JPMorgan Chase (JPM) increased its bid for troubled investment bank Bear Stearns (BSC) by fivefold on Monday, a week and a day after JPMorgan said $2 a share was its final offer.

According to the terms of the new deal, JPMorgan will buy Bear Stearns for $10 a share.

Also, JPMorgan will purchase 95 million newly-issued shares, representing 39.5% of Bear Stearns stock, in the next couple weeks in order to bypass shareholder approval. The share purchase is expected to be completed around April 8.

Under Delaware state law, where both banks are incorporated, JPMorgan can purchase up to 39.5% of Bear without shareholder approval. This provides JPMorgan the leverage it needs to take over Bear Stearns without having to get a significant shareholder approval - providing some form of finality to this deal.

"We believe the amended terms are fair to all sides and reflect the value and risks of the Bear Stearns franchise," said JPMorgan Chief Executive Jaime Dimon in a release. He also said the deal will "bring more certainty for our respective shareholders, clients and the marketplace. We look forward to a prompt closing and being able to operate as one company."

The $10 a share price values Bear at approximately $1.2 billion, which is still significantly down from the company's value only 10 days ago.

Usually shareholder approval is needed for this 39.5% move, but the New York Stock Exchange granted an exception to both Bear and JPMorgan, that allows this bypass to occur when "securing shareholder approval for the issuance would seriously  jeopardize the financial viability of the listed company," according to JPMorgan.

With this 39.5% stake, JPMorgan needs only 10.6% more of the shares in order to get approval for the merger. That may not be difficult for JPMorgan.

According to various news outlets, Bear Stearns' board of directors, who own approximately 5% of the firm, will vote in favor of the deal. That leaves only 5.6% of the shares needing to vote in favor of the deal.

The increase in JPMorgan’s bid comes to little surprise for both analysts and Wall Street. Bear shares traded at nearly triple JPMorgan’s $2 a bid all last week on speculation that JPMorgan’s offer was artificially low.

The $10 bid is a play to help sweeten the offer to Bear shareholders-- who have seen the value of their shares vanish in less than 10 days. There has been significant resistance to JPMorgan’s offer from both major stakeholders like British billionaire Joseph Lewis, who owns an 8.4% stake, and Bear Stearns employees, who owns one-third of the company.

"Our Board of Directors believes that the amended terms provide both significantly greater value to our shareholders, many of whom are Bear Stearns employees, and enhanced coverage and certainty for our customers, counterparties, and lenders," said Bear Stearns CEO Alan Schwartz in a statement.

Despite the $10 a share offer, Bear Stearns shares surged past that amount. Bear shares rose to $12 in early trading on the New York Stock Exchange--a possible sign that traders and investors still believe that JPMorgan's offer is still too low. It could also be short covering, when traders who are betting that a stock's price will go down and have to repurchase shares to cover their positions.

“The whole thing is absolutely bizarre….One has to really wonder what will the ultimate price really be for Bear Stearns," Ted Weisberg of Seaport Securities told FOX Business.

The special financing agreement between the two companies has also been altered. The Federal Reserve will now provide $30 billion in financing for the transaction, but JPMorgan will only take on $1 billion of any losses that may come from their acquisition of Bear.

"This action is being taken by the Federal Reserve, with the support of the Treasury Department, to bolster market liquidity and promote orderly market functioning," the New York Federal Reserve said in a statement.

Standard & Poor's upgraded Bear Stearns long-term credit rating on Monday from "A-" to "AA-," saying that the $10 a share deal guarantees all of Bear's debt under JPMorgan's umbrella. S&P expects the deal to close in mid-May.

Bear Stearn's collapse came suddenly and quite painfully for both the bank and its shareholders. 

Starting March 10, rumors swirled through the market that Bear was having liquidity issues. Those rumors quickly became fact, causing a classic "run on the bank" at Bear. These rumors and depositors pulling funds forced Bear into the arms of JPMorgan that following Friday on March 14. It was widely suspected that Bear would not survive the weekend, which it didn't. JPMorgan offered $2 a share for Bear last weekend.