Document:

Exhibit 10.12

 

Execution Copy

 

AGREED UPON TERMS AND PROCEDURES

 

THESE AGREED UPON TERMS AND PROCEDURES (these “Terms and Procedures”)
are dated as of January 31, 2008, and are agreed to and acknowledged by OLD SECOND BANCORP, INC., a Delaware
corporation (“Borrower”), and LASALLE BANK NATIONAL ASSOCIATION, a
national banking association (“Lender”),
in connection with certain credit facilities provided by Lender to Borrower.

 

R E C I T A L
S :

 

A.                                   Borrower is a bank holding company that owns 100% of the issued and
outstanding capital stock of Old Second National Bank, a national banking
association, (the “Bank”), and is
acquiring HeritageBanc, Inc. (“Heritage”),
by causing Old Second Acquisition, Inc., a Delaware corporation and a
wholly owned subsidiary of Borrower (“Merger
Corp”), to merge with and into Heritage (the “Merger”) pursuant to the terms and
conditions of an Agreement and Plan of Merger, dated as of November 5,
2007, among Borrower and Merger Corp and Heritage, and immediately thereafter
causing Heritage Bank, a wholly owned subsidiary of Heritage (“Heritage Bank”), to merge with and into Old
Second National Bank (the “Bank Merger”)
pursuant to the terms and conditions of a Merger Agreement, dated as of November 20,
2007, between the Bank and Heritage Bank.

 

                                                B.                                     Borrower has requested that Lender provide it with three credit
facilities in the aggregate principal amount of $75,500,000 consisting of (a) a
term loan in the principal amount of $500,000 (the “Term Loan”), (b) a revolving loan in the principal amount
of up to $30,000,000 and (c) subordinated debt in the principal amount of
up to $45,000,000, to be used to finance the acquisition of Heritage Bank and
to increase the capital of the Bank, with any remaining proceeds to be used for
general corporate purposes.

 

C.                                     These Terms and Procedures have been agreed upon, executed and
delivered by Borrower and Lender pursuant to Sections 2.6 and 2.7
of the Loan Agreement (as defined below).

 

NOW, THEREFORE, in consideration of
the mutual covenants, conditions and agreements and to induce Lender to enter
into the Loan Agreement and to make Loans and other financial accommodations to
Borrower, the parties hereby agree as follows:

 

1.                                      DEFINITIONS. All capitalized terms
used herein that are not otherwise defined herein shall have the meanings
ascribed to them in that certain Loan and Subordinated Debenture Purchase
Agreement of even date herewith between Lender and Borrower (as amended,
restated, supplemented or modified from time to time, the “Loan Agreement”).

 

2.                                      INTEREST RATES. Borrower agrees
that matters concerning the election, payment, application, accrual and
computation of interest and interest rates shall be in accordance with Lender’s
practices set forth herein and in the other Loan Documents.

 

2.1                               Interest Rate Election. Each
Borrowing Tranche under any Loan shall bear interest as a Base Rate Tranche
unless and until Borrower shall otherwise elect. Borrower shall make a LIBO
Rate or Base Rate election by delivering a Rate Election Notice (a) not less
than one Business Day prior to the Borrowing Date, in the case of Base Rate
Tranche, (b) not less 

 

 

 

 

than three Business Days prior to the Borrowing Date,
in the case of a LIBO Rate Tranche, and (c) in no event more than five
Business Days prior to a Borrowing Date, provided that no more than one LIBO
Rate Tranche for any Loan shall be outstanding at any one time. Each Rate
Election Notice shall specify the effective date for the LIBOR Period to be
applicable to any LIBO Rate Tranche with respect to any Loan. The LIBO Rate
shall remain fixed for all disbursements made under a Loan that bear interest
based on the LIBO Rate until the next LIBOR Period commences. Any Rate Election
Notice delivered by Borrower shall be irrevocable and may not be modified in
any way without the prior written approval of Lender. In addition to initially
electing to designate a Borrowing Tranche as a Base Rate Tranche or a LIBO Rate
Tranche, Borrower may further elect, by designation on a Rate Election Notice, (i) to
convert a Base Rate Tranche or any portion thereof to a LIBO Rate Tranche, (ii) to
convert a LIBO Rate Tranche or any portion thereof into a Base Rate Tranche, or
(iii) to continue any LIBO Rate Tranche or any portion thereof for an
additional LIBOR Period. In the event that Borrower fails to notify Lender that
it desires to continue any LIBO Rate Tranche or any portion thereof by the last
day of the applicable LIBOR Period, Borrower shall be deemed to have elected to
continue the LIBO Rate Tranche in question for an additional LIBOR Period equal
in length to the expiring LIBOR Period. The LIBOR Period for the continuation
of any LIBO Rate Tranche shall commence on the day after the last day of the
next preceding LIBOR Period. Notwithstanding anything to the contrary contained
herein and subject to the default interest provisions contained herein, if an
Event of Default occurs, all LIBO Rate Tranches will convert to Base Rate
Tranches upon the expiration of the LIBOR Periods therefor. The conversion of a
LIBO Rate Tranche to a Base Rate Tranche pursuant to a description in a Rate
Election Notice shall only occur on the last Business Day of the LIBOR Period
relating to such LIBO Rate Tranche. Lender is hereby authorized to rely upon a
Rate Election Notice delivered by any authorized officer of Borrower including
William B. Skoglund, President and Chief Executive Officer, J. Douglas
Cheatham, Executive Vice President and Chief Financial Officer, and James L.
Eccher, Executive Vice President and Chief Operating Officer, which persons are
Borrower’s duly authorized agents, and such additional authorized agents as any
of the above-referenced authorized agents of Borrower shall designate, in
writing, to Lender.

 

If pursuant to the Rate Election Notice
received by Lender pursuant to Section 2.1
hereof, the initial Interest Period of any LIBOR Rate Tranche commences on any
day other than the first Business Day of any month, then the initial Interest
Period of such LIBOR Rate Tranche shall end on the first Business Day of the following
calendar month, notwithstanding the Interest Period specified in such notice,
and the LIBOR Rate for such LIBOR Rate Tranche shall be equal to the LIBOR Rate
for an Interest Period equal to the length of such partial month.  Thereafter, each LIBOR Rate Tranche shall
automatically renew for the Interest Period specified in the initial Rate
Election Notice received by Lender.

 

2.2                               Interest Payments. Subject to Section 2.3 hereof and except as
otherwise expressly provided in any Note, interest accrued on each Borrowing
Tranche or any other outstanding amount of the Loans shall be payable by
Borrower in arrears on the 30th day of each March, June, September and
December, commencing March 30, 2008, and on the applicable Maturity Date
of each Loan.

 

2.3                               Default Interest. Notwithstanding
the rates of interest and the payment dates specified in this Section 2, effective immediately
upon the occurrence and during the continuance of any Event of Default, the
principal balance of any Loan then outstanding and, to 

 

 

2

 

the extent permitted by applicable law, any interest
payments not paid within ten (10) days after the same becomes due shall
bear interest payable upon demand at a rate which is two percent (2%) per annum
in excess of the rate of interest otherwise payable under these Agreed Upon
Terms and Procedures (the “Default Rate”).
In addition, all other amounts due Lender (whether directly or for
reimbursement) under these Terms and Procedures or any of the other Loan
Documents, if not paid when due or, in the event no time period is expressed,
if not paid within five (5) days after written notice from Lender that the
same has become due, shall thereafter bear interest at the foregoing Default
Rate. Finally, any amount due on a Maturity Date which is not then paid shall
also bear interest thereafter at the Default Rate. Notwithstanding anything to
the contrary set forth in this Section 2.3
or elsewhere in these Terms and Procedures, the Default Rate of interest shall
apply with respect to an Event of Default relating to the Subordinated Debt if
such Event of Default occurs pursuant to Sections
8.1.1.16 or 8.1.1.17
of the Loan Agreement or such Event of Default is one with respect to which
Lender would be entitled to declare the Subordinated Debenture immediately due
and payable pursuant to Section 8.6
of the Loan Agreement.

 

2.4                               Computation of Interest. Interest
shall be computed on the basis of the actual number of days elapsed in the
period during which interest accrues and a year of 360 days. In computing
interest, the date of funding shall be included and the date of payment shall
be excluded; provided, however, that if any funding is repaid on the same day
on which it is made, one day’s interest shall be paid thereon. The parties
hereto intend to conform strictly to applicable usury laws as in effect from
time to time during the terms of the Loans. Accordingly, if the transaction
contemplated hereby would be usurious under applicable law (including the laws
of the United States of America, or of any other jurisdiction whose laws may be
mandatorily applicable), then, in that event, notwithstanding anything to the
contrary in this Agreement or any of the Notes, Borrower and Lender agree that
the aggregate of all consideration that constitutes interest under applicable
law that is contracted for, charged or received under or in connection with
this Agreement shall under no circumstances exceed the maximum amount of
interest allowed by applicable law, and any excess shall be credited to
Borrower by Lender (or if such consideration shall have been paid in full, such
excess refunded to Borrower by Lender).

 

2.5                               Certain Provisions Regarding LIBO Rate Tranches.

 

2.5.1                     Changes; Legal Restrictions. In
the event the adoption of or any change in any law, treaty, rule, regulation,
guideline or the interpretation or application thereof by a governmental
authority (whether or not having the force of law and whether or not the
failure to comply therewith would be unlawful) either (a) subjects Lender
to any tax (other than income taxes or franchise taxes not specifically based
on Loan transactions), duty or other charge of any kind with respect to any
LIBO Rate Tranche or changes the basis of taxation of payments to Lender of
principal, fees, interest or any other amount payable in connection with a LIBO
Rate Tranche, or (b) imposes on Lender any other condition materially more
burdensome in nature, extent or consequence than those in existence as of the
date of this Agreement, which conditions are related to a LIBO Rate Tranche or
Loan transaction, and the result of any of the foregoing is to increase the
cost to Lender of making, renewing or maintaining any LIBO Rate Tranches or to
reduce any amount receivable thereunder; then, in any such case, Borrower shall
promptly pay to Lender, as applicable, upon demand, such amount or amounts as
may be necessary to compensate Lender for any such additional cost incurred or
reduced amounts received.  

 

3

 

Notwithstanding the foregoing, any increase, change or
modification to any local, state or federal income, franchise or similar tax
which is not specifically directed to or based on a LIBO Rate Tranche or a Loan
transaction shall not result in any change in the payments made by Borrower.

 

2.5.2                     LIBO Rate Lending Unlawful. If
Lender shall determine (which determination shall, upon notice thereof to
Borrower, be conclusive and binding in the absence of readily demonstrable
error) that the adoption of or any change in any law, treaty, rule, regulation,
guideline or in the interpretation or application thereof by any governmental
authority makes it unlawful for Lender to make or maintain any LIBO Rate
Tranche, (a) the obligation of Lender to make or continue any LIBO Rate
Tranche shall, upon such determination, forthwith be suspended until Lender
shall notify Borrower that the circumstances causing such suspension no longer
exist, and (b) if required by such law, interpretation or application, all
LIBO Rate Tranches shall automatically convert into Base Rate Tranches.

 

2.5.3                     Unascertainable Interest Rate. If
Lender shall have determined in good faith that adequate means do not exist for
ascertaining the interest rate applicable hereunder to LIBO Rate Tranches,
then, upon notice from Lender to Borrower, the obligations of Lender to make or
continue LIBO Rate Tranches shall forthwith be suspended, and thereafter the
Loan shall continue at the applicable Base Rate until Lender shall notify
Borrower that the circumstances causing such suspension no longer exist. Lender
will give such notice when it determines, in good faith, that such
circumstances no longer exist; provided, however, that Lender shall not have
any liability with respect to any delay in giving such notice.

 

2.5.4                     Funding Losses. In the event
Lender shall incur any loss or expense (including, without limitation, any loss
or expense incurred by reason of the liquidation or reemployment of deposits or
other funds acquired by Lender to make or maintain any LIBO Rate Tranche) as a
result of any continuance, conversion, repayment or prepayment of the principal
amount of, or failure to make or termination of, any LIBO Rate Tranche on a
date other than the scheduled last day of the LIBOR Period applicable thereto,
then, upon the written notice of such from Lender to Borrower, Borrower shall
reimburse Lender for such loss or expense within three Business Days after
receipt of such notice. Such written notice (which shall include calculations
in reasonable detail) shall be conclusive and binding in the absence of readily
demonstrable error.

 

2.6                               Additional Interest on LIBO Rate Tranches. So long as and to the extent Lender shall be required under
regulations of the FRB to maintain reserves with respect to liabilities or
assets consisting of or including Eurocurrency Liabilities (as defined in the
definition of Reserve Percentage), and Lender’s performance under this
Agreement shall have given rise to additional reserve requirements for Lender
thereunder, Borrower shall pay to Lender additional interest on the unpaid
principal amount of each LIBO Rate Tranche. Such additional interest shall
accrue from the later of the date such reserve requirement commences and the
date of the first disbursement under such LIBO Rate Tranche until the earlier
of the date such reserve requirement ends and the date the principal amount of
such LIBO Rate Tranche is paid in full, at an interest rate per annum equal at
all times to the remainder obtained by subtracting (a) the LIBO Rate for
the LIBOR Period for such LIBO Rate Tranche from (b) the rate obtained by
dividing the LIBO Rate by a percentage equal to 100% minus the Reserve
Percentage as in effect from time to time during such LIBOR Period. Lender
shall, as soon as practicable but not later than the last day of the LIBOR
Period, provide notice to Borrower of 

 

 

4

 

any such additional interest arising in connection
with such LIBO Rate Tranche and the certification of Lender that the additional
amount is due and that the additional reserve requirement is applicable to such
LIBO Rate Tranche. Such additional interest shall be payable directly to Lender
on the dates specified herein for payment of interest.

 

2.7                               Notice of Changes or Increased Costs Relating to LIBO Rate Tranches. Lender agrees that, as promptly as reasonably practicable after
it becomes aware of the occurrence of an event or the existence of a condition
which would cause it to be affected by any of the events or conditions
described in Sections 2.5
or 2.6 hereof, it will
notify Borrower of such event and the possible effects thereof, provided that
the failure to provide such notice shall not affect Lender’s rights to
reimbursement provided for herein.

 

3.                                      PAYMENTS. Borrower agrees that
matters concerning prepayments, payments and application of payments shall be
in accordance with Lender’s practices set forth herein and in the other Loan
Documents.

 

3.1                               Prepayment. Subject to Section 2.5.4 hereof, Borrower
may, upon at least one (1) Business Day’s notice to Lender, prepay,
without penalty, all or a portion of the principal amount outstanding under the
Subordinated Debt or the Revolving Loan in a minimum aggregate amount of
$25,000 or any larger integral multiple of $25,000 by paying the principal
amount to be prepaid, together with unpaid accrued interest thereon to the date
of prepayment. Notwithstanding anything to the contrary set forth in this
Agreement or in any other Loan Document, principal amounts outstanding under
the Term Loan may not be prepaid without the written consent and approval of
Lender, which consent and approval may be withheld at Lender’s sole and
absolute discretion; provided, however, that if all amounts outstanding under
any other indebtedness owing from Borrower to Lender have been repaid and
Borrower has satisfied in full all other financial obligations to Lender, then
Borrower may prepay, without penalty or the written consent and approval of
Lender, all or a portion of the principal amount outstanding under the Term
Loan by paying the principal amount to be prepaid, together with unpaid accrued
interest thereon to the date of prepayment.

 

3.2                               Manner and Time of Payment. All
payments of principal, interest and fees hereunder payable to Lender shall be
made, without condition or reservation of right and free of set-off or
counterclaim, in U.S. dollars and by wire transfer (pursuant to Lender’s
written wire transfer instructions) of immediately available funds delivered to
Lender not later than 11:00 a.m. (Chicago time) on the date due. Funds
received by Lender after that time and date shall be deemed to have been paid
on the next succeeding Business Day.

 

3.3                               Payments on Non-Business Days.
Whenever any payment to be made by Borrower hereunder shall be stated to be due
on a day which is not a Business Day, payments shall be made on the next
succeeding Business Day and such extension of time shall be included in the
computation of the payment of interest hereunder.

 

3.4                               Application of Payments. All payments
received by Lender from or on behalf of Borrower shall first be applied to
amounts due to Lender to pay Lender’s fees and reimburse Lender’s costs and
expenses, including those pursuant to Section 5.6
or Section 8.5 of the
Loan Agreement and, second to accrued interest under the Subordinated
Debenture, third to accrued interest under the Term Note, fourth to accrued
interest under the Revolving Note, fifth to 

 

 

5

 

principal amounts outstanding under the Revolving
Note, sixth to principal amounts outstanding under the Subordinated Debenture
and then to principal amounts outstanding under the Term Note; provided,
however, subject to Section 8.6
of the Loan Agreement, that after the date on which the final payment of
principal with respect to any Loan is due or following and during any Event of
Default, all payments received on account of Borrower’s Liabilities shall be
applied in whatever order, combination and amounts as Lender, in its sole and
absolute discretion, decides, to all costs, expenses and other indebtedness
owing to Lender. No amount paid or prepaid on any of the Notes (other than the
Revolving Note) may be reborrowed.

 

4.                                      MISCELLANEOUS. The provisions of Section 9  of the Loan Agreement
shall be incorporated in these Terms and Procedures as though restated herein,
mutatis mutandis.

 

5.                                      CONFLICTS WITH LOAN AGREEMENT. In
the event of a conflict between the terms of the Loan Agreement and the terms
of these Terms and Procedures, the provisions of these Terms and Procedures
shall govern.

 

[THE REMAINDER OF THIS PAGE IS
INTENTIONALLY LEFT BLANK]

 

 

 

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IN WITNESS WHEREOF, the undersigned
has caused these Terms and Procedures to be duly executed and delivered as of
the day and year first above written.

 

 

	
   

  	
   

  	
  OLD SECOND BANCORP, INC.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   /s/ William B. Skoglund

  
	
   

  	
   

  	
   

  	
  Name:

  	
  William B.
  Skoglund

  
	
   

  	
   

  	
   

  	
  Title:

  	
  President,
  Chief Executive Officer and

  
	
   

  	
   

  	
   

  	
   

  	
  Chairman

  

 

 

 

	
   

  	
   

  	
  LASALLE BANK NATIONAL ASSOCIATION

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   /s/ Jeffrey J. Bowden

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Jeffery J.
  Bowden

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Senior Vice
  President

  

 

 

S-1Exhibit 10.20

REVOLVING
CREDIT AGREEMENT

Dated as of August
2, 2007

This Revolving Credit
Agreement (this “Agreement”) is by and between COBIZ FINANCIAL INC., a corporation formed
under the laws of the State of Colorado (“Borrower”), and U.S. BANK NATIONAL  ASSOCIATION, a national banking association
(“Lender”), with a banking office at 2555 South Colorado Boulevard,
Denver, Colorado 80222.

ARTICLE
1 LOANS

Section 1.1 [Reserved.]

Section 1.2 Revolving Credit Loans. Subject to the
terms and conditions of this Agreement, Lender agrees to make loans to
Borrower, from time to time from the date of this Agreement through July 31,
2008 (the “Maturity Date”), at such times and in such amounts, not to
exceed THIRTY MILLION AND NO/100 UNITED STATES DOLLARS ($30,000,000.00) (the “Commitment”)
at any one time outstanding, as Borrower may request (the “Loan(s)”).
During such period Borrower may borrow, repay and reborrow hereunder. Each
borrowing shall (i) in the case of Loans that bear interest at the Federal
Funds Rate, be in the amount of at least $100,000 or the remaining unused
amount of the Commitment and (ii) in the case of Loans that bear interest at
LIBOR, shall be in the amount of at least $1,000,000 or the remaining unused
amount of the Commitment.

Section 1.3 Revolving Credit Note. The Loans shall
be evidenced by a promissory note (the “Note”), substantially in the form of
Exhibit A, with appropriate insertions, dated the date hereof, payable to the
order of Lender and in the original principal amount of the Commitment. Lender
may at any time and from time to time at Lender’s sole option attach a schedule
(grid) to the Note and endorse thereon notations with respect to each Loan
specifying the date and principal amount thereof, the Interest Period (as
defined below) (if applicable), the applicable interest rate and rate option,
and the date and amount of each payment of principal and interest made by
Borrower with respect to each such Loan. Lender’s endorsements as well as its
records relating to the Loans shall be rebuttably presumptive evidence of the
outstanding principal and interest on the Loans, and, in the event of
inconsistency, shall prevail over any records of Borrower and any written
confirmations of the Loans given by Borrower, absent manifest error. The
principal of the Note shall be payable on or before the Maturity Date.

Section 1.4 Extension of Maturity Date. Borrower
may request an extension of the Maturity Date by submitting a request for an
extension to Lender (an “Extension Request”) no more than sixty (60)
days prior to the current Maturity Date. The Extension Request must specify the
new Maturity Date requested by Borrower and the date (which must be at least
thirty (30) days after the Extension Request is delivered to Lender) as of
which Lender must respond to the Extension Request (the “Extension Date”).
The new Maturity Date shall be no more than 364 days after the Maturity Date in
effect at the time the Extension Request is received, including such Maturity
Date as one of the days in the calculation of the days elapsed. If Lender fails
to respond to an Extension Request by the Extension Date, Lender shall be
deemed to have denied the Extension Request. If Lender, in its sole discretion,
decides to approve the Extension

 

 

Request, Lender shall deliver its written consent to
Borrower and the Maturity Date specified in the Extension Request shall become
effective at the expiration of the existing Maturity Date.

ARTICLE
2 INTEREST AND FEES

Section 2.1 Interest Rate. Borrower agrees to pay
interest on the unpaid principal amount of the Loans from time to time
outstanding hereunder at the following rates per year:

(a)                    Before
maturity of any Loan, whether by acceleration or otherwise, at the option of
Borrower, subject to the terms hereof at a rate equal to:

(i)                        “LIBOR,”
which shall mean the sum of (A) the 1, 2 or 3 month LIBOR rate (which Interest
Period Borrower shall select subject to the terms stated herein) quoted by
Lender from Telerate Page 3750 or any successor thereto (which shall be the
LIBOR rate in effect two New York Banking Days prior to the commencement of the
advance), adjusted for any reserve requirement and any subsequent costs arising
from a change in government regulation, plus (B) one and fifteen
hundredths percent (+1.15%) per annum; or

(ii)                   “Federal
Funds Rate,” which shall mean the sum of (A) the weighted average of the
rates on overnight Federal funds transactions, with members of the Federal
Reserve System only, arranged by Federal funds brokers, plus (B) one and
fifteen hundredths percent (1.15%) per annum. The Federal Funds Rate shall be
determined by Lender on the basis of reports by Federal funds brokers to, and
published daily by, the Federal Reserve Bank of New York in the Composite
Closing Quotations for U.S. Government Securities. If such publication is
unavailable or the Federal Funds Rate is not set forth therein, the Federal
Funds Rate shall be determined on the basis of any other source reasonably
selected by Lender. The Federal Funds Rate applicable each day shall be the
Federal Funds Rate reported as applicable to Federal funds transactions on that
date. In the case of Saturday, Sunday or a legal holiday, the Federal Funds
Rate shall be the rate applicable to Federal funds transactions on the
immediately preceding day for which the Federal Funds Rate is reported.

(b)                   After the
maturity of any Loan, whether by acceleration or otherwise, such Loan shall
bear interest until paid at a rate equal to two percent (2%) in addition to the
rate in effect immediately prior to maturity (but not less than the Prime-Based
Rate in effect at maturity).

Section 2.2 Rate Selection. Borrower shall select
and change its selection of the interest rate between LIBOR and the Federal
Funds Rate, as applicable, to apply to (a) at least $1,000,000 and in integral
multiples of $1,000,000 thereafter of any Loan or portion thereof which bears
interest at LIBOR, and (b) at least $100,000 and in integral multiples of
$100,000

 

 

2

 

thereafter of any Loan or portion thereof which bears
interest at the Federal Funds Rate, in all cases subject to the requirements
herein stated:

(a)                  At the time any
Loan is made;

(b)                 At the expiration
of a particular LIBOR Interest Period selected for the outstanding principal
balance of any Loan or portion of any Loan currently bearing interest at LIBOR;
and

(c)                  At any time for
the outstanding principal balance of any Loan or portion thereof currently
bearing interest at the Federal Funds Rate.

Section 2.3 Rate Changes and Notifications.

(a)                  LIBOR. If
Borrower wishes to (i) obtain a new Loan bearing interest at LIBOR, (ii) have
an existing Loan bearing interest at LIBOR continue to bear interest at LIBOR
for a new Interest Period upon the expiration of the Interest Period then in
effect or (iii) convert the rate of interest on any Loan or portion thereof,
within the limits described above, from the Federal Funds Rate to LIBOR, it
shall, at or before 12:00 noon, New York time, not less than two New York
Banking Days prior to the New York Banking Day on which such Loan bearing
interest at LIBOR is to be made, continued or converted, give Lender written
notice thereof, which shall be irrevocable. Such notice shall specify the
principal amount of the Loan which is to bear interest at LIBOR and the desired
LIBOR Interest Period of 1, 2 or 3 months. Notwithstanding that any LIBOR
Interest Period selected by Borrower may extend beyond the Maturity Date,
Borrower acknowledges and agrees that all amounts owing by Borrower to Lender
under this Agreement in respect of principal, accrued interest, fees and
expenses, including any amounts owing under Section 2.5(c), shall be due and
payable on the Maturity Date.

(b)                 Federal Funds
Rate. If Borrower wishes to obtain a new Loan bearing interest at the
Federal Funds Rate, it shall, at or before 12:00 noon, New York time, on the
date such new Loan will be made, which shall be a New York Banking Day, give
Lender written notice thereof specifying the principal amount of such new Loan.
Such notice shall be irrevocable.

(c)                  Failure to
Notify. If Borrower does not timely notify Lender at the expiration of the
Interest Period then in effect with respect to a Loan bearing interest at LIBOR
that Borrower elects to have a new Interest Period established for such Loan
pursuant to Section 2.3(a)(ii) above, then Borrower shall be deemed to have
elected to have such Loan accrue interest after the expiration of such Interest
Period at the Federal Funds Rate. If Borrower does not timely notify Lender as
to its selection of the interest rate option with respect to any new Loan, then
Borrower shall be deemed to have elected to have such new Loan accrue interest
at the Federal Funds Rate.

Section 2.4 Interest Payment Dates. Accrued
interest shall be paid in respect of each Loan to which the Federal Funds Rate
applies on the last day of each month in each year,

 

3

 

beginning with the first of such dates to occur after the date of the
first Loan bearing interest at the Federal Funds Rate, at maturity, and upon
payment in full. Accrued interest shall be paid in respect of each Loan bearing
interest at LIBOR on the Interim Maturity Date in respect of the Interest
Period for such Loan, at maturity, and upon payment in full, whichever is
earlier or more frequent. After maturity, accrued interest on all outstanding
Loans shall be payable upon demand.

Section 2.5 Additional
Provisions With Respect to Federal Funds Rate and LIBOR Loans.
The selection by Borrower of the Federal Funds Rate or LIBOR and the
maintenance of the Loans or portions thereof at such rate shall be subject to
the following additional terms and conditions:

(a)                    Availability
of Deposits at a Determinable Rate. If, after Borrower has elected to
borrow or maintain any Loan at the Federal Funds Rate or LIBOR, Lender notifies
Borrower that:

(i)                        United
States dollar deposits in the amount and for the maturity requested are not
available to Lender (in the case of LIBOR, in the London interbank market); or

(ii)                     Reasonable
means do not exist for Lender to determine the Federal Funds Rate or LIBOR for
the amount and maturity requested;

all as determined by
Lender in its sole discretion, then the principal subject to the Federal Funds
Rate or LIBOR shall accrue or shall continue to accrue interest at an annual
rate equal to the Prime Rate in effect from time to time.

(b)                   Prohibition
of Making, Maintaining, or Repayment of Loans at the Federal Funds Rate or
LIBOR. If any treaty, statute, regulation, interpretation thereof, or any
directive, guideline, or otherwise by a central bank or fiscal authority
(whether or not having the force of law) shall prohibit making, maintaining or
repaying any Loan subject to the Federal Funds Rate or LIBOR, then on and as of
the date the prohibition becomes effective, all Loans subject to that
prohibition shall bear interest at an annual rate equal to the Prime Rate in
effect from time to time.

(c)                    Payments of
Principal and Interest to be Inclusive of Any Taxes or Costs. All payments
of principal and interest shall include any taxes (other than income taxes
imposed by the United States or any state or locality thereof on the income of
Lender) and increased costs incurred by Lender resulting from a change in, or
promulgation of, any treaty, statute, regulation, interpretation thereof, or
any directive or guideline by a central bank or fiscal authority (whether or
not having the force of law) which affects a Loan bearing interest at the
Federal Funds Rate or LIBOR. Without limiting the generality of the preceding
obligation, illustrations of such taxes and costs are:

(i)                        Taxes (or
the withholding of amounts for taxes) of any nature whatsoever including
income, excise, and interest equalization taxes, as well as all levies,
imposts, duties, or fees whether now in existence or resulting from

 

4

 

a change in, or
promulgation of, any treaty, statute, regulation, interpretation thereof, or
any directive, guideline, or otherwise, by a central bank or fiscal authority
(whether or not having the force of law) or a change in the basis of, or time
of payment of, such taxes and other amounts resulting therefrom;

(ii)                     Any reserve
or special deposit requirements against assets or liabilities of, or deposits
with or for the account of, Lender with respect to principal outstanding at
LIBOR including those imposed under Regulation D of the Federal Reserve Board
or resulting from a change in, or the promulgation of, such requirements by
treaty, statute, regulation, interpretation thereof, or any directive,
guideline, or otherwise by a central bank or fiscal authority (whether or not
having the force of law);

(iii)                  Any other
increased costs resulting from compliance with treaties, statutes, regulations,
interpretations, or any directives or guidelines, or otherwise by a central
bank or fiscal authority (whether or not having the force of law), including
capital adequacy regulations;

If Lender incurs any such
taxes or costs, Borrower, upon demand in writing specifying such taxes and
costs, shall promptly pay them; save for manifest error Lender’s specification
shall be presumptively deemed correct.

(d)               Interest
Differential. Borrower agrees to pay to Lender any Interest Differential
incurred as a result of:

(A)                Any new Loan
requested by Borrower to bear interest at LIBOR which is not made on the
specified borrowing date (or is made but bears interest at the Federal Funds
Rate) (with the Interest Differential being calculated as if the Loan bearing
interest at LIBOR had been made and repaid on the specified borrowing date);

(B)                  a voluntary
prepayment at a date other than the applicable Interim Maturity Date of a Loan
bearing interest at LIBOR;

(C)                  a mandatory
repayment at a date other than the applicable Interim Maturity Date of a Loan
bearing interest at LIBOR as the result of the occurrence of an Event of
Default and the acceleration of any portion of the indebtedness hereunder; or

(D)                 a prohibition on
maintainingan outstanding Loan bearing interest at LIBOR (with the Interest
Differential being calculated as if such Loan were repaid on the effective date
of such prohibition).

The term “Interest Differential” shall mean that sum
equal to the greater of zero or the financial loss incurred by Lender resulting
from prepayment, calculated as the difference between the amount of interest
Lender would have earned (from like investments in the Money

 

5

 

Markets as of the first day of the LIBOR Loan) had
prepayment not occurred and the interest Lender will actually earn (from like
investments in the Money Markets as of the date of prepayment) as a result of
the redeployment of funds from the prepayment. Because of the short-term nature
of each Loan bearing interest at LIBOR, Borrower agrees that the Interest
Differential shall not be discounted to its present value.

Section 2.6 Basis of Computation. Interest and fees
payable hereunder shall be computed for the actual number of days elapsed on
the basis of a year consisting of 360 days, including the date a Loan is made
and excluding the date a Loan or any portion thereof is paid or prepaid.

Section 2.7 Commitment Fee, Reduction of Commitment.
Borrower agrees to pay Lender a commitment fee (the “Commitment Fee”) in
arrears of twenty-five hundredths of one percent (0.25%) per year on the
average daily unused amount of the Commitment. The Commitment Fee shall
commence to accrue on the date of this Agreement and shall be paid on the last
day of each calendar quarter in each year, beginning with the first of such
dates to occur after the date of this Agreement, at maturity and upon payment
in full. At any time or from time to time, upon at least three New York Banking
Business Days’ prior written notice, which shall be irrevocable, Borrower may reduce
the Commitment in the amount of at least $1,000,000 or in full; provided that
Borrower may not reduce the Commitment below an amount equal to the aggregate
outstanding principal amount of all Loans. Upon any such reduction of any part
of the unused Commitment, any accrued and unpaid Commitment Fee on the part
reduced shall be paid in full as of the date of such reduction.

ARTICLE 3 PAYMENTS AND
PREPAYMENTS

Section 3.1 Prepayments. Borrower may prepay
without penalty or premium any Loan bearing interest at the Federal Funds Rate
or at the Prime Rate pursuant to Section 2.5(a) or (b) at any time. Borrower
may prepay a Loan bearing interest at LIBOR prior to the applicable Interim
Maturity Date upon payment of the Interest Differential under Section 2.5(c)(iv).
Borrower shall give Lender written notice of a prepayment of a Loan (a) in the
case of prepayment of a Loan or Loans bearing interest at the Federal Funds
Rate, no later than 12 noon, New York time, on the prepayment date and (b) in
the case of prepayment of a Loan or Loans bearing interest at LIBOR, no later
than 12 noon, New York time, on the date which is three New York Banking Days
prior to the prepayment date. Each notice shall specify the amount and date of
the prepayment and identify whether Loans bearing interest at the Federal Funds
Rate or LIBOR are being prepaid. Any partial prepayment of a Loan which bear
interest at LIBOR (and any repayment of a Loan which bears interest at LIBOR on
the Interim Maturity Date therefor) shall be in a minimum amount of $1,000,000
(or if less, the outstanding principal balance of such Loan) and any partial
prepayment of Loans which bear interest at the Federal Funds Rate shall be in a
minimum amount of $100,000 (or if less, the outstanding principal balance of the
Loans bearing interest at the Federal Funds Rate).

Section 3.2 Funds. All payments of principal,
interest and the Commitment Fee shall be made in immediately available funds to
Lender at its banking office indicated above or as otherwise directed by Lender.

 

6

ARTICLE 4 REPRESENTATIONS
AND WARRANTIES

To induce Lender to make each of the Loans, Borrower
represents and warrants to Lender that:

Section 4.1 Organization. Borrower is existing and
in good standing as a duly qualified and organized bank holding company.
Borrower and each Subsidiary (as hereinafter defined) are existing and in good
standing under the laws of their jurisdiction of formation, and are duly
qualified, in good standing and authorized to do business in each jurisdiction
where failure to do so would reasonably be expected to have a Material Adverse
Effect. Borrower and each Subsidiary have the power and authority to own their
properties and to carry on their businesses as now being conducted.

Section 4.2 Authorization; No Conflict. The
execution, delivery and performance of this Agreement, the Note and all related
documents and instruments: (a) are within Borrower’s corporate powers; (b) have
been authorized by all necessary corporate action; (c) have received any and
all necessary governmental approvals; and (d) do not and will not contravene or
conflict with any provision of law or charter or by-laws of Borrower or any
material agreement affecting Borrower or its property. This Agreement is, and
the Note when executed and delivered will be, legal, valid and binding
obligations of Borrower, enforceable against Borrower in accordance with their
respective terms subject to applicable bankruptcy, insolvency, reorganization
and other laws affecting creditors’ rights generally and subject to general
equitable principles.

Section 4.3 Financial Statements. Borrower has
supplied to Lender copies of its audited consolidated financial statements as
of and for the twelve month period ended December 31, 2006 and its internally
prepared financial statements as of and for the three month period ended March
31, 2007. Such statements have been furnished to Lender, have been prepared in
conformity with generally accepted accounting principles applied on a basis
consistent with that of the preceding fiscal year, except as disclosed in such
statements (and subject, in the case of the interim statements, to year end
audit adjustments and the absence of footnotes), and fairly present the
financial condition of Borrower and its Subsidiaries as at such dates and the
results of their operations for the respective periods then ended. Since the
date of those financial statements, no material, adverse change in the
business, condition, properties, assets, operations, or prospects of Borrower
or its Subsidiaries has occurred except as disclosed on Schedule 4.3.
There is no known contingent liability of Borrower or any Subsidiary (excluding
loan commitments, letters of credit, and other contingent liabilities incurred
in the ordinary course of the banking business) in an amount greater than
$5,000,000 (other than a contingent liability which is covered by insurance and
with respect to which the insurer has confirmed coverage in writing) which is
not reflected in such financial statements or disclosed on Schedule 4.3.

Section 4.4 Taxes. Borrower and each Subsidiary
have filed or caused to be filed all federal, state and local tax returns
which, to the knowledge of Borrower or such Subsidiary, are required to be
filed, and have paid or have caused to be paid all taxes as shown on such
returns or on any assessment received by them, to the extent that such taxes
have become due (except for current taxes not delinquent and taxes being
contested in good faith and by appropriate proceedings for which adequate
reserves have been provided on the books of Borrower or the

 

 

7

appropriate Subsidiary, and as to which no
foreclosure, sale or similar proceedings have been commenced).

Section 4.5 Liens. None of the assets of Borrower
or any Subsidiary are subject to any mortgage, pledge, title retention lien, or
other lien, encumbrance or security interest except: (a) for current taxes not
delinquent or taxes being contested in good faith and by appropriate
proceedings; (b) for liens arising in the ordinary course of business for sums
not due or sums being contested in good faith and by appropriate proceedings
and with respect to which appropriate reserves have been established in
accordance with generally accepted accounting principles; (c) to the extent
specifically shown in the financial statements referred to in Section 4.3;
(d) for liens in favor of Lender; (e) liens and security interests securing
deposits of public funds, repurchase agreements, Federal funds purchased, trust
assets, advances from a Federal Home Loan Bank, discount window borrowings from
a Federal Reserve Bank and other similar liens granted in the ordinary course
of the banking business; (f) liens under workers’ compensation, unemployment
insurance, social security or similar legislation; (g) liens, deposits and
pledges to secure the performance of leases, public or statutory obligations or
other similar obligations arising in the ordinary course of the banking
business; (h) judgment and other similar liens arising in connection with court
proceedings, provided the execution or other enforcement of such liens is
effectively stayed; and (i) easements, restrictions and other similar
encumbrances which do not materially interfere with the occupation, use and
enjoyment of the property or assets encumbered thereby or materially interfere
with the value of the property subject thereto.

Section 4.6 Adverse Contracts. Neither Borrower nor
any Subsidiary is a party to any agreement or instrument or subject to any
charter or other corporate restriction, nor is it subject to any judgment,
decree or order of any court or governmental body, which would reasonably be
expected to have a Material Adverse Effect. Neither Borrower nor any Subsidiary
has, nor with reasonable diligence should have had, knowledge of or notice that
it is in default in the performance, observance or fulfillment of any of the
obligations, covenants or conditions contained in any agreement, instrument,
restriction, judgment, decree or order which would reasonably be expected to
have a Material Adverse Effect.

Section 4.7 Regulation U. Borrower is not engaged
principally in, nor is one of Borrower’s important activities, the business of
extending credit for the purpose of purchasing or carrying “margin stock”
within the meaning of Regulation U of the Board of Governors of the Federal
Reserve System as now and from time to time hereinafter in effect.

Section 4.8 Litigation and Contingent Liabilities.
No litigation (including derivative actions), arbitration proceedings or
governmental proceedings are pending or, to Borrower’s knowledge, threatened
against Borrower which would (singly or in the aggregate) reasonably be
expected to have a Material Adverse Effect, except as set forth (including
estimates of the dollar amounts involved) in Schedule 4.8.

Section 4.9 FDIC Insurance. The deposits of each
Subsidiary Bank of Borrower are insured by the FDIC and no act has occurred
which would adversely affect the status of such Subsidiary Bank as an FDIC
insured bank.

 

8

 

Section 4.10 Investigations. Neither Borrower nor
any Subsidiary Bank is under investigation by, or is operating under the
restrictions imposed by or agreed to in connection with, any regulatory
authority, other than routine examinations by regulatory authorities having
jurisdiction over Borrower or such Subsidiary Bank.

Section 4.11 Subsidiaries. Attached hereto as Schedule
4.11 is a correct and complete list of all Subsidiaries of Borrower.

Section 4.12 Bank Holding Company. Borrower has
complied in all material respects with all federal, state and local laws
pertaining to bank holding companies, including without limitation the Bank
Holding Company Act of 1956, as amended, and to the best of its knowledge there
are no conditions to its engaging in the business of being a registered bank
holding company.

Section 4.13 ERISA.

(a)                    Borrower and
the ERISA Affiliates and the plan administrator of each Plan (other than a
Multiemployer Plan) have fulfilled in all material respects their respective
obligations under ERISA and the Code with respect to such Plan and such Plan is
currently in substantial compliance with the applicable provisions of ERISA and
the Code.

(b)                   With respect to
each Plan, there has been no (i) “reportable event” within the meaning of
Section 4043 of ERISA and the regulations thereunder which is not subject to
the provision for waiver of the 30-day notice requirement to the PBGC; (ii)
failure by Borrower or any ERISA Affiliate to timely make or properly accrue
any contribution which is due to any Plan; (iii) action under Section 4041 (c)
of ERISA to terminate any Pension Plan; (iv) action under Section 4041 (b) of
ERISA to terminate any Pension Plan which could require Borrower to incur a
liability or obligations to make a material contribution to such Pension Plan;
(v) withdrawal from any Pension Plan with two or more contributing sponsors or
the termination of any such Pension Plan that could subject the Borrower to
material liability pursuant to Section 4063 or 4064 of ERISA; (vi) institution
by PBGC of proceedings to terminate any Pension Plan, or the occurrence of any
event or condition which might constitute grounds under ERISA for the
termination of, or the appointment of a trustee to administer, any Pension Plan
(other than a Multiemployer Plan); (vii) the imposition on Borrower or any
ERISA Affiliate of liability pursuant to Sections 4062(e), 4069 or 4212 of
ERISA; (viii) complete or partial withdrawal (within the meaning of Sections
4203 and 4205 of ERISA) by Borrower or any ERISA Affiliate from any Pension
Plan which is a Multiemployer Plan that is in reorganization or insolvency
pursuant to Sections 4241 or 4245 of ERISA, or that has terminated under Sections
4041A or 4042 of ERISA; (ix) prohibited transaction described in Section 406 of
ERISA or 4975 of the Code which could subject Borrower to the imposition of any
material fines, penalties, taxes or related charges imposed by either Section
4975 of the Code or Section 502(i) of ERISA; (x) material pending claim (other
than routine claims for benefits) against any Plan (other than a Multiemployer
Plan) which

 

9

could reasonably be
expected to result in material liability; (xi) receipt from the Internal
Revenue Service of notice of the failure of any Plan (other than a
Multiemployer Plan) to qualify under Section 401 (a) of the Code, or the
failure of any trust forming part of any Plan (other than a Multiemployer Plan)
to fail to qualify for exemption from taxation under Section 501(a) of the
Code, if applicable; or (xii) imposition of a lien pursuant to Section
401(a)(29) or 412(n) of the Code or Section 302(f) of ERISA.

Section 4.14 Environmental
Laws.

(a)                    Borrower and
each of its Subsidiaries have obtained all permits, licenses and other
authorizations which are required to be obtained by Borrower or such
Subsidiaries, as the case may be, under all Environmental Laws and are in
compliance in all material respects with any applicable Environmental Laws.

(b)                   Borrower has
not received any notice, demand, request for information, citation, summons,
order or complaint, no penalty has been assessed and no investigation or review
is pending or, to Borrower’s knowledge, threatened by any governmental agency
or other Person, in each case, with respect to any alleged or suspected failure
by Borrower or any of its Subsidiaries to comply in any material respect with
any Environmental Laws.

(c)                    There are no
material liens arising under or pursuant to any Environmental Laws on any of
the property owned or, to Borrower’s knowledge, leased by Borrower or any of
its Subsidiaries.

(d)                   There are no
conditions existing currently or, to Borrower’s knowledge, likely to exist
during the term of this Agreement which would subject Borrower or any of its
Subsidiaries or any of their owned property or, to Borrower’s knowledge, any of
their leased property, to any material lien, damages, penalties, injunctive
relief or cleanup costs under any Environmental Laws or which require or are
reasonably likely to require cleanup, removal, remedial action or other
responses pursuant to Environmental Laws by Borrower and its Subsidiaries.

ARTICLE 5 COVENANTS

Until all obligations of
Borrower hereunder, under the Note and all other related documents and
instruments are paid and fulfilled in full, Borrower agrees that it shall, and
shall cause each Subsidiary to, comply with the following covenants, unless
Lender consents otherwise in writing:

Section 5.1 Existence, Mergers, Etc. Each
Subsidiary Bank shall take such action as may be necessary from time to time to
maintain its status as a national banking association or state banking
corporation, as applicable, and to maintain FDIC insurance coverage for deposits
as such Subsidiary Bank. Borrower and each Subsidiary shall preserve and
maintain their respective corporate, partnership or joint venture (as
applicable) existence, and will not liquidate, dissolve, or merge, or
consolidate with or into any other entity, or sell, lease, transfer or

 

10

otherwise dispose of all or a substantial part of their assets other
than in the ordinary course of business as now conducted, except that:

(a)                    Any Subsidiary
may merge or consolidate with or into Borrower or any one or more wholly-owned
Subsidiaries;

(b)                   Any Subsidiary
may sell, lease, transfer or otherwise dispose of any of its assets to Borrower
or one or more wholly-owned Subsidiaries;

(c)                    Any
Insignificant Subsidiary may (i) merge or consolidate with any other Person,
(ii) sell, lease, transfer or otherwise dispose of its assets to another Person
or (iii) liquidate or dissolve (“Insignificant Subsidiary” means a
Subsidiary with (1) net income that is less than 2.5% of the consolidated net
income of Borrower and its Subsidiaries for the most recent fiscal quarter
ended for which a consolidated income statement of Borrower is available and
(2) tangible assets that are less than 2.5% of consolidated tangible assets of
Borrower and its Subsidiaries as of the end of the most recent fiscal quarter
ended for which a consolidated balance sheet of Borrower is available); and

(d)                   Any Subsidiary
may merge or consolidate with any other Person provided that (i) the surviving
entity is a Subsidiary of Borrower (ii) before and after giving effect to such
merger or consolidation, no Event of Default or Unmatured Event of Default
exists or is continuing, (iii) following such merger or consolidation, Borrower
shall continue to own the same or greater percentage of the stock or other
ownership interests of such Subsidiary as it owned immediately prior to such
merger or consolidation and (iv) after giving effect to such merger or
consolidation, Borrower is in pro forma compliance with Section 5.4 of
this Agreement.

Borrower and each
Subsidiary shall take all steps to become and remain duly qualified, in good
standing and authorized to do business in each jurisdiction where failure to do
so might have a Material Adverse Effect.

Section 5.2 Reports, Certificates and Other Information.
Borrower shall furnish (or cause to be furnished) to Lender:

(a)                    Interim
Reports. Within forty-five (45) days after the end of each quarter of each
fiscal year of Borrower, a copy of an unaudited financial statement of Borrower
and its Subsidiaries prepared on a consolidated basis consistent in all
material respects with the consolidated financial statements of Borrower and
its Subsidiaries referred to in Section 4.3 above and prepared in
accordance with generally accepted accounting principles (subject to year-end
audit adjustments and the absence of footnotes), signed by an authorized
officer of Borrower and consisting of at least: (i) a balance sheet as at the
close of such quarter; and (ii) a statement of earnings and source and
application of funds for such quarter and for the period from the beginning of
such fiscal year to the close of such quarter.

 

11

(b)                   Annual
Report. Within ninety (90) days after the end of each fiscal year of
Borrower, a copy of an annual report of Borrower and its Subsidiaries prepared
on a consolidated basis and in conformity with generally accepted accounting
principles applied on a basis consistent in all material respects with the
consolidated financial statements of Borrower and its Subsidiaries referred to
in Section 4.3 above, duly certified by independent certified public
accountants of recognized standing and accompanied by an opinion without a
“going concern” or comparable qualification. Such independent certified public
accountants shall be selected by the Audit Committee of the Board of Directors
of Borrower (which Audit Committee members shall, subject to the exceptions and
phase-in requirements set forth in NASDAQ rules and regulations, consist solely
of independent members of Borrower’s Board of Directors) using their good faith
business judgment.

(c)                    Certificates.
Contemporaneously with the furnishing of a copy of each annual report and of
each quarterly statement provided for in this Section, a certificate dated the
date of such annual report or such quarterly statement and signed by either the
Chief Executive Officer, the President, the Chief Financial Officer or the
Treasurer of Borrower, to the effect that no Event of Default or Unmatured
Event of Default has occurred and is continuing, or, if there is any such
event, describing it and the steps, if any, being taken to cure it, and
containing (except in the case of the certificate dated the date of the annual
report) a computation of, and showing compliance with, any financial ratio or
restriction contained in this Agreement.

(d)                   Reports to
SEC. Notification of each filing and report made by Borrower or any
Subsidiary with or to any securities exchange or the Securities and Exchange
Commission which are made publicly available. Such notification shall be
forwarded electronically to Lender via e-mail at such addresses as Lender shall
provide to Borrower and shall indicate where copies of such filings and reports
can be obtained electronically (for avoidance of doubt, Borrower will notify
Lender of any such filings and reports if electronic means of notification is
inoperable). If copies of such documents are not available electronically,
notification of the filing of such documents shall still be made, and Borrower
shall provide a paper copy of such documents to Lender promptly upon Lender’s
request.

(e)                    Notice of
Default, Litigation and ERISA Matters. Within five business days after
learning of the occurrence of any of the following, written notice describing
the same and the steps being taken by Borrower or any Subsidiary affected in
respect thereof: (i) the occurrence of an Event of Default or an Unmatured
Event of Default; (ii) the institution of, or any adverse determination in, any
litigation, arbitration or governmental proceeding which, if adversely
determined, would reasonably be expected to have a Material Adverse Effect;
(iii) the occurrence of any event referred to in Section 4.13(b); or
(iv) the issuance of any cease and desist order, memorandum of understanding,
cancellation of insurance, or proposed disciplinary action from the FDIC or
other regulatory entity.

 

 

12

(f)                      [Reserved].

(g)                   Other
Information. From time to time such other information, financial or
otherwise, concerning Borrower or any Subsidiary as Lender may reasonably
request.

Section 5.3 Inspection. At Borrower’s expense if an
Event of Default or Unmatured Event of Default has occurred or is continuing,
Borrower and each Subsidiary shall permit Lender and its agents at any time
during normal business hours, and upon at least one business day’s prior
notice, to inspect their properties and to inspect and make copies of their
books and records. If no Event of Default or Unmatured Event of Default shall
have occurred and be continuing, Lender may conduct such inspections at any
time during normal business hours and upon reasonable notice to Borrower, and
such inspection and copies shall be at Lender’s expense.

Section 5.4 Financial Requirements.

(a)                    Well
Capitalized Status.

(i)                        Borrower
and its consolidated Subsidiaries, on a consolidated basis, shall at all times
meet any definition of an “adequately capitalized” institution, as such term is
defined by the Federal Reserve Board with respect to Borrower’s consolidated
“Tier I leverage ratio,” “Tier I risk-based capital” and “total risk-based
capital” (as such terms are defined by the Federal Reserve Board and shown on
filings by Borrower with the Federal Reserve Board).

(ii)                     Borrower
shall cause each Subsidiary Bank at all times to meet any definition of a “well
capitalized” institution, as such term is defined by the various federal
Regulatory Authorities with respect to such Subsidiary Bank’s “Tier I leverage
ratio,” “Tier I risk-based capital” and “total risk-based capital” (as such
terms are defined by the FDIC and shown on call reports filed with the FDIC).

(b)                   Nonperforming
Assets. All assets of all Subsidiary Banks and other Subsidiaries
classified as “non-performing” (which shall include all loans in non-accrual
status, more than ninety (90) days past due in principal or interest,
restructured or renegotiated, or listed as “other restructured” or “other real
estate owned”) on the FDIC or other regulatory agency call report shall not
exceed at any time two percent (2.0%) of the total loans of Borrower and its
Subsidiaries on a consolidated basis.

(c)                    Return on
Average Assets. Borrower’s consolidated net income shall be at least
eighty-five hundredths of one percent (0.85%) of its average assets, calculated
on an annualized basis as at the last day of each fiscal quarter of Borrower;
provided, however, that for purposes of determining return on average assets,
customary and reasonable, non-recurring expenses and charges incurred by
Borrower in

 

13

connection with a permitted acquisition or public
offering under Sections 5.1 and 5.6 hereof shall be excluded.

Section 5.5 Taxes and Guaranties. Borrower and each
Subsidiary shall:

(a)                    Taxes.
Pay and discharge all taxes, assessments and governmental charges or levies
imposed upon them, upon their income or profits or upon any properties
belonging to them, prior to the date on which penalties attach thereto, and all
lawful claims for labor, materials and supplies when due, except that no such
tax, assessment, charge, levy or claim need be paid which is being contested in
good faith by appropriate proceedings as to which adequate reserves shall have
been established, and no foreclosure, sale or similar proceedings have
commenced.

(b)                   Guaranties.
Not assume, guarantee, endorse or otherwise become or be responsible in any
manner (whether by agreement to purchase any obligations, stock, assets, goods
or services, or to supply or loan any funds, assets, goods or services, or
otherwise) with respect to the obligation of any other Person, except: (i) by
the endorsement of negotiable instruments for deposit or collection in the
ordinary course of business, issuance of letters of credit or similar
instruments or documents in the ordinary course of business; (ii) in the case
of Borrower, Trust Guarantees; and (iii) guaranties by the Borrower of the
obligations of a wholly-owned Subsidiary or by a Subsidiary of the obligations
of the Borrower or a wholly-owned Subsidiary of the Borrower.

Section 5.6 Investments and Loans. Neither Borrower
nor any Subsidiary shall make any loan, advance, extension of credit or capital
contribution to, or purchase or otherwise acquire for consideration, evidences
of indebtedness, capital stock or other securities of any Person, except that
Borrower and any Subsidiary may:

(a)                    purchase or
otherwise acquire and own short-term money market items;

(b)                   invest, by way
of purchase of securities or capital contributions, in the Subsidiary Banks or
any other bank or banks, and upon Borrower’s purchase or other acquisition of
twenty-five percent (25%) or more of the stock of any bank, such bank shall
thereupon become a “Subsidiary Bank” for all purposes under this Agreement;

(c)                    invest, by way
of loan, advance, extension of credit (whether in the form of lease,
conditional sales agreement, or otherwise), purchase of securities, capital
contributions, or otherwise, in Subsidiaries other than banks or Subsidiary
Banks;

(d)                   invest, by way
of purchase of securities or capital contributions, in other Persons so long as
before and after giving effect thereto no Event of Default or Unmatured Event
of Default shall have occurred and be continuing and the investment is in
compliance with Regulation Y of the Federal Reserve Board; and

 

14

(e)                    in the case of
any Trust Issuer, purchase any Trust Indebtedness and, in the case of Borrower,
purchase any common securities of any Trust Issuer and issue any Trust
Guarantees.

Nothing in this Section
5.6 shall prohibit a Subsidiary Bank from making investments, loans,
advances, or other extensions of credit in the ordinary course of the banking
business upon such terms as may at the time be customary in the banking
business.

Section 5.7 Capital Structure and Dividends. Except
as provided in Section 5.1, Borrower shall continue to own, directly or
indirectly, the same (or greater) percentage of the stock and partnership,
joint venture, or other equity interest in each Subsidiary that it held on the
date of this Agreement, and no Subsidiary shall issue any additional stock or
partnership, joint venture or other equity interests, options or warrants in
respect thereof, or securities convertible into such securities or interests,
other than to Borrower or to a Subsidiary wholly owned by Borrower.

Section 5.8 Maintenance of Properties. Borrower and
each Subsidiary shall maintain, or cause to be maintained, in good repair,
working order and condition, all material properties (whether owned or held
under lease) necessary for Borrower or such Subsidiary to conduct its business,
and from time to time make or cause to be made all needed and appropriate
repairs, renewals, replacements, additions, and improvements thereto, so that
the business carried on in connection therewith may be properly and
advantageously conducted at all times (for avoidance of doubt, this Section
5.8 does not limit or restrict Borrower or any Subsidiary from opening,
closing or moving any of their branch offices or other office properties).

Section 5.9 Insurance. Borrower and each Subsidiary
shall maintain insurance in responsible companies in such amounts and against
such risks as is required by law and such other insurance, in such amount and against
such hazards and liabilities, as is customarily maintained by bank holding
companies and banks similarly situated. Each Subsidiary Bank shall have
deposits insured by the FDIC.

Section 5.10 Use of Proceeds.

(a)                    General.
The proceeds of the Loans shall be used for general corporate purposes
(including acquisitions permitted under Section 5.6). Neither Borrower
nor any Subsidiary shall use or permit any proceeds of the Loans to be used,
either directly or indirectly, for the purpose, whether immediate, incidental
or ultimate, of “purchasing or carrying any margin stock” within the meaning of
Regulations U or X of the Board of Governors of the Federal Reserve System, as
amended from time to time. If requested by Lender, Borrower and each Subsidiary
will furnish to Lender a statement in conformity with the requirements of
Federal Reserve Form U-l. No part of the proceeds of the Loans will be used for
any purpose which violates or is inconsistent with the provisions of Regulation
U or X of the Board of Governors.

(b)                   Tender
Offers and Going Private. Neither Borrower nor any Subsidiary shall use (or
permit to be used) any proceeds of the Loans to acquire any security of

 

 

15

 

Borrower or a Subsidiary
in any transaction which is subject to Section 13 or 14 of the Securities
Exchange Act of 1934, as amended, or any regulations or rulings thereunder.

 

Section 5.11 Compliance with Law. Borrower and each
Subsidiary shall comply in all material respects with all applicable laws and
regulations (whether federal, state or local and whether statutory,
administrative, judicial or otherwise) and with every lawful governmental order
or similar actions (whether administrative or judicial), specifically including
but not limited to all requirements of the Bank Holding Company Act of 1956, as
amended, and with the regulations of the Board of Governors of the Federal
Reserve System relating to bank holding companies.

 

Section 5.12 Restriction on Liens; Negative Pledges.
Borrower will not, without Lender’s prior written consent, create, incur,
assume or permit to exist any mortgage, pledge, encumbrance or other lien or
levy upon or security interest in any of the capital stock of any Subsidiary Bank
now owned or hereafter acquired by Borrower. Borrower further agrees that
Borrower shall not, without Lender’s prior written consent, enter into, or
become a party or subject to any negative pledge agreement relating to any of
Borrower’s assets with any third party except for Lender.

 

Section 5.13 Restriction on Indebtedness. Borrower
will not and will not permit any of the Subsidiaries to create, incur, assume
or have outstanding any indebtedness for borrowed money (including capitalized
leases) except (a) indebtedness under the Note issued under this
Agreement; (b) other indebtedness to Lender or any of its affiliates; (c) indebtedness
owed by Borrower to a Subsidiary or by a Subsidiary to another Subsidiary; (d) obligations
under capitalized leases not exceeding $100,000; and (e) any other
indebtedness outstanding on the date hereof, and shown on Borrower’s financial
statements delivered to Lender prior to the date hereof, provided such other
indebtedness shall not be renewed, extended or increased.

 

ARTICLE 6 CONDITIONS OF LENDING

 

Section 6.1 Documentation; No Default. The
obligation of Lender to make any Loan is subject to the following conditions
precedent:

 

(a)                    Initial
Documentation. Lender shall have received all of the following concurrently
with the execution and delivery hereof, each duly executed and dated the date
hereof or other date satisfactory to Lender, in form and substance satisfactory
to Lender and its counsel, at the expense of Borrower, and in such number of
signed counterparts as Lender may request (except for the Note, of which only
the original shall be signed):

 

(i)                        Note.
The Note duly executed.

 

(ii)                     Resolution;
Certificate of Incumbency. A copy of a resolution of the Board of Directors
of Borrower authorizing the execution, delivery and performance of this
Agreement, the Note and other documents provided for in this Agreement,
certified by the secretary or assistant secretary of

 

 

16

 

Borrower, together with a
certificate of such officer of Borrower, certifying the names of the officer(s) of
Borrower authorized to sign this Agreement, the Note and any other documents
provided for in this Agreement, together with a sample of the true signature of
each such Person (Lender may conclusively rely on such certificate until
formally advised by a like certificate of any changes therein).

 

(iii)                  Governing
Documents. A copy of the articles of incorporation and bylaws of Borrower,
certified by the secretary or assistant secretary of Borrower.

 

(iv)                 Certificate of
No Default. A certificate signed by an appropriate officer of Borrower to
the effect that: (A) no Event of Default or Unmatured Event of Default has
occurred and is continuing or will result from the making of the first Loan;
and (B) the representations and warranties of Borrower contained herein
are true and correct as at the date of the first Loan as though made on that
date.

 

(v)                    Opinion of
Counsel to Borrower. An opinion of counsel to Borrower substantially in the
form of Exhibit B attached hereto.

 

(vi)                 Good Standing
Certificates. Good standing certificates from the Secretary of State of
Colorado.

 

(vii)              Miscellaneous.
Such other documents and certificates as Lender may reasonably request.

 

(b)                   Representations
and Warranties True. At the date of each new Loan, Borrower’s
representations and warranties set forth herein shall be true and correct as of
such date as though made on such date except (i) that the representations
made in Section 4.3 shall apply to the most recent financial statements
furnished to Lender under Section 5.2 and (b) for changes permitted
by this Agreement.

 

(c)                    No Default.
At the time of each new Loan, and immediately after giving effect to such Loan,
no Event of Default or Unmatured Event of Default shall have occurred and be
continuing at the time of such Loan, or would result from the making of such
Loan.

 

Section 6.2 Automatic Update of Representations and Warranties and
No-Default Certificate; Certificate at Lender’s Option. The
request by Borrower for any new Loan shall be deemed a representation and
warranty by Borrower that the statements in subsections (b) and (c) of
Section 6.1 are true and correct on and as at the date of such
requested Loan. Upon receipt of each Loan request Lender in its sole discretion
shall have the right to request that Borrower provide to Lender, prior to
Lender’s funding of the requested Loan, a certificate executed by Borrower’s
Chief Executive Officer, President, Treasurer, or Chief Financial Officer to
such effect.

 

 

17

 

ARTICLE 7 DEFAULT

 

Section 7.1 Events of Default. The occurrence of
any of the following shall constitute an “Event of Default”:

 

(a)                    failure to
pay, when and as due, any principal, interest or other amounts payable
hereunder or under the Note; provided that, in the case of interest only, such
failure shall continue for three (3) days after its due date;

 

(b)                   any default,
event of default, or similar event shall occur or continue under any other
instrument, document, note or agreement delivered to Lender in connection with
this Agreement and any applicable cure period provided therein shall have
expired; or any such instrument, document, note or agreement shall not be, or
shall cease to be, enforceable in accordance with its terms;

 

(c)                    there shall
occur any default or event of default, or any event or condition that might
become such with notice or the passage of time or both, or any similar event,
or any event that requires the prepayment of borrowed money or the acceleration
of the maturity thereof, under the terms of any evidence of indebtedness or
other agreement issued or assumed or entered into by Borrower or any Subsidiary
for obligations in an aggregate amount in excess of Two Million and No/100
United States Dollars ($2,000,000.00), or under the terms of any indenture,
agreement, or instrument under which any such evidence of indebtedness or other
agreement is issued, assumed, secured, or guaranteed, and such event shall
continue beyond any applicable period of grace provided therein;

 

(d)                   any
representation, warranty, schedule, certificate, financial statement, report,
notice, or other writing furnished by or on behalf of Borrower or any
Subsidiary to Lender is false or misleading in any material respect on the date
as of which the facts therein set forth are stated or certified;

 

(e)                    Any guaranty
of or pledge of collateral security for the Loans shall be repudiated or become
unenforceable or incapable of performance;

 

(f)                      Borrower or
any Subsidiary shall fail to comply with Sections 5.1, 5.2(e), 5.4,
5.5, 5.6, 5.7 and 5.11 hereof; or fail to comply
with or perform any agreement or covenant of Borrower or any Subsidiary
contained herein, which failure does not otherwise constitute an Event of
Default, and such failure shall continue unremedied for thirty (30) days after
notice thereof to Borrower by Lender;

 

(g)                   an event or
condition specified in Section 4.13(b) shall occur or exist
and if as a result of such event or condition, together with all other such
events or conditions if any, Borrower or any ERISA Affiliate shall incur, or,
in the reasonable opinion of Lender, shall be reasonably likely to incur, a
liability to a Plan, a Multiemployer Plan or the PBGC (or any combination of
the foregoing) which, in the reasonable determination of Lender, has a Material
Adverse Effect;

 

(h)                   any Person, or
two or more Persons acting in concert, shall acquire beneficial ownership
(within the meaning of Rule 13d-3 of the Securities and Exchange

 

 

18

 

Commission under the
Securities Exchange Act of 1934) of 50% or more of the outstanding shares of
voting stock of Borrower;

 

(i)                        any
proceeding (judicial or administrative) shall be commenced against Borrower or
any Subsidiary, or with respect to any assets of Borrower or any Subsidiary
which would reasonably be expected to have a Material Adverse Effect and which
is not dismissed within ninety (90) days after it is commenced against Borrower
or any Subsidiary; or final judgment(s) and/or settlement(s) in an
aggregate amount that is more than One Million and No/100 United States Dollars
($1,000,000) in excess of insurance for which the insurer has confirmed
coverage in writing, a copy of which writing has been furnished to Lender, shall
be entered or agreed to in any suit or action commenced against Borrower or any
Subsidiary, and which are not satisfied within thirty (30) days after they have
been entered or agreed to in any suit or action commenced against Borrower or
any Subsidiary;

 

(j)                        Borrower
shall grant or any Person (other than Lender) shall obtain a security interest
in any property or assets of Borrower which secures the repayment of the Loans;
Borrower or any other Person (other than Lender) shall perfect (or attempt to
perfect) such a security interest; a court shall determine that Lender does not
have a first priority security interest in any of the collateral for the Loans
enforceable in accordance with the terms of the related documents; or any
notice of a federal tax lien against Borrower shall be filed with any public
recorder and is not satisfied within thirty (30) days from the time of such
filing, unless Borrower is contesting the validity thereof in good faith by
appropriate proceedings and has set aside on its books adequate reserves with
respect thereto in accordance with generally accepted accounting principles;

 

(k)                     There shall
be any material loss or depreciation in the value of any collateral for the
Loans for any reason, or, unless expressly permitted by the related documents,
all or any part of any collateral for the Loans or any direct, indirect, legal,
equitable or beneficial interest therein is assigned, transferred or sold
without Lender’s prior written consent;

 

(1)                     any Federal
Reserve Bank, the FDIC or other regulatory entity shall issue or agree to enter
into any formal enforcement action with or against Borrower or any Subsidiary
(including, but not limited to, a formal written agreement, cease and desist
order, suspension, removal or prohibition order or capital directive, but
excluding a civil money penalty), or any Federal Reserve Bank, the FDIC or
other regulatory entity shall issue or enter into any informal enforcement
action with or against Borrower or any Subsidiary (including, but not limited
to, a commitment letter, memorandum of understanding or any similar action) or
assess a civil money penalty, which in each case is materially adverse to the
consolidated assets, financial condition, business or operations of Borrower or
any Subsidiary;

 

(m)                  Borrower or any
Subsidiary (other than an Insignificant Subsidiary) shall fail to comply with Section 5.1
hereof or shall suspend the transaction of all or a substantial portion of its
usual business or Borrower or any Subsidiary (other than

 

 

19

 

an Insignificant
Subsidiary) shall take any corporate action to approve or authorize to approve
any action or omission that would result in any of the foregoing;

 

(n)                    any
bankruptcy, insolvency, reorganization, arrangement, readjustment or similar
proceeding, domestic or foreign, is instituted by or against Borrower or any
Subsidiary, and in the case of an involuntary bankruptcy proceeding, such
proceeding is not dismissed within sixty (60) days (it is acknowledged and agreed
that Lender has no obligation to make Loans during such cure period); or
Borrower or any Subsidiary shall take any steps toward, or to authorize, such a
proceeding; or

 

(o)                    Borrower or
any Subsidiary shall become insolvent, generally shall fail or be unable to pay
its debts as they mature, shall admit in writing its inability to pay its debts
as they mature, shall make a general assignment for the benefit of its
creditors or shall enter into any composition or similar agreement.

 

Section 7.2 Default Remedies.

 

(a)                     Upon the
occurrence and during the continuance of any Event of Default specified in Section 7.1(a)-(m),
Lender at its option may declare the Note (principal, interest and other
amounts) and any other amounts owed to Lender under this Agreement, including
without limitation any accrued but unpaid Commitment Fee, immediately due and
payable without notice or demand of any kind. Upon the occurrence of any Event
of Default specified in Section 7.1(n)-(o), the Note (principal,
interest and other amounts) and any other amounts owed to Lender under this
Agreement, including without limitation any accrued but unpaid Commitment Fee,
shall be immediately and automatically due and payable without action of any
kind on the part of Lender. Upon the occurrence and during the continuance of
any Event of Default, any obligation of Lender to make any Loan shall
immediately and automatically terminate without action of any kind on the part
of Lender, and Lender may exercise any rights and remedies under this Agreement,
the Note, any related document or instrument, and at law or in equity.

 

(b)                    Lender may, by
written notice to Borrower, at any time and from time to time, waive any Event
of Default or Unmatured Event of Default, which shall be for such period and subject
to such conditions as shall be specified in any such notice. In the case of any
such waiver, Lender and Borrower shall be restored to their former position and
rights hereunder, and any Event of Default or Unmatured Event of Default so
waived shall be deemed to be cured and not continuing; but no such waiver shall
extend to or impair any subsequent or other Event of Default or Unmatured Event
of Default. No failure to exercise, and no delay in exercising, on the part of
Lender of any right, power or privilege hereunder shall preclude any other or
further exercise thereof or the exercise of any other right, power or
privilege. The rights and remedies of Lender herein provided are cumulative and
not exclusive of any rights or remedies provided by law.

 

 

20

 

ARTICLE 8 DEFINITIONS

 

Section 8.1 General. As used herein:

 

(a)                    The term “Code”
shall mean the Internal Revenue Code of 1986, as amended form time to time.

 

(b)                   The term “Environmental
Laws” shall mean all federal, state and local laws, including statutes,
regulations, ordinances, codes, rules and other governmental restrictions
and requirements, relating to the discharge of air pollutants, water pollutants
or process waste water or otherwise relating to the environment or hazardous
substances or the treatment, processing, storage, disposal, release, transport
or other handling thereof, including, but not limited to, the federal Solid
Waste Disposal Act, the federal Clean Air Act, the federal Clean Water Act, the
federal Resource Conservation and Recovery Act, the federal Hazardous Materials
Transportation Act, the federal Comprehensive Environmental Response,
Compensation and Liability Act of 1980, the federal Toxic Substances Control
Act, regulations of the Nuclear Regulatory Agency, and regulations of any state
department of natural resources or state environmental protection agency, in
each case as now or at any time hereafter in effect.

 

(c)                    The term “ERISA”
shall mean the Employee Retirement Income Security Act of 1974, as amended from
time to time.

 

(d)                   The term “ERISA
Affiliate” shall mean any corporation or trade or business which is a
member of the same controlled group of corporations (within the meaning of Section 414(b) of
the Code) as Borrower or is under common control (within the meaning of Section 414(c) of
the Code) with Borrower.

 

(e)                    The term “FDIC”
means the Federal Deposit Insurance Corporation and any successor thereof.

 

(f)                      The term “Interest
Period” means, with regard to LIBOR Loans, the period commencing on the
advance date of the applicable LIBOR Loan and ending on the numerically
corresponding day 1, 2 or 3 months thereafter matching the interest rate term
selected by Borrower; provided, however, (i) if any Interest Period would
otherwise end on a day which is not a New York Banking Day, then the Interest
Period shall end on the next succeeding New York Banking Day unless the next
succeeding New York Banking Day falls in another calendar month, in which case
the Interest Period shall end on the immediately preceding New York Banking
Day; or (ii) if any Interest Period begins on the last New York Banking
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 the Interest Period),
then the Interest Period shall end on the last New York Banking Day of the
calendar month.

 

(g)                   The term “Interim
Maturity Date” means the last day of any Interest Period.

 

 

21

 

(h)                   The term “Material
Adverse Effect” means (a) a material adverse change in, or a material
adverse effect upon, the operations, business, properties, condition (financial
or otherwise) or prospects of Borrower and its Subsidiaries taken as a whole; (b) a
material impairment of the ability of Borrower to perform its obligations under
this Agreement the Note, any related document to which it is a party and to
avoid any Event of Default; or (c) a material adverse effect upon the
legality, validity, binding effect or enforceability against Borrower of this
Agreement or the Note.

 

(i)                       The term “Money
Markets” refers to one or more wholesale funding markets available to and
selected by Lender, including negotiable certificates of deposit, commercial
paper, eurodollar deposits, bank notes, federal funds, interest rate swaps or
others.

 

(j)                       The term “Multiemployer
Plan” shall mean a multiemployer plan defined as such in Section 3(37)
of ERISA to which contributions have been made by Borrower or any ERISA
Affiliate as a “contributing sponsor” (within the meaning of Section 4001(a)(13)
of ERISA).

 

(k)                    The term “New
York Banking Day” means any day (other than a Saturday or Sunday) on which
commercial banks are open for business in New York, New York.

 

(l)                       The term “PBGC”
shall mean the Pension Benefit Guaranty Corporation or any entity succeeding to
any or all of its functions under ERISA.

 

(m)                 The term “Pension
Plan” shall mean any Plan which is a “defined benefit plan” within the
meaning of Section 3(35) of ERISA.

 

(n)                   The term “Person”
shall mean any individual, corporation, company, limited liability company,
voluntary association, partnership, trust, estate, unincorporated organization
or government (or any agency, instrumentality or political subdivision
thereof).

 

(o)                   The term “Plan”
shall mean any plan, program or arrangement covering current or former
employees of Borrower or any of its ERISA Affiliates which constitutes an “employee
benefit plan” within the meaning of Section 3(3) of ERISA.

 

(p)                   The term “Prime
Rate” means the prime rate announced by Lender from time to time, as and
when such rate changes.

 

(q)                   The term “Subsidiary”
means any corporation, partnership, joint venture, trust, or other legal entity
of which Borrower owns directly or indirectly twenty-five percent (25%) or more
of the outstanding voting stock or interest, or of which Borrower has effective
control, by contract or otherwise. The term Subsidiary includes each Subsidiary
Bank unless stated otherwise explicitly.

 

(r)                      The term “Subsidiary
Bank” means each Subsidiary which is a bank.

 

 

22

 

(s)                    The term “Trust
Guarantee” means any guarantee of Borrower of the Trust Preferred
Securities, which guarantee is subordinate and junior in right of payment to
the prior payment of the obligations of Borrower hereunder and under the Note
on terms satisfactory to Lender.

 

(t)                      The term “Trust
Indebtedness” means indebtedness of Borrower payable to the Trust Issuer or
its transferees (a) which is due not earlier than the date thirty (30)
years after its issuance, (b) which may not be redeemed earlier than five (5) years
after issuance and (c) the payment of which is subordinate and junior in
right of payment to the prior payment of the obligations of Borrower hereunder
and under the Note on terms satisfactory to Lender.

 

(u)                   The term “Trust
Issuer” means a wholly-owned Subsidiary of Borrower which qualifies as a
Delaware or Connecticut statutory business trust.

 

(v)                   The term “Trust
Preferred Securities” means preferred securities issued by the Trust Issuer
(a) which are subject to mandatory redemption not earlier than the date
thirty (30) years after issuance and (b) which may not be optionally
redeemed earlier than five (5) years after issuance.

 

(w)                 The term “Unmatured
Event of Default” means an event or condition which would become an Event
of Default with notice or the passage of time or both.

 

Except as and
unless otherwise specifically provided herein, all accounting terms shall have
the meanings given to them by generally accepted accounting principles and
shall be applied and all reports required by this Agreement shall be prepared,
in a manner consistent in all material respects with the financial statements
referred to in Section 4.3 above.

 

Section 8.2 Applicability of Subsidiary References.
Terms hereof pertaining to any Subsidiary shall apply only during such times as
Borrower has any Subsidiary.

 

ARTICLE 9 NO INTEREST OVER LEGAL RATE.

 

Borrower does not
intend or expect to pay, nor does Lender intend or expect to charge, accept or
collect any interest which, when added to any fee or other charge upon the
principal which may legally be treated as interest, shall be in excess of the
highest lawful rate. If acceleration, prepayment or any other charges upon the
principal or any portion thereof, or any other circumstance, result in the
computation or earning of interest in excess of the highest lawful rate, then
any and all such excess is hereby waived and shall be applied against the
remaining principal balance. Without limiting the generality of the foregoing,
and notwithstanding anything to the contrary contained herein or otherwise, no
deposit of funds shall be required in connection herewith which will, when
deducted from the principal amount outstanding hereunder, cause the rate of
interest hereunder to exceed the highest lawful rate.

 

ARTICLE 10 PAYMENTS, ETC.

 

All payments
hereunder shall be made in immediately available funds, and shall be applied
first to accrued interest and then to principal; however, if an Event of
Default occurs,

 

 

23

 

Lender may, in its sole
discretion, and in such order as it may choose, apply any payment to interest,
principal and/or lawful charges and expenses then accrued. Borrower shall
receive immediate credit on payments received during Lender’s normal banking
hours if made in cash, immediately available funds, or by debit to available
balances in an account at Lender; otherwise payments shall be credited after
clearance through normal banking channels. Unless Borrower instructs otherwise,
all Loans shall be made in immediately available funds and shall be credited to
an account(s) of Borrower with Lender. All payments shall be made without
deduction for or on account of any present or future taxes, duties or other
charges levied or imposed on this Agreement, the Note, the Loans or the
proceeds, Lender or Borrower by any government or political subdivision
thereof.

 

ARTICLE 11 SETOFF.

 

At any time when
an Event of Default has occurred and is continuing, and upon notice to
Borrower, any account, deposit or other indebtedness owing by Lender to
Borrower, and any securities or other property of Borrower delivered to or left
in the possession of Lender or its nominee or bailee, may be set off against
and applied in payment of any obligation hereunder, whether due or not. The
setoff provision in this Section 11 shall not be applicable to any
accounts (and deposits or property therein) maintained at Lender in the name of
Borrower or any of its Subsidiaries for which Borrower or such Subsidiaries
have established and maintained in trust for the benefit of any third party
(not including, however, any affiliate of Borrower or any such Subsidiary).
Borrower shall be obligated to notify Lender promptly upon the receipt of any
such notice of setoff, and provide supporting documentation, in form and
substance reasonably satisfactory to Lender, to establish, in the reasonable
opinion of Lender, that any account subject to such setoff is in fact held by
Borrower or any of its Subsidiaries, as the case may be, in trust for the
benefit of any third party (not including, however, any affiliate or Borrower
or any such Subsidiary). If Borrower fails to comply with the foregoing
sentence, Lender may assume that its setoff of any account or other property is
valid and permissible.

 

ARTICLE 12 NOTICES.

 

All notices,
requests and demands to or upon the respective parties hereto shall be made, if
to Lender, to its office indicated above (Attention: Timothy P. Franzen,
Assistant Vice President), and if to Borrower, to its address set forth below,
or to such other address as may be hereafter designated in writing by the
respective parties hereto or, as to Borrower, may appear in Lender’s records.
Notices sent by facsimile transmission shall be deemed to have been given upon
electronic confirmation; notices sent by mail shall be deemed to have been
given three (3) business days after the date when sent by registered or
certified mail, postage prepaid; notices sent by personal delivery or by a
nationally recognized overnight delivery service (e.g., Federal Express) shall be deemed to have been given
when received.

 

ARTICLE 13 MISCELLANEOUS.

 

This Agreement and
any document or instrument executed in connection herewith shall be governed by
and construed in accordance with the internal law of the State of Colorado,
except to the extent superseded by Federal law. This Agreement may only be
amended, supplemented or modified at any time by written instrument duly
executed by Lender and

 

 

24

 

Borrower. Unless the
context requires otherwise, wherever used herein the singular shall include the
plural and vice versa, and the use of one gender shall also denote the other.
Captions herein are for convenience of reference only and shall not define or
limit any of the terms or provisions hereof; references herein to Sections or
provisions without reference to the document in which they are contained are
references to this Agreement. This Agreement shall bind Borrower, its
successors and assigns, and shall inure to the benefit of Lender, its
successors and assigns, except that Borrower may not transfer or assign any of
its rights or interest hereunder without the prior written consent of Lender.
Borrower agrees to pay upon demand all expenses (including without limitation
reasonable attorneys’ fees, legal costs and expenses, whether in or out of
court, in original or appellate proceedings or in bankruptcy) incurred or paid
by Lender or any holder of the Note in connection with (a) the
negotiation, preparation, execution and delivery of this Agreement, the Note
and the other documents to be delivered hereunder, (b) any amendment,
modification or waiver of any of the terms of this Agreement or the Note, (c) any
Event of Default or Unmatured Event of Default and any enforcement or
collection proceedings resulting therefrom, and (d) any transfer, stamp,
documentary or other similar taxes, assessments or charges levied by any
governmental or revenue authority in respect of this Agreement, the Note or any
other document referred to herein. Except as otherwise specifically provided
herein, Borrower expressly and irrevocably waives presentment, protest, demand
and notice of any kind in connection herewith. Lender may, at its option, sell
all or any interests in the Note and other related documents to other financial
institutions. Any purchaser of an interest in the Note is referred to as a “Participant.”
In connection with such sales (and thereafter), Lender may, subject to the
provisions of Section 15 hereof, disclose any financial information Lender
may have concerning Borrower to any such Participant or potential Participant.

 

ARTICLE 14 ARBITRATION AND WAIVER OF JURY TRIAL

 

(a)                    This Section concerns
the resolution of any controversies or claims between Lender and Borrower,
whether arising in contract, tort or by statute, including but not limited to
controversies or claims that arise out of or relate to: (i) this Agreement
(including any renewals, extensions or modifications); or (ii) any
document executed in connection with this Agreement (collectively, a “Claim”).

 

(b)                   At the request
of Lender or Borrower, any Claim shall be resolved by binding arbitration in
accordance with the Federal Arbitration Act (Title 9, U.S. Code) (the “Act”).
The Act will apply even though this Agreement provides that it is governed by
the law of a specified state.

 

(c)                    Arbitration
proceedings will be determined in accordance with the Act, the applicable rules and
procedures for the arbitration of disputes of JAMS or any successor thereof (“JAMS”),
and the terms of this Section. In the event of any inconsistency, the terms of
this Section shall control.

 

(d)                   The arbitration
shall be administered by JAMS and conducted, unless otherwise required by law,
in the State of Colorado. All Claims shall be determined by one arbitrator;
however, if Claims exceed Five Million Dollars ($5,000,000), upon the request
of Lender or Borrower, the Claims shall be decided by three arbitrators. All
arbitration hearings shall commence within thirty (30) days of the demand for

 

 

25

 

arbitration and close
within thirty (30) days of commencement and the award of the arbitrator(s) shall
be issued within thirty (30) days of the close of the hearing. However, the
arbitrator(s), upon a showing of good cause, may extend the commencement of the
hearing for up to an additional sixty (60) days. The arbitrator(s) shall
provide a concise written statement of reasons for the award. The arbitration
award may be submitted to any court having jurisdiction to be confirmed and
enforced.

 

(e)                    The arbitrator(s) will
have the authority to decide whether any Claim is barred by the statute of
limitations and, if so, to dismiss the arbitration on that basis. For purposes
of the application of the statute of limitations, the service on JAMS under
applicable JAMS rules of a notice of Claim is the equivalent of the filing
of a lawsuit. Any dispute concerning this arbitration provision or whether a
Claim is arbitrable shall be determined by the arbitrator(s). The arbitrator(s) shall
have the power to award legal fees pursuant to the terms of this Agreement.

 

(f)                      This Section does
not limit the right of Lender or Borrower to: (i) exercise self-help
remedies, such as, but not limited to, setoff; (ii) initiate judicial or
non-judicial foreclosure against any real or personal property collateral; (iii) exercise
any judicial or power of sale rights, or (iv) act in a court of law to
obtain an interim remedy, such as, but not limited to, injunctive relief, writ
of possession or appointment of a receiver, or additional or supplementary
remedies.

 

(g)                   The filing of a
court action is not intended to constitute a waiver of the right of any party,
including the suing party, thereafter to require submittal of the Claim to
arbitration.

 

(h)                   By agreeing to
binding arbitration, the parties irrevocably and voluntarily waive any right
they may have to a trial by jury in respect of any Claim. Furthermore, without
intending in any way to limit this Agreement to arbitrate, to the extent any
claim is not arbitrated, the parties irrevocably and voluntarily waive any
right they may have to a trial by jury in respect of such Claim. This provision
is a material inducement for the parties entering into this Agreement.

 

ARTICLE 15 CONFIDENTIALITY

 

Lender hereby
agrees to keep, and cause Representatives and Potential Participants (as
defined below) to keep, any and all information relating to Borrower which is (i) furnished
by Borrower to Lender (or to any affiliate of Lender); and (ii) non-public,
confidential or proprietary in nature, confidential; provided, however, that
such information and other credit information relating to Borrower may be
distributed by Lender or such affiliate to (a) Lender’s or such affiliate’s
directors, managers, officers, employees, attorneys, affiliates, assignees,
participants, auditors and agents (“Representatives”) on an as-needed basis, (b) banking
regulators and other governmental agencies upon request or in the ordinary
course of such agencies’ examinations of Lender or such affiliate and (c) upon
the order of a court or other governmental agency having jurisdiction over
Lender or such affiliate, and after giving prior written notice to Borrower (unless
providing such notice is not practicable or is prohibited by the

 

 

26

 

terms of such order), to
any other party. In addition such information and other credit information may
be distributed by Lender to potential participants or assignees of any portion
of the Loans (“Potential Participants”), provided, that such Potential
Participant agrees to follow the confidentiality requirements set forth herein.
Borrower and Lender further agree that this provision shall survive the
termination of this Agreement.

 

[Signature Page Follows]

 

 

27

 

IN WITNESS
WHEREOF, the parties hereto have caused this Agreement to be duly executed as
of the date first above written.

 

	
   

  	
   

  	
   

  	
  COBIZ FINANCIAL INC.

  
	
   

  	
   

  	
   

  	
  By

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Name:

  	
  Lyne B. Andrich

  
	
   

  	
   

  	
   

  	
   

  	
  Title:

  	
  Executive Vice
  President and Chief Financial Officer

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  Address for notices: 

  821 17th Street  

  Denver, CO 80202 

  Attention: Chief
  Financial Officer

  

 

	
   

  	
   

  	
   

  	
  U.S. BANK NATIONAL
  ASSOCIATION

  	
   

  
	
   

  	
   

  	
   

  	
  By

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Name:

  	
  Timothy P. Franzen

  
	
   

  	
   

  	
   

  	
   

  	
  Title:

  	
  Assistant Vice
  President

  
							

 

 

28

EXHIBIT A

 

REVOLVING CREDIT NOTE

 

	
  $30,000,000

  	
   

  	
  Denver, Colorado

  
	
   

  	
   

  	
  August     ,
  2007

  

 

FOR VALUE
RECEIVED, on or before the Maturity Date (as defined in the Revolving Credit
Agreement referred to below), COBIZ FINANCIAL
INC., a corporation formed under the laws of the State of Colorado (“Borrower”),
promises to pay to the order of U.S. BANK
NATIONAL ASSOCIATION, a national banking association (hereafter,
together with any subsequent holder hereof, called “Lender”), at its
banking office at 2555 South Colorado Boulevard, Denver, Colorado 80222, or at
such other place as Lender may direct, the aggregate unpaid principal balance
of each advance (a “Loan” and collectively the “Loans”) made by
Lender to Borrower hereunder. The total principal amount of Loans outstanding
at any one time hereunder shall not exceed THIRTY MILLION UNITED STATES DOLLARS
($30,000,000).

 

Lender is hereby
authorized by Borrower at any time and from time to time at Lender’s sole
option to attach a schedule (grid) to this Note and to endorse thereon
notations with respect to each Loan specifying the date and principal amount
thereof, and the date and amount of each payment of principal and interest made
by Borrower with respect to each such Loan. Lender’s endorsements as well as
its records relating to Loans shall be rebuttably presumptive evidence of the
outstanding principal and interest on the Loans, and, in the event of
inconsistency, shall prevail over any records of Borrower and any written
confirmations of Loans given by Borrower absent manifest error.

 

Borrower agrees to
pay interest on the unpaid principal amount from time to time outstanding
hereunder on the dates and at the rate or rates as set forth in the Revolving
Credit Agreement (as hereinafter defined).

 

Payments of both
principal and interest are to be made in immediately available funds in lawful
money of the United States of America.

 

This Note evidences
indebtedness incurred under that certain Revolving Credit Agreement dated as of
the date hereof by and between Borrower and Lender (and, if amended, restated
or replaced, all amendments, restatements and replacements thereto or therefor,
if any) (the “Revolving Credit Agreement;” capitalized terms not
otherwise defined herein have the same meaning herein as in the Revolving
Credit Agreement). Reference is hereby made to the Revolving Credit Agreement
for a statement of its terms and provisions, including without limitation those
under which this Note may be paid prior to its due date or have its due date
accelerated.

 

This Note shall be
governed by and construed in accordance with the internal law of the State of
Colorado.

 

	
   

  	
   

  	
  COBIZ FINANCIAL INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By

  	
   

  
	
   

  	
   

  	
   

  	
  Lyne B. Andrich 

  Executive Vice
  President and Chief Financial Officer

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