SUBORDINATED NOTE PURCHASE AGREEMENT

 

 

SUBORDINATED NOTE PURCHASE AGREEMENT

 

This SUBORDINATED NOTE PURCHASE AGREEMENT (this “ Agreement ”) is dated as of August 22, 2008, and entered into by and among COMMUNITYSOUTH FINANCIAL CORPORATION, a South Carolina corporation  (the “ Company ”), and the purchasers listed on Exhibit A hereto (the “Initial Purchaser”) and any subsequent purchaser (a “Subsequent Purchaser”) who executes a counterpart of this Agreement that is accepted by the Company (each Initial Purchaser and any Subsequent Purchaser is referred to herein as a “ Purchaser ” and collectively, as the “ Purchasers ”). Capitalized terms that are not otherwise defined shall have the meanings set forth in Section 11 hereof.

 

R E C I T A L S :

 

WHEREAS, the Company owns all of the outstanding Equity Securities of CommunitySouth Bank and Trust, a state bank incorporated under the laws of  the state of South Carolina (the “Bank”); and

 

WHEREAS, subject to the terms and conditions hereof, the Purchasers desire to purchase and the Company desire that the Purchasers purchase subordinated notes of the Company  that qualify as Tier 2 Capital under applicable rules and regulations of the Board of Governors of the Federal Reserve System (“FRB”).

 

NOW, THEREFORE, in consideration of the premises and the agreements, provisions and covenants herein contained, the Company agrees with the Purchasers as follows:

 

SECTION 1

 

THE NOTES; CLOSING

 

1.1                                  Purchase and Sale . Subject to the terms and conditions of this Agreement:

 

(A)                               The Company shall sell to the Initial Purchasers and the Initial Purchasers shall purchase from the Company, on the Initial Closing Date, the Company’s 11.5% Subordinated Notes due 2018, in the aggregate principal amount of up to $7,000,000, in substantially the form attached hereto as Exhibit B , appropriately completed in conformity herewith and duly and validly issued, authorized and executed by the Company in the amounts set forth opposite each Initial Purchaser’s name on Exhibit A hereto on the Initial Closing Date (the “ Initial Notes ”). The term “Notes” as used herein shall mean the Initial Notes, any Subsequent Notes and all notes issued in exchange or substitution for such Initial Notes or Subsequent Notes. The Notes, including the principal and interest, shall be unsecured and subordinate and junior in right of payment to the holders of the Senior Indebtedness to the extent set forth in Section 9 hereof.

 

(B)                                 The closing of the purchase and sale of the Initial Notes (the “ Initial Closing ”) shall take place at the offices of Nelson Mullins Riley & Scarborough, LLP in Greenville, SC on August 22, 2008 or at such other place or on such other date as may be

 

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determined by the Company. The date on which the Initial Closing occurs is referred to herein as the “ Initial Closing Date .”

 

In connection with the Initial Closing, the Company will deliver to the Initial Purchasers the Initial Notes, each registered in each Initial Purchaser’s name as stated in Exhibit A (or in the name of such Initial Purchaser’s nominees as may be specified in Exhibit A ), against payment by the Initial Purchasers of the purchase price of the Initial Notes.

 

(C)                                 The Company may sell to Subsequent Purchasers and Subsequent Purchasers may purchase from the Company, on one or more Subsequent Closing Dates, the Company’s 11.5% Subordinated Notes due 2018, in an aggregate principal amount that, together with the aggregate principal amount of the Initial Notes and any other Subsequent Notes as of their respective date(s) of issuance, does not exceed $7,000,000, in substantially the Form attached here to as Exhibit B , appropriately completed in conformity herewith and duly and validly issued, authorized and executed by the Company, in each case in the amount determined by the Company up to the amount set forth on a Subsequent Purchaser’s subscription agreement (any such notes are referred to herein as “Subsequent Notes”).

 

(D)                                The closing of the purchase and sale of any Subsequent Notes (any such closing, a “Subsequent Closing”) shall take place at the offices of Nelson Mullins Riley & Scarborough, LLP on one or more dates to be determined by the Company.  The date on which any Subsequent Closing occurs is referred to herein as a “Subsequent Closing Date.”  The term “Closing Date” refers to the Initial Closing Date or to a Subsequent Closing Date, as applicable, as the context requires.  In connection with any Subsequent Closing, the Company will deliver to the applicable Subsequent Purchaser one or more Subsequent Notes, each registered in the name of the Subsequent Purchaser as set forth in the applicable counterpart (or in the name of such Subsequent Purchaser’s nominees as may be specified in the applicable counterpart), against payment by the applicable Subsequent Purchaser(s) of the purchase price of the Subsequent Note(s).

 

1.2                                  Interest and Related Fees .

 

(A)                               Interest . Except as provided in subsection 1.2(B) , interest shall accrue on the unpaid principal amount of the Notes, and on all other Obligations, outstanding from time to time at the rate of 11.5% per annum, compounded quarterly. Interest on the unpaid principal amount of the Notes outstanding from time to time and on all other Obligations shall be calculated daily on the basis of a three hundred sixty five (365) day year (or a three hundred sixty six (366) day year in a leap year) for the actual number of days elapsed in the period during which it accrues.

 

(B)                                 Payment of Interest and Related Fees . The Company shall pay accrued interest on the first day of each calendar quarter commencing October 1, 2008. In addition, accrued and unpaid interest shall be payable on the maturity of the Notes, whether by acceleration or otherwise, and on the date of any prepayment (with respect to the amount prepaid).

 

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(C)                                 Excess Interest . Under no circumstances will the rate of interest chargeable be in excess of the maximum amount permitted by law. If excess interest is charged and paid in error, then the excess amount will be promptly refunded or applied to repayment or prepayment of principal; provided , that to the extent all or any portion of such excess amount is applied to repayment or prepayment of principal, interest on the amount so prepaid will not be required to be paid at such time.

 

(D)                                Expenses and Attorneys Fees .  The Company agrees to promptly pay or cause to be paid all reasonable fees, costs and expenses (including reasonable attorneys’ fees and expenses) to the extent incurred by the Holders in connection with any action that is necessary or appropriate to enforce any Transaction Documents or to collect any payments actually due from the Company. All fees, costs and expenses for which the Company is responsible under this subsection 1.2(F)(ii) shall be deemed part of the Obligations when incurred.

 

1.3                                  Payments . All payments by the Company of the Obligations shall be without set off, deduction (unless required by applicable law) or counterclaim and shall be made in same day funds and delivered to each Holder, as applicable, by wire transfer to the account set forth on the subscription agreement for such Holder or such other place as such Holder may from time to time designate in writing. The Company shall receive credit on the day of receipt for funds received by such Holder by 1:00 p.m., Eastern Standard Time. In the absence of timely receipt, such funds shall be deemed to have been paid on the next Business Day. Whenever any payment to be made hereunder shall be stated to be due on a day that is not a Business Day, the payment may be made on the next succeeding Business Day and such extension of time shall be included in the computation of the amount of interest due hereunder.

 

1.4                                  Repayments and Prepayments .

 

(A)                               Voluntary Prepayments of Notes . The Company may prepay the Notes at any time after the September 30, 2011, in whole or in part. To exercise its option to make any voluntary prepayment hereunder, the Company must give the Holders of the Notes written notice of such prepayment not less than ten (10) and not more than forty (40) days prior to the date fixed for such prepayment, specifying the date of proposed prepayment. On the date so fixed for payment, the principal amount of the Notes and the accrued interest on the Notes shall be and become due and payable in full. Any prepayment of the Notes under this subsection 1.4(A) will be made subject to receipt by the Company of prior approval from, or consultation with, the FRB if then required under applicable capital guidelines or policies of the FRB.

 

(B)                                 Scheduled Repayments . The Company shall pay the aggregate principal amount of the Notes outstanding in full on September 30, 2018 (the “ Maturity Date ”).

 

(C)                                 Pro Rata Payment . All payments owed to the Holders of the Notes (whether for principal, interest, or otherwise) shall be made pro rata among such Holders based upon the aggregate unpaid principal amount of the Notes held by each such Holder.

 

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1.5                                  Tax Forms .

 

(A)                               Tax Forms . Each Holder shall provide to the Company a properly completed Form W-9 or W-8 or similar form, and any successor Holder shall provide to the Company a properly completed Form W-9 or Form W-8 (or any successor thereto) or similar form, as appropriate to such Holder’s status. All such forms shall be completed in such a manner as to eliminate, to the fullest extent permitted by law, the Company’s obligation to make, withhold, or deduct any Taxes with respect to any payments of reimbursements made hereunder.

 

SECTION 2

 

AFFIRMATIVE COVENANTS

 

The Company covenants and agrees that so long as the Notes or any Obligations relating thereto remain outstanding, the Company shall perform and comply in all material respects with all covenants in this Section 2 provided that the Company will comply with any such covenant that is already qualified by a materiality qualifier in all respects.

 

2.1                                  Compliance with Agreement . The Company will timely perform the terms, representations, warranties and covenants of this Agreement and all other Transaction Documents.

 

2.2                                  Organizational Existence and Conduct of Business . Except as otherwise permitted by Section 3.4 , the Company will, and will cause the Bank to, at all times preserve and keep in full force and effect such Person’s (i) organizational existence and all rights and franchises material to such Person’s business, and (ii) material leases, privileges, franchises, qualifications and rights that are necessary in the ordinary conduct of its business.

 

2.3                                  Subordinated Debt . If the Notes cease to be deemed to be Tier 2 Capital, other than due to the limitation imposed by the FRB on the capital treatment of subordinated debt during the five years immediately preceding the maturity date of the Notes: (a) the Company will immediately notify Holders, and (b) the Company and the Holders will work together in good faith to immediately execute and deliver all such agreements (including, without limitation, replacement notes) as reasonably necessary in order to restructure the obligations evidenced by the Notes and this Agreement to qualify for Tier 2 capital treatment.

 

2.4                                  Exchange of Notes . The Company shall at any time, upon written request of the Holder of a Note and surrender of the Note for such purpose, at the expense of the Company, issue new Notes in exchange therefor in such denominations of at least $100,000, as shall be specified by the Holder of such Note, in an aggregate principal amount equal to the then unpaid principal amount of the Note or Notes surrendered and substantially in the form of Exhibit B with appropriate insertions and variations, and bearing interest from the date to which interest has been paid on the Note surrendered.

 

2.5                                  Replacement of Notes . Upon receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of any Note, and, in the case of any such loss, theft or destruction, upon delivery of a bond of indemnity reasonably satisfactory to the Company or, if the Company agrees, an indemnity agreement in form and substance reasonably satisfactory to the Company, or, in the case of any such mutilation, upon surrender and

 

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cancellation of the Note, as the case may be, the Company will issue a new Note of like tenor, in lieu of such lost, stolen, destroyed or mutilated Note.

 

SECTION 3

 

NEGATIVE COVENANTS

 

The Company covenants and agrees that so long as the Notes or any Obligations relating thereto remain outstanding, unless Majority Holders shall otherwise give their prior written consent, the Company, shall perform and comply with all covenants in this Section 3 .

 

3.1                                  Limitations on Dividend Payments . If there shall have occurred and be continuing a Default or an Event of Default pursuant to Section 7.1 then the Company may not (A) declare or pay any dividends or distributions on, or redeem, purchase, acquire, or make a liquidation payment with respect to, any of the Company’s Equity Securities, or (B) make any payment of principal, if any, or interest on or repay, repurchase or redeem any Indebtedness of the Company that rank pari passu in all respects with or junior in interest to the Notes (other than repurchases, redemptions or other acquisitions of Equity Securities of the Company in connection with any employment contract, benefit plan or other similar arrangement with or for the benefit of one or more employees, officers, directors or consultants, or a dividend reinvestment or stockholder stock purchase plan).

 

3.2                                  Consolidation, Merger, Conveyance, Transfer or Lease .  The Company shall not consolidate with or merge into any other Person or convey, transfer or lease its properties and assets substantially as an entirety to any Person, and the Company shall not permit any Person to consolidate with or merge into the Company or convey, transfer or lease its properties and assets substantially as an entirety to the Company, unless:

 

(A)                               In case the Company shall consolidate with or merge into another Person or convey, transfer or lease its properties and assets substantially as an entirety to any Person, the Person formed by such consolidation or into which the Company is merged or the Person which acquires by conveyance or transfer, or which leases, the properties and assets of the Company substantially as an entirety (i) shall be a corporation, partnership, national association or trust, (ii) shall be organized and validly existing under the laws of the United States of America, any State thereof or the District of Columbia and (iii) shall expressly assume the due and punctual payment of the principal of and any interest on the Notes and all other Obligations of the Company hereunder; and

 

(B)                                 Immediately after giving effect to such transaction and treating any Indebtedness that becomes an obligation of the Company or any of its Subsidiaries as a result of such transaction as having been incurred by the Company or any of its Subsidiaries at the time of such transaction, no Event of Default, and no event which, after notice or lapse of time or both, would become an Event of Default, shall have occurred and be continuing.

 

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SECTION 4

 

REPORTING

 

The Company covenants and agrees that so long as the Notes or any Obligations relating thereto remain outstanding, unless Majority Holders shall otherwise give their prior written consent, the Company shall perform and comply with all covenants in Section 4.1 .

 

4.1                                  Events of Default . Promptly upon any executive officer of the Company obtaining knowledge of any condition or event that constitutes, or which would reasonably be expected to result in, an Event of Default or Default. the Company shall deliver copies of all notices given or received by any CommunitySouth Entity with respect to any such event or condition and a certificate of an executive officer of the Company specifying the nature and period of existence of such event or condition and what action the Company has taken, is taking and proposes to take with respect thereto.

 

SECTION 5

 

COMPANY REPRESENTATIONS AND WARRANTIES

 

The Company represents and warrants to the Purchasers that, except as disclosed in, or incorporated by reference in, the CommunitySouth Financial Corporation 11.5% Subordinated Notes Due 2018 Private Placement Memorandum dated August 19, 2008 (including any amendments or supplements thereto), as of such Purchaser’s Closing Date the following statements will be true, correct and complete:

 

5.1                                  No Conflicts . The consummation of the Related Transactions will not (i) violate or conflict with any Organizational Documents of any CommunitySouth Entity, or (ii) violate or conflict with any laws, rules, regulations or orders of any Governmental Authority, except if such violations or conflicts would not reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect.  No consent, approval or authorization of, or registration, filing or declaration with, any Governmental Authority is required in connection with the Related Transactions, other than those the absence of which would not reasonably be expected to result in a Material Adverse Effect.

 

5.2                                  Organization, Powers and Good Standing .

 

(A)                               Organization and Powers . The Company is a “bank holding company” under the Bank Holding Company Act of 1956, as amended, and the South Carolina Banking and Branching Efficiency Act, as amended, and is duly registered as such with the FRB and the South Carolina Board of Financial Institutions (“SCBFI”).

 

The Bank is a state bank organized, existing and in good standing under the laws of the State of South Carolina supervised and regulated by the SCBFF and the FDIC (collectively, the “ Regulatory Authorities ”). After giving effect to the transactions contemplated by this Agreement, the Bank will be “well capitalized” for all purposes of its Regulatory Authorities.

 

Each CommunitySouth Entity is duly organized, validly existing and (if applicable) in good standing under the laws of South Carolina.  Each CommunitySouth Entity has all requisite

 

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corporate or organizational power and authority to own and operate its material properties, to carry on its business as now conducted in all material respects, to enter into any Transactions Document to which it is a party, and to incur the Obligations and carry out the Related Transactions, as applicable. This Agreement and the other Transaction Documents and the transactions contemplated hereby and thereby and performance by the Company of its obligations hereunder and thereunder have been duly and validly authorized by all necessary corporate or organizational action on the part of the Company.

 

(B)                                 Subsidiaries .  The Company has no Subsidiaries other than the Bank, and the Bank has no Subsidiaries.  The issued and outstanding shares of capital stock or other ownership interests of the Bank were duly authorized and validly issued, are fully paid and nonassessable and, are owned by the Company, directly or indirectly, free and clear of any material Liens, other than any Liens in favor of the Bank of Tennessee or that may be granted to other lenders to the Company.

 

(C)                                 Binding Obligation . This Agreement is, and the other Transactions Documents when executed and delivered will be, the legal, valid and binding obligations of  the Company, each enforceable against the Company in accordance with their respective terms, except to the extent that the enforceability thereof may be limited by the application of bankruptcy, receivership, conservatorship, reorganization, insolvency and similar laws affecting creditors’ rights generally and equitable principles being applied at the discretion of a court before which any proceeding may be brought, and to limitations on the rights to indemnity and contribution hereunder that exist by virtue of public policy under federal and state securities laws.

 

5.3                                  Private Offering . No form of general solicitation or general advertising was used by any CommunitySouth Entity or any representative thereof in connection with the offer or sale of the Notes.  None of the CommunitySouth Entities or any Person acting on their behalf has, directly or indirectly, made any offers or sales of any security or solicited any offers to buy any security under circumstances that would, and none of the foregoing shall take any actions or steps that would, require registration of the offer and sale of any of the Notes under the Securities Act or any state securities or “blue sky” laws.

 

SECTION 6

 

PURCHASER REPRESENTATIONS; TRANSFER RESTRICTIONS

 

6.1                                  Authorization . Each of the Purchasers has full power and authority to enter into this Agreement and any other Transaction Documents to which it is a party, and each such agreement constitutes its valid and legally binding obligation, enforceable in accordance with its terms, except to the extent enforceability may be limited by the application of bankruptcy, receivership, conservatorship, reorganization, insolvency and similar laws affecting creditors’ rights generally and equitable principles being applied at the discretion of a court before which any proceeding may be brought, and to limitations on the rights to indemnity and contribution hereunder that exist by virtue of public policy under federal and state securities laws.

 

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6.2                                  Purchase for Own Account . Each of the Purchasers is acquiring the Notes for such Purchaser’s own account and not with a view to the distribution of such securities.

 

6.3                                  Investment Experience . Each of the Purchasers acknowledges that such Purchaser can bear the economic risk of its investment, and has such knowledge and experience in financial or business matters that it is capable of evaluating the merits and risks of the investment in the securities to be sold in accordance with this Agreement.

 

6.4                                  Accredited Investor . Each of the Purchasers is an “accredited investor” within the meaning of SEC Rule 501 of Regulation D under the Securities Act.

 

6.5                                  Investment Process . Each of the Purchasers has independently evaluated its investment decision; followed its own investment procedures; conducted diligence and received information it needs for an informed decision.  Each Purchaser has access to and has reviewed, the extent such Purchaser, so desires, the Company’s filings with the Securitas and Exchange Commission (the “SEC”), which filings are available at the SEC’s website (https://www.sec.gov).

 

6.6                                  Restricted Securities . Each of the Purchasers understands that the securities it is purchasing as contemplated hereby are “restricted securities” under the federal securities laws and that such securities may be resold without registration under the Securities Act only in certain limited circumstances. Each of the Purchasers understands that, in the absence of an effective registration statement covering the securities or an available exemption from registration under the Securities Act, the securities must be held indefinitely.  Any transfer of Notes in a transaction in the absence of an effective registration statement is subject to the Company’s approval, based on the Company’s assessment of whether the transaction complies with applicable state and federal securities laws.

 

6.7                                  Legends .

 

(A)              (i)                                      The Purchasers agree to the imprinting, so long as is required by this Section 6.7 , of a legend on the Notes purchased pursuant to this Agreement in substantially the following form:

 

THIS SUBORDINATED NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR APPLICABLE STATE LAWS AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED, OFFERED, PLEDGED OR OTHERWISE DISTRIBUTED FOR VALUE UNLESS THERE IS AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT AND/OR SUCH LAWS COVERING THIS INSTRUMENT OR THE COMPANY, UPON ITS REQUEST, RECEIVES AN OPINION OF COUNSEL FOR THE HOLDER OF THIS INSTRUMENT ACCEPTABLE TO THE COMPANY’S STATING THAT SUCH SALE, TRANSFER, ASSIGNMENT, OFFER, PLEDGE OR OTHER DISTRIBUTION FOR VALUE IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF SUCH ACT AND APPLICABLE STATE LAWS.

 

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THIS SUBORDINATED NOTE IS NOT A SAVINGS ACCOUNT OR DEPOSIT AND IT IS NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY FEDERAL AGENCY.

 

(B)                Certificates evidencing the Notes shall not contain any legend (including the legends described in subsection 6.7(A) ), if the Company determines that such legend is not required under applicable requirements of the Securities Act (including judicial interpretations and pronouncements issued by the staff of the SEC and applicable state laws).

 

6.8                                  Transfer Restrictions . Any sale, transfer, assignment or other disposition of Notes must be in denominations of at least $100,000 (or, if less, the aggregate outstanding principal amount of the Note(s) held by the Holder seeking to sell, transfer, assign or otherwise dispose of one or more Notes), unless otherwise consented to by the Company in its sole discretion.  The Notes may be sold, assigned, transferred or otherwise disposed of, in whole or in part, by the Holder thereof, only in accordance with applicable securities laws and subject to the provisions of this Agreement.  Without limiting the foregoing, without prior written consent of the Company, no Note may be sold, transferred, or assigned during the six month period following the original purchase of such Note from the Company.

 

6.9                                  Sufficient Funds . As of the applicable Closing Date, each Purchaser will have sufficient funds to make full payment for the Notes to be purchased by such Purchaser.

 

SECTION 7

 

DEFAULT, RIGHTS AND REMEDIES

 

7.1                                  Event of Default . “Event of Default” shall mean the occurrence or existence of any one or more of the following:

 

(A)                               Payment .  (i)                               Failure to pay any installment or other payment of principal or interest of any of the Notes, when due, or (ii) failure to pay any other amount due under this Agreement or any of the other Transaction Documents, in either case within 180 days of receipt by the Company of Notice from a Holder that such payment is past due, or

 

(B)                                 Default in Other Agreements .  (i) Failure of any CommunitySouth Entity to pay when due or within any applicable grace period any principal or interest on Indebtedness having a principal balance in excess of $7,000,000 or (ii) breach or default of any CommunitySouth Entity, or the occurrence of any condition or event, with respect to any Indebtedness of such CommunitySouth Entity, if the effect of such breach, default or occurrence is to cause such Indebtedness having an aggregate principal amount in excess of $7,000,000 to become or be declared due prior to their stated maturity; or

 

(C)                                 Breach of Certain Provisions .  A material failure of the Company to perform or comply with the terms and conditions contained in Section 3.1 or Section 3.2 ; or

 

(D)                                Breach of Warranty .  Any representation, warranty, certification or other statement made by any CommunitySouth Entity in any of the Transaction Documents or in any

 

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certificate at any time given by such Person in writing pursuant to or in connection with any of the Transaction Documents is false in any material respect on the date made or, if such representation, warranty, certification or other statement relates to a date other than the date as of which made, then as of such date, which in either case would reasonably be expected to result in a Material Adverse Effect and such breach is not remedied or waived within thirty (30) days after receipt by the Company of notice from Majority Holders of such breach; or

 

(E)                                  Other Defaults Under Transaction .  Any CommunitySouth Entity defaults in the performance of or compliance with any material term contained in this Agreement or the other Transaction Documents (other than occurrences described in other provisions of this Section 7.1 for which a different grace or cure period is specified or which constitute immediate Events of Default) and such default would reasonably be expected to result in a Material Adverse Effect and such default is not remedied or waived within thirty (30) days after receipt by the Company of notice from Majority Holders of such default; or

 

(F)                                  Bankruptcy .

 

(i)                     A court having jurisdiction in the premises shall enter a decree or order for relief in respect of the Company in an involuntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, or appoints a receiver, liquidator, assignee, custodian, trustee, sequestrator or other similar official of the Company or for any substantial part of its property, or orders the winding-up or liquidation of its affairs and such decree, appointment or order shall remain unstayed and in effect for a period of sixty (60) days; or

 

(ii)                  The Company shall commence a voluntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, shall consent to the entry of an order for relief in an involuntary case under any such law, or shall consent to the appointment of or taking possession by a receiver, liquidator, assignee, trustee, custodian, sequestrator or other similar official of the Company or of any substantial part of its property, or shall make any general assignment for the benefit of creditors, or shall fail generally to pay its debts as they become due; or

 

(iii)               A court or administrative or governmental agency or body shall enter a decree or order for the appointment of a receiver of the Bank or all or substantially all of its property in any liquidation, insolvency or similar proceeding with respect to the Bank or all or substantially all of its property; provided that at such time the Bank is a major subsidiary depository institution of the Company as contemplated by Appendix A of 12 CFR part 225; or

 

(iv)              The Bank shall consent to the appointment of a receiver for it or all or substantially all of its property in any liquidation, insolvency or similar proceeding with respect to it or all or substantially all of its property.; provided that at such time the Bank is a major subsidiary depository institution of the Company as contemplated by Appendix A of 12 CFR part 225;

 

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(G)                                 Dissolution .  Any order, judgment or decree is entered against the Company or the Bank decreeing the dissolution or split up of the Company or the Bank and such order remains undischarged or unstayed for a period in excess of thirty (30) days; or

 

(H)                                Solvency .  The Company or the Bank ceases to be solvent or admits in writing its present or prospective inability to pay its debts as they become due or is notified that it is considered an institution in “troubled condition” within the meaning of 12 U.S.C. Section 1831i and the regulations promulgated thereunder; or

 

(I)                                     Injunction .  The Company or a the Bank is enjoined, restrained or in any way prevented by the order of any court or any administrative or regulatory agency from conducting all or any part of its business for more than thirty (30) days unless such event or circumstance would not reasonably be expected to have a Material Adverse Effect; or

 

7.2                                  Acceleration and other Remedies .

 

(A)                               Non-Bankruptcy Defaults .  When any Event of Default other than those set forth in subsection 7.1(F)  has occurred and is continuing, the Majority Holders may, by written notice to the Company enforce any and all rights and remedies available to the Holders under the Transaction Documents or applicable law (subject to the provisions of the Transaction Documents); provided, however, the Holders may not accelerate payment of the principal of, or the accrued interest on, the Notes.

 

(B)                                 Bankruptcy Defaults .  When any Event of Default described in subsection 7.1(F)  has occurred and is continuing, then the Notes, including both principal and interest, and all fees, charges and other Obligations payable hereunder and under the Transaction Documents, shall immediately become due and payable without presentment, demand, protest or notice of any kind. In addition, the Holders may exercise any and all remedies available to it under the Transaction Documents or applicable law.

 

(C)                                 Tier 2 Capital Characterization .  If the Company receives a written notification from the FRB that the Notes no longer constitute Tier 2 Capital of the Company, other than due to the limitation imposed by the second sentence of 12 C.F.R. Section 250.166(e), which limits the capital treatment of subordinated debt during the five years immediately preceding the maturity date of the subordinated debt and the Notes and this Agreement cannot be restructured so as to qualify the Notes for Tier 2 ca