OR DENOMINATED, AND HOWEVER OR WHENEVER INCURRED, INCLUDING WITHOUT LIMITATION
INDEBTEDNESS PURSUANT TO THOSE TWO (2) CERTAIN PROMISSORY NOTES FROM THE PLEDGOR
PAYABLE TO THE ORDER OF THE LENDER, EACH BEING IN THE PRINCIPAL AMOUNT OF SIX
MILLION DOLLARS ($6,000,000.00) AND EACH BEING DATED OF EVEN DATE HEREWITH, AS
EACH OF THEM MAY BE AMENDED FROM TIME TO TIME, AS WELL AS INDEBTEDNESS INCURRED
PURSUANT TO ANY OTHER PAST, PRESENT OR FUTURE COMMITMENT OF LENDER TO PLEDGOR
PURSUANT TO THE LOAN AGREEMENT (ALL OF THE FOREGOING, COLLECTIVELY, THE
"OBLIGATIONS"); EXCEPT THAT THE INDEBTEDNESS AND OTHER LIABILITIES SECURED BY
THIS AGREEMENT SHALL NOT INCLUDE ANY INDEBTEDNESS SUBJECT TO THE DISCLOSURE
REQUIREMENTS OF THE FEDERAL TRUTH-IN-LENDING ACT IF AT THE TIME SUCH
INDEBTEDNESS IS CREATED OR INCURRED, ANY LEGALLY REQUIRED DISCLOSURE OF THIS
SECURITY INTEREST SHALL NOT HAVE BEEN MADE.
3.
REPRESENTATIONS AND WARRANTIES.
PLEDGOR HEREBY REPRESENTS AND
WARRANTS TO LENDER (A) THAT PLEDGOR IS THE LEGAL AND EQUITABLE OWNER OF THE
PLEDGED SECURITIES, THAT PLEDGOR HAS THE COMPLETE AND UNCONDITIONAL AUTHORITY TO
PLEDGE THE PLEDGED SECURITIES BEING PLEDGED BY IT, AND HOLDS THE SAME FREE AND
CLEAR OF ALL LIENS, CHARGES, ENCUMBRANCES AND SECURITY INTERESTS OF EVERY KIND
AND NATURE; (B) THAT NO CONSENT OR APPROVAL OF ANY GOVERNMENTAL BODY OR
REGULATORY AUTHORITY, OR OF ANY OTHER PARTY, WHICH WAS OR IS NECESSARY TO THE
VALIDITY OF THIS PLEDGE, HAS NOT BEEN OBTAINED; AND (C) THAT THE PLEDGED
SECURITIES REPRESENT FIFTY-ONE PERCENT (51%) OF THE ISSUED AND OUTSTANDING
CAPITAL STOCK OF THE BANK.
PLEDGOR FURTHER REPRESENTS AND WARRANTS THAT NO PART
OF THE OBLIGATIONS WILL BE USED TO PURCHASE OR CARRY ANY "MARGIN STOCK", AS
DEFINED IN REGULATION U OF THE BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM,
12 CFR § 221.1 ET SEQ.
4.
COVENANTS.
PLEDGOR HEREBY FURTHER COVENANTS AND AGREES WITH LENDER
AS FOLLOWS, UNTIL ALL OBLIGATIONS (OTHER THAN CONTINGENT INDEMNIFICATION
OBLIGATIONS FOR CLAIMS WHICH HAVE NOT BEEN ASSERTED) HAVE BEEN FULLY PAID AND
PERFORMED (OR UNLESS SPECIFICALLY WAIVED BY LENDER IN WRITING):
(A)
NO DISPOSITION, ETC.
THE PLEDGOR SHALL NOT SELL, ASSIGN, TRANSFER,
EXCHANGE, OR OTHERWISE DISPOSE OF, OR GRANT ANY OPTION WITH RESPECT TO, ANY OF
THE PLEDGED SECURITIES, NOR WILL IT CREATE, INCUR OR PERMIT TO EXIST ANY PLEDGE,
LIEN, MORTGAGE, HYPOTHECATION, SECURITY INTEREST, CHARGE, OPTION OR ANY OTHER
ENCUMBRANCE WITH RESPECT TO ANY OF THE PLEDGED SECURITIES, OR ANY INTEREST
THEREIN, OR ANY PROCEEDS THEREOF, EXCEPT FOR THE LIEN AND SECURITY INTEREST
PROVIDED FOR BY THIS AGREEMENT.
(B)
SHARE ADJUSTMENTS.
ALL NEW, SUBSTITUTE, AND ADDITIONAL SHARES, OR
OTHER SECURITIES, ISSUED BY REASON OF ANY SHARE DIVIDEND, RECLASSIFICATION,
RECAPITALIZATION, ADJUSTMENT OR OTHER CHANGE DECLARED OR MADE IN THE CAPITAL
STRUCTURE OF THE BANK (SUBJECT TO OBTAINING LENDER'S PRIOR WRITTEN CONSENT
THERETO AS REQUIRED BY THE LOAN DOCUMENTS), WHICH ARE ISSUED IN RESPECT OF THE
PLEDGED SECURITIES, SHALL BE DELIVERED TO AND HELD BY LENDER UNDER THE TERMS OF
THIS AGREEMENT IN THE SAME MANNER AS THE PLEDGED SECURITIES ORIGINALLY PLEDGED
HEREUNDER.
(C)
WARRANTS AND