SUBORDINATED NOTE PURCHASE AGREEMENT Dated as of October 20, 2009

Exhibit 10.1

SUBORDINATED
NOTE PURCHASE AGREEMENT

Dated as of October 20, 2009

SUBORDINATED NOTE PURCHASE AGREEMENT

     This SUBORDINATED NOTE PURCHASE AGREEMENT (this “Agreement”) is dated as of October 20, 2009 and is made by and among RIVER BANK (“Borrower”) and COMMERCE BANK & TRUST COMPANY (the “ Lender ”).

RECITALS :

     Borrower is a Massachusetts bank and a wholly-owned subsidiary of LSB Corporation, a Massachusetts corporation (“ Parent ”).

     Borrower has requested that Lender purchase from Borrower $6,000,000 in subordinated debt (the “Subordinated Debt”) that qualifies as Tier 2 Capital (as defined herein). The Subordinated Debt may be referred to in this Agreement as the “Facility.”

     Lender is willing to purchase from Borrower a subordinated note in the principal amount of $6,000,000 in accordance with the terms, subject to the conditions and in reliance on, the recitals, representations, warranties, covenants and agreements set forth herein and in the Subordinated Note (as defined herein). The Subordinated Debt is intended to qualify as Tier 2 Capital.

      THEREFORE, in consideration of the mutual covenants, conditions and agreements herein contained, the parties hereto hereby agree as follows:

A G R E E M E N T :

1. DEFINITIONS .

      1.1. Defined Terms . The following capitalized terms generally used in this Agreement and in the other Transaction Document have the meanings defined or referenced below. Certain other capitalized terms used only in specific sections of this Agreement may be defined in such sections.

      “Affiliate(s)” means, with respect to any Person, such Person’s immediate family members, partners, members or parent and subsidiary corporations, and any other Person directly or indirectly controlling, controlled by, or under common control with, said Person and their respective Affiliates, and solely in the case of Lender and its Affiliates, their members, shareholders, directors, officers, employees, agents and representatives.

      “Board Resolution” means a copy of a resolution certified by the Secretary or an Assistant Secretary of the Borrower to (i) have been duly adopted by the Board of Directors and (ii) be in full force and effect on the date of such certification.

      “Borrower” has the meaning set forth in the preamble hereto and shall include any successor to Borrower by merger or consolidation.

      “Borrower 2008 Financial Statements” has the meaning set forth in Section 4.4 .

      “Borrower Financial Statements” has the meaning set forth in Section 4.4 .

      “Borrower’s Accountant” means such firm of certified public accountants selected by Parent as shall from time to time audit Parent.

      “Borrower’s Liabilities” means Borrower’s obligations under this Agreement and any other Transaction Documents.

      “Business Day” means any day other than a Saturday, Sunday or any other day on which banking institutions in Massachusetts are permitted or required by any applicable law or executive order to close.

      “Closing” has the meaning set forth in Section 2.5 .

      “Closing Date” means October 20, 2009.

      “Code” means the Internal Revenue Code of 1986, as amended or recodified.

      “Condition or Release” means any presence, use, storage, transportation, discharge, disposal, release or threatened release of any Hazardous Materials.

      “Disbursement” has the meaning set forth in Section 3.1 .

      “Equity Interest” means any and all shares, interests, participations or other equivalents (however designated) of capital stock of a corporation, any and all equivalent ownership interests in a Person which is not a corporation and any and all warrants, options or other rights to purchase any of the foregoing.

      “Event of Default” has the meaning set forth in Section 8.1.1 .

      “Facility” has the meaning set forth in the recitals hereto.

      “FDIC” means the Federal Deposit Insurance Corporation.

      “FDI Act” means the Federal Deposit Insurance Act, as amended or recodified.

      “FRB” means the Board of Governors of the Federal Reserve System.

      “GAAP” means generally accepted accounting principles in effect from time to time in the United States of America.

      “Governmental Agency(ies)” means, individually or collectively, any federal, state, county or local governmental department, commission, board, regulatory authority or agency with jurisdiction over Borrower or Parent, as applicable.

      “Hazardous Materials” means oil, flammable explosives, asbestos, urea formaldehyde insulation, polychlorinated biphenyls, radioactive materials, hazardous wastes, toxic or contaminated substances or similar materials, including, without limitation, any substances which are “hazardous substances,” “hazardous wastes,” “hazardous materials” or “toxic substances” under the Hazardous Materials Laws and/or other applicable environmental laws, ordinances or regulations.

      “Hazardous Materials Laws” mean any laws, regulations, permits, licenses or requirements pertaining to the protection, preservation, conservation or regulation of the environment which relates to real property, including, without limitation: the Clean Air Act, as amended, 42 U.S.C. Section 7401 et seq.; the Federal Water Pollution Control Act, as amended, 33 U.S.C. Section 1251 et seq.; the Resource Conservation and Recovery Act of 1976, as amended, 42 U.S.C. Section 6901 et seq.; the Comprehensive Environment Response, Compensation and Liability Act of 1980, as amended (including the Superfund Amendments and Reauthorization Act of 1986), 42 U.S.C. Section 9601 et seq.; the Toxic Substances Control Act, as amended, 15 U.S.C. Section 2601 et seq.; the Occupational Safety and Health Act, as amended, 29 U.S.C. Section 651, the Emergency Planning and Community Right-to-Know Act of 1986, 42 U.S.C. Section 11001 et seq.; the Mine Safety and Health Act of 1977, as amended, 30 U.S.C. Section 801 et seq.; the Safe Drinking Water Act, 42 U.S.C. Section 300f et seq.; and all comparable state and local laws, laws of other jurisdictions or orders and regulations.

      “Indebtedness” means and includes: (a) all items arising from the borrowing of money that, according to GAAP as in effect from time to time, would be included in determining total liabilities as shown on the consolidated balance sheet of Borrower or any Subsidiary of Borrower; and (b) all obligations secured by any lien in property owned by Borrower whether or not such obligations shall have been assumed; provided, however, Indebtedness shall not include deposits or other indebtedness created, incurred or maintained in the ordinary course of Borrower’s business (including, without limitation, federal funds purchased, advances from any Federal Home Loan Bank, secured deposits of municipalities, letters of credit issued by Borrower’s depository institution and repurchase arrangements) and consistent with customary banking practices and applicable laws and regulations.

      “Instructions” means disbursement instructions given by Borrower to Lender specifying the manner in which proceeds of the Subordinated Debt should be disbursed at Closing.

      “Interest Payment Date” means a date one month after the closing date and every month thereafter continuing until the earlier of the Maturity Date or the date the Subordinated Debt is paid in full.

      “Interest Rate” means a 8.50% per annum rate of interest.

      “Interim Financial Statements” has the meaning set forth term in Section 4.4.1.

      “Leases” means all leases, licenses or other documents providing for the use or occupancy of any portion of any Property, including all amendments, extensions, renewals, supplements, modifications, sublets and assignments thereof and all separate letters or separate agreements relating thereto.

      “Lender” has the meaning set forth in the preamble hereto.

      “Material Adverse Effect” means, with respect to any Person, any change or effect that (i) is or would be reasonably likely to be material and adverse to the financial position, results of operations, business or prospects of such Person or its Subsidiaries, or (ii) would materially impair the ability of any Person to perform its respective obligations under this Agreement or the Subordinated Note, or otherwise materially impede the consummation of the transactions contemplated hereby; provided, however, that “Material Adverse Effect” shall not be deemed to include the impact of (1) changes in banking and similar laws, rules or regulations of general applicability or interpretations thereof by Governmental Agencies, (2) changes in GAAP or regulatory accounting requirements applicable to financial institutions and their holding companies generally, (3) changes after the date of this Agreement in general economic or capital market conditions affecting financial institutions or their market prices generally and not specifically related to Parent, Borrower or Lender, including, but not limited to, changes in levels of interest rates generally, (4) direct effects of compliance with this Agreement on the operating performance of Parent, Borrower or Lender, including expenses incurred by Parent, Borrower or Lender in consummating the transactions contemplated by this Agreement, and (5) the effects of any action or omission taken by Borrower with the prior written consent of Lender, and vice versa, or as otherwise contemplated by this Agreement and the Subordinated Note.

      “Maturity Date” means October 20, 2016.

      “Parent” has the meaning set forth in the recitals hereto.

      “Person” means an individual, a corporation (whether or not for profit), a partnership, a limited liability company, a joint venture, an association, a trust, an unincorporated organization, a government or any department or agency thereof (including a Governmental Agency) or any other entity or organization.

      “Property” means any real property owned or leased by Borrower or any Affiliate or Subsidiary.

      “Subordinated Debt” has the meaning set forth in the recitals hereto.

      “Subordinated Note” means a Subordinated Note in the form attached as Exhibit A hereto, as amended, restated, supplemented or modified from time to time and each Subordinated Note delivered in substitution or exchange for such Subordinated Note.

      “Subsidiary” means with respect to any Person, any corporation or entity in which a majority of the outstanding Equity Interest is directly or indirectly owned by such Person.

      “Tier 2 Capital” has the meaning given to the term “Tier 2 capital” in the Statement of Policy on Risk-Based Capital for state chartered FDIC-insured non-member banks published by the FDIC (12 C.F.R. Part 325, Appendix A, as amended, modified and supplemented and in effect from time to time or any replacement thereof).

      “Transaction Documents” means this Agreement and the Subordinated Note.

      “Unmatured Event of Default” means an event or circumstance that with the passage of time, the giving of notice or both could become an Event of Default.

      1.2. Certain Accounting Terms; Interpretations . Notwithstanding the foregoing, any accounting terms used in this Agreement which are not specifically defined herein shall have the meaning customarily given to them in accordance with GAAP. Where the character or amount of any asset or liability or item of income or expense is required to be determined or any consolidation or other accounting computation is required to be made for the purposes of this Agreement, it shall be done in accordance with GAAP except where such principles are inconsistent with the specific provisions of this Agreement. The foregoing definitions are equally applicable to both the singular and plural forms of the terms defined. The words “hereof”, “herein” and “hereunder” and words of like import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement. The word “including” when used in this Agreement without the phrase “without limitation,” shall mean “including, without limitation.” All references to time of day herein are references to eastern time unless otherwise specifically provided. Any reference contained herein to attorneys’ fees and expenses shall be deemed to be reasonable fees and expenses of Lender’s outside counsel and of any other third-party experts or consultants engaged by Lender’s outside counsel on Lender’s behalf. All references to the Transaction Documents shall be deemed to be to such documents as amended, modified or restated from time to time. With respect to any reference in this Agreement to any defined term, (a) if such defined term refers to a Person, then it shall also mean all heirs, legal representatives and permitted successors and assigns of such Person, and (b) if such defined term refers to a document, instrument or agreement, then it shall also include any replacement, extension or other modification thereof.

      1.3. Exhibits Incorporated . All Exhibits attached are hereby incorporated into this Agreement.

2. SUBORDINATED DEBT .

      2.1. General Matters .

           2.1.1. Certain Terms . The Lender agrees to purchase the Subordinated Debt from Borrower on the Closing Date in accordance with the terms of, and subject to the conditions set forth in, this Agreement and the Subordinated Note. The Subordinated Debt shall be disbursed in accordance with Section 3.1 . The Subordinated Debt shall bear interest per annum at a rate equal to 8.50%. The unpaid principal balance of the Subordinated Debt plus all accrued but unpaid interest thereon shall be due and payable on the Maturity Date, or such earlier date on which such amount shall become due and payable on account of acceleration by Lender in accordance with the terms of the Subordinated Note or this Agreement.

           2.1.2. Subordination . The Subordinated Note shall be subordinated in accordance with the subordination provisions set forth therein.

      2.2. The Subordinated Note . The Facility shall be further evidenced by the Subordinated Note.

      2.3. Maturity Date . On the Maturity Date, all sums due and owing under this Agreement and the other Transaction Document with respect to the Subordinated Note shall be repaid in full. Borrower acknowledges and agrees that Lender has not made any commitments, either express or implied, to extend the terms of the Facility past its Maturity Date, and shall not extend such terms beyond the Maturity Date unless Borrower and Lender hereafter specifically otherwise agree in writing.

      2.4. Unsecured Facility . The obligations of Borrower to Lender under the Subordinated Note shall be unsecured.

      2.5. The Closing . The execution and delivery of the Transaction Documents (the “Closing”) shall occur at the offices of the Borrower at 10:00 a.m. (local time) on the Closing Date, or at such other place or time or on such other date as the parties hereto may agree.

      2.6. Interest Payments . The Facility will bear interest at the Interest Rate of 8.50% per annum on the principal thereof, on any overdue principal and on any overdue installment of interest, payable on each Interest Payment Date at the rates and under the circumstances set forth herein. The initial Interest Payment Date shall be on the date one month after the Closing.

      2.7. Computation of Interest . Interest shall be computed on the basis of the actual number of days elapsed in the period during which interest accrues and a year of 360 days. In computing interest, the date of funding shall be included and the date of payment (with respect to the amount timely paid on such date) shall be excluded. The parties hereto intend to conform strictly to applicable usury laws as in effect from time to time during the term of the Facility. Accordingly, if the transaction contemplated hereby would be usurious under applicable law (including the laws of the United States of America, or of any other jurisdiction whose laws may be mandatorily applicable), then, in that event, notwithstanding anything to the contrary in this Agreement or the Subordinated Note, Borrower and Lender agree that the aggregate of all

consideration that constitutes interest under applicable law that is contracted for, charged or received under or in connection with this Agreement shall under no circumstances exceed the maximum amount of interest allowed by applicable law, and any excess shall be credited to Borrower by Lender (or if such consideration shall have been paid in full, such excess refunded to Borrower by Lender).

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

      2.9. Application of Payments . All payments received by Lender from or on behalf of Borrower shall be applied first to amounts due to Lender to reimburse Lender’s costs and expenses, including those pursuant to Section 5.4 or Section 8.4 , second to accrued interest under the Subordinated Note, and third to principal amounts outstanding under the Subordinated Note; provided, however, subject to Section 8.1.2 of this Agreement, that after the date on which the final payment of principal with respect to the Facility is due or following and during any Event of Default or Unmatured Event of Default, all payments received on account of Borrower’s Liabilities shall be applied in whatever order, combination and amounts as Lender, in its sole and absolute discretion, decides, to all costs, expenses and other indebtedness owing to Lender.

      2.10. Payment of Principal . Borrower shall repay to Lender $1,200,000 as principal reduction on the third annual anniversary of the closing and on each successive annual anniversary thereafter until the final maturity date in 2016.

      2.11. Redemption . Commencing on or after the one year anniversary of the Closing Date, Borrower may, upon at least five Business Days’ notice to Lender, redeem all or a portion of the principal amount outstanding under the Subordinated Debt by paying the principal amount to be prepaid, together with unpaid accrued interest thereon to the date of redemption. With respect to the premature redemption of Subordinated Debt, Borrower shall pay Lender an amount in cash equal to (i) 104.0% of the principal amount of Subordinated Debt to be redeemed if redeemed on or after October 20, 2010 but before October 20, 2012, (ii) 103.0% of the principal amount of Subordinated Debt to be redeemed if redeemed on or after October 20, 2012 but before October 20, 2013, (iii) 102.5% of the principal amount of Subordinated Debt to be redeemed if redeemed on or after October 20, 2013 but before October 20, 2014, (iv) and 100.5% of the principal amount of Subordinated Debt to be redeemed if redeemed on October 20, 2014 but before October 20, 2016, in each case plus unpaid interest accrued thereon to such redemption date. Borrower acknowledges, under current applicable regulations, it may not retire its obligations hereunder without the prior written consent of the FDIC or other primary regulator (including payment at maturity, or pursuant to an acceleration clause or redemption prior to maturity). Borrower further acknowledges that Lender shall have no responsibility to verify whether Borrower has obtained any such consent.

      2.12. Right of Offset . Lender hereby expressly waives any right of offset it may have against Borrower.

3. DISBURSEMENT .

      3.1. Disbursement. At the Closing Date, assuming all of the terms and conditions set forth in Section 3.2 have been satisfied by Borrower and Borrower has executed and delivered to Lender each of the Transaction Documents and any other related documents in form and substance reasonably satisfactory to Lender, Lender shall disburse $6,000,000 (net of certain expenses) to Borrower for the Subordinated Note (the “Disbursement” ).

      3.2. Conditions Precedent to Disbursement . In conjunction with and as additional (but independent) supporting evidence for certain of the covenants, representations and warranties made by Borrower herein, prior to and as a condition of the Disbursement, Borrower shall deliver or cause to be delivered to Lender each of the following:

           3.2.1. Transaction Documents . The Transaction Documents, including, without limitation, the Subordinated Note.

           3.2.2. Authority Documents .

                3.2.2.1. A copy, certified by the Secretary or an Assistant Secretary of Borrower, of the charter of Borrower;

                3.2.2.2. A good standing certificate of Borrower issued by the appropriate secretary of state or Governmental Agency;

                3.2.2.3. A copy, certified by the Secretary or an Assistant Secretary of Borrower, of the Bylaws of Borrower;

                3.2.2.4. A copy, certified by the Secretary or an Assistant Secretary of Borrower, of the resolutions of the board of directors of Borrower authorizing the execution, delivery and performance of this Agreement and the Subordinated Note; and

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

           3.2.3. Other Requirements . Such other additional information regarding Borrower, any Subsidiary and their respective assets, liabilities (including any liabilities arising from, or relating to, legal proceedings) and contracts as Lender may reasonably require.

           3.2.4. Other Documents . Such other certificates, affidavits, schedules, resolutions, opinions, notes and/or other documents which are provided for hereunder or as Lender may reasonably request.

4. GENERAL REPRESENTATIONS AND WARRANTIES . Borrower hereby represents and warrants to Lender as follows:

      4.1. Organization and Authority .

           4.1.1. Organization Matters . Borrower is validly existing and in good standing under the laws of The Commonwealth of Massachusetts and has all requisite corporate power and authority, and possesses all licenses necessary, to conduct business and activities as presently conducted, to own its properties and to perform its obligations under this Agreement. The deposit accounts of Borrower are insured by the FDIC. Borrower has not received any notice or other information indicating that Borrower is not an “insured depository institution” as defined in 12 U.S.C. Section 1813, nor has any event occurred which could reasonably be expected to adversely affect the status of Borrower as an FDIC-insured institution. Borrower and its Subsidiaries have made payment of all franchise and similar taxes in all of the respective jurisdictions in which they are incorporated, chartered or qualified, except for any such taxes (i) where the failure to pay such taxes will not have a Material Adverse Effect on Borrower, (ii) the validity of which is being contested in good faith or (iii) for which proper reserves have been set aside on the books of Borrower or any applicable Subsidiary, as the case may be.

           4.1.2. Capital Stock and Related Matters . All of the outstanding capital stock of Borrower is owned beneficially and of record by Parent and has been duly authorized and validly issued and is fully paid and nonassessable. There are, as of the date hereof, no outstanding options, rights, warrants or other agreements or instruments obligating Borrower to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of the capital stock of Borrower or obligating Borrower to grant, extend or enter into any such agreement or commitment to any Person other than Parent.

           4.1.3. Subsidiaries . Each Subsidiary of Borrower and Parent is validly existing and in good standing under the laws of its jurisdiction or organization, and each Subsidiary has all requisite power and authority, corporate or otherwise, and possesses all material licenses necessary, to conduct its business and own its properties.

      4.2. No Impediment to Transactions .

           4.2.1. Transaction is Legal and Authorized . The issuance of the Subordinated Debt, the borrowing of the principal amount of the Facility, the execution of this Agreement and the other Transaction Document and compliance by Borrower with all of the provisions of this Agreement and of the other Transaction Document are within the corporate and other powers of Borrower. This Agreement and the other Transaction Document to which Borrower is a party have been duly authorized, executed and delivered, and, assuming due authorization, execution and delivery by the other parties thereto, are the legal, valid and binding obligations of Borrower, enforceable in accordance with their terms.

           4.2.2. No Defaults or Restrictions . Neither the execution and delivery of the Transaction Documents nor compliance with their terms and conditions will (a) violate, conflict with or result in a breach of, or constitute a default under: (i) any of the terms, obligations, covenants, conditions or provisions of any corporate restriction or of any contract, agreement,

indenture, mortgage, deed of trust, pledge, bank loan or credit agreement, charter, bylaw or any other agreement or instrument to which Borrower, Parent or any Subsidiary is now a party or by which any of them or any of their properties may be bound or affected; (ii) any judgment, order, writ, injunction, decree or demand of any court, arbitrator, grand jury, or Governmental Agency; or (iii) any statute, rule or regulation applicable to Borrower or Parent, except, in each such case, for such violations and conflicts that would not reasonably be expected to have, singularly or in the aggregate, a Material Adverse Effect on such Person, or (b) result in the creation or imposition of any lien, charge or encumbrance of any nature whatsoever upon any property or asset of Borrower, Parent or any Subsidiary, except for such liens, charges and encumbrances that would not reasonably be expected to have, singularly or in the aggregate, a Material Adverse Effect on such Person. None of Borrower, Parent or any Subsidiary is in default in the performance, observance or fulfillment of any of the terms, obligations, covenants, conditions or provisions contained in any indenture or other agreement creating, evidencing or securing Indebtedness of any kind or pursuant to which any such Indebtedness is issued, or other agreement or instrument to which Borrower, Parent or any Subsidiary is a party or by which Borrower, Parent or any Subsidiary or their respective properties may be bound or affected, except, in each case, only such defaults that would not reasonably be expected to have, singularly or in the aggregate, a Material Adverse Effect on Borrower, Parent or any Subsidiary.

           4.2.3. Governmental Consent . No governmental orders, permissions, consents, approvals or authorizations are required to be obtained by Borrower that have not been obtained, and no registrations or declarations are required to be filed by Borrower in connection with, or, contemplation of, the execution and delivery of, and performance under, this Agreement and the other Transaction Document that have not been filed, other than such orders, permissions, consents, approvals, authorizations, registrations and declarations that would not reasonably be expected to have, singularly or in the aggregate, a Material Adverse Effect on Borrower.

      4.3. Possession of Licenses and Permits . Each of Borrower and the Subsidiaries possesses such permits, licenses, approvals, consents and other authorizations (collectively, “Governmental Licenses”) issued by the appropriate Governmental Agencies necessary to conduct the business now operated by it, except where the failure to possess such Governmental Licenses would not, singularly or in the aggregate, have a Material Adverse Effect on Borrower; each of the Borrower and its Subsidiaries is in compliance with the terms and conditions of all such Governmental Licenses, except where the failure so to comply would not, singly or in the aggregate have a Material Adverse Effect on Borrower; all of the Governmental Licenses are valid and in full force and effect, except when the invalidity of such Governmental Licenses or the failure of such Governmental Licenses to be in full force and effect would not have a Material Adverse Effect on Borrower; and neither Borrower nor any Subsidiary of Borrower has received any notice of proceedings relating to the revocation or modification of any such Governmental Licenses which, singularly or in the aggregate, in the reasonable judgment of Borrower, is likely to result in a Material Adverse Effect on Borrower.

      4.4. Financial Condition .

           4.4.1. Borrower Financial Statements . Borrower has delivered to Lender copies of regulatory financial statements on the appropriate regulatory form filed by Borrower (the “Borrower 2008 Financial Statements”) for the 12 months ended December 31, 2008.

The Borrower 2008 Financial Statements are true and correct in all material respects, are prepared in accordance with the respective books of account and records of Borrower and its Subsidiaries and have been prepared in accordance with applicable banking regulations, rules and guidelines and with GAAP on a basis consistent with prior periods, and fairly and accurately present in all material respects the financial condition of Borrower and its assets and liabilities and the results of its operations as at, and for the period ending at, such date. In addition, Borrower has delivered to Lender copies of its regulatory financial statements filed by Borrower for the period ended June 30, 2009 (“Interim Financial Statements” and together with the Borrower 2008 Financial Statements, the “Borrower Financial Statements”). The Interim Financial Statements are true and correct in all material respects, are prepared in accordance with the respective books of account and records of Borrower and its Subsidiaries and have been prepared in accordance with applicable banking regulations, rules and guidelines and with GAAP, without footnotes and subject to year end adjustments, on a basis consistent with prior periods, and, to the best of Borrower’s knowledge, fairly and accurately present in all material respects the financial condition of Borrower and its assets and liabilities and the results of its operations as at, and for the period ending at, such date. The Borrower Financial Statements contain and reflect provisions for taxes, reserves and other liabilities of Borrower in accordance with applicable banking regulations, rules and guidelines, respectively. Borrower does not have any material debt, liability or obligation of any nature (whether accrued, contingent, absolute or otherwise) which is not provided for or disclosed in the Borrower Financial Statements.

           4.4.2. Absence of Default . No event has occurred which either of itself or with the lapse of time or the giving of notice or both, would give any creditor of Borrower the right to accelerate the maturity of any material Indebtedness of Borrower. Borrower is not in default under any other lease, agreement or instrument, or any law, rule, regulation, order, writ, injunction, decree, determination or award, non-compliance with which could reasonably be expected to result in a Material Adverse Effect on Borrower.

           4.4.3. Loans . Each loan having an outstanding balance of more than $1,000,000 and reflected as an asset of Borrower in the Borrower Financial Statements is the legal, valid and binding obligation of the obligor named therein, enforceable in accordance with its terms. To the best of Borrower’s knowledge, after due and diligent inquiry, (a) no obligor named therein is seeking to avoid the enforceability of the terms of any loan, and (b) no loan having an unpaid balance (principal and accrued interest) in excess of $1,000,000 is subject to any defense, offset or counterclaim.

           4.4.4. Allowance for Loan Losses . The allowance for loan losses shown in the Borrower Financial Statements has been established in a manner consistent with past practices and in accordance with applicable regulatory guidelines and, to the best of Borrower’s knowledge, is adequate in all respects to provide for losses, net of recoveries relating to loans

previously charged off, on loans and leases outstanding as of the date of such statements or reports.

           4.4.5. Solvency . After giving effect to the consummation of the transactions contemplated by this Agreement, Borrower has capital sufficient to carry on its business and transactions and all businesses and transactions in which it is about to engage and is solvent and able to pay its debts as they mature. No transfer of property is being made and no indebtedness is being incurred in connection with the transactions contemplated by this Agreement with the intent to hinder, delay or defraud either present or future creditors of Borrower, Parent or any Subsidiary.

      4.5. Title to Properties .

           4.5.1. Owned Property . For assets or property owned by Borrower, Parent or any Subsidiary, Borrower, Parent and the Subsidiaries have, respectively, good and marketable fee title to all the owned Properties, and good and marketable title to all other property and assets reflected in the Borrower Financial Statements, except for (a) real property and other assets acquired and/or being acquired from debtors in full or partial satisfaction of obligations owed to Borrower, (b) property or other assets leased by Borrower, Parent or the Subsidiaries, and (c) property and assets sold or otherwise disposed of in the ordinary course of the Borrower’s business subsequent to the date of the Borrower Financial Statements.

           4.5.2. Leased Property . For assets or property leased by Borrower, Parent or any Subsidiary, Borrower and each such Subsidiary enjoy peaceful and undisturbed possession under all of the Leases under which they are operating, all of which permit the customary operations of Borrower, Parent and any Subsidiary, as applicable. None of such Leases is in material default and no event has occurred which with the passage of time or the giving of notice, or both, would constitute a material default by Borrower, Parent or any Subsidiary under any thereof.

      4.6. No Material Adverse Change . Since June 30, 2009, to the best of Borrower’s knowledge, neither the business, operations, properties nor assets of Borrower, Parent or any Subsidiary have been materially and adversely affected in any way, as the result of any act or event, including, without limitation, fire, explosion, accident, act of God, strike, lockout, flood, drought, storm, earthquake, combination of workmen or other labor disturbance, riot, activity of armed forces or of the public enemy, embargo, or nationalization, condemnation, requisition or taking of property, or cancellation or modification of contracts, by any domestic or foreign government or any instrumentality or agency thereof. Since September 30, 2009, there has been no development or event which has had or could reasonably be expected to have a Material Adverse Effect on Borrower, Parent or any Subsidiary other than changes arising from transactions in the ordinary course of business, and none of such changes has been materially adverse, whether in the ordinary course of business or otherwise.

      4.7. Legal Matters .

           4.7.1. Compliance with Law . Borrower, Parent and the Subsidiaries have complied with all applicable statutes, rules, regulations, orders and restrictions of any domestic

or foreign government, or any instrumentality or agency thereof, having jurisdiction over the conduct of their respective businesses or the ownership of their respective properties, except where any such failure to comply would not reasonably be expected to have a Material Adverse Effect on Borrower, Parent or any Subsidiary.

           4.7.2. Taxes . Borrower, Parent and each Subsidiary have filed all United States income tax returns and all state and municipal tax returns which are required to be filed, and have paid, or made adequate provision for the payment of, all material taxes which have become due pursuant to said returns or pursuant to any assessment received by Borrower, Parent or any Subsidiary, except such taxes, if any, as are being contested in good faith and as to which adequate reserves have been provided. Borrower is unaware of any audit, assessment or other proposed action or inquiry of the Internal Revenue Service with respect to the United States income tax liability of Borrower, Parent or any Subsidiary. To the best of Borrower’s knowledge, Borrower, Parent and each Subsidiary have withheld amounts from their employees, shareholders or holders of public deposit accounts in full and complete compliance with the tax withholding provisions of applicable federal, state and local laws and each has filed all federal, state and local returns and reports for all years for which any such return or report would be due with respect to employee income tax withholding, social security, unemployment taxes, income and other taxes and all payments or deposits with respect to such taxes have been made within the time period required by law.

           4.7.3. Regulatory Enforcement Actions . None of Borrower, Parent, any Subsidiary or any of their respective officers or directors is