CNB OR ANY OTHER DEPOSITORY INSTITUTION SUBSIDIARY TO
FAIL TO BE CLASSIFIED AS A WELL CAPITALIZED BANK;
(B)
ASSET QUALITY.
(A) CONSOLIDATED NON-PERFORMING LOANS TO EXCEED 2.00% OF
CONSOLIDATED TOTAL ASSETS, OR (B) CONSOLIDATED LOSS RESERVE ALLOWANCE TO BE LESS
THAN 25.0% OF CONSOLIDATED NON-PERFORMING LOANS;
(C)
LIQUIDITY.
THE LIQUIDITY RATIO TO BE LESS THAN 1.25 TO 1.00; OR
(D)
EARNINGS.
(A) ITS RETURN ON ASSETS TO BE LESS THAN 0.50%, OR (B) ITS
RETURN ON EQUITY TO BE LESS THAN 10.0%.
ARTICLE VII- NEGATIVE COVENANTS
The Borrower hereby agrees that, so long as any amount remains outstanding under
this Agreement, the Borrower shall not, and shall not permit any Subsidiary to:
7.01 SALE OF ASSETS.
Sell, lease, transfer or otherwise dispose of (a "Transfer"), any assets, except
(A)
ANY DEPOSITORY INSTITUTION SUBSIDIARY
MAY SELL LOANS IN THE ORDINARY
COURSE OF BUSINESS;
(B)
THE BORROWER OR ANY SUBSIDIARY MAY TRANSFER ASSETS THAT, IN ITS GOOD
FAITH, REASONABLE JUDGMENT, HAVE NO FURTHER USEFUL OR PRODUCTIVE CAPACITY, ARE
FULLY USED DEPRECIATED, ARE OBSOLETE OR ARE NO LONGER NECESSARY OR PRODUCTIVE IN
THE ORDINARY COURSE OF THE BORROWER'S BUSINESS;
(C)
TRANSFERS BETWEEN SUBSIDIARIES AND FROM ANY SUBSIDIARY TO THE BORROWER;
(D)
SALES OF INVESTMENTS PERMITTED BY SECTION 7.03; AND
(E)
OTHER TRANSFERS IF, AFTER GIVING EFFECT OF SUCH TRANSFER, (I) NO DEFAULT
OR EVENT OF DEFAULT EXISTS AND (II) ALL ASSETS TRANSFERRED DURING THE
THEN-CURRENT FISCAL YEAR WOULD NOT (A) HAVE AN AGGREGATE BOOK VALUE, OR, IF
HIGHER, MARKET VALUE IN EXCESS OF 10% OF CONSOLIDATED TANGIBLE NET WORTH AT THE
END OF THE IMMEDIATELY PROCEEDING FISCAL YEAR OR (B) HAVE CONTRIBUTED OR THAN
10% OF CONSOLIDATED OPERATING PROFIT FOR ANY OF THE THREE MOST RECENTLY
COMPLETED FISCAL YEARS, PROVIDED THAT IN NO EVENT SHALL THE AGGREGATE ASSETS
TRANSFERRED PURSUANT TO THIS CLAUSE (E) HAVE A BOOK VALUE, OR, IF HIGHER, MARKET
VALUE IS EXCESS OF 20% OF THE CONSOLIDATED TANGIBLE NET WORTH.
18
7.02 MERGER AND CONSOLIDATION.
Merge or consolidate with any Person except, if no Default or Event of Default
exists or result therefrom:
(A)
A SUBSIDIARY MAY MERGE INTO THE BORROWER, IF THE BORROWER IS THE SURVIVING
CORPORATION;
(B)
A SUBSIDIARY MAY MERGE INTO ANY OTHER SUBSIDIARY; AND
(C)
ANY PERSON MAY MERGE INTO THE BORROWER OR ANY SUBSIDIARY IF THE BORROWER
OR SUCH SUBSIDIARY IS THE SURVIVING CORPORATION.
7.03 RESTRICTED INVESTMENTS.
Make any Investment except
(A)
THAT THE BORROWER OR ANY SUBSIDIARY MAY MAKE INVESTMENTS (I) PERMITTED BY
THE BORROWER'S INVESTMENT POLICY DATED MAY 20, 2006, A COPY OF WHICH HAS BEEN
PROVIDED TO THE LENDER, AS IT MAYBE AMENDED FROM TIME TO TIME, PROVIDED THAT ANY
AMENDMENT AFFECTING THE QUALITY STANDARD OR THE LIMITS PER INVESTMENT CATEGORY
WILL NOT TAKE EFFECT UNTIL 20 DAYS AFTER THE LENDER HAS RECEIVED A COPY OF THE
REVISED INVESTMENT POLICY AND HAS NOT DELIVERED TO THE BORROWER A WRITTEN
DISSENT TO SUCH AMENDMENT WITHIN SUCH 20 DAY PERIOD, OR (II) RATIFIED AT THE
FIRST MEETING OF THE BORROWER'S INVESTMENT COMMITTEE OCCURRING