Document:

Exhibit 10.6

 

THIRD
AMENDED AND RESTATED REVOLVING CREDIT NOTE

 

	
  $7,700,000

  	
   

  	
  March 30, 2009

  

 

FOR VALUE
RECEIVED,  P&F
INDUSTRIES, INC., a Delaware corporation (“P&F”), FLORIDA PNEUMATIC MANUFACTURING CORPORATION,
a Florida corporation (“Florida Pneumatic”), EMBASSY
INDUSTRIES, INC., a New York corporation (“Embassy”), GREEN MANUFACTURING, INC., a Delaware
corporation (“Green”), COUNTRYWIDE HARDWARE,
INC., a Delaware corporation (“Countrywide”), NATIONWIDE INDUSTRIES, INC., a Florida
corporation (“Nationwide”),WOODMARK INTERNATIONAL,
L.P., a Delaware limited partnership (“Woodmark”), PACIFIC STAIR PRODUCTS, INC., a Delaware corporation (“Pacific”),
WILP HOLDINGS, INC., a Delaware
corporation (“WILP”), CONTINENTAL TOOL GROUP,
INC., a Delaware corporation (“Continental”) and HY-TECH MACHINE, INC., a Delaware corporation (“Hy-Tech”;;
and collectively with P&F, Florida Pneumatic, Embassy, Green, Countrywide,
Nationwide, Woodmark, Pacific, WILP and Continental the “Co-Borrowers”),
jointly and severally promise to pay to the order of HSBC BANK USA, NATIONAL ASSOCIATION  (the
“Lender”), on or before the Revolving Credit Termination Date, the principal
amount of SEVEN MILLION SEVEN HUNDRED THOUSAND ($7,700,000) DOLLARS or, if less, the unpaid principal amount of all Revolving
Credit Loans made by the Lender to the Co-Borrowers under the Credit Agreement
referred to below.

 

The Co-Borrowers jointly and severally
promise to pay interest on the unpaid principal amount hereof from the date
hereof until paid in full at the rates and at the times which shall be
determined, and to make principal repayments on this Note at the times which
shall be determined, in accordance with the provisions of the Credit Agreement
referred to below.

 

This Note is one of the “Revolving Credit Notes”
referred to in the Credit Agreement, dated as of June 30, 2004, by and
among the Co-Borrowers, Citibank, N.A., as Administrative Agent, and the
Lenders (including the Lender) as are or may from time to time become parties
thereto (as same has been and may be further amended, restated, supplemented or
modified, the “Credit Agreement”) and is issued pursuant to and entitled to the
benefits of the Credit Agreement to which reference is hereby made for a more
complete statement of the terms and conditions under which the Revolving Credit
Loans evidenced hereby were made and are to be repaid.  Capitalized terms used herein without
definition shall have the meanings set forth in the Credit Agreement.

 

Each of the Lender and any subsequent holder
of this Note shall record the date, Type and amount of each Revolving Credit
Loan and the date and amount of each payment or prepayment of principal of each
Revolving Credit Loan on the grid schedule annexed to this Note; provided,
however, that the failure of the Lender or any holder to set forth such
Revolving Credit Loans, payments and other information on the attached grid
schedule shall not in any manner affect the obligation of the Co-Borrowers to
repay the Revolving Credit Loans made by the Lender in accordance with the
terms of this Note.

 

This Note is subject to prepayment as
provided in Section 3.03 of the Credit Agreement.

 

Upon the occurrence of an Event of Default
the unpaid balance of the principal amount of this Note together with all
accrued but unpaid interest thereon, may become, or may be declared to be, due
and payable in the manner, upon the conditions and with the effect provided in
the Credit Agreement.

 

 

All payments of principal and interest in
respect of this Note shall be made in lawful money of the United States of
America in immediately available funds at the office of Citibank, N.A., as
Administrative Agent for the Lenders under the Credit Agreement, located at 730
Veterans Memorial Highway, Hauppauge, New York 11788 or at such other place as
shall be designated in writing for such purpose in accordance with the terms of
the Credit Agreement.

 

No reference herein to the Credit Agreement
and no provision of this Note or the Credit Agreement shall alter or impair the
obligation of the Co-Borrowers, which is absolute and unconditional, to pay the
principal of and interest on this Note at the place, at the respective times,
and in the currency herein prescribed.

 

Each Co-Borrower and each endorser of this
Note waive diligence, presentment, protest, demand, and notice of any kind in
connection with this Note.

 

This Note is an amendment and restatement of,
and is being issued in replacement of and substitution for, the Second Amended
and Restated Revolving Credit Note dated February 12, 2007 in the original
principal amount of $6,300,000 issued by the Co-Borrowers (the “Original Note”).  The execution and delivery of this Note shall
not be construed to have constituted a repayment of any principal of, or
interest on, the Original Note.

 

THIS NOTE
SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES OF
CONFLICTS OR CHOICE OF LAW.

 

[next page is signature page]

 

2

 

IN WITNESS
WHEREOF, each Co-Borrower has caused this Note to be executed and delivered by
its duly authorized officer, as of the day and year and at a place first above
written.

 

	
   

  	
  P&F INDUSTRIES, INC.

  
	
   

  	
  FLORIDA
  PNEUMATIC MANUFACTURING CORPORATION

  
	
   

  	
  EMBASSY INDUSTRIES, INC.

  
	
   

  	
  GREEN MANUFACTURING, INC.

  
	
   

  	
  COUNTRYWIDE HARDWARE, INC.

  
	
   

  	
  NATIONWIDE INDUSTRIES, INC.

  
	
   

  	
  WOODMARK INTERNATIONAL, L.P.

  
	
   

  	
  By:

  	
  Countrywide Hardware, Inc., its General

  
	
   

  	
   

  	
  Partner

  
	
   

  	
  PACIFIC STAIR PRODUCTS, INC.

  
	
   

  	
  WILP HOLDINGS, INC.

  
	
   

  	
  CONTINENTAL TOOL GROUP, INC.

  
	
   

  	
  HY-TECH MACHINE, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Joseph A. Molino, Jr.

  
	
   

  	
   

  	
  Joseph A. Molino, Jr., the Vice President of each of the
  corporations named above

  
				

 

3EXHIBIT 10.1

 

AMENDED AND RESTATED

EMPLOYMENT AGREEMENT

 

THIS AGREEMENT is made as of this 28 day
of August, 2007, between GRAYSTONE FINANCIAL
CORP., a Pennsylvania business corporation (the “Corporation”), and GRAYSTONE BANK (“Bank”), a Pennsylvania
chartered bank and ANDREW SAMUEL, an
adult individual (“Executive”).

 

WITNESSETH:

 

WHEREAS, the Bank and Executive have been
parties to an employment agreement dated November 14, 2005 relating to the
employment of the Executive by the Bank (the “Original Agreement”); and

 

WHEREAS, the Corporation and the Bank desire to
continue to employ Executive to serve in the capacity of Chairman, President
and Chief Executive Officer  of the
Corporation and the Bank on the terms and conditions set forth herein; and

 

WHEREAS, the Corporation, the Bank
and the Executive desire to amend and restate the Original Agreement as set
forth herein.

 

AGREEMENT

 

NOW, THEREFORE, the parties hereto,
intending to be legally bound, agree as follows:

 

1.                                     Employment.  The
Corporation and the Bank each hereby employs Executive and Executive hereby
accepts employment with Corporation and the Bank, on the terms and conditions
set forth in this Agreement.

 

2.                                     Duties of Employee.  Executive shall serve as the President and
Chief Executive Officer of the Corporation and the Bank, reporting only to the
Board of Directors of the Corporation and the Bank and shall have supervision
and control over, and responsibility for, the general management and operation
of the Corporation and the Bank, and shall have such other powers and duties as
may from time to time be prescribed by the Board of Directors of the
Corporation and the Bank, provided such powers and duties are consistent with
the Executive’s position.  Executive
shall be elected as a member and Chairman of the Board of Directors of the
Corporation, subject to election by shareholders, and appointed as Chairman of
the Corporation’s Board of Directors. 
Executive shall devote his full time, attention and energies to the
business of the Corporation and the Bank during the Employment Period (as
defined in Section 3 of this Agreement); provided, however, that this Section 2
shall not be construed as preventing Executive from (a) engaging in
activities incident or necessary to personal investments, (b) acting as a
member of the board of directors of any non-profit association or corporation,
or (c) 

 

 

being involved in any other activity with the
prior approval of the Board of Directors of the Corporation or the Bank.  The Executive shall not engage in any
business or commercial activities, duties or pursuits which compete with the
business or commercial activities of the Corporation or the Bank, nor may the
Executive serve as a director or officer or in any other capacity in a company
which competes with the Corporation or the Bank.

 

3.                                     Term of Agreement.

 

(a)                                Employment Period.  This Agreement shall be for a three (3) year
period (the “Employment Period”) beginning on the date first mentioned above,
and if not previously terminated pursuant to the terms of this Agreement, the
Employment Period shall end three (3) years later; provided however, that
the Employment Period shall be automatically renewed one year later on the
first anniversary date of the commencement of the Employment Period (the “Renewal
Date”) for a period ending three (3) years from the Renewal Date unless
either party shall give written notice of non-renewal to the other party at
least ninety (90) days prior to the Renewal Date, in which event this Agreement
shall terminate at the end of the Employment Period.  If this Agreement is renewed on the Renewal
Date, it will be automatically renewed on the first anniversary date of the
Renewal Date and each subsequent year (the “Annual Renewal Date”) for a period
ending three (3) years from each Annual Renewal Date, unless either party
gives written notice of non-renewal to the other party at least ninety (90)
days prior to the Annual Renewal Date, in which case this Agreement will
continue in effect for a term ending two (2) years from the Annual Renewal
Date immediately following such notice.

 

(b)                               Termination for Cause.  Notwithstanding the provisions of Section 3(a) of
this Agreement, this Agreement may be terminated by the Corporation or the Bank
for Cause (as defined herein) upon written notice from the Board of Directors
of the Corporation to Executive.  As used
in this Agreement, “Cause” shall mean any of the following:

 

(i)                                     Executive’s conviction of or
plea of guilty or nolo contendere to a felony, a crime of falsehood or a crime
involving moral turpitude, or the actual incarceration of Executive for a
period of thirty (30) consecutive days or more;

 

(ii)                                  Executive’s willful
continuing failure to follow the lawful instructions of the Chief Executive
Officer or the Board of Directors of the Corporation or the Bank (which
instructions must be consistent with the terms of this Agreement), after the
Executive’s receipt of written notice of such instructions, other than a
failure resulting form Executive’s incapacity because of physical or mental illness;

 

(iii)                               A government regulatory
agency recommends or orders in writing that the Corporation or the Bank
terminate the employment of the Executive with the Corporation or the Bank or
relieve him of his duties as such relate to the Corporation or the Bank; or

 

 

(iv)                              Executive’s violation of the
covenant not to compete contained in Section 8 or the confidentiality
provisions of Section 9.

 

If
this Agreement is terminated for Cause, all of Executive’s rights under this
Agreement shall cease as of the effective date of such termination, except
that:

 

(i)                                     the Bank shall pay to
Executive the unpaid portion, if any, of his Annual Base Salary through the
date of termination; and

 

(ii)                                  the Bank shall provide to
Employee such post-employment benefits, if any, as may be provided for under
the terms of the employee benefit plans of the Bank then in effect.

 

(c)                                Termination for
Good Reason. 
Notwithstanding the provisions of Section 3(a) of this
Agreement, this Agreement shall terminate automatically upon Executive’s
termination of employment for Good Reason. 
The term “Good Reason” shall mean (i) a reduction in salary or
material reduction in benefits, including any incentive compensation plan,
except in cases of a national financial depression or emergency when such
reduction has been implemented generally by the Board of Directors for the
Corporation’s senior management, (ii) a reassignment which assigns
full-time employment duties to Executive at a location more than fifty (50)
miles from the Corporation’s principal executive office on the date of this
Agreement, (iii) any other material breach or default by the Corporation
or the Bank under any term or provision of this Agreement, including any
reduction, in any material respect and without Executive’s consent, of the
authority, duties or other terms and conditions of Executive’s employment
hereunder, (iv) any failure of Executive to be elected to the Board of
Directors of either the Corporation or the Bank or to be appointed as Chairman
of each such Board; or  (v) any
delivery by the Corporation or the Bank to the Executive of a written notice of
non-renewal pursuant to Section 3(a) above, in all cases after notice
from the Executive to the Corporation within ninety (90) days after the initial
existence of any such condition that the condition constitutes Good Reason and
the failure of the Corporation and the Bank to cure such situation within
thirty (30) days after said notice.

 

If such termination occurs for Good Reason, then
Bank shall pay Executive such benefits as are set forth in Section 7 of
this Agreement.

 

(d)                               Death.  Notwithstanding the provisions of Section 3(a) of
this Agreement, this Agreement shall terminate automatically upon Executive’s
death and Executive’s rights under this Agreement shall cease as of the date of
such termination, except that (i) the Bank shall pay to Executive’s
spouse, personal representative, or estate the unpaid portion, if any, of his
Annual Base Salary through date of death and the balance of the payments (if
any) owing pursuant to Section 15(b) below, and (ii) the Bank
shall provide to Executive’s dependents any benefits due under the Bank’s
employee benefit plans.

 

(e)                                Disability.  Executive, the Corporation and the Bank agree
that if Executive becomes eligible for employer-provided short-term and/or
long-term disability benefits, or worker’s compensation benefits, then the Bank’s
obligation to pay Executive 

 

 

his
base salary shall be reduced by the amount of the disability or worker’s
compensation benefits received by Executive.

 

Executive, the Corporation and the Bank agree that
if, in the judgment of the Corporation’s Board of Directors, the Executive is
unable, as a result of illness or injury, to perform the essential functions of
his position on a full-time basis with or without a reasonable accommodation
and without posing a direct threat to himself or others for a period of six
months, the Corporation and the Bank will suffer an undue hardship in
continuing the Executive’s employment as set forth in this agreement.  Accordingly, this Agreement shall terminate
at the end of the six-month period, and all of Executive’s rights under this
Agreement shall cease, with the exception of those rights which Executive may
have under the Bank’s benefit plans.

 

(f)                                  Resignation
from Board of Directors.  In
the event Executive’s employment under this Agreement is terminated for any
reason, Executive’s service as a Director of the Corporation, the Bank, and any
affiliate or subsidiary thereof shall immediately terminate.  This Section 3(f) shall constitute
a resignation notice for such purposes.

 

4.                                     Employment Period Compensation, Benefits and Expenses.

 

(a)                                Annual Base Salary.  For services performed by Executive under
this Agreement, Bank shall pay Executive an Annual Base Salary during the
Employment Period at the rate of Two Hundred Ten Thousand Dollars ($210,000)
per year, minus applicable withholdings and deductions, payable at the same
times as salaries are payable to other executive employees of the Bank.  The Annual Base Salary shall be reviewed
annually by the Board of Directors and the Board may, from time to time,
increase Executive’s Annual Base Salary, and any and all such increases shall
be deemed to constitute amendments to this Section 4(a) to reflect
the increased amounts, effective as of the date established for such increases
by the Board.  In reviewing adjustments
to Annual Base Salary, the Board of Directors shall consider relevant market
data regarding executive salaries at peer financial institutions and the
performance of the Corporation and the Bank under the Executive’s leadership.

 

(b)                               Bonus.  The Board of Directors of the Corporation and
the Bank may provide for the payment of an annual bonus to the Executive as it
deems appropriate to provide incentive to the Executive and to reward the
Executive for his performance.  Such
bonus may, but need not be, determined in accordance with any incentive bonus
programs for executive officers as approved by the Board of Directors.  The payment of any such bonuses will not reduce
or otherwise affect any other obligation of the Bank to the Executive provided
for in this Agreement.

 

(c)                                Vacations, Holidays, etc.  During the term of this Agreement, Executive
shall be entitled to be paid annual vacation in accordance with the policies as
established from time to time by the Board of Directors of the Bank.  However, Executive shall not be entitled to
receive any additional compensation from Bank for failure to take a vacation,
nor shall Executive be able to accumulate unused vacation time from one year 

 

 

to
the next, except to the extent authorized by the Board of Directors of
Bank.  The Executive shall also be
entitled to all paid holidays, sick days and personal days provided by the Bank
to its regular full-time employees and senior executive officers.

 

(d)                               Automobile.  During the term of this Agreement, the Bank
shall provide the Executive with exclusive use of an automobile mutually agreed
upon by Executive and Bank.  This
automobile shall be a mid-size car or comparable sports utility vehicle.  The Bank shall be responsible and shall pay
for all costs associated with the operation and maintenance of such automobile,
including, without limitation, insurance coverage, repairs, maintenance and
other operating and incidental expenses, including registration, fuel and oil.

 

(e)                                Country Club Membership Fees.  The Bank shall pay for Executive’s membership
dues, capital fund assessments and similar items necessary or appropriate to
maintain a membership at a country club within the Bank’s market area as
mutually agreed upon by Bank and Executive.

 

(f)                                  Stock Based Incentives.  During the term of this Agreement, Executive
shall be entitled to such stock based incentives as may be granted from time to
time by the Corporation’s Board of Directors under the Corporation’s stock
based incentive plans and as are consistent with the Executive’s
responsibilities and performance.

 

(g)                               Employee Benefit Plans.  During the term of this Agreement, Executive
shall be entitled to participate in or receive the benefits of any employee
benefit plan currently in effect at the Bank, subject to the terms of said
plan, until such time that the Board of Directors authorizes a change in such
benefits.

 

(h)                               Business Expenses.  During the term of this Agreement, Executive
shall be entitled to receive prompt reimbursement for all reasonable expenses
incurred by him, which are properly accounted for, in accordance with the
policies and procedures established by the Board of Directors of the
Corporation or the Bank for its executive officers.

 

5.                                     Termination of Employment Following Change in Control.

 

(a)                                If a Change in Control (as
defined in Section 5(b) of this Agreement) shall occur at any time
during the term of this Agreement, Executive may terminate his employment for
any reason or no reason by delivering a notice in writing (the “Notice of
Termination”) to the Corporation within thirty (30) days of the Change in
Control which termination shall be effective immediately upon delivery of such
Notice of Termination.

 

(b)                               As used in this
Agreement, “Change in Control” shall mean the occurrence immediately of any of
the following:

 

(A)                              the consummation of (i) a
merger, consolidation, division or other fundamental transaction involving the
Corporation or the Bank, (ii) a sale, exchange, transfer or other
disposition of substantially all of the assets of the Corporation or the Bank
to any entity which is not a direct or indirect subsidiary 

 

 

of
the Corporation, or (iii) a purchase by the Corporation or the Bank of
substantially all of the assets of another entity; unless (y) such
merger, consolidation, division, sale, exchange, transfer, purchase,
disposition or other transaction is approved in advance by eighty percent (80%)
or more of the members of the Board of Directors of the Corporation who are not
interested in the transaction and (z) a majority of the members of the
Board of Directors of the legal entity resulting from or existing after any
such transaction and a majority of the Board of Directors of such entity’s parent
corporation, if any, are former members of the Board of Directors of the
Corporation; or

 

(B)                                any “person” (as such term
is used in Sections 13(d) and 14(d) of the Securities Exchange Act of
1934 (the “Exchange Act”)), other than the Corporation, a direct or indirect
subsidiary of the Corporation, or a person who is the beneficial owner of more
than twenty-five percent (25%) of the Corporation’s outstanding securities on
the date of this Agreement becomes the “beneficial owner” (as defined in Rule 13d-3
under the Exchange Act), directly or indirectly, of securities of the
Corporation representing twenty-five percent (25%) or more of the combined
voting power of Corporation’s then outstanding securities; or

 

(C)                                during any period of two (2) consecutive
years during the term of Executive’s employment under this Agreement,
individuals who at the beginning of such period constitute the Board of
Directors of the Corporation cease for any reason to constitute at least a
majority thereof, unless the election of each director who was not a director
at the beginning of such period has been approved in advance by directors
representing at least two-thirds of the directors then in office who were
directors at the beginning of the period; or

 

(D)                               any other change in control
of the Corporation or the Bank similar in effect to any of the foregoing.

 

6.                                     Rights in Event of Change in Control.

 

(a)                                In the event that Executive
delivers a Notice of Termination (as defined in Section 5(a) of this
Agreement) to the Corporation, Executive shall be entitled to receive the
compensation and benefits set forth below:

 

(i)                                     Executive shall be paid,
within twenty (20) days following termination, a lump sum cash payment equal to
three times the sum of (1) the highest Annual Base Salary as defined in Section 4(a) during
the immediately preceding three calendar years, (2) the highest cash bonus
and other cash incentive compensation earned by him with respect to one of the
three calendar years immediately preceding the year of termination and (3) the
highest value of stock options and other stock based incentives awarded to the
Executive with respect to one of the three calendar years immediately preceding
the year of termination, which value shall be based upon the grant-date fair
value of the award determined in accordance with SFAS 123(R) (“Share-Based
Payments”).  The amount shall be subject
to federal, state, and local tax withholdings. 

 

 

Notwithstanding
the foregoing, the value of restricted stock awarded to Executive under the
Bank’s 2006 Restricted Stock Plan shall not be included under §6(a)(i)(3) above
for purposes of calculating the compensation payable to Executive.

 

(ii)                                  In addition, for a period of
thirty-six (36) months from the date of termination of employment, Executive shall
be permitted to continue participation in and the Bank shall maintain the same
level of contribution for Executive’s participation in the Bank’s life,
disability, medical/health insurance and other health and welfare benefits in
effect with respect to Executive during the one (1) year prior to his
termination of employment, or, if Bank is not permitted by the insurance
carriers to provide such benefits because Executive is no longer an employee, a
dollar amount equal to the cost to Executive of obtaining such benefits (or
substantially similar benefits).

 

(b)                               Executive shall not be
required to mitigate the amount of any payment provided for in this Section 6
by seeking other employment or otherwise, nor shall the amount of payment or
the benefit provided for in this Section 6 be reduced by any compensation
earned by Executive as the result of employment by another employer or by
reason of Executive’s receipt of or right to receive any retirement or other
benefits after the date of termination of employment or otherwise.

 

(c)                                Should the total of all
amounts or benefits payable hereunder, together with any other payments which
Executive has a right to receive from the Corporation, the Bank, any affiliates
or subsidiaries of the Corporation or the Bank, or any successors of any of the
foregoing, result in the imposition of an excise tax under Internal Revenue
Code Section 4999 (or any successor thereto), Executive shall be entitled
to an additional “excise tax” adjustment payment in an amount such that, after
the payment of all federal and state income and excise taxes, Executive will be
in the same after-tax position as if no excise tax had been imposed.  Any payment or benefit which is required to
be included under Internal Revenue Code Sections 280G or 4999 (or any successor
provisions thereto) for purposes of determining whether an excise tax is
payable shall be deemed a payment “made to Executive” or a payment “which
Executive has a right to receive” for purposes of this provision.  The Corporation or the Bank (or its
successor) shall be responsible for the costs of calculation of the
deductibility of payments and benefits and the excise tax by the Corporation’s
independent certified accountant and tax counsel and shall notify Executive of
the amount of excise tax prior to the time such excise tax is due.  If at any time it is determined that the
additional “excise tax” adjustment payment previously made to Executive was
insufficient to cover the effect of the excise tax, the gross-up payment
pursuant to this provision shall be increased to make Executive whole,
including an amount to cover the payment of any penalties resulting from any
incorrect or late payment of the excise tax resulting from the prior
calculation.  All such amounts required
to be paid hereunder shall be paid at the time any withholdings may be required
(or, if earlier, the time Executive shall be required to pay such amounts)
under applicable law, and any additional amounts to which Executive may be
entitled shall be paid or reimbursed no later than fifteen (15) days following
confirmation of such amount by the Corporation’s independent accountants;
provided 

 

 

however,
that any payments to be made under this Section 6(c) shall in all
events be made no later than the end of the Executive’s taxable year next
following the taxable year in which the Executive remits such excise tax
payments.  In the event any amounts paid
hereunder are subsequently determined to be in error because estimates were
required or otherwise, the parties agree to reimburse each other to correct
such error, as appropriate, and to pay interest thereon at the applicable
federal rate (as determined under Internal Revenue Code Section 1274 for
the period of time such erroneous amount remained outstanding and unreimbursed).  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.

 

7.                                       Rights in Event of
Termination of Employment Absent Change in Control.

 

(a)                                If Executive’s employment is
involuntarily terminated by the Corporation or the Bank without Cause or is
terminated by Executive for Good Reason pursuant to Section 3(c), then
Bank shall pay (or cause to be paid) to Executive, within twenty (20) days
following termination, a lump sum cash payment equal to three times the sum of (1) the
highest Annual Base Salary as defined in Section 4(a) during the
immediately preceding three calendar years, (2) the highest cash bonus and
other cash incentive compensation earned by him with respect to one of the
three calendar years immediately preceding the year of termination and (3) the
highest value of stock options and other stock based incentives awarded to the
Executive with respect to one of the three calendar years immediately preceding
the year of termination, which value shall be based upon the grant-date fair
value of the award determined in accordance with SFAS 123(R) (“Share-Based
Payments”).  The amount shall be subject
to federal, state and local tax withholdings. 
In addition, for a period of three (3) years from the date of
termination of employment, Executive shall be permitted to continue
participation in, and the Bank shall maintain the same level of contribution
for, Executive’s participation in the Bank’s life, disability, medical/health
insurance and other health and welfare benefits in effect with respect to
Executive during the one (1) year prior to his termination of employment,
or, if Bank cannot provide such benefits because Executive is no longer an
employee, a dollar amount equal to the cost of Executive of obtaining such
benefits (or substantially similar benefits). 
In addition, if permitted pursuant to the terms of the plan, Executive
shall receive additional retirement benefits to which he would have been
entitled had his employment continued through the then remaining term of the
Agreement.  Notwithstanding the
foregoing, the value of restricted stock awarded to Executive under the Bank’s
2006 Restricted Stock Plan shall not be included under §7(a)(3) above for
purposes of calculating the compensation payable to Executive.

 

(b)                               Executive shall not be required to
mitigate the amount of any payment provided for in this Section 7 by
seeking other employment or otherwise, nor shall the amount of payment or the
benefit provided for in this Section 7 be reduced by any compensation
earned by Executive as the result of employment by another employer or by
reason of Executive’s receipt of or right to receive any retirement or other
benefits after the date of termination of employment or otherwise.

 

 

(c)                                In the event
that amounts or benefits payable hereunder, together with any other payments
which Executive has a right to receive from the Corporation, the Bank, any affiliates
or subsidiaries of the Corporation or the Bank, or any successors of any of the
foregoing, result in the imposition of an excise tax under Internal Revenue
Code Section 4999 (or any successor thereto), Executive shall be entitled
to an additional “excise tax” adjustment payment in an amount such that, after
the payment of all federal and state income and excise taxes, Executive will be
in the same after-tax position as if no excise tax had been imposed.  Any payment or benefit which is required to
be included under Internal Revenue Code Sections 280G or 4999 (or any successor
provisions thereto) for purposes of determining whether an excise tax is
payable shall be deemed a payment “made to Executive” or a payment “which
Executive has a right to receive” for purposes of this provision.  The Bank (or its successor) shall be
responsible for the costs of calculation of the deductibility of payments end
benefits and the excise tax by the Bank’s independent certified accountant and
tax counsel and shall notify Executive of the amount of excise tax due prior to
the time such excise tax is due.  If at
any time it is determined that the additional “excise tax” adjustment payment
previously made to Executive was insufficient to cover the effect of the excise
tax, the gross-up payment pursuant to this provision shall be increased to make
Executive whole, including an amount to cover the payment of any penalties
resulting from any incorrect or late payment of the excise tax resulting from
the prior calculation.  All such amounts
required to be paid hereunder shall be paid at the time any withholdings may be
required (or, if earlier, the time Executive shall be required to pay such
amounts) under applicable law, and any additional amounts to which Executive
may be entitled shall be paid or reimbursed no later than fifteen (15) days
following confirmation of such amount by the Corporation’s independent
accountants; provided however, that any payments to be made under this Section 6(c) shall
in all events be made no later than the end of the Executive’s taxable year
next following the taxable year in which the Executive remits such excise tax
payments.  In the event any amounts paid
hereunder are subsequently determined to be in error because estimates were
required or otherwise, the parties agree to reimburse each other to correct
such error, 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).  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.

 

8.                                       Covenant Not to Compete.

 

(a)                                Executive hereby
acknowledges and recognizes the highly competitive nature of the business of
the Corporation and the Bank and accordingly agrees that, during and for the
applicable period set forth in Section 8(c) hereof, Executive shall
not:

 

(i)                                     enter into or be engaged
(other than by the Corporation or the Bank), directly or indirectly, either for
his own account or as agent, consultant, employee, partner, officer, director,
proprietor, investor (except as an investor owning less than 5% of the stock of
a publicly owned company) or otherwise of any person, firm, corporation or
enterprise engaged in (1) the banking (including

 

 

bank
holding company) or financial services industry, (2) starting a new bank
or (3) any other activity in which the Corporation, Bank or any of its
subsidiaries are engaged during the Employment Period, in either case within a
fifty (50) mile radius of the legal or principal executive office of the
Corporation or the Bank and the office at which the Executive spent the
majority of his time (the “Non-Competition Area”); or

 

(ii)                                  solicit, directly or
indirectly, current or former customers of the Corporation or the Bank or any
of their respective subsidiaries to divert their business from the Corporation
and/or the Bank; or

 

(iii)                               solicit, directly or
indirectly, any person who is employed by the Corporation or the Bank or any of
their respective subsidiaries to leave the employ of the Corporation or the
Bank.

 

(b)                                 It is expressly understood
and agreed that, although the parties consider the restrictions contained in Section 8(a) hereof
reasonable for the purpose of preserving for the Corporation, the Bank and its
subsidiaries their goodwill and other proprietary rights, if a final judicial
determination is made by a court having jurisdiction that the time or territory
or any other restriction contained in this Section 8(a) hereof is an
unreasonable or otherwise unenforceable restriction against Executive, the
provisions of Section 8(a) hereof shall not be rendered void but
shall be deemed amended to apply as to such maximum time and territory and to
such other extent as such court may judicially determine or indicate to be
reasonable.

 

(c)                                  The provisions of this Section 8
shall be applicable commencing on the date of this Agreement and continuing for
twelve (12) months after the effective date of the termination of Executive’s
employment. Notwithstanding the above provisions, if the Executive violates the
provisions of this Section 8 and the Bank must seek enforcement of the
provisions of Section 8 and is successful in enforcing the provisions,
either pursuant to a settlement agreement, or pursuant to court order, the
covenant not to compete will remain in effect for one full year following the
date of the settlement agreement or court order.

 

(d)                                 Executive hereby agrees that
the provisions of this Section 8 are fully assignable by the Corporation
and the Bank to any successor.  Executive
also acknowledges that the terms and conditions of this Section 8 will not
be affected by the circumstances surrounding his termination of employment.

 

(e)                                  The Executive acknowledges
and agrees that any breach of the restrictions set forth in this Section 8
will result in irreparable injury to the Corporation and the Bank for which it
shall have no meaningful remedy at law, and the Corporation and the Bank shall
be entitled to injunctive relief in order to enforce provisions hereof.  Upon obtaining any such final and
nonappealable injunction, the Corporation and the Bank shall be entitled to
pursue reimbursement from the Executive and/or the Executive’s employer of
attorney’s fees and costs reasonably incurred in obtaining such final and
nonappealable injunction.  In addition,
the Corporation and the Bank shall be entitled to pursue 

 

 

reimbursement
from the Executive and/or the Executive’s employer of costs reasonably incurred
in securing a qualified replacement for any employee enticed away from the
Corporation and the Bank by Executive. 
Further, the Corporation and the Bank shall be entitled to set off
against or obtain reimbursement from Executive of any payments owed or made to
the Executive hereunder.

 

9.                                     Unauthorized Disclosure.  During the term of his employment hereunder,
or at any later time, the Executive shall not, without the written consent of
the Board of Directors of the Corporation and the Bank or a person authorized
thereby (except as may be required pursuant to a subpoena or other legal
process), knowingly disclose to any person, other than an employee of the
Corporation and the Bank or a person to whom disclosure is reasonably necessary
or appropriate in connection with the performance by the executive of his duties
as an executive of the Corporation and the Bank, any material confidential
information obtained by him while in the employ of the Corporation and the Bank
with respect to any of the Corporation and the Bank’s services, products,
improvements, formulas, designs or styles, processes, customers, methods of
business or any business practices the disclosure of which could be or will be
damaging to the Corporation and the Bank; provided, however, that confidential
information shall not include any information known generally to the public
(other than as a result of unauthorized disclosure by the Executive or any
person with the assistance, consent or direction of the Executive) or any
information of a type not other considered confidential by persons engaged in
the same business or a business similar to that conducted by the Corporation
and the Bank or any information that must be disclosed as required by law.

 

10.                               Indemnification; Liability Insurance.  The Corporation and the Bank shall indemnify
the Executive, to the fullest extent permitted by Pennsylvania law, with
respect to any threatened, pending or contemplated action, suit or proceeding
brought against him by reason of the fact that he is or was a director,
officer, employee or agent of the Corporation and the Bank or is or was serving
at the written request of the Corporation as a director, officer, employee or
agent of another person or entity.  The
Executive’s right to indemnification provided herein is not exclusive of any
other rights to which Executive may be entitled under any bylaw, agreement,
vote of shareholders or otherwise, and shall continue beyond the term of this
Agreement.

 

11.                               Notices.  Except as
otherwise provided in this Agreement, any notice required or permitted to be
given under this Agreement shall be deemed properly given if in writing and if
mailed by registered or certified mail, postage prepaid with return receipt
requested, to Executive’s address, in the case of notices to Executive, and to
the principal executive office of the Corporation, in the case of notice to the
Corporation or the Bank.

 

12.                              Waiver.  No
provision of this Agreement may be modified, waived or discharged unless such
waiver, modification or discharge is agreed to in writing and signed by
Executive and an executive officer specifically designated by the Board of
Directors of the Corporation.  No waiver
by either party hereto at any time of any breach by the other party hereto of,
or compliance with, any condition or provision of this Agreement to be
performed by such other party shall be deemed a waiver of similar or dissimilar
provisions or conditions at the same or at any prior or subsequent time.

 

 

13.                                 Assignment.  This Agreement shall not be assignable by any
party, except by Bank and the Corporation to any successor in interest to its
business.

 

14.                                   Entire
Agreement.  This
Agreement contains the entire agreement of the parties relating to the subject
matter of this Agreement and supersedes and replaces any prior written or oral
agreements between them respecting the within subject matter, including,
without limitation, the Original Agreement.

 

15.                               Successors;
Binding Agreement.

 

(a)                                    The Corporation and the Bank
will require any successor (whether direct or indirect, by purchase, merger,
consolidation, or otherwise) to all or substantially all of the business and/or
assets of the Corporation and/or the Bank to expressly assume and agree to
perform this Agreement in the same manner and to the same extent that the
Corporation and the Bank would be required to perform it if no such succession
had taken place.  As used in this
Agreement, “Corporation” and “Bank” shall mean the Corporation and the Bank, as
defined previously and any successor to its respective business and/or assets
as aforesaid which assumes and agrees to perform this Agreement by operation of
law or otherwise.

 

(b)                                 This Agreement
shall inure to the benefit of and be enforceable by Executive’s personal or
legal representatives, executors, administrators, heirs, distributees, devisees
or legatees.  If Executive should die
after a notice of termination pursuant to Section 3(c) or 5(a) is
delivered by Executive, or following termination of Executive’s employment
without Cause, and any amounts would be payable to Executive under this
Agreement if Executive had continued to live, all such amounts shall be paid in
accordance with the terms of this Agreement to Executive’s devisee, legatee, or
other designee, or, if there is no such designee, to Executive’s estate.

 

16.                                   Arbitration.  The Corporation, the Bank and Executive
recognize that in the event a dispute should arise between them concerning the
interpretation or implementation of this Agreement, lengthy and expensive
litigation will not afford a practical resolution of the issues within a
reasonable period of time.  Consequently,
with the exception of the covenant not to compete provisions in Section 8,
which the Corporation and/or the Bank may seek to enforce in any court of
competent jurisdiction, each party agrees that all disputes, disagreements and questions
of interpretation concerning this Agreement are to be submitted to resolution,
in Harrisburg, Pennsylvania, to the American Arbitration Association (the “Association”)
in accordance with the Association’s National Rules for the Resolution of
Employment Disputes or other applicable rules then in effect (“Rules”).  The Corporation, the Bank or Executive may
initiate an arbitration proceeding at any time by giving notice to the other in
accordance with the Rules. The Corporation, the Bank and Executive may, as a
matter or right, mutually agree on the appointment of a particular arbitrator
from the Association’s pool.  The
arbitrator shall not be bound by the rules of evidence and procedure of
the courts of the Commonwealth of Pennsylvania but shall be bound by the
substantive law applicable to this Agreement. 
The decision of the arbitrator, absent fraud, duress, incompetence or
gross and obvious error of act, shall be final and binding upon the parties and
shall be enforceable in courts of proper jurisdiction.  Following written notice of a request for
arbitration, the Corporation, Bank and 

 

 

Executive
shall be entitled to an injunction restraining all further proceedings in any
pending or subsequently filed litigation concerning this Agreement, except as
otherwise provided herein.

 

17.                                   Legal
Expenses.  Bank will
pay to the Executive all reasonable legal fees and expenses when incurred by
the Executive in seeking to obtain or enforce any right or benefit provided by
this Agreement, provided he brings the action in good faith and is successful
on the merits.

 

18.                                   Validity.  The
invalidity or unenforceability of any provision of this Agreement shall not
affect the validity or enforceability of any other provision of this Agreement,
which shall remain in full force and effect.

 

19.                                   Applicable
Law.  This Agreement shall be
governed by and construed in accordance with the domestic, internal laws of the
Commonwealth of Pennsylvania, without regard to its conflicts of laws
principles.

 

20.                                 Headings.  The section
headings of this Agreement are for convenience only and shall not control or
affect the meaning or construction or limit the scope or intent of any of the
provisions of this Agreement.

 

21.                                   409A Safe Harbor.  The parties hereto intend that any and all post-employment
compensation under this Agreement satisfy the requirements of Section 409A
of the Internal Revenue Code of 1986, as amended, and any regulations or
guidance promulgated thereunder (“Section 409A”) or an exception or
exclusion therefrom to avoid the imposition of any accelerated or additional
taxes pursuant to Section 409A. 
Accordingly, notwithstanding anything in this Agreement to the contrary,
in no event shall the Corporation or the Bank be obligated to commence payment
or distribution to the Executive of any amount that constitutes deferred
compensation within the meaning of Section 409A earlier than the earliest
permissible date under Section 409A that such amount could be paid without
any accelerated or additional taxes or interest being imposed under Section 409A.   The Corporation, the Bank and the Executive
agree that they will execute any and all amendments to this Agreement as they
mutually agree in good faith may be necessary to ensure compliance with the
distribution provisions of Section 409A and to cause any and all amounts
due under this Agreement, the payment or distribution of which is delayed
pursuant to Section 409A, to be paid or distributed in a single sum
payment at the earliest permissible date under Section 409A.

 

 

IN WITNESS WHEREOF, the parties have executed this
Agreement as of the date first above written.

 

	
  ATTEST:

  	
   

  	
  GRAYSTONE FINANCIAL CORP.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/ Mark Merrill

  	
   

  	
  By: 

  	
  /s/ Marcus Faust

  
	
  Secretary

  	
   

  	
   

  	
  Vice Chairman

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  ATTEST:

  	
   

  	
  GRAYSTONE BANK

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/ Mark Merrill

  	
   

  	
  By: 

  	
  /s/ Marcus Faust

  
	
  Secretary

  	
   

  	
   

  	
  Vice Chairman

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  WITNESS:

  	
   

  	
  EXECUTIVE

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   /s/ Randall Horst

  	
   

  	
  /s  Andrew S. Samuel

  

 

 

FIRST AMENDMENT TO AMENDED AND RESTATED EMPLOYMENT AGREEMENT

 

THIS FIRST AMENDMENT (this “Amendment”) is made
as of November 12, 2008, by and among GRAYSTONE FINANCIAL CORP.,
a Pennsylvania business corporation (hereinafter referred to as the “Corporation”),
GRAYSTONE BANK, a Pennsylvania state
chartered bank (hereinafter referred to as the “Bank”), and ANDREW SAMUEL (hereinafter referred to as “Executive”).

 

W I T N E S S E T H:

 

WHEREAS, Executive is now serving as Chairman, President
and Chief Executive Officer of the Corporation and the Bank; and

 

WHEREAS, the Corporation, the Bank and Executive are
parties to that certain Amended and Restated Employment Agreement dated as of August 28,
2007 (the “Employment Agreement”) pursuant to which, among other things,
Executive would be entitled to certain benefits if he terminated his employment
for any reason within 30 days after a “Change in Control” as defined therein;
and

 

WHEREAS, the Corporation and Tower Bancorp, Inc., a
Pennsylvania corporation having its principal office in Greencastle,
Pennsylvania (“Tower”), are parties to that certain Agreement and Plan of Merger
dated as of November 12, 2008 (the “Merger Agreement”) pursuant to which
the Corporation will merge with and into Tower, with Tower as the surviving
corporation (the “Merger”) and, upon the completion of the Merger, Greencastle
will merge with and into the Bank and the Bank will become a wholly-owned
subsidiary of Tower;

 

WHEREAS, the Merger will constitute a “Change in Control”
of the Corporation and the Bank under the Change in Control Agreement;

 

WHEREAS, the Corporation and the Bank consider the continued
services of Executive to be in the best interests of the Corporation and the
Bank; and

 

WHEREAS, upon consummation of the Merger, Executive is to
be employed as the President and Chief Executive Officer of the Corporation and
the Chairman, President and Chief Executive Officer of the Bank; and

 

WHEREAS, the Corporation, the Bank and Executive desire to
enter into this Amendment in light of the pending Merger and to ensure that the
Agreement complies with the requirements of Section 409A of the Internal
Revenue Code of 1986, as amended.

 

NOW, THEREFORE, in consideration of the foregoing and other
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, intending to be legally bound hereby, Executive, the Corporation
and the Bank agree as follows:

 

 

1.                                       Upon
consummation of the Merger, Executive shall continue as a member of the Board
of Directors of the Corporation and shall be employed as the President and
Chief Executive Officer of the Corporation and the Chairman, President and
Chief Executive Officer of the Bank.

 

2.                                       Executive
hereby agrees that he shall not exercise his right pursuant to Section 5(a) of
the Employment Agreement to terminate his employment with the Bank within
thirty (30) days of the Merger.  Executive
hereby irrevocably waives any entitlement to benefits under the Employment
Agreement as a result of any such voluntary termination should he breach his
agreement in the foregoing sentence.

 

3.                                       Effective on
the date hereof, Section 3(e) of the Employment Agreement is amended
in its entirety, to read as follows:

 

(e)                                   Disability.  Executive, Corporation and Bank agree that if
Executive becomes Disabled, within the meaning of Section 409A of
the Internal Revenue Code of 1986, and the regulations thereunder, and becomes
eligible for employer-provided short-term and/or long-term disability benefits,
or worker’s compensation benefits, then Graystone Bank’s obligation to pay
Executive his Annual Base Salary shall be reduced by the amount of the
disability or worker’s compensation benefits received by Executive.

 

Executive, Corporation and Bank agree that if, in
the judgment of the Corporation’s Board of Directors, the Executive is unable,
as a result of illness or injury, to perform the essential functions of his
position on a full-time basis with or without a reasonable accommodation and
without posing a direct threat to himself or others for a period of six months,
the Corporation and the Bank will suffer an undue hardship in continuing the
Executive’s employment as set forth in this agreement.  Accordingly, this Agreement shall terminate
at the end of the six-month period, and all of Executive’s rights under this
Agreement shall cease, with the exception of those rights which Executive may
have under the Bank’s benefit plans.

 

4.                                      Effective on
the date hereof, Section 5(b) of the Employment Agreement defining
the term “Change in Control” is amended in its entirety, to redefine “Change in
Control”, to read as follows:

 

(b)                                 As used in this Agreement, “Change in Control” of
the Corporation or the Bank shall mean a change in the ownership or effective
control applicable to the Corporation or the Bank as
described in Section 409A(a)(2)(A)(v) of the Internal Revenue Code of
1986, as amended (or any successor provision thereto) and the regulations
thereunder.

 

5.                                       Effective on
the date hereof, the Employment Agreement is hereby amended to add a new Section 22
to read as follows:

 

22.                                  Specified Employee Status.  Notwithstanding anything in this Agreement to
the contrary, in the event Executive is determined to be a Specified Employee,
as that term is defined in Section 409A, payments to such Specified
Employee under paragraphs 

 

 

6
or 7, other than payments qualifying as short term deferrals or an exempt
separation pay arrangement under Section 409A, shall not begin earlier
than the first day of the seventh month after the date of termination.

 

For purposes of the foregoing, the date upon which a
determination is made as to the Specified Employee status of the Executive, the
Identification Date (as defined in Section 409A) shall be December 31.

 

6.                                       Effective with
the consummation of the Merger, the Employment Agreement is hereby amended so
that all references therein to the Corporation shall be deemed references to
Tower, and Tower, as successor to Graystone Financial Corp., shall be
responsible for all of the obligations of the Corporation to Executive under
the Employment Agreement as specifically provided in Section 15(a) of
the Employment Agreement.

 

7.                                       Effective upon
consummation of the Merger, Section 8(a)(i) of the Employment
Agreement is hereby amended and restated in its entirety to revise the
Non-Competition Area as follows:

 

(i)                                     enter into or
be engaged (other than by the Corporation or the Bank), directly or indirectly,
either for his own account or as agent, consultant, employee, partner, officer,
director, proprietor, investor (except as an investor owning less than 5% of
the stock of a publicly owned company) or otherwise of any person, firm,
corporation or enterprise engaged in (1) the banking (including bank
holding company) or financial services industry, or (2) any other activity
in which Corporation or Bank or any of their subsidiaries are engaged
during the Employment Period, in any county in which, at the date of
termination of the Executive’s employment, a branch location, office, loan
production office, or trust or asset and wealth management office
of Corporation, Bank, or any of their subsidiaries are located (“Non-Competition
Area”); or

 

8.                                       Except as amended
by this Amendment, the Employment Agreement shall continue in full force and
effect and shall continue after consummation of the Merger.  This Amendment may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
shall constitute one and the same agreement.

 

9.                                       This Amendment
shall be binding upon and inure to the benefit of the parties hereto, their
respective heirs, executors, administrators, successors and, to the extent
permitted hereunder, assigns.

 

[signatures follow on next page]

 

 

IN WITNESS WHEREOF, the parties have executed
this First Amendment to Amended and Restated Employment Agreement as of the day
and year first above written.

 

	
  ATTEST:

  	
   

  	
  GRAYSTONE
  FINANCIAL CORP.

  
	
   

  	
   

  	
   

  
	
  /s/
  Carl D. Lundblad

  	
   

  	
  By:

  	
  /s/
  Jeffrey Renninger

  
	
  Secretary

  	
   

  	
   

  	
  Executive
  Vice President

  
	
   

  	
   

  	
   

  
	
  ATTEST:

  	
   

  	
  GRAYSTONE
  BANK

  
	
   

  	
   

  	
   

  
	
  /s/
  Carl D. Lundblad

  	
   

  	
  By:

  	
  /s/
  Jeffrey Renninger

  
	
  Secretary

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  WITNESS:

  	
   

  	
  EXECUTIVE

  
	
   

  	
   

  	
   

  
	
  /s/
  Carl D. Lundblad

  	
   

  	
  /s/
  Andrew Samuel

  
	
   

  	
   

  	
  Andrew
  Samuel

  

 

Consent and Acknowledgement

 

Tower
Bancorp, Inc. (“Tower”), intending to be legally bound, hereby consents,
as of the day and year first above written, to the foregoing amendment of the
employment agreement referenced therein (the “Agreement”) and hereby agrees
that, upon consummation of the merger of Graystone Financial Corp. with and
into Tower, with Tower as the surviving corporation, Tower shall become the
successor to Graystone Financial Corp. by operation of law and shall assume and
thereafter perform all of the obligations of Graystone Financial Corp. under
the Agreement as amended to the same extent as Graystone Financial Corp. would
be required to perform it  if no such
succession had taken place.

 

 

	
  ATTEST:

  	
  TOWER
  BANCORP, INC.

  
	
   

  	
   

  
	
  /s/
  John H. McDowell, Sr.

  	
   

  	
  By:
  

  	
  /s/
  Jeffrey B. Shank

  
	
  Secretary

  	
   

  	
  President
  and CEO

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