Document:

IN THE MATTER OF MAGYAR BANK    )       STATE OF NEW JERSEY
                                )       DEPARTMENT OF
NEW BRUNSWICK, NEW JERSEY       )       BANKING AND INSURANCE

                                  CONSENT ORDER

TO:   MAGYAR BANK
      400 Somerset Street
      PO Box 1365
      New Brunswick, New Jersey 08901

      JOSEPH J. LUKACS. JR
      Chairman of the Board
      400 Somerset Street
      PO Box 1365
      New Brunswick, New Jersey 08901

                               BOARD OF DIRECTORS
                                   MAGYAR BANK

Acknowledged:
Magyar Bank, New Brunswick, New Jersey

By:

Andrew G. Hodulik

Thomas Lankey

Joseph J. Lukacs, Jr.

Martin A. Lukacs

Salvatore J. Romano

Edward C. Stokes, III

Joseph A. Yelencsics

<PAGE>

        WHEREAS, the Commissioner of Banking and Insurance of the State of New
Jersey ("Commissioner") is charged with the responsibility of administering and
enforcing the Banking Act of 1948, N.J.S.A. 17:9A-1 et seq.; and
                                   -------

        WHEREAS, a joint Report of Examination of Magyar Bank was performed by
the New Jersey Department of Banking and Insurance ("DOBI") and the Federal
Deposit Insurance Corporation ("FDIC") commencing on September 21, 2009(1)
("2009 ROE");

        WHEREAS, the 2009 ROE was served upon the President and each director
of Magyar Bank on or about March 12, 2010;

        WHEREAS, the Commissioner having reviewed and considered the 2009 ROE,
hereby incorporates in this ORDER, each and every finding contained in the 2009
ROE, which findings shall have the same force and effect as if set forth fully
herein;

        WHEREAS, the Commissioner and the Bank having agreed to enter into this
Consent Order pursuant to N.J.S.A. 17:9A-267, and the Bank, without admitting or
                          --------
denying any charges of unsafe and sound banking practices and violations of law
or regulation, hereby consent to the following provisions;

------------------------
(1) Pursuant to N.J.S.A. 17:9A-264 and NJA.C. 3:3-2. (a)(l), every report and
                --------               --------------------
copy of a report of examination of a bank made by or under the supervision of
the commissioner shall be confidential and shall not be made public.

<PAGE>

        NOW THEREFORE, IT IS on this 22nd day of April, 2010

        ORDERED AND AGREED pursuant to the Commissioner's authority under
N.J.S.A. 17:9A-267, that the Bank shall comply with the following:
--------

                                   MANAGEMENT
                                   ----------

1.      (a) Within 60 days from the effective date of this ORDER, the Bank shall
have and retain qualified management.

        (b) At a minimum, such management shall include: a chief executive
officer with proven ability in managing a bank of comparable size and complexity
and experience in upgrading a low quality loan portfolio; a senior lending
officer with an appropriate level of lending, collection, and loan supervision
experience for the type and quality of the Bank's loan portfolio; and a chief
financial officer with demonstrated ability in all financial areas including,
but not limited to, accounting, regulatory reporting, budgeting and planning,
management of the investment function, liquidity management, and interest rate
risk management. The Board shall provide the necessary written authority to
management to implement the provisions of this ORDER.

        (c) The qualifications of management shall be assessed on its ability
to:

                (i) comply with the requirements of this ORDER;

                (ii) operate the Bank in a safe and sound manner;

                (iii) comply with applicable laws, rules, and regulations; and

<PAGE>

                (iv) restore all aspects of the Bank to a safe and sound
condition, including capital adequacy, asset quality, management effectiveness,
earnings, liquidity, and sensitivity to interest rate risk.

                               BOARD OF DIRECTORS
                               ------------------

2.      (a) As of the effective date of this ORDER, the Board shall increase its
participation in the affairs of the Bank, assuming full responsibility for the
approval of sound policies and objectives and for the supervision of all of the
Bank's activities, consistent with the role and expertise commonly expected for
directors of banks of comparable size.

        (b) This participation shall include meetings to be held no less
frequently than monthly at which, at a minimum, the following areas shall be
reviewed and approved: reports of income and expenses; new, overdue, renewal,
insider, charged off, and recovered loans; investment activity; liquidity levels
and funds management; adoption or modification of operating policies; individual
committee reports; audit reports; internal control reviews including
management's responses; reconciliation of general ledger accounts; and
compliance with this ORDER. Board minutes shall document these reviews and
approvals, including the names of any dissenting directors.

        (c) The Bank shall notify the Commissioner in writing of any additions,
resignations or terminations of any members of its board of directors or any of
its senior executive officers within 15 days of the event. Any notification
required by this subparagraph shall include a description of the background(s)
and experience of any proposed replacement personnel and must be received at
least 30 days prior to the individual(s) assuming the new position(s/ The Bank
shall also establish procedures to ensure compliance with section 32 of the Act,

<PAGE>

12 U.S.C. ss. 183li, and Subpart F of Part 303 of the FDIC Rules and
   ------
Regulations, 12 C.F.R. ss. 303.0 et seq.
                ------           -- ----

               REDUCTION OF CLASSIFIED AND SPECIAL MENTION ASSETS
               --------------------------------------------------

3.      (a) Beginning with the effective date of this ORDER, the Bank shall
charge off from its books and records any loan classified "Loss" in the 2009 ROE
or any future report of examination.

        (b) Within 30 days from the effective date of this ORDER, the Bank
shall revise and/or adopt, implement, and adhere to, a realistic and reasonable
written plan to reduce the Bank's risk position in each asset in excess of
$250,000 which is classified "Substandard" or "Doubtful" or listed as Special
Mention in the 2009 ROE. For purposes of this provision, "reduce" means to
collect, charge off, or improve the quality of an asset so as to warrant its
removal from adverse classification.

        (c) The plan shall include, but not be limited to, provisions which:

                (i) prohibit an extension of credit for the payment of
interest, unless the Board provides, in writing, a detailed explanation of why
the extension is in the best interest of the Bank and how it improves the
position of the Bank, including an appropriate workout plan that has been
developed and will be implemented in conjunction with the additional credit to
be extended. Copies of the statement approved by the Board shall be made a part
of the Board minutes and placed in the appropriate loan file and submitted to
the Commissioner with the quarterly progress reports required pursuant to
paragraph 18 of this ORDER;

                (ii) provide for a documented review and analysis of the
current financial condition of each classified and/or Special Mention borrower
and/or guarantor, and a documented review and analysis of the borrower's and/or

<PAGE>

guarantor's repayment ability, cash flow and source of repayment, including the
value and accessibility of any pledged or assigned collateral and any possible
actions to improve the Bank's collateral position;

                (iii) delineate areas of responsibility for loan officers;

                (iv) establish a schedule for addressing and eliminating the
safety and soundness violations pertaining to Special Mention assets cited in
the 2009 ROE;

                (v) establish schedules showing, on a quarterly basis, the
consolidated balance of all adversely classified assets and all Special Mention
assets, and the ratio of the consolidated balance of all adversely classified
assets and all Special Mention assets, respectively, to the Bank's projected
Tier 1 capital plus the ALLL; and

                (vi) provide for the submission of monthly written progress
reports to the Board for review and notation in minutes of the meetings of the
Board;

        (d) The plan required by this provision shall be submitted to the
Commissioner for non-objection upon completion but no later than 30 days from
the effective date of this ORDER. Within 30 days of receipt of any objections
from the Commissioner, and after incorporation and adoption of all objections or
comments, the Board shall approve the plan, which approval shall be recorded in
the minutes of the meeting of the Board, While this ORDER remains in effect, the
plan shall be revised to include assets which become adversely classified after
the effective date of this ORDER or are listed as Special Mention at a
subsequent examination.

        (e) The Board shall submit quarterly reports to the Commissioner that
reflect the progress the bank has made in reducing the bank's risk exposure in
each asset in excess of $250,000 classified Substandard or Doubtful or listed

<PAGE>

for Special Mention in the 2009 ROE with the quarterly progress reports required
pursuant to paragraph 18 of this Order.

                REDUCTION OF DELINQUENCIES AND NON-ACCRUAL ASSETS
                -------------------------------------------------

4.      (a) Within 30 days from the effective date of this ORDER, the Bank shall
formulate and submit to the Commissioner for review and comment a reasonable and
realistic written plan for the reduction and collection of delinquent and
non-accrual loans. Such plan shall include, but not be limited to, provisions
which:

                (i) prohibit the extension of credit for the payment of
interest, unless the Board adopts prior to such extension of credit a detailed
written statement giving reasons why such extension of credit is in the best
interests of the Bank and how it improves the position of the Bank, including an
appropriate workout plan that has been developed and will be implemented in
conjunction with the additional credit to be extended. Copies of the statement
approved by the Board shall be made a part of the Board minutes and placed in
the appropriate loan file and submitted to the Commissioner with the quarterly
progress reports required pursuant to paragraph 18 of this ORDER;

                (ii) delineate areas of responsibility for implementing and
monitoring the Bank's collection policies;

                (iii) establish specific collection procedures to be
instituted at various stages of a borrower's delinquency;

                (iv) establish dollar levels to which the Bank shall reduce
delinquencies and non-accruals within 30 days from the effective date of this
ORDER; and

<PAGE>

                (v) provide for the submission of monthly written progress
reports to the Board for review and notation in the Board minutes.

        (b) For purposes of the plan, "reduce" means to charge-off or collect.

        (c) Within 30 days after the Commissioner has responded to the plan,
the Board shall adopt the plan as amended or modified by the Commissioner. The
plan shall be implemented immediately to the extent that the provisions of the
plan are not already in effect at the Bank.

               REDUCTION OF COMMERCIAL REAL ESTATE CONCENTRATIONS
               --------------------------------------------------

5.      (a) Within 60 days from the effective date of this ORDER, the Bank shall
develop and submit a written plan, acceptable to the Commissioner, for
systematically reducing and monitoring the Bank's commercial real estate ("CRE")
loan concentrations of credit identified in the 2009 ROE to an amount which is
commensurate with the Baulks business strategy, management expertise, size, and
location. Such plan shall prohibit any advances that would increase the
concentrations unless the advance is pursuant to an existing loan agreement and
shall include, but not be limited to:

                  (i) dollar levels and percent of total capital to which the
Bank shall reduce the concentration;

                (ii) timeframes for achieving the reduction in dollar levels in
response to (i) above;

                (iii) provisions requiring compliance with the Interagency
Guidance on Concentrations in Commercial Real Estate Lending, Sound Risk
Management Practices (FDL-104-2006, issued December 12, 2006) and Managing
Commercial Real Estate Concentrations in a Challenging Environment (FIL-22-2008,
issued March 17, 2008);

<PAGE>

                (iv) provisions for controlling and monitoring of CRE, including
plans to address the rationale for CRE levels as they relate to growth and
capital targets, segmentation and testing of the CRE portfolio to detect and
limit concentrations with similar risk characteristics; and

                (v) provisions for the submission of monthly written progress
reports to the Board for review and notation in minutes of the Board meetings.

                (vi) For purposes of the plan,  "reduce" means to  charge-offer
collect,  or increase Tier 1 capital.

        (b) The plan required by this provision shall be submitted to the
Commissioner for non-objection. Within 30 days of receipt of any objections from
the Commissioner, and after incorporation and adoption of all objections or
comments, the Board shall approve the plan, which approval shall be recorded in
the minutes of the meeting of the Board. The plan shall be implemented
immediately to the extent that the provisions of the plan are not already in
effect at the Bank.

                        REDUCTION OF OTHER CONCENTRATION
                        --------------------------------

6.      Within 60 days from the effective date of this ORDER, the Bank shall
develop and submit a written plan, acceptable to the Commissioner, for
systematically reducing and monitoring the Bank's concentration of bank-owned
life insurance ("BOUT) identified in the 2009 ROE to an investment level that is
consistent with the Bank's BOLI Policy, as well as ensuring consistency with the
Interagency Statement on the Purchase and Risk Management of Life Insurance
(FIL-12 7-2004, issued on December 7, 2004).

<PAGE>

                               LOAN ADMINISTRATION
                               -------------------

7.      (a) Within 45 days from the effective date of this ORDER, the Bank shall
submit to the Commissioner revised written loan policies and procedures that
have been approved by the Board which shall establish policy guidelines for the
identification and treatment of collateral dependent impaired loans in
conformance with guidance contained in the Financial Accounting Standards Board
Statement Number 114 and Federal Financial Institutions Examination Council's
Instructions for the Reports of Condition and Income and provide for the
implementation of an effective loan review program;

        (b) Within 30 days from the effective date of this ORDER, the Bank
shall review all borrower relationships to determine compliance with the Bank's
legal lending limit and take appropriate steps to reduce and monitor the
outstanding balance of any loan that exceeds or is in danger of exceeding the
Bank's legal lending limit; and

         (c) Within 45 days from the effective date of this ORDER, the Board
shall develop policies and procedures governing the operations of the Bank's
Small Business Administration lending program.

                 RESTRICTION ON ADVANCES TO CLASSIFIED BORROWERS
                 -----------------------------------------------

8.      (a) While this ORDER is in effect, the Bank shall not extend, directly
or indirectly, any additional credit to or for the benefit of any borrower whose
existing credit has been classified "Loss," either in whole or in part, in the
2009 ROE, and is uncollected, or to any borrower who is already obligated in any
manner to the Bank on any extension of credit, including any portion thereof,
that has been charged off the books of the Bank and remains uncollected. The
requirements of this paragraph shall not prohibit the Bank from renewing (after

<PAGE>

full collection, in cash, of interest due from the borrower) any credit already
extended to the borrower,

         (b) While this ORDER is in effect, the Bank shall not extend, directly
or indirectly, any additional credit to or for the benefit of any borrower whose
extension of credit is classified "Doubtful" and/or "Substandard/(3) either in
whole or in part, in the 2009 ROE, and is uncollected, unless the Board has
signed a detailed written statement giving reasons why failure to extend such
credit would be detrimental to the best interests of the Bank and how it
improves the position of the Bank, including an appropriate workout plan that
has been developed and will be implemented in conjunction with the additional
credit to be extended. Copies of the statement shall be placed in the
appropriate loan file and included in the minutes of the applicable meeting of
the Board and submitted to the Commissioner with the quarterly progress reports
required pursuant to paragraph 18 of this ORDER.

                                     CAPITAL
                                     -------

9.      (a) Within 30 days from the effective date of this ORDER, the Board
shall develop a written capital plan ("Capital Plan"), subject to review and
approval of the Commissioner, that details the manner in which the Bank will
achieve a leverage ratio of at least 8% and a total risk-based capital ratio of
at least 12% (as defined in Part 325 of the FDIC's Rules and Regulations, 12
C.F.R. Part 325). At a minimum, the Capital Plan shall include specific
benchmark leverage and total risk-based capital ratios to be achieved at each
calendar quarter end until the full achievement of the required capital levels.
The Bank shall comply with the FDIC's Statement of Policy on Risk-Based Capital

<PAGE>

found in Appendix A to Part 325 of the FDIC Rules and Regulations, 12 C.F.R.
Part 325, App. A.

        (b) In the event any capital ratio is or falls below the minimum
required by the , approved Capital Plan, the Bank shall immediately notify the
Commissioner and

                (i) within 45 days shall increase capital in an amount
sufficient to comply with the ratios as set forth in the approved Capital Plan,
or

                (ii) within 45 days submit to the Commissioner a contingency
plan for the sale, merger, or liquidation of the Bank in the event the primary
sources of capital are not available.

         (c) The Capital Plan required by this provision shall be submitted to
the Commissioner for non-objection. Within 30 days of receipt of any objections
from the Commissioner, and after incorporation and adoption of all objections or
comments, the Board shall approve the plan, which approval shall be recorded in
the minutes of the meeting of the Board. Thereafter, the Bank shall implement
and fully comply with the Capital Plan.

                       ALLOWANCE FOR LOAN AND LEASE LOSSES
                       -----------------------------------

10.     (a) Within 30 days from the effective date of this ORDER, the Board
shall establish and document an accurate, comprehensive and consistent
methodology for determining its ALLL consistent with sound banking practices and
shall eliminate and/or correct all contraventions of the Interagency Policy
Statement on the Allowance for Loan and Lease Losses (FIL-105-2006, issued
December 13, 2006).

        (b) The Bank shall maintain, through charges to current operating
income, an adequate ALLL. The adequacy of the ALLL shall be determined in light
of the volume of criticized loans, the current level of past due and

<PAGE>

nonperforming loans, past loan loss experience, evaluation of the potential for
loan losses in the Bank's portfolio, current economic conditions, and any safety
and soundness violations contained in the Bank's most recent report of
examination.

        (c) The Bank shall conduct, at a minimum, a quarterly assessment of its
ALLL and shall maintain a written record, for supervisory review, indicating the
methodology used in determining the amount of the ALLL needed and any
deficiencies shall be promptly remedied. The quarterly assessment shall be
reviewed by the Board and shall be recorded in the minutes of the corresponding
Board meeting.
                             PROFIT AND BUDGET PLAN
                             ----------------------

11.     (a) Within 60 days from the effective date of this ORDER, and within the
first 30 days of each calendar year thereafter, the Bank shall develop and fully
implement a written profit plan consisting of goals and strategies, consistent
with sound banking practices, and taking into account the Bank's other written
plans, policies, or other actions as required by this ORDER ("Profit Plan").

        (b) The Profit Plan shall include, at a minimum:

                (i) specific provisions to maintain appropriate allowance for
loan and lease losses;

                (ii) realistic and comprehensive budgets for all categories of
income and expense items;

                (iii) an executive compensation plan, addressing any and all
salaries, bonuses and other benefits of every kind or nature whatsoever, both
current and deferred, whether paid directly or indirectly, which plan

<PAGE>

incorporates qualitative as well as profitability performance standards for the
Bank's Senior Executive Officers;

                (iv) a description of the operating assumptions that form the
basis for, and adequately support, material projected revenue and expense
components;

                (v) coordination of the Bank's loan, investment, funds
management, and operating policies; strategic plan; and allowance for loan and
lease loss methodology with the profit and budget planning;

                (vi) a budget review process to monitor the revenue and
expenses of the Bank whereby actual performance is compared against budgetary
projections not less than quarterly;

                (vii) recording the results of the budget review and any
actions taken by the Bank as a result of the budget review in the minutes of the
board of directors; and

                (viii) the individuals) responsible for implementing each of
the goals and strategies of the Profit Plan.

        (c) The Profit Plan required by this provision shall be submitted to
the Commissioner for non-objection. Within 30 days of receipt of any objections
from the Commissioner, and after incorporation and adoption of all objections or
comments, the Board shall approve the plan, which approval shall be recorded in
the minutes of the meeting of the Board. Thereafter, the Bank shall implement
and fully comply with the Profit Plan.

        (d) The copies of the quarterly reports required under paragraph 1
l(b)(vi) shall be submitted to the Commissioner by the 30th day after the end of
the calendar quarter following the effective date of this ORDER and by the 30th
day after the end of every calendar quarter thereafter with the quarterly

<PAGE>

progress reports required pursuant to paragraph 18 of this Order.

                                 STRATEGIC PLAN
                                 --------------

12.     (a) Within 60 days from the effective date of this ORDER, the Bank shall
formulate adopt, and implement a realistic and comprehensive strategic plan
("Strategic Plan"). The Strategic Plan required by this provision shall contain
an assessment of the Bank*s current financial condition and market area, and a
description of the operating assumptions that form the basis for major projected
income and expense components

        (b) The Strategic Plan shall address, at a minimum:

                (i) strategies for pricing policies and asset/liability
management; and

                (ii) financial goals, including pro forma statements for asset
growth, capital adequacy, and earnings.

        (c) The Strategic Plan required by this provision shall be submitted to
the Commissioner for non-objection. Within 30 days of receipt of any objections
from the Commissioner, and after incorporation and adoption of all objections or
comments, the Board shall approve the Strategic Plan, which approval shall be
recorded in the minutes of the meeting of the Board. Thereafter, the Bank shall
implement and fully comply with the Strategic Plan.

                       LIQUIDITY AND FUNDS MANAGEMENT PLAN
                       -----------------------------------

13.     (a) Within 60 days from the effective date of this ORDER, the Bank shall
develop a Liquidity and Funds Management Plan and submit it to the Commissioner
for non-objection. Annually thereafter, while this ORDER is in effect, the Bank
shall review its plan for adequacy and, based upon such review, shall make
necessary revisions to the plan to strengthen funds management procedures and

<PAGE>

maintain adequate provisions to meet the Bank's liquidity needs.

        (b) The Liquidity and Funds Management Plan shall include, at a minimum,
provisions which:

                (i) provide a statement of the Bank's long-term and short-term
liquidity needs and plans for ensuring that such needs are met;

                (ii) provide for a periodic review of the Bank's deposit
structure, including the volume and trend of total deposits and the volume and
trend of the various types of deposits offered, the maturity distribution of
time deposits, rates being paid on each type of deposit, rates being paid by
trade area competition, caps on large time deposits, public funds, out-of-area
deposits, and any other information needed;

                (iii) establish a reasonable range for its net non-core funding
ratio as computed in the Uniform Bank Performance Report and shall address the
means by which the Bank will seek to reduce its reliance on non-core funding;

                (iv) identify the source and use of borrowed and/or volatile
funds;

                (v) establish sufficient back-up lines of credit that would
allow the Bank to borrow funds to meet depositor demands if the Bank's other
provisions for liquidity proved to be inadequate;

                (vi) require the retention of securities and/or other identified
categories of investments that can be liquidated within one day in amounts
sufficient (as a percentage of the Bank's total assets) to ensure the
maintenance of the Bank's liquidity posture at a level consistent with short-
and long-term liquidity objectives;

<PAGE>

                (vii) establish a minimum liquidity ratio and defining how the
ratio is to be calculated;

                (viii) establish a liquidity contingency plan ("Liquidity
Contingency Plan") that identifies sources of liquid assets to meet the Bank's
contingency funding needs. At a minimum, the Liquidity Contingency Plan shall be
prepared in conformance with the guidance set forth in Liquidity Risk Management
(FIL-84-2008, issued August 26,2008), identifying alternative courses of action
designed to meet the Bank's liquidity needs;

                (ix) address the use of borrowings (i.e., seasonal credit needs,
match funding mortgage loans, etc.) and providing for reasonable maturities
commensurate with the use of the borrowed funds; addressing concentration of
funding sources; and addressing pricing and collateral requirements with
specific allowable funding channels (i.e., brokered deposits, internet deposits/
Fed funds purchased and other correspondent borrowings); and

                (x) comply with the guidance set forth in Liquidity Risk
Management (FIL-84-2008 issued August 26, 2008).

         (c) The Liquidity and Funds Management Plan and the Liquidity
Contingency Plan required by this provision shall be submitted to the
Commissioner for non-objection. Within 30 days of receipt of any objections from
the Commissioner, and after incorporation and adoption of all objections or
comments, the Board shall approve the plans, which approval shall be recorded in
the minutes of the meeting of the Board. Thereafter, the Bank shall implement
and fully comply with the Liquidity and Funds Management Plan and the Liquidity
Contingency Plan.

<PAGE>

                                BROKERED DEPOSITS
                                -----------------

14.     (a) Upon the effective date of this ORDER, the Bank shall not solicit,
accept, renew or roll over any "brokered deposits" (as that term is defined in
section 337.6(a)(2) of the FDIC's Rules and Regulations, 12 C.F.R. ss.
337.6(a)(2)), unless the Bank has applied for and been granted a waiver by the
Regional Director of the FDIC's New York Regional Office ("Regional Director")
in accordance with the provisions of section 337.6 of the FDIC's Rules and
Regulations, 12 C.F.R. ss. 337.6.

        (b) While this ORDER is in effect, the Bank shall comply with the
restrictions on the effective yield on deposits described in section 337.6 of
the FDIC's Rules and Regulations, 12 C.F.R. ss. 337.6.

                            RESTRICTION ON DIVIDENDS
                            ------------------------

15.     Beginning on the effective date of this ORDER, the Bank shall not
declare or pay any dividend without the prior written consent of the
Commissioner.

                            CORRECTION AND PREVENTION
                            -------------------------

16.     Beginning on the effective date of this ORDER, the Bank shall take steps
necessary, consistent with other provisions of this ORDER and sound banking
practices, to correct and prevent the unsafe or unsound banking practices and
violations of law and regulations and all contraventions of federal banking
agency policies and procedures and guidelines that were identified in the 2009
ROE. In addition, the Board shall take all steps necessary to ensure that the
Bank is operated with adequate management supervision and Board oversight to
prevent any future unsafe or unsound banking practice or violation of law or
regulation or contravention of federal banking agency policies, procedures and
guidelines.

<PAGE>

                              COMPLIANCE COMMITTEE
                              --------------------

17.     Within 30 days from the effective date of this ORDER, the Board shall
establish a committee of the Board members charged with the responsibility of
ensuring that the Bank complies with the provisions of this ORDER. The
Compliance Committee shall be composed of at least 3 Board members who are not
now, and have never been, involved in the daily operations of the bank. The
committee shall report monthly to the full Board, and a copy of the report and
any discussion relating to the report or the ORDER shall be noted in the Board
minutes. The establishment of this committee shall not diminish the
responsibility or liability of the entire Board to ensure compliance with the
provisions of this ORDER.

                                PROGRESS REPORTS
                                ----------------

18. Within 30 days from the end of each calendar quarter following the effective
date of this ORDER, the Board shall furnish written progress reports to the
Commissioner detailing the form, content, and manner of any actions taken to
secure compliance with this ORDER.

                                  SHAREHOLDERS
                                  ------------

19. After the effective date of this ORDER, the Bank shall send a copy of this
ORDER, or otherwise furnish a description of this ORDER, to its parent holding
company for inclusion with the Bank's next shareholder communication. The
description shall fully describe the ORDER in all material aspects.

<PAGE>

                                  OTHER ACTIONS
                                  -------------

20.     The Bank shall notify the Commissioner immediately of any material
adverse development affecting the Bank's condition, performance, or outlook.

21.     It is expressly and clearly understood that if, at any time, the
Commissioner shall deem it appropriate in fulfilling the responsibilities placed
upon him or her under applicable law to undertake any further action affecting
the Bank, nothing in this ORDER shall in any way inhibit, estop, bar or
otherwise prevent him or her from doing so, including, but not limited to, the
imposition of civil money penalties. 22. It is expressly and clearly understood
that nothing herein shall preclude any proceedings brought by the Commissioner
to enforce the terms of this ORDER, and that nothing herein constitutes, nor
shall the Bank contend that it constitutes, a waiver of any right, power, or
authority of the Regional Director or any other representatives of the United
States or agencies thereof. Department of Justice or any other representatives
of the State of New Jersey or any other agencies thereof, including any
prosecutorial agency, to bring other actions deemed appropriate.

23.     Failure to comply with this ORDER may result in imposition of penalties
upon the Bank pursuant to NJ.S.A. 17:9A-268, as well as other administrative
actions pursuant to law. In addition, if a director of the Bank takes an action,
or fails to take an action, that contributes to the Bank's failure to comply
with this ORDER, the director may be subject to penalties as provided by law.

<PAGE>

                                 ORDER EFFECTIVE
                                 ---------------

24.     This agreement may be executed in several counterparts, each of which
shall be deemed an original, and all of such counterparts together shall
constitute one and the same instrument.

25.     The provisions of this ORDER shall be binding upon the Bank, its
directors, officers, employees, agents, successors,  assigns, and other
institution-affiliated parties of the Bank.

26.     Each paragraph of this ORDER shall remain effective and enforceable
until stayed, modified, terminated or suspended by the Commissioner.

27.     In the event any paragraph of this Order is ruled to be invalid, illegal
or  unenforceable by the decision of any Court of competent jurisdiction, the
validity, legality and enforceability of the remaining paragraphs hereof shall
not in any way be affected or impaired thereby.

28.     This ORDER and all terms, provisions and findings incorporated herein,
shall be deemed a final agency action by the New Jersey Department of Banking
and Insurance upon the below, knowing and voluntary signatures of the Directors
of Magyar Bank and upon execution by (he Commissioner.

                              /s/ Thomas B. Considine
                            -------------------------
                               Thomas B. Considine
                                  Commissioner

<PAGE>

Consented to as to both form and substance:

Magyar Bank

/s/ Andrew G. Hodulik
-----------------------------
Andrew G. Hodulik
Director

/s/ Thomas Lankey
-----------------------------
Thomas Lankey
Director

/s/ Joseph J. Lukacs, Jr.
-----------------------------
Joseph J. Lukacs, Jr.
Director

/s/ Martin A. Lukacs
-----------------------------
Martin A. Lukacs
Director

/s/ Salvatore J. Romano
-----------------------------
Salvatore J. Romano
Director

/s/ Edward C. Stokes, III
-----------------------------
Edward C. Stokes, III
Director

/s/ Joseph A. Yelencsics
-----------------------------
Joseph A. Yelencsics
Directorexhibit.htm

Exhibit 10.1

 

FORBEARANCE AGREEMENT

This Forbearance Agreement (this “Agreement”) is made and entered into April 21, 2010 and, upon satisfaction of the conditions precedents set forth in Paragraph 3 below, effective as of April 1, 2010, by and between JPMorgan Chase Bank, N.A. (the “Lender”), United Western Bancorp, Inc. (the “Borrower”), and Equi-Mor Holdings, Inc. (the “Pledgor”).

RECITALS

A.           Borrower is a Colorado corporation whose address is 700 17th Street, Suite 2100, Denver, Colorado 80202.  Pledgor is a Colorado corporation whose address is 700 17th Street, Suite 2100, Denver, Colorado 80202.

B.           As of June 29, 2007, Borrower entered into that certain Credit Agreement (as amended and/or modified, the “Credit Agreement”) with Lender pursuant to which the credit facilities provided for therein were made available to Borrower by Lender.  The Credit Agreement was subsequently amended pursuant to the: (i) Amendment To Credit Agreement, dated as of June 30, 2008 (the “First Credit Agreement Amendment”); (ii) Amendment To Credit Agreement, dated as of June 29, 2009 (the “Second Credit Agreement Amendment”); (iii) Amendment To Credit Agreement, dated as of September 30, 2009 (the “Third Credit Agreement Amendment”); (iv) Amendment And Forbearance Agreement, dated as of December 14, 2009 (the “First Forbearance & Fourth Credit Agreement Amendment”); and (v) Amendment To Credit Agreement, Note Modification And Forbearance Agreement, dated as of January 15, 2010 (the “Second Forbearance, Note Modification & Fifth Credit Agreement Amendment,” and together with the First Credit Agreement Amendment, Second Credit Agreement Amendment, Third Credit Agreement Amendment, First Forbearance & Fourth Credit Agreement Amendment, collectively, the “Amendment/Forbearance Agreements”).

C.           Borrower executed that certain Line Of Credit Note ($25,000,000.00), dated September 30, 2009, in favor of Lender in connection with Facility B (Line Of Credit Facility) under the Credit Agreement in the original principal amount of $25,000,000.00 (as modified and/or amended, the “LOC Note”), which LOC Note was given in replacement, renewal, decrease and/or extension of, but not in extinguishment of, the indebtedness evidenced by that certain Line Of Credit Note, dated June 29, 2009, executed by the Borrower in favor of Lender in the original principal amount of $30,000,000.00 (together with any predecessor notes pertaining to such indebtedness, collectively, the “Prior Notes”).  The LOC Note was subsequently amended under the terms of the Second Forbearance, Note Modification & Fifth Credit Agreement Amendment.  As of March 31, 2010, the principal and interest amounts outstanding under the LOC Note were as follows:

Principal............................................                                                                           $ 17,500,000.00

 

 

  

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Interest.............................................                                                                           $      109,107.88

TOTAL.............................................                                                                           $ 17,609,107.88.

D.           Borrower’s obligations under the Credit Agreement and LOC Note (collectively, the “Obligations”) are secured, without limitation, pursuant to that certain: (i) Continuing Pledge Agreement, dated as of June 29, 2007, executed by Borrower in favor of Lender, by the Collateral as defined therein, including, without limitation, all shares of United Western Bank stock (the “UWB Stock Pledge Agreement”); (ii) Continuing Pledge Agreement, dated as of January 15, 2010, executed by Borrower in favor of Lender, by the Collateral as defined therein, including, without limitation, Account No. 80492211 held at First Southwest Company (the “Borrower Securities Account Pledge Agreement”); and (iii) Continuing Pledge Agreement, dated as of January 15, 2010, executed by Equi-Mor Holdings, Inc. in favor of Lender, by the Collateral as defined therein, including, without limitation, Account No. 29718794 held at First Southwest Company (the “Equi-Mor Securities Account Pledge Agreement”).

E.           First Southwest Company, Lender, and Borrower or Pledgor (as applicable) entered into that certain: (i) Control Agreement, dated January 15, 2010, with respect to Account No. 80492211 held at First Southwest Company (the “Borrower Securities Control Agreement”); and (ii) Control Agreement, dated January 15, 2010, with respect to Account No. 29718794 held at First Southwest Company (the “Equi-Mor Securities Control Agreement”).

F.           The Credit Agreement, Amendment/Forbearance Agreements, LOC Note, Prior Notes, UWB Stock Pledge Agreement, Borrower Securities Account Pledge Agreement, Equi-Mor Securities Account Pledge Agreement, Borrower Securities Control Agreement, and Equi-Mor Securities Control Agreement and all other instruments, agreements and documents referenced in or executed and delivered in connection with any of the foregoing, including all amendments and renewals thereof, are collectively hereinafter referred to as the “Loan Documents.”

G.           Borrower previously defaulted under the terms of the Credit Agreement as a result of entry into Memorandums Of Understanding with the Office of Thrift Supervision (the “OTS”) by the Borrower and one of its subsidiaries, United Western Bank (the “MOU Defaults”).  Borrower and Lender entered into the First Forbearance & Fourth Credit Agreement Amendment pursuant to which Borrower and Lender made certain agreements, acknowledgements and Loan Document amendments, including, without limitation, Lender’s agreement to forbear from exercising remedies on account of the MOU Defaults until the earlier of maturity date of the LOC Note, which was December 31, 2009, or the occurrence of any additional default thereunder or under any of the other Loan Documents.

H.           The forbearance period under First Forbearance & Fourth Credit Agreement Amendment Agreement expired.  Subsequently, Borrower and Lender entered into the Second 

 

 

  

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Forbearance, Note Modification & Fifth Credit Agreement Amendment pursuant to which Borrower and Lender made certain agreements, acknowledgements and Loan Document amendments, including, without limitation, Lender’s agreement to: (i) modify the LOC Note by extending the maturity date of the LOC Note to June 30, 2010; (ii) forbear from exercising remedies on account of the defaults set forth therein until the earlier of June 30, 2010, or the occurrence of any additional default thereunder or under any of the other Loan Documents; and (iii) modify the Credit Agreement by amending the Non-Performing Assets Plus OREO Ratio under the Credit Agreement, and Borrower’s agreement to: (a) make a $2,500,000.00 immediate principal payment to Lender against the outstanding Obligations under the LOC Note and Credit Agreement; (b) make an additional $1,250,000.00 principal payment to Lender against the outstanding Obligations under the LOC Note and Credit Agreement on March 31, 2010; (c) grant Lender a security interest in the Collateral set forth in the Borrower Securities Account Pledge Agreement and Equi-Mor Securities Account Pledge Agreement and execute control agreements relating to such interests; and (d) the Bank having no further obligation to make any Advances under the LOC Note.

I.           Additional defaults have or are anticipated to have occurred under the Second Forbearance, Note Modification & Fifth Credit Agreement Amendment and certain of the Loan Documents.  Borrower is in default, without limitation, on account of the following (the “Additional Defaults”): under the LOC Note as amended by Section 3.3(B) of the Second Forbearance, Note Modification & Fifth Credit Agreement Amendment and Section 7.1(A) of the Credit Agreement, regarding its obligation to make an additional $1,250,000.00 principal payment to Lender on March 31, 2010.  It is anticipated that the following defaults may have occurred prior to the effective date hereof, or will occur after the effective date hereof but prior to May 15, 2010, under the Loan Documents (the “Additional Anticipated Defaults”): (i) under Section 4.11 of the Credit Agreement, regarding Borrower’s obligation to at all times cause United Western Bank to maintain a Non-Performing Assets Plus OREO Ratio of not greater than six and one-half percent (6.5%) commencing December 31, 2009, and at all times thereafter; (ii) under Section 4.10 of the Credit Agreement, regarding Borrower’s obligation to at all times cause United Western Bank to maintain its categorization as “Well Capitalized” as defined by the regulations of United Western Bank’s primary Governmental Authority; and (iii) as a result of any regulatory restrictions, orders, agreements, actions or proceedings disclosed to Lender prior to the date hereof which restricts the Borrower from making a loan payment under the LOC Note (the “Preexisting Regulatory Payment Restrictions”) under Section 5.10(1), 6.3 (as it relates to the consent of Governmental Authorities), 6.10  (as it relates to the consent of Governmental Authorities), 6.8 and 7.1(I) of the Credit Agreement, as a result of the Preexisting Regulatory Payment Restrictions.  As a result of the Additional Defaults and the Additional Anticipated Defaults (collectively and together with the MOU Defaults, the “Disclosed Defaults”), and in conjunction with the MOU Defaults, Lender is entitled to exercise the default remedies set forth in the Loan Documents.  Borrower waives any notices of the Disclosed Defaults required under the Loan Documents.

J.           Borrower has requested that Lender continue to forbear from exercising its rights 

 

 

 

  

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and remedies under the Loan Documents arising on account of the Disclosed Defaults.  Lender agrees to forbear from exercising such rights and remedies until the Termination Date (as defined below) on the terms and conditions set forth herein.

AGREEMENTS

NOW, THEREFORE, in consideration of the Recitals, which are deemed a material part of this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, it is agreed as follows:

1.           In consideration for the agreement of Lender to forbear from exercising certain remedies on account of the Disclosed Defaults until the Termination Date (as defined below), Borrower agrees to the Recitals set forth above and to perform the obligations set forth below.

2.           In consideration for the agreements and representations made herein, provided that Borrower and Pledgor fully and timely satisfy all obligations set forth in this Agreement and the Loan Documents (as modified by this Agreement), Lender agrees to forbear from exercising its rights and remedies under the Loan Documents on account of the Disclosed Defaults (which are not waived but expressly preserved) until the earlier of: (i) the end of business on May 15, 2010; or (ii) the occurrence of a default, other than the Disclosed Defaults, under any of the Loan Documents, this Agreement, or any other agreement required to be entered into by this Agreement without any notice or grace period (the earlier of (i) and (ii) being referred to as the “Termination Date” and the period of time from the effective date of this Agreement to the Termination Date being referred to as the “Forbearance Period”).

 

 

3.           The forbearance by Lender set forth in Paragraph 2 above shall be conditioned upon, and shall not become effective until, satisfaction of the following:

	
  

	
A.

	
Borrower and Pledgor have duly executed and delivered this Agreement to Lender, in form and substance acceptable to Lender in its sole discretion, and the Agreement is executed by Lender;

	
  

	
B.

	
Borrower has duly executed and delivered to Lender a Stock Power relating to the UWB Stock Pledge Agreement, in form and substance acceptable to Lender in its sole discretion, which Stock Power is guarantied by a financial institution who is a member of an approved Medallion Guaranty program; and

	
  

	
C.

	
Execution by Borrower and/or Pledgor and delivery to Lender of such other and further documentation as Lender may reasonably deem necessary to accomplish the terms, conditions, acknowledgments, and agreements set forth herein, which documents shall be in form and substance reasonably acceptable to Lender in its sole discretion.

 

  

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4.           As a material inducement to Lender to enter into this Agreement, Borrower and Pledgor (as appropriate relative to their respective obligations) each separately represent and warrant that:

 

	
  

	
A.

	
This Agreement constitutes, and any of the documents required herein will constitute, upon execution and delivery, legal, valid, and binding obligations or agreements of the Borrower and Pledgor, enforceable in accordance with their respective terms;

 

	
  

	
B.

	
The execution, delivery, and performance of this Agreement, and any other document required herein, is within the corporate powers of Borrower and Pledgor, has been duly authorized by all necessary and appropriate action, whether corporate or regulatory in nature, and does not and will not: (i) require any consent or approval of the board of directors of Borrower or Pledgor; (ii) violate any provision of the articles of incorporation of Borrower or Pledgor, their respective bylaws, any other document of corporate governance, or any law, rule, regulation, order, writ, judgment, injunction, decree, determination or award presently in effect having applicability to Borrower or Pledgor; (iii) require the consent or approval of, or filing or registration with, any governmental body, agency, regulator or authority (except with respect to Borrower making monthly interest payments under the LOC Note and Credit Agreement and paying the Forbearance Fee, which requires the prior written non-objection of the OTS); (iv) cause any breach of, or constitute a default under, any contract, indenture or other agreement or instrument under which Borrower or Pledgor is a party or by which it or its properties may be bound or affected; or (v) result in the imposition of any lien, charge or encumbrance upon any property of Borrower or Pledgor not contemplated herein.

 

	
  

	
C.

	
Each of the statements set forth in the Recitals are true and correct in all respects, including, without limitation, the amount of the Obligations of the Borrower owing to the Lender, and the Lender may rely on the accuracy thereof;

 

	
  

	
D.

	
Borrower and Pledgor acknowledge that: (i) as a result of the Disclosed Defaults Lender has the right, without further notice, to enforce its rights and remedies under the Loan Documents and applicable law and, except as specifically set forth herein, has no obligation to forbear from enforcing such rights and remedies; and (ii) the Lender has duly performed all of its obligations under the Loan Documents;

 

 

 

  

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E.

	
The Loan Documents constitute legal, valid, and binding agreements of the Borrower and Pledgor enforceable in accordance with their respective terms;

 

	
  

	
F.

	
Neither the Borrower nor the Pledgor has any objection, defenses, set-offs, claims, counterclaims, or causes of action of any kind or nature whatsoever with respect to any of the Loan Documents or Obligations or to the validity and perfection of Lender’s security interests in, and liens upon, its collateral property as set forth in the Loan Documents, all of which are hereby expressly waived, released, and relinquished, whether known or unknown;

 

	
  

	
G.

	
Except for the Disclosed Defaults, Borrower and Pledgor have complied with all of their obligations under the Loan Documents.  There is no condition, event, act or omission that exists which could constitute a default or Event of Default under the Loan Documents, and no condition, event, act or omission that has occurred and is continuing that, with the giving of notice or the passage of time or both, would constitute a default or an Event of Default under the Loan Documents, other than the Disclosed Defaults;

 

	
  

	
H.

	
All representations and warranties set forth in Loan Documents are true and correct as of the date of this Agreement, except as related to the Disclosed Defaults; and

 

	
  

	
I.

	
With respect to the outstanding shares of United Western Bank stock which are owned by Borrower, all physical share certificates have been transferred, and no physical share certificates have not been transferred, by Borrower to Lender pursuant to the UWB Stock Pledge Agreement.

 

5.           Borrower hereby covenants and agrees with Lender (in addition to, but not in limitation of unless expressly noted, any terms, conditions, agreements and/or covenants set forth in the Loan Documents), from and after the date hereof, to the following:

 

	
  

	
A.

	
Borrower is hereby obligated to pay Lender a fee in the amount of $20,000.00 (the “Forbearance Fee”), which fee shall be paid in good and available funds upon receipt of a written non-objection from the OTS for Borrower to pay such fee.

 

	
  

	
B.

	
As soon as practicable after the date hereof, Borrower shall provide Lender with written confirmation of Borrower’s request for written non-objection from the OTS with respect to Borrower paying Lender the Forbearance Fee, as well as any response from the OTS pertaining to such request;

 

	
  

	
C.

	
As soon as practicable after the date hereof, Borrower shall provide Lender with: (i) an updated resolution from its board of directors authorizing identified officers of the company to incur and pay debt, borrow and repay money, and otherwise 

 

 

 

  

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enter into and perform agreements. obligations and transactions on behalf of the Borrower with Lender in connection with the Loan Documents; (ii) the thrift financial report for United Western Bank, or replacement or successor report if not a thrift financial report, for the first quarter period of 2010 (such thrift financial report shall be provided immediately after United Western Bank has filed such report, which in no event shall be later than May 15, 2010); and (iii) the unaudited balance sheets and related statements of operations of Pledgor prepared in accordance with GAAP as of March 31, 2010, certified by the Chief Financial Officer of Pledgor as being true and accurate to the best of its knowledge and belief and prepared in good faith; and

 

 

	
  

	
D.

	
Lender has no further obligation to make any Advances under the LOC Note and Borrower has no right to request further Advances under the LOC Note, regardless of whether payments have been made to reduce outstanding amounts owing under the LOC Note.

 

6.           In the event that Borrower or Pledgor fails to satisfy any covenants, representations, warranties, or agreements of this Agreement or any other Loan Document (other than the violations giving rise to the Disclosed Defaults) such failure shall immediately and without further notice or any grace period constitute an event of default under this Agreement (“Forbearance Default”) and Lender shall have no further obligation to forbear from exercising any of its rights or remedies under the Loan Documents, this Agreement, or any agreement or document executed in connection herewith or required herein.

7.           Upon the occurrence of a Forbearance Default as defined in Paragraph 6 hereof, Lender may, at its own option, terminate its obligations under this Agreement and the indebtedness due under the Loan Documents shall be immediately due and payable, all without demand, presentment, or other notice of any kind, all of which are hereby expressly waived, and Lender shall be entitled to immediately exercise all rights and remedies available herein and under the Loan Documents, the Uniform Commercial Code, and any other applicable state or federal law.  Notwithstanding the foregoing, however, the representations, warranties, acknowledgments, covenants, and agreements made by Borrower and Pledgor herein shall survive any election of Lender to terminate its obligations hereunder in the event of a Forbearance Default.

8.           Borrower and Pledgor acknowledge and agree that the MOU Defaults and Additional Defaults have occurred and are existing under the Loan Documents as of the date of this Agreement and further acknowledge and agree that Lender is entitled to take all actions legally available to it under the Loan Documents or applicable law upon the occurrence of a Forbearance Default without any further or additional notice or grace period to Borrower or Pledgor.

 

 

  

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9.           Borrower and Pledgor restate, acknowledge and agree that: (i) the amounts set forth in Recital C above are outstanding and owing; (ii) the Obligations are owing and not subject to any claim, offset, counterclaim, defense or affirmative defense of any kind; (iii) the Obligations remain the continuing and individual obligations of Borrower, subject to the security interests granted by Borrower and Pledgor, until all amounts due thereunder, including attorneys’ fees and costs incurred by Lender in connection with this Agreement or enforcement of the Loan Documents, are paid in full; (iv) the liens and security interests granted to Lender by Borrower and Pledgor are and remain valid security interests in the assets subject thereto; and (v) as of the date hereof, each of the Borrower and Pledgor separately releases, discharges, and agrees to hold harmless Lender and each of its representatives, agents, employees, attorneys, directors, officers, parents, affiliates, assigns, insurers, subsidiaries, and their successors and assigns (collectively, the “Released Parties”) from any and all claims, defenses, affirmative defenses, setoffs, counterclaims, actions, causes of action, suits, controversies, agreements, provisions, liabilities and demands in law or in equity, whether known or unknown (collectively, the “Claims”) which Borrower or Pledgor ever had, now has, or may hereafter have against or related to the Released Parties through the date of this Agreement relating to or arising out of the Loan Documents, the transactions described therein, the Obligations, or the administration by Lender of the Loan Documents, provided, however, notwithstanding the foregoing, Borrower and Pledgor are not releasing the Released Parties with respect to their obligations pertaining to the Collateral (as defined in the following agreements) pledged to Lender pursuant to the terms of the Borrower Securities Account Pledge Agreement and Equi-Mor Securities Account Pledge Agreement.

10.           Pledgor separately acknowledges and agrees to the continuing authenticity and enforceability of the Equi-Mor Securities Account Pledge Agreement notwithstanding the agreements set forth herein.  Pledgor separately ratifies and reaffirms the Equi-Mor Securities Account Pledge Agreement in its entirety, confirms its continuing validity, and agrees that it shall remain in full force and effect until the Obligations have been paid in full to the Lender and all remaining obligations of Borrower and Pledgor to Lender under the Loan Documents and this Agreement have been fully paid in cash and/or performed to the satisfaction of Lender.  The Equi-Mor Securities Account Pledge Agreement is incorporated herein by reference.

11.           Pledgor separately agrees that, as of the date hereof, it has no claims or defenses of any kind by way of offset or otherwise to satisfaction in full of the obligations to Lender pursuant to the Equi-Mor Securities Account Pledge Agreement.  To the extent that any such claim or defense may presently exist or may arise in the future, Pledgor expressly waives any and all claims or defenses against any of the Released Parties that now or hereafter exist by reason of, among other things, and without limitation: (i) any and all amendments or modifications of any Loan Documents or related agreement or instrument; (ii) any and all alterations, accelerations, extensions or other changes in the time or manner of payment or performance of the Obligations; (iii) any and all increases or decreases in the rate of interest or other charges; (iv) the release, substitution or addition of any collateral or any shareholder of the corporation; (v) any failure of 

 

 

  

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Lender to give notice of default to the Borrower, Pledgor, or any shareholder; (vi) any failure of Lender to pursue the Borrower, Pledgor, or any of their property with due diligence; or (vii) any failure of Lender to resort to the collateral or to remedies which may be available to it.

12.           The agreements set forth herein shall not constitute a novation of any of the Loan Documents.  Except as specifically set forth in this Agreement, the Loan Documents shall remain in full force and effect and are hereby ratified and confirmed.  To the extent that any provision of this Agreement conflicts with any terms or conditions set forth in the Loan Documents, the provisions of this Agreement shall supersede and control.  Borrower and Pledgor shall continue to comply with all undertakings, obligations and representations set forth in the Loan Documents to the extent not modified in this Agreement.  Except as expressly provided herein, the execution, delivery, and performance of this Agreement and any document required by this Agreement shall not: (i) constitute an extension, modification, or waiver of any aspect of the Loan Documents or any right or remedy thereunder; (ii) extend the terms of the Loan Documents or the due date of any of the loans set forth therein; (iii) establish a course of dealing between the Lender, on the one hand, and Borrower and/or Pledgor, on the other hand, or give rise to any obligation on the part of Lender to extend, modify or waive any term or condition of the Loan Documents; or (iv) give rise to any defenses or counterclaims to the right of Lender to compel payment of any loan or to otherwise enforce its rights and remedies under the Loan Documents.

13.           Borrower and Pledgor separately acknowledge that it: (i) has been represented, or had the opportunity to be represented, by its own legal counsel in connection with the Loan Documents, this Agreement, and any agreements or documents required by this Agreement, including, without limitation, with respect to the releases and waivers set forth herein; (ii) has exercised independent judgment with respect to the Loan Documents, this Agreement, and any agreements or documents required by this Agreement; (iii) has not relied on Lender or its counsel for any advice with respect to the Loan Documents, this Agreement, or any agreements or documents required by this Agreement; and (iv) has had a reasonable opportunity to consider whether there may be future damages, injuries, claims, obligations, or liabilities which presently are unknown, unforeseen or not yet in existence and consciously intends to release them.  Based upon the foregoing, no rule of contract construction or interpretation shall be employed to construe this Agreement more strictly against one party or the other.

14.           This Agreement has been negotiated, executed, and delivered in the State of Colorado and shall be deemed to have been made in the State of Colorado.  The validity of this Agreement, its construction, interpretation, and enforcement as well as the rights of the parties hereunder (including, without limitation, with respect to the collateral) shall be determined under, governed by, and construed in accordance with the internal laws of the State of Colorado (without regard to its conflict of law principles).

15.           Each provision of this Agreement shall be severable from every other provision of this Agreement for the purpose of determining the legal enforceability of any specific provision.

 

 

 

  

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16.           This Agreement and the other documents referred to herein contain the entire agreement between Lender, Borrower, Pledgor, or any of them, with respect to the subject matter hereof and supersedes all previous communications and negotiations.  For the sake of clarity, execution of this Agreement by Lender shall not constitute, and shall not be construed as, Lender’s agreement with, or acceptance of, Borrower’s proposal for Lender to accept the collateral pledged under the Borrower Securities Account Pledge Agreement and Equi-Mor Securities Account Pledge Agreement in exchange for satisfaction of the Obligations.  No representation, undertaking, promise, or condition concerning the subject matter hereof shall be binding upon Lender unless clearly expressed in this Agreement or in the other documents referred to herein.  Any discussions and correspondence about the terms of a possible extension, modification, and/or restructuring of any of the Loan Documents shall be deemed to be in the nature of settlement negotiations.  Accordingly, any such discussions and correspondence will not be admissible in any legal or administrative proceedings and shall not be actionable under any theory of law or utilized for any purpose without the consent of all parties.  No agreement which is reached herein shall give rise to any claim or cause of action except for breach of the express provisions of a legally binding written agreement.

17.           Nothing contained in this Agreement or any other document required by or referred to herein, nor any action taken pursuant hereto or thereto, shall be construed as: (i) permitting or obligating Lender to act as financial or business advisor or consultant to Borrower or Pledgor; (ii) permitting or obligating Lender to control or to conduct the operations of Borrower or Pledgor; (iii) creating any fiduciary obligation on the part of Lender to Borrower or Pledgor; or (iv) causing Borrower or Pledgor to be treated as an agent of Lender.

18.           This Agreement may be executed in any number of counterparts, all of which taken together shall constitute one agreement.  Any of the parties hereto may execute this Agreement by signing, whether by facsimile transmission or otherwise, any such counterpart.

 

 

19.           BORROWER AND PLEDGOR HEREBY CONSENT TO THE EXCLUSIVE JURISDICTION OF ANY STATE OR FEDERAL COURT SITUATED IN DENVER, COLORADO, AND WAIVE ANY OBJECTION BASED ON LACK OF PERSONAL JURISDICTION, IMPROPER VENUE OR FORUM NON CONVENIENS, WITH REGARD TO ANY ACTIONS, CLAIMS, DISPUTES OR PROCEEDINGS RELATING TO THIS AGREEMENT, ANY OF THE LOAN DOCUMENTS, OR ANY DOCUMENT OR AGREEMENT DELIVERED HEREUNDER OR REQUIRED IN CONNECTION HEREWITH, OR ANY TRANSACTION ARISING FROM OR CONNECTED TO ANY OF THE FOREGOING.  BORROWER AND PLEDGOR WAIVE PERSONAL SERVICE OF ANY AND ALL PROCESS UPON THEM, AND CONSENT TO ALL SUCH SERVICE OF PROCESS MADE BY MAIL OR BY MESSENGER DIRECTED TO ANY OF THEM AT THE ADDRESSES 

 

 

  

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SPECIFIED IN THE LOAN DOCUMENTS.  NOTHING HEREIN SHALL AFFECT THE RIGHT OF LENDER TO SERVE PROCESS IN ANY MANNER PERMITTED BY LAW, OR LIMIT THE RIGHT OF LENDER TO BRING PROCEEDINGS AGAINST BORROWER, PLEDGOR, OR ANY OF THEIR PROPERTY OR ASSETS IN THE COMPETENT COURTS OF ANY OTHER JURISDICTION OR JURISDICTIONS.

20.           BORROWER AND PLEDGOR HEREBY WAIVE ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT, ANY OF THE LOAN DOCUMENTS, ANY DOCUMENT DELIVERED HEREUNDER OR REQUIRED IN CONNECTION HEREWITH, OR ANY TRANSACTION ARISING FROM OR CONNECTED TO ANY OF THE FOREGOING.  BORROWER AND PLEDGOR REPRESENT THAT THIS WAIVER IS KNOWINGLY, WILLINGLY AND VOLUNTARILY GIVEN.

21.           BORROWER AND PLEDGOR WAIVE ANY RIGHT ANY OF THEM MAY NOW OR HEREAFTER HAVE TO CLAIM OR RECOVER FROM LENDER ANY CONSEQUENTIAL, EXEMPLARY, OR PUNITIVE DAMAGES.

 

22.           This Agreement shall be binding upon, and shall inure solely to the benefit of, Borrower, Pledgor, Lender and each of their respective successors, assigns and affiliates.  No other third-party, person or entity shall have any rights or benefits under this Agreement.

 

23.           Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to such terms in the Loan Documents.

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JP MORGAN CHASE BANK, N.A.

	  	
UNITED WESTERN BANCORP, INC.

	  	  	  
	  	  	  
	
By: /s/ Milena Kolev                                           

	  	
By:  /s/ Michael J. McCloskey

	
Milena Kolev

	  	
Michael J. McCloskey

	
VP

	  	
Chief Operating Officer

	  	  	  
	  	  	
EQUI-MOR HOLDINGS, INC.

	  	  	  
	  	  	  
	  	  	
By:  /s/ Michael J. McCloskey

	  	  	
Michael J. McCloskey

	  	  	
President & CEO

 

 

 

 

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