Document:

Unassociated Document

    Exhibit
10.4

     

    CONSENT
AND SEVENTH AMENDMENT TO LOAN AND SECURITY AGREEMENT

     

    THIS
CONSENT AND SEVENTH AMENDMENT TO LOAN AND SECURITY AGREEMENT (this “Amendment”), dated as
of December 21, 2009, is made with respect to the LOAN AND SECURITY AGREEMENT,
dated as of July 26, 2005 (as amended, modified, supplemented or restated and in
effect from time to time, the “Loan Agreement”),
between WELLS FARGO RETAIL FINANCE, LLC (herein, the “Lender”), a Delaware
limited liability company with offices at One Boston Place, 18th Floor, Boston,
Massachusetts 02109, and BLUEFLY, INC. (the “Borrower”), a
Delaware corporation with its principal executive offices at 42 West 39th
Street, New York, New York  10018.

     

    BACKGROUND:

     

    The
Borrower has informed the Lender that the Borrower intends to issue 8,823,529
shares of common stock having a par value of $0.01 to Rho Ventures VI, L.P.
(“Rho”) for a
purchase price of $1.70 per share (the “Specified
Transaction”);

     

    The
Borrower has informed the Lender that in connection with the Specified
Transaction and as a condition precedent thereto certain of the Subordinated
Entities shall convert the Convertible Promissory Notes (as such term is defined
in the Subordinated Note Documents) into common shares of the Borrower and that
in connection with such conversion the Borrower desires to pay the Subordinated
Entities cash interest for the period ending November 30, 2009 in the aggregate
amount of $332,081.17 plus interest thereafter accruing (the “Cash
Interest”)

     

    The Borrowers have requested that the
Lender (i) consent to the Specified Transaction to the extent necessary to
prevent the occurrence of a Default under the Loan Agreement as a result of the
Specified Transaction, (ii) consent to the payment of the Cash Interest
and (iii) amend
certain terms and conditions of the Loan Agreement, and the Lender is willing to
do so on the terms and conditions set forth in this Seventh
Amendment.

     

    In
consideration of the mutual covenants contained herein and benefits to be
derived herefrom, the parties hereto agree as follows:

     

    SECTION
1. Capitalized
Terms. All capitalized terms used herein and
not otherwise defined shall have the same meaning herein as in the Loan
Agreement.

     

    SECTION 2.
Consent
to Specified Transaction.  Subject to
satisfaction of each and all of the preconditions to effectiveness set forth in
SECTION 5 below, the Lender hereby consents to (i) the consummation by the
Borrower of the Specified Transaction; (ii) the payment by the Borrower to and
receipt by certain of the Subordinated Entities of the of the Cash Interest
notwithstanding Section 4.19(b) of the Loan Agreement and Section 2.2(a) of the
Subordination Agreement.

     

    SECTION
3. Limited
Scope of Waiver and Consent.  The consent to
the Specified Transaction contained in SECTION 2 above (i) is a limited,
one-time consent, (ii) shall not be deemed to constitute to any similar
transaction or any other event which is prohibited by the terms of the Loan
Agreement, and (iii) is granted by the Lender in reliance upon the Borrower’s
representations, warranties and agreements set forth herein.

     

    SECTION
4. Amendment
to Loan Agreement.  The provisions of
the Loan Agreement are hereby amended as follows:

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    4.1
Article 1 of the Loan Agreement is
hereby amended as follows:

     

    The
definition of “Change of
Control” contained therein is deleted in its entirety and replaced with
the following:

     

    "Change in
Control":   The occurrence of
any of the following:

     

    (a)           The acquisition, by any group of persons
(within the meaning of the Exchange Act) or by any Person, other than by one or
more of the Subordinated Entities, Prentice Capital Management, L.P. or Rho
Ventures VI, L.P.  and/or their affiliates, of beneficial ownership
(within the meaning of Rule 13d-3 of the Exchange Act) of 35% or more of the
issued and outstanding capital stock of the Borrower having the right, under
ordinary circumstances, to vote for the election of directors of the Borrower,
which Person or group of Persons thereby becomes the largest shareholder of
Borrower.

     

    (b)            More than half of the persons who were
directors of the Borrower on the first day of any period consisting of Twelve
(12) consecutive calendar months (the first of which Twelve (12) month periods
commencing with the first day of the month during which this Agreement was
executed) (together with any new directors whose nomination for election by the
equity holders of the Borrower, was approved by a vote of at least a majority of
the directors then still in office who were either directors at the beginning of
such period or whose election or nomination for election was previously so
approved), cease, for any reason other  than death or disability, to
be directors of the Borrower.

     

    4.2
Article 2 of the Loan Agreement is
hereby amended as follows:

     

    4.2.1
Section 2.14 of the Loan Agreement
is hereby deleted in its entirety and replaced with the
following:

     

    In addition to any other fee to be paid
by the Borrower on account of the Revolving Credit, the Borrower shall pay the
Lender the "Unused Line
Fee" (so referred to herein) of
0.75% per annum of the
average difference, during the month just ended (or relevant period with respect
to the payment being made on the Termination Date) between the Revolving Credit
Ceiling and the aggregate of the unpaid principal balance of the Loan Account
and the undrawn Stated Amount of L/C's outstanding during the relevant
period.  The Unused Line Fee shall be paid in arrears, on the first
day of each month after the execution of this Agreement and on the Termination
Date.

     

    SECTION
5. Conditions
Precedent.  This Amendment
shall not be effective until each of the following conditions have been
satisfied, as determined by the Lender in its discretion:

     

    5.1
The Lender shall have received counterparts of this Amendment duly executed by
each of the parties hereto.

     

    5.2 All
corporate and shareholder action on the part of the Borrower necessary for the
valid execution, delivery and performance by the Borrower of this Amendment
shall have been duly and effectively taken and evidence thereof reasonably
satisfactory to the Lender shall have been provided to the Lender.

     

    
      
         

      

      
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    5.3 After
giving effect to this Amendment, the representations and warranties in the Loan
Agreement and the other Loan Documents shall be true and correct in all material
respects on and as of the date hereof, as though made on such date (except to
the extent that such representations and warranties relate solely to an earlier
date, in which case they shall be true and correct as of such earlier
date).

     

    5.4 After
giving effect to this Amendment, no Default or Event of Default shall have
occurred and be continuing on the date hereof, nor shall result from the
consummation of the transactions contemplated herein.

     

    5.5 The
Specified Transaction shall have been consummated and Rho shall have purchased
the Initial Shares (as defined it the Purchase Agreement) for the Initial
Purchase Price (as defined it the Purchase Agreement).

     

    5.6 The
Borrower shall have paid to the Lender an amendment fee in the amount of
$20,000.00 (the “Amendment Fee”) in
consideration for the amendment contained herein.  The Amendment Fee
shall be fully earned upon the date hereof, and shall not be subject to refund
or rebate under any circumstances.

     

    5.7 The
Borrower shall have paid in full all reasonable costs and expenses of the Lender
(including, without limitation, reasonable attorneys’ fees) in connection with
the preparation, negotiation, execution and delivery of this
Amendment.

     

    SECTION 6. Waiver of
Claims.

     

    6.1 The
Borrower, for itself and on behalf of its officers, directors, employees,
attorneys, representatives, administrators, successors, and assigns hereby
acknowledges and agrees that it has no offsets, defenses, claims, or
counterclaims against the Lender, or its officers, directors, employees,
attorneys, representatives, parent, affiliates, participants, successors, or
assigns (collectively, “Credit Parties”) with
respect to the Liabilities, or otherwise, and that if the Borrower now has, or
ever did have, any offsets, defenses, claims, or counterclaims against any
Credit Party, whether known or unknown, at law or in equity, from the beginning
of the world through this date and through the time of execution of this
Amendment, all of them are hereby expressly WAIVED, and the Borrower
hereby RELEASES the
Credit Parties from any liability therefor.

     

    
      
         

      

      
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    SECTION 7. Miscellaneous.

     

    7.1
Except as provided herein, all of the terms and conditions of the Loan Agreement
and the other Loan Documents remain in full force and effect.

     

    7.2 This
Amendment may be executed in any number of counterparts and by different parties
hereto in separate counterparts, each of which shall be deemed to be an
original, but all of which taken together shall constitute one and the same
agreement.  Delivery of an executed counterpart of this Amendment by
telefacsimile or electronic mail shall be equally as effective as delivery of an
original executed counterpart of this Amendment.  Any party delivering
an executed counterpart of this Amendment by telefacsimile or electronic mail
also shall deliver an original executed counterpart of this Amendment but the
failure to deliver an original executed counterpart shall not affect the
validity, enforceability, and binding effect of this Amendment.

     

    7.3 This
Amendment expresses the entire understanding of the parties with respect to the
transactions contemplated hereby.  No prior negotiations or
discussions shall limit, modify, or otherwise affect the provisions
hereof.

     

    7.4 THIS AGREEMENT SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS
APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED IN THE COMMONWEALTH OF
MASSACHUSETTS.

     

    [SIGNATURE
PAGES FOLLOW]

     

    
      
         

      

      
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    IN
WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed by
their respective officers thereunto duly authorized, as of the date first above
written.

     

     

     

     

    BORROWER:

    

    BLUEFLY,
INC.

    

    By:     
/s/ Kara B.
Jenny                           

    Name:
Kara B.
Jenny                                

    Title:  
Chief Financial
Officer                 

    

    LENDER:

    

    WELLS
FARGO RETAIL FINANCE, LLC

    

    By:     
/s/ Michele L.
Ayov                     
                  

    Name:
Michele L.
Ayov                           

    Title:  
Vice
Presidentex10_1.htm

    
      
Exhibit 10.1

     

    
      LOAN
AGREEMENT

      

      Dated
as of December 22 , 2009

      

      By and
Between

      

      EMBASSY
BANCORP, INC.

      

      and

      

      UNIVEST
NATIONAL BANK AND TRUST CO.

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      THIS LOAN
AGREEMENT, dated as of December 22, 2009, by and between EMBASSY
BANCORP, INC, a Pennsylvania business corporation having its principal office at
100 Gateway Drive, P.O. Box 20405, Bethlehem, Pennsylvania 18017 (the
“Borrower”), and UNIVEST NATIONAL BANK AND TRUST CO., a national banking
association having its principal office at 14 North Main Street, Univest Plaza,
Souderton, Pennsylvania 18964 (the “Bank”).

      

      WITNESSETH:

      

      WHEREAS,
the Borrower has applied to the Bank for a non-revolving line of credit in the
outstanding principal amount not to exceed $4,000,000 (the “Loan”);
and

      

      WHEREAS,
the proceeds of the Loan will primarily be used by the Borrower as additional
capital to be provided to its subsidiary bank, Embassy Bank for the Lehigh
Valley (“Embassy Bank”); and

      

      WHEREAS,
the Bank is willing to make the Loan to the Borrower upon the terms and
conditions hereinafter set forth;

      

      NOW,
THEREFORE, in consideration of the premises and intending to be legally bound
hereby, the parties hereto agree as follows:

      

      ARTICLE
I

      

      Definitions

      

      SECTION
1.01. Certain
Definitions. In addition to the terms defined elsewhere in this
Agreement, the terms defined in this Section 1.01, whenever used and capitalized
in this Agreement, shall, unless the context otherwise requires, have the
respective meanings herein specified:

      

      “Board of Directors”
shall mean the Board of Directors of the Borrower or any duly authorized
committee of the Board of Directors.

      

      “Business Day” shall
mean any day except a Saturday, Sunday or other day on which commercial banks in
Pennsylvania are authorized by law to close.

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       “GAAP” means generally
accepted accounting principles in the United States of America, consistent with
those used in the preparation of the financial statements referred to in Section
3.01.

      

      “Indebtedness” of any
Person shall mean (a) all items which, in accordance with GAAP, would be
included on the liability side of a balance sheet of such Person as at the date
as of which indebtedness is to be determined, excluding capital stock, surplus,
capital and earned surplus, surplus reserves which in effect were appropriations
of surplus or offsets to asset values (other than all reserves in respect of
obligations, the amount, applicability or validity of which is at such date
being contested in good faith by such Person) and deferred credits, (b) all
indebtedness secured by any mortgage, pledge, security interest or lien existing
on property owned subject to such mortgage, pledge, security interest or liens
whether or not the indebtedness secured thereby shall have been assumed, (c) all
proper accruals for federal and other taxes based on or measured by income or
profits, and (d) all guarantees, endorsements and other contingent obligations,
including, without limitation, all indebtedness guaranteed, directly or
indirectly, in any manner by such Person, or in effect guaranteed or supported,
directly or indirectly, by such Person through an agreement, contingent or
otherwise, (i) to purchase the indebtedness, or (ii) to purchase, sell,
transport or lease (as lessee or lessor) property or to purchase or sell
services at prices or in amounts designed to enable the debtor to make payment
of the indebtedness or to assure the owner of the indebtedness against loss, or
(iii) to supply or advance funds to or in any other manner invest in the debtor;
provided, however, that such term shall not mean and include any indebtedness in
respect of which monies sufficient to pay and discharge the same in full (either
on the stated date of maturity thereof or on such earlier date as such
indebtedness may be duly called for redemption and payment) shall be deposited
with a depository, agency or trustee in trust for the payment
thereof.

      

      “Loan Documents” shall
mean, collectively, this Agreement and any related Notes.

      

      “Note” shall have the
meaning ascribed to such term in Section 2.02.

      

      “Person” shall mean
any individual, corporation, partnership, Limited Liability Company or other
entity, or government, foreign or domestic, or any agency or political
subdivision of any government.

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      ARTICLE
II

      

      The Loan

      

      SECTION
2.01. Loan
Commitment. Subject to the terms and conditions of, and relying upon the
representations and warranties of the Borrower contained in, this Agreement, the
Bank (a) shall make the proceeds of the Loan available to the Borrower on the
date (the “Closing Date”) on which the Borrower executes and delivers to the
Bank the promissory note evidencing the Loan.

      

      SECTION
2.02. Subordinated
Term Loan Note.
The obligation of the Borrower to repay the unpaid principal amount of
the Loan,  to pay interest thereon, and pay unused commitment fees,
shall be evidenced, by a Subordinated Term Loan Note of even date herewith (such
Subordinated Term Loan Note, and any extension, refinancing or renewal of the
same, is referred to herein as the “Note”). The unpaid principal balance of the
Note, the interest and fees, if any, accrued thereon, the
interest rate applicable to such balance, and the term of the Loan shall be
determined from the terms of the Note and the records of the Bank in the absence
of manifest error.

      

      SECTION
2.03. Advances.

      

      (a)        
In accordance with this Agreement and other Loan Documents, Borrower may from
time to time request one or more advances (each advance hereunder being referred
to herein as an “Advance”).  The aggregate principal amount of all
Advances disbursed hereunder shall not exceed $4,000,000.00 (the “Principal
Limit”).

      

      (b)         By
requesting an Advance, Borrower makes a warranty that Borrower is in compliance
with all Loan Documents.  When making a request for an Advance,
Borrower must specify the requested amount and the date.  All Advances
will be made in United States dollars.  Borrower agrees to indemnify
and hold harmless the Bank for the Bank’s reliance on any request for Advances
that the Bank reasonably believes to be genuine.  To the extent
permitted by law, Borrower will indemnify the Bank and hold the Bank harmless
when the person making any request represents that Borrower authorized the
person to request an Advance even when the person is unauthorized or the
person’s signature is not genuine.  The Borrower may request Advances
by the following methods: (1) in person; (2) by phone; or (3) by
mail.

      

      (c)         In
addition to any other Loan conditions, requests for, and access to, Advances are
subject to the following limitations:

      

      (1)
Obligatory Advances.  Bank will make all Advances under and subject to
this Agreement’s terms and conditions.

      

      (2)
Advance Amount.  Subject to the terms and conditions contained in this
Agreement, Advances will be made in the amount requested by
Borrower.

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      (3)
Disbursement of Advances.  On Borrower’s fulfillment of this
Agreement’s terms and conditions, Bank will disburse the Advance in any manner
mutually agreed upon.

      

      (4)
Credit Limit.  Borrower understands that the Bank will not ordinarily
grant a request for an Advance that would cause the unpaid principal of the Loan
to be greater than the Principal Limit.  The Bank may, at its option,
grant such a request without obligating the Bank to do so in the
future.  The Borrower will pay any over Advances in addition to the
regularly scheduled payments.  The Borrower will repay any over
Advance by repaying the Bank in full within 10 days after the overdraft
occurs.

      

      (5)
Records.  The Bank’s records will be conclusive evidence as to the
amount of Advances, the Note’s unpaid principal balances and the accrued
interest.

      

      (d)         The
Borrower will satisfy all of the following conditions before the Bank will make
any Advances under this Agreement.

      

      (1) No
Default.  There has not been a default under this Agreement or any
other Loan Documents nor would a default result from making the Loan or any
Advance.

      

      (2)
Information.  The Bank has received all documents, information,
certifications and warranties as the Bank may require, all properly executed, if
appropriate, on forms acceptable to the Bank.

      

      (3)
Inspections.  The Bank has made all inspections it considers necessary
and is satisfied with this inspection.

      

      (4)
Conditions and Covenants.  Borrower will have performed and complied
with all conditions required for an Advance and all covenants in this Agreement
and any other Loan Documents.

      

      (5)
Warranties and Representations.  The warranties and representations
contained in this Agreement are true and correct at the time of making the
requested Advance.

      

      (6)
Financial Statements.  The Borrower’s most recent financial statements
and other financial reports, delivered to the Bank, are current, complete, true
and accurate in all material respects and fairly represent the Borrower’s
financial condition.

      

      (7)
Bankruptcy Proceedings.  No proceeding under the United States
Bankruptcy Code has been commenced by or against the Borrower or any of the
Borrower’s affiliates.

      

      (8)
Pledge Agreement.  Execution of the Pledge Agreement attached hereto
and marked “Exhibit A” providing for the Borrower’s pledge of 333,333 shares of Embassy Bank
common stock to the Bank in order to secure the Loan and the Borrower’s
Obligations hereunder.

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      SECTION
2.04. Optional
Prepayments.  The Borrower may, upon at least three (3)
Business Days’ written notice to the Bank, without penalty, prepay the Loan in
whole or in part at any time provided that all prepayments shall be accompanied
by payment of all interest and
fees accrued thereon to date. Notwithstanding eligible prepayments under
Section 2.04, any prepayment made from the proceeds of a public stock offering
and/or the sale of the majority of the stock or assets of the Borrower shall not
be considered an eligible payment under Section 2.04.  In the event of
an ineligible payment, there shall be a  prepayment fee of
$50,000.

      

      SECTION
2.05. General
Provisions as to Loan Payments and Computation of Interest. The Borrower
shall make each payment of principal of, and interest on, the Loan in lawful
money of the United States of America and in federal or other funds immediately
available to the Bank at its address referred to in Section 9.03. The Borrower
hereby irrevocably authorizes the Bank to debit any of its accounts at the Bank
for the payment of all amounts payable under the Loan Documents on the due date
for such payments. Whenever any payment of principal of, or interest on, the
Loan shall be due on a day which is not a Business Day, the date for payment
thereof shall be extended to the next succeeding Business Day and interest shall
continue to accrue thereon. If the date for any payment of principal of the Loan
is extended by operation of law or otherwise, interest thereon shall be payable
for such extended time.  Interest on the Loan shall be computed on the
basis of a year of 360 days, and paid for the actual number of days elapsed
(including the first day but excluding the last day).

      

      ARTICLE
III

      

      Representations and
Warranties

      

      The
Borrower represents and warrants that:

      

      SECTION
3.01. Financial
Statements. The balance sheets of Borrower for the fiscal year ended
December 31, 2008, and its respective statements of income, changes in
stockholders’ equity and changes in financial position for such fiscal year,
including in each case the related schedules and notes, all certified by
Borrower’s independent certified public accountants, copies of all of which
balance sheets and statements have heretofore been delivered to the Bank) the
“Financial Statements”), were prepared in accordance with GAAP consistently
applied throughout the periods involved, are correct and complete and fairly
present the financial position and results of operations of Borrorwer for such
fiscal year. There has been no change in the financial condition of Borrower as
shown on the latest audited balance sheets, other than changes in the ordinary
course of business which have not been materially adverse.

      

      SECTION
3.02. Business and
Properties. No report, document, certificate or statement delivered to
the Bank by or on behalf of the Borrower in connection with the transactions
contemplated by this Agreement contains any untrue statement of a material fact
or omits to state any material fact necessary in order to make the statements
contained therein not misleading. Since December 31, 2008, there has not been
any adverse change in the business, operations, properties or assets of the
Borrower or its subsidiaries which is material to the Borrower and its
subsidiaries taken as a whole or to the Borrower alone.

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      SECTION
3.03. No Pending
Material Litigation or Proceeding. There
are no actions, suits or proceedings (whether or not purportedly on behalf of
the Borrower or any of its subsidiaries) pending or, to the knowledge and belief
of the Borrower, threatened against or affecting the Borrower or any of its
subsidiaries, or the business or properties of the Borrower or any of its
subsidiaries, at law or in equity, or before or by any governmental department,
commission board, agency or instrumentality, domestic or foreign, or any
arbitrator, which might have a material adverse effect on the financial position
of the Borrower and its subsidiaries taken as a whole or which might have any
material adverse effect on the ability of (a) the Borrower or any subsidiary to
carry on its business as now conducted or (b) the Borrower to perform any of its
obligations under the Loan Documents. Neither the Borrower nor any of its
subsidiaries is, to the knowledge and belief of the Borrower, (i) in default in
any material respect under any order, writ, injunction or decree of any court or
arbitrator, or (ii) in default in any material respect under any order,
regulation or demand of any governmental agency, where the default specified in
(i) or (ii) would have consequences that might have a material adverse effect on
the financial position of the Borrower and its subsidiaries taken as a
whole.

      

      SECTION
3.04. Valid
Organization, Good Standing and Qualification of Borrower and
Subsidiaries. The Borrower and its subsidiaries are duly and validly
organized and existing entities in good standing under the laws of their
respective jurisdictions of organization. The Borrower and its subsidiaries are
duly licensed or qualified and in good standing as foreign entities in all other
jurisdictions where the ownership or leasing of property or the nature of
business transacted makes such qualification necessary, and are entitled to own
their respective properties and assets, and to carry on their respective
businesses, all as, and in the places where, such properties and
assets are now owned or operated or such businesses are now conducted or
presently proposed to be conducted, except where failure to so qualify would not
have a material adverse effect on the business, properties or assets, or in the
condition, financial or otherwise, of the Borrower and its subsidiaries taken as
a whole. The Borrower and its subsidiaries have made payment of all franchise
and similar taxes in their respective jurisdictions in which they are qualified
as foreign entities, insofar as such taxes are due and payable at the date of
this agreement, except for any such taxes immaterial in amount or the validity
of which is being contested in good faith and for which proper reserves have
been set aside on the books of the Borrower or any of its subsidiaries, as the
case may be. The shares of capital stock of each subsidiary owned by the
Borrower, directly or indirectly, have been duly issued, are fully paid and
nonassessable, and are owned free and clear of any liens, charges and
encumbrances.

      

      SECTION
3.05.  No Leases Affecting Balance
Sheet Values: Status of Leases. None of the assets or properties the
values of which are reflected in the latest audited consolidated balance sheet
referred to in Section 3.01 is held by the Borrower or any of its subsidiaries
as lessee under any lease (excluding capitalized lease obligations). The
Borrower and its subsidiaries enjoy peaceful and undisturbed possession under
all of the leases under which they are operating, none of which contains any
unusual or burdensome provisions that will, in the judgment of the Borrower,
materially and adversely affect or impair the operations of the Borrower and its
subsidiaries taken as a whole. All of such leases are valid, subsisting and in
full force and effect and, to the best knowledge of the Borrower, none of such
leases is in default.

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      SECTION
3.06. No Adverse
Contracts or Restrictions. Neither the Borrower nor any of its
subsidiaries is a party to, or is bound by, any contract or agreement or
instrument, or subject to any charter
or other corporate restriction, which in the opinion of the Borrower materially
and adversely affects its business, property, assets, operations or condition,
financial or otherwise.

      

      SECTION
3.07. No Legal
Restrictions on Performance: No Defaults.  Neither the
execution and delivery of this Agreement, the consummation of the transactions
contemplated by it, nor compliance with its terms and conditions will conflict
with or result in a breach of, or constitute a default under, any of the terms,
conditions or provisions of any corporate restriction or of any indenture,
mortgage, deed of trust, pledge, bank loan or credit agreement, corporate
charter, bylaws or any other agreement or instrument to which the Borrower or
any of its subsidiaries is now a party or by which any
of them or their respective properties may be bound or affected, or any judgment
or order, writ, injunction, decree or demand of any court, arbitrator, or
federal, state, municipal or other governmental department, commission, board,
bureau, agency or instrumentality, domestic or foreign, or result in the
creation or imposition of any lien charge or encumbrance of any nature
whatsoever upon any of the property or assets of the Borrower or its
subsidiaries under the terms or provisions of any such agreement or instrument.
Except with the respect to the alleged agreement
that is the subject of the litigation disclosed on Schedule A hereto, the
Borrower or its subsidiaries is not in default in any material respect in the
performance, observance or fulfillment of any of the obligations, covenants or
conditions contained in any indenture or other agreement creating, evidencing or
securing Indebtedness of the Borrower or its subsidiaries or pursuant to which
any such Indebtedness is issued or other agreement or instrument to which the
Borrower or its subsidiaries is a party or by which the Borrower or its
subsidiaries or its properties may be bound or affected. No event has occurred
which constitutes an event of default or which, with notice or the lapse of
time, or both, would constitute an event of default under any agreement or
instrument evidencing Indebtedness for money borrowed of the Borrower or any of
its subsidiaries which enables the holders thereof or any Person on their behalf
to declare the same due and payable prior to the maturity thereof.

      

      SECTION
3.08. Compliance with
Statutes and Regulations. The Borrower and its subsidiaries have complied
with, and are currently in compliance with, all applicable statutes,
regulations, orders and restrictions of the United States of America, foreign
countries, states and municipalities, and agencies and instrumentalities of the
foregoing, in  respect of the conduct of their respective businesses
and ownership of their respective properties (including, without limitation,
applicable statutes, regulations, orders and restrictions relating to bank
holding companies, banks, equal employment opportunities and environmental
standards or controls), where failure to comply therewith would have a material
adverse effect on the business, properties or assets, or in the condition,
financial or otherwise, of the Borrower and its subsidiaries taken as a whole.
No governmental consents, approvals or authorizations are required to be
obtained and no registrations or declarations are required to be filed in
connection with the execution and delivery of this agreement.

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      SECTION
3.09. Tax
Status. The Borrower and its subsidiaries have filed all United States
income tax returns and all state, municipal and other tax returns which are
required to be filed, and have paid, or made provision for the payment of, all
taxes which have become due pursuant to said returns or pursuant to any
assessment received by the Borrower or any of its subsidiaries, except such
taxes, if any, as are being contested in good faith and as to which adequate
reserves have been finally determined by the Internal Revenue Service and
satisfied for all taxable years up to and including the taxable year ended
December 31, 2007.

      

      SECTION
3.10. Margin
Regulation. The Borrower will not use any part of the proceeds of the
Loan (a) directly or indirectly to purchase or carry any “margin security” as
such term is defined in Regulation U of the Board of Governors of the Federal
Reserve System, as amended, or to reduce or retire any Indebtedness originally
incurred to purchase any such security within the meaning of such regulation,
(b) so as to involve the Borrower in a violation of Regulation X of such Board,
or (c) for any other purpose not permitted by Section 7 of the Securities
Exchange Act of 1934, as amended, or any of the rules and regulations respecting
the extension of credit promulgated thereunder.

      

      SECTION
3.11. Investment
Company Act. The Borrower is not an “investment company”, or a company
“controlled” by an “investment company”, within the meaning of the Investment
Company Act of 1940, as amended.

      

      SECTION
3.12. Exempt Status.
Of Transaction Under Securities Act. The execution and delivery of the
Note by the Borrower constitutes a transaction exempt from the registration
provisions of the Securities Act of 1933, as amended.

      

      SECTION
3.13. Authorization
and Validity. The Loan Documents have been duly authorized and delivered
by the Borrower and constitute legal, valid and binding obligations of the
Borrower enforceable in accordance with their respective terms.

      

      ARTICLE
IV

      

      Conditions of
Closing

      

      The
Bank’s obligation to make the Loan provided for in Article II shall be subject
to the performance by the Borrower prior to or at the Closing Date of all its
agreements theretofore to be performed under this Agreement, to the accuracy of
its representations and warranties contained in this Agreement, and to the
satisfaction, prior to or concurrently with the closing of the Loan of
the following further conditions:

      

      SECTION
4.01. Opinion of
Counsel. The Bank shall have received on the Closing Date from the
Borrower’s counsel, an opinion, dated the Closing Date, and in form and
substance satisfactory to the Bank, to the effect that:

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      (a)         the
Borrower is a corporation duly organized, existing and in good standing under
the laws of the Commonwealth of Pennsylvania with corporate power to carry on
the business described, and to own the properties referred to, in the Financial
Statements, to enter into this Agreement, to borrow money as contemplated by it,
to issue the Note and to carry out the provisions of the Loan
Documents;

      

      (b)         each
Loan Document has been duly authorized, executed and delivered by the Borrower
and constitutes a legal, valid and binding obligation of the Borrower
enforceable in accordance with its terms (except to the extent that the
enforcement of the provisions thereof may be limited by any applicable
bankruptcy, reorganization, moratorium or similar laws affecting creditors’
rights now or hereafter in effect and except that specific performance is an
equitable remedy which may or may not be awarded by a court in its
discretion);

      

      (c)         it
is not necessary, in connection with the issuance and delivery of the Note to
the Bank under the circumstances contemplated by this Agreement, to register the
Note under the Securities Act of 1933, as amended;

      

      (d)         no
order, permission, consent or approval of any federal or state commission, board
or regulatory authority is required for the execution and delivery of the Loan
Documents; and

      

      (e)         the
Borrower is not qualified as a foreign corporation in any state, and neither the
character of the properties owned by it nor the nature of the business
transacted by it makes such qualification necessary.

      

      SECTION
4.02. Certificate as
to Representations and Warranties and No Events of Default; Corporate
Resolutions.

      

      (a)         The
representations and warranties of the Borrower contained in Article III shall be
true on and as of the Closing Date with the same effect as though such
representations and warranties had been made on and as of the Closing Date, and
no event shall have occurred prior to the Closing Date which constitutes an
Event of Default or which, with notice or the lapse of time, or both, would
constitute an Event of Default, and the Borrower shall have delivered to the
Bank on the Closing Date a certificate, dated the Closing Date and signed by the
President or Chief Financial Officer of the Borrower, to such
effect.

      

      (b)         Certified
copies of all corporate action taken by the Borrower, including resolutions of
its Board of Directors authorizing the execution, delivery and performance of
the Loan Documents, together with a certificate of the Secretary of the Borrower
certifying the names and true signatures of the officers of the Borrower
authorized to sign the Loan Documents.

      

      SECTION
4.03. Proceedings and
Documents. All proceedings to be taken in connection with the
transactions contemplated by this Agreement and all documents incident to such
transactions shall be satisfactory in form and substance to the Bank and the
Bank’s counsel; and the Bank shall have received all documents or other evidence
which the Bank and the Bank’s counsel may reasonably have requested in
connection with such transaction and compliance with the conditions set forth in
this Article IV, in form and substance satisfactory to the Bank and the Bank’s
counsel.

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      ARTICLE
V

      

      Affirmative
Covenants

      

      The
Borrower covenants and agrees that, unless the Borrower obtains the prior
written consent of the Bank to the contrary:

      

      SECTION
5.01. Payment of
Principal and Interest. The Borrower will punctually pay or cause to be
paid the principal of and interest on the Note according to the respective terms
thereof.

      

      SECTION
5.02. Maintenance of Corporate
Existence. The Borrower will at all times do or cause to be done all
things necessary to preserve and keep in full force and effect its corporate
existence, rights, patents and franchises and the corporate existence, rights,
patents and franchises of its subsidiaries and comply with, and cause each
subsidiary to comply with, all related laws applicable to the Borrower or its
subsidiaries in such manner as counsel shall advise; provided, however, that
nothing in this Section 5.02 shall (a) require the
Borrower or any of its subsidiaries to maintain, preserve or renew any right,
patent or franchise which is not, in the opinion of the Board of Directors of
Borrower, necessary or desirable in the conduct of the business of the Borrower
or such subsidiary, as the case may be, or (b) prevent the termination of the
corporate existence of any subsidiary (other than any of its bank subsidiaries)
if, in the opinion of the Board of Directors of Borrower, such termination is in
the best interest of the Borrower and not disadvantageous to the Bank, or (c)
require the Borrower or any of its subsidiaries to comply with any law so long
as the validity or applicability thereof shall be contested in good
faith.

      

      SECTION
5.03. Maintenance of
Insurance. The Borrower will keep adequately insured, and cause each of
its subsidiaries to keep adequately insured, by financially sound and reputable
insurers, all property of a character usually insured by corporations engaged in
the same or a similar business similarly situated against loss or damage of the
kinds customarily insured against by such corporations, and carry, and cause
each of its subsidiaries to carry, such other insurance as is generally carried
by corporations engaged in the same or a similar business similarly
situated.

      

      SECTION
5.04. Payment of Taxes,
Assessments, Etc. The Borrower will duly and promptly pay and discharge,
and cause each of its subsidiaries duly and promptly to pay and discharge, as
the same become due and payable, all taxes, assessments and governmental and
other charges and claims lawfully levied or imposed upon the franchises,
properties, earnings and business of the Borrower or such subsidiary, as the
case may be, as well as all lawful claims for labor, materials and supplies
which, if unpaid, might become a lien or charge upon such properties or any part
thereof; provided, however, that nothing contained in this Section 5.04 shall require the
Borrower or any such subsidiary to pay any such tax, assessment, charge or claim
so long as the Borrower or such subsidiary in good faith shall contest the
validity thereof and shall set aside on its books adequate reserves with respect
thereto.

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      SECTION
5.05. Payment of
Indebtedness. The Borrower will, and will cause each of its subsidiaries
to, pay punctually or discharge when due, or renew or extend, any Indebtedness
heretofore or hereafter incurred by it or any of them, as the case may be, and
discharge, perform and observe the covenants, provisions and conditions to be
performed, discharged and observed on the part of the Borrower or such
subsidiary, as the case may be, in connection therewith, or in connection with
any agreement or other instrument relating thereto, or in connection with any
mortgage, pledge or lien existing at any time upon any of the property or assets
of the Borrower or such subsidiary, as the case may be; provided, however, that
nothing contained in this Section 5.05 shall require the Borrower or any such
subsidiary to pay or discharge or renew or extend any such Indebtedness or to
discharge, perform or observe any such covenants, provisions and conditions so
long as the Borrower or such subsidiary in good faith shall contest any claim
which may be asserted against it in respect of any such Indebtedness or of any
such covenants, provisions and conditions and shall set aside on its books
adequate reserves with respect thereto.

      

      SECTION
5.06. Keeping of
Books. The Borrower will, and will cause each of its subsidiaries to, (a)
keep at all times proper books of record and account in which full, true and
correct entries will be made of its transactions in accordance with good
accounting practice; and (b) set aside on its books from its earnings, for each
fiscal year, reserves for depreciation, obsolescence and/or amortization of its
properties during such years and all other proper reserves, which, in accordance
with good accounting practice, should be set aside from such earnings in
connection with its business.

      

      SECTION
5.07. Compliance with Law.
The Borrower will, and will cause each of  its subsidiaries to, comply
in all material respects with all applicable statutes, regulations and orders
of, and all restrictions imposed by, the United States of America and all
foreign countries having jurisdiction, and any state, municipality or any other
political subdivision or any agency of any thereof, in respect of the conduct of
their respective businesses and the ownership of their respective properties
(including all applicable statutes, regulations, orders and restrictions
relating to bank holding companies, banks, equal employment opportunities and
environmental standards and controls); provided, however, that nothing contained
in this Section 5.07 shall require the Borrower or any such subsidiary to comply
with any law so long as the validity or applicability thereof shall be contested
in good faith.

      

      SECTION
5.08. Notice of
Default. If any Event of Default shall occur, the Borrower will at once
give written notice to the Bank specifying the nature of such Event of Default
and the action, if any, being taken by the Borrower to cure such Event of
Default.

      

      SECTION
5.09. Dividends. The
Borrower will use its best efforts to cause Embassy Bank to declare and pay cash
dividends to the Borrower in amounts sufficient to cause the Borrower to comply
at all times with the financial covenant contained in Section
7.03.

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      SECTION
5.10. Minimum Capital.
The Borrower shall cause Embassy Bank to at all times maintain such
capital and other requirements as are necessary to be classified as a “well
capitalized” institution for both Tier I and Tier II capital purposes, in
accordance with all federal and state laws and regulations applicable to
Pennsylvania state chartered banks. As and when requested by the Bank, the
Borrower will certify the Borrower’s compliance with this covenant to the
Bank.

      

      ARTICLE
VI

      

      Statements, Reports and
Certificates

      to be Delivered by the
Borrower

      

      The
Borrower will deliver to the Bank, unless the Borrower obtains the prior written
consent of the Bank to the contrary, the following:

      

      SECTION
6.01. Quarterly
Financial Statements.  As soon as reasonably possible, and in
any event within 60 days after the close of the first three fiscal quarters of
each year of the Borrower, (a) the unaudited balance sheets of the Borrower and
its consolidated subsidiaries, as of the end of such quarter, setting forth in
comparative form the corresponding figures for the preceding fiscal year, (b)
the unaudited statements of income of the Borrower and its consolidated
subsidiaries for such quarter and for the portion of the fiscal year ended with
such quarter, setting forth in comparative form the corresponding figures for
the corresponding periods of the preceding fiscal year, and (c) the unaudited
statement of cash flows of the Borrower and its consolidated subsidiaries for
the year to date, setting forth in comparative form the corresponding figures
for the corresponding periods of the preceding fiscal year, all in reasonable
detail and certified by the Chief Financial Officer of the Borrower, subject to
year-end audit adjustments.

      

      SECTION
6.02. Annual Reports
and Financial Statements. As soon as reasonably possible, and in any
event within 120 days after the close of each fiscal year of the Borrower, (a)
the audited balance sheets of the Borrower and its consolidated subsidiaries, as
at the end of such fiscal year, setting forth in comparative form the
corresponding figures as at the end of the preceding fiscal year, (b) the
audited statements of consolidated income of the Borrower and its consolidated
subsidiaries, for such fiscal year, setting forth in comparative form the
corresponding figures for the previous fiscal year, and (c) the statement of
cash flows of the Borrower and its consolidated subsidiaries for such fiscal
year, setting forth in comparative form the corresponding figures for the
previous fiscal year. The consolidated balance sheets and statements of the
Borrower and its consolidated subsidiaries shall be prepared in reasonable
detail in accordance with GAAP and shall be accompanied by a report and opinion
of independent public accountants of recognized standing selected by the
Borrower, which report and opinion shall be prepared in accordance with
generally accepted auditing standards relating to reporting.

      

      SECTION
6.03. Compliance
Certificate. Concurrently with the statements required to be furnished
pursuant to Section 6.02, a certificate signed by the President or Chief
Financial Officer of the Borrower stating that a review of the activities of the
Borrower and its subsidiaries during such fiscal year has been made under his
supervision with a view to determining whether during such fiscal year the
Borrower and its subsidiaries had performed and observed all of their respective
obligations under the Loan Documents, and under other evidences of Indebtedness,
and either (a) stating that to the best of his knowledge, the Borrower and its
subsidiaries had during such fiscal year performed and observed each covenant
and condition of the Loan Documents applicable to them and that he had during
the course of such review obtained no knowledge of any Event of Default under
the Loan Documents, or any event of default under any such other evidences of
Indebtedness, or of any event under which, with notice or lapse of time, or
both, would constitute an Event of Default under the Loan Documents, or an event
of default thereunder, or (b) if in his opinion the Borrower and its
subsidiaries have not performed and observed all covenants and conditions
contained in the Loan Documents, or if any Event of Default or any event which,
with notice or lapse of time, or both, would constitute an Event of Default
shall exist under the Loan Documents, or if any event of default or an event
which, with notice or lapse of time or both, would constitute an event of
default shall exist under any other evidences of Indebtedness, specifying all
such events, and their nature and status and stating the action, if any, being
taken by the Borrower to cure or avoid any such Event of Default or event of
default. Such certificate shall also set forth such information and data
demonstrating compliance with the provisions of Article VII of this Agreement as
the Bank may reasonably request.

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      SECTION
6.04. Other Reports
and Statements. Promptly upon the mailing to its stockholders of each
annual report, proxy statement or other report or communication, a copy of each
such report, proxy statement or communication; promptly upon any filing by the
Borrower with the Securities and Exchange Commission or any governmental agency
or agencies substituted for such Commission, or with any national securities
exchange, of any annual or periodic or special report or registration statement,
a copy of such report or statement; and promptly upon filing any reports of
condition required to be filed with the Federal Reserve Board (with respect to
the Borrower or any of its subsidiaries) a copy of such report.

      

      In the
event that any Indebtedness of the Borrower is declared due and payable before
its expressed maturity, or any holder of such Indebtedness shall have the right
to declare such Indebtedness due and payable before its expressed maturity
because of the occurrence of any default under such Indebtedness, the Borrower
will immediately give the Bank written notice of such declaration or right of
declaration.

      

      The Bank
may visit and inspect any of the properties of the Borrower or its subsidiaries
upon reasonable notice and during normal business hours, discuss at the
principal office of the Borrower the affairs, finances and accounts of the
Borrower and its subsidiaries with its and their officers, and request during
such discussion such additional data and information as shall be necessary to
establish that the Borrower has performed and observed the covenants and
conditions set forth in the Loan Documents, all at such reasonable times and as
often as the Bank may desire.

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      ARTICLE
VII

      

      Negative
Covenants

      

      The
Borrower covenants and agrees that, unless the Borrower obtains the Bank’s prior
written consent to the contrary:

      

      SECTION
7.01. Indebtedness.
The Borrower will not create, incur, assume or suffer to exist any
Indebtedness, except:

      

      (a)         Indebtedness
owed to the Bank under the Loan Documents;

      

      (b)         Indebtedness
existing or anticipated on the Closing Date and reflected in the financial
statements referred to in Section 3.01;

      

      (c)         accrued
salaries and wages;

      

      (d)         current
accounts payable arising out of transactions (other than borrowings) in the
ordinary course of business;

      

      (e)         capitalized
leases;

      

      (f)  
       customer deposits, including
certificates of deposit; repurchase agreements; operating lease obligations;
FHLB borrowings and ACBB borrowings; and

      

      (g)         purchase
money obligations.

      

      SECTION
7.02. Change of
Control. The Borrower will not, and will not permit any of its
subsidiaries to, enter into any agreement or take any action which will result
in a change of control. As used in this Section 7.02, “change of control” means,
with respect to either the Borrower or any of its bank subsidiaries, as the case
may be (“Target”), the earliest to occur of any of the following events, each of
which shall be determined independently of the others:

      

      (a)         any
Person becomes a “beneficial owner,” as such term is used in Rule l3d-3
promulgated under the Securities Exchange Act of 1934, as amended
(the “Exchange Act”), of fifty percent (50%) or more of Target’s stock entitled
to vote in the election of directors;

      

      (b)         Target
is a party to a merger, consolidation, other form of business combination or a
sale of all or substantially all of its assets, unless the business of Target is
continued following any such transaction by a resulting entity (which may be,
but need not be, Target) and the shareholders of Target immediately prior to
such transaction hold, directly or indirectly, at least sixty-six percent (66%)
of the voting power of the resulting entity;

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      (c)         there
is a change of control of Target of a nature that would be required to be
reported in response to item 1(a) of Current Report on Form 8-K or item 6(e) of
Schedule l4A of Regulation l4A or any similar item,
schedule or form under the Exchange Act, as in effect at the time of the change,
whether or not Target is then subject to such reporting requirement;
or

      

      (e)         there
has occurred a “change of control” as such term (or any term of like import) is
defined in any of the following documents which is in effect with respect to
Target at the time in question: any note, evidence of indebtedness or agreement
to lend funds to Target, any option, incentive or employee benefit plan of
Target or any employment, severance, termination or similar agreement with any
person who is then an employee of Target.

      

      SECTION
7.03. Cash
Flow. The Borrower will not permit its cash and cash equivalents to be
less than its debt service at the end of each fiscal quarter of the Borrower. As
used in this Section 7.03, “cash and cash equivalents” shall mean cash and
amounts due from depository institutions, interest-earning deposits, federal
funds sold, and securities purchased under resale agreements with an original
maturity of three months or less, and “debt service” shall mean its long-term
debt due within one year, excluding term repurchase agreements, FHLB and ACBB
borrowings, plus interest expense, all determined in accordance with
GAAP.

      

      ARTICLE
VIII

      

      Events of
Default

      

      SECTION
8.01. Events of
Default. In case one or more of the following events (“Events of Default”) shall have
occurred and be continuing:

      

      (a)         default
shall be made in the performance or observance of any of the covenants,
conditions or agreements contained in the Loan Documents and such default shall
continue for a period of 30 days after written notice to the Borrower from the
Bank stating the specific default or defaults; or

      

      (b)         a
decree or order by a court having jurisdiction in the premises shall have been
entered adjudging the Borrower a bankrupt or insolvent or approving as properly
filed a petition seeking reorganization, readjustment, arrangement, composition
or similar relief for the Borrower under the federal bankruptcy laws, or any
other similar applicable federal or state law, and such decree or order shall
have continued undischarged or unstayed for a period of 60 days; or a decree or
order of a court having jurisdiction in the premises for the appointment of a
receiver or liquidator or trustee or assignee in bankruptcy or solvency of the
Borrower or its property, or for the winding up or liquidation of its affairs,
shall have been entered, and such decree or order shall have remained in force
undischarged or unstayed for a period of 60 days; or any property of the Borrower shall be
sequestered or attached and shall not be returned to the possession of the
Borrower or released from such attachment within 60 days thereafter;
or

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      (c)         the
Borrower shall institute proceedings to be adjudicated a voluntary bankrupt, or
shall consent to the filing of a bankruptcy proceeding against it, or shall file
a petition or answer or consent seeking reorganization, readjustment,
arrangement, composition or similar relief under the federal bankruptcy laws, or
any other similar applicable federal or state law, or shall consent to the
filing of any such petition, or shall consent to the appointment of a receiver
or liquidator or trustee or assignee in bankruptcy or insolvency out or of a
substantial part of its property, or shall make an assignment for the benefit of
creditors, or shall admit in writing its inability to pay its debts generally as
they become due, or shall voluntarily suspend transaction of its usual business,
or corporate action shall be taken by the Borrower in furtherance of any of the
aforesaid purposes; or

      

      (d)         final
judgment for the payment of money in excess of $500,000 (whether one judgment or
several which in the aggregate exceed $500,000) shall be rendered against the
Borrower or any of its subsidiaries and the same shall remain undischarged for a
period of 60 days during which execution shall not be effectively stayed;
provided, however, if the Borrower or any subsidiary posts a bond which would
satisfy the judgment and execution on the judgment is effectively stayed
thereby, such judgment shall not constitute an Event of Default during such
time; or

      

      (e)         any
representation or warranty made or deemed made by the Borrower in this Agreement
or which is contained in any certificate, document, opinion, financial or other
statement furnished at any time under or in connection with this Agreement, or the
making of the Loan shall prove to have been incorrect in any material respect on
or as of the date made or deemed made;

      

      then, and
in each and every such case, the Bank by notice in writing to the Borrower may
declare the principal of the Note to be immediately due and payable, and upon
any such declaration the same shall become immediately due and payable, anything
in the Loan Documents to the contrary notwithstanding and Bank may exercise all
of its remedies as set forth in the Pledge Agreement attached hereto as Exhibit
“A”.

      

      In case
any one or more of the Events of Default specified above in this Section 8.01
shall have occurred and be continuing, the Bank may proceed to protect and
enforce its rights either by suit in equity or by action at law, or both, or by
other appropriate proceedings, whether for the specific performance (to the
extent permitted by law) of any covenant or agreement contained in the Loan
Documents, or in aid of the exercise of any
power granted in the Loan Documents, or may proceed to enforce the payment of
the Note or to enforce any other legal or equitable right of the Bank. The
Borrower shall pay all reasonable expenses incurred by the Bank in connection
with the enforcement of the Loan Documents.

      

      ARTICLE
IX

      

      Miscellaneous

      

      SECTION
9.01. Consents,
Waivers and Modifications. Any term, agreement or condition of the Loan
Documents may be amended, or compliance therewith may be waived (either
generally or in a particular instance and either retroactively or
prospectively), if the Borrower shall have obtained the prior written consent of
the Bank; provided, however, that any waiver shall be effective only in the
specific instance and for the purpose for which given.

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      SECTION
9.02. Survival of
Covenants: Successors and Assigns. All covenants, agreements,
representations and warranties made by the Borrower in the Loan Documents and in
certificates or other documents delivered pursuant to the Loan Documents,
regardless of any investigation made by the Bank or on its behalf, shall survive
the execution and delivery of the Loan Documents to the Bank, and shall continue
in full force and effect until the Loan is paid in full. All such covenants,
agreements, representations and warranties shall be binding upon any successors
and assigns of the Borrower.

      

      SECTION
9.03. Notices.
All notices, requests and demands to or upon the respective parties hereto shall
be deemed to have been given or made when deposited in the mails, postage
prepaid, registered or certified mail, return receipt requested, or, in the case
of telegraphic notice, when delivered to the telegraph company, charges prepaid,
or when sent by courier system providing for receipt of delivery, addressed as
follows or to such other address as may be hereafter designated in writing by
the respective parties hereto:

      

      
        	
                 
      

              	
                To
      the Borrower:

              	
                Embassy
      Bancorp, Inc.

              

      

      100
Gateway Drive

      Suite
100

      Bethlehem,
PA 18017-9417

      Attn:
Judith A. Hunsicker

      

      
        	
                 
      

              	
                To
      the Bank:

              	
                Univest
      Corporation of Pennsylvania

              

      

      14 North
Main Street

      Univest
Plaza

      Souderton,
PA 18964

      Attn:
Philip C. Jackson

      

      SECTION
9.04. Reimbursement of
Bank. The
Borrower hereby agrees, upon request, to reimburse the Bank for all of the
reasonable out-of-pocket expenses, including counsel fees, incurred by the Bank
in connection with the preparation and execution of the Loan
Documents.

      

      SECTION
9.05. Successors. This
Agreement shall be binding upon and inure to the benefit of the Borrower and the
Bank and their respective successors and assigns, except that neither party may
assign or transfer its rights hereunder without the prior written consent of the
other party.

      

      SECTION
9.06. Construction. This
Agreement, and the rights and obligations of the parties hereunder, shall be
governed by, and construed and interpreted in accordance with, the domestic
internal laws of the Commonwealth of Pennsylvania without regard to its rules
pertaining to conflict of laws. The Section headings contained in this Agreement
are for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      SECTION
9.07. Severability. Any
provision contained in this Agreement which is prohibited or unenforceable in
any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.

      

      SECTION
9.08. Counterparts. This
Agreement may be executed in any number of counterparts with the same effect as
if the signatures thereto and hereto were upon the same instrument, but all of
such counterparts taken together shall be deemed to constitute one and the same
instrument.

      

      SECTION
9.09. Entire
Agreement. The Loan Documents represent the entire agreement between the
Bank and the Borrower with respect to the financing transactions to which they
relate, and cannot be changed or amended except by an agreement in writing
signed by the party against whom enforcement of the change or amendment is
sought.

      

      IN
WITNESS WHEREOF, the undersigned have caused this Agreement to be duly executed
and delivered as of the day and year first above written.

      

      

      
        	 
      	
                EMBASSY
      BANCORP, INC.

              	 
      
	 
      	 
      	 
      	 
      
	 
      	
                By:

              	
                /s/ David M. Lobach

              	 
      
	 
      	
                Name:

              	
                David
      M. Lobach

              	 
      
	 
      	
                Title:

              	
                Chairman
      and CEO

              	 
      
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      
	 
      	
                UNIVEST
      NATIONAL BANK AND TRUST CO.

              	 
      
	 
      	 
      	 
      	 
      
	 
      	
                By:

              	
                /s/ Philip C. Jackson

              	 
      
	 
      	
                Name:

              	
                Philip
      C. Jackson

              	 
      
	 
      	
                Title:

              	
                Market
      President

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00166-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00166-of-00352.parquet"}]]