FORBEARANCE AGREEMENT

Exhibit 10.2

FORBEARANCE AGREEMENT

This Forbearance Agreement (this “ Agreement ”) is dated as of August 14, 2009 by and among National Consumer Cooperative Bank, D/B/A National Cooperative Bank (“ Borrower ”), SunTrust Bank, as administrative agent (in such capacity, “ Administrative Agent ”), and the Banks (as defined below) signatory hereto.

W I T N E S S E T H:

WHEREAS , pursuant to that certain Credit Agreement, dated as of May 1, 2006 (as amended, restated, supplemented, or otherwise modified from time to time, the “ Credit Agreement ”), by and among Borrower, Administrative Agent, PNC Bank, National Association and Wachovia Bank, National Association, as co-syndication agents (“ Syndication Agents ”), Calyon New York Branch and Union Bank of California, N.A., as co-documentation agents (“ Documentation Agents ”), SunTrust Capital Markets, Inc., as lead arranger and book manager (“ Arranger ”; Administrative Agent, Syndication Agents, Documentation Agents and Arranger are each an “ Agent ” and are, collectively, the “ Agents ”), and the lenders party thereto from time to time (collectively, “ Banks ”), Banks have made certain loans and financial accommodations to Borrower;

WHEREAS, Borrower has notified Administrative Agent that certain Defaults and Events of Default have occurred and are continuing under the Credit Agreement as a result of (a) Borrower’s failure to maintain (i) the ratio of Consolidated Earnings Available for Fixed Charge to Consolidated Fixed Charges as required under Section 6.9(b) of the Credit Agreement for the period ended June 30, 2009, (ii) the ratio of Consolidated Debt to Consolidated Adjusted Net Worth as required under Section 6.9(c) of the Credit Agreement for the period ended June 30, 2009, (iii) the ratio of Nonperforming Assets to Total Loans as required under Section 6.9(e) of the Credit Agreement for the period ended May 31, 2009 and (iv) the Return on Average Assets as required under Section 6.9(g) of the Credit Agreement as of June 30, 2009, (b) Events of Default under Section 8.5 of the Credit Agreement with respect to Borrower’s failure to perform its obligations under the Senior Note Agreement, and (c) Borrower’s failure to promptly notify Administrative Agent in writing of the foregoing pursuant to Section 6.7(a) of the Credit Agreement (collectively, the “ Existing Events of Default ”). No other Default or Event of Default is, or shall be deemed to be, an Existing Event of Default;

WHEREAS, Borrower has requested that Administrative Agent and Banks forbear from exercising remedies with respect to the Existing Events of Default as set forth herein; and

WHEREAS, on and subject to the terms and conditions set forth herein, Administrative Agent and Banks have agreed to forbear from exercising remedies with respect to the Existing Events of Default.

NOW, THEREFORE, in consideration of the premises set forth above, the terms and conditions contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

1.  Capitalized Terms . Each capitalized term used but not defined herein shall have the meaning ascribed to such term in the Credit Agreement.

2.  Events of Default and Forbearance . Administrative Agent and Banks hereby agree as of the Effective Date (defined below) to forbear from exercising the Enforcement Actions (defined below) solely with respect to the Existing Events of Default until the earliest to occur of any of the following (each, a “ Termination Event ”): (a) the occurrence of a breach or default under this Agreement; (b) the occurrence of a Default or Event of Default that does not constitute an Existing Event of Default; (c) the acceleration of all or any part of the Indebtedness outstanding under the Senior Notes or the Senior Note Agreement, any enforcement action with respect to the Senior Notes or upon payment by Borrower of any principal under the Senior Notes; (d) termination or amendment of any forbearance agreement entered into with the requisite holders of the Senior Notes or any other failure of any such agreement to continue to be in full force and effect; and (e) November 16 ,  2009 (the earliest date of occurrence of any Termination Event, the “ Forbearance Termination Date ”). The time period from the Effective Date to the Forbearance Termination Date is the “ Forbearance Period .” Borrower acknowledges and agrees that upon the Forbearance Termination Date, the forbearance provided under this Section 2 shall terminate and Administrative Agent and Banks shall have the right to exercise any and all rights and remedies to the extent provided under Article 8 of the Credit Agreement or otherwise under the Loan Documents or under applicable law or at equity (collectively, the “ Enforcement Actions ”) due to the Existing Events of Default or any other Event of Default that has occurred and is continuing. Borrower hereby further acknowledges and agrees that from and after the Forbearance Termination Date, Administrative Agent and Banks shall be under no obligation of any kind whatsoever to forbear from exercising any remedies on account of the Existing Events of Default or any other Event of Default (whether similar or dissimilar to the Existing Events of Default).

Borrower hereby further acknowledges and agrees that during the Forbearance Period, Administrative Agent and Banks have no obligation to make any Loans to, or on behalf of, Borrower. The foregoing notwithstanding, if and to the extent that Administrative Agent or any Bank continue to make Revolving Loans, notwithstanding the occurrence of any Default or Event of Default, whether the Existing Events of Default or otherwise, (a) such Revolving Loans shall be made, issued, caused to be issued, or executed, as applicable, in Administrative Agent’s and such Bank’s sole and absolute discretion, and (b) no such action shall be construed as (i) a waiver or forbearance of any of Administrative Agent’s and Banks’ rights, remedies, and powers against Borrower, NCBFC or the Collateral (including, without limitation, the right to terminate without notice, the making of Revolving Loans) or (ii) a waiver of any such Default or Event of Default or the Existing Events of Default.

3.  Forbearance Covenants by Borrower . As a material inducement to the execution by Administrative Agent and the undersigned Banks of this Agreement, each Borrower hereby agrees that it shall comply with each of the following covenants and that the failure to comply with any of such covenants shall constitute an immediate default under this Agreement and an immediate Event of Default under the Credit Agreement, which shall not be a Existing Event of Default, and shall result in the immediate termination of the forbearance by Banks as provided under Section 2 of this Agreement:

(a) Borrower shall maintain a minimum Cash balance of $60 million at all times during the Forbearance Period, unless otherwise consented to in writing by Majority Banks;

(b) At all times during the Forbearance Period, Borrower shall maintain a ratio of Nonperforming Assets of Borrower and its Subsidiaries to Total Loans (excluding letters of credit) of not greater than 0.075:1.0;

(c) as soon as available, but not later than 30 days following the Effective Date, a runoff analysis of Borrower’s loan portfolio updated as of July 31, 2009, including projections to and through the date the Loans are paid in full;

(d) Commencing by 4:00 p.m. (Eastern time) on August 19, 2009 and by 4:00 p.m. (Eastern time) each Wednesday thereafter, Borrower shall deliver to Administrative Agent, or its designated advisors, a Cash balance report as of close of business (Eastern time) on Friday of the previous week;

(e) Commencing by 4:00 p.m. (Eastern time) on August 21, 2009 and by 4:00 p.m. (Eastern time) each Friday thereafter, Borrower shall deliver to Administrative Agent, or its designated advisors, a 13-week rolling cash flow forecast together with a detailed variance report with respect to the previous 13-week rolling cash flow forecast delivered, which shall be in the form attached hereto as Exhibit A ;

(f) on the day that is 30 days following the end of each calendar month, draft monthly financial statements including balance sheets, statements of income and statements of shareholders equity, and on the date that is 45 days following the end of each calendar month, final copies of such monthly financial statements;

(g) Borrower shall prepare and deliver to each of Administrative Agent and Banks, in form and detail reasonably satisfactory to Banks, such additional information (including information provided by Borrower to its other creditors) regarding the assets, liabilities, business and financial condition of Borrower, NCBFC and their respective subsidiaries (and projections relating thereto) as shall be reasonably requested by Administrative Agent or Banks;

(h) On or before September 15, 2009, Borrower shall deliver to Administrative Agent, or its designated advisors, a plan of restructuring, which shall include, but shall not be limited to, liquidity projections and needs, proposed designations and timing of asset dispositions, and any projected capital raises (the “ Restructuring Plan ”);

(i) On or before September 18, 2009 (but following the delivery of the Restructuring Plan), Borrower shall meet with Administrative Agent and Banks to discuss the Restructuring Plan;

(j) During the Forbearance Period, Borrower (i) shall not make any voluntary capital contribution to the Thrift (whether directly or through NCBFC) without the prior written consent of Majority Banks and (ii) shall, notwithstanding the limitation in Section 7.9(xiii) of the Credit Agreement or 5M of the Senior Note Agreement, be permitted to make a capital contribution expressly requested by the Office of Thrift Supervision or other Governmental Authority to the Thrift (whether directly or through NCBFC) in an aggregate amount up to $10 million without the prior written consent of Majority Banks; provided that Borrower remains in compliance with Section 3(a) above;

(k) During the Forbearance Period, Borrower shall not open any new depository account, securities account or investment account unless such account shall be maintained at one or more of the Banks;

(l) Within thirty (30) days of the Effective Date, Borrower will enter into account control agreements among the Collateral Agent (as defined in the Intercreditor Agreement), Borrower and the applicable depository institution, in form and substance reasonably satisfactory to the Collateral Agent, with respect to each of Borrower’s deposit accounts, investment accounts and securities accounts (in each case, except with respect to Excluded Accounts (as defined in the Security Agreement)) held at any bank or financial institution other than Banks.

(m) Borrower shall allow full access to its books and records, inspection of its facilities and access to its officers, employees, independent certified public accountants, pursuant to and consistent with Section 6.2 of the Credit Agreement for Administrative Agent, Banks and their advisors, it being understood that Borrower and/or its financial advisor shall have the opportunity to be present for any discussions with the independent certified public accountants.

4.  Acknowledgements .

(a)  Acknowledgement of Obligations . Borrower hereby acknowledges, confirms and agrees that as of the close of business on August 12, 2009, Borrower was indebted to Administrative Agent and Banks for Loans and other financial accommodations under the Loan Documents in the following principal amounts:

All such obligations under the Credit Agreement owing by Borrower together with interest accrued and accruing thereon, and all fees, costs, expenses and other charges now or hereafter payable by Borrower to Administrative Agent and each Bank, are unconditionally owing by Borrower to each Bank, without offset, defense or counterclaim of any kind, nature or description whatsoever.

(b)  Acknowledgement of Payment of Costs and Fees . Borrower hereby acknowledges, confirms and agrees that Borrower shall pay to Administrative Agent and each Bank all reasonable and documented costs, fees, expenses and charges of every kind in connection with the preparation, negotiation, execution and delivery of this Agreement and any documents and instruments relating hereto.

(c)  Acknowledgement of Security Interests . Borrower hereby acknowledges, confirms and agrees that Collateral Agent, for itself and the benefit of the Secured Creditors (as defined in the Security Agreement), has and shall continue to have valid, enforceable and perfected first-priority liens (subject to Permitted Liens and Liens permitted pursuant to Section 7.2 of the Credit Agreement) upon and security interests in the Collateral granted to Collateral Agent, for itself and the benefit of the Banks, pursuant to the Loan Documents or otherwise granted to or held by Collateral Agent, for itself and the benefit of the Secured Creditors (as defined in the Security Agreement).

(d)  Acknowledgment of No Bank Obligations . Borrower hereby acknowledges, confirms and agrees that as a result of the Existing Events of Default, Administrative Agent and Banks have no obligations to make, issue or otherwise provide any Loans or other financial accommodations to Borrower.

(e)  Acknowledgment of Interest Rates . Borrower hereby acknowledges, confirms and agrees that as a result of the Existing Events of Default (i) upon expiration of the applicable Interest Period in effect for any LIBOR Loans, such LIBOR Loans shall become Base Rate Loans, (ii) no Base Rate Loans may be converted into LIBOR Loans and (iii) Section 8(a) below shall be applicable with respect to all Base Rate Loans.

(f)  Binding Effect of Documents . Borrower hereby acknowledges, confirms and agrees that: (i) each of the Loan Documents to which it is a party has been duly executed and delivered to Administrative Agent and Banks thereto by Borrower, and each is in full force and effect as of the Forbearance Effective Date (except to the extent set forth therein), (ii) the agreements and obligations of Borrower contained in the Loan Documents and in this Agreement constitute the legal, valid and binding obligations of Borrower, enforceable against Borrower in accordance with their respective terms, and Borrower has no valid defense to the enforcement of the obligations under the Credit Agreement, except as may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, or other similar laws, now or hereafter in effect, relating to or affecting creditor rights and subject to equitable principles and (iii) Administrative Agent and each Bank are and shall be entitled to the rights, remedies and benefits provided for in the Loan Documents and under applicable law or at equity.

5.  Representations and Warranties . Borrowe