Document:

ex10-7.htm

    
      Exhibit
10.7

    

    AMENDMENT

    TO
EMPLOYMENT AGREEMENT

    

    AGREEMENT
made the 26th day of
December, 2007, by and between STERLING BANK, a New Jersey-chartered commercial
bank (the “Bank”), and ROBERT H. KING, an individual (the
“Executive”).

     

    WITNESSETH:

    

    WHEREAS,
the parties entered into an agreement dated January 25, 2006, relating, among
other things, to the Executive’s employment by the Bank (the “Employment
Agreement”); and

     

    WHEREAS,
the parties desire, to amend the Employment Agreement to comply with section
409A of the Internal Revenue Code of 1986, as amended (the “Code”), by executing
this document (the “Amendment”), effective as of January 25, 2006.

     

    NOW,
THEREFORE, the parties, intending to be legally bound hereby, further agree as
follows, effective as of January 25, 2006:

     

    1. Section
2(f) of the Employment Agreement is amended and restated to read as
follows;

     

    (f)           Voluntary Termination by the
Executive With Good Reason.  The Executive may resign his
employment under this Agreement for a Good Reason at any time during the
Employment Period upon thirty (30) days notice as herein set
forth.  As used in this Agreement, “Good Reason” means any of the
following, unless such circumstances are fully cured within thirty (30) days
after the Executive notifies the Bank in writing that he intends to terminate
his employment for Good Reason::

     

    (i)           any
reduction in title, a material change in reporting structure or a material
reduction in the Executive’s responsibilities or authority (including such
responsibilities and authority as the same may be increased at any time during
the Employment Period) over the operations of the Bank, which reduction or
change shall be deemed to have occurred if the Bank becomes a subsidiary of (or
integrated into) an entity that is initially controlled (determined by reference
to the voting power of its securities) by persons other than the Bank’s
shareholders immediately prior to the relevant transaction;

     

    (ii)           the
assignment to the Executive of duties inconsistent with the Executive’s title as
the President and Chief Executive Officer of the Bank, resulting in a material
negative change to the Executive in the employment relationship;

     

    (iii)           any
reassignment of the Executive that reasonably requires the Executive to move his
present principal residence referred to in Section 13, or to provide his
employment services under this Agreement at a principal office location of the
Bank that is more than 25 miles from where the Bank’s principal office is
located on the date of this Agreement;

     

     

    
      
         

      

      
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    (iv)           any
removal of the Executive from office or any material adverse change in the terms
and conditions of the Executive’s employment, except for any termination of the
Executive’s employment under the provisions of Subsections (a), (c) or
(d);

     

    (v)           any
material reduction in the Executive’s base compensation provided in Section 3(a)
or in the Executive’s incentive compensation provided in Section 3(d), unless,
in the latter case, such reduction is in accordance with the terms of any
written incentive plan approved by the Board of Directors, in each case, as in
effect on the date hereof or as the same may be increased from time to time;
provided however, that no reduction shall be deemed to occur if it occurs by
reason of any permitted action by the Bank set forth in Section 3;

     

    (vi)           any
failure of the Bank to provide the Executive with benefits at least as favorable
(in the aggregate) as those enjoyed by him under any of the pension and welfare
(including insured welfare) benefit plans in which the Executive then currently
participates, or the taking of any action that would materially reduce any of
such benefits, unless such reduction is part of a reduction applicable to all or
substantially all of the officers of the Bank covered by such
plans;

     

    (vii)           the
failure of any successor of the Bank to assume and agree to perform (or cause to
be assumed and agreed to be performed by one of its affiliated companies) the
Bank’s obligations under this Agreement, as provided in and to the extent
required by Section 14(a); or

     

    (viii)                      a
material breach of this Agreement on the part of the Bank at any relevant time,
coupled with the failure to cure the same within 30 days after receipt of a
written notice of such breach from the Executive.

     

    At the
Option of the Executive, exercisable by him within 90 days after the occurrence
of an event constituting an event of Good Reason and after the Bank has failed
to cure or otherwise fully remedy such event within 30 days following written
notice of such event by the Executive, the Executive may resign from employment
under this Agreement by a notice in writing (the “Notice of Termination”)
delivered to the Bank, whereupon the provisions of Section 4 shall
apply.  Notwithstanding the foregoing, any amounts payable upon
termination by the Executive upon the occurrence of any of the foregoing Good
Reason events shall be paid only if the Executive actually terminates employment
within two (2) years following the initial existence of such event.

     

     

    
      
         

      

      
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    2.   Section
4(a)(ii) of the Employment Agreement is amended and restated to read as
follows;

     

    (ii)           The
Executive shall also be entitled, at the Bank’s sole cost,  to
continuation of welfare benefits in which he was participating as of the date of
his termination of employment, for a period of three-years following such
termination; provided, however, that this provision shall not result in
duplication of any of such benefits as otherwise provided for
herein.  To the extent it is determined that any benefits under the
preceding sentence are taxable to the Executive, they are intended to constitute
payments made upon an involuntary termination from service and payable pursuant
to Treas. Reg. §1.409A-1(b)(9)(iii), to the maximum extent permitted by said
provision and to the extent the payment of such taxable benefits would exceed
the specified time period under Treas. Reg. §1.409A-1(b)(9)(iii), Executive
shall be paid, within thirty (30) days of the date of termination, a lump sum
amount in cash equal to the present value (determined based upon the interest
rate provided in Section 1274(b)(2)(B) of the Internal Revenue Code of 1986, as
amended (the “Code”)) of the Bank’s cost, as of the date of termination, of
otherwise providing such benefit beyond the specified time period under Treas.
Reg. §1.409A-1(b)(9)(iii).  To the extent any such benefit may not be
provided to the Executive because he is no longer an employee of the Bank, the
Bank shall pay Executive, within thirty (30) days of the date of termination, a
lump sum payment in an amount equal to the present value (using the interest
rate provided in Code Section 1274(b)(2)(B)) of 100% of the cost to the Bank,
under the applicable welfare benefit plans of the Bank, for providing such
benefits to the Executive, his spouse and eligible dependents, if any, for the
period commencing as of the first day of the first month next following the date
of termination and continuing for thirty-six months thereafter, at the cost in
effect as of the date of termination (less the Executive’s portion of the cost
for the active plans) and assuming an annual 10% increase in the amount of such
costs over the period described in this Section.

     

    3.   Section
4(a)(iii) of the Employment Agreement is amended and restated to read as
follows;

     

    (iii)           In
the event that the amounts and benefits payable under this section, when added
to other amounts and benefits which may become payable to the Executive by the
Bank (the “Payments”), are such that he becomes subject to the excise tax
provisions of Code Section 4999, the 

     

     

    
      
         

      

      
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    Bank
shall pay him such additional amount or amounts (the “Gross-Up Payments”) as
will result in his retention (after the payment of all federal, state and local
excise, employment, and income taxes with respect to the Payments) of a net
amount equal to the net amount he would have retained had the initially
calculated Payments been subject only to income and employment
taxation.  For purposes of determining the amount of Gross-Up
Payments, the Executive shall be deemed to be subject to the highest marginal
federal, state, local and (if relevant) foreign tax rates.  All
calculations required to be made under this paragraph shall be made by the
Bank’s independent public accountants, subject to the right of the Executive’s
representative to review the same.  All such amounts required to be
paid shall be paid at the time any withholding may be required under applicable
law, and any additional amounts to which the Executive may be entitled shall be
paid or reimbursed no later than 15 days following confirmation of such amount
by the Bank’s independent accountants, but in no event later than the end of the
Executive’s taxable year next following the Executive’s taxable year in which
the Executive or the Bank (as the case may be) remits the related
taxes.  In the event any amounts paid hereunder by the Bank are
subsequently determined to be in excess of the amounts owed because estimates
were required or otherwise, the Executive will reimburse the Bank to correct the
error upon written notice from the Bank, together with written confirmation of
the same by the Bank’s independent accountants, as appropriate, and to pay
interest thereon at the applicable federal rate (as determined under Code
Section 1274 for the period of time such erroneous amount remained outstanding
and unreimbursed).  In the event any amounts paid hereunder by the
Bank are subsequently determined to be less than the amounts owed (or paid later
than when due) for any reason, the Bank will pay to the Executive the deficient
amount, together with (i) interest at the greater of the above-referenced rate
or the interest he may be required to pay taxing authorities, plus (ii) any
penalties assessed against him by such authorities.  Prior to its
payment to the Executive, the Bank shall be entitled to request the delivery of
proof (by calculations made by the Executive’s accountant or, in the case of tax
assessments, the Executive’s delivery of copies of such assessments) of the
underpaid amounts and any interest or penalties assessed by taxing
authorities.  The parties recognize that the actual implementation of
the provisions of this subsection are complex and agree to deal with each other
in good faith to resolve any questions or disagreements arising
hereunder.

     

    4. A new
Section 4(a)(v) is added to the Employment Agreement, reading as
follows;

     

    (v)           Any
payments made pursuant to this Section 4(a), to the extent of payments made from
the date of termination of Executive’s employment through March 15th of the
calendar year following such termination, are intended to constitute separate
payments for purposes of Treas. Reg. §1.409A-2(b)(2) and thus payable pursuant
to the “short-term deferral” rule set forth in Treas. Reg. §1.409A-1(b)(4); to
the extent such payments are 

     

     

    
      
         

      

      
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    made
following said March 15th, they are intended to constitute separate payments for
purposes of Treas. Reg. §1.409A-2(b)(2) made upon an involuntary termination
from service and payable pursuant to Treas. Reg. §1.409A-1(b)(9)(iii), to the
maximum extent permitted by said provision.  Notwithstanding the
foregoing, if the Bank determines that any other payments hereunder fail to
satisfy the distribution requirement of Code Section 409A(a)(2)(A), the payment
of such benefit shall be delayed to the minimum extent necessary so that such
payments are not subject to the provisions of Code Section
409A(a)(1).

     

    5. A new
Section 4(e) is added to the Employment Agreement, reading as
follows;

     

    (e)           Separation from
Service.  Notwithstanding anything in this Agreement to the
contrary, the receipt of any benefits under this Section 4 as a result of
Executive’s termination of employment shall be subject to satisfaction of the
condition precedent that the Executive undergo a “separation from service”
within the meaning of Treas. Reg. § 1.409A-1(h) or any successor
thereto.

     

    6. Section
17 of the Employment Agreement is deleted in its entirety and Section 18 is
renumbered accordingly.

     

    

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

     

    STERLING
BANK

    

    By:  /s/ R. Scott
Horner                                                                           

    

    Date:   December
26, 2007

    

    

    [CORPORATE
SEAL]                                                         Attest:  /s/ Dale F.
Braun

    

    Date:   December
26, 2007

    

    

    /s/ Robert H.
King                                                                           

    Robert H.
King

    Date:   December
26, 2007

     

     

     

     

    5ex4-1.htm

     

     

     

    EXHIBIT
4.1

    

    

      
        

      

    

    CREDIT
AGREEMENT

    

    dated as
of

    

    March 28,
2008

    

    between

    

    NATIONAL
PENN BANCSHARES, INC.

    

    and

    

    KEYBANK
NATIONAL ASSOCIATION

    

    

    

    

    

    
      
        

      

      
         

         

         

         

         

         

        
          
          

        

        
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    This
CREDIT AGREEMENT is made and entered into as of March 28, 2008 between NATIONAL
PENN BANCSHARES, INC., a Pennsylvania corporation and KEYBANK NATIONAL
ASSOCIATION, a national banking association.

    

    Recitals:

    

    A. 
The Borrower desires to borrow funds under this Agreement for general corporate
purposes, including, but not limited to, injection of capital into the Bank
Subsidiaries, refinancing existing debt, and share repurchases.

    

    B.  
The Lender is willing to make loans under the terms and conditions set forth in
this Agreement.

    

    Agreements:

    

    NOW,
THEREFORE, the parties hereto agree as follows:

    

    

    ARTICLE
1

    

    DEFINITIONS

    

     
Section 1.01.  Defined
Terms.  As used in this Agreement, the following terms have the
meanings specified below:

    

    “Adjusted LIBO Rate” means,
with respect to any Eurodollar Borrowing for any Interest Period, an interest
rate per annum (rounded upwards, if necessary, to the next 1/16 of 1%) equal to
(a) the LIBO Rate for such Interest Period multiplied by (b) the Statutory
Reserve Adjustment.

    

    “Affiliate” means, with
respect to a specified Person, another Person that directly, or indirectly
through one or more intermediaries, Controls, or is Controlled by or under
common Control with such specified Person.

    

    “Applicable Rate” means one
percent (1.00%).

    

    “Bank Subsidiaries” means
NATIONAL PENN BANK, a national banking association and wholly-owned Subsidiary
of the Borrower and CHRISTIANA BANK & TRUST COMPANY, a Delaware chartered
banking corporation, each being a “Bank Subsidiary”.

    

     “Base Rate” means a rate
per annum equal to the greater of (a) the Prime Rate or (b) one-half of one
percent in excess of the Federal Funds Effective Rate.

    

    “Board of Directors” means,
the Board of Directors of the Borrower or either Bank Subsidiary, as the case
may be, or any committee thereof duly authorized to act on behalf of such Board
of Directors.

    

    “Borrower” means NATIONAL PENN
BANCSHARES, INC., a Pennsylvania corporation, and its successors.

    

    “Borrowing” means Loans of the
same Interest Type made, converted or continued on the same day and, in the case
of Eurodollar Loans, as to which the same Interest Period is in
effect.

    

    “Borrowing Request” means a
request by the Borrower for a Borrowing in accordance with Section
2.03.

    

    “Business Day” means any day
that is not a Saturday, Sunday or other day on which commercial banks in
Cleveland, Ohio are authorized or required by law to remain closed; provided that, when used in
connection with a Eurodollar Loan, the term “Business Day” shall also exclude
any day on which banks are not open for dealings in dollar deposits in the
London interbank market.

    

    
      
        
        

      

      
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    “Call Report” has the meaning
set forth in Section 5.01(v).

    

    “Capital Lease Obligations” of
any Person means obligations of such Person to pay rent or other amounts under
any lease of (or other arrangement conveying the right to use) real or personal
property, or a combination thereof, which obligations are required under GAAP to
be classified and accounted for as capital leases on a balance sheet of such
Person.  The amount of such obligations will be the capitalized amount
thereof determined in accordance with GAAP.

    

    “Change in Control” means the
occurrence of any of the following:

    

    (a)           any
“person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act)
is or becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under
the Exchange Act, except that for the purposes of this clause (a) such person
shall be deemed to have “beneficial ownership” of all shares that any such
person has the right to acquire, whether such right is exercisable immediately
or only after the passage of time), directly or indirectly, of more than 20% of
either the aggregate ordinary voting power or the aggregate equity value
represented by the issued and outstanding Equity Interests in the Borrower or a
Bank Subsidiary, as the case may be;

    

    (b)           individuals
who constituted the Board of Directors of the Borrower or a Bank Subsidiary, as
the case may be, at any given time (together with any new directors whose
election by such Board of Directors or whose nomination for election by the
stockholders of the Borrower or such Bank Subsidiary, as approved by a vote of
66-2/3% of the directors of the Borrower or such Bank Subsidiary then still in
office who were either directors at such time or whose election or nomination
for election was previously so approved) cease for any reason to constitute a
majority of the Board of Directors then in office;

    

    (c)           the
adoption of a plan relating to the liquidation or dissolution of the Borrower or
a Bank Subsidiary, as the case may be; or

    

    (d)           the
merger (other than a merger permitted under the provisions of Section 6.01) or
consolidation of the Borrower or a Bank Subsidiary, as the case may be, with or
into another Person or the merger of another Person with or into the Borrower or
a Bank Subsidiary, as the case may be, or the sale of all or substantially all
the assets of the Borrower or a Bank Subsidiary, as the case may be (determined
on a Consolidated basis) to another Person, other than a merger or consolidation
transaction in which holders of Equity Interests representing 100% of the
ordinary voting power represented by the Equity Interests in the Borrower or a
Bank Subsidiary, as the case may be, immediately prior to such transaction (or
other securities into which such securities are converted as part of such merger
or consolidation transaction) own directly or indirectly at least a majority of
the ordinary voting power represented by the Equity Interests in the surviving
Person in such merger or consolidation transaction issued and outstanding
immediately after such transaction and in substantially the same proportion as
before the transaction.

    

    “Change in Law” means (a) the
adoption of any law, rule or regulation after the date of this Agreement, (b)
any change in any law, rule or regulation or in the interpretation or
application thereof by any Governmental Authority after such date or (c)
compliance by the Lender (or, for purposes of Section 2.14(b), by any lending
office of the Lender or by the Lender’s holding company) with any request,
guideline or directive (whether or not having the force of law) of any
Governmental Authority made or issued after such date.

    

    “Commitment” means the
commitment of the Lender to make Revolving Loans hereunder, expressed as an
amount representing the maximum aggregate amount of the Lender’s Exposure
hereunder, as such commitment may be reduced from time to time pursuant to
Section 2.07  The initial amount of the Lender’s Commitment is
$50,000,000.

    

    “Consolidated” means the
Borrower and its Subsidiaries, taken as a whole in accordance with
GAAP.

    

    “Control” means possession,
directly or indirectly, of the power (a) to vote 20% or more of any class of
voting securities of a Person or (b) to direct or cause the direction of the
management or policies of a Person, whether through the ownership of voting
securities, by contract or otherwise.  “Controlling” and “Controlled”
have meanings correlative thereto.

    

    
      
        
        

      

      
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    “Debt” of any Person means,
without duplication:

    

    (a)           all
obligations of such Person for borrowed money or with respect to deposits or
advances of any kind (other than unspent cash deposits held in escrow by or in
favor of such Person, or in a segregated deposit account controlled by such
Person, in each case in the ordinary course of business to secure the
performance obligations of, or damages owing from, one or more third
parties),

    

    (b)           all
obligations of such Person evidenced by bonds, debentures, notes or similar
instruments,

    

    (c)           all
obligations of such Person on which interest charges are customarily paid (other
than obligations where interest is levied only on late or past due
amounts).

    

    (d)           all
obligations of such Person under conditional sale or other title retention
agreements relating to property acquired by such Person,

    

    (e)           all
obligations of such Person in respect of the deferred purchase price of property
or services (excluding current accounts payable incurred in the ordinary course
of business),

    

    (f)           all
Debt of others secured by (or for which the holder of such Debt has an existing
right, contingent or otherwise, to be secured by) any Lien on property owned or
acquired by such Person, whether or not the Debt secured thereby has been
assumed,

    

    (g)           all
Guarantees by such Person of Debt of others,

    

    (h)           all
Capital Lease Obligations of such Person,

    

    (i)           all
unpaid obligations, contingent or otherwise, of such Person as an account party
in respect of letters of credit and letters of guaranty (other than cash
collateralized letters of credit to secure the performance of workers’
compensation, unemployment insurance, other social security laws or regulations,
bids, trade contracts, leases, environmental and other statutory obligations,
surety and appeal bonds, performance bonds and other obligations of a like
nature, in each case, obtained in the ordinary course of business),

    

    (j)           all
capital stock of such Person which is required to be redeemed or is redeemable
at the option of the holder if certain events or conditions occur or exist or
otherwise, and

    

    (k)           all
obligations, contingent or otherwise, of such Person in respect of bankers’
acceptances.

    

    The Debt of any Person shall include
the Debt of any other entity (including any partnership in which such Person is
a general partner) to the extent that such Person is liable therefor as a result
of such Person’s ownership interest in or other relationship with such entity,
except to the extent that contractual provisions binding on the holder of such
Debt provide that such Person is not liable therefor.

    

    Notwithstanding the foregoing, in
connection with the purchase by the Borrower or any Material Subsidiary of any
business, the term “Debt” will exclude post-closing payment adjustments to which
the seller may become entitled to the extent such payment is determined by a
final closing; provided,
however, that, at the time of closing, the amount of any such payment is
not determinable and, to the extent such payment thereafter becomes fixed and
determined, the amount is paid when due.

    

    “Default” means any event or
condition which constitutes an Event of Default or which upon notice, lapse of
time or both would, unless cured or waived, become an Event of
Default.

    

    “Dollars” or “$” refers to lawful money of
the United States.

    

    
      
        
        

      

      
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    “Domestic Subsidiary” means
each Subsidiary that is not a Foreign Subsidiary.

    

    “Effective Date” means the
date on which each of the conditions specified in Section 4.01 is satisfied (or
waived in accordance with Section 8.02).

    

    “Environmental Laws” means all
laws, rules, regulations, codes, ordinances, orders, decrees, judgments,
injunctions, notices or binding agreements issued, promulgated or entered into
by any Governmental Authority, relating in any way to the environment, the
preservation or reclamation of natural resources, the management, release or
threatened release of any Hazardous Material or the effects of the environment
on health and safety.

    

    “Equity Interests” means (i)
shares of capital stock, partnership interests, membership interests in a
limited liability company, beneficial interests in a trust or other equity
ownership interests in a Person or (ii) any warrants, options or other rights to
acquire such shares or interests.

    

    “ERISA” means the Employee
Retirement Income Security Act of 1974, as amended from time to
time.

    

    “ERISA Affiliate” means any
trade or business (whether or not incorporated) that, together with the Borrower
or any Subsidiary, is treated as a single employer under Section 4 14(b) or (c)
of the Internal Revenue Code or, solely for purposes of Section 302 of ERISA and
Section 412 of the Internal Revenue Code, is treated as a single employer under
Section 414 of the Internal Revenue Code.

    

    “ERISA Event” means (a) any
“reportable event”, as defined in Section 4043 of ERISA or the regulations
issued thereunder with respect to a Plan (except an event for which the 30-day
notice period is waived); (b) the existence with respect to any Plan of an
“accumulated funding deficiency” (as defined in Section 412 of the Internal
Revenue Code or Section 302 of ERISA), whether or not waived; (c) the filing
pursuant to Section 4 12(d) of the Internal Revenue Code or Section 303(d) of
ERISA of an application for a waiver of the minimum funding standard with
respect to any Plan; (d) the incurrence by the Borrower or any ERISA Affiliate
of any liability under Title IV of ERISA with respect to the termination of any
Plan; (e) the receipt by the Borrower or any ERISA Affiliate from the PBGC or a
plan administrator of any notice relating to an intention to terminate any Plan
or Plans or to appoint a trustee to administer any Plan; (f) the incurrence by
the Borrower or any ERISA Affiliate of any liability with respect to withdrawal
or partial withdrawal from any Plan or Multiemployer Plan; or (g) the receipt by
the Borrower or any ERISA Affiliate of any notice, or the receipt by any
Multiemployer Plan from the Borrower or any ERISA Affiliate of any notice,
concerning the imposition of Withdrawal Liability or a determination that a
Multiemployer Plan is, or is expected to be, insolvent or in reorganization,
within the meaning of Title IV of ERISA.

    

    “Eurodollar”, when used with
respect to any Loan or Borrowing, refers to whether such Loan, or the Loans
comprising such Borrowing, are bearing interest at a rate determined by
reference to the Adjusted LIBO Rate.

    

    “Events of Default” has the
meaning specified in Article 7.

    

    “Exchange Act” means the
Securities Exchange Act of 1934, as amended from time to time.

    

    “Excluded Taxes” means, with
respect to the Lender or other recipient of a payment made by or on account of
any obligation of the Borrower hereunder:

    

    (a)           income
or franchise taxes imposed on (or measured by) its net income, receipts, capital
or net worth by the United States (or any jurisdiction within the United States,
except to the extent that such jurisdiction within the United States imposes
such taxes solely in connection with the Lender Party’s enforcement of its
rights or exercise of its remedies under the Loan Documents), or by the
jurisdiction under the laws of which such recipient is organized or in which its
principal office is located or in the case of the Lender, in which its
applicable lending office is located; and

    

    (b)           any
branch profits taxes imposed by the United States or any similar tax imposed by
any other jurisdiction described in clause (a) above.

    

    “Exposure” means, the sum of
the aggregate outstanding principal amount of the Lender’s Revolving
Loans.

     

    
      
        
        

      

      
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    “FDIC” means the Federal
Deposit Insurance Corporation.

    

    “Federal Funds Effective Rate”
means, for any day, the weighted average (rounded upwards, if necessary,
to the next 1/100 of 1%) of the rates on overnight Federal funds transactions
with members of the Federal Reserve System arranged by Federal funds brokers, as
published on the next succeeding Business Day by the Federal Reserve Bank of
Cleveland, or, if such rate is not so published on such Business Day, the
average (rounded upwards, if necessary, to the next 1/100 of 1%) of the
quotations for such day for such transactions received by the Lender from three
Federal funds brokers of recognized standing selected by it.

    

    “Federal Reserve Board” means
the Board of Governors of the Federal Reserve System of the United
States.

    

    “Financial Officer” means the
chief financial officer, treasurer, any assistant treasurer, the controller or
any assistant controller of the Borrower.

    

    “Financing Transactions” means
the execution, delivery and performance by the Borrower of the Loan Documents to
which it is to be a party, the borrowing of Loans, the use of the proceeds
thereof.

    

    “Fiscal Quarter” means a
fiscal quarter of the Borrower.

    

    “Fiscal Year” means a fiscal
year of the Borrower.

    

    “Foreign Subsidiary” means a
Subsidiary (which may be a corporation, limited liability company, partnership
or other legal entity) organized under the laws of a jurisdiction outside the
United States, and conducting substantially all its operations outside the
United States.

    

    “GAAP” means generally
accepted accounting principles as in effect from time to time in the United
States, applied on a basis consistent (except for changes concurred in by the
Borrower’s independent public accountants) with the most recent audited
Consolidated financial statements of the Borrower and its Consolidated
Subsidiaries delivered to the Lender.

    

    “Governmental Authority” means
the government of the United States, any other nation or any political
subdivision thereof, whether state or local, and any agency, authority,
instrumentality, regulatory body, court, central bank or other entity exercising
executive, legislative, judicial, taxing, regulatory or administrative powers or
functions of or pertaining to government.

    

    “Guarantee” by any Person (the
“guarantor”) means any obligation, contingent or otherwise, of the guarantor
guaranteeing or having the economic effect of guaranteeing any Debt or other
debt-like obligations of any other Person (the “primary obligor”) in any
manner, whether directly or indirectly, and including any obligation of the
guarantor, direct or indirect, (a) to purchase or pay (or advance or supply
funds for the purchase or payment of) such Debt or other obligation or to
purchase (or advance or supply funds for the purchase of) any security for the
payment thereof, (b) to purchase or lease property, securities or services for
the purpose of assuring the owner of such Debt or other obligation of the
payment thereof, (c) to maintain working capital, equity capital or any other
financial statement condition or liquidity of the primary obligor so as to
enable the primary obligor to pay such Debt or other obligation or (d) as an
account party in respect of any letter of credit or letter of guaranty issued to
support such Debt or other obligation; provided that the term
“Guarantee” shall not include endorsements for collection or deposit in the
ordinary course of business.

    

    “Hazardous Materials” means
all explosive or radioactive substances or wastes and all hazardous or toxic
substances, wastes or other pollutants, including petroleum or petroleum
distillates, asbestos or asbestos-containing materials, polychlorinated
biphenyls, radon gas, infectious or medical wastes and all other substances or
wastes of any nature regulated pursuant to any Environmental Law.

    

    “Indemnified Taxes” means all
Taxes except Excluded Taxes.

     

    
      
        
        

      

      
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    “Interest Election” means an
election by the Borrower to change or continue the Interest Type of a Borrowing
in accordance with Section 2.06.

    

    “Interest Payment Date” means
(a) with respect to any Base Rate Loan, the last day of each calendar month and
(b) with respect to any Eurodollar Loan, the last day of the Interest Period
applicable to the Borrowing of which such Loan is a part.

    

    “Interest Period” means, with
respect to any Eurodollar Borrowing, the period beginning on the date of such
Borrowing and ending on the numerically corresponding day in the calendar month
that is one, two or three months thereafter, as the Borrower may
elect;  provided
that (a) if any Interest Period would end on a day other than a Business
Day, such Interest Period shall be extended to the next succeeding Business Day
unless such next succeeding Business Day would fall in the next calendar month,
in which case such Interest Period shall end on the next preceding Business Day
and (b) any Interest Period that commences on the last Business Day of a
calendar month (or on a day for which there is no numerically corresponding day
in the last calendar month of such Interest Period) shall end on the last
Business Day of the last calendar month of such Interest Period.  For
purposes hereof, the date of a Borrowing initially shall be the date on which
such Borrowing is made and thereafter shall be deemed to be the effective date
of the most recent conversion or continuation of such Borrowing.

    

    “Interest Type”, when used
with respect to any Loan or Borrowing, refers to whether the rate of interest on
such Loan, or on the Loans comprising such Borrowing, is determined by reference
to the Adjusted LIBO Rate or the Base Rate.

    

    “Internal Revenue Code” means
the Internal Revenue Code of 1986, as amended from time to time.

    

    “Lender Affiliate” means, (a)
with respect to the Lender, (i) an Affiliate of the Lender or (ii) any entity
(whether a corporation, partnership, trust or otherwise) that is engaged in
making, purchasing, holding or otherwise investing in bank loans and similar
extensions of credit in the ordinary course of its business and is administered
or managed by the Lender or an Affiliate of the Lender and (b) with respect to
the Lender that is a fund which invests in bank loans and similar extensions of
credit, any other fund that invests in bank loans and similar extensions of
credit and is managed by the same investment advisor as the Lender or by an
Affiliate of such investment advisor.

    

    “Lender” means KeyBank
National Association, a national banking association, its successors and
assigns.

    

    “LIBO Rate” means, with
respect to any Eurodollar Borrowing for any Interest Period, the per annum rate
of interest, determined by the Lender in accordance with its usual procedures
(which determination shall be conclusive and binding absent manifest error) as
of approximately 11:00 A.M. (London time) two (2) Business Days prior to the
beginning of such Interest Period pertaining to such Eurodollar Borrowing,
appearing on Reuters Screen LIBOR01 Page (or any successor to or substitute page
of such Service, or any successor to or substitute for such Service providing
rate quotations comparable to those currently provided on such page of such
Service, as determined by the Lender from time to time for purposes of providing
quotations of interest rates applicable to dollar deposits in the London
interbank market) as the rate in the London interbank market for dollar deposits
in immediately available funds with a maturity comparable to such Interest
Period.  In the event that such a rate quotation is not available for
any reason, then the rate shall be the rate, determined by the Lender as of
approximately 11:00 A.M. (London time) two (2) Business Days prior to the
beginning of such Interest Period pertaining to such Eurodollar Borrowing, to be
the average (rounded upwards, if necessary, to the nearest one sixteenth of one
percent (1/16th of 1%)) of the per annum rates of interest at which dollar
deposits in immediately available funds, approximately equal in principal amount
to such Eurodollar Borrowing and for a maturity comparable to the Interest
Period, are offered to KeyBank National Association by prime banks in the London
interbank market.

    

    “Lien” means, with respect to
any asset, (a) any mortgage, deed of trust, lien, pledge, hypothecation,
encumbrance, charge or security interest in, on or of such asset, (b) the
interest of a vendor or a lessor under any conditional sale agreement, capital
lease or title retention agreement (or any financing lease having substantially
the same economic effect as any of the foregoing) relating to such asset and (c)
in the case of securities, any purchase option, call or similar right of a third
party with respect to such securities.

     

    
      
        
        

      

      
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    “Loan Documents” means this
Agreement, any promissory note issued by the Borrower pursuant to Section
2.08(e) and any certificate required to be delivered by the Borrower pursuant to
Article 2 or Article 5.

    

    “Loan Loss Reserve” means the
sum of (i) valuation allowances on mortgage loans, plus (ii) valuation
allowances on non-mortgage loans.

    

    “Loans” means loans made by
the Lender to the Borrower pursuant to this Agreement.

    

    “Material Adverse Effect”
means a material adverse effect on (a) the business, operations,
properties, assets, financial condition, prospects, contingent liabilities or
material agreements of the Borrower and its Subsidiaries taken as a whole, (b)
the ability of the Borrower to perform any of its obligations under any Loan
Document or (c) the rights of or benefits available to the Lender under, or the
validity or enforceability of, any Loan Document.

    

    “Maturity Date” means the
Revolving Availability Termination Date.

    

    “Multiemployer Plan” means a
multiemployer plan as defined in Section 4001(a)(3) of ERISA.

    

    “Non-Performing Assets” means
the sum of (i) all loans classified as past due 90 days or more and still
accruing interest; (ii) all loans classified as “non-accrual” and no longer
accruing interest; (iii) all loans classified as “restructured loans and
leases”; and (iv) all other “non-performing assets”, including OREO and
“repossessed property”, as reported in the then most recent Call
Report.

    

    “Non-Performing Loans” means
the sum of (i) all loans classified as past due 90 days or more and still
accruing interest; and (ii) all loans classified as “non-accrual” and no longer
accruing interest; (iii) all loans classified as “restructured loans and
leases”, as reported in the then most recent Call Report.

     

    “Ordinary Course Debt” means
Debt incurred by the Borrower or a Subsidiary of the Borrower from time to time
in wholesale funding markets available to the Borrower or a Subsidiary of the
Borrower, including negotiable certificates of deposit, broker certificates of
deposit, commercial paper, eurodollar deposits, bank notes, federal funds,
interest rate swaps, trust preferred securities, or repurchase
transactions.

    

    “OREO” means assets classified as
“other real estate owned” as reported in the then most recent Call
Report.

    

    “Other Taxes” means any and all present or
future recording, stamp, documentary, excise, transfer, sales, property or
similar taxes, charges or levies arising from any payment made under any Loan
Document or from the execution, delivery or enforcement of, or otherwise with
respect to, any Loan Document.

    

    “Participants” has the meaning
specified in Section 8.04(c).

    

    “PBGC” means the Pension
Benefit Guaranty Corporation referred to and defined in ERISA and any successor
entity performing similar functions.

     

    “Permitted Investments” means
any of the following:  (i) any investment in direct obligations of the
United States of America or any agency thereof; (ii) investments in time deposit
accounts, certificates of deposit and money market deposits maturing within 180
days of the date of acquisition thereof issued by the Lender or a bank or trust
company which is organized under the laws of the United States of America, any
State thereof or any foreign country recognized by the United States of America,
and which bank or trust company has capital, surplus and undivided profits
aggregating in excess of $50,000,000 (or the foreign currency equivalent
thereof) and whose long-term debt is rated “A” (or such similar equivalent
rating) or higher by at least one nationally recognized statistical rating
organization (as defined in Rule 436 under the Exchange Act) or any money market
fund sponsored by a registered broker dealer or mutual fund distributor; (iii)
repurchase obligations with a term of not more than 30 days for underlying
securities of the types described in clause (i) above entered into with the
Lender or a bank meeting the qualifications described in clause (ii) above; (iv)
investments in commercial paper, maturing not more than 90 days after the date
of acquisition, issued by a corporation (other than an Affiliate of the
Borrower) organized and in existence under the laws of the United States of
America or any foreign country recognized by the United States of America with a
rating at the times as of which any investment therein is made of “P-l” (or
higher) by Moody’s or “A-1” (or higher) by S&P; (v) investments in
securities with maturities of six months or less from the date of acquisition
issued or fully guaranteed by any state, commonwealth or territory of the United
States of America, or by any political subdivision or taxing authority thereof,
and rated at least “A” by S&P or “A” by Moody’s; (vi) overnight investments
with banks rated “B” or better by Fitch, Inc.; (vii) in the case of a Subsidiary
that is a Foreign Subsidiary, investments of the type and maturity described in
clauses (i) through (vi) above of foreign obligors, which investments or
obligors (or the parents of such obligors) have ratings described in such
clauses or equivalent ratings from comparable foreign rating agencies; and
(viii) deposits in foreign financial institutions not meeting the standards set
forth in clause (ii) above, to the extent that such deposits do not at any time
exceed $10,000,000 in the aggregate.

     

    
      
        
        

      

      
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    “Permitted Liens”
means:

    

    (a)           Liens
imposed by law for taxes that are not yet due or are being contested in
compliance with Section 5.04;

    

    (b)           carriers’,
warehousemen’s, mechanics’, materialmen’s, repairmen’s and other like Liens
imposed by law, arising in the ordinary course of business and securing
obligations that are not overdue by more than 30 days or are being contested in
compliance with Section 5.04;

    

    (c)           pledges
and deposits made in the ordinary course of business in compliance with workers’
compensation, unemployment insurance and other social security laws or
regulations (including, without limitation, deposits made in the ordinary course
of business to cash collateralize letters of credit described in the
parenthetical in clause (1) of the definition of “Debt”);

    

    (d)           deposits
to secure the performance of bids, trade contracts, leases, statutory
obligations, surety and appeal bonds, performance bonds and other obligations of
a like nature, and Liens imposed by statutory or common law relating to banker’s
liens or rights of setoff or similar rights relating to deposit accounts, in
each case in the ordinary course of business;

    

    (e)           Liens
arising in the ordinary course of business in favor of issuers of documentary
letters of credit;

    

    (f)           judgment
liens in respect of judgments that do not constitute an Event of Default under
clause (k) of Article 7; and

    

    (g)           easements,
zoning restrictions, rights-of-way, licenses, reservations, minor irregularities
of title and similar encumbrances on real property imposed by law or arising in
the ordinary course of business that do not secure any monetary obligation and
do not materially detract from the value of the affected property or interfere
with the ordinary conduct of business of the Borrower or any Material
Subsidiary;

    

    provided that, except as
provided in clause (c), above, the term “Permitted Liens” shall not include any
Lien that secures Debt.

    

    “Person” means any natural
person, corporation, limited liability company, trust, joint venture,
association, company, partnership, Governmental Authority or other
entity.

    

    “Plan” means any employee
pension benefit plan (except a Multiemployer Plan) subject to the provisions of
Title IV of ERISA or Section 412 of the Internal Revenue Code or Section 302 of
ERISA, and in respect of which the Borrower or any ERISA Affiliate is (or, if
such plan were terminated, would under Section 4069 of ERISA be deemed to be) a
“contributing sponsor” as defined in Section 400 l(a)(13) of ERISA.

    

    “Prevailing Eastern Time”
means “eastern standard time” as defined in 15 USC §263 as modified by 15
USC §260a.

    

    “Prime Rate” means, for any
day, the rate of interest per annum then most recently publicly announced by
KeyBank National Association as its “prime” rate (or equivalent rate otherwise
named) in effect at its principal office in Cleveland, Ohio, which prime rate is
not necessarily the lowest rate of interest charged by KeyBank National
Association to commercial borrowers.  Each change in the Prime Rate
will be effective for purposes hereof from and including the date such change is
publicly announced as being effective.

     

    
      
        
        

      

      
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    “Regulation U” means
Regulation U of the Board of Governors of the Federal Reserve System, as in
effect from time to time.

    

    “Related Parties” means, with
respect to any specified Person, such Person’s Affiliates and the respective
directors, officers, employees, agents and advisors of such Person and its
Affiliates.

    

    “Restricted Payment” means any
dividend or other distribution (whether in cash, securities or other property)
with respect to any Equity Interest in the Borrower, or any payment (whether in
cash, securities or other property) or incurrence of an obligation by the
Borrower or any of its Subsidiaries, including any sinking fund or similar
deposit, on account of the purchase, redemption, retirement, acquisition,
cancellation or termination of any Equity Interest in the Borrower.

    

    “Return on Average Assets”
means, return on average assets as defined by regulatory agencies having
jurisdiction over each Bank Subsidiary or in guidelines published by the Federal
Reserve Board or other applicable regulatory agency.

    

    “Revolving Availability” means
on any date an amount equal to the Commitment Amount on such date, minus the
Total Outstanding Amount on such date.

    

    “Revolving Availability Period”
means the period from and including the Effective Date to but excluding
the Revolving Availability Termination Date (or, if earlier, the date on which
the outstanding Commitment terminates).

    

    “Revolving Availability Termination
Date” means March 27, 2009 (or if such date is not a Business Day with
respect to Eurodollar Loans, the next preceding day that is a Business Day with
respect to Eurodollar Loans).

    

    “Revolving Loan” means a Loan
made pursuant to Section 2.02.

    

    “SEC” means the United States
Securities and Exchange Commission.

    

    “Statutory Reserve Adjustment”
means a fraction (expressed as a decimal), the numerator of which is the
number one and the denominator of which is the number one minus the aggregate of
the maximum reserve percentages (including any marginal, special, emergency or
supplemental reserves) expressed as a decimal established by the Federal Reserve
Board to which the Lender is subject with respect to eurocurrency funding
(currently referred to as “Eurocurrency Liabilities” in Regulation D of the
Federal Reserve Board).  Such reserve percentages will include those
imposed pursuant to such Regulation D.  Eurodollar Loans will be
deemed to constitute eurocurrency funding and to be subject to such reserve
requirements without benefit of or credit for proration, exemptions or offsets
that may be available from time to time to the Lender under such Regulation D or
any comparable regulation.  The Statutory Reserve Adjustment will be
adjusted automatically on and as of the effective date of any change in any
applicable reserve percentage.

    

    “subsidiary” means, with
respect to any Person (the “parent”) at any date, (a) any
corporation, limited liability company, partnership or other entity the accounts
of which would be consolidated with those of the parent in the parent’s
consolidated financial statements if such financial statements were prepared in
accordance with GAAP as of such date and (b) any other corporation, limited
liability company, partnership or other entity (i) of which securities or other
ownership interests (x) representing more than 50% of the ordinary voting power
or, in the case of a partnership, more than 50% of the general partnership
voting interests or (y) otherwise having ordinary voting power to elect a
majority of the board of directors or other persons performing similar
functions, are, as of such date, owned, controlled or held, or (ii) that is
otherwise Controlled (pursuant to clause (b) of the definition of “Control”) as
of such date, by the parent and/or one or more of its subsidiaries.

    

    “Subsidiary” means any
subsidiary of the Borrower.

     

    
      
        
        

      

      
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    “Taxes” means any and all
present or future taxes, levies, imposts, duties, deductions, charges or
withholdings imposed by any Governmental Authority.

    

    “Total Loans” means the total
loans and leases, net of unearned income, as set forth on Schedule RC-C of the
most recent Call Report.

    

    “Total Outstanding Amount”
means, at any date, the aggregate Exposure of the Lender at such
date.

    

    “USA Patriot Act” means the
Uniting and Strengthening America by Providing Appropriate Tools Required to
Intercept and Obstruct Terrorism (USA PATRIOT Act) Act of 2001.

    

    “United States” means the
United States of America.

    

    “Withdrawal Liability” means
liability to a Multiemployer Plan as a result of a complete or partial
withdrawal from such Multiemployer Plan, as such terms are defined in Part I of
Subtitle E of Title IV of ERISA.

    

    Section 1.02.  Classification of Loans and
Borrowings.  For purposes of this Agreement.  Loans
and Borrowings may be classified by Interest Type (e.g., a “Eurodollar Loan” or
a “Eurodollar Borrowing”).

    

    Section 1.03.  Terms
Generally.  The definitions of terms herein (including those
incorporated by reference to another document) apply equally to the singular and
plural forms of the terms defined.  Whenever the context may require,
any pronoun includes the corresponding masculine, feminine and neuter
forms.  The words “include”, “includes” and “including” shall be deemed to
be followed by the phrase “without
limitation”.  The word “will” shall be construed to
have the same meaning and effect as the word “shall”.  Unless the
context requires otherwise, (a) any definition of or reference to any agreement,
instrument or other document herein shall be construed as referring to such
agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (b) any reference
herein to any Person shall be construed to include such Person’s successors and
assigns, (c) the words “herein”, “hereof’ and “hereunder”, and words of similar
import, shall be construed to refer to this Agreement in its entirety and not to
any particular provision hereof, (d) all references herein to Articles,
Sections, Exhibits and Schedules shall be construed to refer to Articles and
Sections of, and Exhibits and Schedules to, this Agreement and (e) the word
“property” shall be construed to refer to any and all tangible and intangible
assets and properties, including cash, securities, accounts and contract
rights.

    

    Section 1.04.  Accounting Terms; Changes in
GAAP.  Except as otherwise expressly provided herein, all terms
of an accounting or financial nature shall be construed in accordance with GAAP
as in effect from time to time; provided that, if the
Borrower notifies the Lender that the Borrower requests an amendment of any
provision hereof to eliminate the effect of any change occurring after the date
hereof in GAAP or in the application thereof (or if the Lender notifies the
Borrower requesting an amendment of any provision hereof for such purpose),
regardless of whether such notice is given before or after such change in GAAP
or in the application thereof, then such provision shall be applied on the basis
of GAAP as in effect and applied immediately before such change shall have
become effective until such notice shall have been withdrawn or such provision
amended in accordance herewith.

    

    

    ARTICLE
2

    

    THE
CREDITS

    

    Section 2.01.  Commitment.  
Subject to the terms and conditions set forth herein, the Lender agrees to make
Revolving Loans to the Borrower from time to time during the Revolving
Availability Period in an aggregate principal amount that will not at any time
result in the Total Outstanding Amount exceeding the Commitment then in
effect.  Within the foregoing limit and subject to the terms and
conditions set forth herein, the Borrower may borrow, prepay and reborrow
Revolving Loans.

    

    Section 2.02.  Revolving
Loans.  (a) Each Revolving Loan shall be made as part of a
Borrowing consisting of Loans of the same Interest Type made by the Lender, as
the Borrower may request (subject to Section 2.13) in accordance
herewith.  The Lender at its option may make any Eurodollar Loan by
causing any domestic or foreign branch or Affiliate of the Lender to fund such
Loan.  Any exercise of such option shall not affect the Borrower’s
obligation to repay such Loan as provided herein.

     

    
      
        
        

      

      
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    (b)           At
the beginning of each Interest Period for any Eurodollar Borrowing, the
aggregate amount of such Borrowing shall be an integral multiple of $500,000 and
not less than $1,000,000.  When each Base Rate Borrowing is made, the
aggregate amount of such Borrowing shall be an integral multiple of $500,000 and
not less than $1,000,000; provided that a Base Rate
Borrowing may be in an aggregate amount that is equal to the entire unused
balance of the Commitment.  Borrowings of more than one Interest Type
may be outstanding at the same time; provided that there shall not
at any time be more than a total of four Eurodollar Borrowings
outstanding.

    

    (c)           Notwithstanding
any other provision hereof, the Borrower will not be entitled to request, or to
elect to convert or continue, any Eurodollar Borrowing if the Interest Period
requested with respect thereto would end after the Revolving Availability
Termination Date.

    

    Section 2.03.  Requests to Borrow Revolving
Loans.  To request a Revolving Borrowing, the Borrower shall
notify the Lender of such request by telephone (a) in the case of a Eurodollar
Borrowing, not later than 11:00 a.m., Prevailing Eastern Time, three Business
Days before the date of the proposed Borrowing or (b) in the case of a Base Rate
Borrowing, not later than 11:00 a.m., Prevailing Eastern Time, on the date of
the proposed Borrowing.  Each such telephonic Borrowing Request shall
be irrevocable and shall be confirmed promptly by hand delivery or telecopy to
the Lender of a written Borrowing Request in a form approved by the Lender and
signed by the Borrower.  Each such telephonic and written Borrowing
Request shall specify the following information in compliance with Section
2.02:

    

    (i)           the
aggregate amount of such Borrowing;

    

    (ii)           the
date of such Borrowing, which shall be a Business Day;

    

    (iii)           whether
such Borrowing is to be a Base Rate Borrowing or a Eurodollar
Borrowing;

    

    (iv)           in
the case of a Eurodollar Borrowing, the initial Interest Period to be applicable
thereto, which shall be a period contemplated by the definition of “Interest
Period”; and

    

    (v)           the
location and number of the Borrower’s account to which funds are to be
disbursed, which shall comply with the requirements of Section
2.05.

    

    If no election as to the Interest Type
of a Borrowing is specified, the requested Borrowing will be a Base Rate
Borrowing.  If no Interest Period with respect to a requested
Eurodollar Borrowing is specified, the Borrower will be deemed to have selected
an Interest Period of one month’s duration.

    

    Section 2.04.  Reserved.

    

    Section 2.05.  Funding of Revolving Loans.
The Lender making a Revolving Loan hereunder shall credit the principal
amount thereof in immediately available funds, by 1:00 p.m., Prevailing Eastern
Time, on the proposed date of such Loan, to an account of the Borrower
maintained with the Lender in Cleveland, Ohio and designated by the Borrower in
the applicable Borrowing Request.

    

    

    Section 2.06.  Interest
Elections.  (a) Each Borrowing of Revolving Loans initially
shall be of the Interest Type specified in the applicable Borrowing Request and,
in the case of a Eurodollar Borrowing, shall have an initial Interest Period as
specified in such Borrowing Request.  Thereafter, the Borrower may
elect to convert such Borrowing to a different Interest Type or, in the case of
a Eurodollar Borrowing, to continue such Borrowing for one or more additional
Interest Periods, all as provided in this Section.  The Borrower may
elect different options with respect to different portions of the affected
Borrowing, and the Loans comprising each such portion shall be considered a
separate Borrowing.

     

    
      
        
        

      

      
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    (b)           To
make an election pursuant to this Section, the Borrower shall notify the Lender
thereof by telephone by the time that a Borrowing Request would be required
under Section 2.03 if the Borrower were requesting that a Borrowing of the
Interest Type resulting from such election be made on the effective date of such
election.  Each such telephonic Interest Election shall be irrevocable
and shall be confirmed promptly by hand delivery, telecopy or e-mail
transmission to the Lender of a written Interest Election in a form approved by
the Lender and signed by the Borrower.

    

    (c)           Each
telephonic and written Interest Election shall specify the following information
in compliance with Section 2.02:

    

    (i)           the
Borrowing to which such Interest Election applies and, if different options are
being elected with respect to different portions thereof, the portions thereof
to be allocated to each resulting Borrowing (in which case the information to be
specified pursuant to clauses (iii) and (iv) below shall be specified for each
resulting Borrowing);

    

    (ii)           the
effective date of the election made pursuant to such Interest Election, which
shall be a Business Day;

    

    (iii)           whether
the resulting Borrowing is to be a Base Rate Borrowing or a Eurodollar
Borrowing; and

    

    (iv)           if
the resulting Borrowing is to be a Eurodollar Borrowing, the Interest Period to
be applicable thereto after giving effect to such election, which shall be a
period contemplated by the definition of “Interest Period”.

    

    If an Interest Election requests a
Eurodollar Borrowing but does not specify an Interest Period, the Borrower will
be deemed to have selected an Interest Period of one month’s
duration.

    

    (d)           If
the Borrower fails to deliver a timely Interest Election with respect to a
Eurodollar Borrowing before the end of an Interest Period applicable thereto,
such Borrowing (unless repaid) will be converted to a Base Rate Borrowing at the
end of such Interest Period.  Notwithstanding any contrary provision
hereof, if an Event of Default has occurred and is continuing, and the Lender so
notifies the Borrower, then, so long as an Event of Default is continuing, (i)
no outstanding Borrowing may be converted to or continued as a Eurodollar
Borrowing and (ii) each Eurodollar Borrowing (unless repaid) will be converted
to a Base Rate Borrowing at the end of the Interest Period applicable thereto on
the date of such notice.

    

    Section 2.07.  Termination or Reduction of
Commitment.  

     

    (a)   Unless previously
terminated, the Commitment will terminate on the Revolving Availability
Termination Date.

    

    (b)          The
Borrower may at any time terminate, or from time to time reduce, the Commitment;
provided that (i) the
amount of each reduction of the Commitment shall be an integral multiple of
$500,000 and not less than $1,000,000 and (ii) the Borrower shall not terminate
or reduce the Commitment if, after giving effect thereto and to any concurrent
prepayment of Revolving Loans pursuant to Section 2.09, the total Exposure would
exceed the Commitment.

    

    (c)           The
Borrower shall notify the Lender of any election to terminate or reduce the
Commitment under Section 2.07(b), at least three Business Days before the
effective date of such termination or reduction, specifying such election and
the effective date thereof.  Each notice delivered by the Borrower
pursuant to this Section will be irrevocable; provided that any such notice
terminating the Commitment may state that it is conditioned on the effectiveness
of other credit facilities, in which case such notice may be revoked by the
Borrower (by notice to the Lender on or before the specified effective date) if
such condition is not satisfied.  Any termination or reduction of the
Commitment will be permanent.

    

    Section 2.08.  Payment at Maturity; Evidence of
Debt.  

     

    (a)     The Borrower
unconditionally promises to pay to the Lender on the Maturity Date the then
unpaid principal amount of the  Revolving Loans.

     

    
      
        
        

      

      
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    (b)           The
Lender shall maintain in accordance with its usual practice an account or
accounts evidencing the indebtedness of the Borrower to the Lender resulting
from each Loan made by the Lender, including the amounts of principal and
interest payable and paid to the Lender from time to time.

    

    (c)           The
Lender shall maintain accounts in which it shall record (i) the amount of each
Loan made hereunder, the Interest Type thereof and each Interest Period (if any)
applicable thereto, (ii) the amount of any principal or interest due and payable
or to become due and payable from the Borrower to the Lender hereunder and (iii)
the amount of any sum received by the Lender hereunder.

    

    (d)           The
entries made in the accounts maintained pursuant to subsections (b) and (c) of
this Section shall be prima
facie evidence of the existence and amounts of the obligations recorded
therein; provided that
any failure by the Lender to maintain such accounts or any error therein shall
not affect the Borrower’s obligation to repay the Loans in accordance with the
terms of this Agreement.

    

    (e)           The
Loans shall be evidenced by a promissory note in the Form of Exhibit A
hereto.

    

    Section 2.09.  Optional and Mandatory
Prepayments.  (a) Optional
Prepayments.  The Borrower will have the right at any time to
prepay any Borrowing in whole or in part, subject to the provisions of this
Section and Section 2.15.

    

    (b)           Mandatory
Prepayments.  If at any date the Total Outstanding Amount
exceeds the Commitment calculated as of such date, then not later than the next
succeeding Business Day, the Borrower shall be required to prepay the Loans in
an amount equal to such excess until the Total Outstanding Amount does not
exceed the Commitment.

    

    (c)           Allocation of
Prepayments.  Before any optional or mandatory prepayment of
Borrowings hereunder, the Borrower shall select the Borrowing or Borrowings to
be prepaid and shall specify such selection in the notice of such prepayment
pursuant to Section 2.09(f).

    

    (d)           Partial
Prepayments.  Each partial prepayment of a Borrowing shall be
in an amount that would be permitted under Section 2.02(b) for a Borrowing of
the same Interest Type, except as needed to apply fully the required amount of a
mandatory prepayment.  Each partial prepayment of a Borrowing shall be
applied ratably to the Loans included in such Borrowing.

    

    (e)           Accrued
Interest.  Each prepayment of a Borrowing shall be accompanied
by accrued interest to the extent required by Section 2.12.

    

    (f)           Notice of
Prepayments.  The Borrower shall notify the Lender by telephone
(confirmed by telecopy or e-mail transmission) of any prepayment of any
Borrowing hereunder (i) in the case of a Eurodollar Borrowing, not later than
noon, Prevailing Eastern Time, three Business Days before the date of prepayment
and (ii) in the case of a Base Rate Borrowing, not later than noon, Prevailing
Eastern Time, on the date of prepayment.  Each such notice shall be
irrevocable and shall specify the prepayment date, the principal amount of each
Borrowing or portion thereof to be prepaid and, in the case of a mandatory
prepayment, a reasonably detailed calculation of the amount of such prepayment;
provided that, if a
notice of optional prepayment is given in connection with a conditional notice
of termination of the Commitment as contemplated by Section 2.07(c), then such
notice of prepayment may be revoked if such notice of termination is revoked in
accordance with Section 2.07(c).  Promptly after it receives any such
notice, the Lender shall advise the Lender of the contents thereof.

    

    Section 2.10.  Reserved.

    

    Section 2.11.  Reserved.

    

    Section 2.12.  Interest.  

     

    (a)    The
Loans comprising each Base Rate Borrowing shall bear interest for each day at
the Base Rate.

    

    (b)           The
Loans comprising each Eurodollar Borrowing shall bear interest for each Interest
Period in effect for such Borrowing at the Adjusted LIBO Rate for such Interest
Period, plus the Applicable Rate.

     

    
      
        
        

      

      
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    (c)           Notwithstanding
the foregoing, (i) if any principal of or interest on any Loan or any fee or
other amount payable by the Borrower hereunder is not paid when due, whether at
stated maturity, upon acceleration or otherwise, such overdue amount shall bear
interest, after as well as before judgment, at a rate per annum equal to (A) in
the case of overdue principal of any Loan, 2% plus the rate that otherwise would
be applicable to such Loan as provided in the preceding subsections of this
Section or (B) in the case of any other amount, 2% plus the Base Rate; and (ii)
upon notice to the Borrower from the Lender upon and during the continuance of
an Event of Default, and continuing for so long as an Event of Default exists
(but without duplication of the interest accruing pursuant to clause (i),
above), interest on the Loans shall bear interest, after as well as before
judgment, at a rate per annum equal to 2% plus the rate that otherwise would be
applicable to such Loan as provided in the preceding subsections of this
Section.

    

    (d)           Interest
accrued on each Loan shall be payable in arrears on each Interest Payment Date
for such Loan and upon termination of the Commitment; provided that (i) interest
accrued pursuant to Section 2.12(c) shall be payable on demand, (ii) upon any
repayment of any Loan (except a prepayment of a Base Rate Revolving Loan before
the end of the Revolving Availability Period), interest accrued on the principal
amount repaid shall be payable on the date of such repayment and (iii) upon any
conversion of a Eurodollar Loan before the end of the current Interest Period
there for, interest accrued on such Loan shall be payable on the effective date
of such conversion.

    

    (e)           All
interest hereunder will be computed on the basis of a year of 360 days, except
that interest computed by reference to the Base Rate at times when the Base Rate
is based on the Prime Rate will be computed on the basis of a year of 365 days
(or 366 days in a leap year), and in each case will be payable for the actual
number of days elapsed (including the first day but excluding the last
day).  Each applicable Base Rate or Adjusted LIBO Rate shall be
determined by the Lender, and its determination thereof will be conclusive
absent manifest error.

    

    Section 2.13.  Alternate Rate of
Interest.  If before the beginning of any Interest Period for a
Eurodollar Borrowing:

    

    (i)           deposits
in dollars in the applicable amounts are not being offered to the Lender in the
London interbank market for such Interest Period; or

    

    (ii)           The
Adjusted LIBO Rate for such Interest Period will not adequately and fairly
reflect the cost to the Lender of making or maintaining such Loans for such
Interest Period;

    

    then the
Lender shall give notice thereof to the Borrower by telephone or telecopy as
promptly as practicable thereafter and, until the Lender notifies the Borrower
that the circumstances giving rise to such notice no longer exist, (i) any
interest election that requests the conversion of any Borrowing to, or
continuation of any Borrowing as, a Eurodollar Borrowing will be ineffective and
(ii) if any Borrowing Request requests a Eurodollar Borrowing, such Borrowing
will be made as a Base Rate Borrowing.

    

    Section 2.14.  Increased
Costs.  

     

    (a)    If any Change
in Law shall:

    

    (i)           impose,
modify or deem applicable any reserve, special deposit or similar requirement
against assets of, deposits with or for the account of, or credit extended by,
the Lender (except any such reserve requirement reflected in the Adjusted LIBO
Rate); or

    

    (ii)           impose
on the Lender or the London interbank market any other condition affecting this
Agreement or Eurodollar Loans made by the Lender;

    

    and the
result of any of the foregoing shall be to increase the cost to the Lender of
making or maintaining any Eurodollar Loan (or of maintaining its obligation to
make Eurodollar Loans) or to increase the cost to the Lender or to reduce any
amount received or receivable by the Lender hereunder (whether of principal,
interest or otherwise), then the Borrower shall pay to the Lender such
additional amount or amounts as will compensate it for such additional cost
incurred or reduction suffered.

     

    
      
        
        

      

      
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    (b)           If
the Lender determines that any Change in Law regarding capital requirements has
or would have the effect of reducing the rate of return on the Lender’s capital
or on the capital of the Lender’s holding company, if any, as a consequence of
this Agreement or the Loans made by the Lender, to a level below that which the
Lender or the Lender’s holding company could have achieved but for such Change
in Law (taking into consideration the Lender’s policies and the policies of the
Lender’s holding company with respect to capital adequacy), then from time to
time following receipt of the certificate referred to in subsection (c) of this
Section, the Borrower shall pay to the Lender such additional amount or amounts
as will compensate it or its holding company for any such reduction
suffered.

    

    (c)           A
certificate of the Lender setting forth the amount or amounts necessary to
compensate it or its holding company, as the case may be, as specified in
subsection (a) or (b) of this Section shall be delivered to the Borrower and
shall be conclusive absent manifest error.  Each such certificate
shall contain a representation and warranty on the part of the Lender to the
effect that the Lender has complied with its obligations pursuant to Section
2.18 hereof in an effort to eliminate or reduce such amount.  The
Borrower shall pay the Lender the amount shown as due on any such certificate
within 10 days after receipt thereof.

    

    (d)           Failure
or delay by the Lender to demand compensation pursuant to this Section will not
constitute a waiver of its right to demand such compensation; provided that the Borrower
will not be required to compensate the Lender pursuant to this Section for any
increased cost or reduction incurred more than 180 days before it notifies the
Borrower of the Change in Law giving rise to such increased cost or reduction
and of its intention to claim compensation therefor.  However, if the
Change in Law giving rise to such increased cost or reduction is retroactive,
then the 180-day period referred to above will be extended to include the period
of retroactive effect thereof.

    

    Section 2.15.  Break Funding
Payments.  If (a) any principal of any Eurodollar Loan is
repaid on a day other than the last day of an Interest Period applicable thereto
(including as a result of an Event of Default), (b) any Eurodollar Loan is
converted on a day other than the last day of an Interest Period applicable
thereto, (c) the Borrower fails to borrow, convert, continue or prepay any
Revolving Loan on the date specified in any notice delivered pursuant hereto
(regardless of whether such notice may be revoked under Section 2.09(f) and is
revoked in accordance therewith), or (d) any Eurodollar Loan is assigned on a
day other than the last day of an Interest Period applicable thereto as a result
of a request by the Borrower pursuant to Section 2.18, then the Borrower shall
compensate the Lender for its loss, cost and expense attributable to such
event.  In the case of a Eurodollar Loan, such loss, cost and expense
to the Lender shall be deemed to include an amount determined by the Lender to
be the excess, if any, of (i) the amount of interest that would have accrued on
the principal amount of such Loan had such event not occurred, at the Adjusted
LIBO Rate that would have been applicable to such Loan, for the period from the
date of such event to the end of the then current Interest Period therefor (or,
in the case of a failure to borrow, convert or continue, the Interest Period
that would have begun on the date of such failure), over (ii) the amount of
interest that would accrue on such principal amount for such period at the
interest rate which the Lender would bid were it to bid, at the beginning of
such period, for dollar deposits of a comparable amount and period from other
banks in the eurodollar market.  A certificate of the Lender setting
forth any amount or amounts that the Lender is entitled to receive pursuant to
this Section shall be delivered to the Borrower and shall be conclusive absent
manifest error.  The Borrower shall pay the Lender the amount shown as
due on any such certificate within 10 days after receipt thereof.

    

    Section 2.16.  Taxes.  

     

    (a)    All payments
by the Borrower under the Loan Documents shall be made free and clear of and
without deduction for any Indemnified Taxes or Other Taxes; provided that, if the
Borrower shall be required to deduct any Indemnified Taxes or Other Taxes from
such payments, then (i) the sum payable will be increased as necessary so that,
after all required deductions (including deductions applicable to additional
sums payable under this Section) are made, each relevant Lender Party receives
an amount equal to the sum it would have received had no such deductions been
made, (ii) the Borrower shall make such deductions and (iii) the Borrower shall
pay the full amount deducted to the relevant Governmental Authority in
accordance with applicable law.

    

    (b)           In
addition, the Borrower shall pay any Other Taxes to the relevant Governmental
Authority in accordance with applicable law.

    

    (c)           The
Borrower shall indemnify the Lender, within 10 days after written demand
therefor, for the full amount of any Indemnified Taxes or Other Taxes paid by
the Lender with respect to any payment by or obligation of the Borrower under
the Loan Documents (including indemnified Taxes or Other Taxes imposed or
asserted on or attributable to amounts payable under this Section) and any
penalties, interest and reasonable expenses arising therefrom or with respect
thereto, whether or not such Indemnified Taxes or Other Taxes were correctly or
legally imposed or asserted by the relevant Governmental Authority.  A
certificate as to the amount of any such payment delivered to the Borrower by
the Lender on its own behalf, or by the Lender on behalf of the Lender, shall be
conclusive absent manifest error.  If the Borrower has indemnified the
Lender pursuant to this Section 2.16(c).  the Lender shall take such
steps as the Borrower shall reasonably request (at the Borrower’s expense) to
assist the Borrower in recovering the Indemnified Taxes or Other Taxes and any
penalties or interest attributable thereto; provided that the Lender
shall not be required to take any action pursuant to this Section 2.17(c)
unless, in the judgment of the Lender, such action (i) would not subject the
Lender to any unreimbursed cost or expense and (ii) would not otherwise be
disadvantageous to the Lender.

     

    
      
        
        

      

      
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    (d)           As
soon as practicable after the Borrower pays any Indemnified Taxes or Other Taxes
to a Governmental Authority, the Borrower shall deliver to the Lender the
original or a certified copy of a receipt issued by such Governmental Authority
evidencing such payment, a copy of the return reporting such payment or other
evidence of such payment reasonably satisfactory to the Lender.

    

    Section 2.17.  Payments
Generally.  

     

    (a)    The Borrower
shall make each payment required to be made by it under the Loan Documents
(whether of principal, interest or fees, or amounts payable under Section 2.14,
2.15 or 2.16(c) or otherwise) before the time expressly required under the
relevant Loan Document for such payment (or, if no such time is expressly
required, before noon, Prevailing Eastern Time) on the date when due, in
immediately available funds, without set-off or counterclaim.  Any
amount received after such time on any day may, in the discretion of the Lender,
be deemed to have been received on the next succeeding Business Day for purposes
of calculating interest thereon.  All such payments shall be made to
the Lender at its offices at 127 Public Square, 6th Floor,
Cleveland, Ohio 44114.  The Lender shall distribute any such payment
received by it for the account of any other Person to the appropriate recipient
promptly alter receipt thereof.  Unless otherwise specified herein, if
any payment under any Loan Document shall be due on a day that is not a Business
Day, the date for payment will be extended to the next succeeding Business Day
and, if such payment accrues interest, interest thereon will be payable for the
period of such extension.  All payments under each Loan Document shall
be made in dollars.

    

    (b)           If
at any time insufficient funds are received by and available to the Lender to
pay fully all amounts of principal, interest and fees then due hereunder, such
funds shall be applied (i) first, to pay interest and fees then due hereunder,
and (ii) second, to pay principal then due hereunder.

    

    Section 2.18.  Lender’s Obligation to
Mitigate.  If the Lender requests compensation under Section
2.14, or if the
Borrower is required to pay any additional amount to the Lender or any
Governmental Authority for the account of the Lender pursuant to Section 2.16,
then the Lender shall use all commercially reasonable efforts to mitigate or
eliminate the amount of such compensation or additional amount, including
without limitation, by designating a different lending office for funding or
booking its Loans hereunder or by assigning its rights and obligations hereunder
to another of its offices, branches or affiliates; provided that  the
Lender shall not be required to take any action pursuant to this Section 2.18
unless, in the judgment of the Lender, such designation or assignment or other
action (i) would eliminate or reduce amounts payable pursuant to Section 2.14 or
2.16, as the case may be, in the future, (ii) would not subject the Lender to
any unreimbursed cost or expense and (iii) would not otherwise be
disadvantageous to the Lender.  The Borrower shall pay all reasonable
costs and expenses incurred by the Lender in connection with any such
designation or assignment.

    

    

    ARTICLE
3

    

    REPRESENTATIONS
AND WARRANTIES

    

    The Borrower represents and warrants to
the Lender that:

    

    Section 3.01.  Organization; Powers. Each of
the Borrower and each Bank Subsidiary is duly organized, validly existing and in
good standing under the laws of the jurisdiction of its organization, has all
requisite power and authority to carry on its business as now conducted and,
except where failures to do so, in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect, is qualified to do business in,
and is in good standing in, every jurisdiction where such qualification is
required.

     

    
      
        
        

      

      
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    Section 3.02.  Authorization;
Enforceability.   The Financing Transactions to be entered into
by the Borrower are within its corporate powers and have been duly authorized by
all necessary corporate action and, if required, stockholder or equity holder
action.  This Agreement has been duly executed and delivered by the
Borrower and constitutes, and each other Loan Document to which the Borrower is
to be a party, when executed and delivered by the Borrower, will constitute, a
legal, valid and binding obligation of the Borrower, as the case may be, in each
case enforceable in accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium and other laws affecting creditors’
rights generally and subject to general principles of equity, regardless of
whether considered in a proceeding in equity or at law.

    

    Section 3.03.  Governmental Approvals; No
Conflicts.  The Financing Transactions (a) do not require any
consent or approval of, registration or filing with, or other action by, any
Governmental Authority, except such as have been obtained or made and are in
full force and effect, (b) will not violate any applicable law or regulation or
the charter, by-laws, or other organizational documents of the Borrower or any
order of any Governmental Authority, (c) will not violate or result in a default
under any indenture, agreement or other instrument binding upon the Borrower or
any of its properties, or give rise to a right thereunder to require the
Borrower to make any payment, where such default or payment reasonably can be
expected to have a Material Adverse Effect and (d) will not result in the
creation or imposition of any Lien on any property of the Borrower.

    

    Section 3.04.  Financial Statements; No Material
Adverse Change.  

     

    (a)    The Borrower
has heretofore furnished to the Lender (i) the audited Consolidated balance
sheet of the Borrower and the Borrower’s Subsidiaries as of December 31, 2007
and the related Consolidated statements of income and cash flows for the Fiscal
Year then ended, reported on by an independent public accountant of recognized
national standing, certified by the Borrower’s chief financial
officer.  Such financial statements present fairly, in all material
respects, the Consolidated financial position of the Borrower and its
Subsidiaries as of such dates and its Consolidated results of operations and
cash flows for such periods in accordance with GAAP.

    

    (b)           Since
December 31, 2007, and as of the Effective Date, there has been no material
adverse change in the business, operations, properties, assets, financial
condition, prospects, contingent liabilities or material agreements of the
Borrower and its Subsidiaries, taken as a whole.

    

    Section 3.05.  Borrower’s
Subsidiaries.  As of the Effective Date, the Borrower has no
Subsidiaries other than those set forth on Schedule 3.05.  Schedule
3.05 accurately identifies the jurisdiction under the laws of which such
Subsidiary is formed.

    

    Section 3.06.  Litigation.  As of
the Effective Date, there is no action, suit, arbitration proceeding or other
proceeding, inquiry or investigation, at law or in equity, before or by any
arbitrator or Governmental Authority pending against the Borrower or a Bank
Subsidiary or of which the Borrower or a Bank Subsidiary has otherwise received
notice or which, to the knowledge of the Borrower or a Bank Subsidiary, is
threatened against the Borrower or such Bank Subsidiary (i) as to which there is
a reasonable possibility of an unfavorable decision, ruling or finding which
would reasonably be expected to result in a Material Adverse Effect or (ii) that
involves any of the Loan Documents or the Financing Transactions.

    

    Section 3.07.  Compliance with Laws and Agreements;
Foreign Asset Control and Other Regulations.  

     

    (a)    The Borrower
is in compliance with all laws, regulations and orders of any Governmental
Authority applicable to it or its property (including (i) all Environmental
Laws, (ii) ERISA, (iii) applicable laws, regulations and orders dealing with
intellectual property, and (iv) the Fair Labor Standards Act and other
applicable law dealing with such matters) and all indentures, agreements and
other instruments binding on it or its property, except where failures to do so,
in the aggregate, would not reasonably be expected to result in a Material
Adverse Effect.  No Default has occurred and is
continuing.

    

    (b)           The
Borrower is and will remain in full compliance with all laws and regulations
applicable to it ensuring that no person who owns a controlling interest in or
otherwise controls the Borrower is or shall be (A) listed on the Specially
Designated Nationals and Blocked Person List maintained by the Office of Foreign
Assets Control (“OFAC”), Department of the
Treasury, and/or any other similar lists maintained by OFAC pursuant to any
authorizing statute, Executive Order or regulation or (B) a person designated
under Section 1(b), (c) or (d) of Executive Order No. 13224 (September 23,
2001), any related enabling legislation or any other similar Executive Orders,
including the USA Patriot Act

     

    
      
        
        

      

      
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    (c)           The
desposit accounts of each Bank Subsidiary are insured by the
FDIC.  Niether Bank Subsidiary has received any notice or other
information indicating that such Bank Subsidiary is not an “insured depository
institution” as defined in 12 U.S.C. 1813, nor has any event occurred which
could reasonably be expected to adversely effect the status of such Bank
Subsidiary as an FDIC-insured institution.

    

    (d)           Neither
Bank Subsidiary nor any of its officers or directors is now operating under any
restrictions, agreements, memoranda, or commitments (other than restrictions of
general application) imposed by any Governmental Authority.  No such
restrictions are threatened, and there are no such agreements, memoranda or
commitments being sought by any Governmental Authority.

    

    Section 3.08.  Investment Company
Status.  The Borrower is not (a) an “investment company” or a
company “controlled” by an “investment company” within the meaning of the
Investment Company Act of 1940, as amended.

    
 

    Section 3.09.  ERISA.  No ERISA
Event has occurred or is reasonably expected to occur that, when taken together
with all other ERISA Events for which liability is reasonably expected to occur,
would reasonably be expected to result in a Material Adverse
Effect.

    

    Section 3.10.  Regulation
U.  Neither the Borrower nor any of its Subsidiaries is engaged
principally, or as one of its important activities, in the business of extending
credit for the purpose of purchasing or carrying margin stock (within the
meaning of Regulation U).

    

    Section 3.11.  Disclosure.  The
Borrower has disclosed to the Lender all agreements, instruments and corporate
or other restrictions to which it is subject, and all other matters known to it,
that, individually or in the aggregate, would reasonably be expected to result
in a Material Adverse Effect.  All of the reports, financial
statements, certificates and other written information (other than projected
financial information) that have been made available by or on behalf of the
Borrower to the Lender in connection with the negotiation of this Agreement or
any other Loan Document or delivered hereunder or thereunder, are complete and
correct in all material respects and do not contain any untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements contained therein not materially misleading in light of the
circumstances under which such statements are made; provided that, with respect
to projected financial information, the Borrower represents only that such
information was prepared in good faith based on assumptions believed to be
reasonable at the time.

    

    Section 3.12.  Solvency.  Immediately
after the Financing Transactions to occur on the Effective Date are consummated
and after giving effect to the application of the proceeds of each Loan made on
the Effective Date and after giving effect to the application of the proceeds of
each Loan made on any other date, (a) the fair value of the assets of the
Borrower, at a fair valuation, will exceed its debts and liabilities,
subordinated, contingent or otherwise; (b) the Borrower will be able to pay its
debts and liabilities, subordinated, contingent or otherwise, as such debts and
liabilities become absolute and matured; and (c) the Borrower will not have
unreasonably small capital with which to conduct the business in which it is
engaged as such business is now conducted and proposed to be conducted after the
Effective Date.

    

    

    ARTICLE
4

    

    CONDITIONS

    

    Section 4.01.  Effective
Date.  The obligations of the Lender to make Loans hereunder
shall not become effective until the date on which each of the following
conditions is satisfied (or waived in accordance with Section
8.02):

    

    (a)           The
Lender shall have received counterparts hereof signed by the
Borrower.

     

    
      
        
        

      

      
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    (b)           The
Lender shall have received favorable written opinion addressed to the Lender and
dated the Effective Date of in-house counsel for the Borrower covering such
matters relating to the Borrower, the Loan Documents or the Financing
Transactions as the Lender shall reasonably request.  The Borrower
requests such counsel to deliver such opinion.

    

    (c)           The
Lender shall have received such documents and certificates as the Lender or its
counsel may reasonably request relating to the organization, existence and good
standing of the Borrower and the Bank Subsidiaries, the authorization for and
validity of the Financing Transactions and any other legal matters relating to
the Borrower and the Bank Subsidiaries, the Loan Documents or the Financing
Transactions, all in form and substance satisfactory to the Lender and its
counsel.

    

    (d)           The
Lender shall have received a certificate, dated the Effective Date and signed by
the President, a Vice President or a Financial Officer of the Borrower,
confirming compliance with the conditions set forth in clause (b), (c) and (d)
of Section 4.02.

    

    (e)           The
Lender shall not have determined that, since December 31, 2007, any event,
development or circumstance has occurred that has had or would reasonably be
expected to have a Material Adverse Effect, other than those events,
developments and circumstances that have been disclosed to the Lender in
writing.

    

    (f)           The
Lender shall not have become aware of any information or other matter affecting
the Borrower or the Financing Transactions which was in existence prior to the
date of this Agreement and is inconsistent in a material and adverse manner with
any such information or other matter disclosed to them prior to the date of this
Agreement.

    

    (g)           The
Borrower shall have executed and delivered to the Lender the note required by
Section 2.08(e).

    

    (h)           Reserved.

    

    (i)           The
Borrower shall have paid all fees and other amounts due and payable to the
Lender on or before the Effective Date, including, to the extent invoiced, all
out-of-pocket expenses (including fees, charges and disbursements of counsel)
required to be reimbursed or paid by the Borrower under the Loan
Documents.

    

    (j)           All
consents and approvals required to be obtained from any Governmental Authority
or other Person in connection with the Financing Transactions shall have been
obtained and be in full force and effect, except where failure to obtain such
approval or consent would not have a Material Adverse Effect.

    

    (k)           The
Lender shall have received from the Borrower such other certificates and other
documents as the Lender may reasonably have requested.

    

    Promptly
after the Effective Date occurs, the Lender shall notify the Borrower thereof,
and such notice shall be conclusive and binding.

    

    Section 4.02.  Conditions to Initial Utilization
and Each Subsequent Utilization.  The obligation of the Lender
to make a Loan on the occasion of any Borrowing (including the initial
Borrowing), is subject to receipt of the Borrower’s request therefor in
accordance herewith and to the satisfaction of the following
conditions:

    

    (a)           The
Effective Date shall have occurred.

    

    (b)           Immediately
after giving effect to such Borrowing, no Default shall have occurred and be
continuing.

    

    (c)           The
representations and warranties of the Borrower set forth in the Loan Documents
shall be true on and as of the date of such Borrowing, as
applicable.

    

    (d)           Immediately
before and after such Borrowing is made, the Total Outstanding Amount will not
exceed the Commitment.

     

    
      
        
        

      

      
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    Each Borrowing shall be deemed to
constitute a representation and warranty by the Borrower on the date thereof as
to the matters specified in clauses (b), (c) and (d) of this
Section.

    

    

    ARTICLE
5

    

    AFFIRMATIVE
COVENANTS

    

    Until all the Commitment have expired
or terminated and the principal of and interest on each Loan and all fees
payable hereunder have been paid in full, the Borrower covenants and agrees with
the Lender that:

    

    Section 5.01.  Financial Statements and Other
Information.  The Borrower shall furnish to the
Lender:

    

    (i)           as
soon as available and in any event within 120 days after the end of each Fiscal
Year, its audited Consolidated balance sheet as of the end of such Fiscal Year
and the related statements of income and cash flows for such Fiscal Year, or its
annual report on Form 10-K as filed with the SEC, setting forth in each case in
comparative form the figures for the previous Fiscal Year, all reported on an
independent public accountants of recognized national standing (without
qualification or exception and without any qualification or exception as to the
scope of such audit) as presenting fairly in all material respects the financial
position, results of operations and cash flows of the Borrower and its
Subsidiaries on a Consolidated basis in accordance with generally accepted
auditing standards;

    

    (ii)           as
soon as available and in any event within 45 days after the end of each of the
first three Fiscal Quarters of each Fiscal Year, its Consolidated balance sheet
as of the end of such Fiscal Quarter and the related statements of income and
cash flows for such Fiscal Quarter and for the then elapsed portion of such
Fiscal Year, or its quarterly report on Form 10-Q as filed with the SEC, setting
forth in each case in comparative form the figures for the corresponding period
or periods of (or, in the case of the balance sheet, as of the end of) the
previous Fiscal Year, all certified by a Financial Officer as (A) reflecting all
adjustments (which adjustments are normal and recurring unless otherwise
disclosed) necessary for a fair presentation of the results for the period
covered and (B) having been prepared in accordance with the applicable rules of
the SEC;

    

    (iii)          concurrently
with each delivery of financial statements under clause (i) or (ii) above, a
certificate of a Financial Officer (x) certifying as to whether a Default has
occurred and is continuing and, if a Default has occurred and is continuing,
specifying the details thereof and any action taken or proposed to be taken with
respect thereto, (y) setting forth reasonably detailed calculations
demonstrating compliance with Section 5.10,and (z) identifying any change(s) in
GAAP or in the application thereof that have become effective since the date of,
and have had an effect on, the Borrower’s most recent audited financial
statements referred to in Section 3.04 or delivered pursuant to this Section
(and, if any such change has become effective, specifying the effect of such
change on the financial statements accompanying such certificate);

    

    (iv)          concurrently
with each delivery of financial statements under clause (i) above, (A) a
certificate of the accounting firm that reported on such financial statements
stating whether during the course of their examination of such financial
statements they obtained knowledge of any Default (which certificate may be
limited to the extent required by accounting rules or guidelines) and (B) a
certificate of a Financial Officer identifying any Subsidiary that has been
formed or acquired during the Fiscal Year covered by such financial
statements;

    

    (v)          
no later than 30 days after the end of each calendar quarter, the complete
Consolidated Reports of Condition and Income for a Bank With Domestic Offices
Only (FFIEC 041) (the “Call Report”), prepared by each Bank Subsidiary at the
end of such calendar quarter in compliance with the requirements of any federal
or state regulatory agency which has authority to examine such Bank Subsidiary,
all prepared in accordance with the requirements imposed by the applicable
regulatory authorities and applied on a basis consistent with the accounting
practices reflected in any previous Call Report(s) and similar statements
delivered to the Lender prior to the Effective Date, and all amendments
thereto;

     

    
      
        
        

      

      
        25

        
          

        

      

      
        
        

      

    

     

    (vi)           no
later than 30 days after the end of each calendar quarter, the complete
Consolidated Financial Statement for Bank Holding Companies on form FR Y-9C,
prepared by the Borrower at the end of such calendar quarter in compliance with
the requirements of any federal or state regulatory agency which has authority
to examine the Borrower, all prepared in accordance with the requirements
imposed by the applicable regulatory authorities and applied on a basis
consistent with the accounting practices reflected in any previous FR Y-9C
reports and similar statements delivered to the Lender prior to the Effective
Date, and all amendments thereto;

    

    (vii)           promptly
after the same become publicly available, copies of all periodic and other
material reports and proxy statements filed by the Borrower or either Bank
Subsidiary with the SEC, or any Governmental Authority succeeding to any or all
of the functions of the SEC;

    

    (viii)           promptly
upon the effectiveness of any material amendment or modification of, or any
waiver of the rights of the Borrower or either Bank Subsidiary under, the
certificate of formation, limited liability company agreement, certificate of
incorporation, by-laws or other organizational documents of the Borrower or such
Bank Subsidiary; and

    

    (ix)           promptly
following any request therefor, such other information regarding the operations,
business affairs and financial condition of the Borrower and the Bank
Subsidiaries, or compliance with the terms of any Loan Document, as the Lender
may reasonably request.

    

    Section 5.02.  Notice of Material
Events.  The Borrower shall furnish to the Lender and the
Lender prompt written notice of the following:

    

    (a)           the
occurrence of any Default;

    

    (b)           the
filing or commencement of any action, suit or proceeding by or before any
arbitrator or Governmental Authority against or affecting the Borrower or either
Bank Subsidiary or any Affiliate thereof that, if adversely determined, could
reasonably be expected to result in a Material Adverse Effect;

    

    (c)           the
occurrence of any ERISA Event that, alone or together with any other ERISA
Events that have occurred, could reasonably be expected to result in liabilities
of the Borrower and a Bank Subsidiary in an aggregate amount exceeding
$5,000,000; and

    

    (d)           any
other development that results in, or would reasonably be expected to result in,
a Material Adverse Effect.

    

    Each notice delivered under this
Section shall be accompanied by a statement of a Financial Officer or other
executive officer of the Borrower setting forth the details of the event or
development requiring such notice and any action taken or proposed to be taken
with respect thereto.

    

    Section 5.03.  Existence; Conduct of
Business.  The Borrower shall, and shall cause each Bank
Subsidiary to, do or cause to be done all things necessary to preserve, renew
and keep in full force and effect its legal existence and the rights, licenses,
permits, privileges, franchises, patents, copyrights, trademarks and trade names
material to the conduct of its business; provided that the foregoing
shall not prohibit any merger, consolidation, liquidation or dissolution
permitted under Section 6.01.

    

    Section 5.04.  Payment of
Obligations.  The Borrower shall, and shall cause each Bank
Subsidiary to, pay all of its debt and other material obligations, including Tax
liabilities, before the same shall become delinquent or in default, except where
(a) the validity or amount thereof is being contested in good faith by
appropriate proceedings, (b) the Borrower or the applicable Bank Subsidiary has
set aside on its books adequate reserves with respect thereto in accordance with
GAAP, (c) such contest effectively suspends collection of the contested
obligation and the enforcement of any Lien securing such obligation and (d) the
failure to make payment pending such contest would not reasonably be expected to
result in a Material Adverse Effect.

     

    
      
        
        

      

      
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    Section 5.05.  Maintenance of
Properties.  The Borrower shall, and shall cause each Bank
Subsidiary to, maintain all property material to the conduct of its business in
good working order and condition, ordinary wear and tear excepted.

    

    Section 5.06.  Insurance.   The
Borrower shall keep itself and all of its insurable properties, and shall cause
each Bank Subsidiary to keep itself and all of its insurable properties, insured
at all times to such extent, by such insurers, and against such hazards and
liabilities as is customarily carried by prudent businesses of like size and
enterprise; and promptly upon the Lender’s written request upon and during the
continuance of an Event of Default, the Borrower shall furnish to the Lender
such information about any such insurance as the Lender may from time to time
reasonably request.

    

    Section 5.07.  Proper Records; Rights to Inspect
and Appraise.  The Borrower shall, and shall cause each Bank
Subsidiary to, keep proper books of record and account in which complete and
correct entries are made of all transactions relating to its business and
activities.  The Borrower shall, and shall cause each Bank Subsidiary
to, permit any representatives designated by the Lender, upon reasonable prior
notice, to visit and inspect its properties, to examine and make extracts from
its books and records, and to discuss its affairs, finances and condition with
its officers, directors and employees, all at such reasonable times and as often
as reasonably requested.

    

    Section 5.08.  Compliance with
Laws.  The Borrower shall, and shall cause each Bank Subsidiary
to, comply with all laws, rules, regulations and orders of any Governmental
Authority (including all Environmental Laws and ERISA and the respective rules
and regulations thereunder) applicable to it or its property, other than such
laws, rules or regulations (a) the validity or applicability of which the
Borrower or any Subsidiary is contesting in good faith by appropriate
proceedings or (b) the failure to comply with which cannot reasonably be
expected to result in a Material Adverse Effect.

    

    Section 5.09.  Use of
Proceeds.  The proceeds of the Revolving Loans will be used
only to finance the general corporate purposes of the Borrower, including, but
not limited to, injection of capital into the Bank Subsidiaries, refinancing
existing debt, and share repurchases.  No part of the proceeds of any
Loan will be used, directly or indirectly, for any purpose that entails a
violation of any of the Regulations of the Federal Reserve Board, including
Regulations T, U and X.

    

    Section 5.10.  Financial
Condition.  

     

    (a)    The Borrower
shall, and shall cause each Bank Subsidiary to, at all times, maintain its
categorization as “Well Capitalized” according to the guidelines of the Federal
Reserve Board or other applicable regulatory agency having jurisdiction over the
Borrower or such Bank Subsidiary.

    

    (b)           The
Borrower shall, and shall cause National Penn Bank to at all times maintain a
maximum ratio of Non-Performing Assets to the sum of (i) Total Loans, plus (ii) OREO of
2.00%.

    

    (c)           The
Borrower shall, and shall cause each Bank Subsidiary to at all times maintain a
Return on Average Assets of not less than 0.70% for the most-recently ended four
fiscal quarter period.

    

    (d)           The
Borrower shall cause Christiana Bank & Trust Company to maintain a minimum
ratio of Loan Loss Reserve to Non-Performing Loans as of the last day of each
Fiscal Quarter of not less than 110%.

    

    

    ARTICLE
6

    

    NEGATIVE
COVENANTS

    

    Until the Commitments have expired or
terminated and the principal of and interest on each Loan and all fees payable
hereunder have been paid in full, the Borrower covenants and agrees with the
Lender that:

    

    Section 6.01.  Fundamental
Changes.  The Borrower shall not, and shall not permit either
Bank Subsidiary to, merge into or consolidate with any other Person, or
liquidate or dissolve, or permit any other Person to merge into or consolidate
with it, except that the Borrower or a Bank Subsidiary may merge with any Person
organized under the laws of the United States of America or one of its States or
the District of Columbia so long as (A) the Borrower or the applicable Bank
Subsidiary, as the case may be, is the surviving corporation.

     

    
      
        
        

      

      
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    Section 6.02.  Restrictive
Agreements.  The Borrower shall not and shall not permit any of
its Subsidiaries to, directly or indirectly, enter into or permit to exist any
agreement or other arrangement that prohibits, restricts or imposes any
condition on (a) the ability of the Borrower or any Subsidiary to create or
permit to exist any Lien on any of its property or (b) the ability of any
Subsidiary to pay dividends or other distributions with respect to any shares of
its capital stock or to make or repay loans or advances to the Borrower or any
other Subsidiary or to Guarantee debt of the Borrower or any other Subsidiary;
provided that (i) the
foregoing shall not apply to restrictions and conditions imposed by law or by
any Loan Document, (ii) the foregoing shall not apply to restrictions and
conditions existing on the date hereof and identified on Schedule 6.02 (but
shall apply to any amendment or modification expanding the scope of, or any
extension or renewal of, any such restriction or condition), (iii) the foregoing
shall not apply to customary restrictions and conditions contained in agreements
relating to the sale of a Subsidiary pending such sale, provided that such
restrictions and conditions apply only to the Subsidiary that is to be sold,
(iv) clause (a) of this Section shall not apply to restrictions or conditions
imposed by any agreement relating to secured debt permitted by this Agreement if
such restrictions or conditions apply only to the property securing such Debt
and (v) clause (a) of this Section shall not apply to customary provisions in
leases and other contracts restricting the assignment thereof.

    

    Section 6.03.  Amendment of Material
Documents.  The Borrower shall not, and shall not permit either
Bank Subsidiary to, without the prior written consent of the Lender, amend,
modify or waive any of its rights under its certificate of incorporation,
by-laws or other organizational documents, in each case in any manner that would
reasonably be expected to have a Material Adverse Effect.

    

    Section
6.04.  Negative
Pledge.  The Borrower shall not create, incur, assume or suffer
to exist any Lien upon the Borrower’s Equity Interests in either Bank
Subsidiary.

    

    Section
6.05.  Debt; Certain
Equity Securities.  The Borrower shall not create, incur,
assume or permit to exist any Debt, except:

    

    (i)           Debt
created under the Loan Documents;

    

    (ii)           Debt
existing on the date hereof and refinancings, extensions, renewals or refundings
of such Debt that do not increase the outstanding principal amount thereof or
result in an earlier maturity date or decreased weighted average life
thereof;

    

    (iii)           other
unsecured Debt (1) that is on terms and conditions and subject to covenants
that, taken as a whole, are no more restrictive than the terms, conditions and
covenants contained in this Agreement and (2) having a maturity date on or
before first anniversary of the Revolving Availability Termination
Date;

    

    (iv)           Capital
Lease Obligations of the Borrower not to exceed $10,000,000 in the aggregate
outstanding at any time;

    

    (v)           Ordinary
Course Debt; and

    

    (vi)           Debt
secured by Liens permitted under Section 6.06(iv), so long as the aggregate
unpaid principal balance thereof, on a Consolidated basis, does not exceed
$10,000,000 at any time.

    

    Section 6.06.  Liens.  The
Borrower shall not, and shall not permit any of its Subsidiaries to, create or
permit to exist any Lien on any property now owned or hereafter acquired by it,
or assign or sell any income or revenues (including accounts receivable) or
rights in respect of any thereof, except:

    

    (i)           Permitted
Liens;

     

    
      
        
        

      

      
        28

        
          

        

      

      
        
        

      

    

     

    (ii)           any
Lien on any property of the Borrower or any Subsidiary existing on the date
hereof and listed in Schedule 6.06; provided that (A) such Lien
shall not apply to any other property of the Borrower or any Subsidiary and (B)
such Lien shall secure only those obligations which it secures on the date
hereof and extensions, renewals and replacements thereof that do not increase
the outstanding principal amount thereof;

    

    (iii)          any
Lien existing on any property or asset before the acquisition thereof by the
Borrower or any Subsidiary or existing on any property or asset of any Person
that first becomes a Subsidiary after the date hereof before the time such
Person becomes a Subsidiary; provided that (A) such Lien
is not created in contemplation of or in connection with such acquisition or
such Person becoming a Subsidiary, (B) such Lien will not apply to any other
property or asset of the Borrower or any Subsidiary and (C) such Lien will
secure only those obligations which it secures on the date of such acquisition
or the date such Person first becomes a Subsidiary, as the case may be, and
extensions, renewals and replacements thereof that do not increase the
outstanding principal amount thereof;

    

    (iv)          Liens
on fixed or capital assets acquired, constructed or improved by the Borrower or
any Subsidiary; provided
that (A) the Debt secured by such Liens is permitted by, as applicable,
Section 6.05, (B) such Liens and the Debt secured thereby are incurred before or
within 90 days after such acquisition or the completion of such construction or
improvement, (C) the Debt secured thereby does not exceed the cost of acquiring,
constructing or improving such fixed or capital assets and (D) such Liens will
not apply to any other property of the Borrower or any Subsidiary;

    

    (v)           Liens
to secure a Debt owing to the Borrower;

    

    (vi)          any
Lien arising out of the refinancing, extension, renewal or refunding of any Debt
secured by a Lien permitted by any of clauses (iii), (iv) or (v) of this
Section; provided that
such Debt is not increased (except by the amount of fees, expenses and premiums
required to be paid in connection with such refinancing, extension, renewal or
refunding) and is not secured by any additional assets;

    

    (vii)          Liens
in connection with Ordinary Course Debt; and

    

    (viii)         Liens
not otherwise permitted by the foregoing clauses of this Section 6.06 securing
Debt in an aggregate principal amount at any time outstanding, on a Consolidated
basis, not to exceed $50,000,000.

    

    Section
6.07.   Investments,
Loans, Advances, Guarantees and Acquisitions.  

     

    (a)    The Borrower
shall not, and shall not permit its Subsidiaries to, purchase, hold or acquire
(including pursuant to any merger with any Person that was not a wholly owned
Subsidiary before such merger) any Equity Interest in or evidence of
indebtedness or other security (including any option, warrant or other right to
acquire any of the foregoing) of, make or permit to exist any loan or advance
to, Guarantee any obligation of, or make or permit to exist any investment or
other interest in, any other Person, or purchase or otherwise acquire (in one
transaction or a series of transactions) any assets of any other Person
constituting a business unit, except:

    

    (i)           Permitted
Investments and investments in cash;

    

    (ii)           investments
existing on the date of this Agreement;

    

    (iii)          investments
by the Borrower and its Subsidiaries in Equity Interests in their respective
Subsidiaries (or in any Person that will, upon the making of such investment,
become a Subsidiary); provided
that the aggregate amount of such investments by the Borrower and its
Subsidiaries after the Effective Date in reliance on this clause (iii), taken
together with the aggregate amount of loans and advances made by the Borrower to
Subsidiaries in reliance on clause (iv), shall not exceed an amount at any time
outstanding equal to $60,000,000;

     

    (iv)           loans
or advances made by the Borrower to any Subsidiary or made by any Subsidiary to
the Borrower or any other Subsidiary; provided that the amount of
such loans and advances made by the Borrower to Subsidiaries shall be subject to
the limitation set forth in clause 6.07(a)(iii) above;

     

    
      
        
        

      

      
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    (v)           Loans,
letters of credit and other extensions of credit by the Bank Subsidiaries in the
ordinary course of its business;

    

    (vi)           investments
received in connection with (A) the bankruptcy, reorganization or
recapitalization of, or settlement of delinquent accounts and disputes with,
customers and suppliers or (B) foreclosure by the Borrower or any of its
Subsidiaries with respect to any secured investment or other transfer of title
with respect to any secured investment in default, in each case in the ordinary
course of business;

    

    (vii)          receivables
owing to the Borrower or any Subsidiary if created or acquired in the ordinary
course of business and payable or dischargeable in accordance with customary
trade terms;

    

    (viii)          payroll,
travel and similar advances to cover matters that are expected at the time of
such advances ultimately to be treated as expenses for accounting purposes and
that are made in the ordinary course of business:

    

    (ix)           loans
or advances to employees made in the ordinary course of business consistent with
past practices of the Borrower or such Subsidiary;

    

    (x)           investments
in stock, obligations or securities received in settlement of debts created in
the ordinary course of business and owing to the Borrower or any Subsidiary or
in satisfaction of judgments;

    

    (xi)           investments
in the Borrower;

    

    (xii)           investments
in any Person if, as a result of such investment, such other Person is merged
with or consolidated into, or transfers or conveys all or substantially all its
assets to, the Borrower or a Subsidiary, in each case subject to the limitations
set forth in Section 6.07(b);

    

    provided, however, that if
the Borrower or any Subsidiary shall acquire any Person and such Person shall
hold any investment that the Borrower or such Subsidiary would not otherwise be
permitted to hold, directly or indirectly, pursuant to this Section 6.7(a), then
the Borrower shall (x) promptly notify the Lender that such Person holds such
investment, and (y) use its best efforts to liquidate such investment or convert
such investment to an investment that the Borrower or such Subsidiary would be
permitted to hold pursuant to this Section 6.7(a).

    

    (b)    The Borrower
shall not, and shall not permit any of its Subsidiaries to make any material
acquisition unless (i) immediately before and after giving effect thereto, no
Default shall have occurred and be continuing, (ii) in the case of any
acquisition of a Person, such acquisition is non-hostile, and (iii) the assets
received by the Borrower or its Subsidiary in connection therewith are used or
usable in a line of business consistent with the lines of business of the
Borrower and its Subsidiaries as of the date hereof.

    

    Section
6.08.  Restricted
Payments.  The Borrower shall not declare or make, or agree to
pay or make, directly or indirectly, any Restricted Payment, or incur any
obligation (contingent or otherwise) to do so unless, both immediately before
and after giving effect to such Restricted Payment, no Default exists and would
be continuing.

    

    

    ARTICLE
7

    

    EVENTS OF
DEFAULT

    

    If any of the following events (“Events of Default”) shall
occur:

    

    (a)           the
Borrower shall fail to pay any principal of any Loan when the same shall become
due, whether at the due date thereof or at a date fixed for prepayment thereof
or otherwise; or

     

    
      
        
        

      

      
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    (b)           the
Borrower shall fail to pay when due any interest on any Loan or any fee or other
amount (except an amount referred to in clause (a) above) payable under any Loan
Document, and such failure shall continue unremedied for a period of five days;
or

    

    (c)           any
representation, warranty or certification made or deemed made by or on behalf of
the Borrower or any Subsidiary in or in connection with any Loan Document or any
amendment or modification thereof or waiver thereunder, or in any report,
certificate, financial statement or other document furnished pursuant to or in
connection with any Loan Document or any amendment or modification thereof or
waiver thereunder, shall prove to have been incorrect when made or deemed made
and, if the circumstances giving rise to such false or misleading representation
or warranty are susceptible to being cured in all material respects, such false
or misleading representation or warranty shall not be cured in all material
respects for five days after the earlier to occur of (i) the date on which an
officer of the Borrower shall obtain knowledge thereof, or (ii) the date on
which written notice thereof shall have been given to the Borrower by the
Lender; or

    

    (d)           the
Borrower shall fail to observe or perform any covenant or agreement contained in
Section 5.0l(a)(i), Section 5.0l(a)(ii), Section 5.0l(a)(iv), Section 5.02, or
Section 5.04 or in Article 6; or

    

    (e)           the
Borrower shall fail to observe or perform any provision of any Loan Document
(other than those failures covered by clauses (a), (b), (c) and (d) of this
Article 7) and such failure shall continue for 15 days after the earlier of
notice of such failure to the Borrower from the Lender or knowledge of such
failure by an officer of the Borrower; or

    

    (f)           the
Borrower or any of its Subsidiaries shall fail to make a payment or payments
(whether of principal or interest and regardless of amount) in respect of any
debt with a principal balance in excess of $1,000,000 when the same shall become
due, whether at the due date thereof or at a date fixed for prepayment thereof
or otherwise; or

    

    (g)           any
event or condition occurs that (i) results in any debt with a principal balance
in excess of $1,000,000 becoming due before its scheduled maturity or (ii)
enables or permits (with or without the giving of notice, the lapse of time or
both) the holder or holders of such debt or any trustee or agent on its or their
behalf to cause any such debt to become due, or to require the prepayment,
repurchase, redemption or defeasance thereof, before its scheduled maturity;
provided that, in the
case of any event described in clauses (ii) that would permit debt with a
principal balance in excess of $1,000,000 to be accelerated, only after the
lapse of a cure period, so long as the Borrower has notified the Lender
immediately upon occurrence of such event, such event shall give rise to an
Event of Default hereunder upon expiration of such cure period; or

    

    (h)           an
involuntary proceeding shall be commenced or an involuntary petition shall be
filed seeking (i) liquidation, reorganization or other relief in respect of the
Borrower or any of its Subsidiaries or its debts, or of a substantial part of
its assets, under any Federal, state or foreign bankruptcy, insolvency,
receivership or similar law now or hereafter in effect or (ii) the appointment
of a receiver, trustee, custodian, sequestrator, conservator or similar official
for the Borrower or any of its Subsidiaries or for a substantial part of its
assets, and, in any such case, such proceeding or petition shall continue
undismissed for 60 days or an order or decree approving or ordering any of the
foregoing shall be entered; or

    

    (i)           the
Borrower or any of its Subsidiaries shall (i) voluntarily commence any
proceeding or file any petition seeking liquidation, reorganization or other
relief under any Federal, state or foreign bankruptcy, insolvency, receivership
or similar law now or hereafter in effect, (ii) consent to the institution of,
or fail to contest in a timely and appropriate manner, any proceeding or
petition described in clause (h) above, (iii) apply for or consent to the
appointment of a receiver, trustee, custodian, sequestrator, conservator or
similar official for any the Borrower or any of its Subsidiaries or for a
substantial part of its assets, (iv) file an answer admitting the material
allegations of a petition filed against it in any such proceeding, (v) make a
general assignment for the benefit of creditors or (vi) take any action for the
purpose of effecting any of the foregoing; or

    

    (j)           the
Borrower or any of its Subsidiaries shall become unable, admit in writing its
inability or fail generally to pay its debts as they become due; or

     

    
      
        
        

      

      
        31

        
          

        

      

      
        
        

      

    

     

    (k)           one
or more judgments for the payment of money in an aggregate amount exceeding
$1,000,000 shall be rendered against the Borrower or any of its Subsidiaries and
shall remain undischarged for a period of 60 consecutive days during which
execution shall not be effectively stayed, or any action shall be legally taken
by a judgment creditor to attach or levy upon any asset of the Borrower or any
of its Subsidiaries to enforce any such judgment; or

    

    (l)           an
ERISA Event shall have occurred that, in the opinion of the Lender, when taken
together with all other ERISA Events that have occurred, would reasonably be
expected to result in a Material Adverse Effect; or

    

    (m)         any
provision of any Loan Document after delivery thereof shall for any reason cease
to be valid and binding on or enforceable against the Borrower, or the Borrower
shall so state in writing;  or

    

    (n)          a
Change in Control shall have occurred;

    

    then, and
in every such event (except an event with respect to the Borrower described in
clause (h) or (i) above), and at any time thereafter during the continuance of
such event, the Lender may, by notice to the Borrower, take either or both of
the following actions, at the same or different times:  (i) terminate
the Commitment, and thereupon the Commitment shall terminate immediately, and
(ii) declare the Loans then outstanding to be due and payable in whole (or in
part, in which case any principal not so declared to be due and payable may
thereafter be declared to be due and payable), and thereupon the principal of
the Loans so declared to be due and payable, together with accrued interest
thereon and all fees and other obligations of the Borrower accrued hereunder,
shall become due and payable immediately, without presentment, demand, protest
or other notice of any kind, all of which are waived by the Borrower; and in the
case of any event with respect to the Borrower described in clause (h) or (i)
above, the Commitment shall automatically terminate and the principal of the
Loans then outstanding, together with accrued interest thereon and all fees and
other obligations of the Borrower accrued hereunder, shall automatically become
due and payable, without presentment, demand, protest or other notice of any
kind, all of which are waived by the Borrower.

    

    

    ARTICLE
8

    

    MISCELLANEOUS

    

    Section 8.01.  Notices.  Except in
the case of notices and other communications expressly permitted to be given by
telephone, all notices and other communications provided for herein shall be in
writing and shall be delivered by hand or overnight courier service, mailed by
certified or registered mail or sent by telecopy, as follows:

    

    (a)           if
to the Borrower, to it at Philadelphia and Reading Avenues, Boyertown,
Pennsylvania 19512, Attention of Michael Reinhard, Chief Financial Officer
(Facsimile No. (610) 369-6349); and

    

    (b)           if
to the Lender, to KeyBank National Association, 127 Public Square, Cleveland,
Ohio 44114, Attention of James Cribbet (Facsimile No. (216)
689-4381).

    

    Either party hereto may change its
address or telecopy number for notices and other communications hereunder by
notice to the other party.  All notices and other communications given
to any party hereto in accordance with the provisions of this Agreement will be
deemed to have been given on the date of receipt.

    

    Section 8.02.  Waivers;
Amendments.  

     

    (a)    No failure or
delay by the Lender in exercising any right or power hereunder or under any
other Loan Document shall operate as a waiver thereof, nor shall any single or
partial exercise of any such right or power, or any abandonment or
discontinuance of steps to enforce such a right or power, preclude any other or
further exercise thereof or the exercise of any other right or
power.  The rights and remedies of the Lender under the Loan Documents
are cumulative and are not exclusive of any rights or remedies that they would
otherwise have.  No waiver of any provision of any Loan Document or
consent to any departure by the Borrower therefrom shall in any event be
effective unless the same shall be permitted by subsection (b) of this Section,
and then such waiver or consent shall be effective only in the specific instance
and for the purpose for which given.  Without limiting the generality
of the foregoing, the making of a Loan shall not be construed as a waiver of any
Default, regardless of whether the Lender had notice or knowledge of such
Default at the time.

     

    
      
        
        

      

      
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    (b)           No
Loan Document or provision thereof may be waived, amended or modified except, in
the case of this Agreement, by an agreement or agreements in writing entered
into by the Borrower and the Lender or, in the case of any other Loan Document,
by an agreement or agreements in writing entered into by the parties thereto
with the consent of the Lender.

    

    Section 8.03.  Expenses; Indemnity; Damage
Waiver.  

     

    (a)    The Borrower
shall pay (i) all reasonable and documented out-of-pocket expenses incurred by
the Lender and its respective Affiliates, including, without limitation, the
reasonable fees, charges and disbursements of Squire, Sanders & Dempsey
L.L.P., special counsel for the Lender, in connection with the syndication of
the credit facilities provided for herein, the preparation and administration of
the Loan Documents and any amendments, modifications or waivers of the
provisions thereof (whether or not the transactions contemplated hereby or
thereby shall be consummated) and (ii) all out-of-pocket expenses incurred by
the Lender, including the fees, charges and disbursements of any counsel for the
Lender, in connection with the enforcement or protection of its rights in
connection with the Loan Documents (including its rights under this Section) or
the Loans, including all such out-of-pocket expenses incurred during any
workout, restructuring or negotiations in respect of the Loans.

    

    (b)           The
Borrower shall indemnify the Lender and its Related Parties (each such Person
being called an “Indemnitee”) against, and hold each
Indemnitee harmless from, any and all losses, claims, damages, liabilities and
related expenses, including the fees, charges and disbursements of counsel for
any Indemnitee, incurred by or asserted against any Indemnitee arising out of,
in connection with, or as a result of ( i) the execution or delivery of any Loan
Document or any other agreement or instrument contemplated hereby, the
performance by the parties to the Loan Documents of their respective obligations
thereunder or the consummation of the Financing Transactions or any other
transactions contemplated hereby, (ii) any Loan or the use of the proceeds
therefrom, (iii) any actual or alleged presence or release of Hazardous
Materials on or from any property currently or formerly owned or operated by the
Borrower or any Subsidiary, or (iv) any actual or prospective claim, litigation,
investigation or proceeding relating to any of the foregoing, whether based on
contract, tort or any other theory and regardless of whether any Indemnitee is a
party thereto; provided
that (i) such indemnity shall not be available to any Indemnitee to the
extent that such losses, claims, damages, liabilities or related expenses are
determined by a court of competent jurisdiction by final and nonappealable
judgment to have resulted from such Indemnitee’s gross negligence or willful
misconduct; (ii) such indemnity shall not be available to any Indemnitee for
losses, claims, damages, liabilities or related expenses arising out of a
proceeding in which such indemnitee and the Borrower are adverse parties to the
extent that the Borrower prevails on the merits, as determined by a court of
competent jurisdiction (it being understood that nothing in this Agreement shall
preclude a claim or suit by the Borrower against any Indemnitee for such
Indemnitee’s failure to perform any of its obligations to the Borrower under the
Loan Documents); (iii) the Borrower shall not, in connection with any such
proceeding or related proceedings in the same jurisdiction and in the absence of
conflicts of interest, be liable for the fees and expenses of more than one law
firm at any one time for the Indemnitees (which law firm shall be selected (x)
by mutual agreement of the Lender and the Borrower or (y) if no such agreement
has been reached following the Lender’s good faith consultation with the
Borrower with respect thereto, by the Lender in its sole discretion); (iv) each
Indemnitee shall give the Borrower (x) prompt notice of any such action brought
against such Indemnitee in connection with a claim for which it is entitled to
indemnity under this Section and (y) an opportunity to consult from time to time
with such indemnitee regarding defensive measures and potential settlement; and
(v) the Borrower shall not be obligated to pay the amount of any settlement
entered into without its written consent (which consent shall not be
unreasonably withheld).

    

    (c)           To
the extent permitted by applicable law, the Borrower shall not assert, and
hereby waives, any claim against any Indemnitee, on any theory of liability, for
special, indirect, consequential or punitive damages (as opposed to direct or
actual damages) arising out of, in connection with, or as a result of, this
Agreement or any agreement or instrument contemplated hereby, the Financing
Transactions, any Loan or the use of the proceeds thereof.

    

    (e)           All
amounts due under this Section shall be payable within five Business Days after
written demand therefor.

     

    
      
        
        

      

      
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    Section 8.04.  Successors and
Assigns.  

     

    (a)    The
provisions of this Agreement shall be binding on and inure to the benefit of the
parties hereto and their respective successors and assigns permitted hereby,
except that the Borrower may not assign or otherwise transfer any of its rights
or obligations hereunder without the prior written consent of the Lender (and
any attempted assignment or transfer by the Borrower without such consent shall
be null and void).  Nothing in this Agreement, expressed or implied,
shall be construed to confer upon any Person (except the parties hereto, their
respective successors and assigns permitted hereby and, to the extent expressly
provided herein, the Related Parties of the Lender) any legal or equitable
right, remedy or claim under or by reason of this Agreement.

    

    (b)           The
Lender may assign to one or more assignees all or a portion of its rights and
obligations under this Agreement with the prior written consent of the Borrower,
which shall not be withheld or delayed unreasonably; provided, however,  that upon the duration
and continuance of an Event of Default, no such consent by the Borrower shall be
required.

    

    (c)           The
Lender may, without the consent of the Borrower, sell participations to one or
more banks or other entities (“Participants”) in all or a
portion of the Lender’s rights and obligations under this Agreement (including
all or a portion of its Commitment and the Loans owing to it); provided that (i) the
Lender’s obligations under this Agreement shall remain unchanged, (ii) the
Lender shall remain solely responsible to the other parties hereto for the
performance of such obligations and (iii) the Borrower shall continue to deal
solely and directly with the Lender in connection with the Lender’s rights and
obligations under this Agreement.  Any agreement or instrument
pursuant to which the Lender sells such a participation shall provide that the
Lender shall retain the sole right to enforce the Loan Documents and to approve
any amendment, modification or waiver of any provision of the Loan Documents;
provided that such
agreement or instrument may provide that the Lender will not, without the
consent of the Participant, agree to any amendment, modification or waiver
described in clause (i), (ii), (iii) or (iv) of the first proviso to Section
8.02(b) that affects such Participant.  Subject to subsection (1) of
this Section, each Participant shall be entitled to the benefits of Sections
2.14, 2.15 and 2.16 to the same extent as if it were the Lender and had acquired
its interest by assignment pursuant to subsection (b) of this
Section.  To the extent permitted by law, each Participant also shall
be entitled to the benefits of Section 8.09 as though it were the Lender, provided that such
Participant agrees to be subject to Section 2.18(c) as though it were the
Lender.

    

    (d)           A
Participant shall not be entitled to receive any greater payment under Section
2.15 or 2.17 than the applicable Lender would have been entitled to receive with
respect to the participation sold to such Participant, unless the sale of the
participation to such Participant is made with the Borrower’s prior written
consent.

    

    (e)           The  Lender
may at any time pledge or assign a security interest in all or any portion of
its rights under this Agreement to secure obligations of the Lender, including
any pledge or assignment to secure obligations to a Federal Reserve Bank, and
this Section shall not apply to any such pledge or assignment of a security
interest; provided that
no such pledge or assignment of a security interest shall release the Lender
from any of its obligations hereunder or substitute any such pledgee or assignee
for the Lender as a party hereto.

    

    Section 8.05.  Reserved.

    

    Section 8.06.  Survival.  All
covenants, agreements, representations and warranties made by the Borrower in
the Loan Documents and in certificates or other instruments delivered in
connection with or pursuant to the Loan Documents shall be considered to have
been relied upon by the other parties hereto and shall survive the execution and
delivery of the Loan Documents and the making of any Loans, regardless of any
investigation made by any such other party or on its behalf and notwithstanding
that the Lender may have had notice or knowledge of any Default or incorrect
representation or warranty at the time any credit is extended hereunder, and
shall continue in full force and effect as long as any principal of or accrued
interest on any Loan or any fee or other amount payable hereunder is outstanding
and unpaid or any Commitment has not expired or terminated.  The
provisions of Sections 2.14, 2.15, 2.16 and 8.03
shall survive and remain in full force and effect regardless of the consummation
of the Financing Transactions, the repayment of the Loans, the expiration or
termination of the Commitment or the termination of this Agreement or any
provision hereof.

    

    Section 8.07.  Counterparts; Integration;
Effectiveness.  This Agreement may be executed in counterparts
(and by different parties hereto on different counterparts), each of which shall
constitute an original, but all of which when taken together shall constitute a
single contract.  This Agreement, the other Loan Documents and any
separate letter agreements with respect to fees payable to the Lender constitute
the entire contract among the parties relating to the subject matter hereof and
supersede any and all previous agreements and understandings, oral or written,
relating to the subject matter hereof.  Except as provided in Section
4.01, this Agreement (i) will become effective when the Lender shall have signed
this Agreement and received counterparts hereof that, when taken together, bear
the signatures of each of the other parties hereto and (ii) thereafter will be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns.  Delivery of an executed counterpart of a
signature page of this Agreement by telecopy will be effective as delivery of a
manually executed counterpart of this Agreement.

     

    
      
        
        

      

      
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    Section 8.08.  Severability.  If
any provision of any Loan Document is invalid, illegal or unenforceable in any
jurisdiction then, to the fullest extent permitted by law, (i) such provision
shall, as to such jurisdiction, be ineffective to the extent (but only to the
extent) of such invalidity, illegality or unenforceability, (ii) the other
provisions of the Loan Documents shall remain in full force and effect in such
jurisdiction and shall be liberally construed in favor of the Lender in order to
carry out the intentions of the parties thereto as nearly as may be possible and
(iii) the invalidity, illegality or unenforceability of any such provision in
any jurisdiction shall not affect the validity, legality or enforceability of
such provision in any other jurisdiction.

    

    Section 8.09.  Right of
Setoff.  If an Event of Default shall have occurred and be
continuing, the Lender and each of its Affiliates is authorized at any time and
from time to time, to the fullest extent permitted by law, to set off and apply
any and all deposits (general or special, time or demand, provisional or final)
at any time held and other obligations at any time owing by the Lender or
Affiliate to or for the credit or the account of the Borrower against any
obligations of the Borrower now or hereafter existing hereunder and held by the
Lender, irrespective of whether or not the Lender shall have made any demand
hereunder and although such obligations may be unmatured.  The rights
of the Lender under this Section are in addition to other rights and remedies
(including other rights of setoff) that the Lender may have.

    

    Section 8.10.  Governing Law; Jurisdiction; Consent
to Service of Process.  

     

    (a)    This
Agreement shall be construed in accordance with and governed by the law of the
State of Ohio.

    

    (b)           The
Borrower irrevocably and unconditionally submits, for itself and its property,
to the nonexclusive jurisdiction of the courts of the State of Ohio sitting in
Cuyahoga County and of the United States District Court of the Northern District
of Ohio, and any relevant appellate court, in any action or proceeding arising
out of or relating to any Loan Document, or for recognition or enforcement of
any judgment, and each party hereto irrevocably and unconditionally agrees that
all claims in respect of any such action or proceeding may be heard and
determined in such Ohio state court or, to the extent permitted by law, in such
Federal court.  Each party hereto agrees that a final judgment in any
such action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by
law.  Nothing in any Loan Document shall affect any right that the
Lender may otherwise have to bring any action or proceeding relating to any Loan
Document against the Borrower or its properties in the courts of any
jurisdiction.

    

    (c)           The
Borrower irrevocably and unconditionally waives, to the fullest extent it may
legally and effectively do so, any objection that it may now or hereafter have
to the laying of venue of any suit, action or proceeding arising out of or
relating to any Loan Document in any court referred to in subsection (b) of this
Section.  Each party hereto irrevocably waives, to the fullest extent
permitted by law, the defense of an inconvenient forum to the maintenance of any
such suit, action or proceeding in any such court.

    

    (d)           Each
party hereto irrevocably consents to service of process in the manner provided
for notices in Section 8.01.  Nothing in any Loan Document will affect
the right of any party hereto to serve process in any other manner permitted by
law.

    

    Section 8.11.  WAIVER OF JURY
TRIAL.  EACH PARTY HERETO WAIVES, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY
LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO ANY LOAN
DOCUMENT OR ANY TRANSACTION CONTEMPLATED THEREBY (WHETHER BASED ON CONTRACT,
TORT OR ANY OTHER THEORY).  EACH PARTY HERETO (A) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS
REPRESENTED.  EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT,
IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B)
ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER
INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION.

     

    
      
        
        

      

      
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    Section 8.12.  Headings.  Article
and Section headings and the Table of Contents herein are for convenience of
reference only, are not part of this Agreement and shall not affect the
construction of, or be taken into consideration in interpreting, this
Agreement.

    

    Section 8.13.  Confidentiality.  The
Lender agrees to maintain the confidentiality of the Information (as defined
below), except that Information may be disclosed (a) to its and its Affiliates’
directors, officers, employees and agents, including accountants, legal counsel
and other advisors (it being understood that the Persons to whom such disclosure
is made will be informed of the confidential nature of such information and
instructed to keep such Information confidential), (b) to the extent requested
by any regulatory authority, (c) to the extent required by applicable laws or
regulations or by any subpoena or similar legal process, (d) to any other party
to this Agreement, (e) in connection with the exercise of any remedy hereunder
or any suit, action or proceeding relating to any Loan Document or the
enforcement of any right thereunder, (f) subject to an agreement containing
provisions substantially the same as those of this Section, to (i) any actual or
prospective assignee of or Participant in any of its rights or obligations under
this Agreement or (ii) any actual or prospective counterparty (or its advisors)
to any swap or derivative transaction relating to the Borrower and its
obligations, (g) with the consent of the Borrower or (h) to the extent such
Information either (i) becomes publicly available other than as a result of a
breach of this Section or (ii) becomes available to the Lender on a
nonconfidential basis from a source other than the Borrower.  For the
purposes of this Section, “Information” means all
information received from the Borrower relating to the Borrower or its business,
other than any such information that is available to the Lender on a
nonconfidential basis before disclosure by the Borrower; provided that, in the case of
information received from the Borrower after the date hereof, such information
is clearly identified at the time of delivery as confidential.

    

    Notwithstanding the foregoing,
effective from the date of commencement of discussions concerning the
transactions contemplated hereby, the parties hereto and each of their
employees, representatives or other agents may disclose to any and all Persons,
without limitation of any kind, the tax treatment and tax structure of the
transactions contemplated hereby and all materials of any kind (including
opinions or other tax analyses) that have been provided to them relating to such
tax treatment and tax structure.

    

    Section 8.14.  Interest Rate
Limitation.  Notwithstanding anything herein to the contrary,
if at any time the interest rate applicable to any Loan, together with all fees,
charges and other amounts that are treated as interest on such Loan under
applicable law (collectively the “Charges”), shall exceed the
maximum lawful rate (the “Maximum Rate”) that may be
contracted for, charged or otherwise received by the Lender holding such Loan in
accordance with applicable law, the rate of interest payable in respect of such
Loan hereunder, together with all Charges payable in respect thereof, shall be
limited to the Maximum Rate and, to the extent lawful, the interest and Charges
that would have been payable in respect of such Loan but were not payable as a
result of the operation of this Section shall be cumulated and the interest and
Charges payable to the Lender in respect of other Loans or periods shall be
increased (but not above the Maximum Rate therefor) until the Lender shall have
received such cumulated amount, together with interest thereon at the Federal
Funds Effective Rate to the date of payment.

    

    [The
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    IN WITNESS WHEREOF, the parties hereto
have caused this Agreement to be duly executed by their respective authorized
officers as of the day and year first above written.

    

    
      	 
      	
              NATIONAL
      PENN BANCSHARES, INC.

            
	 
      	 
      
	 
      	 
      
	 
      	
              By:

            	
              /s/ Glenn E.
      Moyer                         
      

            
	 
      	
              Name:

            	
              Glenn
      E. Moyer

            
	 
      	
              Title:

            	
              President
      and

            
	 
      	 
      	
              Chief
      Executive Officer

            

    

    

    

    KEYBANK
NATIONAL ASSOCIATION

    

    

    
      	 
      	
              By:

            	
              /s/ James
      Cribbet                                

            
	 
      	Name:	
              James
      Cribbet

            
	 
      	Title: 	
              Vice
      President and

            
	 
      	 
      	
              Senior
      Portfolio Manager

            

    

     

    
      
        
        

      

      
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    Exhibit
A

    

    FORM OF
REVOLVING LOAN NOTE

    

    

    
      	
              $50,000,000

            	
               March
      28, 2008

            

    

    

    

    FOR VALUE
RECEIVED, National Penn Bancshares, Inc., a Pennsylvania corporation (the “Borrower”), promises
to pay to the order of Keybank National Association (the “Lender”), the
principal sum of Fifty Million Dollars ($50,000,000) or such lesser amount that
is aggregate unpaid principal amount of all Loans made by the Lender to the
Borrower pursuant to Article 2 of the Credit Agreement (as hereinafter defined),
in immediately available funds at the main office of KeyBank National
Association, Cleveland, Ohio (or, as the case may be, at the office of any
successor Lender), together with interest on the unpaid principal amount hereof
at the rates and on the dates set forth in the Credit
Agreement.  Subject to the provisions of Article 7 of the Credit
Agreement, the Borrower shall pay the principal of and accrued and unpaid
interest on the Loans in full on the Maturity Date.

    

    The
Lender is hereby authorized to record on the schedule attached hereto, or to
otherwise record in accordance with its usual practice (including, without
limitation in the Lender’s electronic data processing system), the date and
amount of each Loan and the date and amount of each principal payment
hereunder.

    

    This Note
is issued pursuant to, and is entitled to the benefits of, the Credit Agreement
dated as of March 28, 2008 (which, as it may be amended or modified and in
effect from time to time, is herein called the “Credit Agreement”),
between the Borrower and the Lender, to which Credit Agreement reference is
hereby made for a statement of the terms and conditions governing this Note,
including the terms and conditions under which this Note may be prepaid or its
maturity date accelerated.  Capitalized terms used herein and not
otherwise defined herein are used with the meanings attributed to them in the
Credit Agreement.

    

    
      	 
      	
              NATIONAL
      PENN BANCSHARES, INC.

            
	 
      	 
      
	 
      	
              By:

            	
              __________________________________

            
	 
      	
              Name:

            	 
      
	 
      	
              Title:

            	 
      

    

     

    
      
        
        

      

      
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      SCHEDULE
OF LOANS AND PAYMENTS OF PRINCIPAL

      TO

      NOTE OF
NATIONAL PENN BANCSHARES, INC. TO KEYBANK NATIONAL ASSOCIATION

      DATED
MARCH 28, 2008

      

      

      

      
        	
                Date

              	
                Principal
      Amount of Loan

              	
                Maturity
      of Interest Period

              	
                Principal
      Amount

              	
                Unpaid
      Balance

              
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      

      

      

      

    

    

    
      
        
        

      

      
        39

        
          

        

      

      
        
        

    

    Schedule
3.05

    

    Subsidiaries

    

    
      	
               

              National
      Penn Bancshares, Inc. (a Pennsylvania corporation)

            
	 
      	
              NPB
      Capital Trust II

            	 
      
	 
      	
              NPB
      Capital Trust III

            	 
      
	 
      	
              NPB
      Capital Trust IV

            	 
      
	 
      	
              NPB
      Capital Trust V

            	 
      
	 
      	
              NPB
      Capital Trust VI

            	 
      
	 
      	
              National
      Penn Life Insurance Company

            	 
      
	 
      	
              National
      Penn Investment Company

            	 
      
	 
      	
              National
      Penn Bank (a national banking association)

            
	 
      	 
      	
              Caruso
      Benefits Group, Inc.

            
	 
      	 
      	
              Higgins
      Insurance Associates

            
	 
      	 
      	
              KLV
      Inc.

            
	 
      	 
      	
              KLVI,
      Inc.

            
	 
      	 
      	
              KNBT
      Settlement Services, LLC

            
	 
      	 
      	
              Link
      Financial Services, Inc.

            
	 
      	 
      	 
      	
              Link
      Abstract, L.P. – 8-% owned by Link Financial Services,

              Inc.
      (limited partner)

            
	 
      	 
      	
              National
      Penn Capital Advisors

            
	 
      	 
      	
              National
      Penn Insurance Agency, Inc.

            
	 
      	 
      	
              National
      Penn Investors Trust Company

            
	 
      	 
      	
              National
      Penn Leasing Company

            
	 
      	 
      	
              National
      Penn Management Services, LLC

            
	 
      	 
      	
              National
      Penn Realty, Inc.

            
	 
      	 
      	
              NPB
      Delaware, Inc.

            
	 
      	 
      	
              Vantage
      Investment Advisors, LLC

            
	 
      	
              Christiana
      Bank & Trust Company (a Delaware banking
  corporation)

            
	 
      	 
      	
              Christiana
      Corporate Services, Inc.

            
	 
      	 
      	
              Monarch
      Management Services, LLC

            
	 
      	 
      	
              Christiana
      Trust Company, LLC

            
	 
      	
              KNBT
      Inv. I

            
	 
      	
              KNBT
      Inv. II

            
	 
      	
              Nittany
      Asset Management, Inc.

            
	 
      	 
      	 
      

    

    
      
        
        

      

      
        40

        
          

        

      

      
        
        

      

    

     

    Schedule
6.02

    

    Restrictive
Agreements

    

    Trust
indentures relating to trust preferred securities:

    

    
      	
               
      

            	
              ·

            	
              The
      $65.206 million of debentures issued to NPB Capital Trust II on August 20,
      2002 mature on September 30, 2032, and bear interest at the annual fixed
      rate of 7.85%.

            

    

    

    
      	
               
      

            	
              ·

            	
              The
      $20.619 million of debentures issued to NPB Capital Trust III on February
      20, 2004 mature on April 23, 2034, and bear interest at a floating rate
      (three month LIBOR plus a margin of
2.75%).

            

    

    

    
      	
               
      

            	
              ·

            	
              The
      $20.619 million of debentures issued to NPB Capital Trust IV on March 25,
      2004 mature on April 7, 2034, and bear interest at a floating rate (three
      month LIBOR plus a margin of
2.75%).

            

    

    

    
      	
               
      

            	
              ·

            	
              The
      $20.619 million of debentures issued to NPB Capital Trust V on
      April 7, 2004 mature on April 7, 2034, and bear interest at a
      floating rate (three month LIBOR plus a margin of
  2.75%).

            

    

    

    
      	
               
      

            	
              ·

            	
              The
      $15.464 million of debentures issued to NPB Capital Trust VI on January
      19, 2006 mature on March 15, 2036, and bear interest at a floating rate
      (three month LIBOR plus a margin of
1.38%).

            

    

    

    The forms
of indenture are filed as Exhibits 4.3, 4.8, 4.12, 4.16, and 4.20 to the Annual
Report on Form 10-K for 2007 of National Penn Bancshares, Inc.

    

    
      
        
        

      

      
        41

        
          

        

      

      
        
        

      

    

     

    Schedule
6.06

    

    Existing
Liens

    

    

    

    None

    

    

     

     

    
      42

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