Exhibit 10.1

PURCHASE AND ASSUMPTION AGREEMENT

This PURCHASE AND ASSUMPTION AGREEMENT (the “Agreement”) is made as of the 24th
day of April, 2006, between AmSouth Bank, an Alabama banking corporation having
its principal office in Birmingham, Alabama (“Seller”), and Heritage Bank, a
federal savings bank, having its principal office in Hopkinsville, Kentucky
(“Purchaser”):

W I T N E S S E T H:

WHEREAS, Seller desires, upon the terms and conditions hereinafter set forth, to
sell certain assets and assign certain deposit and other liabilities of certain
of its branch offices and other operations located in the State of Tennessee
(collectively, the “Branches”); and

WHEREAS, Purchaser desires to purchase certain assets and assume certain deposit
and other liabilities of or associated with the Branches upon the terms and
conditions hereinafter set forth:

NOW, THEREFORE, in consideration of the premises and the mutual agreements,
covenants and provisions contained herein, and for other good and valuable
consideration the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:

ARTICLE 1.

1.1 Time and Place of Closing. The closing of the transactions contemplated
hereby (the “Closing”) shall be on a Thursday and shall occur within thirty
(30) days after the date on which Purchaser has received all approvals of
federal and/or state regulatory authorities necessary for Purchaser to
consummate such transactions (or the expiration date of any applicable waiting
period in connection with such regulatory approvals) and the receipt of all
other required approvals, or such other time or date as may be mutually agreed
to by the parties (the “Closing Date”); provided that both parties shall use
their best efforts to close on and no later than June 29, 2006. The Closing
shall be held at the offices of Seller in Birmingham, Alabama or such other
location as may be mutually agreed to by the parties.

1.2 Purchase of Assets. Seller agrees, subject to Section 1.3 and the other
terms and conditions of the Agreement, to transfer, convey, assign and deliver
to Purchaser, and Purchaser shall purchase and receive from Seller, on the
Closing Date the following assets, properties and rights (the “Assets”):

(a) all loans attributed to the Branches as of the Closing Date, together with
all security interests, liens, mortgages, guaranties and collateral related
thereto, at their respective then outstanding principal amounts, which reflect
any writedowns arising from adverse classifications, together with accrued
interest thereon and accrued late fees, excluding loan loss reserves and general
reserves (the “Loans”); provided, however, the Loans shall not include any loans
described in Section 1.2(b) below (the “Excluded Loans”), and also provided the
parties to this transaction may be required to share participation in certain
loans described in Section 1.2(b) below (the “Participation Loans”);

 

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(b) Notwithstanding the provisions of Section 1.2(a) above, the Loans shall not
include:

 

  (1) nonaccruals (which term shall include loans which the collateral securing
same has been repossessed or in which collection efforts have been instituted or
claim and delivery or foreclosure proceedings have been filed);

 

  (2) loans 90 days or more past due;

 

  (3) loans in connection with which the borrower has filed a petition for
relief under the United States Bankruptcy Code prior to the Closing Date; or

 

  (4) loans not consistent with Purchaser’s underwriting standards or loans
rated substandard or below in either Seller’s or Purchaser’s risk rating system.

Purchaser shall have 35 days from the Closing to notify Seller in writing that
any Loan should have been excluded at the Closing under this Section 1.2(b) in
Purchaser’s sole discretion. Upon receiving such notice, Seller agrees to
promptly repurchase any such Loan for an amount equal to the outstanding
principal balance thereof reflected on the closing statement (net of any
payments or collections thereon);

In addition to the foregoing, in the event that a particular loan or loans which
are to be transferred as a part of the Loans exceed Purchaser’s legal lending
limit of $7.5 million, Purchaser and Seller shall share participation in such
loan or loans so as to permit Purchaser to acquire such loans consistent with
its legal lending limits, for a period not to exceed 18 months after the
Closing;

(c) all overdrafts associated with deposit liabilities transferred under
Section 1.4, limited to those less than 30 days old;

(d) all of Seller’s rights as lessee under any and all assignable leases
pertaining to or associated with the Branches, including ground leases, together
with all leasehold improvements on any leased real property (the “Leased
Property”), as listed on Exhibit 1.2(d) (the “Leases”);

(e) all of Seller’s right, title and interest in and to equipment pertaining to
the Branches under leases not assigned to Purchaser as listed on Exhibit 1.2(e)
(the “Equipment”), at either the purchase price for the equipment set forth
under the terms of the applicable lease, or, where such applicable lease is
silent, at the residual value of the equipment as determined by the lessor,
subject in either case to the termination or release of the applicable leases in
respect to the Equipment;

(f) all of Seller’s right, title and interest in and to personal property,
furniture, fixtures and equipment, together with any manufacturer’s warranties
or maintenance or service agreements thereon which are in effect on the Closing
Date and are assignable to Purchaser,

 

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located at or used in operation of the Branches and owned by Seller (exclusive
of those items referred to in Section 1.3), as listed on attached Exhibit 1.2(f)
(the “Fixed Assets”). To the extent such information is available to Seller,
Exhibit 1.2(f) shall indicate which Fixed Assets are to be transferred with
manufacturers’ warranties or maintenance or service agreements;

(g) all other Fixed Assets as listed on attached Exhibit 1.2(g) to be provided
at the Closing (the “Other Fixed Assets”), at a liquidation value reasonably
determined by Seller; provided that such liquidation value shall not exceed One
Hundred Thousand Dollars ($100,000);

(h) all petty cash, ATM cash and vault cash maintained at the Branches on the
Closing Date, the exact amounts of which will be certified by the Controller of
Seller or his/her designee as of the Closing Date;

(i) all rights to the extent assignable of Seller in, to and under any vendor
single interest insurance or other insurance on collateral transferred to the
Purchaser with the Loans, as identified or listed on attached Exhibit 1.2(i);

(j) all safe deposit contracts and leases for the safe deposit boxes located at
the Branches, as listed on attached Exhibit 1.2(j); and

(k) all of Seller’s right, title and incidents of interest in and to the real
property owned, as of the Closing Date, in connection with the operations of the
Branches, as listed on attached Exhibit 1.2(k) (the “Real Property”).

1.3 Assets Not Sold. The following are expressly excluded from the Assets (the
“Excluded Assets”):

(a) Seller’s trademarks, tradenames, medallion program stamps, signs, logos and
proprietarily marked stationery, forms, labels, shipping materials, brochures,
advertising material and similar property;

(b) the right of Seller or its affiliates to receive income relating to
annuities or other investment products sold by Seller to customers of the
Branches, including, without limitation, any “AmSouth Investment Services”
products;

(c) any trust accounts located and administered at the Branches (the “Trust
Accounts”); and

(d) any other assets listed on Exhibit 1.3 attached hereto and made a part
hereof.

1.4 Assumption of Liabilities. Purchaser agrees that on and after the Closing
Date, subject to Section 1.5 and the other terms and conditions of this
Agreement and as consideration for the aforesaid transfer, conveyance and
delivery:

(a) it will assume and discharge and pay all liabilities and obligations of
Seller relating to the deposits (as defined in 12 U.S.C. Section 1813(l)) which
are booked to the

 

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Branches, and the related deposit accounts located at the Branches, including
any related sweep accounts, whether represented by collected or uncollected
funds, including, without limitation, all savings, checking and certificate
accounts together with accrued interest, attributed on the records of Seller to
the Branches as of the Closing Date (the “Deposits” or “Deposit Liabilities”),
the exact balances and accrued interest on which shall be certified by the
Controller of Seller or his/her designee as of the Closing Date;

(b) it will assume and thereafter fully and timely perform and discharge, in
accordance with their terms, all of the liabilities and obligations of Seller
under the Loans arising on and after the Closing Date;

(c) it will assume and thereafter fully and timely perform and discharge, in
accordance with their terms, all of the liabilities and obligations of Seller
under the Leases arising on and after the Closing Date;

(d) it will assume and thereafter fully and timely perform and discharge, in
accordance with their terms all safe deposit contracts and leases for the safe
deposit boxes located at the Branches as of the Closing Date;

(e) it will assume and thereafter fully and timely perform and discharge, in
accordance with their terms, all of the liabilities and obligations of Seller
respecting the Real Property, arising on or after the Closing Date; and

(f) it will continue the operation of the Branches.

No assurance can be given by Seller that the present customers of the Branches
will become or continue to be customers of Purchaser, the same being at the sole
discretion of such customers. During the period between execution of this
Agreement and the Closing Date, Seller shall continue to conduct the business of
the Branches, including without limitation, the pricing and rates of the
Deposits and the production and administration of the Loans, substantially in
the manner as heretofore conducted, as contemplated by Article 5 hereof.

1.5 Liabilities Not Assumed. It is expressly understood and agreed that, except
as set forth in Section 1.4 or otherwise in this Agreement, along with the
exhibits and schedules hereto, Purchaser is not assuming any of the debts,
obligations or liabilities of Seller of any kind and nature whatsoever. In
addition, Purchaser does not assume the following liabilities or obligations of
the Seller:

(a) any securities brokerage account or dealer reserve account maintained by
Seller for a customer attributed to the Branches;

(b) any deposit accounts designated as closed status as of the Closing Date, and
any deposit account attributed to the Branches as of the Closing Date which is
subject to any order, agreement or encumbrance that in any way restricts the
payment of funds representing such account on the order of the depositor;

(c) any liability or obligation arising out of a Trust Account;

 

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(d) any liability associated with cashier’s checks or other official bank checks
and traveler’s checks issued by Seller at any of the Branches prior to the
Closing Date;

(e) any liability of Seller for any losses or liabilities due to or arising from
forgery, fraud, defalcation, or any other improper act or omission occurring on
or before the Closing Date;

(f) any liability of Seller for any unfair employment practices by Seller
occurring on or before the Closing Date (such as wrongful termination or
employment discrimination);

(g) any liability or obligation of Seller arising out of any threatened or
pending litigation, or any liability with respect to personal injury or property
damage claims arising from events occurring on or before the Closing Date; and

(h) any other liabilities set forth on Exhibit 1.5(h) attached hereto and made a
part hereof.

1.6 Safe Deposit Business.

(a) As of the Closing Date, Purchaser will assume and discharge Seller’s
obligations with respect to the safe deposit box business at the Branches in
accordance with the terms and conditions of contracts or rental agreements
related to such business, and Purchaser will maintain all facilities necessary
for the use of such safe deposit boxes by persons entitled to use them.

(b) As of the Closing Date, Seller shall transfer the records related to such
safe deposit box business to Purchaser, and Purchaser shall maintain and
safeguard all such records and be responsible for granting access to and
protecting the contents of the safe deposit boxes at the Branches.

(c) Safe deposit box rental payments (not including late payment fees) collected
by Seller before the Closing Date shall be prorated as of the Closing Date.

1.7 Documentation of Assumption. On the Closing Date Purchaser shall deliver to
Seller an undertaking satisfactory in form and substance to counsel for Seller
and counsel for Purchaser, under which Purchaser will assume and agree to
perform, discharge and pay the obligations and liabilities assumed by Purchaser
pursuant to this Agreement. An acceptable form of such undertaking is attached
as Exhibit 1.7 hereto and made a part hereof.

1.8 Assumption Subject to Certain Terms. The liabilities being assumed by
Purchaser pursuant to this Agreement shall be assumed subject to the terms and
conditions of deposit and other written agreements relating thereto and the
laws, rules and regulations applicable thereto.

1.9 Payment. In consideration of the assumption by Purchaser of the Deposit
Liabilities, Seller shall pay Purchaser by wire transfer of immediately
available funds on the first business day following the Closing Date an amount
equal to the Deposit Liabilities determined in accordance with Section 1.4(a)
hereof reduced by the sum of:

(i) the principal amount of the Loans net of unearned income and excluding loan
loss and general reserves as of the Closing Date as shown on the books of
Seller,

 

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(ii) an amount for the Fixed Assets representing the net book value of the Fixed
Assets shown on the books and records of Seller as of the Closing Date,

(iii) the liquidation value of the Other Fixed Assets as determined by Seller,
subject to the limitation set forth in Section 1.2(g),

(iv) the face amount of the petty or vault cash maintained at the Branches
determined in accordance with Section 1.2(f) hereof,

(v) interest receivable on the Loans and other assets transferred by Seller to
Purchaser hereunder,

(vi) the purchase price or, if applicable, the residual value of the Equipment,

(vii) an amount for the Real Property and the Leased Property representing the
land value of the Real Property and the Leased Property shown on the books and
records of Seller as of the Closing Date,

(viii) $5,000 in consideration for providing the notification of changes
contemplated by Section 2.8(e) hereof, and

(ix) 10% of the Deposit Liabilities,

and such payment formula shall be further adjusted in accordance with
Section 1.10. In the event the preceding formula produces a negative number, the
absolute value of such amount shall be paid by Purchaser to Seller by wire
transfer on the Closing Date and Seller shall have no obligation to make any
payment to Purchaser. The payment formula referred to above is for the sole
purpose of determining the amount of cash transferable at the Closing Date and
shall not constitute an allocation of the purchase price for the Branches to any
particular asset being transferred or liability being assumed.

1.10 Pro-Rata Adjustment of Income and Expenses. All rents, utility payments,
real and personal property taxes and similar expenses and charges relating to
the physical plant of the Branches, and the Federal Deposit Insurance
Corporation (“FDIC”) premium and other expenses relating to the Deposit
Liabilities assumed and/or the operation of the Branches, shall be pro-rated
between the parties as of the Closing Date on the basis of a 365-day year. To
the extent any such item has been prepaid by Seller for a period extending
beyond the Closing Date, there shall be a proportionate monetary adjustment in
favor of Seller. Any unearned noninterest income associated with the Branches,
except as provided in Section 1.3(b) or otherwise specifically provided in this
Agreement, shall also be adjusted pro rata between the parties as of the Closing
Date. Any expense relating to the Branches which arises on and after the Closing
Date will be paid by Purchaser.

1.11 Allocation of Purchase Price. (a) The purchase price and liabilities
assumed by Purchaser pursuant to Section 1.4 hereof shall be allocated on an
allocation schedule to be agreed

 

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upon by Purchaser and Seller within 30 days after the Closing Date. This
allocation is intended to comply with the allocation method required by
Section 1060 of the Internal Revenue Code of 1986, as amended (the “Code”).
Purchaser and Seller shall cooperate to comply with all substantive and
procedural requirements of Section 1060 and any regulations thereunder, and the
allocation shall be adjusted if and to the extent necessary to comply with the
requirements of Section 1060.

(b) The parties agree to file their federal income tax returns and their other
tax returns (including any forms or reports required to be filed pursuant to
Section 1060 of the Code or any provisions of state and local law) reflecting
the allocation schedule and shall take no position contrary thereto unless
required to do so pursuant to a determination (as defined in Section 1313(a) of
the Code). Purchaser and Seller shall promptly inform each other of any
challenge by any taxing authority or other governmental entity to the allocation
and agree to consult with and keep each other reasonably informed with respect
to the status of and any material discussion, proposal or submission with
respect to, any challenge.

ARTICLE 2.

ADDITIONAL OBLIGATIONS OF PURCHASER AND SELLER

2.1 Regulatory Approvals.

(a) Purchaser shall, within 10 days following the date of this Agreement,
prepare and file all applications, as required by law, with the appropriate
federal and/or state regulatory authorities for approval to purchase the Assets
and assume the liabilities and obligations of Seller being assumed hereunder, to
establish a branch at the location of each of the Branches and to effect in all
other respects the transactions contemplated hereby (the “Governmental
Approvals”). Purchaser agrees to (i) make draft copies of the applications
(except for any confidential portions thereof) available to Seller and its
counsel on request, (ii) process the applications in a diligent manner and on a
priority basis, (iii) request confidential treatment by the appropriate federal
and/or state regulatory authorities of all non-public information submitted in
the applications, (iv) provide Seller and its counsel promptly with a copy of
the applications as filed (except for any confidential portions thereof) and all
notices, orders, opinions, correspondence and other documents with respect
thereto, and (v) use its best efforts to obtain all Governmental Approvals.
Purchaser and Seller agree to cooperate and use their best efforts to obtain all
consents and approvals of all third parties and to do all things necessary to
consummate the transactions contemplated by this Agreement.

(b) Seller shall, as soon as is practicable, notify the proper regulatory
authorities of its intent to terminate operation of the Branches and to
consummate the transactions contemplated hereby and thereafter shall (i) comply
with the normal and usual requirements imposed by such authorities applicable to
effectuate such transactions and (ii) use its good faith efforts to obtain any
required permission of such regulatory authorities to cease operating the
Branches.

2.2 Full Access. Seller shall afford to the officers and authorized
representatives of the Purchaser, upon prior notice, access to the properties,
books and records directly related to

 

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the Branches in order that Purchaser may have full opportunity to make
reasonable investigations, at Purchaser’s sole expense, at reasonable times
without interfering with the Branches’ normal business and operations, or the
affairs of Seller directly related to the Branches, and the officers of Seller
shall furnish Purchaser with such additional financial and operating data and
other information as to its business, operations and properties at the Branches
as Purchaser may, from time to time, reasonably request and as shall be
available including, without limitation, information required for inclusion in
all governmental applications necessary to effect the transactions contemplated
hereby. Purchaser shall indemnify Seller from and against all costs, damages,
claims and liabilities, including reasonable attorneys fees, arising out of the
negligence of Purchaser or its agents or employees in conducting such
investigations. Nothing in this Section 2.2 shall be deemed to require Seller to
breach any obligation of confidentiality or to reveal any proprietary
information, trade secrets or marketing or strategic plans.

2.3 Confidentiality. Purchaser will hold, and will cause its officers,
directors, employees and agents to hold, in strict confidence and not disclose
to any other person or entity without the prior written consent of Seller
(a) the terms of this Agreement and (b) all information received by Purchaser
from or with respect to the Seller in connection with this Agreement and the
transactions contemplated hereby, except such information (i) as may be
otherwise publicly available otherwise than through the wrongful dissemination
of such information by Purchaser or its officers, directors, employees or
agents, (ii) as may be required to be disclosed by applicable law, or (iii) as
required to obtain the Government Approvals. Seller and Purchaser agree that
neither shall make any public announcement or public comment in any form
whatsoever regarding this Agreement or the transactions contemplated herein,
except as is required by applicable law, without obtaining the prior approval of
the other party. In addition to the foregoing, Seller and Purchaser are parties
to a separate confidentiality agreement relating to the Branches and the
transactions contemplated hereby which shall remain binding upon the parties and
in full force and effect in accordance with its terms.

2.4 Conversion of Accounts; Transfer and Delivery of Assets and Deposit
Liabilities. Prior to the Closing Date, Seller and Purchaser shall cooperate
with each other and shall use their reasonable best efforts (consistent with
their internal day-to-day operations) in order to cause the timely transfer of
information concerning the Assets and the Deposit Liabilities which is
maintained on Seller’s data processing system so that Purchaser can incorporate
such information into Purchaser’s data processing system no later than the
opening of business on the business day following the Closing Date.

To this end, Seller shall provide to Purchaser or Purchaser’s designee on
industry standard magnetic media, the following, so as to enable the parties to
prepare for the transfer of information in machine-readable form pertaining to
the Loan and Deposit Liabilities, it being expressly understood that such data
and magnetic media and tapes shall be in Seller’s standard form for divestiture
files, programs, systems and formats:

(i) A file layout description and test media for each category of Loan and
Deposit Liability to be furnished within 10 days after the execution and
delivery of this Agreement; and

 

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(ii) Test media or tapes to be furnished within 30 days after the execution and
delivery of this Agreement.

On the Closing Date, Seller shall:

(a) deliver to Purchaser such of the Assets as shall be capable of physical
delivery;

(b) execute, acknowledge and deliver to Purchaser all such endorsements,
assignments, bills of sale, deeds (which with respect to the Real Property shall
be special warranty deeds) and other instruments of conveyance, assignment and
transfer as, in the reasonable judgment of Purchaser, shall be necessary and
appropriate to consummate the sale and transfer of the Assets to Purchaser and
to vest in Purchaser the legal and equitable title to the Assets, free and clear
of all liens and encumbrances, except as otherwise permitted in this Agreement.
Purchaser shall be responsible for and shall pay the costs of all title
examinations, titling fees, surveys, attorneys’ fees and expenses, recording and
similar documentary taxes or costs and transfer fees in connection therewith,
including any and all sales and use taxes which are payable or arise as a result
of this Agreement or the consummation of the transactions contemplated by this
Agreement;

(c) assign, transfer and deliver to Purchaser such of the following records
pertaining to the Deposit Liabilities as exist and are available in whatever
form or medium is maintained by the Seller:

(i) orders and contracts between the Seller and depositors at the Branches and
records of similar character, with signature cards delivered as soon as
practicable after the Closing, and Seller to provide to Purchaser in the interim
research assistance as needed; and

(ii) records of account;

(d) produce a bank statement for each demand deposit account, money market
account and savings account transferred and mail the statement to the customer;
and

(e) assign, transfer and deliver to Purchaser the promissory notes, security
agreements and related agreements and all credit files and information relating
to or evidencing all Loans to the extent these agreements or files or materials
exist and in whatever form or medium is maintained by Seller, and provide to
Purchaser a listing of Loans for which the documentation or credit file
associated with such Loans does not include the promissory note, mortgage, deed
of trust or security agreement for such Loans.

2.5 Retention of and Access to Files Following the Closing Date.

(a) Purchaser agrees that it will preserve and safely keep, for as long as may
be required by applicable law, all of the files, books of account and records
referred to in Section 2.4 above for the joint benefit of itself and Seller, and
that it will permit Seller or its representatives, at any reasonable time and at
Seller’s expense, to inspect, make extracts from or copies of, any such files,
books of account or records as Seller shall deem necessary.

 

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(b) In the event that some of Seller’s records concerning the Deposit
Liabilities cannot reasonably be segregated from Seller’s records regarding
accounts not transferred pursuant to this Agreement, Seller will not deliver
such records to Purchaser but will preserve and safely keep such records for as
long as may be required by applicable law. Seller will permit Purchaser or
Purchaser’s representatives, at reasonable times and at Purchaser’s expense, to
inspect, make extracts from or copies of such records which relate to the
Deposit Liabilities.

2.6 Safekeeping. Seller agrees to transfer and deliver to Purchaser on the
Closing Date all safe deposit box contents, including without limitation,
securities, papers, valuables and other items (collectively, “Safekeeping
Items”), held by Seller in safekeeping for its customers at the Branches,
together with all records relating thereto (in whatever form or medium is
maintained by Seller). Purchaser agrees to assume, honor and discharge, from and
after the Closing Date, the duties and obligations of Seller with respect to
such Safekeeping Items and shall be entitled to any right or benefit arising
from such safekeeping business from and after the Closing Date. Purchaser agrees
to execute as of the Closing Date a receipt for such Safekeeping Items.

2.7 Employees.

(a) As of the Closing Date, the active employees of Seller who are then assigned
to the Branches (including regular part-time employees and employees then on
vacation, sick leave, temporary leave of absence for medical purposes or on
short-term disability), who are listed on the attached Exhibit 2.7 (the
“Employees”) will become employees-at-will of Purchaser and will cease to be
employees of Seller. Purchaser agrees to reasonably cooperate with Seller in
obtaining an executed release from each such Employee providing that Seller
shall not be responsible for any severance claims or obligations for such
Employee with respect to any severance plan or policy of Seller. In the event
that Purchaser breaches its obligation to employ the Employees, Purchaser shall
be obligated to pay any severance benefits to any such Employee (unless such
Employee otherwise accepts employment with Purchaser) in accordance with
Seller’s severance arrangement set forth in Exhibit 2.7(a). Seller is
responsible for the filing of Forms W-2 with the Internal Revenue Service and
any required filing with state tax authorities with respect to wages and
benefits paid to each such employee for periods ending on or prior to the
Closing Date. For a minimum period of one (1) year following the Closing Date,
Purchaser agrees to employ the Employees in comparable positions with base cash
remuneration (i.e., wages and/or salary), duties and location at the current
respective Branch locations, equivalent to their respective levels; provided
that such employment shall be subject to termination for good cause.

(b) Purchaser shall grant to the Employees credit for their respective service
with Seller (including Seller as successor in interest by merger) for purposes
of determining their participation, eligibility and vesting rights, but not for
purposes of benefit accrual, in any pension, thrift, profit-sharing, life
insurance, disability and other employee benefit plans or programs now or
hereafter maintained by or on behalf of Purchaser, and with regard to any
medical insurance plan covering Purchaser’s employees, there shall be an open
enrollment period for the Employees without regard to any preexisting conditions
of such Employees or their dependents.

 

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(c) In accordance with the provisions of the Health Insurance Portability and
Accountability Act (“HIPAA”) and the terms of Purchaser’s group health,
hospitalization, medical, dental and disability plans (collectively, the
“Purchaser’s Plans”), the Employees who become participants in the Purchaser’s
Plans shall be given “creditable coverage” credit for their coverage under
Seller’s group health, hospitalization, medical, dental and disability plans
under the pre-existing condition limitation provisions of the Purchaser’s Plans.
In addition, if a condition was not a “pre-existing condition” for a participant
in Seller’s group health, hospitalization, medical, dental and disability plans,
then it shall not be considered to be a pre-existing condition under the
Purchaser’s Plans; provided, however, that if an Employee’s condition is being
excluded as a pre-existing condition under the relevant Seller’s plan of the
Closing Date, then Purchaser may treat such condition as a pre-existing
condition under the relevant Purchaser’s Plan for the period such condition
would have been treated as a pre-existing condition under Seller’s plan.

(d) With respect to any Employee on short term disability or temporary leave of
absence, upon conclusion of his or her short term disability or temporary leave
of absence, subject to the terms and conditions of the applicable plans and
policies of Purchaser and applicable law, each Employee on such disability or
leave shall receive the salary and vacation benefits effective when he or she
went on disability or leave and, to the extent practicable, shall be offered by
Purchaser the same or a substantially equivalent position to his or her position
with Seller.

(e) Purchaser is not assuming, nor shall it have responsibility for the
continuation of, or any liability under or in connection with (i) any employment
contract, collective bargaining agreement, plan or arrangement providing for
insurance coverage or for deferred compensation (except that which is funded by
the bank owned life insurance), bonuses, stock options or other forms or
incentive compensation or post-retirement compensation or benefits which are
entered into or maintained, as the case may be, by Seller; (ii) any “employee
benefit plan” as defined in Section 3(3) of the Employee Retirement Income
Security Act of 1974, as amended (“ERISA”), which is subject to any provision of
ERISA and is maintained, administered or contributed to by Seller; (iii) any
withholding or payroll taxes or penalty related thereto; (iv) any employee
benefits; or (v) any other obligation arising prior to or as a result of actions
by Seller whether prior to or subsequent to the Closing Date.

(f) This Agreement is not intended to create and does not create any contractual
or legal rights in or enforceable by any Employee. Purchaser agrees to obtain
prior approval of Seller before sending any communications to any Employee
concerning the subject matter of this Section 2.7, which approval shall not be
unreasonably withheld. This Agreement may be amended or terminated without
liability to any Employee.

2.8 Payment of Items After the Closing Date; ACH Items. Following the Closing
Date:

(a) Purchaser agrees to pay in accordance with law and customary banking
practices all properly drawn and presented checks, drafts and withdrawal orders
presented to the Purchaser by mail, over the counter or through the check
clearing system of the banking industry, by depositors related to the Deposit
Liabilities, whether drawn on the checks,

 

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withdrawal or draft forms provided by Seller or by Purchaser, and in all other
respects to discharge, in the usual course of the banking business, the duties
and obligations of the Seller with respect to the balances due and owing to the
depositors with respect to whom the Purchaser has assumed the Deposit
Liabilities. Purchaser’s obligations hereunder to honor checks, drafts and
withdrawal orders on forms provided by Seller and carrying its imprint
(including name and transit routing number) shall not apply to any such check,
draft or withdrawal order presented to Purchaser more than sixty (60) days
following the Closing Date.

(b) If any of such depositors, instead of accepting the obligation of Purchaser
to pay the Deposit Liabilities, shall demand payment from Seller for all or any
part of any such Deposit Liabilities, Seller shall not be liable or responsible
for making such payment.

(c) After the Closing, Seller shall be and have the rights and obligations of a
“Collecting Bank” or “Intermediary Bank” under Article 4 of the Uniform
Commercial Code as adopted in Alabama Code (1975) section 7-4-101 et seq. with
respect to items drawn on the accounts transferred which are received by Seller
for processing. Items received for processing against the Deposit Liabilities
shall be grouped and delivered to Purchaser within the time limits provided by
the Uniform Commercial Code in a special cash letter separately identified as
“Transferred Accounts Cash Letter.” For purposes of paying Purchaser’s
obligations to Seller under this Section 2.8, Purchaser will establish a
settlement account with Seller at the Closing Date in a collected amount equal
to $100,000, which amount will be maintained by the Purchaser for a period of
sixty (60) days following the Closing Date, against which will be (i) debited
the checks, returns and items hereafter referred to in this sentence and
(ii) charged amounts in accordance with Section 2.8(c) hereof to provide, among
other things, for the settlement by Purchaser of checks, returns and items which
are presented to Seller within sixty (60) days after the Closing Date and which
are drawn on or chargeable to accounts transferred to Purchaser. In order to
reduce the continuing charges to Seller through the check clearing system of the
banking system which will result from check forms of Seller being used after the
Closing Date by the depositors whose accounts are assumed, Purchaser agrees, at
its cost and expense, and without charge to such depositors, to notify such
depositors immediately after the Closing Date of the Purchaser’s assumption of
the Deposit Liabilities and, not more than 5 nor less than 2 calendar days prior
to the Closing Date, to furnish each depositor of assumed account with new
checks on the forms of the Purchaser reflecting Purchaser’s routing number and
with instructions to utilize the Purchaser’s checks and to destroy unused checks
of Seller. After the expiration of the 60-day period following the Closing Date,
Seller will dishonor checks, drafts or withdrawal orders drawn on the Deposit
Liabilities unless Seller and Purchaser agree to extend the 60-day period and
extend the provision for a settlement account as necessary. Purchaser agrees to
arrange for the transportation directly and pay the expenses of transporting
from Seller to Purchaser all checks, drafts, orders of withdrawal, cash letters,
magnetic tapes and other items related to Seller’s receipt of items relating to
the Deposit Liabilities after the Closing Date. These transportation expenses
may be charged against the settlement account of the Purchaser. Seller shall
terminate all ACH arrangements relating to the Deposit Liabilities on or prior
to the Closing Date.

(d) Purchaser agrees to pay promptly to Seller (i) an amount equivalent to the
amount of any checks, drafts or withdrawal orders credited by Seller before the
Closing Date to such transferred account that are returned to Seller unpaid
after the Closing Date, and (ii) for a

 

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period not to exceed thirty (30) days from the Closing Date, an amount
equivalent to the amount of any checks, drafts or withdrawal orders credited by
Seller after the Closing Date to such transferred account that are returned to
Seller unpaid after the Closing Date. Upon receipt thereof, Seller shall
immediately forward any such check, draft, withdrawal order or other item to
Purchaser, and subject to the time limitations referenced herein, Purchaser
shall remit to Seller the amount of any such item(s).

(e) Prior to Closing, Seller and Purchaser will develop a methodology by which
ACH items received by the Seller after the Closing will be electronically
redirected or forwarded to the Purchaser. Such methodology shall include prompt
notification by Seller, on behalf of Purchaser, to ACH originators in order to
minimize or eliminate processing of ACH items by the Seller after the Closing.
Seller will provide notice and instructions to ACH originators of the changes in
routing and entry numbers for the accounts being transferred from Seller to
Purchaser. Such notification of changes by Seller on behalf of Purchaser shall
be produced and distributed through Seller’s automated systems. In accordance
with the procedures and for the time period specified in Section 2.11, Purchaser
shall indemnify, hold harmless and defend the Seller from and against all
claims, losses, liabilities, demands and obligations, including reasonable
attorneys’ fees, arising out of any actions, suits or proceedings commenced
after the Closing Date which relate to the delivery by Seller of any of the
notification of changes. For 60 days following the Closing Date, the Seller
agrees to continue to accept and forward to the Purchaser in a timely manner all
ACH entries. The settlement for all ACH items will occur between Seller and
Purchaser daily. The Purchaser shall be responsible for processing and
responding to any reclamation against Deposit accounts that were transferred to
Purchaser and shall be responsible for processing all returns.

In the event that customer account numbers are required to be changed or new
account numbers established, Purchaser and Seller shall develop an appropriate
methodology to effect such changes in the context of notification changes, and
shall mutually agree on an amount or amounts to be paid by Purchaser to Seller
for such services. Such amounts shall be in addition to the $5,000 payment
provided in Section 1.9(viii) hereof.

(f) Prior to Closing, Seller and Purchaser will develop a methodology by which
ACH items received by the Seller after the Closing will be electronically
redirected or forwarded to the Purchaser. Such methodology shall include prompt
notification by Seller, on behalf of Purchaser, to ACH originators in order to
minimize or eliminate processing of ACH items by the Seller after the Closing.
Seller will provide notice and instructions to ACH originators of the changes in
routing and entry numbers for the accounts being transferred from Seller to
Purchaser. Such notification of changes by Seller on behalf of Purchaser shall
be produced and distributed through Seller’s automated systems. For 60 days
following the Closing Date, the Seller agrees to continue to accept and forward
to the Purchaser in a timely manner all ACH entries and corresponding funds. The
Seller also agrees to include the originator identification number, and
Purchaser agrees to immediately notify and instruct the originator of the ACH to
reroute the entries directly to the Purchaser. The Purchaser shall be
responsible for processing and responding to any reclamation against Deposit
accounts that were transferred to Purchaser.

 

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In the event that customer account numbers are required to be changed or new
account numbers established as a result of the notifications and transfers,
Purchaser and Seller shall develop an appropriate methodology to effect such
changes in the context of notification changes, and shall mutually agree on an
amount or amounts to be paid by Purchaser to Seller for such services. Such
amounts shall be in addition to the $5,000 payment provided in Section 1.9(viii)
hereof.

(g) For the first 30 days after the Closing, Seller will accept and forward to
Purchaser ACH items as described above, at no charge to Purchaser in addition to
any other clearing items. Beginning on the 31st day after the Closing, and
continuing thereafter, Purchaser shall pay Seller $100 per day for each day
Seller provides any processing of any ACH item or any other clearing items for
the transferred Deposits, Loans or other related accounts. After 60 days after
Closing, Seller may discontinue accepting and forwarding ACH entries and return
them to the originators marked “Branch or Account Sold to Another Depository
Financial Institution.”

2.9 Loan Payments and Information Received After the Closing Date. Following the
Closing, and for a period of 60 days after the Closing, Seller agrees to forward
promptly to Purchaser:

(a) any payments (properly endorsed without recourse as necessary) which are
received by Seller on or after the Closing Date that relate to the Loans and to
provide sufficient information so that any such payments may be properly applied
to the extent such information is available to Seller;

(b) any notices or other correspondence received on or after the Closing Date
that relate to the Loans or other Assets; and

(c) with respect to credit life, credit accident and health policies and on
Loans, as applicable:

(i) at the Closing, Seller shall assign all of its right, title and interest in
and to all insurance certificates in effect in connection with closed end loans
and lines of credit, including the credit life insurance and credit accident and
health insurance, and all its right, title, and interest in such policies given
as security for the loans. Seller shall notify the appropriate insurance
companies that the loans and the respective insurance coverages have been
transferred to Purchaser and secure consent thereof to the extent necessary to
effect the transfers contemplated hereunder. Seller shall prepare and provide to
Purchaser a listing of such loan accounts which shall identify the policies and
insurance companies applicable to such accounts. From and after the Closing,
Purchaser shall be solely responsible for (A) obtaining from each insurer
payment of claims in relation to such insurance in connection with a loan, and
(B) any and all refunds of insurance premiums due to be paid under applicable
law or the loan documents by Purchaser to a debtor regardless of whether
received from any insurer;

(ii) Seller shall transfer to Purchaser at the Closing all unearned premiums (if
any) on such policies held by Seller as of the Closing Date, and

 

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(iii) Seller and Purchaser shall, prior to the Closing, agree upon a method by
which the Purchaser may avoid rebating from the Purchaser’s own funds the
unearned insurance premiums on prepaid Loans without having received from Seller
that portion of the premiums held thereon by the Seller but unearned as of the
Closing Date.

The parties anticipate developing an appropriate methodology for transferring
such items and products and assuming such items and products.

With respect to Section 2.9(a) and Section 2.9(b) hereof, for the first 60 days
after the Closing, the Seller will accept and forward to Purchaser any payments,
notices or other correspondence that relate to the Loans as described above, at
no charge to the Purchaser. Beginning on the 61st day after the Closing, and
continuing thereafter, the Purchaser shall pay the Seller $100 per day for each
day the Seller provides any processing of any payment, notice or other
correspondence that relates to the Loans.

2.10 Seller Identification; Use of Forms; Etc. On the Closing Date, Purchaser
shall substitute its name and logo for the name and logo of Seller on all signs
at the Branches. Seller shall remove from the premises, at Seller’s expense, all
signs which carry the name and logo of Seller as promptly as practicable after
the Closing Date. In addition, immediately after the Closing Date, Purchaser
will (a) change the name and logo on all documents relating to the Assets and
the Deposit Liabilities to Purchaser’s name and logo, (b) notify all persons
whose Loans or Deposit Liabilities are transferred under this Agreement of the
consummation of the transactions contemplated by this Agreement, and (c) provide
all appropriate notices to the Federal Deposit Insurance Corporation and any
other regulatory authorities required as a result of the consummation of such
transactions. Purchaser agrees not to use any forms or other documents bearing
Seller’s or any of its affiliates’ name or logo after the Closing without the
prior written consent of Seller, and, if such consent is given, Purchaser agrees
that all such forms or other documents to which such consent relates will be
stamped or otherwise marked in such a way that identifies the Purchaser as the
party using the form or other document. In addition, Purchaser agrees to replace
promptly all written or electronic materials bearing Seller’s name and/or logo
used in the ordinary course of banking business, including stationary and forms,
with written or electronic materials bearing Purchaser’s name and/or logo,
including without limitation, new coupon books for Loans.

2.11 Indemnification.

(a) After the Closing Date, Seller shall indemnify, hold harmless and defend
Purchaser from and against all claims, losses, liabilities, demands and
obligations, including reasonable attorneys’ fees and expenses, arising out of
(i) any actions, suits or proceedings commenced before the Closing Date (other
than proceedings to prevent or limit the consummation of the transactions
contemplated hereby) relating to operations by the Seller at the Branches,
(ii) any actions, suits or proceedings commenced on or after the Closing Date
but which relate solely to operations at the Branches before the Closing Date,
or (iii) the breach by Seller of any agreement contained herein or in any
agreement delivered pursuant hereto to be performed by it on or after the
Closing Date. It is understood that the obligations of Seller under this
Section 2.11(a) shall survive the Closing Date for a period of 24 months as
specified in Section 2.11(c). On and after the Closing Date, Purchaser shall
maintain in full force and

 

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effect a financial institution blanket fidelity bond which provides coverage for
losses, including computer crime, on a discovery basis. Notwithstanding anything
in (a) above, Seller shall not be responsible for any loss unknown to Seller as
of the Closing Date which is discovered after the Closing Date.

(b) Purchaser shall indemnify, hold harmless and defend Seller from and against
all claims, losses, liabilities, demands and obligations, including reasonable
attorneys’ fees, arising out of (i) any actions, suits or proceedings commenced
after the Closing Date which relate to operation of the Branches by Purchaser
after the Closing Date, (ii) the breach by Purchaser of any agreement contained
herein or in any agreement delivered pursuant hereto to be performed by it on or
after the Closing Date and (iii) the Assets, liabilities and obligations
transferred to or assumed by Purchaser in connection herewith. To the extent any
item which is the subject of any claim, loss, liability, demand or obligation
has been prepaid by Seller for a period extending beyond the Closing Date, there
shall be a proportionate monetary adjustment in favor of Seller. It is
understood that the obligations of Purchaser under this Section 2.11(b) shall
survive the Closing Date for a period of 24 months as specified in
Section 2.11(c).

(c) A claim for indemnity under Sections 2.11(a) or (b) hereof may be made by
the claiming party at any time prior to 24 months after the Closing Date by the
giving of written notice thereof to the other party. Such written notice shall
set forth in reasonable detail the basis upon which such claim for indemnity is
made. In the event that any such claim is made within such 24 month period, the
indemnity relating to such claim shall survive until such claim is resolved.
Claims not made within such 24 month period shall cease and no indemnity shall
be made therefor.

(d) In the event that any person or entity not party to this Agreement shall
make any demand or claim or file or threaten to file any lawsuit, which demand,
claim or lawsuit may result in any liability, damage or loss to one party hereto
of the kind for which such party is entitled to indemnification pursuant to
Sections 2.11(a) or (b) hereof, then, after written notice is provided by the
indemnified party to the indemnifying party of such demand, claim or lawsuit,
the indemnifying party shall have the option, at its cost and expense, to retain
counsel for the indemnified party to defend any such demand, claim or lawsuit.
In the event that the indemnifying party shall fail to respond within ten
business days after receipt of such notice of any such demand, claim or lawsuit,
then the indemnified party shall retain counsel and conduct the defense of such
demand, claim or lawsuit as it may in its discretion deem proper, at cost and
expense of the indemnifying party. In effecting the settlement of any such
demand, claim or lawsuit, an indemnified party shall act in good faith, shall
consult with the indemnifying party and shall enter into only such a settlement
as the indemnifying party shall approve (the indemnifying party’s approval will
be implied if it does not respond within five business days of its receipt of
the notice of such a settlement offer).

2.12 Right to Intervene. In the event that any claim, protest, suit or other
proceeding is instituted or threatened against Purchaser relating to this
Agreement, the Deposit Liabilities or the Loans, other Assets or liabilities
transferred to or assumed by Purchaser hereunder, Seller shall have the right,
at its discretion and expense, to intervene in such matter, and Purchaser hereby
agrees to give prompt and prior notice thereof to Seller thereof and consents to
such intervention.

 

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2.13 Assumption of Risks.

(a) If the Real Property, Leased Property or buildings or other improvements of
one or more of the Branches are destroyed or materially damaged by fire or other
casualty prior to the Closing Date and shall not be substantially repaired or
replaced or shall not have insurance coverage which in the reasonable
determination of Purchaser is sufficient to repair or replace such Real
Property, Leased Property or buildings or other improvements, Purchaser shall
have the right to terminate this Agreement with regard to the applicable Real
Property, Leased Property or buildings or other improvements or to accept the
applicable Real Property or Leased Property as damaged together with any rights
of Seller under the applicable Leases and all other Assets to receive insurance
proceeds or to exercise any other rights of Seller under the applicable Leases
and all other Assets following their assignment to Purchaser on the Closing
Date.

(b) Effective on the Closing Date, Seller will discontinue any casualty and
liability insurance coverage maintained with respect to the premises of the
Branches and all Assets. Purchaser shall be solely responsible for all casualty
losses and liability claims arising on and after the Closing Date.

(c) Effective on the Closing Date, Seller will discontinue providing any
security for persons and property at the Branches and Purchaser assumes all
liabilities arising out of injury or damage to persons and property on and after
the Closing Date.

(d) On and after the Closing Date, Purchaser shall maintain adequate insurance
with respect to the losses described in (b) and (c) above and otherwise with
respect to the operation of the Branches.

2.14 Information Reporting. With respect to the Loans and Deposit Liabilities
purchased and assumed by Purchaser pursuant to this Agreement, Purchaser shall
be responsible for reporting to the customer and to the Internal Revenue Service
(and any state or local taxing authority as required) all interest paid or
earned during the entire year in which the Closing Date occurs. Seller agrees to
provide to Purchaser information about the Deposit Liabilities and Loans up to
the Closing Date necessary for Purchaser to comply with the requirements of this
Section 2.14 but Seller shall have no responsibility to provide such information
to the customer or the Internal Revenue Service or any other person or agency.
Purchaser agrees to indemnify Seller for any penalty, interest, claim, fee
(including reasonable attorney fees) or other liability or expense which may be
imposed upon or asserted against Seller as a result of Purchaser’s failure to
timely and accurately report such interest earned or paid by customers on the
Deposit Liabilities and Loans, as required by law, unless such failure by
Purchaser is due to the Seller’s failure to provide to Purchaser in a timely
manner the amount of interest earned or paid by the customers up to the Closing
Date. Seller agrees to indemnify Purchaser for any penalty, interest, claim, fee
(including reasonable attorney fees) or other liability or expense which may be
imposed upon the Purchaser as a result of Purchaser’s failure to timely and
accurately report interest earned or paid by customers on the Deposit
Liabilities and Loans if Purchaser’s failure is caused by Seller’s failure to
provide in a timely manner the amount of interest earned or paid by customers up
to the Closing Date or errors in such information provided by Seller to
Purchaser.

 

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2.15 No Solicitation by Seller.

(a) For a period of 18 calendar months after the Closing Date, Seller shall not
(i) maintain any list of the deposit customers at the Closing Date of the
Branches for the purpose of marketing loans or attracting deposits,
(ii) specifically target and solicit customers of the Branches using any
customer or mailing list which consists primarily of customers of the Branches;
provided, however, these restrictions shall not restrict general mass mailings,
telemarketing calls, statement stuffers and other similar communications
directed to all customers of Seller or Seller’s affiliates, or to the public or
newspaper, radio, television or Internet advertisements of a general nature or
otherwise prevent Seller from taking such actions as may be required to comply
with any applicable federal or state laws, rules or regulations. he foregoing
restrictions notwithstanding, Seller and its affiliates may continue existing
commercial, trust, mortgage loan, securities sales, and bank card accounts which
are normally established and maintained in offices other than the Branches with
customers of the Branches, and may solicit such business relationships without
restriction after the Closing Date.

(b) In addition, for a period of 12 calendar months after the Closing Date,
Seller will not directly solicit for employment or hire any person who is now
employed at the Branches and continues to be employed without interruption after
the Closing Date (it being understood between the parties that advertising and
other recruiting efforts aimed at the general public shall not violate the terms
of this Agreement).

2.16 Fiduciary Relationships. When the consent of the trust customers is
required, Seller shall use its reasonable efforts to encourage trust customers
assigned to the Branches to agree to the assignment of their respective trust
agreements to the Purchaser. Purchaser shall perform all of the obligations of
Seller arising out of the Trust Accounts; provided that Purchaser is not hereby
assuming any liability for any breach under such Trust Accounts or any breach of
any fiduciary duty by the Seller that occurs prior to the Closing.

2.17 Environmental Study. Within thirty (30) days after the date of this
Agreement, Purchaser may, at Purchaser’s sole cost and expense, obtain a
completed Phase I environmental report (“Phase I”) of any and all Real Property
and Leased Property, conducted by an independent, nationally recognized
environmental investigation and testing firm selected by the Purchaser and
reasonably approved by Seller. In the event the Phase I discloses any potential
environmental condition that in the reasonable belief of Purchaser warrants
further review or investigation, Purchaser shall give notice of the same to
Seller within such thirty (30) day period with respect to the specific Real
Property or Leased Property. Purchaser shall, subject to other terms and
conditions of this Agreement, purchase any and all Real Property and assume
Seller’s rights as lessee under the Leased Property for which specific notice is
not provided within such thirty (30) day period. Upon giving notice, Purchaser
may, within an additional fifteen (15) day period, at one-half of the cost and
expense to Purchaser and one-half to Seller, obtain a completed Phase II
environmental report (“Phase II”). Purchaser shall, subject to other terms and
conditions of this Agreement, purchase any and all Real Property and assume
Seller’s rights as lessee under the Leased Property for which (a) the Phase I or
Phase II report reveals potential levels of environmental contaminants not in
excess of federal and state action limits, or (b) Purchaser shall have been
provided confirmation from governmental authorities with applicable jurisdiction
that no action is required. If the Phase II report reveals levels of
environmental

 

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contaminants in excess of federal and state action limits on any Real Property
or Leased Property, Purchaser may purchase said Real Property and assume
Seller’s rights as lessee under the Leased Property on terms and conditions
mutually agreeable to Purchaser and Seller. In the event that Purchaser and
Seller fail to reach such agreement within sixty (60) days of the date of this
Agreement, Purchaser may, in its sole discretion, lease any such Real Property
or Leased Property on market terms mutually agreeable to Purchaser and Seller,
but Purchaser shall not have any obligation to lease such Real Property or
Leased Property. Purchaser and its employees, agents and representatives shall
hold all contents of any Phase I or Phase II reports confidential and disclose
the contents thereof only with the prior written consent of the Seller or as may
be required under applicable law.

2.18 Communications. During the period from the date of this Agreement to the
Closing Date, Purchaser and Seller shall not communicate with the Employees,
depositors or customers of the Branches, except as specifically required by the
relevant regulatory agencies as part of the approval process, or as specifically
provided for herein:

(a) As soon as practicable following the date of this Agreement, Purchaser and
Seller shall jointly communicate, at Purchaser’s and Seller’s equal expense,
with the Employees, depositors and customers of the Branches advising them of
the transactions contemplated by this Agreement. Such communication shall be in
form and substance mutually satisfactory to the parties hereto and to any
regulatory authorities as may be required by applicable law or regulation. Any
and all public announcements or press releases by either party must comply with
Section 2.3 of this Agreement.

(b) With the exception of the communications provided for in paragraph
(a) above, and in Section 2.7 of this Agreement (to the extent necessary to
convey an offer of employment), Purchaser may not communicate with the
Employees, depositors and other customers of the Branches without the prior
written consent of Seller, and any such communications shall be in form and
substance mutually satisfactory to the parties hereto and to any regulatory
authorities as may be required by applicable law or regulation. Any such
permitted communications may not interrupt or interfere with the normal
operations of the Branches, and shall be at Purchaser’s sole cost and expense.

(c) In addition to the communications provided for in paragraph (a) above,
Seller at its own cost and expenses may communicate with the Employees,
depositors and other customers of the Branches at such times and in such form
and substance mutually satisfactory to the parties hereto and to any regulatory
authorities as may be required by applicable law or regulation.

ARTICLE 3.

REPRESENTATIONS, WARRANTIES AND COVENANTS OF SELLER

Seller hereby represents and warrants to Purchaser as follows, which
representations and warranties shall not survive the Closing Date:

3.1 Corporate Organization. Seller is a banking corporation duly organized,
validly existing and in good standing under the laws of Alabama. Seller has the
corporate power and

 

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authority to own or lease its properties at the Branches, to carry on its
business at the Branches as presently conducted, to execute, deliver and perform
this Agreement and to effect the transactions contemplated hereby. Seller’s
deposits are insured by the FDIC to the maximum extent permitted by law.

3.2 Corporate Authority. The execution and delivery of this Agreement by Seller,
and the consummation by Seller of the transactions contemplated hereby, have
been duly authorized by all necessary corporate actions on the part of Seller.
This Agreement and all related agreements executed and delivered by Seller
pursuant hereto have been duly executed by Seller and constitute the valid and
binding obligations of Seller enforceable against Seller in accordance with
their respective terms, subject to the provisions of federal and other
applicable bankruptcy, insolvency, reorganization, moratorium, receivership,
conservatorship or similar laws relating to or affecting the enforcement of
creditors’ rights generally, now or hereafter in effect, and subject to general
equity principles, which may limit enforcement of certain remedies.

3.3 Assets.

(a) Seller has good and marketable title to the Fixed Assets and Real Estate
free and clear of all liens, security interests and mortgages, if any, except
for “Permitted Encumbrances.” “Permitted Encumbrances” means, with respect to
any Asset, any of the following items: (i) with respect to the Real Property,
easements, restrictions, and other matters of record or visible from the ground,
applicable zoning and land use laws, building restrictions and all other laws of
duly constituted public authorities, grants of public rights of way, standard
exceptions in any title insurance policy, matters that would be shown by a
survey of the Real Property and any defect in or other exception to title that
does not interfere in any material respect with the operation of the Real
Property as a retail banking facility; (ii) liens for taxes or assessments that
are not yet due and payable and that were incurred in the ordinary course of
business; (iii) liens imposed by law, which were incurred in the ordinary course
of business and do not secure indebtedness for borrowed money, such as
carriers’, warehousemen’s, materialmen’s, vendor’s and mechanics liens and other
similar liens which do not materially detract from the value of or interfere
with the current use of the Assets; and (iv) any other encumbrances, claims,
charges, security interests, or liens which do not materially detract from the
value of or interfere with the current use of the Assets. Except as contemplated
by this Agreement, Seller has not sold, transferred, assigned or pledged any of
the Assets.

(b) Seller has not received any written notice of any actual threatened or
pending condemnation proceeding relating to the Real Property.

(c) Each Loan is a valid loan enforceable in accordance with its terms, subject
to bankruptcy, insolvency and other laws affecting creditors’ rights and to
general principles of equity; Seller is the sole owner of each Loan, no
participation therein having been sold; the Loan is not pledged or encumbered;
the principal balance of the Loan as shown on Seller’s books and records is true
and correct as of the last date shown thereon; all Loans (and any notes, other
evidences of indebtedness or security agreements associated therewith) are
transferred to Purchaser without recourse and without any warranties or
representations as to the collectibility of the Loans, the value of the
collateral securing the Loans or the creditworthiness of any maker, guarantors
or other obligors thereof.

 

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(d) Seller has delivered to Purchaser complete and correct copies of all of the
Leases.

(e) The Fixed Assets and leasehold improvements at the Branches are all of the
material tangible assets owned or leased by Seller and used by it to conduct the
business of the Branches as of the date hereof. The banking equipment which
constitutes a part of the Fixed Assets or such leasehold improvements will be
received in “AS IS” condition, with no other warranties by Seller as to their
condition or future performance, except those warranties related to title.

(f) Seller makes no covenant, representation or warranty as to the suitability
of the Fixed Assets, Real Property, Leased Property or leasehold improvements or
as to the physical condition thereof for any purpose whatsoever. Purchaser
acknowledges that it has inspected or been provided the opportunity to inspect
the property, observed its physical characteristics and existing conditions, and
has been afforded the opportunity to conduct such investigation and study on and
of the Fixed Assets, Real Property, Leased Property and leasehold improvements
as it deems necessary for the purpose of acquiring the Fixed Assets, Real
Property, Leased Property and leasehold improvements for Purchaser’s intended
use, and Purchaser hereby waives, effective as of the Closing Date, any and all
objections to or claims with respect to any and all physical characteristics and
existing conditions of the Fixed Assets, Real Property, Leased Property and
leasehold improvements, including without limitation, any hazardous materials
in, at, on, under or related to the Fixed Assets, Real Property, Leased Property
and leasehold improvements, subject to the provisions of Section 2.17 hereof.
Purchaser further acknowledges and agrees that the Fixed Assets, Real Property,
Leased Property and leasehold improvements are to be assigned or sold and
conveyed to, and purchased and accepted by, Purchaser in their present
condition, “AS IS” and with all faults, subject to the provisions of
Section 2.17 hereof. Purchaser hereby assumes the risk that adverse past,
present or future physical characteristics and conditions may not have been
revealed by its inspection or investigation. Purchaser may undertake such
physical inspections and examinations of the Real Property and the Leased
Property, and the legal title thereof, including such inspections of the
buildings thereon, as Purchaser deems necessary or appropriate. The cost of any
such inspections and examinations shall be the responsibility of Purchaser.

3.4 No Violation. Neither the execution and delivery by Seller of this Agreement
or any related agreements, nor the consummation by Seller of the transactions
contemplated hereby or thereby, will violate, conflict with or result in a
default under (i) the Articles of Incorporation or By-Laws of Seller, (ii) any
provision of any agreement (except for the Leases) or any other restriction to
which Seller is a party or by which Seller or any of its properties is bound, or
(iii) any statute, law, decree, regulation or order of any governmental
authority once the Governmental Approvals are obtained.

3.5 Loans.

(a) Seller is the sole owner of each of the Loans, with no participation therein
having been sold; none of the Loans is pledged to a third party; the principal
balance and amount of accrued but unpaid interest and fees of each of the Loans
as shown on Seller’s books and records as of the Closing Date will be true and
correct; and each of the Loans (and all notes,

 

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other evidences of indebtedness, mortgages, loan agreements and security
agreements associated therewith) are transferred to Purchaser hereunder without
recourse and without any representations or warranties as to the collectibility
of the Loans, the value of the collateral securing the Loans or the
creditworthiness of any Obligors (as hereinafter defined) of any Loans.

(b) Each of the Loans was made in the ordinary course of business, was not known
to be uncollectible at the time it was made, and accrues interest (except for
Loans recorded as non-accrual) in accordance with the terms of the Loan. Each
Loan to be purchased pursuant to Section 1.2 hereof, was made, funded and
remains in material compliance with all applicable laws, orders and regulations.
To the knowledge of Seller, the records of Seller regarding all Loans
outstanding are accurate in all material respects and the risk classifications
for the Loans outstanding are, in the best judgment of the management of Seller,
appropriate. To the knowledge of Seller except as may otherwise be indicated in
the Loan file, each Loan is the legal, valid and binding obligation of the
obligor, maker, co-maker, endorser or debtor (the “Obligors”), subject to
bankruptcy, insolvency, fraudulent conveyance and other law of general
applicability relating to or affecting creditor’s rights and to general
principles of equity, and no defense, offset or counterclaim has been asserted
with respect to any such Loan.

3.6 Deposits. To Seller’s knowledge, the balance of each deposit account
included in the Deposit Liabilities as shown on Seller’s books and records at
the Closing Date will be true and correct. All of the deposits domiciled at the
Branches were issued and remain in compliance in all material respects with all
applicable laws, orders and regulations and are insured by FDIC to the maximum
extent provided in the rules and regulations of the FDIC. Seller has the right
to transfer or assign each of the Deposit Liabilities to Purchaser, subject to
any pledges, liens, judgments, court order and restrictions on transfer.

3.7 Compliance with Laws. To the knowledge of Seller after due inquiry, the
Deposit Liabilities and the Loans were opened, extended or made, and have been
maintained in accordance with all applicable federal and state laws,
regulations, rules and orders, except for such instances of noncompliance which
do not have, and are not reasonably likely to have, a material adverse effect on
Seller.

3.8 No Brokers, Etc. Neither Seller nor any of its officers, directors or
employees has employed any broker or finder or incurred any liability for any
brokerage, finders’ or similar fees, commissions or expenses in connection with
this Agreement or the transactions contemplated hereby.

3.9 Real Estate Matters. With respect to the Real Property and Leased Property,
Seller represents and warrants as follows: Seller is currently the owner of the
Real Property and lessee of the Leased Property. On the Closing Date, the Real
Property shall be conveyed by Seller to Purchaser by special warranty deed free
and clear of (i) all mortgages and liens created by Seller and (ii) any other
liens created by Seller, but otherwise shall be sold subject to all current ad
valorem taxes, applicable zoning ordinances, mineral and mining rights not owned
by Seller, matters which would be shown by a survey, matters appearing on
Schedules 1.7 or 3.9, and all matters of record at the time of conveyance.

 

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3.10 Limitation of Warranties. EXCEPT AS SPECIFICALLY SET FORTH IN THIS
AGREEMENT, SELLER EXPRESSLY DISCLAIMS ANY AND ALL WARRANTIES, EXPRESS OR
IMPLIED, WITH RESPECT TO THE FIXED ASSETS, REAL PROPERTY, LEASED PROPERTY OR THE
LEASEHOLD IMPROVEMENTS OR WITH RESPECT TO ANY ASSETS BEING TRANSFERRED TO OR
LIABILITIES BEING ASSUMED BY THE PURCHASER, INCLUDING, WITHOUT LIMITATION, THE
IMPLIED WARRANTIES OF MERCHANTABILITY OR OF FITNESS FOR A PARTICULAR PURPOSE.

3.11 Covenant Not to Compete. Seller hereby covenants and agrees that following
the consummation of this transaction and for a period of eighteen (18) months
thereafter, neither it nor any of its affiliates will (a) open a de-novo branch,
operate, control or otherwise have an interest in any financial institution,
branch or similar facility that has a place of business within Cheatham and
Houston Counties (the “Restricted Area”) or (b) establish an electronic funds
transfer terminal, of any type or description, within the Restricted Area.
Provided, however, that the foregoing shall not be applicable to locations in
which Seller is currently operating a banking facility, other than the Branches.
Nor shall it, in any way, prevent Seller from merging with another financial
institution which operates a banking facility within the Restricted Area or
relocating any current branch within the Restricted Area.

3.12 Consent to Integrated Loan Services Agreement Assignment. Seller shall use
its reasonable best efforts to obtain the consent of Integrated Loan Services
(“ILS”) to Seller’s assignment to Purchaser of the ILS coverage of certain Loans
related to the Branches.

ARTICLE 4.

REPRESENTATIONS, WARRANTIES AND COVENANTS OF PURCHASER

Purchaser hereby represents and warrants to Seller as follows, which
representations and warranties shall not survive the Closing Date:

4.1 Corporate Organization. Purchaser is a federally chartered stock savings
bank duly organized, validly existing and in good standing under the laws of the
United States. Purchaser has the corporate power and authority to own the Assets
being acquired, to assume the liabilities and obligations being assumed
hereunder, including, without limitation, the Deposit Liabilities and Leases, to
execute, deliver and perform this Agreement and to effect the transactions
contemplated hereby. Purchaser’s deposits are insured by the FDIC to the maximum
extent permitted by law.

4.2 Corporate Authority. The execution and delivery of this Agreement and all
related agreements by Purchaser, and the consummation of the transactions
contemplated hereby, have been duly authorized by all necessary corporate
actions on the part of Purchaser. This Agreement and all related agreements
executed and delivered pursuant hereto, including, without limitation, all
instruments confirming the assumption by Purchaser of the obligations and
liabilities of Seller contemplated hereby, have been duly executed by Purchaser
and constitute the valid and binding obligations of Purchaser enforceable
against Purchaser in accordance with their respective terms, subject to the
provisions of federal and other applicable bankruptcy, insolvency,
reorganization, moratorium, receivership, conservatorship or similar laws
relating to or affecting the enforcement of creditors’ rights generally, now or
hereafter in effect, and subject to general equity principals, which may limit
enforcement of certain remedies.

 

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4.3 No Violation. Neither the execution and delivery by Purchaser of this
Agreement or any related agreements, nor the consummation by Purchaser of the
transactions contemplated hereby or thereby, will violate, conflict with or
result in a default under (i) the Federal Stock Charter or Bylaws of Purchaser,
(ii) any provision of any agreement or any other restriction to which Purchaser
is a party or by which Purchaser or any of its properties is bound, or (iii) any
statute, law, decree, regulation or order of any governmental authority once the
Governmental Approvals are obtained.

4.4 No Brokers, Etc. Other than arrangements with Hovde Financial, Inc., neither
Purchaser nor any of its officers, directors or employees has employed any
broker or finder or incurred any liability for any brokerage, finders’ or
similar fees, commissions or expenses in connection with this Agreement or the
transactions contemplated hereby.

4.5 Closing and Conversion Dates. Subject to the terms of this Agreement,
Purchaser agrees to close the acquisition of the Branches and convert its
processing and computer systems on the Closing Date.

4.6 Litigation and Regulatory Proceedings. There are no actions, complaints,
petitions, suits or other proceedings, or any decree, injunction, judgment,
order or ruling, entered, promulgated or pending or, to Purchaser’s knowledge,
threatened against Purchaser or any of its properties or assets which alone, or
taken in the aggregate, reasonably would be expected to prevent consummation of
the transactions contemplated by this Agreement by Purchaser. No governmental
agency has notified Purchaser or any of its affiliates that it would oppose or
not approve or consent to the transactions contemplated by this Agreement, and
Purchaser knows of no reason for any such opposition, disapproval or nonconsent.

4.7 Consents and Approvals. Except for required regulatory approvals set forth
on Schedule 4.7, no consents, approvals, filings or registrations with any third
party or any public body, agency or authority are required in connection with
Purchaser’s consummation of the transactions contemplated by this Agreement
other than what may be required as a result of any acts or circumstances
relating solely to the Seller.

4.8 Regulatory Capital and Condition. Purchaser is in compliance with all of its
regulatory capital standards as of the date hereof, and has no reason to believe
that it will be unable to obtain the required regulatory approvals for the
transactions contemplated by this Agreement. As of the date of this Agreement,
there is no pending or, to the Purchaser’s knowledge, threatened legal or
governmental proceedings against the Purchaser or any of its affiliates that
would affect the Purchaser’s ability to obtain the required regulatory approvals
or satisfy any of the other conditions required to be satisfied in order to
consummate any of the transactions contemplated by this Agreement.

 

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ARTICLE 5.

CONDUCT OF BUSINESS PENDING THE CLOSING DATE

Pending the Closing Date, and except as otherwise consented to by Purchaser:

(a) Seller shall carry on the business of the Branches substantially in the same
manner as heretofore, including, without limitation, maintaining Seller’s
customary lending and underwriting criteria, and Seller shall not, with regard
to the Branches, engage in any activities or transactions outside its ordinary
course of business as conducted as of the date hereof except for activities or
transactions contemplated by this Agreement, provided however, that Seller need
not, in its sole discretion, advertise or promote new or substantially new
customer services in the principal market area of the Branches, and further
provided that Seller may, but shall not be required to, maintain the current
number of Employees at the Branches.

(b) Seller shall use its reasonable best efforts to preserve its business
operation as conducted at the Branches, to preserve for Purchaser the good will
of its customers and others doing business with the Branches, and to exercise
reasonable efforts to cooperate with and assist Purchaser in assuring the
orderly transition of such business from Seller to Purchaser. Notwithstanding
the foregoing, Seller and Purchaser acknowledge and agree that, if, following
the execution of this Agreement, a Branch customer requests that such customer’s
deposit or other account relationship remain with Seller and not be transferred
to Purchaser, that Seller and Purchaser shall cooperate to transfer such deposit
or account relationship to an affiliate of Seller. Nothing herein shall be
construed as requiring Seller to engage in any activities or efforts outside the
ordinary course of business as presently conducted.

(c) Seller shall not grant any increase in compensation or benefits to the
employees or officers of the Branch except as required by law; not pay any bonus
except pursuant to provision of the applicable program or plan adopted by
Seller’s Board of Directors prior to the date of this Agreement; not enter into
or amend any severance agreements with officers at the Branches.

(d) Seller shall not make any change in the interest rates paid with respect to
any of the deposits at the Branch unless such rate changes are affected
system-wide for those branches in the “Middle Tennessee Region” of Seller.

ARTICLE 6.

CONDITIONS TO PURCHASER’S OBLIGATIONS

The obligations of Purchaser to complete the transactions provided for in this
Agreement are conditioned upon the fulfillment, at or before the Closing Date,
of each of the following conditions (all or any of which may be waived in whole
or in part by Purchaser except for the conditions in Section 6.5 which cannot be
waived by Purchaser):

6.1 Representations and Warranties True. The representations and warranties made
by Seller in this Agreement shall be true and correct in all material respects
at and as of the Closing Date as though such representations and warranties were
made at and as of such time.

6.2 Obligations, Covenants and Agreements Performed. Seller shall have performed
and complied in all material respects with all obligations, covenants and
agreements required by this Agreement to be performed or complied with by it
prior to or at the Closing Date.

 

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6.3 Certificate of Compliance. Seller shall have delivered to Purchaser a
certificate of its President or any Senior Vice President, dated at the Closing
Date, certifying to the fulfillment of each of the foregoing conditions.

6.4 No Adverse Litigation. On the Closing Date no action, suit or proceeding
shall be threatened or pending against Purchaser or Seller which might
reasonably be expected to (i) materially and adversely affect the business,
properties, assets and assumed liabilities of the Branches or (ii) materially
and adversely affect the transactions contemplated by this Agreement.

6.5 Regulatory Approvals. Purchaser shall have received from the appropriate
regulatory authorities all Governmental Approvals (i) of the transactions
contemplated hereby and (ii) to operate each of the Branches as a branch of the
Purchaser. No Governmental Approval so obtained which is necessary to consummate
the transactions contemplated in this Agreement shall be conditioned or
restricted in a manner which in the reasonable judgment of Purchaser would have
a material adverse effect on Purchaser or Purchaser’s prospects. Seller shall
not have been notified by any regulatory authority that the discontinued
operation of the Branches by Seller would be a violation of any law, statute,
rule or regulation or any policy of any governmental authority.

6.6 Consent to Assignment of Leases. The lessors under the Leases shall have
consented, on terms reasonably satisfactory to both Seller and Purchaser, to
Seller’s assignment of the Leases to Purchaser, if such consent is required
pursuant to the terms of the Leases.

6.7 No Material Adverse Change. From the date of this Agreement until the
Closing Date there shall have been no material damage to or destruction of the
Branches and the improvements thereto.

6.8 Closing Documents. Seller shall have delivered to Purchaser, in form and
substance reasonably satisfactory to Purchaser, all agreements, instruments,
documents and certificates executed by Seller as are required by this Agreement
to consummate the transactions contemplated hereby.

ARTICLE 7.

CONDITIONS TO SELLER’S OBLIGATIONS

The obligations of Seller to complete the transactions provided for in this
Agreement are conditioned upon the fulfillment, at or before the Closing Date,
of each of the following conditions (all or any of which may be waived by Seller
except for the conditions in Section 7.6 which cannot or will not be waived by
Seller):

7.1 Representations and Warranties True. The representations and warranties made
by Purchaser in this Agreement shall be true and correct in all material
respects at and as of the Closing Date as though such representations and
warranties were made at and as of such time.

7.2 Obligations Performed. Purchaser shall have performed and complied in all
material respects with all obligations and agreements required by this Agreement
to be performed or complied with by it prior to or at the Closing Date.

 

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7.3 Certificate of Compliance. Purchaser shall have delivered to Seller a
certificate of its President or any Senior Vice President, dated at the Closing
Date, certifying to the fulfillment of each of the foregoing conditions.

7.4 No Adverse Litigation. On the Closing Date no action, suit or proceeding
shall be threatened or pending against Purchaser or Seller which might
reasonably be expected to materially and adversely affect the transactions
contemplated by this Agreement.

7.5 Assumption Agreement. Purchaser shall have executed and delivered to Seller
assumption agreements referred to in Section 1.7 satisfactory to Seller and its
counsel and Purchaser and its counsel.

7.6 Regulatory Approvals. Purchaser shall have received from the appropriate
regulatory authorities all Governmental Approvals (i) of the transactions
contemplated hereby and (ii) to operate each of the Branches as a branch of
Purchaser. Seller shall not have been notified by any regulatory authority that
discontinued operation of the Branches by Seller would be a violation of any
statute, regulation or policy of any governmental authority.

7.7 Consent to Assignment of Leases. The landlords under the Leases shall have
consented, on terms reasonably satisfactory to both Seller and Purchaser, to
Seller’s assignment of the Leases to the Purchaser.

ARTICLE 8.

TERMINATION

8.1 Methods of Termination. This Agreement may be terminated in any one of the
following ways:

(a) at any time on or before the Closing Date by the mutual consent in writing
of Purchaser and Seller;

(b) on the Closing Date by Purchaser in writing if the conditions set forth in
Article 6 of this Agreement shall not have been satisfied or waived in writing
by Purchaser;

(c) on the Closing Date by Seller in writing if the conditions set forth in
Article 7 of this Agreement shall not have been satisfied or waived in writing
by Seller;

(d) at any time on or before the Closing Date by Purchaser or Seller in writing
if the other shall have been in breach of any representation or warranty in any
material respect (as if such representation or warranty had been made on and as
of the date hereof and on the date of the notice of breach referred to below),
or in breach of any covenant, undertaking or obligation contained herein and
such breach has not been cured by the earlier of thirty (30) days after the
giving of notice to the breaching party of such breach or the Closing Date;
provided, however, that neither party hereto may terminate this Agreement on
account of its own breach hereof;

 

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(e) by either Seller or Purchaser in writing at any time after any of the
regulatory authorities has denied the application, notice or request of the
Purchaser for approval of the transactions contemplated hereby; and

(f) by Seller or Purchaser in writing if the transactions contemplated hereby
are not consummated on or before June 29, 2006, unless extended by a written
agreement by Seller and Purchaser, in which case this Agreement shall be null
and void, unless the failure of such occurrence is due to the failure of the
party seeking to so terminate to perform or observe any of its agreements and
conditions set forth herein.

8.2 Procedure Upon Termination. In the event of termination pursuant to
Section 8.1 hereof, written notice thereof shall forthwith be given to the other
party, and this Agreement shall terminate and be null and void upon receipt of
such notice immediately or, in the case of Section 8.1(d), upon the passage of
thirty (30) days following such notice if no cure of a breach has occurred,
unless an extension is consented to by the party having the right to terminate.
If this Agreement is terminated as provided herein:

(a) each party will return to the party furnishing the same all documents, work
papers and other materials of the other party relating to this transaction,
whether obtained before or after the execution hereof, to the party furnishing
the same; and

(b) all information received by either party hereto with respect to the business
of the other party (other than information which is a matter of public knowledge
or which has heretofore been or is hereafter published in any publication for
public distribution or filed as public information with any governmental
authority) shall not at any time be used for any business purpose by such party
or disclosed by such party to third persons.

The requirements of this Section 8.2 shall be deemed to survive the termination
of this Agreement.

8.3 Liabilities Upon Termination. In the event of the termination of this
Agreement pursuant to the terms and provisions hereof, neither party hereto
shall have any liability hereunder of any nature whatsoever to the other,
including, without limitation, any liability for monetary damages; provided,
however, that (i) the foregoing shall not preclude liability from attaching to a
party who has intentionally breached or violated any of the provisions hereof,
and (ii) the agreements of the parties hereto with respect to confidentiality
contained in Section 2.3 hereof and in the confidentiality agreement executed by
the parties.

ARTICLE 9.

MISCELLANEOUS PROVISIONS

9.1 Entire Agreement. This Agreement, the exhibits hereto, the confidentiality
agreement and the instruments, agreements, certificates and documents
contemplated hereby supersede all other prior or contemporaneous understandings,
commitments, representations, negotiations, discussions and agreements, whether
oral or written or express or implied, between the parties hereto relating to
the matters contemplated hereby and constitute the entire agreement between the
parties hereto relating to the transactions contemplated hereby.

 

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9.2 Amendment and Modification. The parties hereto by mutual consent may amend,
modify and supplement this Agreement in such manner as may be agreed upon by
them in writing. This Agreement and the Exhibits and Schedules hereto and the
confidentiality agreement executed by the parties constitute the entire
Agreement of the parties.

9.3 Waiver or Extension. Either party by written instrument signed by its duly
authorized officers may extend the time for the performance of any of the
obligations or other acts of the other party and may waive (i) any inaccuracies
in the representations or warranties contained herein or in any document
delivered pursuant hereto or (ii) compliance with any of the undertakings,
obligations, covenants or other acts contained herein or in any such documents;
provided, however, that neither party may waive the requirement for obtaining
the Governmental Approvals.

9.4 Binding Effect; Assignment; Like-Kind Exchange. This Agreement and all of
the provisions hereof shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and permitted assigns, but
neither this Agreement nor any of the rights, interests or obligations hereunder
shall be assigned prior to the Closing Date by either of the parties hereto
without the prior written consent of the other. Purchaser acknowledges that
Seller may engage in a like-kind exchange with respect to the Real
Property under Section 1031 of the Internal Revenue Code (the “1031 Exchange”).
Purchaser agrees to cooperate with Seller in connection with a 1031 Exchange of
the Real Property and consents to the assignment of this Agreement by Seller to
a “qualified intermediary” (within the meaning of Section 1.1031(k)-1 of the
Treasury Regulations) for purposes of effecting a 1031 Exchange.

9.5 Survival of Representations and Warranties The representations, warranties
and conditions set out in this Agreement shall not survive the Closing Date
except as expressly provided to the contrary herein or unless the context
otherwise requires.

9.6 Payment of Expenses. Except as otherwise specifically provided in this
Agreement, each party hereto shall bear and pay all costs and expenses incurred
by it or on its behalf in connection with this Agreement and the transactions
contemplated hereunder. Except as otherwise expressly provided herein, any
expense, fees and costs necessary for any Governmental Approvals or for any
notice to depositors of the assumption of the Deposit Liabilities provided for
in this Agreement shall be paid by Purchaser.

9.7 Breaches with Third Parties. If the assignment of any material claim,
contract, license, lease, commitment, sales order or purchase order (or any
material claim or right or any benefit arising thereunder) without the consent
of a third party would constitute a breach thereof or materially affect the
rights of Purchaser or Seller thereunder, then such assignment is hereby made
subject to such consent or approval being obtained.

9.8 Addresses for Notices, Etc. All notices, requests, demands, consents and
other communications provided for hereunder and under the related documents
shall be in writing and shall be deemed to have been duly given when delivered
by hand, by facsimile transmission (confirmed in writing) or by registered or
certified mail, postage prepaid, to such party at its address set forth below or
such other address as such party may specify by notice to the parties hereto:

 

If to Seller to:    Gail Stevens    Senior Vice President    AmSouth
Bancorporation    AmSouth-Sonat Tower    Strategic Planning    1900 Fifth Avenue
North, 14th Floor    Birmingham, Alabama 35203    (205) 326-4072

 

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Copy to:    John D. Buchanan    General Counsel and Secretary    AmSouth
Bancorporation    AmSouth/Harbert Plaza    Law Department    1901 6th Avenue
North, Suite 920    Birmingham, Alabama 35203 If to Purchaser to:    John E.
Peck    Chief Executive Officer    HopFed Bancorp, Inc.    P.O. Box 537
(42241-0537)    2700 Fort Campbell Boulevard    Hopkinsville, Kentucky 42240   
(270) 885-1171 Copy to:    Edward B. Crosland, Jr.    Jones, Walker, Waechter,
Poitevent, Carrère        & Denègre, L.L.P.    The Watergate, 2600 Virginia
Avenue, N.W., Suite 1113    Washington, District of Columbia 20037    (202)
944-1100

9.9 Counterparts. This Agreement may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

9.10 Headings. The headings of the Sections and Articles of this Agreement are
inserted for convenience only and shall not constitute a part hereof.

9.11 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Alabama, without regard to any
applicable conflicts of law provisions thereof, except to the extent that
federal law applies.

9.12 Severability. If any provision of this Agreement is invalid or
unenforceable, the balance of this Agreement shall remain in effect.

 

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9.13 No Third-Party Rights. Nothing in this Agreement, expressed or implied, is
intended to confer upon any person, other than the parties hereto, or their
respective successors, any rights, remedies, obligations, or liabilities under
or by reason of this Agreement.

[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK.]

 

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

 

     AMSOUTH BANK      By  

 

      

M. List Underwood, Jr.

Its Senior Vice President

ATTEST:      By  

 

     Its  

 

     [Corporate Seal]           HERITAGE BANK      By  
_________________________________________________       

John E. Peck

President and Chief Executive Officer

ATTEST:      By  

 

     Its  

 

     [Corporate Seal]     

 

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