or will pay, directly or indirectly, any
fee, charge, increased interest or other consideration to, or given any additional security or
collateral to, or shortened the maturity or average life of any Debt or permanently reduced any
borrowing capacity in favor of or for the benefit of, any creditor of the Company, its
Subsidiaries, the Guarantor or any of their respective subsidiaries or affiliates as a condition
to,
or otherwise in connection with, the execution or delivery of this Agreement or the Amended
and Restated Bank Forbearance Agreement.

 

 

 

3.9 Letters of Credit. The Company warrants and represents that, other than as set forth on
Schedule 3.9 hereto, none of the currently outstanding letters of credit issued by the
Lenders under the Credit Agreement are scheduled to, or are currently anticipated by the Company
to, expire, terminate or otherwise be released or no longer be required to be outstanding by the
beneficiary thereof, prior to 5:00 p.m. (New York time) on February 17, 2010.

3.10 Existing Debt and Liens. Schedule 3.10(a) hereto sets forth a complete and
correct list of all outstanding Debt of the Company, its Subsidiaries and the Guarantor, in each
case as obligors, as of September 30, 2009 (including with respect thereto, identification of the
obligor(s) and the payee or creditor with respect to such Debt, whether such Debt is secured,
guaranteed or subordinated to any other Debt of the Company, its Subsidiaries and the Guarantor and
the dates and amounts of mandatory repayments of such Debt (whether by amortization payment or at
maturity)), since which date there has been no material change in the amounts, interest rates,
sinking funds, installment payment or maturities of the Debt of the Company, its Subsidiaries and
the Guarantor, except as set forth on such Schedule 3.10(a). Schedule 3.10(b) hereto sets
forth a complete and correct list of all Liens on property of the Company, its Subsidiaries and the
Guarantor as of September 30, 2009 that secure Debt of any Person, and identifying in each case the
obligor(s) with respect to such Debt, the property subject to such Liens and the payee or creditor
with respect to such Debt, since which date there has been no material change in the information
set forth therein, except as set forth on such Schedule 3.10(b).

3.11 Litigation. There are no actions, suits, proceedings, claims or disputes pending or, to
the knowledge of the Company and the Guarantor after due and diligent investigation, threatened or
contemplated, at law, in equity, in arbitration or before any Governmental Authority, by or against
the Company, its Subsidiaries or the Guarantor or against any of their respective properties or
revenues that (a) purport to affect or pertain hereto, or to this Agreement, any Transaction
Document, the Credit Agreement or the Amended and Restated Bank Forbearance Agreement, or any of
the transactions contemplated hereby or thereby, or (b) either individually or in the aggregate, if
determined adversely, could reasonably be expected to have a Material Adverse Effect.

SECTION 4. COMPANY COVENANTS AND AGREEMENTS.

From and after the Effective Date, and irrespective of the occurrence of a Forbearance
Termination Event and in addition to any covenant in the Note Agreement or any other Transaction
Document, each of the Company and the Guarantor, as applicable, shall comply with and be bound by
the following covenants and agreements:

4.1 Fees and Expenses of Noteholders and Noteholders’ Professionals; Cooperation with
Noteholders’ Financial Advisor.

(a) The Company shall make all payments required to be made by it pursuant to and in
the manner set forth in, each of the Retainer Letters.

 

 

 

(b) The Company also agrees to the hiring and the continuing employment by the
Noteholders of their Special Counsel, and by their Special Counsel of the Noteholders’
Financial Advisor, as well as, if necessary, one local counsel for each relevant
jurisdiction (all such Persons, together with Special Counsel and the Noteholders’ Financial
Advisor, the “Noteholders’ Professionals”). The Noteholders’ Professionals shall be
selected by the Noteholders in their sole discretion. The Company shall provide the
Noteholders’ Professionals continuing access during normal business hours to the Company’s
books and records and the opportunity to discuss the Company’s financial condition,
performance, financial statements and other matters pertinent to the Noteholders’ investment
in the Company with its officers, directors, independent accountants and any financial or
other advisor or consultant to the Company (and this Section hereby constitutes permission
and direction to such Persons to discuss and disclose such information; it being understood
that the Company and/or its financial advisor shall be present for any discussions with the
independent accountants of the Company). The Company will cooperate with the Noteholders’
Financial Advisor and will respond within a reasonable timeframe to all reasonable requests
by the Noteholders’ Financial Advisor for information, documents and analyses relating to
the Company and its Subsidiaries. Except as otherwise agreed in writing, the Noteholders’
Financial Advisor shall not have any duty to share its work product with, or accept
instructions from, the Company or any other Person. Further, the Company agrees that it
will consent to the Lenders sharing information with the Noteholders that may be received or
prepared by Ambit Risk and Performance Consulting upon terms and conditions as may be set
forth in a separate information sharing agreement.

4.2 Yield-Maintenance Amount. The Company acknowledges and agrees that the Yield-Maintenance
Amount in respect of each of the Notes shall have accrued as of August 14, 2009 in the aggregate
amount of $6,841,615 which shall have been further apportioned ratably between the 2009 Notes and
2010 Notes such that the Yield-Maintenance Amount in respect of the 2009 Notes shall have been
$1,703,721 and the Yield-Maintenance Amount in respect of the 2010 Notes shall have been
$5,137,894. Such amounts shall have been added to and capitalized into the outstanding principal
amount of the Notes and shall be treated as outstanding principal for all purposes under the Note
Agreement, the Notes and this Agreement. For the avoidance of doubt, after giving effect to the
provisions of this Section, no further Yield-Maintenance Amounts or Modified Yield-Maintenance
Amounts shall be payable in respect of the Notes. In consideration of the foregoing, the 2009
Noteholders acknowledge and agree that they will not deliver a Put Notice to the Company pursuant
to Section 4A of the Note Agreement with respect to the 2009 Notes prior to the occurrence of a
Forbearance Termination Event.

4.3 Monthly Interest. Beginning with the first Business Day of the month following the
Effective Date, and on the first business day of each succeeding month thereafter, notwithstanding
anything in the Notes or the Note Agreement to the contrary, the Company shall pay interest in
respect of the outstanding principal balance of the Notes monthly in arrears at the Applicable Rate
and on the basis of a 360 day year of twelve 30 day months.

 

 

 

4.4 Prepayments.

(a) On the Effective Date, the Company shall voluntarily prepay the Senior Note
Outstandings and the Revolving Credit Outstandings (each as defined in the Intercreditor
Agreement) ratably in accordance with the terms of sections 3(b) and 7(a) of the
Intercreditor Agreement, together with accrued interest thereon, in an amount not less than
$31,000,000. Any prepayments under this Section 4.4(a) will be deemed to be voluntary
prepayments of principal for all purposes and shall be without duplication of any other
payment required under this Section 4.4 or any Transaction Document.

(b) On each Excess Cash Payment Date (as defined below), the Company shall prepay the
Senior Note Outstandings and the Revolving Credit Outstandings ratably in accordance with
the terms of sections 3(b) and 7(a) of the Intercreditor Agreement, together with accrued
interest thereon, in an aggregate amount equal to Excess Cash (as defined below);
provided, however, (i) any payment of Excess Cash will be without
duplication of any other mandatory prepayment required under this Section 4.4 or any other
Transaction Document including any mandatory prepayment required under the Transaction
Documents with respect to proceeds which are also included in the calculation of Excess
Cash. As used herein, “Excess Cash” shall mean, with respect to any calendar month, cash
and cash equivalents as defined under GAAP (valued at the fair market value thereof) of the
Company as of the last day of such calendar month as reflected in the draft monthly
financial statements required to be delivered pursuant to Section 4.11(c) hereof (exclusive
of amounts included therein with respect to deposits in the Company’s clearing account and
other accounts where Company is acting as the custodian or in a fiduciary capacity for the
cash and cash equivalents as defined under GAAP maintained in such accounts) in excess of
$55 million; and “Excess Cash Payment Date” shall mean, with respect to any calendar month,
the first business day after the date that the draft monthly financial statements for such
calendar month are required to be delivered pursuant to Section 4.11(c) hereof, commencing
with the first Business Day after the date that the draft monthly financial statements for
October 2009 are required to be delivered (the “October Excess Cash Payment”); provided that
the October Excess Cash Payment shall be reduced on a dollar-for-dollar basis by the amount
of the prepayment made pursuant to Section 4.4(a) hereof. Any prepayments of Excess Cash
under this Section 4.4(c) will be deemed to be voluntary prepayments of principal for all
purposes.

(c) The Company shall make no payments to the Lenders unless the Company concurrently
makes a ratable payment to all of the Noteholders in accordance with the terms of sections
3(b) and 7(a) of the Intercreditor Agreement.

4.5 Letters of Credit. [Reserved]

4.6 Financial Covenants. As a material inducement to the execution by the Noteholders of this
Agreement, the Company hereby agrees that it shall comply with each of the following covenants:

(a) At all times during the Forbearance Period, unless consented to by the Required
Holders, the Company shall not permit the aggregate amount of cash and Cash
Equivalents (valued at the fair market value thereof) held by the Company to be less
than $30,000,000;

 

 

 

(b) At all times during the Forbearance Period, the Company shall not permit the ratio
of Nonperforming Assets of the Company and its Subsidiaries to Total Loans (excluding
letters of credit) to exceed 0.075:1.0; and

(c) During the Forbearance Period, the Company (i) shall not make any voluntary capital
contribution to the Thrift (whether directly or through NCBFC) without the prior written
consent of the Required Holders and (ii) shall, notwithstanding the limitation in section
7.9(xiii) of the Credit Agreement and Section 5M of the Note Agreement, be permitted to make
a capital contribution expressly requested by the Office of Thrift Supervision or other
Government Authority to the Thrift (whether directly or through NCBFC) in an aggregate
amount of up to $10,000,000 without the prior written consent of Required Holders; provided
that the Company remains in compliance with Section 4.6(a) above..

4.7 Restricted Payments. The Company shall not, directly or indirectly, declare, order, make
or set apart any sum for or pay any Restricted Payment except for Patronage Dividends and other
dividends, in each case payable by the Company solely in common stock of the Company.

4.8 Investments. The Company and the Guarantor shall not make any of the Restricted
Investments permitted to be made pursuant to clauses (p) and (q) of the definition of Restricted
Investments.

4.9 Loans, Advances and Payments. The Company shall not, directly or indirectly, (i) make any
payments to any Person not required by a valid and enforceable contract as in effect on the
Effective Date, except in the ordinary course of business, nor (ii) enter into any contract
requiring payments to be made by the Company except in the ordinary course of business or as part
of the transactions contemplated by this Agreement. For the avoidance of doubt, notwithstanding
subsection (e) of the definition of Forbearance Termination Event, the payment by the Company to
the holders of the Class A Notes in the amount of $2,500,000 in respect of a mandatory principal
prepayment due December 15, 2009 shall not constitute a Forbearance Termination Event hereunder.

4.10 Borrowings by the Thrift. Notwithstanding anything in the Note Agreement to the
contrary, during the Forbearance Period, the Thrift shall be permitted to borrow (a) federal funds
from any Federal Reserve Bank under the Term Auction Facility of the Federal Reserve System and (b)
secured or unsecured federal funds from any Federal Reserve Bank or any member of the Federal
Reserve System for a period not to exceed 120 days, in each case so long as such borrowings are
made in the ordinary course of business in such circumstances as may be incidental or usual in
carrying on the banking of the Thrift incurred in accordance with applicable laws and regulations
and safe and sound practice.

 

 

 

4.11 Cash Flow Forecast, Other Information, etc. The Company shall prepare and deliver to
each of the Noteholders, each in form and detail reasonably satisfactory to the Noteholders,

(a) commencing by 4:00 p.m. (Eastern time) on November 18, 2009 and by 4:00 p.m.
(Eastern time) each Wednesday thereafter, a cash balance report as of the close of business
(Eastern time) on Friday of the previous week;

(b) commencing by 4:00 p.m. (Eastern time) on November 20, 2009 and by 4:00 p.m.
(Eastern time) each Friday thereafter, a 13-week rolling cash flow forecast together with a
detailed variance report with respect to the previous 13-week rolling cash flow forecast
delivered, which shall be in the form attached hereto as Exhibit B;

(c) on the day that is 30 days following the end of each calendar month, draft monthly
financial statements including balance sheets, statements of income and statements of
shareholders equity, and on the day that is 45 days following the end of each calendar
month, final copies of such monthly financial statements, provided, however, that with
respect to December 2009, such draft monthly financial statements shall be delivered not
later than February 12, 2010 and such final monthly financial statements shall be delivered
together with the annual financial statements to be delivered in accordance with Section
5H(ii) of the Note Agreement; and

(d) such additional information (including information provided by the Company to its
other creditors) regarding the assets, liabilities, business and financial condition of the
Company, the Guarantor and their respective subsidiaries (and projections relating thereto)
as shall be reasonably requested by the Noteholders.

4.12 Compliance Certificates. During the Forbearance Period, notwithstanding anything in the
Note Agreement to the contrary, any certificate delivered pursuant to Section 5I of the Note
Agreement shall certify that there exists no Event of Default under the Note Agreement other than
the Specified Defaults and that there exists no default under the Note Agreement or the Credit
Agreement, as modified by this Agreement and the Amended and Restated Bank Forbearance Agreement,
respectively, and if such cannot be so certified, specifying in reasonable detail the exceptions,
if any, to such statement.

4.13 Amendments to Credit Agreement, etc. Until the termination of any forbearance or waiver
period under the Bank Forbearance Agreement, the Company shall not, without the written consent of
the Required Holders, except as contemplated by the Amended and Restated Bank Forbearance
Agreement, enter into any amendment of, or modification or supplement to, the Credit Agreement, the
Amended and Restated Bank Forbearance Agreement, or any related agreements, or enter into any other
agreements with any of the Lenders or the Bank Agent with respect to the Credit Agreement or the
Amended and Restated Bank Forbearance Agreement, that would have the direct or indirect effect of
any of the following: shortening the date of maturity of any loan or note, increasing the stated
principal amount of any loan or note or adding to such amounts, adding to or making more onerous
the conditions for issuing letters of credit, accelerating the time or increasing the amount of
payment of principal, interest or other amounts (other than as required in Section 4.4 herein),
increasing the interest
rate or effective interest rate on any Debt (whether by changing a contractual or default
rate, changing a reference or base rate (other than normal fluctuations in such rate as may be
contemplated by changes in the reference rates in the Credit Agreement) or by changing an interest
rate spread above a reference rate), increasing the amount of or imposing additional fees or costs,
or adding covenants or other restrictions or making more onerous existing covenants.

 

 

 

4.14 No Fees, etc. None of the Company, its Subsidiaries, the Guarantor or their respective
subsidiaries or affiliates has paid or will pay, directly or indirectly, any work fee,
administrative agent’s fee or any other fee, charge, increased interest, premium or other
consideration to, or has given or will give any additional security or collateral to, or has
shortened or will shorten the maturity or average life of any Debt or permanently reduced any
borrowing capacity in favor of or for the benefit of, any creditor of the Company, any creditor of
any Affiliate or any agent acting for or on behalf of any such creditors with respect to the Credit
Agreement in connection with or as an inducement to enter into the Amended and Restated Bank
Forbearance Agreement or similar agreement, other than (a) the fees and payments described in the
Amended and Restated Bank Forbearance Agreement (including any fees to counsel and financial
advisors) and the forbearance fee described in Section 5.5 below and (b) as permitted in Section
4.4 herein, in each case payable under the terms of, and as disclosed in, the Amended and Restated
Bank Forbearance Agreement.

4.15 Meetings. The Company, the Guarantor and their respective senior management and advisors
shall make themselves available for such periodic meetings as the Noteholders or the Noteholders’
Professionals may reasonably request, to take place at mutually convenient times, in person or by
telephone with representatives of the Noteholders, the Noteholders’ Financial Advisor, Special
Counsel and any financial or other advisor or consultant to the Company and Guarantor, to discuss
the Company’s and the Guarantor’s business operations and such other matters as such
representatives may reasonably request.

4.16 Further Assurances. The Company and the Guarantor will cooperate with the Noteholders
and execute such further instruments and documents as the Noteholders shall reasonably request to
carry out to their satisfaction the transactions contemplated by this Agreement.

4.17 New and Existing Loans and Commitments. The parties hereto agree that:

(a) Section 6S of the Note Agreement is hereby amended by deleting the reference to
“$54,000,000” and replacing it with “$65,000,000” wherever it appears in section 6S; and

(b) Section 6S of the Note Agreement is hereby amended by deleting the reference to
“December 31, 2009” and replacing it with “December 31, 2010” wherever it appears in section
6S.

4.18 Wachovia Lien. Notwithstanding anything to the contrary contained in the Note Agreement
or herein, the Noteholders hereby consent to the establishment and maintenance of cash collateral
funded by the Thrift in an amount not greater than $5.25 million in an account to be maintained at
Wachovia Bank, National Association (“Wachovia”) and subject to a Lien
granted by Thrift in favor of Wachovia to secure obligations owed to Wachovia in connection
with the clearing account maintained by Thrift at Wachovia. Thrift will be permitted to enter into
and perform its obligations under a security agreement in substantially the form attached hereto as
Exhibit C.

 

 

 

SECTION 5. CONDITIONS PRECEDENT.

The forbearance granted in Section 2.1 shall not become effective unless all of the following
conditions precedent shall have been satisfied (the date of such satisfaction being herein referred
to as the “Effective Date”):

5.1 Execution and Delivery of this Agreement. Each Noteholder shall have received a
counterpart of this Agreement, duly executed and delivered by each of the Company, the Guarantor
and the Noteholders.

5.2 Execution and Delivery of Amended and Restated Bank Forbearance Agreement. A true and
correct copy of the Amended and Restated Bank Forbearance Agreement shall have been provided to the
Noteholders and shall be in full force and effect simultaneously with the effectiveness of this
Agreement.

5.3 No Default; Representations and Warranties True. The warranties and representations set
forth in Section 3 shall be true and correct in all material respects on the Effective Date and no
Default or Event of Default shall exist other than the Specified Defaults.

5.4 Proceedings Satisfactory. All documents executed and delivered, and actions and
proceedings taken, in connection with this Agreement shall be reasonably satisfactory to the
Noteholders and Special Counsel. The Noteholders and Special Counsel shall have received copies of
such documents and papers as they may reasonably request in connection therewith, in form and
substance reasonably satisfactory to each of them.

5.5 Partial Prepayment of Notes. The Company shall have made and each of the Noteholders
shall have received its pro-rata share of the voluntary prepayment described in Section 4.4(a)
hereof.

5.6 Payment of Interest, Fees and Expenses. The Company shall have paid:

(a) pro rata to each Noteholder, in consideration of the agreements of such Noteholder
contained herein, by wire transfer of immediately available funds, a forbearance fee, in an
amount equal to 0.50% of the aggregate outstanding principal amount of the Notes after
giving effect to (i) the capitalization of the Yield-Maintenance Amounts set forth in
Section 4.2 hereof and (ii) the voluntary prepayment described in Section 4.4(a) hereof;
such fee shall be deemed earned when paid and shall not be subject to recovery or repayment
in the event this Agreement is terminated or rescinded for any reason; and

(b) the reasonable and documented fees and expenses of the Noteholders (including
without limitation, the retainers of Special Counsel and the Noteholders’ Financial Advisor
and the reasonable and documented fees and expenses of Special
Counsel incurred prior to the Effective Date) that have been presented to the Company
at least three (3) Business Days prior to the Effective Date by wire transfer of immediately
available funds.

 

 

 

SECTION 6. NO PREJUDICE OR WAIVER; REAFFIRMATION.

6.1 No Prejudice or Waiver. Except as provided herein, the terms of this Agreement shall not
operate as a waiver by the Noteholders of, or otherwise prejudice the Noteholders’ rights, remedies
or powers under, any other agreement or document (including, without limitation, the Transaction
Documents) or applicable law. Except as expressly provided herein:

(a) no terms and provisions of any agreement are modified or changed by this Agreement;
and

(b) the terms and provisions of the Transaction Documents shall continue in full force
and effect.

6.2 Reaffirmation of Outstanding Obligations, Ratification, etc. 

(a) The Company and the Guarantor, as applicable, hereby adopts again, ratifies and
confirms in all respects, as its own act and deed, the Transaction Documents and
acknowledges (i) that all such instruments and documents shall continue in full force and
effect and (ii) that as of the Effective Date, it has no claim or cause of action against
any Noteholder (or any of its respective directors, trustees, officers, employees or agents)
or any offset right, counterclaim or defense of any kind against any of its obligations,
indebtedness or liabilities to any Noteholder nor does it have any intention of bringing any
such claim or cause of action against any Noteholder in respect of the foregoing.

(b) This Agreement shall not, under the law of any jurisdiction whatsoever, be deemed
to be or be construed as a novation of the respective rights and obligations of the parties
hereto under the Transaction Documents.

6.3 Breach of Agreement. Each of the Company and the Guarantor acknowledges and agrees that
its failure to perform any of the provisions of this Agreement or the breach, in any material
respect, of any representation, warranty or covenant in this Agreement shall constitute an
immediate Event of Default under the Note Agreement and a Forbearance Termination Event.

SECTION 7. MISCELLANEOUS.

7.1 Successors and Assigns. This Agreement shall be binding upon and enforceable by and
against the parties hereto and their respective successors and assigns.

7.2 Governing Law. This Agreement shall be construed and enforced in accordance with, and the
rights of the parties shall be governed by, the law of the State of New York, excluding choice of
law principles of the law of such State that would require the application of the laws of a
jurisdiction other than such State.

 

 

 

7.3 Duplicate Originals; Facsimile Signatures. Two or more duplicate originals of this
Agreement may be signed by the parties, each of which shall be an original but all of which
together shall constitute one and the same instrument. This Agreement may be executed in one or
more counterparts and shall be effective when at least one counterpart shall have been executed by
each party hereto, and each set of counterparts which, collectively, show execution by each party
hereto shall constitute one duplicate original. Execution of this Agreement by any of the parties
may be evidenced by way of a faxed or electronic transmission of such party’s signature and such
faxed or electronic signature shall be deemed to constitute the original signature of such party to
this Agreement and shall be admissible into evidence for all purposes.

7.4 Waivers and Amendments. Neither this Agreement nor any term hereof may be changed,
waived, discharged or terminated orally, or by any action or inaction, but only by an instrument in
writing signed by the Company, the Guarantor and the Required Holders.

7.5 Section Headings. The titles of the sections hereof appear as a matter of convenience
only, do not constitute a part of this Agreement and shall not affect the construction hereof.

7.6 Survival. All warranties, representations, certifications and covenants made by or on
behalf of the Company, the Guarantor and/or any of their respective subsidiaries herein or in any
certificate or other instrument delivered pursuant hereto shall be considered to have been relied
upon by the Noteholders and shall survive the execution of this Agreement, regardless of any
investigation made by or on behalf of the Noteholders. All statements in any such certificate or
other instrument shall constitute warranties and representations of the Company, the Guarantor
and/or their respective subsidiaries, as the case may be, hereunder.

7.7 No Third Party Beneficiaries. This Agreement shall be solely for the benefit of the
parties hereto and their respective successors and assigns. No person not a party hereto,
including, without limitation, any other creditor of the Company, the Guarantor or any of their
respective subsidiaries, shall have any rights under, or as a result of the existence of, this
Agreement.

7.8 Waiver and Release. For and in consideration of the agreements contained in this
Agreement, and other good and valuable consideration, the receipt and sufficiency of all of which
are hereby acknowledged, the Company and the Guarantor, on its own behalf, and to the extent that
it is lawfully able to do so, on behalf of its predecessors, successors, assigns, subsidiaries,
affiliates and agents and all of their respective past, present and future officers, directors,
trustees, shareholders, employees, contractors and attorneys, and the predecessors, heirs,
successors, and assigns of each of them (collectively referred to in this Section 7.8 as the
“Releasors”) do hereby jointly and severally fully RELEASE, REMISE, ACQUIT, IRREVOCABLY WAIVE and
FOREVER DISCHARGE each of the Noteholders, together with their respective predecessors, successors,
assigns, subsidiaries, affiliates and agents and all of their respective past, present and future
officers, directors, trustees, shareholders, employees, contractors and professionals (including,
without limitation, the Noteholders’ Professionals), and the predecessors, heirs, successors and
assigns of each of them (the Noteholders and all of the foregoing being collectively referred to in
this Section as the “Released Parties”), from and with respect to any and all Claims (as defined
below).

 

 

 

As used in this Section 7.8, the term “Claims” shall mean and include any and all, and all
manner of, action and actions, cause and causes of action, suits, disputes, controversies, claims,
debts, sums of money, offset rights, defenses to payment, agreements, promises, notes, bonds,
bills, covenants, losses, damages, judgments, executions and demands of whatever nature, known or
unknown, whether in contract, in tort or otherwise, at law or in equity, for money damages or dues,
recovery of property, or specific performance, or any other redress or recompense which have
accrued, may have been had, or may be now possessed by or on behalf of any one or more of the
Releasors against any one or more of the Released Parties for, upon, by reason of, on account of,
or arising from or out of, or by virtue of, any transaction, event or occurrence, duty or
obligation, indemnification, agreement, promise, warranty, covenant or representation, breach of
fiduciary duty, breach of any duty of fair dealing, breach of confidence, breach of funding
commitment, undue influence, duress, economic coercion, conflict of interest, negligence, bad
faith, malpractice, violations of federal or state securities laws or the Racketeer Influenced and
Corrupt Organizations Act, intentional or negligent infliction of mental distress, tortious
interference with contractual relations, tortious interference with corporate governance or
prospective business advantage, breach of contract, deceptive trade practices, libel, slander,
usury, conspiracy, wrongful acceleration of any indebtedness, wrongful foreclosure or attempt to
foreclose on any collateral relating to any indebtedness, action or inaction, relationship or
activity, service rendered, matter, cause or thing, whatsoever, express or implied, transpiring,
entered into, created or existing from the beginning of time to the date of the execution of this
Agreement in respect of the Notes, the Note Agreement or any other Transaction Document, and shall
include, but not be limited to, any and all Claims in connection with, as a result of, by reason
of, or in any way related to or arising from the existence of any relationships or communications
by and between the Releasors and the Released Parties with respect to the Notes, the Note
Agreement, the other Transaction Documents and all agreements, documents and instruments related
thereto, as presently constituted and as the same may from time to time be amended.

Each of the Company and the Guarantor hereby represents and warrants to the Released Parties
that:

(a) it has the full right, power, and authority to execute and deliver this Agreement
containing this Section 7.8 without the necessity of obtaining the consent of any other
party;

(b) it has received independent legal advice from attorneys of its choice with respect
to the advisability of granting the release provided herein, and with respect to the
advisability of executing this Agreement containing this Section 7.8;

(c) it has not relied upon any statements, representations or promises of any of the
Released Parties in executing this Agreement containing this Section 7.8, or in granting the
release provided herein;

(d) it has not entered into any other agreements or understandings relating to the
Claims;

 

 

 

(e) the terms of this Section 7.8 are contractual, not a mere recital, and are the
result of negotiation among all the parties; and

(f) this Section 7.8 has been carefully read by, and the contents hereof are known and
understood by, and it is signed freely by, each of the Company and the Guarantor.

Each of the Company and the Guarantor covenants and agrees not to bring any claim, action,
suit or proceeding regarding or related in any manner to the matters released hereby, and each of
the Company and the Guarantor further covenants and agrees that this Section 7.8 is a bar to any
such claim, action, suit or proceeding.

All prior discussions and negotiations regarding the Claims have been and are merged and
integrated into, and are superseded by, this Section 7.8. Each of the Company and the Guarantor
acknowledges that no representation or warranty of any kind or character has been made to the
Company or the Guarantor by any one or more of the Released Parties or any agent, representative or
attorney of the Released Parties to induce the execution of this Agreement containing this Section
7.8. Each of the Company and the Guarantor understands, agrees and expressly assumes the risk of
any fact not recited, contained or embodied in this Section 7.8 which may hereafter turn out to be
other than, different from, or contrary to, the facts now known to the Company or the Guarantor or
believed by the Company or the Guarantor to be true, and further agrees that this Section 7.8 shall
not be subject to termination, modification, or rescission, by reason of any such difference in
facts.

7.9 Acknowledgement. Each of the Company and the Guarantor acknowledges that (a) except as
expressly set forth herein, none of the Noteholders has agreed to (and none has any obligation
whatsoever to discuss, negotiate or agree to) any other restructuring, modification, amendment,
waiver or forbearance with respect to the Notes, the Note Agreement, the Guaranty Agreement or any
other Transaction Document; (b) no understanding with respect to any other restructuring,
modification, amendment, waiver or forbearance with respect to the Notes, the Note Agreement, the
Guaranty Agreement or any other Transaction Document shall constitute a legally binding agreement
or contract, or have any force or effect whatsoever, unless and until reduced to writing and signed
by authorized representatives of each party hereto; (c) the execution and delivery of this
Agreement has not established any course of dealing between the parties hereto or created any
obligation or agreement of any Noteholder with respect to any future restructuring, modification,
amendment, waiver or forbearance with respect to the Note Agreement, the Notes, the Guaranty
Agreement or any other Transaction Document; and (d) the Noteholders have heretofore properly
performed and satisfied in a timely manner all of their respective obligations, if any, to the
Company and the Guarantor, under any of the Note Agreement, the Notes, the Guaranty Agreement and
each other Transaction Document.

7.10 Indemnification. Each of the Company and the Guarantor, jointly and severally, agrees to
indemnify each of the Noteholders and their affiliates, and their respective representatives,
affiliates, directors, officers, trustees, employees, agents and professionals (including, without
limitation, the Noteholders’ Professionals) from, and hold each of them harmless against, any and
all losses, liabilities, claims, damages or expenses incurred by any of them arising out of or by
reason of any investigation or litigation or other proceedings (including

 

 

 

any threatened investigation, litigation or other proceedings) relating to, or in connection
with, this Agreement, including, without limitation, the reasonable fees and disbursements of
counsel incurred in connection with any such investigation, litigation or other proceedings (but
excluding any such losses, liabilities, claims, damages or expenses incurred by reason of the gross
negligence or willful misconduct of the person to be indemnified). Without limiting the generality
of the foregoing, each of the Company and the Guarantor, jointly and severally, agrees to pay
currently the expenses reasonably and necessarily incurred by the Noteholders relating to any such
investigation, litigation or other proceedings (including, without limitation, the fees and
expenses of legal counsel) in advance of the final disposition thereof, unless a court of competent
jurisdiction finally determines that neither the Company nor the Guarantor is obligated to provide
such current payment in respect of such investigation, litigation or proceeding.

7.11 Tolling of Statutes of Limitation. The parties hereto agree that all applicable statutes
of limitation in respect of the Note Agreement and the other Transaction Documents are tolled as of
the Effective Date and shall continue to be tolled and shall not begin running until the
Forbearance Termination Date.

7.12 Notices. All notices and communications to the Company and the Noteholders shall be sent
to the addresses and in the manner specified in the Note Agreement.

(a) A copy of all notices and communications to any Noteholder shall simultaneously be
delivered to:

Bingham McCutchen LLP

One State Street

Hartford, Connecticut 06103

Attention: Scott Falk

Phone: 860.240.2763

Fax: 860.240.2800

E-mail: scott.falk@bingham.com

(b) A copy of all notices and communications to the Company shall simultaneously be
delivered to:

National Consumer Cooperative Bank

2011 Crystal Drive, Suite 800

Arlington, VA 22202

Attention: Richard Reed

Phone: (202) 349-7446

Fax: (703) 647-4203

E-mail: rreed@ncb.coop

with a copy to:

Goodwin Procter LLP

The New York Times Building

620 Eighth Avenue

New York, New York 10018

Attention: Emanuel C. Grillo, Esq.

Phone: (212) 813-8880

Fax: (212) 355-3333

E-mail: egrillo@goodwinprocter.com

 

 

 

7.13 Directly or Indirectly. Where any provision in this Agreement refers to action to be
taken by any Person, or which such Person is prohibited from taking, such provision shall be
applicable whether such action is taken directly or indirectly by such Person, including actions
taken by or on behalf of any partnership or limited liability company in which such Person is a
general partner or managing member, as applicable.

7.14 Entire Agreement. This Agreement and the Transaction Documents, as amended to the date
hereof, embody the entire agreement and understanding among the Noteholders, the Company and the
Guarantor and supersede all prior agreements and understandings relating to the subject matter
hereof and thereof.

7.15 Severability. Any provision of this Agreement which is prohibited or unenforceable in
any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition
or unenforceability without invalidating the remaining provisions hereof, and any such prohibition
or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision
in any other jurisdiction.

[Remainder of page intentionally left blank. Next page is signature page.]

 

 

 

	 	 	 	 	 
	 	

Accepted and Agreed:

NATIONAL CONSUMER COOPERATIVE BANK

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	

NCB FINANCIAL CORPORATION

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

 

 

 

	 	 	 	 	 
	 	

[NAME OF EACH NOTEHOLDER]

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

 

 

 

SCHEDULE 3.1

LIST OF SUBSIDIARIES, AFFILIATES, ETC.

 

 

 

SCHEDULE 3.9

Letters of Credit

 

 

 

SCHEDULE 3.10(a)

Debt

As of September 30, 2009

 

 

 

SCHEDULE 3.10(b)

Existing Liens

As of September 30, 2009

 

 

 

EXHIBIT A

AMENDED AND RESTATED BANK FORBEARANCE AGREEMENT

See attached.

 

 

 

EXHIBIT B

FORM OF 13-WEEK ROLLING CASH FLOW FORECAST

See attached.

 

 

 

EXHIBIT C

FORM OF SECURITY AGREEMENT

See attached.

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