ON AVERAGE ASSETS.
BANK SHALL MAINTAIN AN ANNUALIZED RETURN ON
AVERAGE ASSETS OF AT LEAST 70/100 PERCENT (0.70%) AS OF EACH COVENANT COMPLIANCE
DATE, WHICH COVENANT SHALL BE MEASURED AS OF EACH COVENANT COMPLIANCE DATE.
IN
DETERMINING SUCH ANNUALIZED RETURN, BANK'S EARNINGS WILL BE ANNUALIZED USING ITS
YEAR TO DATE EARNINGS.
5.16
LOAN TO VALUE RATIO.
BORROWER AND BANK SHALL MAINTAIN AT ALL TIMES A
LOAN TO VALUE RATIO OF NOT MORE THAN SEVENTY-FIVE PERCENT (75%).
AS USED
HEREIN, THE TERM "LOAN TO VALUE RATIO" SHALL MEAN THE RATIO THAT (A) THE
THEN-OUTSTANDING AGGREGATE PRINCIPAL BALANCE OF THE LOANS BEARS TO (B) THE
BANK'S TANGIBLE COMMON EQUITY.
SUCH RATIO SHALL BE MEASURED AS OF THE END OF
EACH CALENDAR YEAR.
5.17
LOAN LOSS RESERVES.
WITH RESPECT TO THE BANK, MAINTAIN AT ALL TIMES
LOAN LOSS RESERVES IN AMOUNTS DEEMED ADEQUATE BY ALL FEDERAL AND STATE
REGULATORY AUTHORITIES.
5.18
INDEMNIFICATION.
BORROWER AND BANK SHALL INDEMNIFY THE LENDER, AND
HOLD IT HARMLESS OF AND FROM ANY AND ALL LOSS, COST, DAMAGE OR EXPENSE, OF EVERY
KIND AND NATURE, INCLUDING REASONABLE ATTORNEYS' FEES, WHICH THE LENDER INCURS
BY REASON OF ANY VIOLATION OF ANY ENVIRONMENTAL LAWS BY BORROWER OR BANK OR BY
ANY PREDECESSORS OR SUCCESSORS TO TITLE TO ANY PROPERTY OF THE BORROWER OR BANK.
5.19
COMPLIANCE CERTIFICATE.
FURNISH LENDER A CERTIFICATE OF COMPLIANCE
DULY CERTIFIED BY THE CHIEF EXECUTIVE OFFICER OF BORROWER WITHIN FORTY-FIVE (45)
DAYS AFTER THE END OF EACH CALENDAR QUARTER STATING THAT BORROWER AND EACH BANK
SUBSIDIARY AND THE BORROWER AND ALL SUBSIDIARIES, AS APPLICABLE, ARE IN
COMPLIANCE WITH ALL TERMS, COVENANTS AND CONDITIONS OF THIS LOAN AGREEMENT AND
ALL RELATED LOAN DOCUMENTS, INCLUDING, BUT NOT LIMITED TO, SECTIONS 5.1 - 5.17
OF THIS AGREEMENT.
SUCH CERTIFICATE OF COMPLIANCE SHALL BE AS SET FORTH IN
EXHIBIT H AND OTHERWISE BE IN FORM AND SUBSTANCE SATISFACTORY TO LENDER.
6.
NEGATIVE COVENANTS.
Borrower covenants and agrees with Lender that Borrower shall comply
and cause the Bank and other Subsidiaries to comply with the following negative
covenants unless the prior written consent of Lender shall be obtained, so long
as Borrower may borrow under this Agreement or so long as any indebtedness
remains outstanding under the Loan Documents:
6.1
INDEBTEDNESS.
NEITHER BORROWER NOR THE BANK SHALL CREATE, INCUR,
ASSUME OR SUFFER TO EXIST, CONTINGENTLY OR OTHERWISE, ANY INDEBTEDNESS, EXCEPT
FOR THE FOLLOWING INDEBTEDNESS:
(A)
THE INDEBTEDNESS OF BORROWER UNDER THE LOAN DOCUMENTS;
(B)
INDEBTEDNESS OWED BY THE BORROWER TO THE BANK OR ANY OTHER
SUBSIDIARY OR BY THE BANK TO THE BORROWER;
(C)
DEBT FOR OPERATING EXPENSES OR OTHERWISE INCURRED BY THE BANK OR
ANY OTHER SUBSIDIARY IN THE ORDINARY COURSE OF BUSINESS;
(D)
PURCHASE MONEY INDEBTEDNESS AND CAPITALIZED LEASE OBLIGATIONS IN AN
AGGREGATE AMOUNT NOT TO EXCEED $500,000 OUTSTANDING AT ANY TIME AND SECURED
SOLELY BY LIENS ON THE ASSETS FINANCED OR LEASED PURSUANT THERETO AND OTHERWISE
PERMITTED UNDER SECTION 6.2 HEREOF;
(E)
UNSECURED INDEBTEDNESS CONSTITUTING OBLIGATIONS OF THE BORROWER OR
ANY SUBSIDIARY OTHER THAN THE BANK UNDER DEBENTURES,