CDCI Banks and Thrifts Summary of Terms

Community Development
Capital Initiative
CDFI Bank/Thrift
Senior Preferred Stock
Summary of CDCI Senior Preferred Terms
Issuer:

A qualifying financial institution (“QFI”) that is (i) any U.S. bank or
U.S. savings association not controlled by a Bank Holding Company
(“BHC”) or Savings and Loan Holding Company (“SLHC”); (ii) any
top-tier U.S. BHC, (iii) any top-tier U.S. SLHC which engages
solely or predominately in activities that are permitted for financial
holding companies under relevant law; or (iv) any U.S. bank or U.S.
savings association controlled by a U.S. SLHC that does not engage
solely or predominately in activities that are permitted for financial
holding companies under relevant law, excluding Subchapter S
corporations and mutual organizations; provided, that, in each case,
the QFI (i) is a regulated community development financial
institution currently certified by the Community Development
Financial Institution Fund (the “Fund”) of the United States
Department of the Treasury (“UST”) pursuant to 12 C.F.R.
1805.201(a) as having met the eligibility requirements of the Fund’s
Community Development Financial Institutions Program (“CDFI”);
and (ii) shall not be any BHC, SLHC, bank or savings association
controlled (within the meaning of 12 U.S.C. 1841(a)(2) and 12
C.F.R. 225(a)(i) in the case of BHCs and banks; and 12 U.S.C.
1467a (a)(2) and 12 C.F.R. 583.7 in the case of SLHCs and savings
associations) by a foreign bank or company. For purposes of this
program, “U.S. bank”, “U.S. savings association,” “U.S. BHC” and
“U.S. SLHC” means a bank, savings association, BHC or SLHC
organized under the laws of the United States or any State of the
United States, the District of Columbia, any territory or possession
of the United States, Puerto Rico, Northern Mariana Islands, Guam,
American Samoa, or the Virgin Islands. UST will determine the
eligibility and allocation of funds for each QFI after consultation
with the appropriate federal banking agency.

Initial Holder:

UST.

Security:

Senior preferred stock (the “CDCI Senior Preferred”), liquidation
preference $1,000 per share. Depending upon each QFI’s available
authorized preferred shares, UST may agree to purchase CDCI
Senior Preferred with a higher liquidation preference per share, in
which case UST may require the QFI to appoint a depositary to hold
the CDCI Senior Preferred and issue depositary receipts.

Size:

Each QFI may issue CDCI Senior Preferred having an aggregate
capital amount equal to not more than five percent (5%) of its riskweighted assets (“RWA”) less the aggregate capital or, as the case
may be, principal amount of any outstanding TARP assistance.
Any QFI that, in applying to qualify for this program, is determined
by its primary regulators to require additional capital in order to be a
“viable” financial institution, shall be required to receive capital
(“Private Capital”) from one or more private, non-government
investors prior to or concurrently with any purchase of CDCI Senior
Preferred by UST, such that the sum of the Private Capital and the
amount of CDCI Senior Preferred issued to such QFI under this
program shall be sufficient to establish the QFI’s “viability” on a
pro-forma basis. Such QFI receiving Private Capital shall only be
eligible to issue CDCI Senior Preferred in an aggregate amount
equal to, on a dollar-for-dollar basis, the amount of Private Capital it
received; provided that the amount of CDCI Senior Preferred issued
shall not be greater than five percent (5%) of RWA less the
aggregate capital or, as the case may be, principal amount of any
outstanding TARP assistance; provided further that any Private
Capital shall be subordinate to the CDCI Senior Preferred, on terms
satisfactory to UST.
QFIs currently participating in the UST Capital Purchase Program
(“CPP”) that issued preferred stock to UST may apply to exchange
the entirety of their existing CPP preferred stock for CDCI Senior
Preferred as set forth herein.1 Additionally, such QFIs may, but
shall not be required to, apply to issue CDCI Senior Preferred to
UST in an aggregate capital amount up to the positive difference, if
any, between (i) five percent (5%) of its RWA and (ii) the aggregate
liquidation preference of any outstanding (x) preferred stock issued
under CPP and (y) CDCI Senior Preferred; provided, however, with
respect to either an exchange or new issuance, (i) the QFI has not
breached any representation, warranty or covenant set forth in the
documents governing the CPP preferred stock or its sale to UST; and
(ii) the QFI has paid to UST all accrued dividends then due on the
CPP preferred stock.
RWA, for purposes hereunder, shall be as of the most recent fiscal
quarter ended.

1

Applications for exchanges of CPP preferred stock for CDCI Senior Preferred shall be made on a different
application form than applications for new issuances of CDCI Senior Preferred. Applications solely to exchange
CPP preferred stock for CDCI Senior Preferred shall not be required to be reviewed by the primary regulators of the
applying QFI.

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Ranking:

Senior to common stock and pari passu with existing or future
authorized or issued preferred shares but senior to preferred shares
which by their terms rank junior to any existing or future authorized
or issued preferred shares.

Regulatory Capital
Status:

Tier 1.

Term:

Perpetual.

Dividend Rate:

Two percent (2%) per annum until the eighth (8th) anniversary of the
closing date of this investment and thereafter at a rate of nine percent
(9%) per annum.
Dividends shall be payable quarterly in arrears on February 15, May
15, August 15 and November 15 of each year. Dividends shall be
computed on the basis of a 360-day year consisting of twelve 30-day
months.

Dividend Form:

For each QFI that is a BHC or SLHC, the CDCI Senior Preferred
shall pay cumulative dividends. For each QFI that is not a BHC or
SLHC, the CDCI Senior Preferred shall pay non-cumulative
dividends.

Redemption:

The CDCI Senior Preferred may be redeemed, in whole or in part, at
any time and from time to time, at the option of the QFI, subject to
the approval of the QFI’s primary federal bank regulator. All
redemptions of the CDCI Senior Preferred shall be at 100% of its
liquidation preference, plus (i) in the case of cumulative CDCI
Senior Preferred, any accrued and unpaid dividends and (ii) in the
case of noncumulative CDCI Senior Preferred, accrued and unpaid
dividends for the then current dividend period (regardless of whether
any dividends are actually declared for such dividend period).

Restrictions on
Dividends and
Repurchases:

For as long as any CDCI Senior Preferred is outstanding, no
dividends may be declared or paid on junior preferred shares,
preferred shares ranking pari passu with the CDCI Senior Preferred
(other than in the case of pari passu preferred shares, dividends
payable on a pro rata basis with the CDCI Senior Preferred), or
common shares, nor may the QFI repurchase or redeem any junior
preferred shares, preferred shares ranking pari passu with the CDCI
Senior Preferred or common shares, unless (i) in the case of
cumulative CDCI Senior Preferred, all accrued and unpaid dividends
on the CDCI Senior Preferred are paid in full or (ii) in the case of
non-cumulative CDCI Senior Preferred, the full dividend for the
latest completed dividend period shall have been declared and paid
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in full.
Additional Restrictions
on Common Dividends:

Additional Restrictions
on Repurchases:

UST’s consent shall be required for any increase in common
dividends per common share until the eighth (8th) anniversary of the
closing date of this investment; unless prior to such date the CDCI
Senior Preferred (i) is redeemed in whole or (ii) no longer held by
UST or any of its affiliates.
UST’s consent shall be required for any share repurchases (other
than (i) repurchases of the CDCI Senior Preferred and (ii)
repurchases of junior preferred shares or common shares in
connection with any benefit plan in the ordinary course of business
consistent with past practice) until the eighth (8th) anniversary of the
closing date of this investment; unless prior to such date the CDCI
Senior Preferred is (x) redeemed in whole or (y) no longer held by
UST or any of its affiliates. These restrictions are in addition to the
restrictions on share repurchases of junior preferred shares, preferred
shares ranking pari passu with the CDCI Senior Preferred, or
common shares set forth above under “Restrictions on Dividends
and Repurchases.”

Voting rights:

The CDCI Senior Preferred shall be non-voting, other than class
voting rights on (i) any authorization or issuance of capital shares
ranking senior to the CDCI Senior Preferred, (ii) any amendment to
the rights of CDCI Senior Preferred, or (iii) any merger, exchange,
dissolution or similar transaction which would adversely affect the
rights of the CDCI Senior Preferred. If dividends payable on the
CDCI Senior Preferred are not paid in full for six (6) dividend
periods, whether or not consecutive, the holders of the CDCI Senior
Preferred will have the right to elect two (2) directors. The right to
elect directors will end when dividends have been paid in full for
four (4) consecutive dividend periods.

Transferability:

The CDCI Senior Preferred shall not be subject to any contractual
restrictions on transfer.

CDFI Covenants:

Each QFI shall covenant that (i) the Fund has not withdrawn or
qualified its certification that such QFI meets the requirements of 12
C.F.R. 1805.201(b)(1)-(6), (ii) its primary mission is promoting
community development, as may be determined by UST from time
to time based on the criteria set forth in 12 C.F.R. 1805.201(b)(1),
(iii) its predominant business activity is the provision, in arms-length
transactions, of “Financial Products”, “Development Services”
and/or other similar financing, (iv) it serves a “Target Market” by
serving one or more “Investment Areas” and/or “Targeted
Populations” as may be determined by UST from time to time
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substantially in the manner set forth in 12 C.F.R. 1805.201(b)(3), (v)
it directly, through an affiliate, or through a contract with another
provider, provides “Development Services” in conjunction with its
“Financial Products”, (vi) it maintains accountability to residents of
its “Investment Area(s)” or “Targeted Population(s)” through
representation on its governing board or directors or otherwise and
(vii) it is not an agency or instrumentality of the United States, or
any State or political subdivision thereof, as described in 12 C.F.R.
1805.201(b)(6). The terms “Financial Products”, “Development
Services”, “Target Market”, “Investment Areas” and “Targeted
Populations” are used herein in the same manner as such terms are
used in 12 C.F.R. 105.201(b).
Each QFI shall also deliver to UST (x) on the date that is 180 days
after the closing date of this investment, and (y) annually at the end
of each fiscal year of such QFI (i) reports and other documents
sufficient to evidence such QFI’s status as a CDFI including
documentation evidencing its ongoing compliance with the Fund’s
requirements for CDFIs and (ii) a certification that such QFI remains
in compliance with the foregoing covenants. Additionally, each QFI
shall be required to notify UST immediately of any breach of the
foregoing covenants.
Remedies for breaches of the foregoing covenants shall be set forth
in the definitive documentation for the CDCI Senior Preferred.
Access and
Information:

So long as UST or any of its affiliates holds CDCI Senior Preferred
having a liquidation preference of at least ten percent (10%) of its
initial investment, each QFI shall permit UST to (x) examine its
corporate books and make copies thereof and to discuss the affairs,
finances and accounts of such QFI with the principal officers of such
QFI upon reasonable notice and at such times as UST may
reasonably request and (y) review any information material to UST’s
investment provided by such QFI to its regulators.
At any time that any CDCI Senior Preferred is outstanding, each QFI
shall deliver to UST (i) annually at the end of each fiscal year of
such QFI, an audited (to the extent available) consolidated balance
sheet of such QFI as of such fiscal year, and audited consolidated
statements of income, retained earnings and cash flows of such QFI
for such year, prepared in accordance with GAAP and setting forth
in each case in comparative form the figures for the previous fiscal
year; and (ii) copies of any quarterly reports provided to other equity
holders of such QFI or the QFI’s management. Additionally, to the
extent a QFI receives an assessment on its internal controls from its
auditors at any time in the ordinary course of its business during any
period in which UST or any of its affiliates holds CDCI Senior
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Preferred, a copy of such assessment shall also be delivered to UST.
On an annual basis during any period in which UST or any of its
affiliates holds CDCI Senior Preferred, each QFI shall be required to
complete and deliver to UST a survey, in a form specified by UST,
describing, among other things, how it has utilized the capital it
received in connection with the issuance of the CDCI Senior
Preferred and the effects of such capital on the operations and status
of the QFI.
Transparency,
Executive
Compensation and
Employ American
Workers Act:

Each QFI and its subsidiaries shall take all necessary action to
ensure that it and its executive officers, respectively, are in
compliance with (i) all UST guidelines regarding transparency,
reporting and monitoring; (ii) Section 111 of the EESA, as
implemented by the TARP Standards for Compensation and
Corporate Governance set forth in 31 C.F.R. Part 30; (iii) the
provisions of the Employ American Workers Act (Section 1611 of
Division A, Title XVI of the American Recovery and Reinvestment
Act of 2009), Public Law No. 111-5, effective as of February 17,
2009; and (iv), in the case of (ii) and (iii), all rules, regulations and
guidance issued thereunder.

Affiliate Transactions:

For as long as UST or any of its affiliates holds any debt or equity
securities (including the CDCI Senior Preferred) of the QFI, the QFI
and its subsidiaries will not enter into a transaction with related
persons (within the meaning of Item 404 under the SEC’s
Regulation S-K) unless such transaction is (i) on terms no less
favorable to the QFI and its subsidiaries than could be obtained from
an unaffiliated third party, and (ii) has been approved by the audit
committee or a comparable body of independent directors of the
QFI, or if there are no “independent directors,” the board of directors
of the QFI but only if the board of directors maintains written
documentation supporting its determination that the transaction
meets the requirements of (i) of this paragraph.

Warrant:

Subject to the requirements of Section 113(d)(3)(A) of the
Emergency Economic Stabilization Act, QFIs participating in this
program shall not be required to issue warrants to UST.

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