Document:

ex10-2.htm

FEDERAL DEPOSIT INSURANCE CORPORATION

WASHINGTON, D.C.

AND

STATE OF MICHIGAN

OFFICE OF FINANCIAL AND INSURANCE REGULATION FOR THE STATE OF MICHIGAN ("OFIR")

LANSING, MICHIGAN

	  	  	  
	  	
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In the Matter of

	
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CONSENT ORDER

	  	
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COMMUNITY CENTRAL BANK

	
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MOUNT CLEMENS, MICHIGAN

	
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FDIC-10-561b

	  	
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(STATE CHARTERED

	
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INSURED NONMEMBER BANK)

	
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Community Central Bank, Mount Clemens, Michigan (“Bank”),  having been advised of its right to a NOTICE OF CHARGES AND OF HEARING detailing the unsafe or unsound banking practices alleged to have been committed by the Bank, and of its right to a hearing on the charges under section 8(b) of the Federal Deposit Insurance Act (“Act”), 12 U.S.C. § 1818(b), and under  § 2304 of the Banking Code of 1999, Mich. Comp Laws § 487.12304, regarding hearings before the Office of Financial and Insurance Regulation for the State of Michigan ("OFIR") , and having waived those rights, entered into a STIPULATION AND CONSENT TO THE ISSUANCE OF A CONSENT ORDER (“STIPULATION”) with representatives of  the Federal Deposit Insurance Corporation (“FDIC”) and the OFIR dated October 29, 2010, whereby, solely for the purpose of this proceeding and without admitting or denying any charges of unsafe or unsound banking practices relating to weaknesses in asset quality, earnings, and capital and without admitting or denying any violations of law, rule, or regulation, the Bank consented to the issuance of a CONSENT ORDER (“ORDER”) by the 

 

  

  

  

  

 

FDIC and the OFIR.

The FDIC and the OFIR considered the matter and decided to accept the STIPULATION.

Having determined that the requirements for issuance of an order under 12 U.S.C. § 1818(b), and Mich. Comp Laws § 487.12304 have been satisfied, the FDIC and OFIR HEREBY ORDER that the Bank, its institution-affiliated parties, as that term is defined in section 3(u) of the Act, 12 U.S.C. § 1813(u), and its successors and assigns, take affirmative action as follows:

MANAGEMENT

           1.           (a)           Within thirty (90) days from the effective date of this ORDER, the Bank shall have and retain qualified management.  Management shall be provided the necessary written authority to implement the provisions of this ORDER.  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

	
  

	
(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.

(b)           During the life of this ORDER, prior to the addition of any individual to the board of directors or the employment of any individual as a senior executive officer, the Bank shall request and obtain the written approval of the OFIR’s Chief Deputy Commissioner (“Chief Deputy Commissioner”).  For purposes of this ORDER, “senior executive officer” is defined as in section 32 of the Act (“section 32”), 12 U.S.C. § 1831(i), and section 303.101(b) of 

 

  

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the FDIC Rules and Regulations, 12 C.F.R. § 303.101(b).

MANAGEMENT PLAN

2.           (a)           Within thirty (30) days from the effective date of this ORDER, the Bank shall submit a proposal to, and thereafter shall, retain an independent third party acceptable to the Regional Director of the FDIC’s Chicago Region (“Regional Director”) and Chief Deputy Commissioner, who will develop a written analysis and assessment of the Bank’s management needs (“Management Study”) for the purpose of providing qualified management for the Bank.

(b)           The Bank shall provide the Regional Director and Chief Deputy Commissioner with a copy of the proposed engagement letter or contract with the independent third party for review.

(c)           The Management Study shall be developed within ninety (90) days from the effective date of this ORDER.  The Management Study shall include, at a minimum:

	
  

	
(i)

	
Identification of both the type and number of officer positions needed to properly manage and supervise the affairs of the Bank;

	
  

	
(ii)

	
Identification and establishment of such Bank committees as are needed to provide guidance and oversight to active management;

	
  

	
(iii)

	
Evaluation of the Bank's executive officers to determine whether these individuals possess the ability, experience and other qualifications required to perform present and anticipated duties, including adherence to the Bank’s established policies and practices, and restoration and maintenance of the Bank in a safe and sound condition;

	
  

	
(iv)

	
Evaluation of all Bank officers’ compensation, including salaries,

 

  

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director fees, and other benefits; and,

	
  

	
(v)

	
A plan to recruit and hire any additional or replacement personnel with the requisite ability, experience and other qualifications to fill those officer positions identified by this paragraph of this ORDER.

       (d)           The plan required by this paragraph shall be submitted to the Regional Director and Chief Deputy Commissioner for review and comment.  Within thirty (30) days of receipt of any comments from the Regional Director or Chief Deputy Commissioner, the Bank shall incorporate any changes required by the Regional Director or Chief Deputy Commissioner and thereafter adopt, implement, and adhere to the plan.

BOARD PARTICIPATION

3.           (a)           As of the effective date of this ORDER, the board of directors 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.  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; adoption or modification of operating policies; individual committee reports; audit reports; internal control reviews including managements responses; and compliance with this ORDER.  Board minutes shall document these reviews and approvals, including the names of any dissenting directors.

(b)   Within fifteen (15) days from the effective date of this ORDER, the Bank’s board of directors shall have in place a program that will provide for monitoring of the Bank’s compliance with this ORDER.

 

  

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(c)   Following the required date of compliance with subparagraph (a) above, the Bank’s board of directors shall review the Bank’s compliance with this ORDER and record its review in the minutes of each regularly scheduled monthly board of directors’ meeting.

CAPITAL

4.           (a)           Within ninety (90) days from the effective date of this ORDER, the Bank shall have and maintain its level of Tier 1 capital as a percentage of its total assets (“capital ratio”) at a minimum of nine percent (9.0%) and its level of qualifying total capital as a percentage of risk-weighted assets (“total risk based capital ratio”) at a minimum of twelve percent (12.0%). For purposes of this ORDER, Tier 1 capital, qualifying total capital, total assets, and risk-weighted assets shall be calculated in accordance with Part 325 of the FDIC Rules and Regulations (“Part 325”), 12 C.F.R. Part 325.

(b)           If, while this ORDER is in effect, the Bank increases capital by the sale of new securities, the board of directors of the Bank shall adopt and implement a plan for the sale of such additional securities, including the voting of any shares owned or proxies held by or controlled by them in favor of said plan.  Should the implementation of the plan involve public distribution of Bank securities, including a distribution limited only to the Bank’s existing shareholders, the Bank shall prepare detailed offering materials fully describing the securities being offered, including an accurate description of the financial condition of the Bank and the circumstances giving rise to the offering, and other material disclosures necessary to comply with Federal securities laws.  Prior to the implementation of the plan and, in any event, not less than 20 days prior to the dissemination of such materials, the materials used in the sale of the securities shall be submitted to the FDIC Registration and Disclosure Section, 550 17th Street, N.W., Washington, D.C. 20429 and to the Commissioner, Office of Financial and Insurance 

 

  

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Regulation for the State of Michigan, 611 Ottawa Street, Lansing, Michigan 48933, for their review.  Any changes requested to be made in the materials by the FDIC or the OFIR shall be made prior to their dissemination.

(c)           In complying with the provisions of this paragraph, the Bank shall provide to any subscriber and/or purchaser of Bank securities written notice of any planned or existing development or other changes which are materially different from the information reflected in any offering materials used in connection with the sale of Bank securities.  The written notice required by this paragraph shall be furnished within ten (10) calendar days of the date any material development or change was planned or occurred, whichever is earlier, and shall be furnished to every purchaser and/or subscriber of the Bank’s original offering materials.

LOSS CHARGE-OFF

5.           As of the effective date of this ORDER the Bank shall charge off from its books and records any asset classified “Loss” in the Report of Examination dated March 29, 2010 (“ROE”) that has not been previously collected or charged off, and shall further charge off any asset classified “loss” at subsequent examinations or visitations during the life of this ORDER within ten (10) days of receipt of the report.

PROHIBITION OF ADDITIONAL LOANS TO CLASSIFIED BORROWERS

6.           (a)           As of the effective date of this ORDER, the Bank shall not extend, directly or indirectly, any additional credit to, or for the benefit of, any borrower who is already obligated in any manner to the Bank on any extensions of credit (including any portion thereof) that has been charged off the books of the Bank or classified “Loss” in the ROE, so long as such credit remains uncollected.

(b)           As of the effective date of this ORDER, the Bank shall not extend, directly 

 

  

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or indirectly, any additional credit to, or for the benefit of, any borrower whose loan or other credit has been classified “Substandard”, “Doubtful”, or is listed for Special Mention in the ROE, and is uncollected unless the Bank’s board of directors has adopted, prior to such extension of credit, a detailed written statement giving the reasons why such extension of credit is in the best interest of the Bank.  A copy of the statement shall be signed by each director, and incorporated in the minutes of the applicable board of directors’ meeting.  A copy of the statement shall be placed in the appropriate loan file.

REDUCTION OF DELINQUENCIES AND CLASSIFIED ASSETS

7.           (a)           Within sixty (60) days from the effective date of this ORDER, the Bank shall adopt, implement, and adhere to, a written plan to reduce the Bank’s risk position in each asset in excess of $250,000 which is more than ninety (90) days delinquent or classified “Substandard” or “Doubtful” in the ROE.  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;

	
  

	
(ii)

	
Provide for review of the current financial condition of each delinquent or classified borrower, including a review of borrower cash flow and collateral value;

	
  

	
(iii)

	
Delineate areas of responsibility for loan officers;

	
  

	
(iv)

	
Establish dollar levels to which the Bank shall reduce delinquencies and classified assets within 6 and 12 months from the effective date of this ORDER; and

 

  

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(v)

	
Provide for the submission of monthly written progress reports to the Bank’s board of directors for review and notation in minutes of the meetings of the board of directors.

       (b)           As used in this paragraph, “reduce” means to: (1) collect; (2) charge off; (3) sell; or (4) improve the quality of such assets so as to warrant removal of any adverse classification by the FDIC and the OFIR.

       (c)           While this ORDER remains in effect, the plan shall be revised to include assets which become more than ninety (90) days delinquent after the effective date of this ORDER or are adversely classified at any subsequent examinations.

LIQUIDITY PLAN

8.           (a)           Within sixty (60) days of the effective date of this ORDER, the Bank shall adopt a written contingency funding plan (“Liquidity Plan”).  The Liquidity Plan shall identify sources of liquid assets to meet the Bank’s contingency funding needs over time horizons of one month, two months, and three months.  At a minimum, the Liquidity Plan shall be prepared in conformance with the Liquidity Risk Management Guidance found at FIL-84-2008, as supplemented by FIL-13-2010, and include provisions to address the issues identified in the ROE.

(b)           On each Friday the Bank is open for business during the life of this ORDER, the Bank shall submit to the Regional Director and the Chief Deputy Commissioner a liquidity analysis report, in a format that is acceptable to the Regional Director and the Chief Deputy Commissioner.

(c)           A copy of the plan required by this paragraph shall be submitted to the Regional Director and the Chief Deputy Commissioner.

 

  

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DIVIDEND RESTRICTION

9.           As of the effective date of this ORDER, the Bank shall not declare or pay any  dividend without the prior written consent of the Regional Director and Chief Deputy Commissioner.

ALLOWANCE FOR LOANS AND LEASE LOSSES

10.           (a)           Within thirty (30) days of the effective date of this ORDER the Bank shall increase its Allowance for Loan and Lease Losses (“ALLL”) to $7,000,000.

(b)   Prior to submission or publication of all Reports of Condition and Income required by the FDIC after the effective date of this ORDER, the board of directors of the Bank shall review the adequacy of the Bank’s ALLL, provide for an adequate ALLL, and accurately report the same. The minutes of the board meeting at which such review is undertaken shall indicate the findings of the review, the amount of increase in the ALLL recommended, if any, and the basis for determination of the amount of ALLL provided.  In making these determinations, the board of directors shall consider the FFIEC Instructions for the Reports of Condition and Income and any analysis of the Bank’s ALLL provided by the FDIC or OFIR.

(c)   ALLL entries required by this paragraph shall be made prior to any capital determinations required by this ORDER.

PROFIT PLAN AND BUDGET

11.           (a)           Within ninety (90) days from the effective date of this ORDER, the Bank shall adopt, implement, and adhere to a written profit plan and a realistic, comprehensive budget for all categories of income and expense for calendar years 2010 and 2011.  The plans required by this paragraph shall contain formal goals and strategies, consistent with sound banking practices, to reduce discretionary expenses and to improve the Bank’s overall earnings, and shall 

 

  

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contain a description of the operating assumptions that form the basis for major projected income and expense components, and identify the major areas in, and means by which, earnings will be improved.

(b)           At each monthly board meeting following completion of the profit plans and budgets required by this paragraph, the Bank’s board of directors shall evaluate the Bank’s actual performance in relation to the plan and budget, record the results of the evaluation, and note any actions taken by the Bank in the minutes of the board of directors’ meeting at which such evaluation is undertaken.

(c)           A written profit plan and budget shall be prepared for each calendar year for which this ORDER is in effect.

(d)           Copies of the plans and budgets required by this paragraph shall be submitted to the Regional Director and Chief Deputy Commissioner.

STRATEGIC PLAN

12.           (a)           Within ninety (90) days from the effective date of this ORDER, the Bank shall formulate, adopt, and implement a realistic, comprehensive strategic plan.  The plan required by this paragraph 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.  The written 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.

(b)           Within thirty (30) days from the end of each calendar quarter following 

 

  

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the effective date of this ORDER, the Bank’s board of directors shall evaluate the Bank’s actual performance in relation to the strategic plan required by this paragraph and record the results of the evaluation, and any actions taken by the Bank, in the minutes of the board of directors’ meeting at which such evaluation is undertaken.

(c)           The strategic plan required by this ORDER shall be revised 30 days prior to the end of each calendar year during which this ORDER is in effect. Thereafter the Bank shall approve the revised plan, which approval shall be recorded in the minutes of a board of directors’ meeting, and the Bank shall implement and adhere to the revised plan.

(d)           Copies of the plan and revisions thereto required by this paragraph shall be submitted to the Regional Director and Chief Deputy Commissioner.

CORRECTION OF VIOLATIONS

13,           Within sixty (60) days from the effective date of this ORDER, the Bank shall eliminate and/or correct all violations of law, rule, and regulations listed in the ROE.

LENDING AND COLLECTION POLICIES

14.           (a)           Within sixty (60) days from the effective date of this ORDER, the Bank shall revise, adopt, and implement written lending and collection policies to provide effective guidance and control over the Bank’s lending function.  In addition, the Bank shall obtain adequate and current documentation for all loans in the Bank’s loan portfolio.

(b)           The revisions to the Bank’s loan policy and practices, required by this paragraph, at a minimum, shall incorporate the items discussed in the ROE.

(c)           Copies of the policies and revisions thereto required by this paragraph shall be submitted to the Regional Director and Chief Deputy Commissioner.

 

  

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LOAN UNDERWRITING AND CREDIT ADMINISTRATION

15.           Within ninety (90) days from the effective date of this ORDER, the bank will implement a system to ensure that loan underwriting and credit administration deficiencies detailed in the ROE are corrected.  In addition, the bank will obtain re-appraisals or re-evaluations of real estate collateral securing adversely classified and delinquent loans, consistent with the collateral monitoring requirements of Appendix A to Part 365, Appendix A to Part 364, and the Interagency Policy Statement of Appraisal and Evaluation Guidelines.

NOTIFICATION TO SHAREHOLDER

16.           Following the effective date of this ORDER, the Bank shall send to its shareholder a copy of this ORDER: (1) in conjunction with the Bank’s next shareholder communication; or (2) in conjunction with its notice or proxy statement preceding the Bank’s next shareholder meeting.

PROGRESS REPORTS

17.           Within forty-five (45) days from the end of each calendar quarter following the effective date of this ORDER, the Bank shall furnish to the Regional Director and Chief Deputy Commissioner written progress reports signed by each member of the Bank’s board of directors, detailing the actions taken to secure compliance with the ORDER and the results thereof.

The effective date of this ORDER shall be the date of issuance by the FDIC and the OFIR.  The provisions of this ORDER shall be binding upon the Bank, its institution-affiliated parties, and any successors and assigns thereof. 

The provisions of this ORDER shall remain effective and enforceable except to the extent that, and until such time as, any provision has been modified, terminated, suspended, or set aside 

 

  

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by the FDIC and the OFIR.

Pursuant to delegated authority.

Dated:  November 1, 2010

	  	  	  
	
/s/ M. Anthony Lowe                   

M. Anthony Lowe

Regional Director

Chicago Regional Office

Federal Deposit Insurance

Corporation

 

	  	
/s/ Stephen R. Hilker                            

Stephen R. Hilker

Chief Deputy Commissioner

Office of Financial and Insurance 

Regulation for the State of Michigan

 

 

 

March 29, 2010YesYesOffice of Financial and Insurance Regulation for the State of Michigan ("OFIR")§ 2304 of the Banking Code of 1999, Mich. Comp Laws § 487.12304LansingMichigan and the Chief Deputy Commissioner (“OFIR”) of the Office of Financial and Insurance Regulation for the State of Michigan ("OFIR") (“State”)Stephen R. HilkerChief Deputy Commissionerex10-2_1437559.htm

Exhibit 10.2

Australia Acquisition Corp.

Level 11, 459 Collins Street

Melbourne VIC 3000

Australia

July 29, 2010

 

Ziegler Asset Partners Trust

36 Billyard Ave.

Elizabeth Bay

Sidney NSW 2011

Australia

RE:           Initial Ordinary Share Subscription Agreement

 

Ladies and Gentlemen:

 

We are pleased to accept the offer Ziegler Asset Partners Trust (the “Subscriber”) has made to purchase 3,066,667 ordinary shares of $0.001 par value per share (the “Initial Ordinary Shares”) up to 400,000 of which Initial Ordinary Shares are subject to complete or partial redemption, at nominal cost to us, (the “Redemption”) if the underwriters of the initial public offering (“IPO”) of Australia Acquisition Corp., an exempted company incorporated in the Cayman Islands with limited liability (the “Company”) do not fully exercise their over-allotment option (the “Over-allotment Option”).  The terms on which the Company is willing to sell the Initial Ordinary Shares to the Subscriber, and the Company and the Subscriber’s agreements regarding such Initial Ordinary Shares, are as follows:

 

1.           PURCHASE OF INITIAL ORDINARY SHARES.  FOR THE SUM OF $25,000 (THE “PURCHASE PRICE”), WHICH THE COMPANY ACKNOWLEDGES RECEIVING IN CASH, THE COMPANY HEREBY SELLS AND ISSUES THE INITIAL ORDINARY SHARES TO THE SUBSCRIBER, AND THE SUBSCRIBER HEREBY PURCHASES THE INITIAL ORDINARY SHARES FROM THE COMPANY, SUBJECT TO REDEMPTION, ON THE TERMS AND SUBJECT TO THE CONDITIONS SET FORTH IN THIS AGREEMENT.  CONCURRENTLY WITH THE SUBSCRIBER’S EXECUTION OF THIS AGREEMENT, THE COMPANY WILL REGISTER THE SUBSCRIBER’S NAME IN THE REGISTER OF MEMBERS KEPT IN ACCORDANCE WITH THE CAYMAN ISLANDS COMPANIES LAW (2010).

 

2.           REPRESENTATIONS, WARRANTIES AND AGREEMENTS.

 

2.1           Subscriber’s Representations, Warranties and Agreements.  To induce the Company to issue the Initial Ordinary Shares to the Subscriber, the Subscriber hereby represents and warrants to the Company and agrees with the Company as follows:

 

2.1.1           No Government Recommendation or Approval.  The Subscriber understands that no United States federal or state agency or similar agency of any other country has passed upon or made any recommendation or endorsement of the offering of the Initial Ordinary Shares.

 

2.1.2           No Conflicts. The execution, delivery and performance of this Agreement and the consummation by the Subscriber of the transactions contemplated hereby do

 

  

  

  

not violate, conflict with or constitute a default under (i) the Subscriber’s Certificate of Formation or Operating Agreement (if not an individual), (ii) any agreement, indenture or instrument to which the Subscriber is a party or (iii) any law, statute, rule or regulation to which the Subscriber is subject, or any agreement, order, judgment or decree to which the Subscriber is subject.

 

2.1.3           Organization and Authority.  If not an individual, the Subscriber is a limited liability company duly organized, validly existing under the laws of the Commonwealth of Australia and possesses all requisite power and authority necessary to carry out the transactions contemplated by this Agreement.

 

2.1.4           Experience, Financial Capability and Suitability.  The Subscriber is sufficiently experienced in financial and business matters to be capable of evaluating the merits and risks of this investment and to make an informed decision relating thereto. The Subscriber is aware its investment in the Company is a speculative investment that has limited liquidity, because there may never be an established market for the Company’s securities.  The Subscriber has the financial capability for making the investment and the investment is a suitable one for the Subscriber.  The Subscriber can, without impairing its financial condition, hold the Shares for an indefinite period of time and can afford a complete loss of the investment. The Subscriber acknowledges that the Company has urged the Subscriber to seek independent advice from professional advisors relating to the suitability of an investment in the Company and in connection with this Agreement, and that the Subscriber has sought and received such independent professional advice with respect to such investment and this Agreement or, after careful consideration, the Subscriber has determined to waive its right to seek and/or receive such independent professional advice.

 

2.1.5           Access to Information.  Prior to the execution of this Agreement, the Subscriber has had the opportunity to ask questions of and receive answers from representatives of the Company concerning an investment in the Company, as well as the finances, operations, business and prospects of the Company, and the opportunity to obtain additional information to verify the accuracy of all information so obtained.

 

2.1.6           Accredited Investor.  Subscriber represents that it is an “accredited investor” as such term is defined in Rule 501(a) of Regulation D under the Securities Act of 1933, as amended (the “Securities Act”) and acknowledges the sale contemplated hereby is being made in reliance, among others, on a private placement exemption to “Accredited Investors” contained in Regulation D under the Securities Act or similar exemptions under state law; and, accordingly, such securities will be “restricted securities” within the meaning of Rule 144(a)(3) under the Securities Act, and therefore may not be offered, pledged or sold by Subscriber, directly or indirectly, in the United States without registration under United States federal and state securities laws and Subscriber understands the certificates representing such securities will contain a legend in respect of such restrictions.  The Subscriber did not decide to enter into the Agreement as a result of any general solicitation or general advertising within the meaning of Rule 502 under the Securities Act.

 

2.1.7           Intent.  The Subscriber is purchasing the Initial Ordinary Shares solely for investment purposes, for the Subscriber’s own account and not for the account or

 

  

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benefit of any U.S. Person to the extent Subscriber is not a U.S. Person, and not with a view towards the distribution thereof and the Subscriber has no present arrangement to sell the Initial Ordinary Shares to or through any person or entity. The Subscriber shall not engage in hedging transactions with regard to the Initial Ordinary Shares unless in compliance with the Securities Act. Notwithstanding, the Subscriber may transfer the Initial Ordinary Shares, subject to the transfer restrictions contained Section 2.1.8 and Section 4, to members of the Company’s proposed management team on substantially similar terms contained herein.

 

2.1.8           Restrictions on Transfer. The Subscriber understands the Initial Ordinary Shares are being offered in a transaction not involving a public offering within the meaning of the Securities Act. The Initial Ordinary Shares have not been registered under the Securities Act, and, if in the future the Subscriber decides to offer, resell, pledge or otherwise transfer the Initial Ordinary Shares, such Initial Ordinary Shares may be offered, resold, pledged or otherwise transferred only (A) pursuant to an effective registration statement filed under the Securities Act, (B) pursuant to an exemption from registration under Rule 144 promulgated under the Securities Act, if available, or (C) pursuant to any other exemption from the registration requirements of the Securities Act, and in each case in accordance with any applicable securities laws of any state or any other jurisdiction.  Subscriber agrees that if any transfer of its Initial Ordinary Shares or any interest therein is proposed to be made, as a condition precedent to any such transfer, Subscriber may be required to deliver to the Company an opinion of counsel satisfactory to the Company.  Absent registration or another exemption from registration, the Subscriber agrees that he will not resell the Initial Ordinary Shares.  Subscriber further acknowledges that because the Company is a shell company, Rule 144 may not be available to the Subscriber for the resale of the Initial Ordinary Shares until one year after following consummation of the initial business combination of the Company, despite technical compliance with the requirements of Rule 144 and the release or waiver of any contractual transfer restrictions.

 

2.2           Company’s Representations, Warranties and Agreements.  To induce the Subscriber to purchase the Initial Ordinary Shares, the Company hereby represents and warrants to the Subscriber and agrees with the Subscriber as follows:

 

2.2.1           Organization and Corporate Power. The Company is an exempted company incorporated with limited liability which is duly organized, validly existing and in good standing under the laws of the Cayman Islands and is qualified to do business in every jurisdiction in which the failure to so qualify would reasonably be expected to have a material adverse effect on the financial condition, operating results or assets of the Company. The Company possesses all requisite corporate power and authority necessary to carry out the transactions contemplated by this Agreement.

 

2.2.2           No Conflicts. The execution, delivery and performance of this Agreement and the consummation by the Company of the transactions contemplated hereby do not violate, conflict with or constitute a default under (i) the Memorandum of Association of the Company or the Articles of Association of the Company, (ii) any agreement, indenture or instrument to which the Company is a party or (iii) any law, statute, rule or regulation to which the Company is subject, or any agreement, order, judgment or decree to which the Company is subject.

 

  

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2.2.3           Title to Securities. Upon issuance in accordance with, and payment pursuant to, the terms hereof, the Initial Ordinary Shares will be duly and validly issued, fully paid and nonassessable. Upon issuance in accordance with, and payment pursuant to, the terms hereof, the Subscriber will have or receive good title to the Initial Ordinary Shares, free and clear of all liens, claims and encumbrances of any kind, other than (a) transfer restrictions hereunder and under the other agreements contemplated hereby, (b) transfer restrictions under federal and state securities laws, and (c) liens, claims or encumbrances imposed due to the actions of the Subscriber.

 

3.           REDEMPTION OF INITIAL ORDINARY SHARES.

 

3.1           Failure to Consummate Business Combination; Partial or No Exercise of the Over-allotment Option.  In the event the Over-allotment Option granted to the representative of the underwriters of the Company’s IPO is not exercised in full, the Subscriber acknowledges and agrees that we shall redeem, at nominal cost to us, any and all such number of Initial Ordinary Shares (up to an aggregate of 400,000 Initial Ordinary Shares and pro rata based upon the percentage of the Over-allotment Option exercised) such that immediately following such redemption, the Subscriber and all other initial shareholders prior to the IPO will own an aggregate number of ordinary shares (not including ordinary shares issuable upon exercise of any warrants or any ordinary shares purchased by the Subscriber in the Company’s IPO or in the aftermarket) equal to 25% of the issued and outstanding ordinary shares of the Company immediately following the IPO.

 

3.2           Termination of Rights as Shareholder.  If any of the Initial Ordinary Shares are redeemed in accordance with this Section 3, then after such time the Subscriber (or successor in interest), shall no longer have any rights as a holder of such Initial Ordinary Shares, and the Company shall take such action as is appropriate to cancel such Initial Ordinary Shares.  In addition, the Subscriber hereby irrevocably grants the Company a limited power of attorney for the purpose of effectuating the foregoing and agrees to take any and all action reasonably requested by the Company necessary to effect any adjustment in this Section 3.

 

4.           RESTRICTIONS ON TRANSFER.

 

4.1           Securities Law Restrictions.  The Subscriber agrees not to sell, transfer, pledge, hypothecate or otherwise dispose of all or any part of the Initial Ordinary Shares unless, prior thereto (a) a registration statement on the appropriate form under the Securities Act and applicable state securities laws with respect to the Initial Ordinary Shares proposed to be transferred shall then be effective or (b) the Company shall have received an opinion from counsel reasonably satisfactory to the Company, that such registration is not required because such transaction is exempt from registration under the Securities Act and the rules promulgated by the Securities and Exchange Commission (“SEC”) thereunder and with all applicable state securities laws.

 

4.2           Restrictive Legends.  All certificates representing the Shares shall have endorsed thereon legends substantially as follows:

 

  

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“THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE SECURITIES LAWS AND NEITHER THE SECURITIES NOR ANY INTEREST THEREIN MAY BE OFFERED, SOLD, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR SUCH LAWS OR AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT AND SUCH LAWS WHICH, IN THE OPINION OF COUNSEL FOR THIS CORPORATION, IS AVAILABLE.”

 

4.3           Additional Initial Ordinary Shares or Substituted Securities.  In the event of the declaration of a stock dividend, the declaration of an extraordinary dividend payable in a form other than stock, a spin-off, a stock split, an adjustment in conversion ratio, a recapitalization or a similar transaction affecting the Company’s outstanding capital stock without receipt of consideration, any new, substituted or additional securities or other property which are by reason of such transaction distributed with respect to any Initial Ordinary Shares subject to this Section 4 or into which such Initial Ordinary Shares thereby become convertible shall immediately be subject to this Section 4.  Appropriate adjustments to reflect the distribution of such securities or property shall be made to the number and/or class of Initial Ordinary Shares subject to this Section 4.

 

5.           OTHER AGREEMENTS.

 

5.1           Further Assurances.  Subscriber agrees to execute such further instruments and to take such further action as may reasonably be necessary to carry out the intent of this Agreement.

 

5.2           No Obligation as to Employment.  The Company is not by reason of this Agreement obligated to employ, or continue to employ, the Subscriber in any capacity.

 

5.3           Notices.  All notices, requests, consents and other communications hereunder shall be in writing, shall be addressed to the receiving party’s address set forth on the first page of this Agreement or to such other address as a party may designate by notice hereunder, and shall be either (a) delivered by hand, (b) sent by overnight courier, or (c) sent by certified mail, return receipt requested, postage prepaid.  All notices, requests, consents and other communications hereunder shall be deemed to have been given either (i) if by hand, at the time of the delivery thereof to the receiving party at the address of such party set forth above, (ii) if sent by overnight courier, on the next business day following the day such notice is delivered to the courier service, or (iii) if sent by certified mail, on the (5th) business day following the day such mailing is made.

 

5.4           Entire Agreement.  This Agreement, together with that certain letter agreement between the Subscriber and the Company, substantially in the form filed as an exhibit to the Registration Statement, embodies the entire agreement and understanding between the Subscriber and the Company with respect to the subject matter hereof and supersedes all prior

 

  

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oral or written agreements and understandings relating to the subject matter hereof.  No statement, representation, warranty, covenant or agreement of any kind not expressly set forth in this Agreement shall affect, or be used to interpret, change or restrict, the express terms and provisions of this Agreement.

 

5.5           Modifications and Amendments.  The terms and provisions of this Agreement may be modified or amended only by written agreement executed by all parties hereto.

 

5.6           Waivers and Consents.  The terms and provisions of this Agreement may be waived, or consent for the departure therefrom granted, only by written document executed by the party entitled to the benefits of such terms or provisions.  No such waiver or consent shall be deemed to be or shall constitute a waiver or consent with respect to any other terms or provisions of this Agreement, whether or not similar.  Each such waiver or consent shall be effective only in the specific instance and for the purpose for which it was given, and shall not constitute a continuing waiver or consent.

 

5.7           Assignment.  The rights and obligations under this Agreement may not be assigned by either party hereto without the prior written consent of the other party.

 

5.8           Benefit.  All statements, representations, warranties, covenants and agreements in this Agreement shall be binding on the parties hereto and shall inure to the benefit of the respective successors and permitted assigns of each party hereto.  Nothing in this Agreement shall be construed to create any rights or obligations except among the parties hereto, and no person or entity shall be regarded as a third-party beneficiary of this Agreement.

 

5.9           Governing Law.  This Agreement and the rights and obligations of the parties hereunder shall be construed in accordance with and governed by the law of State of New York, without giving effect to the conflict of law principles thereof.

 

5.10           Severability.  In the event that any court of competent jurisdiction shall determine that any provision, or any portion thereof, contained in this Agreement shall be unreasonable or unenforceable in any respect, then such provision shall be deemed limited to the extent that such court deems it reasonable and enforceable, and as so limited shall remain in full force and effect.  In the event that such court shall deem any such provision, or portion thereof, wholly unenforceable, the remaining provisions of this Agreement shall nevertheless remain in full force and effect.

 

5.11           No Waiver of Rights, Powers and Remedies.  No failure or delay by a party hereto in exercising any right, power or remedy under this Agreement, and no course of dealing between the parties hereto, shall operate as a waiver of any such right, power or remedy of such party.  No single or partial exercise of any right, power or remedy under this Agreement by a party hereto, nor any abandonment or discontinuance of steps to enforce any such right, power or remedy, shall preclude such party from any other or further exercise thereof or the exercise of any other right, power or remedy hereunder.  The election of any remedy by a party hereto shall not constitute a waiver of the right of such party to pursue other available remedies.  No notice to or demand on a party not expressly required under this Agreement shall entitle the

 

  

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party receiving such notice or demand to any other or further notice or demand in similar or other circumstances or constitute a waiver of the rights of the party giving such notice or demand to any other or further action in any circumstances without such notice or demand.

 

5.12           Survival of Representations and Warranties.  All representations and warranties made by the parties hereto in this Agreement or in any other agreement, certificate or instrument provided for or contemplated hereby, shall survive the execution and delivery hereof and any investigations made by or on behalf of the parties.

 

5.13           No Broker or Finder.  Each of the parties hereto represents and warrants to the other that no broker, finder or other financial consultant has acted on its behalf in connection with this Agreement or the transactions contemplated hereby in such a way as to create any liability on the other.  Each of the parties hereto agrees to indemnify and save the other harmless from any claim or demand for commission or other compensation by any broker, finder, financial consultant or similar agent claiming to have been employed by or on behalf of such party and to bear the cost of legal expenses incurred in defending against any such claim.

 

5.14           Headings and Captions.  The headings and captions of the various subdivisions of this Agreement are for convenience of reference only and shall in no way modify or affect the meaning or construction of any of the terms or provisions hereof.

 

5.15           Counterparts.  This Agreement may be executed in one or more counterparts, all of which when taken together shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party, it being understood that both parties need not sign the same counterpart.  In the event that any signature is delivered by facsimile transmission or by e-mail delivery of a “.pdf” format data file, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile or “.pdf” signature page were an original thereof.

 

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If the foregoing accurately sets forth our understanding and agreement, please sign the enclosed copy of this agreement and return it to us.

 

	  	
Very truly yours,

	  	  
	  	
AUSTRALIA ACQUISITION CORP.

	  	  	  
	  	
By:

	  /s/ Peter Ziegler
	  	  	
Name: Peter Ziegler

	  	  	
Title: Chief Executive Officer

	
Accepted and agreed this

	  
	
July 29, 2010

	  
	  	  
	
ZIEGLER ASSET PARTNERS TRUST

	  
	  	  	  
	
By:

	  /s/ Peter Ziegler	  
	
Name:  Peter Ziegler

	  
	
Title: Authorized Signatory

	  

  

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