Common use of Negative Covenants of Target Clause in Contracts

Negative Covenants of Target. From the date of this ---------------------------- Agreement until the earlier of the Effective Time or the termination of this Agreement, TARGET covenants and agrees that it will not do or agree or commit to do, or permit any of its Subsidiaries to do or agree or commit to do, any of the following without the prior written consent of the chief executive officer or chief financial officer of PURCHASER, which consent shall not be unreasonably withheld or delayed: (a) amend the Articles of Incorporation, Bylaws or other governing instruments of any TARGET Company; or (b) incur any additional debt obligation or other obligation for borrowed money (other than indebtedness of a TARGET Company to another TARGET Company) (for the TARGET Companies on a consolidated basis) except in the ordinary course of the business of TARGET Companies consistent with past practices (which shall include, for TARGET Subsidiaries that are depository institutions, creation of deposit liabilities, purchases of federal funds, receipt of Federal Home Loan Bank advances, and entry into repurchase agreements fully secured by U.S. government or agency securities), or impose, or suffer the imposition, on any share of stock held by any TARGET Company of any Lien or permit any such Lien to exist; or (c) repurchase, redeem or otherwise acquire or exchange (other than exchanges in the ordinary course under employee benefit plans), directly or indirectly, any shares, or any securities convertible into any shares, of the capital stock of any TARGET Company, or declare or pay any dividend or make any other distribution in respect of TARGET's capital stock; provided, however, that -------- ------- TARGET may declare and pay a dividend in cash to the TARGET shareholders during the second calendar quarter of 2001 in an amount in the aggregate equal to the lesser of (i) the net income of TARGET for the first calendar quarter of 2001, and (ii) the aggregate dividend paid to the TARGET shareholders during calendar year 2000; or (d) except for this Agreement, or pursuant to the exercise of stock options outstanding as of the date hereof and pursuant to the terms thereof in existence on the date hereof, or as Previously Disclosed, issue, sell, pledge, encumber, authorize the issuance of or enter into any Contract to issue, sell, pledge, encumber or authorize the issuance of or otherwise permit to become outstanding, any additional shares of TARGET Common Stock or any other capital stock of any TARGET Company, or any stock appreciation rights, or any option, warrant, conversion or other right to acquire any such stock, or any security convertible into any such stock; or (e) adjust, split, combine or reclassify any capital stock of any TARGET Company or issue or authorize the issuance of any other securities in respect of or in substitution for shares of TARGET Common Stock or sell, lease, mortgage or otherwise dispose of or otherwise encumber (i) any shares of capital stock of any TARGET Subsidiary (unless any such shares of stock are sold or otherwise transferred to another TARGET Company) or (ii) any Asset having a book value in excess of $50,000 other than in the ordinary course of business for reasonable and adequate consideration; or (f) acquire direct or indirect control over any Person, other than in connection with (i) internal reorganizations or consolidations involving existing Subsidiaries, (ii) foreclosures in the ordinary course of business, or (iii) acquisitions of control by a depository institution Subsidiary in its fiduciary capacity; or (g) grant any increase in compensation or benefits to the employees or officers of any TARGET Company (including such discretionary increases as may be contemplated by existing employment agreements), except in accordance with past practice Previously Disclosed or as required by Law; pay any bonus except to employees in accordance with past practice Previously Disclosed or the provisions of any applicable program or plan adopted by its Board of Directors prior to the date of this Agreement; enter into or amend any severance agreements with officers of any TARGET Company; or pay any bonus to, or grant any increase in fees or other increases in compensation or other benefits to, directors of any TARGET Company; or (h) enter into or amend any employment Contract between any TARGET Company and any Person (unless such amendment is required by Law) that the TARGET Company does not have the unconditional right to terminate without Liability (other than Liability for services already rendered), at any time on or after the Effective Time; or (i) adopt any new employee benefit plan of any TARGET Company or make any material change in or to any existing employee benefit plans of any TARGET Company other than any such change that is required by Law or that, in the opinion of counsel, is necessary or advisable to maintain the tax qualified status of any such plan; or (j) make any significant change in any accounting methods or systems of internal accounting controls, except as may be appropriate to conform to changes in regulatory accounting requirements or GAAP; or (k) commence any Litigation other than in accordance with past practice, settle any Litigation involving any Liability of any TARGET Company for money damages in excess of $50,000 or which involves material restrictions upon the operations of any TARGET Company; or (l) except in the ordinary course of business, modify, amend or terminate any material Contract or waive, release, compromise or assign any material rights or claims.

Negative Covenants of Target. From Except as expressly contemplated by this Agreement or otherwise consented to in writing by ACQUIROR, from the date of this ---------------------------- Agreement until the earlier Effective Date, TARGET will not do any of the Effective Time following: (a) Increase the compensation payable to or to become payable to any director, officer or employee earning more than $75,000 or being increased to more than $75,000, provided, however, that TARGET may increase the compensation of any employee consistent with TARGET's customary annual salary increase practices which, in any event, shall not exceed 10% of an employee's salary and provided further that TARGET and ACQUIROR shall consult and mutually agree upon any transition bonuses; grant any severance or termination pay (other than pursuant to the normal severance policy of TARGET as in effect on the date of this Agreement, TARGET covenants and agrees that it will not do or agree or commit to do) to, or permit enter into any of its Subsidiaries to do employment or agree or commit to doseverance agreement with, any of director, officer or employee other than employment agreements entered into with the following without the prior written consent of the chief executive officer or chief financial officer of PURCHASER, ACQUIROR (which consent shall not be unreasonably withheld withheld); or delayed: (a) establish, adopt, enter into or amend the Articles of Incorporation, Bylaws any employee benefit plan or other governing instruments of any TARGET Company; orarrangement except as may be required by applicable Law; (b) incur any additional debt obligation or other obligation for borrowed money (other than indebtedness of a TARGET Company to another TARGET Company) (for the TARGET Companies on a consolidated basis) except in the ordinary course of the business of TARGET Companies consistent with past practices (which shall include, for TARGET Subsidiaries that are depository institutions, creation of deposit liabilities, purchases of federal funds, receipt of Federal Home Loan Bank advances, and entry into repurchase agreements fully secured by U.S. government or agency securities), or impose, or suffer the imposition, on any share of stock held by any TARGET Company of any Lien or permit any such Lien to exist; or (c) repurchase, redeem or otherwise acquire or exchange (other than exchanges in the ordinary course under employee benefit plans), directly or indirectly, any shares, or any securities convertible into any shares, of the capital stock of any TARGET Company, or declare Declare or pay any dividend on, or make any other distribution (however characterized) in respect of, outstanding shares of TARGET's its capital stock; provided, however, that -------- ------- TARGET may declare and pay a dividend in cash to the TARGET shareholders during the second calendar quarter of 2001 in an amount in the aggregate equal to the lesser of (i) the net income of TARGET for the first calendar quarter of 2001, and (ii) the aggregate dividend paid to the TARGET shareholders during calendar year 2000; or; (dc) except Redeem, purchase or otherwise acquire any shares of its capital stock or equity interest or any securities or obligations convertible into or exchangeable for this Agreementany shares of its capital stock or equity interest, or pursuant any options, warrants or conversion or other rights to acquire any shares of its' capital stock or any such securities or obligations (except in connection with the exercise of outstanding stock options outstanding as or stock purchase warrants referred to herein, in accordance with their terms or, in connection with the conversion of the date hereof and pursuant to the terms thereof convertible debentures, in existence on the date hereof, accordance with their terms); effect any reorganization or as Previously Disclosed, issue, sell, pledge, encumber, authorize the issuance of recapitalization; or enter into any Contract to issue, sell, pledge, encumber or authorize the issuance of or otherwise permit to become outstanding, any additional shares of TARGET Common Stock or any other capital stock of any TARGET Company, or any stock appreciation rights, or any option, warrant, conversion or other right to acquire any such stock, or any security convertible into any such stock; or (e) adjust, split, combine or reclassify any of its capital stock of any TARGET Company or issue or authorize or propose the issuance of any other securities in respect of, in lieu of or in substitution for for, shares of TARGET Common Stock its' capital stock; (d) Issue, deliver, award, grant or sell, leaseor authorize or propose the issuance, mortgage delivery, award, grant or otherwise dispose sale (including the grant of any security interests, liens, claims, pledges, limitations in voting rights, charges or otherwise encumber (iother encumbrances) of, any shares of any class of its capital stock or other securities (including shares held in treasury); (e) Acquire or agree to acquire, by merging or consolidating with, by purchasing an equity interest in or a portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division (other than a wholly-owned subsidiary) thereof, or otherwise acquire or agree to acquire any assets of any TARGET Subsidiary other person (unless any such shares of stock are sold or otherwise transferred to another TARGET Company) or (ii) any Asset having a book value in excess of $50,000 other than the purchase of assets from suppliers or vendors in the ordinary course of business for reasonable and adequate consideration; orconsistent with past practice) in each case which are material to it; (f) acquire direct Sell, lease, exchange, mortgage, pledge, transfer or indirect control over otherwise dispose of, or agree to sell, lease, exchange, mortgage, pledge, transfer or otherwise dispose of, any Personof its assets outside of the ordinary course of business; (g) Propose or adopt any amendments to its Certificate of Incorporation or By-Laws, other than except as otherwise provided in connection with Section 7.2(g) of TARGET's Disclosure Schedule; (h) Change any of its methods of accounting in effect, or make or rescind any express or deemed election relating to taxes, settle or compromise any claim, action, suit, litigation, proceeding, arbitration, investigation, audit or controversy relating to Taxes (except where the amount of such settlements or controversies, individually or in the aggregate, does not exceed $50,000), or change any of its methods of reporting income or deductions for federal income tax purposes from those employed in the preparation of the federal income tax returns for the taxable year ended 1999, except as may be required by Law or generally accepted accounting principles; (i) internal reorganizations Except as set forth in Section 7.2(i) of the TARGET Disclosure Schedule, incur any obligation for borrowed money or consolidations involving existing Subsidiariespurchase money indebtedness, (ii) foreclosures whether or not evidenced by a note, bond, debenture or similar instrument, except obligations arising from establishment of a line of credit and borrowings under such line of credit or similar arrangement not in excess of $50,000; or in the ordinary course of business, or (iii) acquisitions of control by a depository institution Subsidiary in its fiduciary capacity; or (g) grant any increase in compensation or benefits to the employees or officers of any TARGET Company (including such discretionary increases as may be contemplated by existing employment agreements), except in accordance business consistent with past practice Previously Disclosed or as required by Law; pay any bonus except to employees and not in accordance with past practice Previously Disclosed or the provisions excess of any applicable program or plan adopted by its Board of Directors prior to the date of this Agreement; enter into or amend any severance agreements with officers of any TARGET Company; or pay any bonus to, or grant any increase in fees or other increases in compensation or other benefits to, directors of any TARGET Company; or (h) enter into or amend any employment Contract between any TARGET Company and any Person (unless such amendment is required by Law) that the TARGET Company does not have the unconditional right to terminate without Liability (other than Liability for services already rendered), at any time on or after the Effective Time; or (i) adopt any new employee benefit plan of any TARGET Company or make any material change in or to any existing employee benefit plans of any TARGET Company other than any such change that is required by Law or that, $100,000 in the opinion of counsel, is necessary or advisable to maintain the tax qualified status of any such plan; oraggregate; (j) make Enter into any significant change in material arrangement, agreement or contract with any accounting methods third party, which provides for an exclusive arrangement with that third party or systems of internal accounting controlsis substantially more restrictive on TARGET, except as may be appropriate or substantially less advantageous to conform to changes in regulatory accounting requirements TARGET, than arrangements, agreements or GAAP; orcontracts existing on the date hereof; (k) commence Amend any Litigation other than of the material terms or provisions of its capital stock; (l) Except as set forth in accordance with past practiceSection 7.2(l) of the TARGET Disclosure Schedule, settle (i) make any Litigation involving any Liability of any TARGET Company for money damages capital expenditures individually in excess of $50,000 or which involves material restrictions upon in the operations aggregate in excess of any TARGET Company$100,000; or enter into or terminate (l) except in the ordinary course of businessbusiness and consistent with past practice) any lease of, modifyor purchase or sell, amend any real property; or terminate enter into any material Contract leases of personal property involving individually in excess of $50,000 annually or waive, release, compromise in the aggregate in excess of $100,000 annually; and (m) Agree in writing or assign otherwise to do any material rights or claimsof the foregoing.

Negative Covenants of Target. From the date of this ---------------------------- Agreement until the earlier of the Effective Time or the termination of this Agreement, TARGET unless the prior written consent of Buyer shall have been obtained, and except as otherwise expressly contemplated herein or as set forth in Section 6.2 of Target’s Disclosure Memorandum, Target covenants and agrees that it will not do or agree or commit to do, or permit any of its Subsidiaries to do or agree or commit to do, any of the following without the prior written consent of the chief executive officer or chief financial officer of PURCHASER, which consent shall not be unreasonably withheld or delayedfollowing: (a) amend the Articles of Incorporation, Bylaws or other governing instruments of any TARGET Company; orTarget Entity; (b) incur or guarantee any additional debt obligation or other obligation for borrowed money (other than indebtedness of Target or a TARGET Company wholly owned Target Subsidiary to Target or another TARGET Company) (for the TARGET Companies on a consolidated basiswholly owned Target Subsidiary) except in the ordinary course of the business of TARGET Companies consistent with past practices (which shall include, for TARGET Subsidiaries that are depository institutions, creation of deposit liabilities, purchases of federal funds, receipt of Federal Home Loan Bank advances, and entry into repurchase agreements fully secured by U.S. government or agency securities), or impose, or suffer the imposition, on any share of stock held by any TARGET Company of any Lien or permit any such Lien to exist; orpractices; (c) except for Target Common Stock to be purchased on the open market by the trust associated with the Director Plan or purchases on the open market under the Target’s 401(k) Plan, repurchase, redeem redeem, or otherwise acquire or exchange (other than exchanges in accordance with the ordinary course under employee benefit plansterms of this Agreement), directly or indirectly, any shares, or any securities convertible into or exchangeable or exercisable for any shares, of the capital stock of any TARGET CompanyTarget Entity, or declare make, declare, pay or pay set aside for payment any dividend or set any record date for or declare or make any other distribution in respect of TARGET's Target’s capital stock; provided, however, that -------- ------- TARGET may declare and pay a dividend in cash stock or other equity interests (other than with respect to the TARGET shareholders during the second calendar quarter of 2001 in an amount in the aggregate equal to the lesser of (i) the net income of TARGET for the first calendar quarter of 2001, and (ii) the aggregate dividend paid to the TARGET shareholders during calendar year 2000; orTarget Series A Preferred Stock); (d) except for this Agreement, or pursuant to the exercise of stock options or other Equity Rights outstanding as of the date hereof and pursuant to the terms thereof in existence on the date hereof, or as Previously Disclosed, (i) issue, sell, pledge, dispose of, encumber, authorize or propose the issuance of or of, enter into any Contract to issue, sell, pledge, encumber dispose of, encumber, or authorize or propose the issuance of of, or otherwise permit to become outstanding, any additional shares of TARGET Target Common Stock or any other capital stock of any TARGET CompanyTarget Entity, or any stock appreciation rights, or any option, warrant, conversion or other right to acquire any such stockEquity Right, or (ii) permit any security convertible into any such stock; oradditional shares of Target Common Stock to become subject to new grants or Equity Rights, except for issuances under Target’s dividend reinvestment plan as in effect on the date hereof; (e) directly or indirectly adjust, split, combine or reclassify any capital stock or other equity interest of any TARGET Company Target Entity or issue or authorize the issuance of any other securities in respect of or in substitution for shares of TARGET Target Common Stock Stock, or sell, transfer, lease, mortgage mortgage, permit any Lien, or otherwise dispose of of, discontinue or otherwise encumber (i) any shares of capital stock of any TARGET Subsidiary Target Entity (unless any such shares of stock are sold or otherwise transferred to another TARGET CompanyTarget or a wholly owned Target Subsidiary) or (ii) any Asset having with a book value in excess of $50,000 100,000 other than pursuant to Contracts in force at the date of the Agreement; (i) purchase any securities or make any acquisition of or investment in, either by purchase of stock or other securities or equity interests, contributions to capital, Asset transfers, purchase of any Assets (including any investments or commitments to invest in real estate or any real estate development project) or other business combination, or by formation of any joint venture or other business organization or by contributions to capital (other than by way of foreclosures or acquisitions of control in a fiduciary or similar capacity or in satisfaction of debts previously contracted in good faith, in each case in the ordinary course of business for reasonable and adequate consideration; or (f) business), any Person other than a wholly owned Target Subsidiary, or otherwise acquire direct or indirect control over any Person, other than in connection with (i) internal reorganizations ; or consolidations involving existing Subsidiaries, (ii) foreclosures in the ordinary course enter into a plan of businessconsolidation, merger, share exchange, share acquisition, reorganization or complete or partial liquidation with any Person (other than consolidations, mergers or reorganizations solely among wholly owned Target Subsidiaries), or (iii) acquisitions a letter of control by a depository institution Subsidiary intent, memorandum of understanding or agreement in its fiduciary capacity; orprinciple with respect thereto; (g) (i) grant any increase in compensation or benefits to the employees or officers of any TARGET Company (including such discretionary increases as may be contemplated by existing employment agreements)Target Entity, except (A) in accordance the case of any employee with a base salary of less than $50,000 as of the date hereof, for any increases in base salary in the ordinary course of business consistent with past practice Previously Disclosed practice, not to exceed three percent (3%) in the case of any individual employee or three percent (3%) in the aggregate for all employees, which amount shall not exceed $100,000 in the aggregate for all employees on an annualized basis, or (B) as required by Law; (ii) pay any bonus except (x) severance or termination pay or (y) any bonus, in either case other than pursuant to employees the Target Benefit Plan in accordance with past practice Previously Disclosed or effect on the provisions date hereof and in the case of (x) subject to receipt of an effective release of claims from the employee, and in the case of (y) to the extent required under the terms of the plan without the exercise of any applicable program or plan adopted by its Board of Directors prior to the date of this Agreementupward discretion; (iii) enter into or amend any severance agreements with employees or officers of any TARGET CompanyTarget Entity; or pay any bonus to, or (iv) grant any increase in fees or other increases in compensation or other benefits to, to directors of any TARGET CompanyTarget Entity except as disclosed in Section 6.2(g) of Target’s Disclosure Memorandum in the ordinary course of business consistent with past practice; oror (v) waive any stock repurchase rights, accelerate, amend or change the period of exercisability of any Equity Rights or restricted stock, or reprice Equity Rights granted under the Target Stock Plan or authorize cash payments in exchange for any Equity Rights; (h) enter into into, amend or amend renew any employment Contract between any TARGET Company Target Entity and any Person having a salary thereunder in excess of $50,000 per year (unless such amendment is required by Law) that the TARGET Company Target Entity does not have the unconditional right to terminate without Liability (other than Liability for services already rendered), at any time on or after the Effective Time; or; (i) adopt any new employee benefit plan of any TARGET Company or make any material change in or to any existing employee benefit plans of any TARGET Company other than any such change that is except as required by Law or thator, with respect to a Target ERISA Plan that is intended to be tax-qualified and in the opinion of counsel, counsel such action is necessary or advisable to maintain the tax qualified status status, (i) adopt any new Employee Benefit Plan of any Target Entity or terminate or withdraw from, or amend, any Target Benefit Plan, (ii) make any distributions from such planEmployee Benefit Plans, except as required or the terms of such plans; oror (iii) fund or in any other way secure the payment of compensation or benefits under any Target Benefit Plan; (j) make any significant change in any Tax or accounting principles, practices or methods or systems of internal accounting controls, except as may be appropriate required to conform to changes in Tax Laws or regulatory accounting requirements or GAAP; or; (k) commence any Litigation other than in accordance the ordinary course of business consistent with past practice, settle or settle, waive or release or agree or consent to the issuance of any Order in connection with any Litigation (i) involving any Liability of any TARGET Company Target Entity for money damages in excess of $50,000 100,000 or which involves material restrictions upon (ii) arising out of or relating to the operations of any TARGET Company; ortransactions contemplated hereby; (l) except in the ordinary course of business(i) enter into, renew, extend, modify, amend or terminate any (A) Contract that calls for aggregate annual payments of $100,000 or more, except in the ordinary course of business consistent with past practice, (B) Target Contract, (C) Contract referenced in Section 4.29 (or any other Contract with any broker or finder in connection with the Merger or any other transaction contemplated by this Agreement), or (D) Contract, plan, arrangement or other transaction of the type described in Section 4.30 (other than, in the case of sub-clauses (A) and (B), Contracts that can be terminated on less than 30 days’ notice with no prepayment penalty, liability or other obligation); (ii) make any material amendment or modification to any Contract described in clause (i), other than in the ordinary course of business consistent with past practice; or (iii) waive, release, compromise or assign any material rights or claimsclaims under any Contract described in clause (i); (m) enter into any new line of business or change in any material respect its lending, investment, risk and asset-liability management, interest rate or fee pricing with respect to depository accounts of any Target Entity, or other material banking or operating policies, or waive any material fees with respect thereto, except as required by Law or by rules or policies imposed by a Regulatory Authority; (n) make, or commit to make, any capital expenditures in excess of $100,000 individually or $500,000 in the aggregate; (o) except as required by Law or applicable Regulatory Authorities, make any material changes in its policies and practices with respect to (i) underwriting, pricing, originating, acquiring, selling, servicing, or buying or selling rights to service, Loans, or (ii) its hedging practices and policies; (p) cancel or release any material indebtedness owed to any Person or any claims held by any Person, except for (i) sales of Loans and sales of investment securities, in each case in the ordinary course of business consistent with past practice, or (ii) as expressly required by the terms of any Contracts in force at the date of the Agreement; (q) permit the commencement of any construction of new structures or facilities upon, or purchase or lease any real property in respect of any branch or other facility, or make any application to open, relocate or close any branch or other facility; (r) materially change its investment securities portfolio policy, or its policies with respect to the classification or reporting of such portfolios, or invest in any mortgage-backed or mortgage related securities which would be considered “high-risk” securities under applicable regulatory pronouncements; (s) except as set forth in Section 6.2(s) of Target’s Disclosure Memorandum, make, change or revoke any material Tax election, change any material method of Tax accounting, adopt or change any taxable year or period, file any amended material Tax Returns, agree to an extension or waiver of any statute of limitations with respect to the assessment or determination of Taxes, settle or compromise any material Tax liability of any Target Entity, enter into any closing agreement with respect to any material Tax or surrender any right to claim a material Tax refund; (t) take any action, or knowingly fail to take any action, which action or failure to act prevents or impedes, or could reasonably be expected to prevent or impede, the Merger from qualifying as a “reorganization” within the meaning of Section 368(a) of the Internal Revenue Code; (u) Notwithstanding any other provision hereof, knowingly take any action that is reasonably likely to result in any of the conditions set forth in Article 8 not being satisfied or materially impair its ability to perform its obligations under this Agreement or to consummate the transactions contemplated hereby, except as required by applicable Law; (v) enter into any securitizations of any Loans or create any special purpose funding or variable interest entity other than on behalf of clients; (w) foreclose upon or take a deed or title to any commercial real estate without first conducting a Phase I environmental assessment (except where such an assessment has been conducted in the preceding twelve months) of the property or foreclose upon any commercial real estate if such environmental assessment indicates the presence of hazardous material; (x) make or acquire any Loan or issue a commitment (including a letter of credit) or renew or extend an existing commitment for any Loan, or amend or modify in any material respect any Loan (including in any manner that would result in any additional extension of credit, principal forgiveness, or effect any uncompensated release of collateral, i.e., at a value below the fair market value thereof as determined by Target), except (i) new unsecured Loans not in excess of $250,000 to any Person, (ii) new secured Loans not in excess of $500,000 to a Person not a current borrower or an affiliate of a current borrower, (iii) new secured Loans not in excess of $750,000 to a Person who is a current borrower or an affiliate of a current borrower (unless such Person is a current borrower or an affiliate of a current borrower under an existing Loan rated “special mention” or worse by Buyer, as identified in Section 6.2(x) of Buyer’s Disclosure Memorandum, in which case such new secured Loan shall not be in excess of $250,000), (iv) renewals or extensions of existing Loans or commitments for any Loan not in excess of $500,000 to a Person who is a current borrower or an affiliate of a current borrower with aggregate outstanding debt of at least $1,000,000 (provided, that if such Person is a current borrower or an affiliate of a current borrower under an existing Loan rated “special mention” or worse by Buyer, as identified in Section 6.2(x) of Buyer’s Disclosure Memorandum, such renewal or extension shall not be in excess of $250,000; and provided, further, that any such renewals or extensions shall be granted on similar terms to those of the matured debt), (v) with respect to amendments or modifications that have previously been approved by Target prior to the date hereof, amend or modify in any material respect any existing Loan rated “special mention” or worse by Buyer, as identified in Section 6.2(x) of Buyer’s Disclosure Memorandum, with total credit exposure not in excess of $250,000, or (vi) with respect to any such actions that have previously been approved by Target prior to the date hereof, modify or amend any Loan in a manner that would result in any additional extension of credit, principal forgiveness, or effect any uncompensated release of collateral, i.e., at a value below the fair market value thereof as determined by Target, in each case not in excess of $100,000; or (y) agree to take, make any commitment to take, or adopt any resolutions of Target’s board of directors in support of, any of the actions prohibited by this Section 6.2.

Negative Covenants of Target. From the date of this ---------------------------- Agreement until the earlier of the Effective Time or the termination of this Agreement, TARGET unless the prior written consent of Buyer shall have been obtained (which consent shall not be unreasonably withheld, delayed or conditioned), and except as otherwise expressly contemplated herein or as Previously Disclosed, Target covenants and agrees that it will not do or agree or commit to do, or permit any of its Subsidiaries to do or agree or commit to do, any of the following without the prior written consent of the chief executive officer or chief financial officer of PURCHASER, which consent shall not be unreasonably withheld or delayedfollowing: (a) amend the Articles of Incorporation, Bylaws or other governing instruments of any TARGET Company; orTarget Entity; (b) incur or guarantee any additional debt obligation or other obligation for borrowed money (other than indebtedness of a TARGET Company Target Entity to another TARGET Company) (for the TARGET Companies on a consolidated basisTarget Entity) except in the ordinary course of the business of TARGET Companies consistent with past practices (which shall include, for TARGET Subsidiaries that are depository institutions, creation of deposit liabilities, purchases of federal funds, receipt of Federal Home Loan Bank advances, and entry into repurchase agreements fully secured by U.S. government or agency securities), or impose, or suffer the imposition, on any share of stock held by any TARGET Company of any Lien or permit any such Lien to exist; orpractices; (c) repurchase, redeem redeem, or otherwise acquire or exchange (other than exchanges in the ordinary course under employee benefit plansthe terms of a Target Benefit Plan in existence on the date hereof), directly or indirectly, any shares, or any securities convertible into any shares, of the capital stock of any TARGET CompanyTarget Entity, or declare or pay any dividend or make any other distribution in respect of TARGET's Target’s capital stock; provided, howeverthat Target may (to the extent legally and contractually permitted to do so), that -------- ------- TARGET may but shall not be obligated to, declare and pay regular quarterly cash dividends on the shares of Target Common Stock at a rate not in excess of $.015 per share; and provided, that the last quarterly dividend by Target prior to the Effective Time and the payment thereof shall be coordinated with Buyer so that holders of Target Common Stock do not receive dividends on both Target Common Stock and Buyer Common Stock received in the Merger in respect of such quarter or fail to receive a dividend on either in cash to the TARGET shareholders during the second calendar quarter respect of 2001 in an amount in the aggregate equal to the lesser of (i) the net income of TARGET for the first calendar quarter of 2001, and (ii) the aggregate dividend paid to the TARGET shareholders during calendar year 2000; orsuch quarter; (d) except for this Agreement, or pursuant to the exercise of stock options or other Equity Rights outstanding as of the date hereof and pursuant to the terms thereof in existence on the date hereof, or as Previously Disclosed, issue, sell, pledge, encumber, authorize the issuance of or of, enter into any Contract to issue, sell, pledge, encumber encumber, or authorize the issuance of of, or otherwise permit to become outstanding, any additional shares of TARGET Target Common Stock or any other capital stock of any TARGET CompanyTarget Entity, or any stock appreciation rights, or any option, warrant, conversion or other right to acquire any such stock, or any security convertible into any such stock; orEquity Right; (e) adjust, split, combine or reclassify any capital stock of any TARGET Company Target Entity or issue or authorize the issuance of any other securities in respect of or in substitution for shares of TARGET Target Common Stock Stock, or sell, lease, mortgage mortgage, permit any Lien, or otherwise dispose of or otherwise encumber (i) any shares of capital stock of any TARGET Target Subsidiary (unless any such shares of stock are sold or otherwise transferred to another TARGET CompanyTarget Entity) or (ii) any material Asset having a book value in excess of $50,000 other than in the ordinary course of business for reasonable or pursuant to Contracts in force at the date of the Agreement and adequate consideration; orlisted on Section 6.2(e) of Target’s Disclosure Memorandum; (f) purchase any securities or make any material investment, either by purchase of stock of securities, contributions to capital, Asset transfers, or purchase of any Assets, in any Person other than a Target Subsidiary, or otherwise acquire direct or indirect control over any Person, other than in connection with (i) internal reorganizations or consolidations involving existing Subsidiaries, (ii) foreclosures in the ordinary course of business, or (iii) acquisitions of control by a depository institution Subsidiary in its fiduciary capacity; orbusiness consistent with past practices; (g) (i) grant any increase in compensation or benefits to the employees or officers of any TARGET Company (including such discretionary increases as may be contemplated by existing employment agreements)Target Entity, except for merit-based salary increases for employees other than officers in the ordinary course in accordance with past practice Previously Disclosed or except as required by Law; (ii) pay any bonus except to employees (x) severance or termination pay or (y) any bonus, in accordance with past practice Previously Disclosed either case other than as required by written severance policies or the provisions of any applicable program or plan adopted by its Board of Directors prior to written Contracts in effect on the date of this Agreement; (iii) enter into or amend any severance agreements with employees or officers of any TARGET CompanyTarget Entity, other than with respect to any employee or officer with an annual salary of $60,000 or less, the entering into of standard separation agreements in the ordinary course consistent with past practice in connection with the payment of severance under the terms of the Target’s written severance policy as disclosed in Section 7.8 of Target’s Disclosure Memorandum; or pay any bonus to, or (iv) grant any increase in fees or other increases in compensation or other benefits to, to directors of any TARGET CompanyTarget Entity except in the ordinary course of business consistent with past practice; oror (v) waive any stock repurchase rights, accelerate, amend or change the period of exercisability of any Target Options or other Equity Rights or restricted stock, or reprice any Target Options or other Equity Rights granted under a Target Stock Plan or authorize cash payments in exchange for any Target Options or other Equity Rights; (h) enter into or amend any employment Contract between any TARGET Company Target Entity and any Person having a salary thereunder in excess of $60,000 per year (unless such amendment is required by Law) that the TARGET Company Target Entity does not have the unconditional right to terminate without Liability (other than Liability for services already rendered), at any time on or after the Effective Time; or; (i) adopt any new employee benefit plan Employee Benefit Plan of any TARGET Company Target Entity or terminate or withdraw from, or make any material change in or to to, any existing employee benefit plans of any TARGET Company Target Benefit Plans other than any such change that is required by Law or that, in the opinion of counsel, is necessary or advisable to maintain the tax qualified status of any such plan; or, or any change that does not result in a cost increase to Target Entities (other than immaterial administrative costs in connection with the implementation of such change), or make any distributions from such Target Benefit Plans, except as required by Law, the terms of such Target Benefit Plans as in effect on the date hereof or in the ordinary course of business consistent with past practice; (j) make any significant change in any accounting methods or systems of internal accounting controls, except as may be appropriate to conform to changes in regulatory accounting requirements or required by GAAP; or; (k) (i) make, change or revoke any material Tax election, (ii) change any of its methods of accounting for Tax purposes, (iii) settle or compromise any material Tax Liability or any Tax disputes, claims, audits, examinations, or other proceedings, (iv) file any material amended Tax Return or (v) enter into a “closing agreement” described in Section 7121 of the Internal Revenue Code (or any corresponding or comparable provision of state, local or foreign Law); (l) commence any Litigation other than in accordance the ordinary course of business consistent with past practice, or settle any Litigation (i) involving any Liability of any TARGET Company Target Entity for money damages in excess of $50,000 100,000 or which involves material restrictions upon materially restricting or otherwise affecting the business or operations of any TARGET Company; orTarget Entity or (ii) relating to the transactions contemplated hereby; (li) except in the ordinary course of business, enter into, modify, amend or terminate any material Contract or waive, release, compromise or assign any material rights or claimsclaims or (ii) enter into, modify or amend any Contract of the sort specified in Section 4.16(c) or (f); (n) enter into any new line of business or change in any material respect its lending, investment, risk and asset-liability management, interest rate or fee pricing with respect to depository accounts, hedging and other material banking or operating policies except as required by Law or by rules or policies imposed by a Regulatory Authority; (o) (i) without previously notifying and consulting with Buyer, make, or commit to make, any capital expenditures provided for in the capital expenditure budget Previously Disclosed to Buyer or (ii) make, or commit to make, any capital expenditures not provided for in the capital expenditure budget Previously Disclosed to Buyer and in excess of $10,000 individually or $50,000 in the aggregate; (p) except as required by Law or applicable regulatory authorities, make any material changes in its policies and practices with respect to underwriting, pricing, originating, acquiring, selling, servicing, or buying or selling rights to service, loans; (q) permit the commencement of any construction of new structures or facilities upon, or purchase or lease any real property in respect of any branch or other facility, or, without previously notifying and consulting with Buyer, make any application to open, relocate or close, or open, relocate or close any branch or other facility; (r) without previously notifying and consulting with Buyer, except for Loans or commitments for Loans that have previously been approved by Target prior to the date of this Agreement, make or acquire any Loan or issue a commitment (or renew or extend an existing commitment) for any Loan relationship aggregating in excess of $1,000,000, or amend or modify in any material respect any existing Loan relationship, that would result in total credit exposure to the applicable borrower (and its affiliates) in excess of $1,000,000. In the event that Target is required to notify or consult Buyer pursuant to this subsection (r), Target shall provide Buyer with timely notice of the date and time of any committee or other meeting scheduled by Target for purposes of considering any such Loan, together with all information that is provided to members of such committee or other authority regarding such Loan. Buyer shall be invited to have one or more of its representatives attend any such meeting for purposes of consulting with Target on any Loan covered by this subsection (r). If no representative of Buyer attends any such meeting, actions taken by Target at such meeting shall not be subject to any further review by Buyer; (s) without previously notifying and consulting with Buyer, restructure or materially change its investment securities portfolio or its gap position, through purchases, sales or otherwise, or its policies with respect to the classification or reporting of such portfolios; or (t) agree to take, make any commitment to take, or adopt any resolutions of Target’s board of directors in support of, any of the actions prohibited by this Section 6.2.

Negative Covenants of Target. From the date of this ---------------------------- Agreement until the earlier of the Effective Time or the termination of this Agreement, TARGET Target covenants and agrees that it will not do or agree or commit to do, or permit any of its Subsidiaries to do or agree or commit to do, any of the following without the prior written consent of the chief executive officer or chief financial officer of PURCHASERPurchaser, which consent shall not be unreasonably withheld or delayed: (a) amend the Articles of IncorporationIncorporation or Association, Bylaws By-Laws or other governing instruments of any TARGET Target Company; or (b) incur any additional debt obligation or other obligation for borrowed money (other than indebtedness of a TARGET Target Company to another TARGET Target Company) (for the TARGET Target Companies on a consolidated basis) except in the ordinary course of the business of TARGET Target Companies consistent with past practices (which shall include, for TARGET Target Subsidiaries that are depository institutions, creation of deposit liabilities, purchases of federal funds, receipt of Federal Home Loan Bank advances, and entry into repurchase agreements fully secured by U.S. government or agency securities), or impose, or suffer the imposition, on any share of stock held by of any TARGET Target Company of any Lien or permit any such Lien to exist; or (c) repurchase, redeem or otherwise acquire or exchange (other than redemptions without the payment of any additional consideration or exchanges in the ordinary course under employee benefit plansplans or exercises or conversions prior to the Effective Time of Target Options pursuant to the terms thereof), directly or indirectly, any shares, or any securities convertible into any shares, of the capital stock of any TARGET Target Company, or declare or pay any dividend or make any other distribution in respect of TARGET's Target’s capital stock; provided, however, that -------- ------- TARGET may declare and pay a dividend in cash to the TARGET shareholders during the second calendar quarter of 2001 in an amount in the aggregate equal to the lesser of (i) the net income of TARGET for the first calendar quarter of 2001, and (ii) the aggregate dividend paid to the TARGET shareholders during calendar year 2000; or (d) except for this AgreementAgreement or pursuant to another agreement with a Purchaser Company, or pursuant to the exercise of stock options Target Options outstanding as of the date hereof and pursuant to the terms thereof in existence on the date hereof, or as Previously Disclosed, issue, sell, pledge, encumber, authorize the issuance of or enter into any Contract to issue, sell, pledge, encumber or authorize the issuance of or otherwise permit to become outstanding, any additional shares of TARGET Target Common Stock or any other capital stock of any TARGET Target Company, or any stock appreciation rights, or any option, warrant, conversion or other right to acquire any such stock, or any security convertible into any such stock; or (e) adjust, split, combine or reclassify any capital stock of any TARGET Target Company or issue or authorize the issuance of any other securities in respect of or in substitution for shares of TARGET Target Common Stock or sell, lease, mortgage or otherwise dispose of or otherwise encumber (i) any shares of capital stock of any TARGET Target Subsidiary (unless any such shares of stock are sold or otherwise transferred to another TARGET Target Company) or (ii) any Asset having a book value in excess of $50,000 other than in the ordinary course of business for reasonable and adequate consideration; or (f) acquire another business or merge or consolidate with another entity or acquire direct or indirect control over any Person, other than in connection with (i) internal reorganizations or consolidations involving existing Subsidiaries, (ii) foreclosures in the ordinary course of business, or (iii) acquisitions of control by a depository institution Subsidiary in its fiduciary capacity; or (g) except as Previously Disclosed, grant any increase in compensation or benefits to the employees or officers of any TARGET Target Company (including such discretionary increases as may be contemplated by existing employment agreements), except in accordance with past practice Previously Disclosed or as required by Law; pay any bonus except to employees in accordance with past practice Previously Disclosed or the provisions of any applicable program or plan adopted by its Board of Directors prior to the date of this Agreement; enter into or amend any severance agreements with officers of any TARGET Target Company; or pay any bonus to, or grant any increase in fees or other increases in compensation or other benefits to, directors of any TARGET Target Company; or (h) enter into or amend any employment Contract between any TARGET Target Company and any Person (unless such amendment is required by Law) that the TARGET Target Company does not have the unconditional right to terminate without Liability (other than Liability for services already rendered), at any time on or after the Effective Time; or (i) adopt any new employee benefit plan of any TARGET Target Company or make any material Material change in or to any existing employee benefit plans of any TARGET Target Company other than any such change that is required by Law or that, in the opinion of counsel, is necessary or advisable to maintain the tax qualified status of any such plan; or (j) make any significant change in any Tax or accounting methods or systems of internal accounting controls, except as may be appropriate to conform to changes in regulatory accounting requirements or GAAP; or (k) fail to maintain its books, accounts and records in the usual manner on a basis consistent with that heretofore employed; or (l) commence any Litigation other than in accordance with past practice, settle any Litigation involving any Liability of any TARGET Target Company for money damages in excess of $50,000 or which involves material Material restrictions upon the operations of any TARGET Target Company; or (lm) enter into any new line of banking or nonbanking business in which it is not actively engaged as of the date of this Agreement; or (n) (i) charge off (except as may otherwise be required by Law or by regulatory authorities or by GAAP consistently applied) or sell (except in the ordinary course of business consistent with past practices or as the Board of Directors of the respective Target Company deems necessary to conduct safe and sound banking practices) any of its portfolio of loans, discounts or financing leases, or (ii) sell any asset held as other real estate or other foreclosed assets for an amount Materially less than 100% of its book value; or (o) except in the ordinary course of business, modify, amend or terminate any material Material Contract or waive, release, compromise or assign any material Material rights or claims; or (i) make any new loans or extensions of credit or renew, extend or renegotiate any existing loans or extensions of credit (A) with respect to properties or businesses outside of the current market area of Target or to borrowers whose principal residence is outside of the current market area of Target, (B) that are unsecured and in the principal amount in excess of $50,000, or (C) that are secured and in the principal amount in excess of $250,000; (ii) purchase or sell (except for sales of single family residential first mortgage loans in the ordinary course of business for fair market value) any whole loans, leases, mortgages or any loan participations or agented credits or other interest therein, or (iii) renew or renegotiate any loans or credits that are on any watch list and/or are classified or special mentioned or take any similar actions with respect to collateral held with respect to debts previously contracted or other real estate owned, except pursuant to safe and sound banking practices and with prior disclosure to Purchaser; provided, however, that this Section 6.2(p) shall not apply to Orange Park; and provided further, however, that St. Marys may, without prior notice to or the written consent of Purchaser renew or extend existing credits on substantially similar terms and conditions as present at the time such credit was made or last extended, renewed or modified, for a period not to exceed one year and at rates not less than market rates for comparable credits and transactions and without any release of any collateral; or (q) make any Material election with respect to Taxes; or (r) except for purchases of U.S. Treasury securities or U.S. Government agency securities, which in either case have maturities of five (5) years or less, (i) purchase any securities or make any Material investment, either by purchase of stock or securities, contributions to capital, Asset transfers or purchase of any assets, in any Person other than any Target Company, or (ii) otherwise acquire direct or indirect control over any Person other than in connection with (A) foreclosures in the ordinary course of business, (B) acquisitions of control by a depository institution Subsidiary in its fiduciary capacity, or (C) the creation of new, wholly-owned Subsidiaries organized to conduct or continue activities otherwise permitted by this Agreement.

Negative Covenants of Target. From the date of this ---------------------------- Agreement until ---------------------------- the earlier of the Effective Time or the termination of this Agreement, TARGET covenants and agrees that it will not do or agree or commit to do, or permit any of its Subsidiaries to do or agree or commit to do, any of the following without the prior written consent of the chief executive officer or chief financial officer of PURCHASER, which consent shall not be unreasonably withheld or delayedwithheld: (a) amend the Articles of Incorporation, Bylaws or other governing instruments of any TARGET Company; or (b) incur any additional debt obligation or other obligation for borrowed money (other than indebtedness of a TARGET Company to another TARGET Company) (for the TARGET Companies on a consolidated basis) except in the ordinary course of the business of TARGET Companies consistent with past practices (which shall include, for TARGET Subsidiaries that are depository institutions, creation of deposit liabilities, purchases of federal funds, receipt of Federal Home Loan Bank advances, and entry into repurchase agreements fully secured by U.S. government or agency securities), or impose, or suffer the imposition, on any share of stock held by any TARGET Company of any Lien or permit any such Lien to exist; or (c) repurchase, redeem redeem, or otherwise acquire or exchange (other than exchanges in the ordinary course under employee benefit plans), directly or indirectly, any shares, or any securities convertible into any shares, of the capital stock of any TARGET Company, or declare or pay any dividend or make any other distribution in respect of TARGET's capital stock; provided, however, provided that -------- ------- TARGET may declare and shall be permitted (i) to pay a cash dividend in cash to the TARGET shareholders during the second calendar quarter of 2001 in an amount in not to exceed $50,000 if the aggregate equal Merger shall not have been consummated by September 30, 1997, so long as the failure to consummate the lesser Merger on or before such date was not caused by any breach of (i) the net income of TARGET for the first calendar quarter of 2001this Agreement by TARGET, and (ii) to pay a cash dividend if, as and to the aggregate extent that the consolidated after-tax net income of TARGET and its Subsidiaries for calendar year 1997 (which shall be computed in accordance with GAAP) is in excess of the sum of (A) the amount of any dividend paid pursuant to clause (i) of this subsection (c) and (B) $1,370.00 multiplied by the number of ---------- -- full calendar days between January 1, 1997 and the day which is five (5) calendar days prior to the TARGET shareholders during calendar year 2000Closing Date; or (d) except for this Agreement, or pursuant to the exercise of stock options outstanding as of the date hereof and pursuant to the terms thereof in existence on the date hereof, or as Previously Disclosed, issue, sell, pledge, encumber, authorize the issuance of of, or enter into any Contract to issue, sell, pledge, encumber encumber, or authorize the issuance of or otherwise permit to become outstanding, any additional shares of TARGET Common Stock or any other capital stock of any TARGET Company, or any stock appreciation rights, or any option, warrant, conversion conversion, or other right to acquire any such stock, or any security convertible into any such stock; or (e) adjust, split, combine or reclassify any capital stock of any TARGET Company or issue or authorize the issuance of any other securities in respect of or in substitution for shares of TARGET Common Stock or sell, lease, mortgage or otherwise dispose of or otherwise encumber (i) any shares of capital stock of any TARGET Subsidiary (unless any such shares of stock are sold or otherwise transferred to another TARGET Company) or (ii) any Asset having a book value in excess of $50,000 other than in the ordinary course of business for reasonable and adequate consideration; or (f) acquire direct or indirect control over any Person, other than in connection with (i) internal reorganizations or consolidations involving existing Subsidiaries, (ii) foreclosures in the ordinary course of business, or (iii) acquisitions of control by a depository institution Subsidiary in its fiduciary capacity; or (g) grant any increase in compensation or benefits to the employees or officers of any TARGET Company (including such discretionary increases as may be contemplated by existing employment agreements), except in accordance with past practice Previously Disclosed or as required by Law; pay any bonus except to employees in accordance with past practice Previously Disclosed or the provisions of any applicable program or plan adopted by its Board of Directors prior to the date of this Agreement; enter into or amend any severance agreements with officers of any TARGET Company; or pay any bonus to, or grant any increase in fees or other increases in compensation or other benefits to, directors of any TARGET Company; or (h) enter into or amend any employment Contract between any TARGET Company and any Person (unless such amendment is required by Law) that the TARGET Company does not have the unconditional right to terminate without Liability (other than Liability for services already rendered), at any time on or after the Effective Time; or (i) adopt any new employee benefit plan of any TARGET Company or make any material change in or to any existing employee benefit plans of any TARGET Company other than any such change that is required by Law or that, in the opinion of counsel, is necessary or advisable to maintain the tax qualified status of any such plan; or (j) make any significant change in any accounting methods or systems of internal accounting controls, except as may be appropriate to conform to changes in regulatory accounting requirements or GAAP; or (k) commence any Litigation other than in accordance with past practice, settle any Litigation involving any Liability of any TARGET Company for money damages in excess of $50,000 or which involves material restrictions upon the operations of any TARGET Company; or (l) except in the ordinary course of business, modify, amend or terminate any material Contract or waive, release, compromise or assign any material rights or claims.

Negative Covenants of Target. From the date of this ---------------------------- Agreement until the earlier of the Effective Time or the termination of this Agreement, TARGET unless the prior written consent of Buyer shall have been obtained, and except as otherwise expressly contemplated herein or as set forth in Section 6.2 of Target’s Disclosure Memorandum, Target covenants and agrees that it will not do or agree or commit to do, or cause or permit any of its Subsidiaries to do or agree or commit to do, any of the following without the prior written consent of the chief executive officer or chief financial officer of PURCHASER, which consent shall not be unreasonably withheld or delayedfollowing: (a) amend the Articles of Incorporationcharter, Bylaws bylaws or other governing instruments of any TARGET Company; orTarget Entity; (b) incur incur, assume, guarantee, endorse or otherwise as an accommodation become responsible for any additional debt obligation or other obligation for borrowed money (other than indebtedness of a TARGET Company Target to another TARGET Company) (for Target Bank or of Target Bank to Target, or the TARGET Companies on a consolidated basis) except in the ordinary course of the business of TARGET Companies consistent with past practices (which shall include, for TARGET Subsidiaries that are depository institutions, creation of deposit liabilities, purchases of federal funds, receipt of borrowings from any Federal Home Loan Bank advancesBank, and entry into repurchase agreements fully secured by U.S. government or agency securitiessales of certificates of deposits, in each case incurred in the Ordinary Course), or impose, or suffer the imposition, on any share of stock held by any TARGET Company of any Lien or permit any such Lien to exist; or; (c) (i) repurchase, redeem redeem, or otherwise acquire or exchange (other than exchanges in accordance with the ordinary course under employee benefit plansterms of this Agreement), directly or indirectly, any shares, or any securities convertible into or exchangeable or exercisable for any shares, of the capital stock of any TARGET CompanyTarget Entity, (ii) make, declare, pay or set aside for payment any dividend or set any record date for or declare or pay any dividend or make any other distribution in respect of TARGET's Target’s capital stock; providedstock or other equity interests, howeverexcept for dividends necessary to satisfy, that -------- ------- TARGET may declare and pay a dividend in cash amounts not to exceed, (A) the estimated tax liability of Target’s shareholders related to Target’s net income and (B) $0.75 per share, per quarter completed prior to the TARGET shareholders during the second calendar quarter Closing Date (provided that such dividends do not violate any applicable Laws or require prior approval of 2001 in an amount in the aggregate equal to the lesser of (i) the net income of TARGET for the first calendar quarter of 2001, and (ii) the aggregate dividend paid to the TARGET shareholders during calendar year 2000; orany Regulatory Authorities); (d) except for this Agreementissue, or pursuant to the exercise of stock options outstanding as of the date hereof and pursuant to the terms thereof in existence on the date hereof, or as Previously Disclosed, issuegrant, sell, pledge, dispose of, encumber, authorize or propose the issuance of or of, enter into any Contract to issue, grant, sell, pledge, encumber dispose of, encumber, or authorize or propose the issuance of of, or otherwise permit to become outstanding, any additional shares of TARGET Target Common Stock or any other capital stock of any TARGET CompanyTarget Entity, or any stock appreciation rights, or any option, warrant, conversion or other right to acquire any such stock, or any security convertible into any such stock; orEquity Right; (e) directly or indirectly adjust, split, combine or reclassify any capital stock or other equity interest of any TARGET Company Target Entity or issue or authorize the issuance of any other securities in respect of or in substitution for shares of TARGET Target Common Stock Stock, or sell, transfer, lease, mortgage mortgage, permit any Lien, or otherwise dispose of of, discontinue or otherwise encumber (i) any shares of capital stock or other equity interests of any TARGET Subsidiary Target Entity (unless any such shares of capital stock or other equity interest are sold or otherwise transferred to another TARGET CompanyTarget or one of the Target Subsidiaries) or (ii) any Asset having a book value in excess of $50,000 other than pursuant to Contracts in force at the date of the Agreement or sales of investment securities in the ordinary course of business for reasonable and adequate consideration; orOrdinary Course; (f) (i) except for purchases of investment securities in the Ordinary Course, purchase any securities or make any acquisition of or investment in, either by purchase of stock or other securities or equity interests, contributions to capital, Asset transfers, purchase of any Assets (including any investments or commitments to invest in real estate or any real estate development project) or other business combination, or by formation of any joint venture or other business organization or by contributions to capital (other than by way of foreclosures or acquisitions of control in a fiduciary or similar capacity or in satisfaction of debts previously contracted in good faith, in each case in the Ordinary Course), any Person other than Target Bank, or otherwise acquire direct or indirect control over any Person, other than in connection with (i) internal reorganizations Person or consolidations involving existing Subsidiaries, (ii) foreclosures in the ordinary course enter into a plan of businessconsolidation, merger, share exchange, share acquisition, reorganization or complete or partial liquidation with any Person (other than consolidations, mergers or reorganizations solely among wholly owned Target Subsidiaries), or (iii) acquisitions a letter of control by a depository institution Subsidiary intent, memorandum of understanding or agreement in its fiduciary capacity; orprinciple with respect thereto; (g) (i) grant any bonus or increase in compensation or benefits to the employees or officers of any TARGET Company (including such discretionary increases as may be contemplated by existing employment agreements)Target Entity, except in accordance with past practice Previously Disclosed or as required by Law; , (ii) pay any bonus except (x) severance or termination pay or (y) any bonus, in either case other than pursuant to employees a Target Benefit Plan in accordance with past practice Previously Disclosed or effect on the provisions date hereof and in the case of clause (x) subject to receipt of an effective release of claims from the employee, and in the case of clause (y) to the extent required under the terms of the Target Benefit Plan without the exercise of any applicable program upward discretion, (iii) enter into, amend, or plan adopted by its Board of Directors prior to increase the date of this Agreement; enter into benefits payable under any severance, change in control, retention, bonus guarantees, collective bargaining agreement or amend any severance agreements similar agreement or arrangement with employees or officers of any TARGET Company; or pay any bonus toTarget Entity, or (iv) grant any increase in fees or other increases in compensation or other benefits to, to directors of any TARGET Company; orTarget Entity, (v) waive any stock repurchase rights, or grant, accelerate, amend or change the period of exercisability of any Equity Rights or restricted stock, or authorize cash payments in exchange for any Equity Rights, (vi) fund any rabbi trust or similar arrangement, (vii) terminate the employment or services of any officer or any employee whose annual base compensation is greater than $75,000, other than for cause or (viii) hire any officer, employee, independent contractor or consultant (who is a natural person) who has annual base compensation greater than $50,000; (h) enter into into, amend or amend renew any employment Contract between any TARGET Company Target Entity and any Person (unless such amendment is required by Law) that the TARGET Company Target Entity does not have the unconditional right to terminate without Liability (other than Liability for services already rendered), at any time on or after the Effective Time; or, provided that nothing in this paragraph shall prohibit the termination of employment agreements as contemplated hereunder; (i) adopt any new employee benefit plan of any TARGET Company or make any material change in or to any existing employee benefit plans of any TARGET Company other than any such change that is except as required by Law or thator, with respect to a Target ERISA Plan that is intended to be tax-qualified in the opinion of counsel, counsel is necessary or advisable to maintain the tax qualified status status, (i) adopt or establish any new Employee Benefit Plan of any Target Entity or terminate or withdraw from, or amend, any Target Benefit Plan, (ii) make any distributions from such plan; orEmployee Benefit Plans, except as required by the terms of such plans, or (iii) fund or in any other way secure the payment of compensation or benefits under any Target Benefit Plan; (j) make any significant change in any accounting principles, practices or methods or systems of internal accounting controls, except as may be appropriate required to conform to changes in regulatory accounting requirements or GAAP; or; (k) commence any Litigation other than in accordance the Ordinary Course, or settle, waive or release or agree or consent to the issuance of any Order in connection with past practice, settle any Litigation (i) involving any Liability of any TARGET Company Target Entity for money damages in excess of $50,000 10,000 or which involves material restrictions upon that would impose any restriction on the operations operations, business or Assets of any TARGET Company; orTarget Entity or the Surviving Corporation or (ii) arising out of or relating to the transactions contemplated hereby; (l) except in the ordinary course of business(i) enter into, renew, extend, modify, amend or terminate any material (A) Contract (1) with a term longer than one year or (2) that calls for aggregate payments of $10,000 or more, (B) Target Contract, (C) Contract referenced in Section 4.34 (or any other Contract with any broker or finder in connection with the Merger or any other transaction contemplated by this Agreement), or (D) Contract, plan, arrangement or other transaction of the type described in Section 4.35 (other than, in the case of sub-clauses (A) and (B), Contracts that can be terminated on less than 30 days’ notice with no prepayment penalty, Liability or other obligation), (ii) make any amendment or modification to any Contract described in clause (i), other than in the Ordinary Course, or (iii) waive, release, compromise or assign any material rights or claimsclaims under any Contract described in clause (i); (m) (i) enter into any new line of business or change in any material respect its lending, investment, risk and asset-liability management, interest rate, fee pricing or other material banking or operating policies (including any change in the maximum ratio or similar limits as a percentage of its capital exposure applicable with respect to its loan portfolio or any segment thereof) or (ii) change its policies and practices with respect to underwriting, pricing, originating, acquiring, selling, servicing or buying or selling rights to service Loans except as required by Law or by rules or policies imposed by a Regulatory Authority; (n) make, or commit to make, any capital expenditures in excess of $5,000 individually or $25,000 in the aggregate; (o) except as required by Law or applicable Regulatory Authorities, make any material changes in its policies and practices with respect to (i) its hedging practices and policies or (ii) insurance policies including materially reduce the amount of insurance coverage currently in place or fail to renew or replace any existing insurance policies; (p) cancel, compromise, waive or release any material indebtedness owed to any Person or any rights or claims held by any Person, except for (i) sales of Loans and sales of investment securities, in each case in the Ordinary Course or (ii) as expressly required by the terms of any Contracts in force at the date of the Agreement; (q) permit the commencement of any construction of new structures or facilities upon, or purchase or lease any real property in respect of any branch or other facility, or make any application to open, relocate or close any branch or other facility; (r) materially change or restructure its investment securities portfolios, its investment securities practices or policies, or change its policies with respect to the classification or reporting of such portfolios, or invest in any mortgage-backed or mortgage related securities which would be considered “high-risk” securities under applicable regulatory pronouncements or change its interest rate exposure through purchases, sales or otherwise, or the manner in which its investment securities portfolios are classified or reported; (s) alter materially its interest rate or fee pricing policies with respect to depository accounts of any Target Subsidiaries or waive any material fees with respect thereto; (t) make, change or revoke any material Tax election, change any material method of Tax accounting, adopt or change any taxable year or period, file any amended material Tax Returns, agree to an extension or waiver of any statute of limitations with respect to the assessment or determination of Taxes, settle or compromise any material Tax liability of any Target Entity, enter into any closing agreement with respect to any material Tax or surrender any right to claim a material Tax refund; (u) take any action, or knowingly fail to take any action, which action or failure to act prevents or impedes, or could reasonably be expected to prevent or impede, the Merger from qualifying as a “reorganization” within the meaning of Section 368(a) of the Internal Revenue Code; (v) enter into any securitizations of any Loans or create any special purpose funding or variable interest entity other than on behalf of clients; (w) foreclose upon or take a deed or title to any commercial real estate (excluding real estate used solely for agricultural production) without first conducting a Phase I environmental assessment (except where such an assessment has been conducted in the preceding 12 months) of the property or foreclose upon any commercial real estate if such environmental assessment indicates the presence of hazardous material; (x) make or acquire any Loan or issue a commitment (including a letter of credit) or renew or extend an existing commitment for any Loan, or amend or modify in any material respect any Loan (including in any manner that would result in any additional extension of credit, principal forgiveness, or effect any uncompensated release of collateral, i.e., at a value below the fair market value thereof as determined by Target Bank), except for (i) Loans or commitments for Loans in full compliance with the Target Bank’s underwriting policy and related Loan policies in effect as of the date of this Agreement without utilization of an exception to the Target Bank’s underwriting policy and related Loan policies, (ii) Loans or commitments for Loans with a principal balance equal to or less than $250,000 in full compliance with the Target Bank’s underwriting policy and related Loan policies in effect as of the date of this Agreement, including pursuant to an exception to such underwriting policy and related Loan policies that is reasonable in light of the underwriting of the borrower for such Loan or commitment, and (iii) amendments or modifications of any existing Loan in full compliance with the Target Bank’s underwriting policy and related Loan policies in effect as of the date of this Agreement without utilization of any of the exceptions provided therein; (y) other than in the Ordinary Course, repurchase, or provide indemnification relating to, Loans in the aggregate in excess of $100,000; (z) notwithstanding any other provision hereof, knowingly take any action that is reasonably likely to result in any of the conditions set forth in ARTICLE 8 not being satisfied, or materially impair its ability to perform its obligations under this Agreement or to consummate the transactions contemplated hereby, except as required by applicable Law; or (aa) agree to take, make any commitment to take, or adopt any resolutions of Target’s board of directors in support of, any of the actions prohibited by this Section 6.2.

Negative Covenants of Target. From the date of this ---------------------------- Agreement until the earlier of the Partnership Merger Effective Time or the termination of this Agreement, TARGET unless the prior written consent of Buyer shall have been obtained, and except as otherwise expressly contemplated herein, Target covenants and agrees that it will not do or agree or commit to do, or permit any of its Subsidiaries to do or agree or commit to do, any of the following without the prior written consent of the chief executive officer or chief financial officer of PURCHASER, which consent shall not be unreasonably withheld or delayedfollowing: (a) except as noted in Section 6.2(a) of the Target Disclosure Memorandum, amend the Articles Charter or Bylaws of IncorporationTarget or the articles or certificate of incorporation, Bylaws bylaws, partnership agreement, operating agreement or other governing instruments joint venture agreement or comparable charter or organization document of any TARGET CompanyTarget Subsidiary; or (b) incur except as noted in Section 6.2(b) of the Target Disclosure Memorandum and with respect to the payment of (i) the Special Dividend determined in accordance with Section 7.16(b) hereof, (ii) the Transaction Fees and Expenses, (iii) any additional debt obligation principal amounts owed or owing under existing Indebtedness, (iv) the purchase price and commercially reasonable and customary transaction costs incurred in connection with closing the acquisitions of the Pending Acquisition Properties or (v) any items set forth in Section 4.9(j) of the Target Disclosure Memorandum, incur, assume, guarantee or otherwise become liable for any Indebtedness or other obligation obligation, including any guarantee obligations, for borrowed money (directly, contingently or otherwise) or refinance or prepay any Indebtedness of Target or its Subsidiaries or make any loan or advance to any other Person (other than indebtedness of loans or advances to a TARGET Company to another TARGET Company) (for the TARGET Companies on a consolidated basis) except in the ordinary course of the business of TARGET Companies consistent with past practices (which shall include, for TARGET Subsidiaries that are depository institutions, creation of deposit liabilities, purchases of federal funds, receipt of Federal Home Loan Bank advances, and entry into repurchase agreements fully secured by U.S. government or agency securitieswholly owned Target Subsidiary), or impose, or suffer the imposition, on any share of stock held by any TARGET Company of any Lien or permit any such Lien to exist; or (c) except as set forth in Section 6.2(c) of the Target Disclosure Memorandum, (i) directly or indirectly repurchase, redeem redeem, or otherwise acquire or exchange (any securities of Target or any Target Subsidiary, other than (x) in connection with the redemption of Target OP Units in accordance with the Target OP Agreement, (y) exchanges in the ordinary course under employee benefit plans), directly Employee Benefit Plans sponsored or indirectly, maintained by Target or a Target Subsidiary upon the exercise of any sharesstock option or other award outstanding on the date hereof and issued pursuant to the Stock Option Plan disclosed in Section 4.3(b) of the Target Disclosure Memorandum, or any securities convertible into any shares, (z) the use of Target Common Stock to pay the capital stock of any TARGET Companyexercise price or tax withholding in connection with equity-based Employee Benefit Plans sponsored or maintained by Target or a Target Subsidiary by the participants therein, or declare (ii) subject to the exceptions described in the next sentence, declare, set aside or pay any dividend or make any other distribution in respect of TARGETTarget's capital stockstock or the equity interests of any Target Subsidiary that is not indirectly wholly owned by Target or Target Operating Partnership. Such restrictions on distributions and dividends shall not apply to (A) Target with respect to regular cash distributions at a rate not in excess of $0.26 per share of Target Common Stock, declared and paid quarterly, (B) Target Operating Partnership in connection with corresponding distributions payable to holders of Target OP Units or (C) the Special Dividend. Such restrictions on distributions and dividends shall also not apply to the extent a distribution (or increase in a distribution) by Target is necessary for Target to maintain REIT status, avoid the incurrence of any Taxes under Section 857 of the Code, or avoid the imposition of any excise taxes under Section 4981 of the Code; provided, howeverthat Target shall furnish Buyer with prior written notice of its intention to pay any such distribution or dividends, shall consult in good faith with Buyer with respect thereto and shall provide Buyer with a statement of the calculation relevant to Target's determination that -------- ------- TARGET may declare and pay a such dividend in cash to the TARGET shareholders during the second calendar quarter of 2001 in an amount in the aggregate equal to the lesser of (i) the net income of TARGET for the first calendar quarter of 2001, and (ii) the aggregate dividend paid to the TARGET shareholders during calendar year 2000or distribution was so required; or (d) except for (i) transactions contemplated by this Agreement, or (ii) pursuant to (x) the exercise of stock options outstanding under the Stock Option Plan as of the date hereof and pursuant to the terms thereof in existence on the date hereof, or (y) the redemption of Target OP Units (Common) pursuant to the Target OP Agreement as Previously Disclosedin effect on the date hereof, or (iii) as disclosed in Section 6.2(d) of the Target Disclosure Memorandum, issue, sell, pledge, encumber, authorize the issuance of or of, enter into any Contract to issue, sell, pledge, encumber encumber, or authorize the issuance of of, or otherwise permit to become outstandingoutstanding or cause to become exercisable any otherwise unexercisable right granted for, any additional shares of TARGET Common Stock Target capital stock or voting securities or any other capital stock or voting securities of any TARGET CompanyTarget Subsidiary (including any Target OP Units), or any stock appreciation rights, or any option, warrant, conversion convertible or exchangeable security or other right Equity Right relating to acquire any such stock, Target or any security convertible into any such stockTarget Subsidiary; or (e) adjust, split, combine combine, classify, or reclassify any capital shares of stock or any other equity interests or Equity Rights of Target or any TARGET Company or issue Target Subsidiary or authorize the issuance of any other securities in respect of or in substitution for such shares of TARGET Common Stock stock, equity interests or other Equity Rights; or (f) except as disclosed in Section 6.2(f) of the Target Disclosure Memorandum, sell, lease, mortgage or otherwise dispose of or otherwise encumber (i) any shares of capital stock of or any TARGET other equity interests of Target or any Target Subsidiary (unless or amend the terms of any such shares security of stock are sold Target or otherwise transferred to another TARGET Company) or (ii) any Asset having a book value in excess of $50,000 other than in the ordinary course of business for reasonable and adequate considerationTarget Subsidiary; or (fg) except as disclosed in Section 6.2(g) of the Target Disclosure Memorandum, purchase any securities or make any material investment, either by purchase of stock or securities, contributions to capital, Asset transfers, or purchase of any Assets, in any Person other than in a wholly owned Target Subsidiary, or otherwise acquire direct or indirect control over any Person, Person other than in connection with (i) internal reorganizations or consolidations involving existing Subsidiaries, (ii) foreclosures in the ordinary course of business, or (iiiii) acquisitions the creation of control new wholly owned Subsidiaries organized to conduct or continue activities otherwise permitted by a depository institution Subsidiary in its fiduciary capacitythis Agreement; or (gh) except as disclosed in Section 6.2(h) of the Target Disclosure Memorandum, (i) grant any increase in compensation or benefits to the employees or officers of Target or any TARGET Company (including such discretionary increases as may be contemplated by existing employment agreements)Target Subsidiary, except in accordance with past practice Previously Disclosed or as required by Law; pay Law or any bonus except to employees Contract in accordance with past practice Previously Disclosed or the provisions of any applicable program or plan adopted by its Board of Directors prior to effect on the date of this Agreement; Agreement and except for increases in the ordinary course of business and consistent with past practice to employees with a salary less than $100,000 per year, (ii) pay any severance or termination pay or any bonus other than (A) in the ordinary course of business provided the severance or termination payment or bonus payment to any single individual does not exceed $25,000 or (B) pursuant to written policies or written Contracts in effect on the date of this Agreement and disclosed in Section 6.2(h) of the Target Disclosure Memorandum, (iii) enter into or amend any severance agreements contractual obligation with any officers or Affiliates of Target or any TARGET Company; Target Subsidiary, (iv) enter into any contractual obligation with any new employee or pay consultant of Target or any bonus toTarget Subsidiary except for obligations entered into in the ordinary course of business and consistent with past practice that involves or may involve annual payments not in excess of $100,000, or (v) grant any increase in fees or other increases in compensation or other benefits to, to directors of Target or any TARGET Company; or (h) enter into or amend any employment Contract between any TARGET Company and any Person (unless such amendment is required by Law) that the TARGET Company does not have the unconditional right to terminate without Liability (other than Liability for services already rendered), at any time on or after the Effective TimeTarget Subsidiary; or (i) adopt any new employee benefit plan Employee Benefit Plan of Target or any TARGET Company Target Subsidiary or terminate or withdraw from, or make any material change in or to to, any existing employee benefit plans Employee Benefit Plans of Target or any TARGET Company Target Subsidiary other than any such change that is required by Law or that, in the opinion of counsel, is necessary or advisable to maintain the tax qualified status of any such plan, or make any distributions from such Employee Benefit Plans, except as required by Law or the terms of such plans; or (j) make any significant change in any Tax accounting method or any material change in any accounting methods or systems of internal accounting controls, except as may be appropriate required to conform to changes in regulatory accounting requirements Tax Laws or GAAP; or (k) commence (i) make, change, or rescind any Litigation other than in accordance with past practiceexpress or deemed election relative to Taxes, settle any Litigation involving any Liability unless such election or rescission is required by Law or necessary (A) to preserve Target's status as a REIT, or (B) to qualify or preserve the status of any TARGET Company Target Subsidiary as a partnership for money damages federal income tax purposes, as a qualified REIT subsidiary under Section 856(i) of the Code, or as a taxable REIT subsidiary under Section 856(l) of the Code, as the case may be (in excess which event Target shall promptly notify Buyer of $50,000 such election and Target or which involves the applicable Target Subsidiary shall make such election in a timely manner), (ii) amend any material restrictions upon Tax Return, or settle or compromise any material federal, state, local or foreign Tax Liability, audit, claim or assessment, (iii) waive or extend the operations statute of limitations with respect to the Taxes of Target or any TARGET CompanyTarget Subsidiary, (iv) enter into any material closing agreement related to Taxes, (v) surrender any right to claim any material Tax refund or (vi) take any action that could reasonably be expected to cause Target to fail to continue to qualify as a REIT; or (l) enter into, amend or modify any Tax Protection Agreement or take any action that would, or could reasonably be expected to, violate any Tax Protection Agreement or otherwise give rise to any Liability of Target or any Target Subsidiary with respect thereto; or (m) except as disclosed in Section 6.2(m) of the Target Disclosure Memorandum, pay, discharge or satisfy any claim, liability, Lien or obligation with respect to, or settle or compromise any Litigation pending, threatened against or affecting Target or any Target Subsidiary, including Litigation relating to the transactions contemplated by this Agreement brought by any current, former or purported holder of any securities of Target, the Target Operating Partnership or any other Target Subsidiary; provided that routine claims, liabilities, obligations and Litigation in the ordinary course of businessbusiness may be paid, modifydischarged, settled or compromised for monetary amounts only (and not for any equitable remedy) if the amount expended does not exceed $50,000 for any single matter and $250,000 in the aggregate for all such matters; or (n) make capital expenditures, other than capital expenditures disclosed in Section 6.2(n) of the Target Disclosure Memorandum and other than capital expenditures made in the ordinary course of business and consistent with past practice in an amount not exceeding $50,000 in each instance and $2,000,000 in the aggregate for all instances; or (o) except as disclosed in Section 6.2(o) of the Target Disclosure Memorandum, enter into (i) any Contract that would be required to be disclosed as a Target Contract if entered into prior to the date hereof or (ii) any Contract with a term longer than one year which cannot be terminated without material penalty upon notice of sixty (60) days or less; or (p) except as disclosed in Section 6.2(p) of the Target Disclosure Memorandum, terminate or amend any Target Contract or terminate any other material Contract (including any Loan Contract) or waive, release, compromise or assign any material rights or claims; or (q) except as disclosed in Section 6.2(q) of the Target Disclosure Memorandum sell, lease, mortgage, subject to any material Lien or otherwise dispose of any Target Property (including, for avoidance of doubt, the Property (as defined in that certain Agreement for the Purchase of Real Property, dated as of March 14, 2005, by and between Shugart Management, Inc. and Target Operating Partnership, as am▇▇▇▇▇)) or modify or waive any rights under any agreements that created a Permitted Title Exception or enter into any contract or agreement to acquire any real property Assets or enter into any contract for any broker, promoter or similar agent to market or otherwise offer for sale or refinance any real property Assets of Target or any Target Subsidiary; or (r) except as disclosed in Section 6.2(r) of the Target Disclosure Memorandum, sell, lease, license, transfer, exchange, swap, acquire, mortgage, subject to any material Lien or otherwise dispose of any of personal property or intangible property, except sales or acquisitions of equipment which are not material to Target and the Target Subsidiaries or their respective businesses or operations taken as a whole which are made in the ordinary course of business; or (s) enter into or make any loans to any of its officers, directors, employees, agents or consultants or make any change in existing borrowing or lending arrangements for or on behalf of any of such persons; or (t) except as necessary in the ordinary conduct of the business of the Target and the Target Subsidiaries and consistent with past practice, dispose of, grant or obtain, or permit to lapse any rights to, any Intellectual Property, or dispose of or disclose to any Person, other than representatives of Buyer, any Trade Secret; or (u) adopt a plan of complete or partial liquidation or resolutions providing for or authorizing such liquidation or a dissolution, consolidation, recapitalization or bankruptcy reorganization; or (v) enter into any transaction, agreement or arrangement between (i) Target or any Target Subsidiary on the one hand and (ii) any affiliate of Target (other than any Target Subsidiary) on the other hand, of the type that would be required to be disclosed under Item 404 of Regulation S-K; or (w) permit any insurance policy to terminate or lapse without replacing such policy with comparable coverage or amend or cancel any insurance policy; or (x) initiate or consent to any material zoning reclassification of any Target Property or any other material change to any approved site plan, special use permit, planned unit development approval or other land use entitlement affecting any Target Property; or (y) fail to use its commercially reasonable efforts to comply or remain in compliance with the material terms of any agreement relating to any outstanding Indebtedness of Target or any Target Subsidiary; or (z) except as disclosed on Section 6.2(z) of the Target Disclosure Memorandum, consummate any transaction for the acquisition of a Pending Acquisition Property; (aa) except as disclosed in Section 6.2(aa) of the Target Disclosure Memorandum, agree, commit or arrange to take any action prohibited under this Section 6.2.

Negative Covenants of Target. From the date of this ---------------------------- Agreement until the earlier of the Effective Time or the termination of this Agreement, TARGET unless the prior written consent of Buyer shall have been obtained, and except as otherwise expressly contemplated herein or as set forth in Section 6.2 of Target’s Disclosure Memorandum, Target covenants and agrees that it will shall not do or agree or commit to do, or permit any of its Subsidiaries to do or agree or commit to do, any of the following without the prior written consent of the chief executive officer or chief financial officer of PURCHASER, which consent shall not be unreasonably withheld or delayedfollowing: (a) amend the Articles certificate of Incorporationincorporation, Bylaws bylaws or other governing instruments of any TARGET Company; orTarget Entity; (b) incur or guarantee any additional debt obligation or other obligation for borrowed money (other than indebtedness of a TARGET Company Target to another TARGET Company) (for the TARGET Companies on a consolidated basis) except Target Bank or of the Target Bank to Target or indebtedness incurred in the ordinary course of the business of TARGET Companies consistent with past practices (which shall include, for TARGET Subsidiaries that are depository institutions, creation of deposit liabilities, purchases of federal funds, receipt of Federal Home Loan Bank advances, and entry into repurchase agreements fully secured by U.S. government or agency securitiesOrdinary Course), or impose, or suffer the imposition, on any share of stock held by any TARGET Company of any Lien or permit any such Lien to exist; or; (c) repurchase, redeem redeem, or otherwise acquire or exchange (other than exchanges in accordance with the ordinary course under employee benefit plansterms of this Agreement), directly or indirectly, any shares, or any securities convertible into or exchangeable or exercisable for any shares, of the capital stock of any TARGET CompanyTarget Entity, or declare make, declare, pay or pay set aside for payment any dividend or set any record date for or declare or make any other distribution in respect of TARGET's Target’s capital stock; provided, however, that -------- ------- TARGET may declare and pay a dividend in cash to the TARGET shareholders during the second calendar quarter of 2001 in an amount in the aggregate equal to the lesser of (i) the net income of TARGET for the first calendar quarter of 2001, and (ii) the aggregate dividend paid to the TARGET shareholders during calendar year 2000; orstock or other equity interests; (d) except for this Agreement, or pursuant to the exercise of stock options outstanding as of the date hereof and pursuant to the terms thereof in existence on the date hereof, or as Previously Disclosed, issue, sell, pledge, dispose of, encumber, authorize or propose the issuance of or of, enter into any Contract to issue, sell, pledge, encumber dispose of, encumber, or authorize or propose the issuance of of, or otherwise permit to become outstanding, any additional shares of TARGET Target Common Stock or any other capital stock of any TARGET CompanyTarget Entity, or any stock appreciation rights, or any option, warrant, conversion or other right to acquire any such stock, or any security convertible into any such stock; orEquity Right; (e) directly or indirectly adjust, split, combine or reclassify any capital stock or other equity interest of any TARGET Company Target Entity or issue or authorize the issuance of any other securities in respect of or in substitution for shares of TARGET Target Common Stock Stock, or sell, transfer, lease, mortgage mortgage, permit any Lien, or otherwise dispose of of, discontinue or otherwise encumber (i) any shares of capital stock of any TARGET Subsidiary Target Entity (unless any such shares of stock are sold or otherwise transferred to another TARGET CompanyTarget or the Target Bank) or (ii) any Asset having a book value in excess of $50,000 other than pursuant to Contracts in force at the date of the Agreement; (i) purchase any securities or make any acquisition of or investment in, either by purchase of stock or other securities or equity interests, contributions to capital, Asset transfers, purchase of any Assets (including any investments or commitments to invest in real estate or any real estate development project) or other business combination, or by formation of any joint venture or other business organization or by contributions to capital (other than by way of foreclosures or acquisitions of control in a fiduciary or similar capacity or in satisfaction of debts previously contracted in good faith, in each case in the ordinary course Ordinary Course), any Person other than the Target Bank (except for purchases of business investment securities made by Target Bank for reasonable and adequate consideration; or (f) its investment portfolio made in Ordinary Course), or otherwise acquire direct or indirect control over any Person, other than in connection with (i) internal reorganizations ; or consolidations involving existing Subsidiaries, (ii) foreclosures in the ordinary course enter into a plan of businessconsolidation, merger, share exchange, share acquisition, reorganization or complete or partial liquidation with any Person (other than consolidations, mergers or reorganizations solely among wholly owned Target Subsidiaries), or (iii) acquisitions a letter of control by a depository institution Subsidiary intent, memorandum of understanding or agreement in its fiduciary capacity; orprinciple with respect thereto; (g) (i) grant any increase in compensation or benefits to the employees or officers of any TARGET Company (including such discretionary increases as may be contemplated by existing employment agreements)Target Entity, except (A) an increase in accordance with past practice Previously Disclosed base salary for employees that does not exceed in the aggregate 3% of the total base compensation paid to all employees of Target Bank during the fiscal year ending December 31, 2013, (B) bonuses for employees that do not exceed in the aggregate $300,000 or (C) as required by Law; (ii) pay any bonus except (x) severance or termination pay or (y) any bonus, in either case other than pursuant to employees the Target Benefit Plan in accordance with past practice Previously Disclosed or effect on the provisions date hereof and in the case of (x) subject to receipt of an effective release of claims from the employee, and in the case of (y) to the extent required under the terms of the plan without the exercise of any applicable program or plan adopted by its Board of Directors prior to the date of this Agreementupward discretion; (iii) enter into or amend any severance agreements with employees or officers of any TARGET CompanyTarget Entity; or pay any bonus to, or (iv) grant any increase in fees or other increases in compensation or other benefits to, to directors of any TARGET CompanyTarget Entity in the Ordinary Course; oror (v) waive any stock repurchase rights, accelerate, amend or change the period of exercisability of any Equity Rights or restricted stock, or authorize cash payments in exchange for any Equity Rights; (h) enter into into, amend or amend renew any employment Contract between any TARGET Company Target Entity and any Person having a salary thereunder in excess of $75,000 per year (unless such amendment is required by Law) that the TARGET Company Target Entity does not have the unconditional right to terminate without Liability (other than Liability for services already rendered), at any time on or after the Effective Time; or; (i) adopt any new employee benefit plan of any TARGET Company or make any material change in or to any existing employee benefit plans of any TARGET Company other than any such change that is except as required by Law or thator, with respect to a Target ERISA Plan that is intended to be tax-qualified in the opinion of counsel, counsel is necessary or advisable to maintain the tax qualified status status, (i) adopt any new Employee Benefit Plan of any Target Entity or terminate or withdraw from, or amend, any Target Benefit Plan, (ii) make any distributions from such planEmployee Benefit Plans, except as required or the terms of such plans; oror (iii) fund or in any other way secure the payment of compensation or benefits under any Target Benefit Plan; (j) make any significant change in any Tax or accounting principles, practices or methods or systems of internal accounting controls, except as may be appropriate required to conform to changes in Tax Laws or regulatory accounting requirements or GAAP; or; (k) commence any Litigation other than in accordance the Ordinary Course, or settle, waive or release or agree or consent to the issuance of any Order in connection with past practice, settle any Litigation (i) involving any Liability of any TARGET Company Target Entity for money damages in excess of $50,000 or which involves material restrictions upon (ii) arising out of or relating to the operations of any TARGET Company; ortransactions contemplated hereby; (l) except in the ordinary course of business(i) enter into, renew, extend, modify, amend or terminate any (A) Contract that calls for aggregate annual payments of $50,000 or more, except in the Ordinary Course, (B) Target Contract, (C) Contract referenced in Section 4.32 (or any other Contract with any broker or finder in connection with the Merger or any other transaction contemplated by this Agreement), or (D) Contract, plan, arrangement or other transaction of the type described in Section 4.33 (other than, in the case of sub-clauses (A) and (B), Contracts that can be terminated on less than 30 days’ notice with no prepayment penalty, liability or other obligation); (ii) make any material amendment or modification to any Contract described in clause (i), other than in the Ordinary Course; or (iii) waive, release, compromise or assign any material rights or claimsclaims under any Contract described in clause (i); (m) enter into any new line of business or change in any material respect its lending, investment, risk and asset-liability management, interest rate, fee pricing or other material banking or operating policies except as required by Law or by rules or policies imposed by a Regulatory Authority; (n) make, or commit to make, any capital expenditures in excess of $50,000 individually or $250,000 in the aggregate; (o) except as required by Law or applicable Regulatory Authorities, make any material changes in its policies and practices with respect to (i) underwriting, pricing, originating, acquiring, selling, servicing, or buying or selling rights to service, Loans, or (ii) its hedging practices and policies; (p) cancel or release any material indebtedness owed to any Person or any claims held by any Person, except for (i) sales of Loans and sales of investment securities, in each case in the Ordinary Course, or (ii) as expressly required by the terms of any Contracts in force at the date of the Agreement; (q) permit the commencement of any construction of new structures or facilities upon, or purchase or lease any real property in respect of any branch or other facility, or make any application to open, relocate or close any branch or other facility; (r) materially change its investment securities portfolio policy, or its policies with respect to the classification or reporting of such portfolios, or invest in any mortgage-backed or mortgage related securities which would be considered “high-risk” securities under applicable regulatory pronouncements; (s) alter materially its interest rate or fee pricing policies with respect to depository accounts of any Target Subsidiaries or waive any material fees with respect thereto; (t) make, change or revoke any material Tax election, change any material method of Tax accounting, adopt or change any taxable year or period, file any amended material Tax Returns, agree to an extension or waiver of any statute of limitations with respect to the assessment or determination of Taxes, settle or compromise any material Tax liability of any Target Entity, enter into any closing agreement with respect to any material Tax or surrender any right to claim a material Tax refund; (u) take any action, or knowingly fail to take any action, which action or failure to act prevents or impedes, or could reasonably be expected to prevent or impede, the Merger from qualifying as a “reorganization” within the meaning of Section 368(a) of the Internal Revenue Code; (v) Notwithstanding any other provision hereof, knowingly take any action that is reasonably likely to result in any of the conditions set forth in Article 8 not being satisfied or materially impair its ability to perform its obligations under this Agreement or to consummate the transactions contemplated hereby, except as required by applicable Law; (w) enter into any securitizations of any Loans or create any special purpose funding or variable interest entity other than on behalf of clients; (x) foreclose upon or take a deed or title to any commercial real estate without first conducting a Phase I environmental assessment (except where such an assessment has been conducted in the preceding twelve months) of the property or foreclose upon any commercial real estate if such environmental assessment indicates the presence of hazardous material; (y) make or acquire any Loan or issue a commitment (including a letter of credit) or renew or extend an existing commitment for any Loan, or amend or modify in any material respect any Loan (including in any manner that would result in any additional extension of credit, principal forgiveness, or effect any uncompensated release of collateral, i.e., at a value below the fair market value thereof as determined by Target), except (i) new Loans not in excess of $1,000,000, (ii) Loans or commitments for Loans that have previously been approved by Target prior to the date of this Agreement not in excess of $1,000,000, (iii) with respect to amendments or modifications that have previously been approved by Target prior to the date hereof, amend or modify in any material respect any existing Loan rated “special mention” or worse by Buyer, as identified in Buyer’s Disclosure Memorandum, with total credit exposure not in excess of $2,000,000, or (iv) with respect to any such actions that have previously been approved by Target prior to the date hereof, modify or amend any Loan in a manner that would result in any additional extension of credit, principal forgiveness, or effect any uncompensated release of collateral, i.e., at a value below the fair market value thereof as determined by Target, in each case not in excess of $1,000,000; or (z) agree to take, make any commitment to take, or adopt any resolutions of Target’s board of directors in support of, any of the actions prohibited by this Section 6.2.

Negative Covenants of Target. From the date of this ---------------------------- Agreement until the earlier of (i) the election to Target's Board of Directors of Buyer's designees pursuant to Section 1.3(a), (ii) the Effective Time Time, or (iii) the termination of this Agreement, TARGET unless the prior written consent of Buyer shall have been obtained, and except as otherwise expressly contemplated herein, Target covenants and agrees that it will not do or agree or commit to do, or permit any of its Subsidiaries to do or agree or commit to do, any of the following without the prior written consent of the chief executive officer or chief financial officer of PURCHASER, which consent shall not be unreasonably withheld or delayedfollowing: (a) amend the Articles of Incorporation, Bylaws or other governing instruments of any TARGET CompanyTarget Entity; or (b) incur any additional debt obligation or other obligation for borrowed money (other than indebtedness of a TARGET Company to another TARGET Company) (for the TARGET Companies on a consolidated basis) except in the ordinary course of the business of TARGET Companies consistent with past practices (which shall include, for TARGET Subsidiaries that are depository institutions, creation of deposit liabilities, purchases of federal funds, receipt of Federal Home Loan Bank advances, and entry into repurchase agreements fully secured by U.S. government or agency securities), or impose, or suffer the imposition, on any share Asset of stock held by any TARGET Company Target Entity of any Lien or permit any such Lien to existexist (other than in connection with Liens in effect as of the date hereof that are disclosed in the Target Disclosure Memorandum); or (c) repurchase, redeem or otherwise acquire or exchange (other than exchanges in the ordinary course under employee benefit plans), directly or indirectly, any shares, or any securities convertible into any shares, of the capital stock of any TARGET CompanyTarget Entity, or declare or pay any dividend or make any other distribution in respect of TARGETTarget's capital stock; provided, however, that -------- ------- TARGET may declare and pay a dividend in cash to the TARGET shareholders during the second calendar quarter of 2001 in an amount in the aggregate equal to the lesser of (i) the net income of TARGET for the first calendar quarter of 2001, and (ii) the aggregate dividend paid to the TARGET shareholders during calendar year 2000; or (d) except for this Agreement, or pursuant to the exercise of stock options outstanding as of the date hereof and pursuant to the terms thereof in existence on the date hereof, or as Previously Discloseddisclosed in Section 8.2 of the Target Disclosure Memorandum, issue, sell, pledge, encumber, authorize the issuance of or of, enter into any Contract to issue, sell, pledge, encumber encumber, or authorize the issuance of of, or otherwise permit to become outstanding, any additional shares of TARGET Target Common Stock or any other capital stock of any TARGET CompanyTarget Entity, or any stock appreciation rights, or any option, warrant, conversion or other right to acquire any such stock, or any security convertible into any such stockEquity Right; or (e) adjust, split, combine or reclassify any capital stock of any TARGET Company Target Entity or issue or authorize the issuance of any other securities in respect of or in substitution for shares of TARGET Target Common Stock Stock, or sell, lease, mortgage or otherwise dispose of or otherwise encumber (ix) any shares of capital stock of any TARGET Target Subsidiary (unless any such shares of stock are sold or otherwise transferred to another TARGET CompanyTarget Entity) or (iiy) any Asset having a book value in excess of $50,000 other than in the ordinary course of business for reasonable and adequate consideration; or (f) except for purchases of U.S. Treasury securities or U.S. Government agency securities, which in either case have maturities of three years or less, purchase any securities or make any material investment, either by purchase of stock of securities, contributions to capital, Asset transfers, or purchase of any Assets, in any Person other than a wholly owned Target Subsidiary, or otherwise acquire direct or indirect control over any Person, other than in connection with (i) internal reorganizations or consolidations involving existing Subsidiaries, (ii) foreclosures in the ordinary course of business, or (iiiii) acquisitions the creation of control new wholly owned Subsidiaries organized to conduct or continue activities otherwise permitted by a depository institution Subsidiary in its fiduciary capacitythis Agreement; or (g) grant any increase in compensation or benefits to the employees or officers of any TARGET Company (including such discretionary increases as may be contemplated by existing employment agreements)Target Entity, except in accordance with past practice Previously Disclosed disclosed in Section 8.2 of the Target Disclosure Memorandum or as required by Law; pay any severance or termination pay or any bonus except other than pursuant to employees written policies or written Contracts in accordance with past practice Previously Disclosed or the provisions of any applicable program or plan adopted by its Board of Directors prior to effect on the date of this AgreementAgreement and disclosed in Section 8.2 of the Target Disclosure Memorandum; and enter into or amend any severance agreements with officers of any TARGET CompanyTarget Entity; or pay any bonus to, or grant any material increase in fees or other increases in compensation or other benefits to, to directors of any TARGET CompanyTarget Entity except in accordance with past practice disclosed in Section 8.2 of the Target Disclosure Memorandum; or waive any stock repurchase rights, accelerate, amend or change the period of exercisability of any Equity Rights or restricted stock, or reprice Equity Rights granted under the Target Stock Plan or authorize cash payments in exchange for any Equity Rights; or (h) enter into or amend any employment Contract between any TARGET Company Target Entity and any Person (unless such amendment is required by Law) that the TARGET Company Target Entity does not have the unconditional right to terminate without Liability (other than Liability for services already rendered), at any time on or after the Effective Time; or (i) adopt any new employee benefit plan of any TARGET Company Target Entity or terminate or withdraw from, or make any material change in or to to, any existing employee benefit plans of any TARGET Company Target Entity other than any such change that is required by Law or that, in the opinion of counsel, is necessary or advisable to maintain the tax qualified status of any such plan, or make any distributions from such employee benefit plans, except as required by Law, the terms of such plans or consistent with past practice; or (j) make any significant change in any Tax or accounting methods or systems of internal accounting controls, except as may be appropriate to conform to changes in Tax Laws or regulatory accounting requirements or GAAP; or (k) commence any Litigation Litigation, other than in accordance with past practice, or settle any Litigation involving any Liability of any TARGET Company Target Entity for material money damages in excess of $50,000 or which involves material restrictions upon the operations of any TARGET CompanyTarget Entity; or (l) except in the ordinary course of businessenter into, modify, amend or terminate any material Contract or waive, release, compromise or assign any material rights or claims.

Negative Covenants of Target. From the date of this ---------------------------- Agreement until the earlier of the Effective Time or the termination of this Agreement, TARGET unless the prior written consent of Buyer shall have been obtained (which consent shall not be unreasonably withheld), and except as otherwise expressly contemplated herein, or as disclosed in Section 7.2 of the Target Disclosure Memorandum, Target covenants and agrees that it will not do or agree or commit to do, or permit any of its Subsidiaries to do or agree or commit to do, any of the following without the prior written consent of the chief executive officer or chief financial officer of PURCHASER, which consent shall not be unreasonably withheld or delayedfollowing: (a) amend the Articles Certificate of Incorporation, Bylaws or other governing instruments of any TARGET Company; Target Entity, or (b) incur any additional debt obligation or other obligation for borrowed money (other than (i) indebtedness of a TARGET Company Target Entity to another TARGET CompanyTarget Entity and (ii) indebtedness under any of the Target Entities' existing credit facilities up to $5.0 million more than the indebtedness currently oustanding under such facilities as of the date hereof) (for the TARGET Companies Target Entities on a consolidated basis) except in the ordinary course of the business of TARGET Companies consistent with past practices (which shall include, for TARGET Subsidiaries that are depository institutions, creation of deposit liabilities, purchases of federal funds, receipt of Federal Home Loan Bank advances, and entry into repurchase agreements fully secured by U.S. government or agency securities), or impose, or suffer the imposition, on any share Asset of stock held by any TARGET Company Target Entity of any Lien or permit any such Lien to existexist (other than in connection with Liens in effect as of the date hereof that are disclosed in the Target Disclosure Memorandum); or (c) repurchase, redeem redeem, or otherwise acquire or exchange (other than exchanges in the ordinary course under employee benefit plans), directly or indirectly, any shares, or any securities convertible into any shares, of the capital stock of any TARGET CompanyTarget Entity, or declare or pay any dividend or make any other distribution in respect of TARGETTarget's capital stock; provided, however, that -------- ------- TARGET may declare and pay a dividend in cash to the TARGET shareholders during the second calendar quarter of 2001 in an amount in the aggregate equal to the lesser of (i) the net income of TARGET for the first calendar quarter of 2001, and (ii) the aggregate dividend paid to the TARGET shareholders during calendar year 2000; or (d) except for this Agreement, or pursuant to the exercise of stock options outstanding as of the date hereof and pursuant to the terms thereof in existence on the date hereof, or as Previously Discloseddisclosed in Section 7.2 of the Target Disclosure Memorandum, issue, sell, pledge, encumber, authorize the issuance of or of, enter into any Contract to issue, sell, pledge, encumber encumber, or authorize the issuance of of, or otherwise permit to become outstanding, any additional shares of TARGET Target Common Stock or any other capital stock of any TARGET CompanyTarget Entity, or any stock appreciation rights, or any option, warrant, conversion or other right to acquire any such stock, Equity Right; or any security convertible into any such stock; or (e) adjust, split, combine or reclassify any capital stock of any TARGET Company Target Entity or issue or authorize the issuance of any other securities in respect of or in substitution for shares of TARGET Target Common Stock Stock, or sell, lease, mortgage or otherwise dispose of or otherwise encumber (i) any shares of capital stock of any TARGET Target Subsidiary (unless any such shares of stock are sold or otherwise transferred to another TARGET CompanyTarget Entity) or (ii) any Asset having a book value in excess of $50,000 100,000 other than in the ordinary course of business for reasonable and adequate consideration; or (f) acquire direct or indirect control over any Person, other than in connection with (i) internal reorganizations or consolidations involving existing Subsidiaries, (ii) foreclosures in the ordinary course of business, or (iii) acquisitions of control by a depository institution Subsidiary in its fiduciary capacity; or (g) grant any increase in compensation or benefits to the employees or officers of any TARGET Company (including such discretionary increases as may be contemplated by existing employment agreements), except in accordance with past practice Previously Disclosed or as required by Law; pay any bonus except to employees in accordance with past practice Previously Disclosed or the provisions of any applicable program or plan adopted by its Board of Directors prior to the date of this Agreement; enter into or amend any severance agreements with officers of any TARGET Company; or pay any bonus to, or grant any increase in fees or other increases in compensation or other benefits to, directors of any TARGET Company; or (h) enter into or amend any employment Contract between any TARGET Company and any Person (unless such amendment is required by Law) that the TARGET Company does not have the unconditional right to terminate without Liability (other than Liability for services already rendered), at any time on or after the Effective Time; or (i) adopt any new employee benefit plan of any TARGET Company or make any material change in or to any existing employee benefit plans of any TARGET Company other than any such change that is required by Law or that, in the opinion of counsel, is necessary or advisable to maintain the tax qualified status of any such plan; or (j) make any significant change in any accounting methods or systems of internal accounting controls, except as may be appropriate to conform to changes in regulatory accounting requirements or GAAP; or (k) commence any Litigation other than in accordance with past practice, settle any Litigation involving any Liability of any TARGET Company for money damages in excess of $50,000 or which involves material restrictions upon the operations of any TARGET Company; or (l) except in the ordinary course of business, modify, amend or terminate any material Contract or waive, release, compromise or assign any material rights or claims.

Negative Covenants of Target. From the date of this ---------------------------- Agreement until ---------------------------- the earlier of the Effective Time or the termination of this Agreement, TARGET covenants and agrees that it will not do or agree or commit to do, or permit any of its Subsidiaries to do or agree or commit to do, any of the following without the prior written consent of the chief executive officer or chief financial officer of PURCHASER, which consent shall not be unreasonably withheld or delayedwithheld: (a) amend the Articles of Incorporation, Bylaws or other governing instruments of any TARGET Company; or (b) incur any additional debt obligation or other obligation for borrowed money (other than indebtedness of a TARGET Company to another TARGET Company) in excess of an aggregate of $50,000 (for the TARGET Companies on a consolidated basis) except in the ordinary course of the business of TARGET Companies consistent with past practices (which shall include, for TARGET Subsidiaries that are depository institutions, creation of deposit liabilities, purchases of federal funds, receipt of Federal Home Loan Bank advances, and entry into repurchase agreements fully secured by U.S. government or agency securities), or impose, or suffer the imposition, on any share of stock held by any TARGET Company of any Lien or permit any such Lien to exist; or (c) repurchase, redeem redeem, or otherwise acquire or exchange (other than exchanges in the ordinary course under employee benefit plans), directly or indirectly, any shares, or any securities convertible into any shares, of the capital stock of any TARGET Company, or declare or pay any dividend or make any other distribution in respect of TARGET's capital stock; provided, however, that -------- ------- TARGET may declare and pay a dividend in cash to the TARGET shareholders during the second calendar quarter of 2001 in an amount in the aggregate equal to the lesser of (i) the net income of TARGET for the first calendar quarter of 2001, and (ii) the aggregate dividend paid to the TARGET shareholders during calendar year 2000; or (d) except for this Agreement, or pursuant to the exercise of stock options outstanding as of the date hereof and pursuant to the terms thereof in existence on the date hereofhereto, or as Previously Disclosed, issue, sell, pledge, encumber, authorize the issuance of of, or enter into any Contract to issue, sell, pledge, encumber encumber, or authorize the issuance of or otherwise permit to become outstanding, any additional shares of TARGET Common Stock or any other capital stock of any TARGET Company, or any stock appreciation rights, or any option, warrant, conversion conversion, or other right to acquire any such stock, or any security convertible into any such stock; or (e) adjust, split, combine or reclassify any capital stock of any TARGET Company or issue or authorize the issuance of any other securities in respect of or in substitution for shares of TARGET Common Stock or sell, lease, mortgage or otherwise dispose of or otherwise encumber (i) any shares of capital stock of any TARGET Subsidiary (unless any such shares of stock are sold or otherwise transferred to another TARGET Company) or (ii) any Asset having a book value in excess of $50,000 other than in the ordinary course of business for reasonable and adequate consideration; or (f) acquire direct or indirect control over any Person, other than in connection with (i) internal reorganizations or consolidations involving existing Subsidiaries, (ii) foreclosures in the ordinary course of business, or (iii) acquisitions of control by a depository institution Subsidiary in its fiduciary capacity; or (g) grant any increase in compensation or benefits to the employees or officers of any TARGET Company (including such discretionary increases as may be contemplated by existing employment agreements), except in accordance with past practice Previously Disclosed or as required by Law; pay any bonus except to employees in accordance with past practice Previously Disclosed or the provisions of any applicable program or plan adopted by its Board of Directors prior to the date of this Agreement; enter into or amend any severance agreements with officers of any TARGET Company; or pay any bonus to, or grant any increase in fees or other increases in compensation or other benefits to, to directors of any TARGET CompanyCompany except for the payment of an amount not to exceed $10,000 to each director of TARGET Bank in consideration of the termination of TARGET Bank's Director's Defined Benefit Plan or in accordance with past practice Previously Disclosed; or (h) enter into or amend any employment Contract between any TARGET Company and any Person (unless such amendment is required by Law) that the TARGET Company does not have the unconditional right to terminate without Liability (other than Liability for services already rendered), at any time on or after the Effective Time; or (i) adopt any new employee benefit plan of any TARGET Company or make any material change in or to any existing employee benefit plans of any TARGET Company other than any such change that is required by Law or that, in the opinion of counsel, is necessary or advisable to maintain the tax qualified status of any such plan; or (j) make any significant change in any accounting methods or systems of internal accounting controls, except as may be appropriate to conform to changes in regulatory accounting requirements or GAAP; or (k) commence any Litigation other than in accordance with past practice, settle any Litigation involving any Liability of any TARGET Company for money damages in excess of $50,000 or which involves material restrictions upon the operations of any TARGET Company; or (l) except in the ordinary course of business, modify, amend or terminate any material Contract or waive, release, compromise or assign any material rights or claims.

Negative Covenants of Target. From Except as expressly contemplated by this Agreement or otherwise consented to in writing by ACQUIROR, from the date of this ---------------------------- Agreement until the earlier of the Effective Time or the termination of this AgreementDate, TARGET covenants and agrees that it will not do or agree or commit to do, or permit any of its Subsidiaries to do or agree or commit to do, any of the following without the prior written consent of the chief executive officer or chief financial officer of PURCHASER, which consent shall not be unreasonably withheld or delayedfollowing: (a) Except as otherwise provided in Section 7.2(a) of the TARGET Disclosure Schedule, increase the compensation payable to or to become payable to any director, officer or employee; grant any severance or termination pay to, or enter into any employment, consulting or severance agreement with, any director, officer or employee or their respective affiliates other than employment or consulting agreements entered into with the consent of ACQUIROR; or establish, adopt, enter into or amend the Articles of Incorporation, Bylaws any employee benefit plan or other governing instruments of any TARGET Company; orarrangement except as may be required by applicable Law; (b) incur any additional debt obligation or other obligation for borrowed money (other than indebtedness of a TARGET Company to another TARGET Company) (for the TARGET Companies on a consolidated basis) except in the ordinary course of the business of TARGET Companies consistent with past practices (which shall include, for TARGET Subsidiaries that are depository institutions, creation of deposit liabilities, purchases of federal funds, receipt of Federal Home Loan Bank advances, and entry into repurchase agreements fully secured by U.S. government or agency securities), or impose, or suffer the imposition, on any share of stock held by any TARGET Company of any Lien or permit any such Lien to exist; or (c) repurchase, redeem or otherwise acquire or exchange (other than exchanges in the ordinary course under employee benefit plans), directly or indirectly, any shares, or any securities convertible into any shares, of the capital stock of any TARGET Company, or declare Declare or pay any dividend on, or make any other distribution (however characterized) in respect of, outstanding shares of TARGET's its capital stock; provided, however, that -------- ------- TARGET may declare and pay a dividend ; (c) Except as otherwise provided in cash to Section 7.2(c) of the TARGET shareholders during the second calendar quarter Disclosure Schedule, redeem, purchase or otherwise acquire any shares of 2001 in an amount in the aggregate equal to the lesser its capital stock or equity interest or any securities or obligations convertible into or exchangeable for any shares of (i) the net income of TARGET for the first calendar quarter of 2001, and (ii) the aggregate dividend paid to the TARGET shareholders during calendar year 2000; or (d) except for this Agreementits' capital stock or equity interest, or pursuant any options, warrants or conversion or other rights to acquire any shares of its' capital stock or any such securities or obligations (except in connection with the exercise of outstanding stock options outstanding as or stock purchase warrants referred to herein, in accordance with their terms or, in connection with the conversion of the date hereof and pursuant to the terms thereof convertible debentures, in existence on the date hereof, accordance with their terms); effect any reorganization or as Previously Disclosed, issue, sell, pledge, encumber, authorize the issuance of recapitalization; or enter into any Contract to issue, sell, pledge, encumber or authorize the issuance of or otherwise permit to become outstanding, any additional shares of TARGET Common Stock or any other capital stock of any TARGET Company, or any stock appreciation rights, or any option, warrant, conversion or other right to acquire any such stock, or any security convertible into any such stock; or (e) adjust, split, combine or reclassify any of its capital stock of any TARGET Company or issue or authorize or propose the issuance of any other securities in respect of, in lieu of or in substitution for, shares of its' capital stock; (d) Except as otherwise provided in Section 7.2(d) of the TARGET Disclosure Schedule and except for the issuance in aggregate of no more than one (1) million shares of TARGET Common Stock and options, warrants or convertible securities exercisable for or convertible into no more than one (1) million shares of TARGET Common Stock, issue, deliver, award, grant or sell, leaseor authorize or propose the issuance, mortgage delivery, award, grant or otherwise dispose sale (including the grant of any security interests, liens, claims, pledges, limitations in voting rights, charges or otherwise encumber (iother encumbrances) of, any shares of any class of its' capital stock or other securities (including shares held in treasury); (e) Acquire or agree to acquire, by merging or consolidating with, by purchasing an equity interest in or a portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division (other than a wholly-owned subsidiary) thereof, or otherwise acquire or agree to acquire any assets of any TARGET Subsidiary other person (unless any such shares of stock are sold or otherwise transferred to another TARGET Company) or (ii) any Asset having a book value in excess of $50,000 other than the purchase of assets from suppliers or vendors in the ordinary course of business for reasonable and adequate consideration; orconsistent with past practice) in each case which are material to it; (f) acquire direct Sell, lease, exchange, mortgage, pledge, transfer or indirect control over otherwise dispose of, or agree to sell, lease, exchange, mortgage, pledge, transfer or otherwise dispose of, any Person, other than in connection with (i) internal reorganizations or consolidations involving existing Subsidiaries, (ii) foreclosures in of its assets outside of the ordinary course of business, or (iii) acquisitions of control by a depository institution Subsidiary in its fiduciary capacity; or; (g) grant Propose or adopt any increase in compensation amendments to its Certificate of Incorporation or benefits to the employees or officers of any TARGET Company (including such discretionary increases as may be contemplated by existing employment agreements)By-Laws, except as otherwise provided in accordance with past practice Previously Disclosed or as required by Law; pay any bonus except to employees in accordance with past practice Previously Disclosed or Section 7.2(g) of the provisions of any applicable program or plan adopted by its Board of Directors prior to the date of this Agreement; enter into or amend any severance agreements with officers of any TARGET Company; or pay any bonus to, or grant any increase in fees or other increases in compensation or other benefits to, directors of any TARGET Company; orDisclosure Schedule; (h) enter into Change any of its methods of accounting in effect, or amend make or rescind any employment Contract between express or deemed election relating to taxes, settle or compromise any TARGET Company and any Person claim, action, suit, litigation, proceeding, arbitration, investigation, audit or controversy relating to Taxes (unless except where the amount of such amendment is required by Law) that settlements or controversies, individually or in the TARGET Company aggregate, does not have the unconditional right to terminate without Liability (other than Liability for services already renderedexceed $50,000), at or change any time on of its methods of reporting income or after the Effective Time; or (i) adopt any new employee benefit plan of any TARGET Company or make any material change in or to any existing employee benefit plans of any TARGET Company other than any such change that is required by Law or that, deductions for federal income tax purposes from those employed in the opinion preparation of counsel, is necessary or advisable to maintain the federal income tax qualified status of any such plan; or (j) make any significant change in any accounting methods or systems of internal accounting controlsreturns for the taxable year ended 1999, except as may be appropriate required by Law or generally accepted accounting principles; (i) Except as set forth in Section 7.2(i) of the TARGET Disclosure Schedule, incur any obligation for borrowed money or purchase money indebtedness, whether or not evidenced by a note, bond, debenture or similar instrument, except obligations arising from establishment of a line of credit and borrowings under such line of credit; (j) Enter into any material arrangement, agreement or contract with any third party which provides for an exclusive arrangement with that third party or is substantially more restrictive on TARGET, or substantially less advantageous to conform to changes in regulatory accounting requirements TARGET, than arrangements, agreements or GAAP; orcontracts existing on the date hereof; (k) commence Except as set forth in Section 7.2(l) of the TARGET Disclosure Schedule, (i) make any Litigation other than in accordance with past practice, settle any Litigation involving any Liability of any TARGET Company for money damages capital expenditures individually in excess of $50,000 or which involves material restrictions upon in the operations aggregate in excess of any TARGET Company$100,000; or enter into or terminate (l) except in the ordinary course of businessbusiness and consistent with past practice) any lease of, modifyor purchase or sell, amend any real property; or terminate enter into any material Contract leases of personal property involving individually in excess of $50,000 annually or waive, release, compromise in the aggregate in excess of $100,000 annually; and (l) Agree in writing or assign otherwise to do any material rights or claimsof the foregoing.

Negative Covenants of Target. From the date of this ---------------------------- Agreement until the earlier of the Effective Time or the termination of this Agreement, TARGET unless the prior written consent of Buyer shall have been obtained (which consent shall not be unreasonably withheld), and except as otherwise expressly contemplated herein, or as disclosed in Section 7.2 of the Target Disclosure Memorandum, Target covenants and agrees that it will not do or agree or commit to do, or permit any of its Subsidiaries to do or agree or commit to do, any of the following without the prior written consent of the chief executive officer or chief financial officer of PURCHASER, which consent shall not be unreasonably withheld or delayedfollowing: (a) amend the Articles Certificate of Incorporation, Bylaws or other governing instruments of any TARGET Company; Target Entity, or (b) incur any additional debt obligation or other obligation for borrowed money (other than (i) indebtedness of a TARGET Company Target Entity to another TARGET CompanyTarget Entity and (ii) indebtedness under any of the Target Entities' existing credit facilities up to $5.0 million more than the indebtedness currently oustanding under such facilities as of the date hereof) (for the TARGET Companies Target Entities on a consolidated basis) except in the ordinary course of the business of TARGET Companies consistent with past practices (which shall include, for TARGET Subsidiaries that are depository institutions, creation of deposit liabilities, purchases of federal funds, receipt of Federal Home Loan Bank advances, and entry into repurchase agreements fully secured by U.S. government or agency securities), or impose, or suffer the imposition, on any share Asset of stock held by any TARGET Company Target Entity of any Lien or permit any such Lien to existexist (other than in connection with Liens in effect as of the date hereof that are disclosed in the Target Disclosure Memorandum); or (c) repurchase, redeem redeem, or otherwise acquire or exchange (other than exchanges in the ordinary course under employee benefit plans), directly or indirectly, any shares, or any securities convertible into any shares, of the capital stock of any TARGET CompanyTarget Entity, or declare or pay any dividend or make any other distribution in respect of TARGETTarget's capital stock; provided, however, that -------- ------- TARGET may declare and pay a dividend in cash to the TARGET shareholders during the second calendar quarter of 2001 in an amount in the aggregate equal to the lesser of (i) the net income of TARGET for the first calendar quarter of 2001, and (ii) the aggregate dividend paid to the TARGET shareholders during calendar year 2000; or (d) except for this Agreement, or pursuant to the exercise of stock options outstanding as of the date hereof and pursuant to the terms thereof in existence on the date hereof, or as Previously Discloseddisclosed in Section 7.2 of the Target Disclosure Memorandum, issue, sell, pledge, encumber, authorize the issuance of or of, enter into any Contract to issue, sell, pledge, encumber encumber, or authorize the issuance of of, or otherwise permit to become outstanding, any additional shares of TARGET Target Common Stock or any other capital stock of any TARGET CompanyTarget Entity, or any stock appreciation rights, or any option, warrant, conversion or other right to acquire any such stock, or any security convertible into any such stockEquity Right; or (e) adjust, split, combine or reclassify any capital stock of any TARGET Company Target Entity or issue or authorize the issuance of any other securities in respect of or in substitution for shares of TARGET Target Common Stock Stock, or sell, lease, mortgage or otherwise dispose of or otherwise encumber (i) any shares of capital stock of any TARGET Target Subsidiary (unless any such shares of stock are sold or otherwise transferred to another TARGET CompanyTarget Entity) or (ii) any Asset having a book value in excess of $50,000 100,000 other than in the ordinary course of business for reasonable and adequate consideration; or (f) except for purchases of U.S. Treasury securities or U.S. Government agency securities, which in either case have maturities of three years or less, purchase any securities or make any material investment, either by purchase of stock or securities, contributions to capital, Asset transfers, or purchase of any Assets, in any Person other than a wholly owned Target Subsidiary, or otherwise acquire direct or indirect control over any Person, other than in connection with (i) internal reorganizations or consolidations involving existing Subsidiaries, (ii) foreclosures in the ordinary course of business, or (ii) the creation of new wholly owned Subsidiaries organized to conduct or continue activities otherwise permitted by this Agreement, or (iii) acquisitions of control by a depository institution Subsidiary investments in its fiduciary capacityconnection with cash management activities consistent with past practices; or (g) grant any increase in compensation or benefits to the employees or officers of any TARGET Company (including such discretionary increases as may be contemplated by existing employment agreements)Target Entity, except in accordance with past practice Previously Disclosed or as required by Law; pay any bonus except to employees in accordance with past practice Previously Disclosed or the provisions of any applicable program or plan adopted by its Board of Directors prior to the date of this Agreement; enter into or amend any severance agreements with officers of any TARGET CompanyTarget Entity; or pay any bonus to, or grant any material increase in fees or other increases in compensation or other benefits to, to directors of any TARGET CompanyTarget Entity; or (h) enter into or amend any employment Contract between any TARGET Company Target Entity and any Person having a salary thereunder in excess of $100,000 per year (unless such amendment is required by Law) that the TARGET Company Target Entity does not have the unconditional right to terminate without Liability (other than Liability for services already rendered), at any time on or after the Effective Time; or (i) adopt any new employee benefit plan of any TARGET Company Target Entity or terminate or withdraw from, or make any material change in or to to, any existing employee benefit plans of any TARGET Company Target Entity other than any such change that is required by Law or that, in the opinion of counsel, is necessary or advisable to maintain the tax qualified status of any such plan, or make any distributions from such employee benefit plans, except as required by Law, the terms of such plans or consistent with past practice; or (j) make any significant material change in any Tax or accounting methods or systems of internal accounting controls, except as may be appropriate to conform to changes in Tax Laws or regulatory accounting requirements or GAAP; or (k) commence enter into any Litigation other than Contract or amend or modify any existing Contract, or engage in accordance any new transaction outside the ordinary course of business consistent with past practicepractice or not on an arm's-length basis, settle with any Litigation involving any Liability Affiliate of any TARGET Company for money damages in excess of $50,000 or which involves material restrictions upon the operations of any TARGET CompanyTarget Entity; or (l) make any capital expenditures or commitments for additions to plant, property or equipment constituting capital assets not in the ordinary course of business consistent with past practice (excluding any capital expenditures required to be made by Irving Tanning Company arising in connection with the upgrade of the water/waste treatment facility operated by the Town of Hartland, Maine); or (m) make any change in the lines of business in which it participates or is engaged; or (n) except in the ordinary course of business, enter into, modify, amend or terminate any material Contract or waive, release, compromise or assign any material rights or claims.

Negative Covenants of Target. From the date of this ---------------------------- Agreement until ---------------------------- the earlier of the Effective Time or the termination of this Agreement, TARGET covenants and agrees that it will not do or agree or commit to do, or permit any of its Subsidiaries to do or agree or commit to do, any of the following without the prior written consent of the chief executive officer or chief financial officer of PURCHASER, which consent shall not be unreasonably withheld or delayedwithheld: (a) amend the Articles of Incorporation, Bylaws or other governing instruments of any TARGET Company; or (b) incur any additional debt obligation or other obligation for borrowed money (other than indebtedness of a TARGET Company to another TARGET Company) in excess of an aggregate of $50,000 (for the TARGET Companies on a consolidated basis) except in the ordinary course of the business of TARGET Companies consistent with past practices (which shall include, for TARGET Subsidiaries that are depository institutions, creation of deposit liabilities, purchases of federal funds, receipt of Federal Home Loan Bank advances, and entry into repurchase agreements fully secured by U.S. government or agency securities), or impose, or suffer the imposition, on any share of stock held by any TARGET Company of any Lien or permit any such Lien to exist, except with regard to Liens on the stock of TARGET Bank Previously Disclosed; or (c) repurchase, redeem redeem, or otherwise acquire or exchange (other than exchanges in the ordinary course under employee benefit plans), directly or indirectly, any shares, or any securities convertible into any shares, of the capital stock of any TARGET Company, or declare or pay any dividend or make any other distribution in respect of TARGET's capital stock; provided, however, that -------- ------- TARGET may declare and pay a dividend in cash to the TARGET shareholders during the second calendar quarter of 2001 in an amount in the aggregate equal to the lesser of (i) the net income of TARGET for the first calendar quarter of 2001, and (ii) the aggregate dividend paid to the TARGET shareholders during calendar year 2000; or (d) except for this Agreement, or pursuant to the exercise of stock options outstanding as of the date hereof and pursuant to the terms thereof in existence on the date hereofhereto, or as Previously Disclosed, issue, sell, pledge, encumber, authorize the issuance of of, or enter into any Contract to issue, sell, pledge, encumber encumber, or authorize the issuance of or otherwise permit to become outstanding, any additional shares of TARGET Common Stock or any other capital stock of any TARGET Company, or any stock appreciation rights, or any option, warrant, conversion conversion, or other right to acquire any such stock, or any security convertible into any such stock; or (e) adjust, split, combine or reclassify any capital stock of any TARGET Company or issue or authorize the issuance of any other securities in respect of or in substitution for shares of TARGET Common Stock or sell, lease, mortgage or otherwise dispose of or otherwise encumber (i) any shares of capital stock of any TARGET Subsidiary (unless any such shares of stock are sold or otherwise transferred to another TARGET Company) or (ii) any Asset having a book value in excess of $50,000 other than in the ordinary course of business for reasonable and adequate consideration; or (f) acquire direct or indirect control over any Person, other than in connection with (i) internal reorganizations or consolidations involving existing Subsidiaries, (ii) foreclosures in the ordinary course of business, or (iii) acquisitions of control by a depository institution Subsidiary in its fiduciary capacity; or (g) grant any increase in compensation or benefits to the employees or officers of any TARGET Company (including such discretionary increases as may be contemplated by existing employment agreements), except in accordance with past practice Previously Disclosed or as required by Law; pay any bonus except to employees in accordance with past practice Previously Disclosed or the provisions of any applicable program or plan adopted by its Board of Directors prior to the date of this Agreement; enter into or amend any severance agreements with officers of any TARGET Company; or pay any bonus to, or grant any increase in fees or other increases in compensation or other benefits to, to directors of any TARGET CompanyCompany except in accordance with past practice Previously Disclosed; or (h) except with regard to the employment agreements referenced in Section 6.2(g), enter into or amend any employment Contract between any TARGET Company and any Person (unless such amendment is required by Law) that the TARGET Company does not have the unconditional right to terminate without Liability (other than Liability for services already rendered), at any time on or after the Effective Time; or (i) adopt any new employee benefit plan of any TARGET Company or make any material change in or to any existing employee benefit plans of any TARGET Company other than any such change that is required by Law or that, in the opinion of counsel, is necessary or advisable to maintain the tax qualified status of any such plan; or (j) make any significant change in any accounting methods or systems of internal accounting controls, except as may be appropriate to conform to changes in regulatory accounting requirements or GAAP; or (k) commence any Litigation other than in accordance with past practice, settle any Litigation involving any Liability of any TARGET Company for money damages in excess of $50,000 or which involves material restrictions upon the operations of any TARGET Company; or (l) except in the ordinary course of business, modify, amend or terminate any material Contract or waive, release, compromise or assign any material rights or claims.

Negative Covenants of Target. From the date of this ---------------------------- Agreement until the earlier of the Effective Time or the termination of this Agreement, TARGET covenants and agrees that it will not do or agree or commit to do, or permit any of its Subsidiaries to do or agree or commit to do, any of the following without the prior written consent of the chief executive officer or chief financial officer of PURCHASER, which consent shall not be unreasonably withheld or delayedwithheld: (a) amend the Articles of Incorporation, Bylaws or other governing instruments of any TARGET CompanyTARGET; or (b) incur any additional debt obligation or other obligation for borrowed money (other than indebtedness in excess of a TARGET Company to another TARGET Company) (for the TARGET Companies on a consolidated basis) an aggregate of $25,000 except in the ordinary course of the business of TARGET Companies consistent with past practices (which shall include, for TARGET Subsidiaries that are depository institutions, creation of deposit liabilities, purchases of federal funds, receipt of Federal Home Loan Bank advances, and entry into repurchase agreements fully secured by U.S. government or agency securities)practices, or impose, or suffer the imposition, on any share of stock held by any TARGET Company of any Lien or permit any such Lien to exist, except with regard to Liens on the stock of TARGET set forth in the TARGET Disclosure Letter; or (c) except as set forth in the TARGET Disclosure Letter, repurchase, redeem redeem, or otherwise acquire or exchange (other than exchanges in the ordinary course under employee benefit plans), directly or indirectly, any shares, or any securities convertible into any shares, of the capital stock of any TARGET CompanyTARGET, or declare or pay any dividend or make any other distribution in respect of TARGET's capital stock; provided, however, that -------- ------- TARGET may declare and pay a dividend in cash to the TARGET shareholders during the second calendar quarter of 2001 in an amount in the aggregate equal to the lesser of (i) the net income of TARGET for the first calendar quarter of 2001, and (ii) the aggregate dividend paid to the TARGET shareholders during calendar year 2000; or (d) except for this Agreement, or pursuant to the exercise of stock options outstanding as of the date hereof and pursuant to the terms thereof in existence on the date hereofhereto, or as Previously Disclosedset forth in the TARGET Disclosure Letter, issue, sell, pledge, encumber, authorize the issuance of of, or enter into any Contract to issue, sell, pledge, encumber encumber, or authorize the issuance of or otherwise permit to become outstanding, any additional shares of TARGET Common Stock or any other capital stock of any TARGET CompanyTARGET, or any stock appreciation rights, or any option, warrant, conversion conversion, or other right to acquire any such stock, or any security convertible into any such stock; or (e) adjust, split, combine or reclassify any capital stock of any TARGET Company or issue or authorize the issuance of any other securities in respect of or in substitution for shares of TARGET Common Stock or sell, lease, mortgage or otherwise dispose of or otherwise encumber (i) any shares of capital stock of any TARGET Subsidiary (unless any such shares of stock are sold or otherwise transferred to another TARGET Company) or (ii) any Asset having a book value in excess of $50,000 25,000 other than in the ordinary course of business for reasonable and adequate consideration; or (f) acquire direct or indirect control over any Person, other than in connection with (i) internal reorganizations or consolidations involving existing Subsidiaries, (ii) foreclosures in the ordinary course of business, or (iii) acquisitions of control by a depository institution Subsidiary in its fiduciary capacity; or (g) grant any increase in compensation or benefits to the employees or officers of any TARGET Company (including such discretionary increases as may be contemplated by existing employment agreements), except in accordance with past practice Previously Disclosed set forth in the TARGET Disclosure Letter or as required by Law; pay any bonus except to employees in accordance with past practice Previously Disclosed set forth in the TARGET Disclosure Letter or the provisions of any applicable program or plan adopted by its Board of Directors prior to the date of this Agreement; enter into or amend any severance agreements with officers of any TARGET CompanyTARGET; or pay any bonus to, or grant any increase in fees or other increases in compensation or other benefits to, to directors of any TARGET Companyexcept in accordance with past practice as described in the TARGET Disclosure Letter; or (h) except with regard to the employment agreements referenced in Section 7.2(g), enter into or amend any employment Contract between any TARGET Company and any Person (unless such amendment is required by Law) that the TARGET Company does not have the unconditional right to terminate without Liability (other than Liability for services already rendered), at any time on or after the Effective Time; or (i) adopt any new employee benefit plan of any TARGET Company or make any material change in or to any existing employee benefit plans of any TARGET Company other than any such change that is required by Law or that, in the opinion of counsel, is necessary or advisable to maintain the tax qualified status of any such plan; or (j) make any significant change in any accounting methods or systems of internal accounting controls, except as may be appropriate to conform to changes in regulatory accounting requirements or GAAP; or (k) commence any Litigation other than in accordance with past practice, settle any Litigation involving any Liability of any TARGET Company for money damages in excess of $50,000 25,000 or which involves material restrictions upon the operations of any TARGET CompanyTARGET; or (l) except in the ordinary course of business, modify, amend or terminate any material Contract or waive, release, compromise or assign any material rights or claims.

Negative Covenants of Target. From Subject to compliance with applicable laws, after the date of this ---------------------------- Agreement until hereof and prior to the Closing Date or earlier of the Effective Time or the termination of this AgreementPlan of Merger, TARGET covenants unless Buyer and agrees that it will not do HR shall otherwise agree in writing or agree or commit to doas may be otherwise specifically contemplated by this Plan of Merger, or permit any of its Subsidiaries to do or agree or commit to do, any of the following without the prior written consent of the chief executive officer or chief financial officer of PURCHASER, which consent Target shall not be unreasonably withheld or delayednot: (a) amend the Articles of Incorporation, Bylaws or other governing instruments of Incur any TARGET Company; or (b) incur any additional debt obligation or other obligation for borrowed money (liabilities other than indebtedness of a TARGET Company to another TARGET Company) (for the TARGET Companies on a consolidated basis) except in the ordinary course of the business of TARGET Companies consistent with past practices (which shall include, for TARGET Subsidiaries that are depository institutions, creation of deposit liabilities, purchases of federal funds, receipt of Federal Home Loan Bank advances, and entry into repurchase agreements fully secured by U.S. government or agency securities), or impose, or suffer the imposition, on any share of stock held by any TARGET Company of any Lien or permit any such Lien to exist; or (c) repurchase, redeem or otherwise acquire or exchange (other than exchanges in the ordinary course under employee benefit plans), directly or indirectly, any shares, or any securities convertible into any shares, of the capital stock of any TARGET Company, or declare or pay any dividend or make any other distribution in respect of TARGET's capital stock; provided, however, that -------- ------- TARGET may declare and pay a dividend in cash to the TARGET shareholders during the second calendar quarter of 2001 in an amount in the aggregate equal to the lesser of (i) the net income of TARGET for the first calendar quarter of 2001, and (ii) the aggregate dividend paid to the TARGET shareholders during calendar year 2000; or (d) except for this Agreement, or pursuant to the exercise of stock options outstanding as of the date hereof and pursuant to the terms thereof in existence on the date hereof, or as Previously Disclosed, issue, sell, pledge, encumber, authorize the issuance of or enter into any Contract to issue, sell, pledge, encumber or authorize the issuance of or otherwise permit to become outstanding, any additional shares of TARGET Common Stock or any other capital stock of any TARGET Company, or any stock appreciation rights, or any option, warrant, conversion or other right to acquire any such stock, or any security convertible into any such stock; or (e) adjust, split, combine or reclassify any capital stock of any TARGET Company or issue or authorize the issuance of any other securities in respect of or in substitution for shares of TARGET Common Stock or sell, lease, mortgage or otherwise dispose of or otherwise encumber (i) any shares of capital stock of any TARGET Subsidiary (unless any such shares of stock are sold or otherwise transferred to another TARGET Company) or (ii) any Asset having a book value in excess of $50,000 other than in the ordinary course of business for reasonable and adequate consideration; or (f) acquire direct or indirect control over any Person, other than in connection with (i) internal reorganizations or consolidations involving existing Subsidiaries, (ii) foreclosures current liabilities incurred in the ordinary course of business; (b) Incur any mortgage, lien, pledge, hypothecation, charge, encumbrance, or (iii) acquisitions restriction of control by a depository institution Subsidiary in its fiduciary capacity; orany kind, except liens for taxes not due; (gc) grant Become a party to any increase in compensation or benefits to the employees or officers of any TARGET Company (including such discretionary increases as may be contemplated by existing employment agreements), except in accordance with past practice Previously Disclosed or as required by Law; pay any bonus except to employees in accordance with past practice Previously Disclosed or the provisions of any applicable program or plan adopted by its Board of Directors prior to the date of this Agreement; enter into or amend any severance agreements with officers of any TARGET Company; or pay any bonus tocontract, or grant any increase in fees renew, extend, or other increases in compensation or other benefits to, directors of any TARGET Company; or (h) enter into or amend any employment Contract between any TARGET Company and any Person (unless such amendment is required by Law) that the TARGET Company does not have the unconditional right to terminate without Liability (other than Liability for services already rendered), at any time on or after the Effective Time; or (i) adopt any new employee benefit plan of any TARGET Company or make any material change in or to modify any existing employee benefit plans of any TARGET Company other than any such change that is required by Law or thatcontract, in the opinion of counsel, is necessary or advisable to maintain the tax qualified status of any such plan; or (j) make any significant change in any accounting methods or systems of internal accounting controls, except as may be appropriate to conform to changes in regulatory accounting requirements or GAAP; or (k) commence any Litigation other than in accordance with past practice, settle any Litigation involving any Liability of any TARGET Company for money damages in excess of $50,000 or which involves material restrictions upon the operations of any TARGET Company; or (l) except in the ordinary course of business; (d) Make any capital expenditures, modifyexcept for ordinary repairs, amend maintenance, and replacement; (e) Declare or terminate pay any material Contract dividend on or waivemake any other distribution to stockholders, releaseexcept for payment of any dividends consistent with past practice; (f) Pay or agree to pay any bonus, compromise increase in compensation, pension, or assign severance pay to any material rights director, stockholder, officer, consultant, agent, or claimsemployee, except for bonuses accrued as of the Closing Date at the same rate as accrued during 1998 through the date of this Plan of Merger in accordance with past practice not exceeding an aggregate of $700,000 to persons (except Rich▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇ch▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇ John ▇. ▇▇▇▇▇▇▇▇▇) ▇▇o are employees of Target on the Closing Date and who sign termination agreements containing appropriate releases and confidentiality provisions; (g) Discharge or satisfy any lien or encumbrance, or pay any obligation or liability, except current liabilities shown on the Target Balance Sheet, or incurred in the ordinary course of business since the date of the Target Balance Sheet; (h) Merge or consolidate with any other entity; (i) Enter into any transactions or take any acts that would constitute a breach of the representations, and warranties contained in this Plan of Merger; and (j) Institute, settle, or agree to settle any action or proceeding before any court or governmental body.

Negative Covenants of Target. From the date of this ---------------------------- -------------------------------- Agreement until the earlier of the Effective Time or the termination of this Agreement, TARGET Target covenants and agrees that it will not do or agree or commit to do, or permit any of its Subsidiaries to do or agree or commit to do, any of the following without the prior written consent of the chief executive officer or chief financial officer of PURCHASERPurchaser, which consent shall not be unreasonably withheld or delayed: (a) amend the Articles of IncorporationIncorporation or Association, Bylaws By-Laws or other governing instruments of any TARGET Target Company; or (b) incur any additional debt obligation or other obligation for borrowed money (other than indebtedness of a TARGET Target Company to another TARGET Target Company) (for the TARGET Target Companies on a consolidated basis) except in the ordinary course of the business of TARGET Target Companies consistent with past practices (which shall include, for TARGET Target Subsidiaries that are depository institutions, creation of deposit liabilities, purchases of federal funds, receipt of Federal Home Loan Bank advances, and entry into repurchase agreements fully secured by U.S. government or agency securities), or impose, or suffer the imposition, on any share of stock held by of any TARGET Target Company of any Lien or permit any such Lien to exist; or (c) repurchase, redeem or otherwise acquire or exchange (other than redemptions without the payment of any additional consideration or exchanges in the ordinary course under employee benefit plansplans or exercises or conversions prior to the Effective Time of Target Options or Target Warrants pursuant to the terms thereof), directly or indirectly, any shares, or any securities convertible into any shares, of the capital stock of any TARGET Target Company, or declare or pay any dividend or make any other distribution in respect of TARGETTarget's capital stock; provided, however, that -------- ------- TARGET may declare and pay a dividend in cash to the TARGET shareholders during the second calendar quarter of 2001 in an amount in the aggregate equal to the lesser of (i) the net income of TARGET for the first calendar quarter of 2001, and (ii) the aggregate dividend paid to the TARGET shareholders during calendar year 2000; or (d) except for this AgreementAgreement or pursuant to another agreement with a Purchaser Company, or pursuant to the exercise of stock options Target Options or Target Warrants outstanding as of the date hereof and pursuant to the terms thereof in existence on the date hereof, or as Previously Disclosed, issue, sell, pledge, encumber, authorize the issuance of or enter into any Contract to issue, sell, pledge, encumber or authorize the issuance of or otherwise permit to become outstanding, any additional shares of TARGET Target Common Stock or any other capital stock of any TARGET Target Company, or any stock appreciation rights, or any option, warrant, conversion or other right to acquire any such stock, or any security convertible into any such stock; or (e) adjust, split, combine or reclassify any capital stock of any TARGET Target Company or issue or authorize the issuance of any other securities in respect of or in substitution for shares of TARGET Target Common Stock or sell, lease, mortgage or otherwise dispose of or otherwise encumber (i) any shares of capital stock of any TARGET Target Subsidiary (unless any such shares of stock are sold or otherwise transferred to another TARGET Target Company) or (ii) any Asset having a book value in excess of $50,000 other than in the ordinary course of business for reasonable and adequate consideration; or (f) acquire another business or merge or consolidate with another entity or acquire direct or indirect control over any Person, other than in connection with (i) internal reorganizations or consolidations involving existing Subsidiaries, (ii) foreclosures in the ordinary course of business, or (iii) acquisitions of control by a depository institution Subsidiary in its fiduciary capacity; or (g) grant any increase in compensation or benefits to the employees or officers of any TARGET Target Company (including such discretionary increases as may be contemplated by existing employment agreements), except in accordance with past practice Previously Disclosed or as required by Law; pay any bonus except to employees in accordance with past practice Previously Disclosed or the provisions of any applicable program or plan adopted by its Board of Directors prior to the date of this Agreement; enter into or amend any severance agreements with officers of any TARGET Target Company; or pay any bonus to, or grant any increase in fees or other increases in compensation or other benefits to, directors of any TARGET Target Company; or (h) enter into or amend any employment Contract between any TARGET Target Company and any Person (unless such amendment is required by Law) that the TARGET Target Company does not have the unconditional right to terminate without Liability (other than Liability for services already rendered), at any time on or after the Effective Time; or (i) adopt any new employee benefit plan of any TARGET Target Company or make any material Material change in or to any existing employee benefit plans of any TARGET Target Company other than any such change that is required by Law or that, in the opinion of counsel, is necessary or advisable to maintain the tax qualified status of any such plan; or (j) make any significant change in any Tax or accounting methods or systems of internal accounting controls, except as may be appropriate to conform to changes in regulatory accounting requirements or GAAP; or (k) fail to maintain its books, accounts and records in the usual manner on a basis consistent with that heretofore employed; or (l) commence any Litigation other than in accordance with past practice, settle any Litigation involving any Liability of any TARGET Target Company for money damages in excess of $50,000 25,000 or which involves material Material restrictions upon the operations of any TARGET Target Company; or (lm) enter into any new line of banking or nonbanking business in which it is not actively engaged as of the date of this Agreement; or (i) charge off (except as may otherwise be required by Law or by regulatory authorities or by GAAP consistently applied) or sell (except in the ordinary course of business consistent with past practices or as the Board of Directors of the respective Target Company deems necessary to conduct safe and sound banking practices) any of its portfolio of loans, discounts or financing leases, or (ii) sell any asset held as other real estate or other foreclosed assets for an amount Materially less than 100% of its book value; or (o) except in the ordinary course of business, modify, amend or terminate any material Material Contract or waive, release, compromise or assign any material Material rights or claims; or (p) make any Material election with respect to Taxes; or (q) except for purchases of U.S. Treasury securities or U.S. Government agency securities, which in either case have maturities of five (5) years or less, (i) purchase any securities or make any Material investment, either by purchase of stock or securities, contributions to capital, Asset transfers or purchase of any assets, in any Person other than any Target Company, or (ii) otherwise acquire direct or indirect control over any Person other than in connection with (A) foreclosures in the ordinary course of business, (B) acquisitions of control by a depository institution Subsidiary in its fiduciary capacity, or (C) the creation of new, wholly-owned Subsidiaries organized to conduct or continue activities otherwise permitted by this Agreement.

Negative Covenants of Target. From the date of this ---------------------------- Agreement until the earlier of the Effective Time or the termination of this Agreement, TARGET unless the prior written consent of Buyer shall have been obtained (which consent shall not be unreasonably withheld or delayed), except as set forth in Section 7.2 of the Target Disclosure Memorandum, and except as otherwise expressly contemplated herein, Target covenants and agrees that it will not do or agree or commit to do, or permit any of its Subsidiaries Target Subsidiary to do or agree or commit to do, any of the following without the prior written consent of the chief executive officer or chief financial officer of PURCHASER, which consent shall not be unreasonably withheld or delayedfollowing: (a) amend the Articles certificate or articles of Incorporationincorporation, Bylaws bylaws or other governing instruments of any TARGET Company; orTarget Entity; (b) incur any additional debt obligation or other obligation for borrowed money (other than indebtedness of a TARGET Company Target Entity to another TARGET Companywholly owned Target Entity) (for the TARGET Companies Target Entities on a consolidated basis) except in the ordinary course of the business of TARGET Companies consistent with past practices (which shall include, for TARGET Subsidiaries that are depository institutions, creation of deposit liabilities, purchases of federal funds, receipt of Federal Home Loan Bank advances, and entry into repurchase agreements fully secured by U.S. government or agency securities), or impose, or suffer the imposition, on any share of stock held by any TARGET Company Asset of any Target Entity of any material Lien or permit any such material Lien to exist; orexist (other than in connection with Liens in effect as of the date hereof that are disclosed in the Target Disclosure Memorandum); (c) repurchase, redeem redeem, or otherwise acquire or exchange (other than exchanges in the ordinary course under employee benefit plansplans or in connection with the Warrant Agreements), directly or indirectly, any shares, or any securities convertible into any shares, of the capital stock of any TARGET Company, or declare or pay any dividend or make any other distribution in respect of TARGET's capital stock; provided, however, that -------- ------- TARGET may declare and pay a dividend in cash to the TARGET shareholders during the second calendar quarter of 2001 in an amount in the aggregate equal to the lesser of (i) the net income of TARGET for the first calendar quarter of 2001, and (ii) the aggregate dividend paid to the TARGET shareholders during calendar year 2000; orTarget Entity; (d) (i) except for this Agreement, or pursuant to the exercise of stock options outstanding as disclosed in Section 7.2(d) of the date hereof and pursuant to the terms thereof in existence on the date hereof, or as Previously DisclosedTarget Disclosure Memorandum, issue, sell, pledge, encumber, authorize the issuance of or of, enter into any Contract to issue, sell, pledge, encumber encumber, or authorize the issuance of of, or otherwise permit to become outstanding, any additional shares of TARGET Target Common Stock or any other capital stock of any TARGET CompanyTarget Entity, or any stock appreciation rights, or any option, warrant, conversion or other right to acquire Equity Right (other than the issuance of Target Common Stock issued upon the exercise of Target Options outstanding on the date hereof in accordance with the Target Option Plan or upon the exercise of the Warrant Agreements) or (ii) declare, set aside or pay any such dividend or distribution payable in cash, stock or property in respect of any Target Entity capital stock, or any security convertible into any such stock; or; (e) adjust, split, combine or reclassify any capital stock of any TARGET Company Target Entity or issue or authorize the issuance of any other securities in respect of or in substitution for shares of TARGET Target Common Stock Stock, or sell, lease, mortgage or otherwise dispose of or otherwise encumber (i) any shares of capital stock of any TARGET Target Subsidiary (unless any such shares of stock are sold or otherwise transferred to another TARGET CompanyTarget Entity) or (ii) any Asset having a book value in excess of $50,000 500,000 other than in the ordinary course of business for reasonable and adequate consideration; orbusiness; (f) (i) except for purchases of U.S. Treasury securities or U.S. Government agency securities, which in either case have maturities of three years or less, purchase any securities or make any material investment, whether by purchase of stock or securities, contributions to capital, Asset transfers, loans or advances, or purchase of any Assets, in any Person other than a wholly owned Target Subsidiary, or otherwise acquire direct or indirect control over any Person, other than in connection with (i) internal reorganizations or consolidations involving existing Subsidiaries, (iiA) foreclosures in the ordinary course of business, or (iiiB) acquisitions the creation of control new wholly owned Subsidiaries organized to conduct or continue activities otherwise permitted by this Agreement or (ii) merge, consolidate or adopt a depository institution Subsidiary in its fiduciary capacity; orplan of liquidation; (g) except as set forth in Section 7.2(g) of the Target Disclosure Memorandum, (i) enter into any new line of business or into any new commercial territory outside of the United States or make or agree to make any new capital expenditures that, in the aggregate, are in excess of $50,000, or (ii) except in the ordinary course of business consistent with past practice, dispose of, grant, obtain or permit to lapse any material rights in any Intellectual Property or dispose of or disclose to any Person, except pursuant to confidentiality obligations, other than to Representatives of Buyer, any material Trade Secret; (h) grant any increase in compensation or benefits to the employees or officers of any TARGET Company (including such discretionary increases as may be contemplated by existing employment agreements)Target Entity, except in accordance with past practice Previously Disclosed or as required by LawLaw or in the ordinary course of business consistent with past practice; pay any severance or termination pay or any bonus except other than pursuant to employees written policies or written Contracts disclosed in accordance with past practice Previously Disclosed Sections 5.14, 5.15 or 7.2(h) of the provisions of any applicable program or plan adopted by its Board of Directors prior to the date of this AgreementTarget Disclosure Memorandum; enter into or amend any severance or employment agreements with any executive officers (or any other employee if such employee would receive aggregate payments (exclusive of benefits) in any calendar year in excess of $150,000) of any TARGET CompanyTarget Entity; or pay any bonus to, or grant any material increase in fees or other increases in compensation or other benefits to, to directors of any TARGET Company; or (hTarget Entity except in accordance with past practice disclosed in Section 7.2(h) enter into of the Target Disclosure Memorandum or waive any stock repurchase rights, accelerate, amend or change the period of exercisability of any employment Contract between Equity Rights or restricted stock, or reprice Equity Rights granted under the Target Option Plan or authorize cash payments in exchange for any TARGET Company and any Person (unless such amendment is required by Law) that the TARGET Company does not have the unconditional right to terminate without Liability (other than Liability for services already rendered), at any time on or after the Effective Time; orEquity Rights; (i) adopt any new employee benefit plan of any TARGET Company Target Entity or terminate or withdraw from, or make any material change in or to to, any existing employee benefit plans of any TARGET Company Target Entity other than any such change that is required by Law or that, in the opinion of counsel, is necessary or advisable to maintain the tax qualified status of any such plan; orplan (including, to the extent such change does not result in any additional liability to Target or Buyer, changes necessary to avoid imposition of taxes under Section 409A of the Internal Revenue Code), or make any distributions from such employee benefit plans, except as required by Law or the terms of such plans; (j) make any significant change (i) in any material Tax election except as may be required to conform to changes in Tax Laws, extend or waive the application of any statute of limitation regarding the assessment or collection of any material Tax, settle or compromise any material Tax Liability or refund or enter into any material Contract relating to Taxes, or (ii) in any accounting methods or policies or systems of internal accounting controls, except as may be appropriate to conform to changes in regulatory accounting requirements or required by GAAP; or; (k) commence except to the extent expressly permitted by Section 8.2, take any Litigation other than action that is intended or would reasonably be expected to result in accordance with past practice, settle any Litigation involving any Liability of any TARGET Company for money damages the conditions to the Merger set forth in excess of $50,000 or which involves material restrictions upon the operations of any TARGET Company; orArticle 9 not being satisfied; (l) except in the ordinary course of business, enter into, modify, amend or terminate any material Target Material Contract or waive, release, compromise or assign any material rights or claimsclaims with respect to any Target Material Contract; (m) terminate or allow to lapse, or modify in any material respect, any insurance policy; or (n) except to the extent expressly permitted by Section 8.2, authorize any of, or commit or agree to take any of, the foregoing actions.