ex10_2.htm


    
      
Exhibit 10.2

     

    
      SUBORDINATED TERM LOAN
NOTE

      


      


      THIS
OBLIGATION IS NOT A DEPOSIT AND IS NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE
CORPORATION OR ANY OTHER FEDERAL AGENCY. THIS OBLIGATION IS SUBORDINATED IN THE
RIGHT OF PAYMENT TO ALL SENIOR INDEBTEDNESS OF MAKER.

      


      
        	
                $4,000,000

              	
                Date:
      December 22, 2009

              


      

      


      FOR VALUE
RECEIVED, EMBASSY BANCORP, INC., a Pennsylvania corporation (“Maker”), promises
to pay to the order of UNIVEST NATIONAL BANK AND TRUST CO. (“Payee”), at Payee’s
principal office in Souderton, Pennsylvania, in lawful money of the United
States of America, the principal amount of Four Million Dollars ($4,000,000), or
so much thereof as may be advanced to the Maker pursuant to the terms hereof and
pursuant to the terms of that certain Loan Agreement of even date herewith by
and between Maker and Payee (the “Loan Agreement”), together with interest on
the part of the principal amount from time to time remaining outstanding and
unpaid from the date of this Subordinated Term Loan Note (the “Note”) at the
rate of Eight and one-half percent (8.50%) per annum.

      


      The
entire unpaid principal of this note and any accrued interest then unpaid shall
be due and payable on or before December 1, 2016.  The
interest on this Note shall be due and payable monthly as it accrues on the
first day of each month until this Note is paid in full, commencing on January
1, 2010.  The Maker shall have the right and privilege upon at least
three (3) Business Days written notice to the Payee of prepaying all or any part
of this Note at any time without penalty, and all payments on this Note shall be
applied first to accrued interest and the balance, if any, to
principal.  Notwithstanding eligible payments under Section 2.04 of
the Loan Agreement, any prepayment from the proceeds from a public stock
offering and/or a sale of the majority of the stock or assets of the Borrower
shall not be considered an eligible payment under Secion 2.04.  In the
event of an ineligible payment, there shall be a prepayment penalty of
$50,000.00

      


      The
highest rate of interest provided for in this Note shall continue to apply to
the debt evidenced by this Note notwithstanding the entry of judgment on this
Note. Calculations by Payee of principal and interest due shall be conclusive
absent manifest error. Interest shall be calculated on the basis of the actual
number of days in the then current calendar year divided by 360. Both principal
and interest are payable in lawful money of the United States of America without
set-off or counterclaim.

      


      As
additional consideration, Maker agrees to pay the following additional
nonrefundable fees and charges from separate funds:

      


      Legal
Fees.  Maker agrees to reimburse the Payee for all reasonable
legal fees incurred in the origination of the Note.


      
        
           


        

        
           


          
            

          

        

        
           


        

      


      Unused Commitment
Fee:  Maker agrees to pay the Payee a thiry five basis point
(.0035%) unused commitment fee calculated on the daily average unused portion of
the Subordinated Note and payable on quarterly basis.

      


      This Note
is referred to in, and is entitled to the benefits of, the Loan Agreement, as
the same may be amended, modified or supplemented from time to time. Capitalized
terms used in this Note and not otherwise defined shall have the respective
meanings given to them in the Loan Agreement. The terms of the Loan Agreement,
including, without limitation, those relating to events of default, are
incorporated herein by reference.

      


      In the
event any payment due hereunder shall become overdue for a period in excess of
fifteen (15) days after
its due date, to cover the extra expense involved in handling delinquent
payments, Maker shall pay to Payee, upon written demand therefor, a “late
charge” equal to five percent (5%) of any overdue
payment.

      


      The
occurrence or existence of an Event of Default under the Loan Agreement shall
constitute an Event of Default under this Note. Should an Event of Default
occur, then the entire unpaid principal balance of this Note, together with all
accrued interest and all other sums due by Maker hereunder shall become due and
payable immediately, and payment of the same may be enforced and recovered in
whole or in part at any time by one or more of the remedies provided to Payee in
this Note or any other Loan Document, and in such case Payee may also recover
all costs of suit and other expenses in connection therewith.

      


      The
remedies of Payee as provided in this Note and in any other Loan Document shall
be cumulative and concurrent and may be pursued singly, successively or together
against Maker at the sole discretion of Payee, and such remedies shall not be
exhausted by any exercise thereof but may be exercised as often as occasion
therefor shall occur. Payee shall not by any act of omission or commission be
deemed to have waived any of its rights or remedies hereunder unless such waiver
be in writing and signed by Payee, and then only to the extent specifically set
forth therein; a waiver on one event shall not be construed as continuing or as
a bar to or waiver of such right or remedy on a subsequent event.

      


      If any
provision hereof is found by a court of competent jurisdiction to be prohibited
or unenforceable, it shall be ineffective only to the extent of such prohibition
or unenforceability, and such prohibition or unenforceability shall not
invalidate the balance of such provision to the extent it is not prohibited or
unenforceable, nor invalidate the other provisions hereof, all of which shall be
liberally construed in favor of Payee in order to effect the provisions of this
Note. As used herein, the words “Payee” and “Maker” shall be deemed and
construed to include the respective successors and assigns of Payee and Maker.
This Note shall be construed according to and governed by the internal laws of
the Commonwealth of Pennsylvania.


      
        
           


        

        
           


          
            

          

        

        
           


        

      


      The
indebtedness of Maker evidenced by this Note, including the principal and
premium, if any, and interest, shall be subordinate and junior in right of
payment to all indebtedness, liabilities and
obligations of Maker, including, but not limited to, its obligations to its
creditors and depositors and the depositors of Embassy Bank for the Lehigh
Valley, and also including its obligations to the Federal Reserve Bank,
Federal Deposit Insurance Corporation (the “FDIC”), and any rights acquired by
the FDIC as a result of loans made by the FDIC to Maker or the purchase or
guarantee of any of its assets by the FDIC pursuant to the provisions of 12
U.S.C. § 1823(c),
(d) or (e), whether now outstanding or hereafter incurred. In the event of any
insolvency, receivership, conservatorship, reorganization, readjustment of debt,
marshaling of assets and liabilities or similar proceedings or any liquidation
or winding-up relating to Maker, whether voluntary or involuntary, all such
obligations shall be entitled to be paid in full before any payment shall be
made on account of the principal of, or premium, if any, or interest, on this
Note. In the event of any such proceedings, after payment in full of all sums
owing on such prior obligations, the holder of this Note, together with any
obligations of Maker ranking on a parity with this Note, shall be entitled to be
paid from the remaining assets of Maker the unpaid principal thereof and any
unpaid premium, if any, and interest before any payment or other distribution,
whether in cash, property or otherwise, shall be made on account of any capital
stock or any obligations of Maker ranking junior to this Note. Nothing herein
shall impair the obligation of Maker, which is absolute and unconditional, to
pay the principal of and any premium and interest on this Note according to its
terms.

      


      Notwithstanding
any other provisions of this Note, including specifically those set forth in the
paragraphs relating to subordination, events of default and covenants of Maker,
it is expressly understood and agreed that the Federal Reserve Board or any
receiver or conservator of Maker appointed by the Federal Reserve Board shall
have the right in the performance of its legal duties, and as part of a
liquidation designed to protect or further the continued existence of Maker or
the rights of any parties or agencies with an interest in, or claim against,
Maker or its assets, to transfer or direct the transfer of the obligations of
this Note to any bank or bank holding company selected by such official which
shall expressly assume the obligation of the due and punctual payment of the
unpaid principal, and interest and premium, if any, on this Note and the due and
punctual performance of all covenants and conditions; and the completion of such
transfer and assumption shall serve to supersede and void any default,
acceleration or subordination which may have occurred, or which may occur due or
related to such transaction, plan, transfer or assumption, pursuant to the
provisions of this Note, and shall serve to return the holder to the same
position, other than for substitution of the obligor, it would have occupied had
no default, acceleration or subordination occurred; except that any interest and
principal previously due, other than by reason of acceleration, and not paid
shall, in the absence of a contrary agreement by the holder of this Note, be
deemed to be immediately due and payable as of the date of such transfer and
assumption, together with the interest from its original due date at the rate
provided for herein.


      
        
           


        

        
           


          
            

          

        

        
           


        

      


      IN
WITNESS WHEREOF, Maker, intending to be legally bound, has duly executed this
Note as of the date first above written.

      


      


      
        	
                WITNESS:

              	
                EMBASSY
      BANCORP, INC.:

              
	 
      	 
      
	 
      	 
      
	
                By:
      /s/ Judith A. Hunsicker

              	
                By:
      /s/ David M. Lobach

              
	
                Name:
      Judith A. Hunsicker

              	
                Name:
      David M. Lobach

              
	
                Title:
      SEVP, COO

              	
                Title:
      Chairman, CEO