REVOLVING CREDIT AGREEMENT dated as of May 27, 2008 between FNB UNITED CORP. as Borrower and SUNTRUST BANK as Lender


Exhibit 10.42
 
 

 
 
 


CONFORMED COPY












dated as of May 27, 2008


between


as Borrower


and


SUNTRUST BANK
as Lender





 



 
 
 

TABLE OF CONTENTS

   
Page
ARTICLE I.  DEFINITIONS; CONSTRUCTION
1
     
Section 1.1.
Definitions
1
Section 1.2.
Accounting Terms and Determination
8
Section 1.3.
Terms Generally
9
     
ARTICLE II.  AMOUNT AND TERMS OF THE REVOLVING COMMITMENT
9
     
Section 2.1.
Revolving Loans and Revolving Credit Note
9
Section 2.2.
Procedure for Revolving Loans
9
Section 2.3.
Optional Reduction and Termination and/or Extension of  Revolving Commitment
9
Section 2.4.
Repayment and Prepayments of Revolving Loans
10
Section 2.5.
Interest on Loans
10
Section 2.6.
Intentionally Omitted
11
Section 2.7.
Computation of Interest
11
Section 2.8.
Inability to Determine Interest Rates
11
Section 2.9.
Illegality
11
Section 2.10.
Increased Costs
11
Section 2.11.
Payments Generally
12
Section 2.12.
Funding Indemnity
12
     
     
ARTICLE III. CONDITIONS PRECEDENT TO REVOLVING LOANS
12
     
Section 3.1.
Conditions to Initial Revolving Loan
12
Section 3.2.
Each Revolving Loan
13
     
ARTICLE IV. REPRESENTATIONS AND WARRANTIES
13
     
Section 4.1.
Existence; Power
14
Section 4.2.
Organizational Power; Authorization
14
Section 4.3.
Governmental Approvals; No Conflicts
14
Section 4.4.
Financial Statements
14
Section 4.5.
Litigation Matters
14
Section 4.6.
Compliance with Laws and Agreements
14
Section 4.7.
Investment Company Act, Etc.
15
Section 4.8.
Taxes
15
Section 4.9.
Margin Regulations
15
Section 4.10.
ERISA
15
Section 4.11.
Disclosure
15
Section 4.12.
Subsidiaries
15
Section 4.13.
Dividend Restrictions; Other Restrictions
15
Section 4.14.
Capital Measures
16
Section 4.15.
FDIC Insurance
16
Section 4.16.
OFAC
16
Section 4.17.
Patriot Act.
16

i

 
 
 


     
ARTICLE V.  AFFIRMATIVE COVENANTS
16
     
Section 5.1.
Financial Statements and Other Information
16
Section 5.2.
Notices of Material Events
18
Section 5.3.
Existence; Conduct of Business
18
Section 5.4.
Compliance with Laws, Etc.
18
Section 5.5.
Books and Records.
18
Section 5.6.
Visitation, Inspection, Etc.
19
Section 5.7.
Maintenance of Properties; Insurance
19
Section 5.8.
Use of Proceeds
19
     
ARTICLE VI.  FINANCIAL COVENANTS
19
     
Section 6.1.
Return on Average Assets
19
Section 6.2.
Ratio of Nonperforming Assets to Total Loans and OREO
19
Section 6.3.
Capital Measures
19
     
     
ARTICLE VII.  NEGATIVE COVENANTS
20
     
Section 7.1.
Indebtedness
20
Section 7.2.
Negative Pledge
21
Section 7.3.
Fundamental Changes
21
Section 7.4.
Restricted Payments
22
Section 7.5.
Restricted Agreements
22
Section 7.6
Investments, Etc
22
     
ARTICLE  VIII.  EVENTS OF DEFAULT
23
     
Section 8.1.
Events of Default
23
     
ARTICLE IX.  MISCELLANEOUS
25
     
Section 9.1.
Notices
25
Section 9.2.
Waiver; Amendments
26
Section 9.3.
Expenses; Indemnification
27
Section 9.4.
Successors and Assigns
28
Section 9.5.
Governing Law; Jurisdiction; Consent to Service of Process
29
Section 9.6.
Waiver of Jury Trial
29
Section 9.7.
Right of Setoff
29
Section 9.8.
Counterparts; Integration
29
Section 9.9.
Survival
29
Section 9.10.
Severability
29
Section 9.11.
Interest Rate Limitation
30
Section 9.12.
Patriot Act
30
     

ii

 
 
 



Schedules
        
         
         
Schedule 4.5
  
-
  
Litigation Matters
Schedule 4.12
  
-
  
Financial Institution Subsidiaries
         
         
Exhibits
        
         
Exhibit A
  
-
  
Revolving Credit Note
Exhibit 2.2
  
-
  
Notice of Revolving Borrowing







iii

 
 
 



THIS REVOLVING CREDIT AGREEMENT (this "Agreement") is made and entered into as of May 27, 2008, by and between FNB UNITED CORP.,   a North Carolina corporation (the “Borrower”), and SUNTRUST BANK, a Georgia banking corporation (the "Lender").

W I T N E S S E T H:

WHEREAS, the Borrower has requested the Lender, and the Lender has agreed, subject to the terms and conditions of this Agreement, to establish a 364-day revolving credit facility in an original principal amount of $10,000,000;

NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained, the Borrower and the Lender agree as follows:


ARTICLE I

DEFINITIONS; CONSTRUCTION

Section 1.1.  Definitions.  In addition to the other terms defined herein, the following terms used herein shall have the meanings herein specified (to be equally applicable to both the singular and plural forms of the terms defined):

“Acquisition” shall mean any transaction or a series of related transactions for the purpose of, or resulting, directly or indirectly, in (a) the acquisition of all or substantially all of the assets of a Person, or of any business or division of any Person, (b) the acquisition of greater than 50% of the capital stock, partnership interest, membership interest or other equity of any Person, or otherwise causing a Person to become a Subsidiary, or (c) a merger or consolidation of, or any other combination with, another Person (other than a Person that is a Subsidiary), provided that the Borrower or any Subsidiary is the surviving entity.

 “Affiliate” shall mean, as to any Person, any other Person that directly, or indirectly through one or more intermediaries, Controls, is Controlled by, or is under common Control with, such Person.

“Availability Period” shall mean the period from the Closing Date to the Commitment Termination Date.

 “Base Rate” shall mean the higher of (i) the per annum rate which the Lender publicly announces from time to time to be its prime lending rate, as in effect from time to time, and (ii) the Federal Funds Rate, as in effect from time to time, plus one-half of one percent (0.50%). The Lender's prime lending rate is a reference rate and does not necessarily represent the lowest or best rate charged to customers.  The Lender may make commercial loans or other loans at rates of inter­est at, above or below the Lender's prime lend­ing rate.  Each change in the Lender’s prime lending rate shall be effective from and including the date such change is publicly announced as being effective.

“Base Rate Loan” shall mean a Revolving Loan which bears interest at the Base Rate.

“Business Day” shall mean (i) any day other than a Saturday, Sunday or other day on which commercial banks in Atlanta, Georgia are authorized or required by law to close and (ii) if such day relates to a borrowing or continuation of, a payment or prepayment of principal or interest on, or an Interest Period for, a
 
 
 
1
 
 
 
Eurodollar Loan or a notice with respect thereto, any day on which dealings in Dollars are carried on in the London interbank market.

“Call Report” shall mean, with respect to Financial Institution Subsidiary, the “Consolidated Reports of Condition and Income” (FFIEC Form 031 or 041 or any successor form of the Federal Financial Institutions Examination Council).

“Change in Control” shall mean (a) with respect to the Borrower,  the occurrence of one or more of the following events: (i) any sale, lease, exchange or other transfer (in a single transaction or a series of related transactions) of all or substantially all of the assets of the Borrower to any Person or "group" (within the meaning of the Securities Exchange Act of 1934 and the rules of the Commission thereunder in effect on the date hereof),  (ii) the acquisition of ownership, directly or indirectly, beneficially or of record, by any Person or "group" (within the meaning of the Securities Exchange Act of 1934 and the rules of the Commission thereunder as in effect on the date hereof) of 25% or more of the outstanding shares of the voting stock of the Borrower or (iii) occupation of a majority of the seats (other than vacant seats) on the board of directors of the Borrower by Persons who were neither (A) nominated by the current board of directors or (B) appointed by directors so nominated, or (b) the Borrower shall own, directly or indirectly, less than 100% of the voting stock of any Financial Institution Subsidiary.

“Change in Law” shall mean (i) the adoption of any applicable law, rule or regulation after the date of this Agreement, (ii) any change in any applicable law, rule or regulation, or any change in the interpretation or application thereof, by any Governmental Authority after the date of this Agreement, or (iii) compliance by the Lender (or for purposes of Section 2.10(b), by the Lender’s holding company, if applicable) with any request, guideline or directive (whether or not having the force of law) of any Governmental Authority made or issued after the date of this Agreement.

“Closing Date” shall mean the date on which the conditions precedent set forth in Section 3.1 and Section 3.2 have been satisfied or waived in accordance with Section 9.2, and unless otherwise indicated, shall be the date of this Agreement.

“Code” shall mean the Internal Revenue Code of 1986, as amended and in effect from time to time.

“Commission” shall mean the Securities and Exchange Commission, and any successor thereto.

“Commitment Termination Date” shall mean May 22, 2009, or such later date as the Revolving Commitment has been extended pursuant to Section 2.3, or earlier if terminated pursuant to Section 2.3 or Section 8.1.

“Control” shall mean the power, directly or indi­rectly, to direct or cause the direction of the man­agement and policies of a Person, whether through the ability to exercise voting power, by contract or otherwise. The terms "Controlling", "Controlled by", and "under common Control with" have meanings correlative thereto.

“Default” shall mean any condition or event that, with the giving of notice or the lapse of time or both, would constitute an Event of De­fault.

"Default Interest" shall have the meaning set forth in Section 2.5(b).

“Dollar(s)” and the sign "$" shall mean lawful money of the United States of America.

 
2
 


“Environmental Laws” shall mean all laws, rules, regulations, codes, ordinances, orders, decrees, judgments, injunctions, notices or binding agreements issued, promulgated or entered into by or with any Governmental Authority, relating in any way to the environment, preservation or reclamation of natural resources, the management, Release or threatened Release of any Hazardous Material or to health and safety matters.

“Environmental Liability” shall mean any liability, contingent or otherwise (including any liability for damages, costs of environmental investigation and remediation, costs of administrative oversight, fines, natural resource damages, penalties or indemnities), of the Borrower or any Subsidiary directly or indirectly resulting from or based upon (a) any actual or alleged violation of any Environmental Law, (b) the generation, use, handling, transportation, storage, treatment or disposal of any Hazardous Materials, (c) any actual or alleged exposure to any Hazardous Materials, (d) the Release or threatened Release of any Hazardous Materials or (e) any contract, agreement or other consensual arrangement pursuant to which liability is assumed or imposed with respect to any of the foregoing.

“ERISA” shall mean the Employee Retirement Income Secu­rity Act of 1974, as amended from time to time, and any successor statute.

“ERISA Affiliate” shall mean any trade or business (whether or not incorporated), which, together with the Borrower, is treated as a single employer under Section 414(b) or (c) of the Code or, solely for the purposes of Section 302 of ERISA and Section  412 of the Code, is treated as a single employer under Section 414 of the Code.

"ERISA Event" shall mean (a) any “reportable event”, as defined in Section 4043 of ERISA or the regulations issued thereunder with respect to a Plan (other than an event for which the 30-day notice period is waived); (b) the existence with respect to any Plan of an “accumulated funding deficiency” (as defined in Section 412 of the Code or Section 302 of ERISA), whether or not waived; (c) the filing pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of an application for a waiver of the minimum funding standard with respect to any Plan; (d) the incurrence by the Borrower or any of its ERISA Affiliates of any liability under Title IV of ERISA with respect to the termination of any Plan; (e) the receipt by the Borrower or any ERISA Affiliate from the PBGC or a plan administrator appointed by the PBGC of any notice relating to an intention to terminate any Plan or Plans or to appoint a trustee to administer any Plan; (f) the incurrence by the Borrower or any of its ERISA Affiliates of any liability with respect to the withdrawal or partial withdrawal from any Plan or Multiemployer Plan; or (g) the receipt by the Borrower or any ERISA Affiliate of any notice, or the receipt by any Multiemployer Plan from the Borrower or any ERISA Affiliate of any notice, concerning the imposition of Withdrawal Liability or a determination that a Multiemployer Plan is, or is expected to be, insolvent or in reorganization, within the meaning of Title IV of ERISA.

“Eurodollar Loan” shall mean a Revolving Loan which bears interest at a rate determined by reference to LIBOR.

“Event of Default” shall have the meaning provided in Article VIII.

 “Federal Funds Rate” shall mean, for any day, the rate per annum (rounded upwards, if necessary, to the next 1/100th of 1%) equal to the weighted average of the rates on overnight Federal funds transactions with member banks of the Federal Reserve System arranged by Federal funds brokers, as published by the Federal Reserve Bank of New York on the next succeeding Business Day or if such rate is not so published for any Business Day, the Federal Funds Rate for such day shall be the average rounded upwards, if necessary, to the next 1/100th of 1% of the quotations for such day on such transactions received by the Lender from three Federal funds brokers of recognized standing selected by the Lender.

 
3
 


“Financial Institution Subsidiary” shall mean each of (a) CommunityONE Bank, National Association, a national banking association, and (b) each other Subsidiary of the Borrower existing on the Closing Date or thereafter formed or acquired that is a depository institution with FDIC-insured deposits.

“Fiscal Quarter” shall mean each fiscal quarter (including the fiscal quarter at the fiscal year-end) of the Borrower and its Subsidiaries.

“FR Report Y-9C” shall mean the “Consolidated Financial Statements for Bank Holding Companies-FR Y-9C” submitted by the Borrower as required by Section 5(c) of the Bank Holding Company Act (12 U.S.C. 1844) and Section 225.5(b) of Regulation Y [12 CFR 225.5(b)], or any successor or similar replacement report.
 
“FR Report Y9-LP” shall mean the “Parent Company Only Financial Statements for Large Bank Holding Companies-FR Y-9LP” submitted by the Borrower as required by Section 5(c) of the Bank Holding Company Act (12 U.S.C. 1844) and Section 225.5(b) of Regulation Y [12 CFR 225.5(b)], or any successor or similar replacement report.

 “GAAP” shall mean generally accepted accounting prin­ciples in the United States applied on a consistent basis and subject to the terms of Section 1.2.

“Governmental Authority” shall mean the government of the United States of America, any other nation or any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government.

“Hazardous Materials” means all explosive or radioactive substances or wastes and all hazardous or toxic substances, wastes or other pollutants, including petroleum or petroleum distillates, asbestos or asbestos containing materials, polychlorinated biphenyls, radon gas, infectious or medical wastes and all other substances or wastes of any nature regulated pursuant to any Environmental Law.

“Hedging Agreements” shall mean interest rate swap, cap or collar agreements, interest rate future or option contracts, currency swap agreements, currency future or option contracts, foreign exchange contracts (forward and/or spot), commodity agreements and other similar agreements or arrangements designed to protect against fluctuations in interest rates, currency values or commodity values.

“Indebtedness” of any Person shall mean, without dupli­cation (i) all obligations of such Person for borrowed money, (ii) all obligations of such Person evidenced by bonds, debentures, notes or other similar instruments, (iii) all obligations of such Person in respect of the deferred purchase price of property or services (other than trade payables incurred in the ordinary course of business), (iv) all obligations of such Person under any conditional sale or other title retention agreement(s) relating to property acquired by such Person, (v) all obligations of such Person under capital leases and all monetary obligations of such Person under Synthetic Leases, (vi) all obligations, contingent or otherwise, of such Person in respect of letters of credit, acceptances or similar extensions of credit, (vii) all guarantees by such Person of Indebtedness of others, (viii) all Indebtedness of a third party secured by any Lien on property owned by such Person, whether or not such Indebtedness has been assumed by such Person, (ix) all obligations of such Person, contingent or otherwise, to purchase, redeem, retire or otherwise acquire for value any common stock of such Person, and (x) all net obligations incurred by such Person under Hedging Agreements.

“Interest Period” shall mean, with respect to any Eurodollar Loan, a period of three months, provided that:

 
4
 


(i)    the initial Interest Period for any such Loan shall commence on the date of such Loan and each Interest Period occurring thereafter in respect of such Loan shall commence on the day on which the next preceding Interest Period expires;

(ii)           if any Interest Period would otherwise end on a day other than a Business Day, such Interest Pe­riod shall be extended to the next succeeding Business Day, unless such Business Day falls in another calendar month, in which case such Interest Period would end on the next preceding Business Day;

(iii)           any Interest Period which begins on the last Business Day of a calendar month or on a day for which there is no nu­merically corresponding day in the calendar month at the end of such Interest Period shall end on the last Business Day of such subsequent calendar month;

 
(iv)
no Interest Period may extend beyond the Commitment Termination Date.

“Investments” shall have the meaning set forth in Section 7.6 hereof.

"LIBOR " shall mean for any applicable Interest Period with respect to a Eurodollar Loan,  that rate per annum that is equal to the quotient of:

(i) the rate per annum equal to the London interbank offered rate for deposits in U.S. dollars for a three-month period, which rate appears on Reuters Screen LIBOR01 Page (or any successor page), or such similar service as determined by the Lender that displays British Bankers' Association interest settlement rates for deposits in U.S. Dollars, as of 11:00 A.M. (London, England time) two (2) Business Days prior to the first day of such Interest Period; provided, that if no such offered rate appears on such page, the rate used will be the per annum rate of interest determined by the Lender to be the rate at which U.S. dollar deposits for a three-month period are offered to the Lender in the London Inter-Bank Market as of 10:00 A.M. (Atlanta, Georgia   time), on the day which is two (2) Business Days prior to the first day of such Interest Period, divided by
 
(ii) a percentage equal to 1.00 minus the maximum reserve percentages (including any emergency, supplemental, special or other marginal reserves) expressed as a decimal (rounded upward to the next 1/100th of 1%) in effect on any day to which the Bank is subject with respect to any Eurodollar loan pursuant to regulations issued by the Board of Governors of the Federal Reserve System with respect to eurocurrency funding (currently referred to as "eurocurrency liabilities" under Regulation D).  This percentage will be adjusted automatically on and as of the effective date of any change in any reserve percentage.
 

“Lien” shall mean any mortgage, pledge, security inter­est, lien (statutory or otherwise), charge, encumbrance, hypothecation, assignment, deposit arrangement, or other arrangement having the practical effect of the foregoing or any preference, priority or other security agree­ment or preferential arrangement of any kind or nature whatsoever (including any conditional sale or other title retention agreement and any capital lease having the same economic effect as any of the foregoing).

"Loan Documents" shall mean, collectively, this Agree­ment, the Revolving Credit Note, any Hedging Agreement entered into with Lender in connection with the Indebtedness under this Agreement or the Revolving Credit Note and any and all other instruments, agreements, documents and writings executed by the Borrower in connection with any of the foregoing.

 
5
 

“Material Adverse Effect” shall mean, with respect to any event, act, condition or occurrence of whatever nature (including any adverse determination in any litigation, arbitration, or governmental investigation or proceeding), whether singly or in conjunction with any other event or events, act or acts, condition or conditions, occurrence or occurrences whether or not related, a material adverse change in, or a material adverse effect on, (i) the business, results of operations, finan­cial condition, assets, or liabilities  of the Borrower and of the Borrower and its Subsidiaries taken as a whole , (ii) the ability of the Borrower to perform any of its obligations under the Loan Documents, (iii) the rights and remedies of the Lender under any of the Loan Documents or (iv) the legality, validity or enforceability of any of the Loan Documents.

“Multiemployer Plan” shall have the meaning set forth in Section 4001(a)(3) of ERISA.

"Nonperforming Assets" shall mean the sum of (a) Nonperforming Loans, (b) nonaccrual investment securities and (c) Other Real Estate Owned (determined in accordance with, and as set forth on, Borrower’s FR Report Y-9C).

“Nonperforming Loans” shall mean the sum of (a) nonaccrual loans and lease financing receivables, (b) loans and lease financing receivables that are contractually past due 90 days or more as to interest or principal and are still accruing interest and (c) loans for which the terms have been modified due to a deterioration in the financial position of the Borrower (determined in accordance with, and as set forth on, Borrower’s FR Report Y-9C).
 

“Notice of Borrowing” shall have the meaning as set forth in Section 2.2.

“Obligations” shall mean all amounts owing by the Borrower to the Lender pursuant to or in connection with this Agreement or any other Loan Document, including without limitation, all principal, interest (including any interest accruing after the filing of any petition in bankruptcy or the commencement of any insolvency, reorganization or like proceeding relating to the Borrower, whether or not a claim for post-filing or post-petition interest is allowed in such proceeding), all reimbursement obligations,  all net obligations under Hedging Agreements, fees, expenses, indemnification and reimbursement payments, costs and expenses (including all fees and expenses of counsel to the Lender incurred pursuant to this Agreement or any other Loan Document), whether direct or indirect, absolute or contingent, liquidated or unliqui­dated, now existing or hereafter arising hereunder or thereunder, together with all renew­als, extensions, modifications or refinancings thereof.

“Other Real Estate Owned” shall mean the sum of (a) real estate acquired in satisfaction of debts previously contracted and (b) other real estate owned, as set forth on Schedule HC-M of Borrower’s FR Report Y-9C.
 
“Participant” shall have the meaning set forth in Section 9.4(c).

 “Payment Office” shall mean the office of the Lender located at ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, or such other location as to which the Lender shall have given written notice to the Borrower.

“PBGC” shall mean the Pension Benefit Guaranty Corpora­tion referred to and defined in ERISA, and any successor entity performing similar functions.

 “Permitted Encumbrances” shall mean

 
6
 

(i)           Liens imposed by law for taxes not yet due or which are being contested in good faith by appropriate proceedings and with respect to which adequate reserves are being maintained in accordance with GAAP;

(ii)    statutory Liens of landlords and Liens of carriers, warehousemen, mechanics, materialmen and other Liens imposed by law created in the ordinary course of business for amounts not yet due or which are being contested in good faith by appropriate proceedings and with respect to which adequate reserves are being maintained in accordance with GAAP;

(iii)    pledges and deposits made in the ordinary course of business in compliance with workers' compensation, unemployment insurance and other social security laws or regulations;

(iv)    deposits to secure the performance of bids, trade contracts, leases, statutory obligations, surety and appeal bonds, performance bonds and other obli­gations of a like nature, in each case in the ordinary course of business;

(v)    judgment and attachment liens not giving rise to an Event of Default or Liens created by or existing from any litigation or legal proceeding that are currently being contested in good faith by appropriate proceedings and with respect to which adequate reserves are being maintained in accordance with GAAP; and

(vi)    easements, zoning restrictions, rights-of-way and similar encumbrances on real property imposed by law or arising in the ordinary course of business that do not secure any monetary obligations and do not materially detract from the value of the affected property or materially interfere with the ordinary conduct of business of the Borrower and its Subsidiaries taken as a whole;

provided, that the term “Permitted Encumbrances” shall not include any Lien securing Indebtedness.

 “Person” shall mean any individual, partnership, firm, corporation, association, joint venture, limited liability company, trust or other entity, or any Governmental Authority.

“Plan” means any employee pension benefit plan (other than a Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section 412 of the Code or Section 302 of ERISA, and in respect of which the Borrower or any ERISA Affiliate is (or, if such plan were terminated, would under Section 4069 of ERISA be deemed to be) an “employer” as defined in Section 3(5) of ERISA.

 “Regulation D” shall mean Regulation D of the Board of Governors of the Federal Reserve System, as the same may be in effect from time to time, and any successor regulations.

“Release” means any release, spill, emission, leaking, dumping, injection, pouring, deposit, disposal, discharge, dispersal, leaching or migration into the environment (including ambient air, surface water, groundwater, land surface or subsurface strata) or within any building, structure, facility or fixture.

“Responsible Officer" shall mean any of the president, the chief executive officer, the chief operating officer, the chief financial officer, the treasurer or a vice president of the Borrower or such other representative of the Borrower as may be designated in writing by any one of the foregoing with the consent of the Lender; and, with respect to the financial covenants only, the chief financial officer or the treasurer of the Borrower.

“Revolving Commitment” shall mean the obligation of the Lender to make Revolving Loans to the Borrower in an aggregate principal amount not exceeding $10,000,000.

 
7
 


                        “Revolving Loan” shall mean a loan made by the Lender to the Borrower under its Revolving Commitment, which will at all times be a Eurodollar Loan except under circumstances set forth in Section 2.8 or Section 2.9 hereof.

“Revolving Credit Note” shall mean a promissory note of the Borrower payable to the order of the Lender in the principal amount of the Revolving Commitment, in substantially the form of Exhibit A.

                        “Subsidiary” shall mean, with respect to any Person (the “parent”), any corporation, part­nership, joint venture, limited liability company, association or other entity the accounts of which would be consolidated with those of the parent in the parent's consolidated financial statements if such financial statements were prepared in accordance with GAAP as of such date, as well as any other corporation, part­nership, joint venture, limited liability company, association or other entity (i) of which securities  or other ownership interests representing more than 30% of the equity  or more than 30% of  the ordinary voting power, or in the case of a partnership, more than 30% of the general partnership interests are, as of such date, owned, Controlled or held, or (ii) that is, as of such date, otherwise Controlled, by the parent or one or more subsidiaries of the parent or by the parent and one or more subsidiaries of the parent. Unless otherwise indicated, all references to "Subsidiary" hereunder shall mean a Subsidiary of the Borrower.

“Synthetic Lease” of any Person shall mean (a) a lease designed to have the characteristics of a loan for federal income tax purposes while obtaining operating lease treatment for financial accounting purposes, or (b) an agreement for the use or possession of property creating obligations that are not required to appear on the balance sheet of such Person but which, upon the insolvency or bankruptcy of such Person would be characterized by a court of competent jurisdiction as indebtedness of such Person.

“Tangible Net Worth” shall mean, as of any date, the total shareholders’ equity of the Borrower and its Subsidiaries that would be reflected on the Borrower's consolidated balance sheet as of such date prepared in accordance with GAAP, minus the amount of all assets of the Borrower and its Subsidiaries that would be classified as intangible assets (including without limitation goodwill and net core deposit intangible) on the Borrower’s consolidated balance sheet as of such date prepared in accordance with GAAP.

“Total Loans” shall mean for the Borrower on a consolidated basis the line item  “Loans net of unearned income” set forth on the Borrower’s consolidated balance sheet delivered pursuant to Section 5.1(a) and (b).

“Withdrawal Liability” shall mean liability to a Multiemployer Plan as a result of a complete or partial withdrawal from such Multiemployer Plan, as such terms are defined in Part I of Subtitle E of Title IV of ERISA.

Section 1.2.  Accounting Terms and Determination.  Un­less otherwise defined or specified herein, all accounting terms used herein shall be interpreted, all accounting determinations hereunder shall be made, and all financial statements required to be delivered hereunder shall be prepared, in accordance with GAAP as in effect from time to time, applied on a basis consistent (except for such changes approved by the Borrower's independent public accountants) with the most recent audited consolidated financial statement of the Borrower delivered pursuant to Section 5.1(a); provided, that if the Borrower notifies the Lender that the Borrower wishes to amend any covenant in Article VI to eliminate the effect of any change in GAAP on the operation of such covenant (or if the Lender notifies  the Borrower that it wishes to amend Article VI for such purpose), then the Borrower's compliance with such covenant shall be determined on the basis of GAAP in effect immediately before the relevant change in GAAP became effective, until either such notice is withdrawn or such covenant is amended in a manner satisfactory to the Borrower and the Lender.

 
8
 


Section 1.3.  Terms Generally. The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined.  The words "include", "includes" and "including" shall be deemed to be followed by the phase "without limitation".  In the computation of periods of time from a specified date to a later specified date, the word "from" means "from and including" and the word "to" means "to but excluding". Unless the context requires otherwise (i) any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as it was originally executed or as it may from time to time be amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein), (ii) any reference herein to any Person shall be construed to include such Person's successors and permitted assigns, (iii) the words "hereof", "herein" and "hereunder" and words of similar import shall be construed to refer to this Agreement as a whole and not to any particular provision hereof, (iv) all references to Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles, Sections, Exhibits and Schedules to this Agreement and (v) all references to a specific time shall be construed to refer to the time in the city and state of the Lender's principal office, unless otherwise indicated.


ARTICLE II

  AMOUNT AND TERMS OF THE REVOLVING COMMITMEN

Section 2.1.  Revolving Loans and Revolving Credit Note.  (a) Subject to the terms and conditions set forth herein, the Lender agrees to make Revolving Loans to the Borrower, from time to time during the Availability Period, in an aggregate principal amount outstanding at any time not to exceed the Revolving Commitment. During the Availability Period, the Borrower shall be entitled to borrow, prepay and reborrow Revolving Loans in accordance with the terms and conditions of this Agreement; pro­vided, that the Borrower may not borrow or reborrow should there exist a Default or Event of Default.

(b)           The Borrower's obligation to pay the principal of, and interest on, Revolving Loans shall be evidenced by the records of the Lender and by the Revolving Credit Note.  The entries made in such records and/or on the schedule annexed to the Revolving Credit Note shall be prima facie evidence of the existence and amounts of the obligations of the Borrower therein recorded; provided, that the failure or delay of the Lender in maintaining or making entries into any such record or on such schedule or any error therein shall not in any manner affect the obligation of the Borrower to repay the Revolving Loans (both principal and unpaid accrued interest) in accordance with the terms of this Agreement.

Section 2.2.   Procedure for Revolving Loans.  The Borrower shall give the Lender written notice (or telephonic notice promptly confirmed in writing) of each Revolving Loan substantially in the form of Exhibit 2.2 (a "Notice of Borrowing") prior to 11:00 a.m. two (2) Business Days prior to which a Revolving Loan is being requested. Each Notice of Borrowing shall be irrevocable and shall specify: (i) the principal amount of the Revolving Loan, (ii) the proposed date of the Revolving Loan (which shall be a Business Day), and  (iii) if the Revolving Loan is $1,000,000 or greater, its purpose (provided in sufficient detail  that is  reasonably satisfactory to the Lender).  The aggregate principal amount of each Revolving Loan shall be not less than $500,000 or a larger multiple of $100,000, or in such lesser amounts equal to the amount of the unused Revolving Commitment. Upon the satisfaction of the applicable conditions set forth in Article III hereof, the Lender will make the proceeds of each Revolving Loan available to the Borrower at the Payment Office on the date specified in the applicable Notice of Borrowing by crediting an account maintained by the Borrower with the Lender or at the Borrower’s option, by effecting a wire transfer of such amount to an account designated by the Borrower to the Lender.

Section 2.3.  Optional Reduction and Termination and/or Extension of Revolving Commitment.

 
9
 


(a)           The Revolving Commitment shall terminate on the Commitment Termination Date; provided, that the Commitment Termination Date may be extended by the Lender for additional 364-day periods in its sole discretion upon receiving a written request from the Borrower not earlier than 60 days and not later than 45 days prior to then existing Commitment Termination Date for an extension. Upon the receipt of such request, the Lender shall use its best efforts to notify the Borrower not later than 30 days prior to any Commitment Termination Date whether it will extend the then existing Commitment Termination Date for an additional 364-day period; provided, that the failure of the Lender to give any such notice to the Borrower shall mean that the then existing Commitment Termination Date will not be so extended.

(b)           Upon at least two (2) Business Days' prior written notice (or telephonic notice promptly confirmed in writing) to the Lender (which notice shall be irrevocable), the Borrower may reduce the Revolving Commitment in part or terminate the Revolving Commitment in whole; provided, that (i) any partial reduction pursuant to this Section 2.3 shall be in an amount of at least $100,000 and any larger multiple of $50,000 and (ii) no such reduction shall be permitted which would reduce the Revolving Commitment (after giving effect thereto and any concurrent prepayments made under Section 2.4) to an amount less than the outstanding Revolving Loans.

Section 2.4.  Repayment and Prepayments of Revolving Loans.

(a)           The outstanding principal amount of all Revolving Loans shall be due and payable (together with accrued and unpaid interest thereon) on the Commitment Termination Date.

(b)           The Borrower shall have the right at any time and from time to time to prepay any Eurodollar Loan, in whole or in part, without premium or penalty, subject to Section 2.12 hereof. Each partial prepayment shall be in an amount not less than $100,000 and integral multiples thereof.

(c)           Subject to Sections 2.8 and 2.9, each Eurodollar Loan shall automatically continue on the last day of an Interest Period for another three-month Interest Period unless the Borrower elects to repay in whole or in part such Eurodollar Loan on the last day of such Interest Period. In the case of a partial repayment, such Eurodollar Loan shall be continued for another one-month Interest Period in the principal amount designated by the Borrower, subject to the minimum amounts specified in Section 2.2.

Section 2.5.  Interest on Loans.

(a)           The Borrower shall pay interest on each Eurodollar Loan at LIBOR, plus 1.50% per annum. If a Base Rate Loan shall be outstanding under the circumstances set forth in Section 2.8 or 2.9, then the Borrower shall pay interest on each Base Rate Loan at the Base Rate in effect from time to time.

(b)           While an Event of Default exists or after acceleration, at the option of the Lender, the Borrower shall pay interest ("Default Interest") with respect to all Eurodollar Loans at the rate otherwise applicable for the then-current Interest Pe­riod plus an additional 2% per annum until the last day of such Interest Period, and thereafter, and with respect to all Base Rate Loans and all other Obligations hereunder, at the Base Rate, plus 2% per annum.

(c)           Interest on the principal amount of all Revolving Loans shall accrue from and includ­ing the date such Revolving Loans are made to but excluding the date of any repay­ment thereof. Interest on all outstanding Eurodollar Loans shall be payable on the last day of each Interest Period applicable thereto and on the Commitment Termination Date. Interest on any Base Rate Loans shall be payable on the last day of each calendar month and on the Commitment Termination Date. All Default Interest shall be payable on demand.

 
10
 



(d)           The Lender shall determine each interest rate applicable to the Revolving Loans hereunder and shall promptly notify the Borrower of such rate in writing (or by telephone, promptly con­firmed in writing).  Any such determination shall be conclusive and binding for all purposes, absent manifest error.

Section 2.6.  Intentionally Omitted.

Section 2.7.  Computation of Interest. All computations of interest hereunder shall be made on the basis of a year of 360 days for the actual number of days (including the first day but excluding the last day) occurring in the period for which such interest or fees are payable (to the extent computed on the basis of days elapsed). Each determination by the Lender of an interest amount hereunder shall be made in good faith and, except for manifest error, shall be final, con­clusive and binding for all purposes.

Section 2.8.   Inability to Determine Interest Rates.  If prior to the commencement of any Interest Period for any Eurodollar Loan, the Lender shall have determined (which determination shall be conclusive and binding upon the Borrower) that (a) by reason of circumstances affecting the relevant interbank market, ad­equate means do not exist for ascertaining LIBOR, or (b) LIBOR does not adequately and fairly reflect the cost to the Lender of making, funding or maintaining its Eurodollar Loans, the Lender shall give written notice (or telephonic notice, promptly confirmed in writing) to the Borrower as soon as practicable thereafter. Until the Lender notifies the Borrower that the circumstances giv­ing rise to such notice no longer exist, (x) the obligation of the Lender to make Eurodollar Loans or to continue outstanding Revolving Loans as Eurodollar Loans shall be suspended and (y) all such affected Eurodollar Loans shall be converted into Base Rate Loans on the last day of the then current Interest Period unless the Borrower elects to prepay such Revolving Loans in accordance with this Agreement.

Section 2.9.  Illegality.  If any Change in Law shall make it unlawful or impossible for the Lender to make, maintain or fund any Eurodollar Loan, the Lender shall promptly give notice thereof to the Borrower, whereupon until the Lender notifies the Borrower that the circumstances giving rise to such suspension no longer exist, the obligation of the Lender to make Eurodollar Loans, or to continue any outstanding Revolving Loans as Eurodollar Loans, shall be suspended. Any new Revolving Loan shall be made as a Base Rate Loan and all then outstanding Eurodollar Loans shall be converted to a Base Rate Loan either (x) on the last day of the then current Interest Period if the Lender may lawfully continue to maintain such Eurodollar Loans to such date or (y) immediately if the Lender shall determine that it may not lawfully continue to maintain such Eurodollar Loans to such date.

Section 2.10.  Increased Costs.

 
(a)
If any Change in Law shall:

(i)            impose, modify or deem applicable any reserve, special deposit or similar requirement that is not otherwise included in the determination of LIBOR hereunder against assets of, deposits with or for the account of, or credit extended by, the Lender (except any such reserve requirement reflected in the calculation of LIBOR); or

(ii)           impose on the Lender or the eurodollar interbank market any other condition affecting this Agreement or any Eurodollar Loans made by the Lender; and the result of the foregoing is to increase the cost to the Lender of making, continuing or maintaining a Eurodollar Loan or to reduce the amount received or receivable by the Lender hereunder (whether of principal, interest or any other amount), then the Borrower shall promptly pay, upon written notice from and demand by the Lender, within five Business Days after the date of such notice and demand, additional amount or amounts sufficient to compensate the Lender for such additional costs incurred or reduction suffered.


 
11
 



(b)           If the Lender shall have determined that on or after the date of this Agreement any Change in Law regarding capital requirements has or would have the ef­fect of reducing the rate of return on the Lender's capital (or on the capital of the Lender's parent corporation) as a consequence of its obligations here­under to a level below that which the Lender or the Lender's parent corporation could have achieved but for such Change in Law (taking into consideration the Lender's policies or the policies of the Lender's parent corporation with respect to capital adequacy) then, from time to time, within five (5) Business Days after receipt by the Borrower of written de­mand by the Lender, the Borrower shall pay to the Lender such additional amounts as will compensate the Lender or the Lender's parent corporation for any such reduction suffered.

(c)           A certifi­cate of the Lender setting forth the amount or amounts necessary to compensate the Lender or its parent corporation, as the case may be, specified in paragraph (a) or (b) of this Section shall be delivered to the Borrower and shall be con­clusive, absent manifest error.  The Borrower shall pay the Lender such amount or amounts within 10 days after receipt thereof.

(d)           Failure or delay on the part of the Lender to demand compensation pursuant to this Section shall not constitute a waiver of the Lender's right to demand such compensation.

Section 2.11.   Payments Generally. The Borrower shall make each payment required to be made by it hereunder (whether of principal, interest, or of amounts payable under Section 2.10 or otherwise) prior to 12:00 noon, on the date when due, in immediately available funds, without set-off or counterclaim. Any amounts received after such time on any date may, in the discretion of the Lender, be deemed to have been received on the next succeeding Business Day for purposes of calculating interest thereon.  All such payments shall be made to the Lender at its Payment Office.  If any payment hereunder shall be due on a day that is not a Business Day, the date for payment shall be extended to the next succeeding Business Day, and, in the case of any payment accruing interest, interest thereon shall be made payable for the period of such extension.  All payments hereunder shall be made in Dollars.

Section 2.12. Funding Indemnity.  In the event of (a) the payment of any principal of a Eurodollar Loan other than on the last day of the Interest Period applicable thereto (including as a result of an Event of Default), or (b) the failure by the Borrower to borrow, prepay, or continue any Eurodollar Loan on the date specified in any applicable notice (regardless of whether such notice is withdrawn or revoked), then, in any such event,  the Borrower shall compensate the Lender, within five (5) Business Days after written demand from the Lender,  for any loss, cost or expense attributable to such event. In the case of a Eurodollar Loan, such loss, cost or expense shall be deemed to include an amount determined by the Lender to be the excess, if any, of  (A) the amount of interest that would have accrued on the principal amount of such Eurodollar Loan if such event had not occurred at LIBOR applicable to such Eurodollar Loan for the period from the date of such event to the last day of the then current Interest Period therefor (or in the case of a failure to borrow or continue, for the period that would have been the Interest Period for such Eurodollar Loan) over (B) the amount of interest that would accrue on the principal amount of such Eurodollar Loan for the same period if LIBOR were set on the date such Eurodollar Loan was prepaid or converted or the date on which the Borrower failed to borrow or continue such  Eurodollar Loan.  A certifi­cate as to any additional amount payable under this Section 2.12 submitted to the Borrower by the Lender shall be con­clusive, absent manifest error.

ARTICLE III
CONDITIONS PRECEDENT TO REVOLVING LOANS

Section 3.1.   Conditions To Initial Revolving Loan.  The obligation of the Lender to make the initial Revolving Loan hereunder is subject to the receipt by the Lender of the following documents in form and substance reasonably satisfactory to the Lender:

 
12
 


(a)
this Agreement duly executed and delivered by the Borrower;

(b)
a duly executed Revolving Credit Note;

(c)           a certificate of the Secretary or Assistant Secre­tary of the Borrower, attaching and certifying copies of its bylaws and of the resolutions of its board of directors, authorizing the execution, delivery and performance of the Loan Documents and certifying the name, title and true signature of each officer of the Borrower authorized to execute the Loan Documents;

(d)           certified copies of the articles of incorporation of the Borrower, together with good standing certificates (or the equivalent) as may be avail­able from the Secretary of State of the jurisdiction of incorporation of the Borrower and each Subsidiary (and in the case of a Financial Institution Subsidiary which is a national bank, from the Office of the Comptroller of the Currency) and each other jurisdiction where the Borrower or such Subsidiary (other than a Financial Institution Subsidiary which is a national bank) is required to be qualified to do business as a foreign corporation;

(e)           a favorable written opinion of  ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇▇▇ PLLC, counsel to the Borrower, addressed to the Lender, and covering such matters relating to the Borrower, the Loan Documents and the transactions contemplated therein as the Lender shall reasonably request; and

(f)           a duly executed funds disbursement agreement.

Section 3.2.   Each Revolving Loan.   The obligation of the Lender to make each Revolving Loan is subject to the satisfaction of the following conditions:

(a)           at the time of and immediately after giving effect to such Revolving Loan, no Default or Event of Default shall exist;

(b)           all representations and warranties of the Borrower  herein shall be true and correct in all material respects on and as of the date of such Revolving Loan both before and after giving effect thereto;

(c)           since December 31, 2007, there shall have been no change which has had or could reasonably be expected to have a Material Adverse Effect;

(d)           the Lender shall have received a duly executed Notice of Borrowing in accordance with Section 2.2 hereof; and

(e)           the Lender shall have received such other docu­ments,  certificates, information or legal opinions as it may reasonably request, all in form and substance reasonably sat­isfactory to the Lender.

The making of each Revolving Loan shall be deemed to constitute a representation and warranty by the Borrower on the date thereof as to the matters specified in paragraphs (a), (b) and (c) of this Section 3.2.


ARTICLE IV

REPRESENTATIONS AND WARRANTIES

The Borrower represents and warrants to the Lender as follows:

 
13
 



Section 4.1.  Existence; Power. (a) Each of the Borrower and its Subsidiaries (other than Community ONE Bank, any subsidiary organized as a Delaware or Connecticut statutory trust in connection with the issuance of trust preferred securities and Premier Investment Services, Inc. which is in the process of being dissolved)  (i) is duly orga­nized, validly existing and in good standing as a corporation under the laws of the jurisdiction of its organization, (ii) ­has all requisite power and authority to carry on its business as now conducted, and (iii) is duly qualified to do business, and is in good standing, in each jurisdiction where such qualification is required, except where a failure to be so qualified could not reasonably be expected to result in a Material Adverse Effect.

(b) CommunityONE Bank, National Association, is a national bank chartered under the laws of the United States and has all requisite power and authority to carry on its business as now conducted.

Section 4.2.  Organizational Power; Authorization.  The execution, delivery and performance by the Borrower of each of the Loan Documents are within the Borrower’s corporate powers and have been duly authorized by all necessary corporate, and if required, stockholder, action. This Agreement has been duly executed and delivered by the Borrower and constitutes, and each other Loan Document when executed and delivered by the Borrower will constitute, valid and binding obligations of the Borrower, en­forceable against it in accordance with their re­spective terms, except as may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, or similar laws affecting the enforcement of creditors' rights generally and by general principles of equity.

Section 4.3. Governmental Approvals; No Conflicts. The execution, delivery and performance by the Borrower of this Agreement and the other Loan Documents  (a) do not require any consent or approval of, registration or filing with, or any action by, any Governmental Authority, except those as have been obtained or made and are in full force and effect, (b) will not violate any applicable law or regulation or the articles of incorporation or by-laws of the Borrower or any order of any Governmental Authority, (c) will not violate or result in a default under any indenture, material agreement or other material instrument binding on the Borrower or any of its Subsidiaries or any of its assets or give rise to a right thereunder to require any payment to be made by the Borrower or any of its Subsidiaries and (d) will not result in the creation or imposition of any Lien on any asset of the Borrower or any of its Subsidiaries, except Liens (if any) created under the Loan Documents.

Section 4.4.  Financial Statements.  The Borrower has furnished to the Lender the con­solidated balance sheet of the Borrower and its Subsidiaries as of December 31, 2007 and the related consolidated statements of income, of shareholders' equity and comprehensive income and of cash flows for the fiscal year then ended, each as audited by ▇▇▇▇▇ ▇▇▇▇▇▇ PLLC.  Such financial statements fairly present, in all material respects, the consolidated financial position of the Borrower and its Subsidiaries as of such date and the consolidated results of op­erations and cash flows for such period in conformity with GAAP consistently applied. Since December 31, 2007, there have been no changes with respect to the Borrower and its Subsidiaries which have had or could reasonably be expected to have, singly or in the aggregate, a Material Adverse Effect.

Section 4.5.  Litigation Matters.  Except as set forth on Schedule 4.5 attached hereto, no litigation, investigation or proceeding of or before any arbitrators or Governmental Authorities is pending against, or, to the knowledge of the Borrower, threatened against or affecting the Borrower or any of its Subsidiaries (i) as to which there is a reasonable possibility of an adverse determination that could reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect or (ii) which in any manner draws into question the validity or enforceability of this Agreement or any other Loan Document.

 
14
 


Section 4.6. Compliance with Laws and Agreements.  The Borrower and each Subsidiary is in compliance with (a) all applicable laws (including without limitation all federal and state banking statutes) and all rules, regulations (including without limitation all federal and state banking regulations) and orders of any Governmental Authority, and (b) all indentures, agreements or other instruments binding upon it or its properties, except in each case where non-compliance, either singly or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect.

Section 4.7.  Investment Company Act.  Neither the Borrower nor any of its Subsidiaries is an "investment company", as defined in, or subject to regulation under, the Investment Company Act of 1940, as amended.

Section 4.8.  Taxes.  The Borrower and its Subsidiaries have timely filed or caused to be filed all Federal income tax returns and all other material tax returns that are re­quired to be filed by them, and have paid all taxes shown to be due and payable on such returns or on any assessments made against it or its property and all other taxes, fees or other charges imposed on it or any of its property by any Governmental Authority, except (i) to the extent the failure to do so would not have a Material Adverse Effect or (ii) where the same are currently being contested in good faith by ap­propriate proceedings and for which the Borrower or such Subsidiary, as the case may be, has set aside on its books adequate reserves.

Section 4.9.  Margin Regulations.  None of the pro­ceeds of any of the Revolving Loans will be used for "purchasing" or "carrying" any "margin stock" with the respective meanings of each of such terms under Regulation U as now and from time to time hereafter in effect or for any purpose that violates the provisions of Regulation U.

Section 4.10.  ERISA.  No ERISA Event has occurred or is reasonably expected to occur that, when taken together with all other such ERISA Events for which liability is reasonably expected to occur, could reasonably be expected to result in a Material Adverse Effect.  The present value of all accumulated benefit obligations under each Plan (based on the assumptions used for purposes of Statement of Financial Standards No. 87) did not, as of the date of the most recent financial statements reflecting such amounts,  exceed by more than $500,000  the fair market value of the assets of all such Plan, and the present value of all accumulated benefit obligations of all underfunded Plans (based on the assumptions used for purposes of Statement of Financial Standards No. 87) did not,  as of the date of the most recent financial statements reflecting such amounts, exceed by more than $500,000 the fair market value of the assets of all such underfunded Plans.

Section 4.11.  Disclosure. The Borrower has disclosed to the Lender all agreements, instruments, and corporate or other restrictions to which the Borrower or any of its Subsidiaries is subject, and all other matters known to any of them, that, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect.  None of the reports (including without limitation all reports that the Borrower is required to file with the Commission), financial statements, certificates or other information furnished by or on behalf of the Borrower to the Lender in connection with the negotiation of this Agreement or any other Loan Document or delivered hereunder or thereunder (as modified or supplemented by any other information so furnished) contains any material misstatement of fact or omits to state any material fact necessary to make the statements therein, taken as a whole, in light of the circumstances under which they were made, not misleading.

Section 4.12.  Subsidiaries. Schedule 4.12 sets forth the name of, the ownership interest of the Borrower in, and the jurisdiction of incorporation of, each Financial Institution Subsidiary and each other Subsidiary (other than any subsidiary organized as a Delaware or Connecticut statutory trust in connection with the issuance of trust preferred securities and Premier Investment Services, Inc. which is in the process of being dissolved), in each case as of the Closing Date.

 
15
 


Section 4.13. Dividend Restrictions; Other Restrictions.  (a) No Financial Institution Subsidiary has violated any applicable regulatory restrictions on dividends, and no Governmental Authority has taken any action to restrict the payment of dividends by any Financial Institution Subsidiary.

(b) Neither the Borrower nor any Subsidiary is under investigation by, or is operating under any restrictions (excluding any restrictions on the payment of dividends referenced in subsection (a) above) imposed by or agreed to with, any Governmental Authority, other than routine examinations by such Governmental Authorities.

Section 4.14.  Capital Measures.  On the Closing Date, both the Borrower and each Financial Institution Subsidiary have been, or are deemed to have been, notified by the appropriate Governmental Authority having regulatory authority over each of them that each of them is “adequately capitalized”,  as determined in accordance with any regulations established by such Governmental Authority.

Section 4.15. FDIC Insurance. The deposits of each Financial Institution Subsidiary that is an “insured depository institution” (within the meaning of § 12 U. S. C. 1831(c)) are insured by the FDIC and no act has occurred that would adversely affect the status of such Financial Institution Subsidiary as an FDIC insured bank.

Section 4.16. OFAC. Neither the Borrower nor any of its Subsidiaries (i) is a person whose property or interest in property is blocked or subject to blocking pursuant to Section 1 of Executive Order 13224 of September 23, 2001 Blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or Support Terrorism (66 Fed. Reg. 49079 (2001)), (ii) engages in any dealings or transactions prohibited by Section 2 of such executive order, or is otherwise associated with any such person in any manner violative of Section 2 or (iii) is a person on the list of Specially Designated Nationals and Blocked Persons or subject to the limitations or prohibitions under any other U.S. Department of Treasury’s Office of Foreign Assets Control regulation or executive order.

Section 4.17. Patriot Act. Each of the Borrower and its Subsidiaries is in compliance, in all material respects, with (i) the Trading with the Enemy Act, as amended, and each of the foreign assets control regulations of the United States Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) and any other enabling legislation or executive order relating thereto and (ii) the Uniting And Strengthening America By Providing Appropriate Tools Required To Intercept And Obstruct Terrorism (USA Patriot Act of 2001).  No part of the proceeds of the Revolving Loans will be used, directly or indirectly, for any payments to any governmental official or employee, political party, official of a political party, candidate for political office, or anyone else acting in an official capacity, in order to obtain, retain or direct business or obtain any improper advantage, in violation of the United States Foreign Corrupt Practices Act of 1977, as amended.


 
ARTICLE V

AFFIRMATIVE COVENANTS

The Borrower covenants and agrees that so long as the Lender has a Revolving Commitment hereunder or the principal of and interest on any Revolving Loan or any fee remains unpaid:

Section 5.1.  Financial Statements and Other Information. The Borrower will deliver to the Lender:

 
16
 


                      (a)           as soon as available and in any event within 90 days after the end of each fiscal year of Borrower, a copy of the annual audited report for such fiscal year for the Borrower and its Subsidiaries, containing a consolidated balance sheet and the related consolidated statements of income, of shareholders' equity and comprehensive income, and of cash flows (together with all footnotes thereto), setting forth in each case in comparative form the figures for the previous fiscal year, all in reasonable detail and reported on by independent public accountants of nationally recognized standing (without a "going concern" or like qualification, exception or explanation  and without any qualification or exception as to scope of such audit) to the effect that  such financial statements present fairly in all material respects the financial condition and the results of operations and cash flows on a consolidated basis of the Borrower for such fiscal year in accordance with GAAP and that the exami­nation by such accountants in connection with such  financial statements has been made in accordance with generally accepted auditing standards; provided, that the requirements set forth in this clause (a) may be fulfilled by providing to the Lender the report of the Borrower to the Commission on Form 10-K for the applicable fiscal year;

(b)           as soon as avail­able and in any event within 45 days after the end of each of the first three fiscal quarters of each fiscal year of the Borrower, an unaudited balance sheet of the Borrower and its Subsidiaries on a consolidated basis as of the end of such fiscal quarter and the related unaudited statements of in­come and cash flows of the Borrower and its Subsidiaries on a consolidated basis for such fiscal quarter and the then elapsed portion of such fiscal year, setting forth in each case in comparative form the figures for the corresponding quarter and the corresponding portion of Borrower's previous fiscal year, all certified by the chief financial officer or treasurer of the Borrower as presenting fairly in all material respects the financial condition and results of operations of the Borrower and its Subsidiaries on a consolidated basis in accordance with GAAP, subject to normal year-end audit adjustments and the absence of footnotes; provided, that the requirements set forth in this clause (b) may be fulfilled by providing to the Lender the report of the Borrower to the Commission on Form 10-Q for the applicable fiscal quarter;

(c)           concurrently with the delivery of the financial statements referred to in clauses (a) and (b) above, a certificate of a Responsible Officer, (i) certifying as to whether there exists a Default or Event of De­fault on the date of such certificate, and if a Default or an Event of Default then exists, specifying the details thereof and the action which the Borrower has taken or proposes to take with respect thereto, and (ii) setting forth in reasonable detail calculations demonstrating compliance with Article VI;

(d)           concurrently with the delivery of the financial statements referred to in clauses (a) and (b) above, duly executed copies of the Borrower’s then-current FR Report Y-9C and FR Report Y-9LP and a duly executed copy of the then-current Call Report for each Financial Institution Subsidiary;

(e)           promptly after the same become publicly available, copies of all periodic and other reports, proxy statements and other materials filed with the Commission, or any Governmental Authority succeeding to any or all functions of said Commission, or with any national securities exchange, or distributed by the Borrower to its shareholders generally, as the case may be; and

(f)           promptly following any request therefor, such other information regarding the results of operations, business affairs and  financial condition of the Borrower or any Subsidiary as the Lender may reasonably request.

Documents required to be delivered pursuant to Section 5.1(a) or (b) or Section 5.1(e) that are filed with, or furnished to, the Commission electronically shall be deemed to have been delivered to the Lender on the date (i) on which the Borrower posts such documents or provides a link thereto on the Borrower’s website on the internet at the website address set forth in Section 9.1 or (ii) on which such documents are posted on the Borrower’s behalf on an internet or intranet website, if any, to which the Lender has access; provided, that (A) the Borrower shall deliver paper copies of such documents to the Lender if the Lender so requests in writing

 
17
 

until a further written notice is received by the Borrower from the Lender to cease delivering paper copies and (B) the Borrower shall notify (which may be by facsimile or electronic mail) the Lender of the posting of any such documents. Notwithstanding anything contained herein, in every instance the Borrower shall be required to provide paper copies of  the certificates required to be delivered pursuant to Section 5.1(c) hereof.

Section 5.2.  Notices of Material Events.  The Borrower will furnish to the Lender prompt written notice of the following:

 
(a)
the occurrence of any Default or Event of Default;

(b)           the filing or commencement of any action, suit or proceeding by or before any arbitrator or Governmental Authority against or, to the knowledge of the Borrower, affecting the Borrower or any Subsidiary which could reasonably be expected to result in a Material Adverse Effect;

(c)           the occurrence of any ERISA Event that alone, or together with any other ERISA Events that have occurred, could reasonably be expected to result in liability of the Borrower and its Subsidiaries in an aggregate amount exceeding $500,000;

(d)           any material investigation of the Borrower or any Subsidiary by any Governmental Agency having regulatory authority over the Borrower or any such Subsidiary (other than routine examinations of the Borrower and/or any such Subsidiary);

(e)           the issuance of any cease and desist order, written agreement, cancellation of insurance or other public enforcement action by the FDIC or other Governmental Authority having regulatory authority over the Borrower or any Subsidiary;

(f)           the issuance of any memorandum of understanding or proposed disciplinary action by or from any Governmental Authority having regulatory authority over the Borrower or any Subsidiary, to the extent that the Borrower or any such Subsidiary is permitted to disclose such information (provided that the Borrower shall take all reasonable efforts to obtain any necessary regulatory consents);

(g)           any other development that results in, or could reasonably be expected to result in, a Material Adverse Effect.

Each notice delivered under this Section shall be accompanied by a written statement of a Responsible Officer setting forth the details of the event or development requiring such notice and any action taken or proposed to be taken with respect thereto.

Section 5.3.  Existence; Conduct of Business.  The Borrower will, and will cause each of its Subsidiaries to, do or cause to be done all things necessary to preserve, renew and maintain in full force and effect its legal existence and its respective rights, licenses, permits, privileges, fran­chises, patents, copyrights, trademarks and trade names material to the conduct of its business and will continue to engage in the same business as presently conducted or such other businesses that are reasonably related thereto; provided, that nothing in this Section shall prohibit any merger, consolidation, liquidation or dissolution permitted under Section 7.3.

Section 5.4.  Compliance with Laws, Etc. The Borrower will, and will cause each of its Subsidiaries to, comply with all laws, rules, regulations and requirements of any Governmental Authority (including without limitation all federal and state banking statutes and regulations) applicable to its assets, except where the failure to do so, either individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect.

 
18
 


Section 5.5.  Books and Records. The Borrower will, and will cause each of its Subsidiaries to, keep proper books of record and account in which full, true and correct entries shall be made of all dealings and transactions in relation to its business and activities to the extent necessary to prepare the consolidated financial statements of Borrower in conformity with GAAP.

Section 5.6.  Visitation, Inspection, Etc.  The Borrower will, and will cause each of its Subsidiaries to, permit any representative of the Lender to visit and inspect its properties, to examine its books and records and to make copies and take ex­tracts therefrom, and to discuss its affairs, finances and ac­counts with any of its officers and with its independent certified public accountants, all at such reasonable times and as of­ten as the Lender may reasonably request after rea­sonable prior notice to the Borrower.

Section 5.7.  Maintenance of Properties; Insurance. (a) The Borrower will, and will cause each of its Subsidiaries to, (i) keep and maintain all property material to the conduct of its business in good working order and condition, ordinary wear and tear excepted,  except where the failure to do so, either individually or it the aggregate, could not reasonably be expected to result in a Material Adverse Effect and (ii) maintain with financially sound and reputable insurance companies, insurance with respect to its prop­erties and business, and the properties and business of its Subsidiaries, against loss or damage of the kinds customarily insured against by companies in the same or similar businesses operating in the same or similar locations.

(b) The deposits of each Financial Institution Subsidiary will at all times be insured by the Federal Deposit Insurance Corporation (“FDIC”).

Section 5.8.  Use of Proceeds .  The Borrower will use the proceeds of all Revolving Loans for general working capital purposes. No part of the proceeds of any Revolving Loan will be used, whether directly or indirectly, for any purpose that would violate any rule or regulation of the Board of Governors of the Federal Reserve System, including Regulation T, U or X.


ARTICLE VI

FINANCIAL COVENANTS

The Borrower covenants and agrees that so long as the Lender has its Revolving Commitment hereunder or the principal of or interest on or any Revolving Loan remains unpaid or any fee remains unpaid:

Section 6.1. Return on Average Assets. The Borrower on a consolidated basis will have at the end of each Fiscal Quarter a Return on Average Assets (determined by reference to the Borrower’s Form 10-Q or 10-K) of not less than 0.50%, determined by taking the sum of the Return on Average Assets for such Fiscal Quarter and the previous three Fiscal Quarters, divided by four (4).

Section 6.2.  Ratio of Nonperforming Assets to Total Loans and OREO. The Borrower on a consolidated basis will not permit at the end of each Fiscal Quarter Nonperforming Assets (determined by reference to the Borrower’s FRY-9C Report) to be greater than 2.00% of the sum of Total Loans (excluding loans held for sale and determined by reference to the Borrower’s Form 10-Q or 10-K) and Other Real Estate Owned (determined by reference to the Borrower’s FRY-9C Report).

Section 6.3.  Capital Measures. (a) The Borrower will have a Total Risk-based Capital Ratio of 9.50% or greater, a Tier 1 Risk-based Capital Ratio of 6.0% or greater, and a Tier 1Leverage Capital Ratio of 5.0% or greater (each as defined by applicable  federal and state regulations or orders), and will not be subject to any written agreement, order, capital directive or prompt corrective action directive by any

 
19
 

Governmental Authority having regulatory authority over the Borrower or (ii) if required by any Governmental Authority having regulatory authority over the Borrower, will have such higher amounts of Total Risk-based Capital and Tier 1 Risk-based Capital and/or such greater Leverage Capital Ratio as specified by such Governmental Authority.

(b) Not later than three (3) months after the Closing Date, each Financial Institution Subsidiary will be “well capitalized” for all applicable state and federal regulatory purposes at all times, and such Financial Institution Subsidiary  (i) will have a Total Risk-based Capital Ratio of 10.0% or greater,  a Tier 1 Risk-based Capital Ratio of 6.0% or greater, and a Tier 1 Leverage Capital Ratio of 5.0% or greater (each as defined by applicable federal and state regulations or orders) and not be subject to any written agreement, order, capital directive or prompt corrective action directive by any Governmental Authority having regulatory authority over such Financial Institution Subsidiary or (ii) if required by any Governmental Authority having regulatory authority over such Financial Institution Subsidiary  in order to remain “well capitalized” and in compliance with all applicable regulatory requirements, will have such higher amounts of Total Risk-based Capital and Tier 1 Risk-based Capital and/or such greater Leverage Ratio as specified by such Governmental Authority. For the period beginning on the Closing Date and ending three (3) months thereafter, each Financial Institution Subsidiary  (i) will have a Total Risk-based Capital Ratio of 9.5% or greater,  a Tier 1 Risk-based Capital Ratio of 6.0% or greater, and a Tier 1 Leverage Capital Ratio of 5.0% or greater (each as defined by applicable federal and state regulations or orders) and not be subject to any written agreement, order, capital directive or prompt corrective action directive by any Governmental Authority having regulatory authority over such Financial Institution Subsidiary.

(c) Notwithstanding the foregoing, if at any time any such Governmental Authority changes the definition of “well capitalized” either by amending such ratios or otherwise, such amended definition, and any such amended or new ratios, shall automatically be incorporated by reference into this Agreement as the minimum standard for the Borrower (except with respect to it Total Risk-based Capital Ratio, in which case the Lender has the right to amend such ratio in subparagraph (a) above in its sole discretion) or any Financial Institution Subsidiary, as the case may be, on and as of the date that any such amendment becomes effective by applicable statute, regulation, order or otherwise.


ARTICLE  VII

NEGATIVE COVENANTS

The Borrower covenants and agrees that so long as the Lender has its Revolving Commitment hereunder or the principal of or interest on any Revolving Loan remains unpaid or any fee remains unpaid:

Section 7.1.  Indebtedness. The Borrower will not, and will not permit any of its Subsidiaries to, create, incur, assume or suffer to exist any Indebtedness, except:

(a)           Indebtedness created pursuant to the Loan Documents;

(b)           Indebtedness of Financial Institution Subsidiaries (i) to the Federal Reserve Board or to the Federal Home Loan Bank Board, (ii) constituting federal funds purchased and securities sold under agreements to repurchase incurred in the ordinary course of business, or  (iii) otherwise incurred in the ordinary course of their banking business;

(c)           Indebtedness constituting obligations of the Borrower and any Financial Institution Subsidiary under debentures, indentures, trust agreements and guarantees in connection with the issuance by such Persons of trust preferred securities;

 
20
 


(d)           (i) Indebtedness owed by the Borrower or any “affiliate” of the Borrower (as defined in Regulation W of the FRB and sections 23A and 23B of the Federal Reserve Act) to any Financial Institution Subsidiary not in violation of Regulation W of the FRB (as amended, supplemented or otherwise modified), or (ii) Indebtedness owed by any Subsidiary to the Borrower or (iii) Indebtedness owed by the Borrower or any Subsidiary to a Subsidiary other than a Financial Institution Subsidiary;

(e)           Any other Indebtedness that is subordinated to the Indebtedness under this Agreement which contains terms, covenants and conditions in form and substance reasonably satisfactory to the Lender as evidenced by its prior written approval thereof;

(f)           Indebtedness incurred under (i) Hedging Agreements entered into in the ordinary course of business to hedge or mitigate risks to which the Borrower or any Subsidiary is exposed in the conduct of its business or the management of its liabilities and (ii) Hedging Agreements entered into by any Financial Institution Subsidiary as a counterparty in the ordinary course of its business; and

(g)           Indebtedness of any Person purchased in a permitted Acquisition as long as the Borrower is in compliance both before and after such Acquisition with the covenants contained in Article VI and no Default or Event of Default exists or would result from such Acquisition, provided that the amount of such Indebtedness together with the amount of such Indebtedness permitted in Section 7.1(c)(iii) shall not exceed $5,000,000 in the aggregate.

Section 7.2.  Negative Pledge .  The Borrower will not, and will not permit any of its Subsidiaries to, create, incur, assume or suffer to exist any Lien on any of its assets or property now owned or hereafter acquired, except:

 (a)           Liens (if any) created in favor of the Lender pursuant to the Loan Documents;

 
(b)
Permitted Encumbrances;

(c)           Liens granted to secure any Indebtedness incurred pursuant to Section 7.1(c) ( as long as in the case of Section 7.1(c)(ii), such Lien shall only extend to those securities sold) and Section 7.1(e); and

(d)           extensions, renewals, or replacements of any Lien referred to in paragraphs (a), (b) and (c) of this Section.

Provided, that at no time and under no circumstances will the Borrower permit any Lien on the capital stock of any Financial Institution Subsidiary.

Section 7.3.  Fundamental Changes.

(a)           The Borrower will not, and will not permit any Subsidiary to, merge into or consolidate into any other Person, or permit any other Person to merge into or consolidate with it, or sell, lease, transfer or otherwise dispose of (in a single transaction or a series of transactions) all or substantially all of its assets (other than in the ordinary course of business) or all or substantially all of the stock of any of its Subsidiaries or liquidate or dissolve; provided, that if at the time thereof and immediately after giving effect thereto, no Default or Event of Default shall have occurred and be continuing, (i) the Borrower or any Subsidiary may merge with a Person which is not affiliated with the Borrower if the Borrower (or such Subsidiary if the Borrower is not a party to such merger) is the surviving Person, (ii) any Subsidiary may merge into another Subsidiary provided that in the case of a Financial Institution Subsidiary, a Financial Institution Subsidiary is the surviving Person, (iii) any Subsidiary may sell, lease, transfer or dispose of its assets to (A)

 
21
 

the Borrower,  (B) in the case of any Subsidiary that is not a Financial Institution Subsidiary, to any other Subsidiary and (C) in the case of a Financial Institution Subsidiary, to another  Financial Institution Subsidiary or to a Subsidiary which is not a Financial Institution Subsidiary provided that such Subsidiary is a direct or indirect Subsidiary of the selling Financial Institution Subsidiary, (iv) any Subsidiary (other than a Financial Institution Subsidiary) or the assets of any Subsidiary may be sold or otherwise transferred so long as the aggregate value of such assets or of such Subsidiary shall not exceed $500,000 in any fiscal year, provided, that any Financial Institution Subsidiary may sell loans, investments or other assets in the ordinary course of its business and (v) notwithstanding anything to the contrary in any of the foregoing, the Borrower or any Subsidiary may enter into a sale leaseback transaction of any of its real property, now owned or hereafter acquired.

(b)           The Borrower will not, and will not permit any of its Subsidiaries to, engage to any material extent in any business other than businesses of the type conducted by the Borrower and its Subsidiaries on the date hereof and businesses reasonably related thereto and any types of businesses that are expressly permitted by any Governmental Authority having jurisdiction over the Borrower and/or any Financial Institutions Subsidiary.

Section 7.4.  Restricted Payments. Upon the occurrence and during the continuation of any Default or Event of Default, the Borrower will not, and will not permit its Subsidiaries to, declare or make, or agree to pay or make, directly or indirectly, any dividend on any class of its stock, or make any payment on account of, or set apart assets for a sinking or other analogous fund for, the purchase, redemption, retirement, defeasance or other acquisition of, any shares of common stock or Indebtedness subordinated to the Obligations of the Borrower or any options, warrants, or other rights to purchase such common stock or such Indebtedness, whether now or hereafter outstanding; provided, that any Subsidiary may pay dividends to the Borrower or to its parent company at any time.

Section 7.5.  Restrictive Agreements.  The Borrower will not, and will not permit any Subsidiary to, directly or indirectly, enter into, incur or permit to exist any agreement that prohibits, restricts or imposes any condition upon (a) the ability of the Borrower or any Subsidiary to create, incur or permit any Lien upon any of its assets or properties, whether now owned or hereafter acquired, or (b) the ability of any Subsidiary to pay dividends or other distributions with respect to its common stock, to make or repay loans or advances to the Borrower or any other Subsidiary, to guarantee Indebtedness of the Borrower or any other Subsidiary or to transfer any of its prop­erty or assets to the Borrower or any Subsidiary of the Borrower; provided, that (i) the foregoing shall not apply to restrictions or conditions imposed by law or by this Agreement or any other Loan Document, (ii) the foregoing shall not apply to customary restrictions and conditions contained in agreements relating to the sale of a Subsidiary pending such sale, provided such restrictions and conditions apply only to the Subsidiary that is sold and such sale is permitted hereunder, and (iii) clause (a) shall not apply to customary provisions in leases restricting the assignment thereof.

Section 7.6.  Investments, Etc  The Borrower will not, and will not permit any of its Subsidiaries to, purchase, hold or acquire (including pursuant to any merger with any Person that was not a wholly-owned Subsidiary prior to such merger), any common stock, Indebtedness or other securities (including any option, warrant, or other right to acquire any of the foregoing) of, make or permit to exist any loans or advances to, Guarantee any obligations of, or make or permit to exist any investment or any other interest in, any other Person (all of the foregoing being collectively called "Investments"), or purchase or otherwise acquire (in one transaction or a series of transactions) any assets of any other Person that constitute a business unit, except:

(a)           Investments existing on the date hereof (including Investments in Subsidiaries) that have been disclosed to the Lender and/or that are set forth on the most current financial statements that have been delivered to the Lender;

 
22
 


(b)           Investments purchased in the ordinary course of business by any Financial Institution Subsidiary;

(c)           Investments made by the Borrower in or to any Subsidiary and by any Subsidiary in or to the Borrower or in or to another Subsidiary, including without limitation any such Investment made in a Subsidiary established in connection with the issuance of trust preferred securities;

(d)           Investments made for the purpose of making or consummating an Acquisition; provided, that (i) after giving effect to such Acquisition, no Default or Event of Default shall have occurred and be continuing, (ii) such Acquisitions are undertaken in accordance with all applicable laws, and (iii) the prior written consent or approval of such Acquisition of the board of directors or equivalent governing body of the Person being acquired. Upon the Borrower or any Subsidiary’s Investment of fifty percent or more of the voting stock any Person that is a regulated financial institution, such Person shall become a Financial Institution Subsidiary for purposes of this Agreement; and

 
(e)
Other Investments permitted by applicable laws and regulations.



ARTICLE VIII

EVENTS OF DEFAULT

Section 8.1.  Events of Default. If any of the following events (each an "Event of Default") shall occur:

(a)           the Borrower shall fail to pay any principal of any Revolving Loan when and as the same shall become due and payable, whether at the due date thereof or at a date fixed for prepayment or otherwise; or

(b)           the Borrower shall fail to pay any interest on any Revolving Loan or any other amount (other than an amount payable under clause (a) of this Article) pay­able under this Agreement or any other Loan Document, when and as the same shall become due and payable, and such failure shall continue unremedied for a period of three (3) days; or

(c)           any representation or warranty made or deemed made by or on behalf of the Borrower or any Subsidiary in or in connection with this Agreement or any other Loan Document (including the Sched­ules attached thereto) and any amendments or modifications hereof or waivers hereunder, or in any certificate, report, financial statement or other document sub­mitted to the Lender by the Borrower  or any representative of the Borrower  pursuant to or in connection with this Agreement shall prove to be incorrect in any material respect when made or deemed made or submitted; or

(d)           the Borrower shall fail to observe or perform any covenant or agreement contained in Section 5.2 (a) or (e), Section 5.3 (with respect to the Borrower’s existence), or Articles VI or VII; or

(e)           the Borrower shall fail to observe or perform any covenant or agreement contained (i) in this Agreement (other than those referred to in clauses (a), (b) and (d) above), and such failure shall remain unremedied for 30 days after the earlier of (x) any Responsible Officer of the Borrower becomes aware of such failure, or (y)  notice thereof shall have been given to the Borrower by the Lender or any Lender or (ii) in any other Loan Document (after taking into consideration any applicable grace periods); or

 
23
 


(f)           the Borrower or any Subsidiary (whether as primary obligor or as guarantor or other surety) shall fail to pay any principal of or premium or interest on any Indebtedness owed to the Bank (including without limitation any Hedging Agreement or any letter of credit) in any amount or any other Indebtedness owed to any other Person greater than $500,000  that is outstanding, when and as the same shall become due and payable (whether at scheduled maturity, required prepayment, acceleration, demand or otherwise), and such failure shall continue after the applicable grace period, if any, specified in the agreement or instrument evidencing such Indebtedness; or any other event shall occur or condition shall exist under any agreement or instrument relating to such Indebtedness and shall continue after the applicable grace period, if any, specified in such agreement or instrument, if the effect of such event or condition is to accelerate, or permit the acceleration of, the maturity of such Indebtedness (without regard to whether such holders or other Person shall have exercised or waived their right to do so); or any such Indebtedness shall be declared to be due and payable; or required to be prepaid or redeemed (other  than by a regularly scheduled required prepayment or redemption), purchased or defeased, or any offer to prepay, redeem, purchase or defease such Indebtedness shall be required to be made, in each case prior to the stated maturity thereof; or

(g)           the Borrower or any Subsidiary shall (i) commence a voluntary case or other proceeding or file any petition seeking liquidation, reorganization or other relief under any federal, state or foreign bankruptcy, insolvency or other similar law now or hereafter in effect  or seeking the appointment of a custodian, trustee, receiver, liquidator or other similar official of it or any substantial part of its property, (ii) consent to the institution of , or fail to contest in a timely and appropriate manner, any proceeding or petition described in clause (i) of this Section, (iii) apply for or consent to the appointment of a custodian, trustee, receiver, liquidator or other similar official for the Borrower or any such Subsidiary or for a substantial part of its assets, (iv) file an answer admitting the material allegations of a petition filed against it in any such proceeding, (v) make a general assignment for the benefit of creditors, or (vi) take any action for the purpose of effecting  any of the foregoing; or

(h)           an involuntary proceeding shall be commenced or an involuntary petition shall be filed seeking (i) liquidation, reorganization or other relief in respect of the Borrower or any  Subsidiary or its debts, or any substantial part of its assets,  under any federal, state or foreign bankruptcy, insolvency or other similar law now or hereafter in effect  or (ii) the appointment of a custodian, trustee, receiver, liquidator or other similar official for the Borrower or any Subsidiary or for a substantial part of its assets, and in any such case, such  proceeding or petition shall remain undismissed for a period of 60 days or an order or decree approving or ordering any of the foregoing shall be entered; or

(i)           the Borrower or any Subsidiary shall become unable to pay, shall admit in writing its inability to pay, or shall fail to pay, its debts as they become due; or

(j)           an ERISA Event shall have occurred that, in the opinion of the Lender, when taken together with other ERISA Events that have occurred, could reasonably be expected to result in liability to the Borrower and the Subsidiaries in an aggregate amount exceeding $500,000; or

(k)           any judgment or order for the payment of money in excess of $500,000 in the aggregate shall be rendered against the Borrower or any Subsidiary, and either (i) enforcement proceedings shall have been commenced by any creditor upon such judgment or order or (ii) there shall be a period of 30 consecutive days during which a stay of enforcement of such judgment or order, by reason of a pending appeal or otherwise, shall not be in effect; or

(l)           any non-monetary judgment or order shall be rendered against the Borrower or any Subsidiary that could reasonably be expected to have a Material Adverse Effect, and there shall be a period of 30 consecutive days during which a stay of enforcement of such judgment or order, by reason of a pending appeal or otherwise, shall not be in effect; or

 
24
 


                    (m)           a Change in Control shall occur or exist; or

(n)           any Governmental Authority having regulatory authority over the Borrower or any Subsidiary shall impose any restriction upon the payment of dividends from any such Subsidiary to the Borrower; or

(o)           any Financial Institution Subsidiary shall cease for any reason to be an insured bank under the Federal Deposit Insurance Act, as amended; or

(p)           the FDIC or any other federal or state regulatory authority shall issue a cease and desist order or take other action of a disciplinary or remedial nature against the Borrower or any Financial Institution Subsidiary  and such order or other action could reasonably be expected to have a Material Adverse Effect or there shall occur with respect to any Financial Institution Subsidiary any event that is grounds for the required submission of a capital restoration plan under 12 U. S. C. §1831o (e)(2) and the regulations thereunder; or

(q)           the Borrower or any Financial Institution Subsidiary shall enter into a punitive written agreement with any Governmental Authority having regulatory authority over such Person for any reason;

then, and in every such event (other than an event with respect to the Borrower or any Subsidiary described in clause (g) or (h) of this Section) and at any time thereafter during the continuance of such event, the Lender may, by notice to the Borrower, take any or all of the follow­ing actions, at the same or different times: (i) terminate its Revolving Commitment; (ii) declare the principal of and any accrued interest on the Revolving Loans, and all other Obligations owing hereunder, to be, whereupon the same shall become due and payable immediately, without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrower and (iii) exercise all remedies contained in any other Loan Document; and  that, if an Event of Default specified in either clause (g) or (h)  shall occur, the Revolving Commitment  shall automatically terminate and the principal of the Revolving Loans then outstanding, together with accrued interest thereon, and  all fees, and all other Obligations shall automatically become due and payable, without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrower.

ARTICLE IX

MISCELLANEOUS

Section 9.1.  Notices.

(a)           Except in the case of notices and other communications expressly permitted to be given by telephone, all notices and other communications to any party herein to be effective shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by telecopy, as follows:

 
To the Borrower:
   
15▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
   
▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
     
   
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Treasurer
   
Telephone Number: (▇▇▇) ▇▇▇-▇▇▇▇
   
Fax Number: (▇▇▇) ▇▇▇-▇▇▇▇


 
25
 


   
Email: ▇▇▇▇.▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇.▇▇▇
   
Website: ▇▇▇.▇▇▇▇▇▇▇▇▇.▇▇▇
     
 
To the Lender:
SunTrust Bank
   
30▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
   
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
     
   
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇
   
Telephone Number: (▇▇▇) ▇▇▇-▇▇▇▇
   
Fax Number: (▇▇▇) ▇▇▇-▇▇▇▇
   
Email: ▇▇▇▇▇.▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇.▇▇▇


Notices sent by hand or overnight courier service, or mailed by certified or registered mail, shall be deemed to have been given when received; notices sent by telecopier shall be deemed to have been given when sent (except that, if not given during normal business hours for the recipient, shall be deemed to have been given at the opening of business on the next Business Day for the recipient).

Any party hereto may change its address or telecopy number for notices and other communications hereunder by notice to the other parties hereto.  All such notices and other communications shall, when transmitted by overnight delivery, or faxed, be effective when delivered for overnight (next-day) delivery, or transmitted in legible form by facsimile machine, respectively, or if mailed, upon the third Business Day after the date deposited into the mails or if delivered, upon delivery; provided, that notices delivered to the Lender shall not be effective until actually received by the Lender at its address specified in this Section 9.1. With respect to any communications delivered or furnished by electronic communication under Section 5.1, such communications sent to an e-mail address shall be deemed received upon the sender’s receipt of an acknowledgement from the intended recipient (such as by the “return receipt requested” function, as available, return e-mail or other written acknowledgement); provided, that if such communications are not sent during the normal business hours of the recipient, such communications shall be deemed to have been sent at the opening of business on the next Business Day for the recipient, and (ii)  communications posted to an internet or intranet website shall be deemed received upon the deemed receipt by the intended recipient at its e-mail address as described in the foregoing clause (i) of notification that such communication is available and identifying the website address therefor.

(b)           Any agreement of the Lender herein to receive certain notices by telephone or facsimile is solely for the convenience and at the request of the Borrower.  The Lender shall be entitled to rely on the authority of any Person purporting to be a Person authorized by the Borrower to give such notice and the Lender shall not have any liability to the Borrower or other Person on account of any action taken or not taken by the Lender in reliance upon such telephonic or facsimile notice.  The obligation of the Borrower to repay the Revolving Loans and all other Obligations hereunder shall not be affected in any way or to any extent by any failure of the Lender to receive written confirmation of any telephonic or facsimile notice or the receipt by the Lender of a confirmation which is at variance with the terms understood by the Lender to be contained in any such telephonic or facsimile notice.

Section 9.2.  Waiver; Amendments.

(a)           No failure or delay by the Lender in exercising any right or power hereunder or any other Loan Document, and no course of dealing between the Borrower and the Lender, shall oper­ate as a waiver thereof, nor shall any single or partial exercise of any such right or power or any abandonment or  discontinuance of steps to enforce such right or power, preclude any other or further exercise thereof or the exer­cise of any other right or power hereunder or thereunder.  The rights and remedies of the Lender hereunder

 
26
 

and under the other Loan Documents are cumulative and are not exclu­sive of any rights or remedies provided by law. No waiver of any provision of this Agreement or any other Loan Document or consent to any departure by the Borrower therefrom shall in any event be effective unless the same shall be permitted by paragraph (b) of this Section, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given. Without limiting the generality of the foregoing, the making of a Revolving Loan shall not be construed as a waiver of any Default or Event of Default, regardless of whether the Lender may have had notice or knowledge of such Default or Event of Default at the time.

(b)           No amendment or waiver of any provision of this Agreement or the other Loan Documents, nor consent to any departure by the Borrower therefrom, shall in any event be effective unless the same shall be in writing and signed by the Borrower and the Lender and then such waiver or consent shall be effective only in the specific instance and for the spe­cific purpose for which given.

Section 9.3.  Expenses; Indemnification.

(a)           The Borrower shall pay (i) all reasonable, out-of-pocket costs and expenses of the Lender (including, without limitation, the reasonable fees, charges and disbursements of outside counsel and the allocated cost of inside counsel) in connection with the preparation and administration of the Loan Documents and any amendments, modifications or waivers thereof (whether or not the transactions contemplated in this Agreement or any other Loan Document shall be consummated), and (ii) all out-of-pocket costs and expenses (including, without limitation, the reasonable fees, charges and disbursements of outside coun­sel and the allocated cost of inside counsel) incurred by the Lender in connection with the enforcement or protection of its rights in connection with this Agreement, including its rights under this Section, or in connection with the Revolving Loans made hereunder, including all such out-of-pocket expenses incurred during any workout, restructuring or negotiations in respect of such Revolving Loans.

                          (b)The Borrower shall indemnify the Lender and each Affiliate of the Lender, and each officer, director, employee, agents and advisors of the Lender and each Affiliate of the Lender (each, an "Indemnitee") against, and hold each of them harmless from, any and all costs, losses, liabilities, claims, damages and related expenses, including the reasonable fees, charges and disbursements of any counsel for any Indemnitee, which may be incurred by any Indemnitee,  or asserted against any Indemnitee by the Borrower or any third Person, arising out of, in connection with or as a result of (i) the execution or delivery of any this Agreement or any other agreement or instrument contemplated hereby, the performance by the parties hereto of their respective obligations hereunder or the consummation  of any of the transactions contemplated hereby, (ii) any Revolving Loan or any actual or proposed use of the proceeds therefrom, (iii) any actual or alleged presence or release of Hazardous Materials on or from any property owned by the Borrower  or any Subsidiary or any Environmental Liability  related in any way to the Borrower or any Subsidiary or (iv) any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether brought by the Borrower or any third Person and whether based on contract, tort, or any other theory  and regardless of whether any Indemnitee is a party thereto; provided,  that such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related expenses are determined  by a court of competent jurisdiction in a final and nonappealable judgment to have resulted from the  gross negligence or willful misconduct of such Indemnitee.

                          (c)The Borrower shall pay, and hold the Lender harmless from and against, any and all present and future stamp, documentary, and other similar taxes with re­spect to this Agreement and any other Loan Documents, any collateral described therein, or any payments due thereunder, and save the Lender harmless from and against any and all liabilities with respect to or resulting from any delay or omission to pay such taxes.

 
27
 


(d)           To the extent permitted by applicable law, the Borrower shall not assert, and hereby waives, any claim against any Indemnitee, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to actual or direct damages) arising out of, in connection with or as a result of, this Agreement or any agreement or instrument contemplated hereby, the transactions contemplated therein, any Loan or the Letter of Credit  or the use of proceeds thereof.

(e)           All amounts due under this Section shall be payable promptly after written demand therefor.

Section 9.4. Successors and Assigns.

(a)           The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns, except that the Borrower may not assign or transfer any of its rights hereunder without the prior written consent of the Lender (and any attempted assignment or transfer by the Borrower without such consent shall be null and void).

(b)           The Lender may at any time sell participations or assignments in all or a portion of its rights and obligations under this Agreement and the other Loan Documents (including all or a portion of its Revolving Commitment and the Revolving Loans at the time owing to it).

(c) The Lender may at any time pledge or assign a security interest in all or any por­tion of its rights under this Agreement and the Revolving Credit Note to secure its obligations to a Federal Reserve Bank without complying with this Section; provided, that no such pledge or assignment shall release the Lender from any of its obligations hereunder or substitute any such pledgee or assignee for such Lender as a party hereto.


Section 9.5.  Governing Law; Jurisdic­tion; Consent to Service of Process.

(a)           This Agreement and the other Loan Documents shall be construed in accordance with and be governed by the law (without giving effect to the conflict of law principles thereof) of the State of North Carolina.

(b)           The Borrower hereby irrevocably and unconditionally submits, for itself and its property, to the non-exclusive jurisdiction of any Federal and/or state court (including without limitation the North Carolina Business Court, if applicable)  located in the State of North Carolina and any appellate court from any thereof, in any action or proceeding arising out of or relating to this Agreement or any other Loan Document or the transactions contemplated hereby or thereby, or for recognition or enforcement of any judgment, and each of the parties hereto hereby irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in such North Carolina state court (including the North Carolina Business Court) or, to the extent permitted by applicable law, such Federal court. Each of the parties hereto agrees that a final nonappealable judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Nothing in this Agreement or any other Loan Document shall affect any right that the Lender may otherwise have to bring any action or proceeding relating to this Agreement or any other Loan Document against the Borrower or its properties in the courts of any jurisdiction.

(c)           The Borrower ir­­revocably and unconditionally waives any objection which it may now or hereafter have to the laying of venue of any such suit, action or proceeding described in paragraph (b) of this Section and brought in any court referred to in paragraph (b) of this Section. Each of the parties hereto irrevocably waives, to the fullest extent permitted by applicable law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court.

 
28
 


(d)           Each party to this Agreement irrevocably consents to the service of process in the manner provided for notices in Section 9.1.  Nothing in this Agreement or in any other Loan Document will affect the right of any party hereto to serve process in any other manner permitted by law.

Section 9.6.  WAIVER OF JURY TRIAL.  EACH PARTY HERETO IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY).

Section 9.7.   Right of Setoff.  In addition to any rights now or hereafter granted under applicable law and not by way of limitation of any such rights, the Lender shall have the right, at any time or from time to time upon the occurrence and during the continuance of an Event of Default, without prior notice to the Borrower, any such notice being expressly waived by the Borrower to the extent permitted by applicable law, to set off and apply against all deposits (general or special, time or demand, provisional or final) of the Borrower at any time held or other obligations at any time owing by the Lender to or for the credit or the account of the Borrower against any and all Obligations held by the Lender, irrespective of whether the Lender shall have made demand hereunder and although such Obligations may be unmatured.  The Lender agrees promptly to notify the Borrower after any such set-off and any application made by the Lender; provided, that the failure to give such notice shall not affect the validity of such set-off and application.

Section 9.8.   Counterparts; Integration.  This Agreement may be executed by one or more of the parties to this Agreement on any number of separate counterparts (including by telecopy), and all of said counterparts taken together shall be deemed to constitute one and the same instrument. This Agreement, the other Loan Documents, and any separate letter agreement(s) relating to any fees payable to the Lender constitute the entire agreement among the parties hereto and thereto regarding the subject matters hereof and thereof and supersede all prior agreements and understandings, oral or written, regarding such subject matters.

Section 9.9.  Survival. All covenants, agreements, representations and warranties made by the Borrower herein and in the certificates or other instruments delivered in connection with or pursuant to this Agreement shall be considered to have been relied upon by the other parties hereto and shall survive the execution and delivery of this Agreement and the making  of any Revolving Loans, regardless of any investigation made by any such other party or on its behalf and notwithstanding that the Lender may have had notice or knowledge of any Default or incorrect representation or warranty at the time any credit is extended hereunder, and shall continue in full force and effect as long as the principal of or any accrued interest on any Revolving Loan or any fee or any other amount payable under this Agreement is outstanding and unpaid and so long as the Revolving Commitment has not expired or terminated.  The provisions of Sections 2.10 and 9.3 shall survive and remain in full force and effect regardless of the consummation of the transactions contemplated hereby, the repayment of the Revolving Loans, the expiration or termination of the Revolving Commitment or the termination of this Agreement or any provision hereof.  All representations and warranties made herein, in the cer­tifi­cates, reports, notices, and other documents delivered pursu­ant to this Agreement shall survive the execution and delivery of this Agreement and the other Loan Documents, and the making of the Revolving Loans.

Section 9.10.  Severability.  Any provision of this Agreement ­or any other Loan Document held to be illegal, invalid or unenforceable in any jurisdiction, shall, as to such jurisdiction, be ineffective to the extent of such illegality, invalidity or unenforceability without affecting the legality, validity or enforceability of the remaining provisions hereof or thereof; and the illegality, invalidity or unenforceability of a particular

 
29
 

provision in a particular jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

Section 9.11.  Interest Rate Limitation.  Notwithstanding anything herein to the contrary, if at any time the interest rate applicable to any Revolving Loan, together with all fees, charges and other amounts which may be treated as interest on such Loan under applicable law (collectively, the "Charges"), shall exceed the maximum lawful rate of interest (the "Maximum Rate") which may be contracted for, charged, taken, received or reserved by the Lender in accordance with applicable law, the rate of interest payable in respect of such Revolving Loan hereunder, together with all Charges payable in respect thereof, shall be limited to the Maximum Rate and, to the extent lawful, the interest and Charges  that would have been payable in respect of such Revolving Loan but were not payable as a result of the operation of this Section shall be cumulated and the interest and Charges payable to the Lender in respect of other Revolving Loans or periods shall be increased (but not above the Maximum Rate therefor) until such cumulated amount, together with interest thereon at the Federal Funds Rate to the date of repayment, shall have been received by the Lender.

Section 9.12.  Patriot Act.   The Lender hereby notifies the Borrower that pursuant to the requirements of the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “Patriot Act”), it is required to obtain, verify and record information that identifies the Borrower, which information includes the name and address of the Borrower and other information that will allow the Lender  to identify the Borrower in accordance with the Patriot Act.  The Borrower shall, and shall cause each of its Subsidiaries to, provide to the extent commercially reasonable, such information and take such other actions as are reasonably requested by the Lender in order to assist the Lender in maintaining compliance with the Patriot Act.






[Remainder of Page Intentionally Left Blank]

 
30
 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed under seal in the case of the Borrower by their respective authorized officers as of the day and year first above written.

 
     
 
By
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
   
Name:  ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
   
Title:  President
     
     
 
[SEAL]
     
 
SUNTRUST BANK
     
     
 
By
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
   
Name:  ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
   
Title:  Director


 
31
 


SCHEDULE 4.5

LITIGATION MATTERS



None
















Schedule 4.5



 
 


SCHEDULE  4.12


Financial Institution Subsidiaries

CommunityONE Bank, National Association, a national banking association

Other Subsidiaries
     
Name
Jurisdiction of Incorporation
Ownership
     
Dover Mortgage Company
100% by Bank
First National Investor Services, Inc.
100% by Bank













Schedule 4.12

 
 


EXHIBIT A
REVOLVING CREDIT NOTE

$10,000,000.00
Atlanta, Georgia
May 27, 2008

FOR VALUE RECEIVED, the undersigned, FNB UNITED CORP.,  a North Carolina corporation (the “Borrower”), hereby promises to pay to SunTrust Bank (the “Lender”) or its registered assigns at its principal office or any other office that the Lender designates, on the Commitment Termination Date (as defined in the Revolving Credit Agreement dated as of May 27, 2008, as the same may be amended, supplemented or otherwise modified from time to time, the “Credit Agreement”), between  the Borrower and  the Lender, the lesser of the principal sum of Ten Million and no/100 Dollars ($10,000,000) and the aggregate unpaid principal amount of all Revolving Loans made by the Lender to the Borrower pursuant to the Credit Agreement, in lawful money of the United States of America in immediately available funds, and to pay interest from the date hereof on the principal amount thereof from time to time outstanding, in like funds, at said office, at the rate or rates per annum and payable on such dates as provided in the Credit Agreement.  In addition, should legal action or an attorney-at-law be utilized to collect any amount due hereunder, the Borrower further promises to pay all costs of collection, including the reasonable attorneys’ fees (determined at customary rates of the firm or firms representing the Lender for hours actually worked, and not as a statutory percentage of amounts outstanding under this Revolving Credit Note) of the Lender.
The Borrower promises to pay interest, on demand, on any overdue principal and, to the extent permitted by law, overdue interest from their due dates at a rate or rates provided in the Credit Agreement.
All borrowings evidenced by this Revolving Credit Note and all payments and prepayments of the principal hereof and the date thereof shall be endorsed by the holder hereof on the schedule attached hereto and made a part hereof or on a continuation thereof which shall be attached hereto and made a part hereof, or otherwise recorded by such holder in its internal records; provided, that the failure of the holder hereof to make such a notation or any error in such notation shall not affect the obligations of the Borrower to make the payments of principal and interest in accordance with the terms of this Revolving Credit Note and the Credit Agreement.
This Revolving Credit Note is issued in connection with, and is entitled to the benefits of, the Credit Agreement which, among other things, contains provisions for the acceleration of the maturity hereof upon the happening of certain events, for prepayment of the principal hereof prior to the maturity hereof and for the amendment or waiver of certain provisions of the Credit Agreement, all upon the terms and conditions therein specified.  THIS REVOLVING CREDIT NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NORTH CAROLINA AND ANY APPLICABLE LAWS OF THE UNITED STATES OF AMERICA.

 
     
 
By:
  
   
Name:
   
Title:
     
 
[SEAL]

 
Exhibit A-1

 
 

LOANS AND PAYMENTS


 
 
 
 
Date
 
 
 
 
Amount and
Type of Loan
 
 
 
Payments of
Principal
 
 
Unpaid
Principal
Balance of
Note
 
 
 
Name of Person
Making
Notation
         
         
         
         
         
         
         
         
         
         
         
         
         
         
         
         




Exhibit A-2

 
 


EXHIBIT 2.2





SunTrust Bank
30▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇

Attention:

Dear Sirs:

Reference is made to the Revolving Credit Agreement dated as of May 27, 2008  (as amended and in effect on the date hereof, the “Credit Agreement”), between the undersigned, as Borrower, and SunTrust Bank, as Lender.  Terms defined in the Credit Agreement are used herein with the same meanings.  This notice constitutes a Notice of Borrowing, and the Borrower hereby requests a Revolving Loan under the Credit Agreement, and in that connection the Borrower specifies the following information with respect to the Revolving Loan requested hereby:

(A)           Principal amount of Revolving Loan:________________________

(B)           Date of Revolving Loan (which is a Business Day): _________________

(C)           Purpose (if larger than $500,000):_______________________________

 
(D)
Location and number of Borrower’s account to which proceeds of Revolving Loan are to be disbursed:__________________________
 

The Borrower hereby represents and warrants that the conditions specified in paragraphs (a), (b) and (c) of Section 3.2 of the Credit Agreement are satisfied.

 
Very truly yours,
     
 
     
 
By:
  
   
Name:
   
Title:








Exhibit 2.2
 

Document Metadata

Filed: August 11th, 2008