Exhibit 10.13

 

AGREEMENT FOR

PURCHASE OF SELECTED ASSETS

AND ASSUMPTION OF CERTAIN LIABILITIES

OF THE LAURENS OFFICE OF METABANK

 

THIS AGREEMENT, dated as of  January 31, 2007, by and between MetaBank, a
financial institution chartered under the laws of the United States, having its
principal place of business in Storm Lake, Iowa (the “Seller”), and Iowa Trust &
Savings Bank, a financial institution chartered under the laws of the State of
Iowa, presently having its principal place of business in Emmetsburg, Iowa (the
“Buyer”).

 

WITNESSETH:

 

WHEREAS, Seller wishes to divest, upon the terms and conditions set forth
herein, certain assets and certain liabilities of its office (the “Office”)
located at Laurens, Iowa; and

 

WHEREAS, Buyer wishes to buy such assets and assume such liabilities upon the
terms and conditions set forth herein.

 

NOW, THEREFORE, in consideration of the premises and the mutual agreements
hereinafter set forth, Seller and Buyer agree as follows:

 

ARTICLE I

TRANSFER OF ASSETS AND LIABILITIES

 

Section 1.1.                                   Transfer of Assets.

 

(a)                                  As of the Effective Date (as defined in
Section 2.1 below) and upon the terms and conditions set forth herein, Seller
will sell, assign, transfer, convey and deliver to Buyer, and Buyer will
purchase from Seller, all of the following assets associated with the Office and
identified in this Agreement and the Exhibits hereto, and not otherwise excluded
from sale pursuant to the provisions of Subsection 1.1(b) below (herein the
“Assets”):

 

(1)                                  All real estate as set forth on
Exhibit 1.1(a)(1), and any improvements and fixtures thereon;

 

(2)                                  All furniture, equipment and other
miscellaneous personal property;

 

(3)                                  Loans (as defined below) transferred
pursuant to Section 1.4;

 

(4)                                  All customer lists, customer histories and
marketing information pertaining to the Office;

 

(5)                                  All property records, warranty information,
manuals and other information such as maintenance records;

 

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(6)                                  All loan files, loan records and other
credit information concerning the customers of the Office whose loans are
acquired by Buyer and all records and files regarding the Assumed Liabilities
(as defined below); and,

 

(7)                                  Cash on hand.

 

(b)                                 Excluded from the assets, properties and
rights being transferred, conveyed and assigned to Buyer under this Agreement
are the assets listed on Exhibit 1.1(b) hereto.  These excluded assets include
Seller’s corporate logos, trademarks, trade names, signs, paper stock, forms and
other supplies containing any such logos, trademarks or trade name (the
“Excluded Assets”).  Seller shall coordinate with the Buyer the removal of the
Excluded Assets from the Office on or prior to the Effective Date.  Seller shall
remove the Excluded Assets at its own cost and shall make any repairs
necessitated by Seller’s negligence in removing the Excluded Assets.

 

Section 1.2.                                   Purchase Price.

 

(a)                                  As consideration for the purchase of the
Assets and assumption of the Assumed Liabilities, as defined in
Section 1.2(b) hereof, Buyer shall pay to Seller a purchase price equal to the
sum of the following:

 

(1)                                  $1,000,000.00 for assets listed in
Section 1.1(a)(1,2,4,5 and 6);

 

(2)                                  The Par Value (Principal and Accrued
Interest to Effective Date), of the Loans to be purchased as set forth in
Section 1.4 hereof; and,

 

(3)                                  Cash on hand at par.

 

(b)                                 In addition to the payment of the purchase
price under Section 1.2(a) above, Buyer shall assume, as of the Effective Date,
and the Deposit Liabilities (collectively the “Assumed Liabilities”); provided,
that any cash items paid by Seller and not cleared prior to the Effective Date
shall be the responsibility of Seller, subject to the terms of Section 1.3
below.

 

(c)                                  Except for the Assumed Liabilities, Buyer
is not assuming any liabilities or obligations of any kind or nature. 
Liabilities and obligations not assumed include, but are not limited to, the
following:

 

(1)                                  Seller’s cashier checks, letters of credit,
money orders, interest checks and expense checks issued prior to the Closing,
consignments of U.S. Government “E” and “EE” bonds and any and all traveler’s
checks; or

 

(2)                                  Deposit accounts associated with qualified
retirement plans (other than IRA accounts and burial trusts which Buyer will
assume) where Seller is the trustee of such plan or the sponsor of a prototype
plan used by such plan; or

 

(3)                                  Liabilities and/or obligations arising out
of or related to the employment of any Employee by Seller; or

 

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(4)                                  General tort liabilities; or

 

(5)                                  Liabilities and/or obligations and/or
losses arising out of events occurring or circumstances existing on or prior to
the Effective Date, whether or not such events or circumstances would be a
covered risk or loss under any of Seller’s errors and omissions insurance
policies, directors’ and officers’ policies, worker’s compensation and
employer’s liability policies, automobile policies, general liability or
casualty insurance policies, commercial general liability insurance policies,
umbrella and excess liability insurance policies, banker’s blanket
bond(s) and/or other fidelity bonds.

 

(d)                                 Seller shall prepare a balance sheet (the
“Pre-Closing Balance Sheet” which is also the Closing Statement referred to in
Section 2.2(b)(13) below) in accordance with generally accepted accounting
principles as of a date not earlier than three (3) business days prior to the
Effective Date (the “Pre-Closing Balance Sheet Date”) reflecting the assets to
be sold and assigned hereunder (as set forth in Section 1.2(a) hereof) and the
liabilities to be transferred and assumed hereunder.  Seller agrees to pay to
Buyer at the Closing (as defined in Section 2.1 hereof), in immediately
available funds in the amount due, as reflected by the Pre-Closing Balance
Sheet.  Amounts paid at Closing for the Loans purchased and the amount of
assumed liabilities shall be subject to subsequent adjustment on the
Post-Closing Balance Sheet (as defined in Section 2.3 hereof and which is also
the Final Closing Statement).

 

Section 1.3.                                   Liabilities.

 

(a)                                  “Deposit Liabilities” shall mean all of
Seller’s duties, obligations, liabilities (including accrued interest) relating
to the deposit accounts, including, without limitation, all demand, time,
savings and individual retirement accounts, located at the Office as of the
Effective Date, as listed as deposits in Exhibit 1.3(a), with the exception of
those specifically not assumed by Buyer pursuant to Section 1.2(c).

 

(b)                                 Buyer agrees to pay in accordance with law
and customary banking practices all properly drawn and presented checks, drafts
and withdrawal orders presented to Buyer by mail, over the counter or through
the check clearing system of the banking industry, by depositors of the accounts
assumed, whether drawn on the checks, withdrawal or draft forms provided by
Seller or by Buyer, and in all other respects to discharge, in the usual course
of the banking business, the duties and obligation of Seller with respect to the
balances due and owing to the depositors whose accounts are assumed by Buyer.

 

(c)                                  If, after the Effective Date, any
depositor, instead of accepting the obligation of Buyer to pay the Deposit
Liabilities assumed, shall demand payment from Seller for all or any part of any
such assumed Deposit Liabilities, Seller shall not be liable or responsible for
making such payment.  Seller and Buyer shall make arrangements to provide for
the daily settlement with immediately available funds by Buyer of checks,
drafts, withdrawal orders, returns and other items presented to and paid by
Seller within sixty (60) days after the Effective Date and drawn on or
chargeable to accounts that have been assumed by Buyer.

 

(d)                                 Buyer may (i) assign new account numbers to
depositors of assumed accounts, if

 

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needed, in the sole discretion of Buyer, (ii) notify such depositors, on or
before the Effective Date, in a form and on a date mutually acceptable to Seller
and Buyer, of Buyer’s assumption of Deposit Liabilities, and (iii) furnish such
depositors with checks on the forms of Buyer and with instructions to utilize
Buyer’s checks and destroy unused check, draft and withdrawal order forms of
Seller. In addition, Seller will notify its affected customers by letter of the
pending assignment of Seller’s deposit accounts to Buyer, which notice shall be
at Seller’s cost and expense and shall be in a form mutually agreeable to Seller
and Buyer.

 

(e)                                  Buyer shall pay promptly to Seller an
amount equivalent to the amount of any checks, drafts or withdrawal orders
credited to an assumed account as of the Effective Date that are returned to
Seller after the Effective Date.

 

(f)                                    On or after the Effective Date, Buyer
will assume and discharge Seller’s duties and obligations in accordance with the
terms and conditions and laws, rules and regulation that apply to the
certificates, accounts and other Deposit Liabilities assumed under this
Agreement.

 

(g)                                 On or after the Effective Date, Buyer will
maintain and safeguard in accordance with applicable law and sound banking
practices all account documents, deposit contracts, signature cards, deposit
slips, canceled items and other records related to the Deposit Liabilities
assumed under this Agreement, subject to Seller’s right of access to such
records as provided in this Agreement.

 

(h)                                 Seller will render a final statement to each
depositor of a demand or savings account assumed under this Agreement as to
transactions occurring through the Effective Date and will comply with all laws,
rules and regulations regarding tax reporting of transactions of such accounts
through the Effective Date.  Seller will not impose periodic fees or blanket
charges in connection with such final statements.

 

(i)                                     On or prior to the Effective Date,
Buyer, at its expense, will use its best efforts to notify all Automated
Clearing House (“ACH”) originators of the transfers and assumptions made
pursuant to the Agreement, and Seller shall furnish the required information. 
For a period of ninety (90) days beginning on the Effective Date, Seller will
honor all ACH items related to accounts assumed under this Agreement which are
mistakenly routed or presented to Seller.  During such ninety (90) days period,
Buyer shall remit by wire transfer on a daily basis the net amount of ACH items
honored by Seller pursuant to this Agreement.  Except as otherwise set forth in
this Agreement, Seller will make no additional charges to Buyer for honoring
such items.  Items mistakenly routed or presented after the ninety (90) day
period will be returned to the presenting party.

 

Section 1.4.                                   Loans Transferred.

 

(a)                                  Seller will transfer to Buyer on the
Effective Date, subject to the terms and conditions of this agreement, all of
Seller’s right, title and interest (including collateral relating thereto) in
loans maintained, serviced and listed in Seller’s general ledger as loans of the
Office (severally referred to as “Loan” and collectively the “Loans”). 
Notwithstanding the foregoing,

for purposes of this Agreement, the Loans shall include only those Loans
specifically identified

 

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by Buyer as Loans it will purchase.  In this regard, it is understood Buyer
shall have the right to purchase or exclude any Loan or Loans previously
identified as coded to the Seller’s Laurens office.  The purchased loans shall
be listed on Exhibit 1.4(a), shall be prepared by Buyer and furnished to Seller
and affixed to this Agreement as a part hereof within thirty (30) days following
Seller’s delivery to Buyer of complete loan information.

 

(b)                                 Buyer will become the beneficiary of credit
life insurance and property casualty insurance written on direct consumer
installment loans.  Contemporaneously with the Closing, Seller shall notify the
appropriate insurance companies of the transfer of Loans from Seller to Buyer
and that Buyer shall become the beneficiary of any insurance policies relating
to the transferred Loans and, as such, be entitled to all rights and privileges
under such policies following the Effective Date, including, without limitation,
any refunds paid after the Effective Date on such policies.

 

(c)                                  In connection with the transfer of any
Loans requiring notice to the borrower, Seller agrees to comply with all notice
and reporting requirements of the loan documents or any law or regulation.

 

(d)                                 All Loans transferred to Buyer shall be
valued at their Par Value, such value to include interest, through the Effective
Date.

 

(e)                                  On or after the Effective Date, Buyer will
be responsible for maintaining and safeguarding all loan files, documents and
records related to the Loans in accordance with applicable law and sound banking
practices.

 

(f)                                    If the balance due on any Loan purchased
pursuant to this Section 1.4 has been reduced by Seller as a result of a payment
by check received before the Effective Date, which item is returned on or after
the Effective Date, the asset value represented by the Loan transferred shall be
correspondingly increased and an amount in cash equal to such increase shall be
paid by Buyer to Seller promptly upon demand.

 

(g)                                 Seller shall remit loan payments it receives
after closing on loans purchased by the Buyer.

 

(h)                                 The standard “dragnet” provisions of
security documents which secure or are contained in other promissory notes made
or held by Seller not constituting the Loans being acquired by Buyer shall not
have priority over Buyer’s security interest in collateral for a Loan
transferred to Buyer hereunder.

 

Section 1.5.                                   Employee Matters.

 

(a)                                  Buyer may, but shall have no obligation to
hire any employees of the Office.

 

(b)                                 Seller makes no representations or
warranties about whether any of the Employees will remain employed at the Office
after the Effective Date.  Seller will use its best efforts to maintain the
Employees as employees of Seller at the Office until the Effective Date.

 

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Any Employee whose employment shall be terminated for any reason prior to the
Effective Date or who shall not be selected by Buyer to become an employee of
Buyer shall be dealt with by Seller in its sole and absolute discretion.  Seller
shall be responsible for paying all federal, state and local income tax
withholding, social security taxes and any other payroll taxes applicable to the
employment of Employees by Seller prior to the Effective Date.  Seller agrees
that, for a period of thirty-six (36) months after the Effective Date, it will
not solicit for employment (i) any Employee who becomes employed by Buyer or
(ii) any person known to Seller to have been employed by Buyer and whose
employment by Buyer has been terminated, either by the Employee or by Buyer,
without Buyer’s prior written permission.

 

(1)    At closing, Seller shall compensate Buyer for the accrued Paid Time Off
(vacation and floating holidays) for Employees retained by Buyer.  Accrued Sick
Time is not a part of accrued Paid Time Off.

 

(aa)    For those employees not retained by Buyer, Seller shall remain
responsible for the administration of the employees’ accrued Paid Time Off.

 

(c)                                  No Employee of the Office is a third party
beneficiary of this Agreement and each Employee hired by Buyer shall be an
employee at will.

 

(d)                                 Seller shall have the right, but not the
obligation, to retain any Employees not hired by Buyer.  Any Employees retained
by Seller shall be subject to the restrictions at Section 6.4.

 

Section 1.6.                                   Records and Data Processing.

 

(a)                                  On and after the Effective Date, Buyer
shall become responsible for maintaining the files, documents and records
referred to in this Agreement.  Buyer will preserve and safekeep them as
required by applicable law and sound banking practices for the joint benefit of
Seller and Buyer.  After the Effective Date, Buyer will permit Seller and its
representatives, for reasonable cause, at reasonable times and upon reasonable
notice and at Seller’s expense, to examine, inspect, copy and reproduce any such
files, documents or records as Seller deems reasonably necessary.

 

(b)                                 On or after the Effective Date, Seller will
permit Buyer and its representatives, for reasonable cause, at reasonable times
and upon reasonable notice and at Buyer’s expense, to examine, inspect, copy and
reproduce files, documents or record retained by Seller regarding the assets and
liabilities transferred under this agreement as Buyer deems reasonably
necessary.

 

Section 1.7.                                   Security.

 

On and after the Effective Date, Buyer shall be solely responsible for the
security of and insurance on all persons and property located in or about the
Office.

 

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Section 1.8.                                   Taxes and Fees Proration of
Certain Expenses: Allocation Form 8594.

 

(a)                                  Buyer shall be responsible for the payment
of all fees and taxes related to this transaction; except that Buyer shall not
be responsible for, or have any liability with respect to, sales, transfer,
income or similar taxes arising out of this transaction, if any, and Seller
agrees that it shall pay, or represents that it has paid, in a timely manner any
and all such taxes.  Buyer shall not be responsible for any income tax liability
of Seller arising from the business or operations of the Office on or before the
Effective Date, and Seller shall not be responsible for any tax liabilities of
Buyer arising from the business or operations of the Office on or after the
Effective Date.  Utility payments, telephone charges, real property taxes,
personal property taxes, rent, salaries, deposit insurance premiums, other
ordinary operating expenses of the Office and other expenses related to the
liabilities assumed or assets purchased hereunder, including, without
limitation, attorney’s fees, costs and expenses incurred in connection with
Litigation (as defined in Section 4.10 below), shall be prorated between the
parties as of the Effective Date.  To the extent any such item has been prepaid
by Seller for a period extending beyond the Effective Date, there shall be a
proportionate monetary adjustment in favor of Seller, but only to the extent
such prepayment benefits Buyer.

 

(b)                                 Seller and Buyer shall allocate the total
consideration paid pursuant to this Agreement, including the deposit base
intangible asset and other identifiable intangible assets acquired by Buyer
pursuant to this Agreement, in accordance with Section 1060 of the Internal
Revenue Code of 1986, as amended.  Accordingly, within one hundred twenty (120)
days after the Closing, Buyer shall provide Seller copies of the Form 8594 and
any required exhibits thereto (the “Asset Acquisition Statement”) setting forth
the allocation of the total consideration.  Within twenty (20) days after
receipt of the Asset Acquisition Statement (or any proposed revision thereof
required to report any updated information), Seller shall propose any changes to
Buyer or shall indicate its concurrence with the Asset Acquisition Statement
which concurrence shall not be unreasonably withheld.  Seller and Buyer shall
endeavor in good faith to resolve any differences within twenty (20) days after
Buyer’s receipt of Seller’s notice of any proposed changes.  The parties agree
to file the Asset Acquisition Statement with their respective federal tax
returns in accordance with the instructions to Form 8594.

 

Section 1.9.                                   Real Property.

 

(a)                                  Seller shall deliver to Buyer as soon as
reasonably possible after the execution of this Agreement an updated abstract of
title as to the Real Property.

 

(b)                                 Buyer shall notify Seller in writing within
forty-five (45) days after Buyer’s receipt of the updated abstract of any
mortgages, pledges, material liens, encumbrances, restrictions, reservations,
tenancies, encroachments, overlaps or other title exceptions or zoning or
similar land use violations relating to the Real Property to which Buyer
reasonably objects (the “Title Defects”).  Buyer agrees that Title Defects shall
not include real property taxes not yet due and payable and easements and rights
of way which do not materially interfere with the use of the Real Property as an
Office.  Seller shall make a good faith effort to correct any such Title Defect
to Buyer’s reasonable satisfaction at least thirty (30) days prior to the
Closing; provided, however, that Seller shall not be obligated to bring any
lawsuit or make any payment of money (except to pay liens that Seller does not
dispute in good faith) to cure a Title Defect.  If

 

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Seller is unable to cure any such Title Defect to Buyer’s reasonable
satisfaction, Buyer shall have the option either to (i) terminate this Agreement
in accordance with Article X of this Agreement, or (ii) receive title in its
then existing condition.

 

(c)                                  Buyer shall have the right to update the
title matters at Closing for any change which may have arisen after the date of
Buyer’s original title search.  If such update indicates any new Title Defects,
Seller may elect to delay the Closing for up to thirty (30) days while it makes
a good faith effort to cure any such Title Defect to Buyer’s reasonable
satisfaction; provided that Seller shall not be obligated to bring any lawsuit
or make any payment of money (except to pay liens that Seller does not dispute
in good faith) to cure a Title Defect.  If Seller is unable to cure any such
Title Defect within the thirty (30) day period, Buyer shall have the option
either (i) terminate this Agreement in accordance with the provisions of
Article X of this Agreement, or (ii) receive title in its then existing
condition.

 

ARTICLE II

CLOSING AND EFFECTIVE DATE

 

Section 2.1.                                   Dates.

 

The purchase of assets and assumption of liabilities provided for in this
Agreement shall occur at a closing (the “Closing”) on April 13, 2007 at a time
and place mutually agreed upon by the parties (the “Closing Date”) so long as
this date follows the receipt of all requisite regulatory approvals and the
expiration of all waiting periods imposed by law or by rule, regulation or order
of any regulatory authority (“Regulatory Prerequisites”).  If Regulatory
Prerequisites do not allow the Closing Date to be April 13, 2007, then the
Closing Date shall be on a day mutually agreeable to the parties, but in no
event later than June 30, 2007.  The parties may agree on an earlier Closing
Date if permitted by the satisfaction of the Regulatory Prerequisites.  The
effective date of this Agreement (the “Effective Date”) shall be 6:00 p.m. local
time on the business day on which the Closing occurs.

 

Section 2.2.                                   Closing.

 

(a)                                  All actions taken and documents delivered
at the Closing shall be deemed to have been taken and executed simultaneously,
and no action shall be deemed taken nor any document delivered until all have
been taken and delivered.

 

(b)                                 At the Closing, subject to all the terms and
conditions of this Agreement, Seller shall deliver to Buyer, or, in the case of
subsections (b)(5), (6) and (8), make reasonably available to Buyer at the
Office:

 

(1)                                  A Corporate Warranty Deed transferring
title to the Real Property, fixtures and improvements to Buyer;

 

(2)                                  A limited warranty Bill of Sale, in
substantially the form attached hereto as Exhibit 2.2(b)(2) (the “Bill of
Sale”), transferring to Buyer all of Seller’s interest in the Loans selected by
Buyer and other personal property comprising the Assets;

 

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(3)                                  An Assignment and Assumption Agreement, in
substantially the form attached hereto as Exhibit 2.2(b)(3) (the “Assignment and
Assumption Agreement”), assigning Seller’s interest in the Deposit Liabilities;

 

(4)                                  Consents from third persons that are
required, if any, to effect the assignments set forth in the Assignment and
Assumption Agreement;

 

(5)                                  Seller’s files and records relating to and
evidencing the Loans;

 

(6)                                  Seller’s records related to the Deposit
Liabilities assumed by the Buyer, including any stop payment orders and ACH
records;

 

(7)                                  Immediately available funds in the net
amount shown as owing to Buyer by Seller on the Closing Statement;

 

(8)                                  Such other assets to be purchased as shall
be capable of physical delivery;

 

(9)                                  A certificate of a proper officer of
Seller, dated the Effective Date, certifying to fulfillment of all conditions
which are the obligation of Seller and that all of the representations and
warranties of Seller set forth in this agreement remain true and correct in all
material respects on the Effective Date;

 

(10)                            Certified copies of (A) Federal stock charter
and Bylaws of Seller and (B) a resolution of the Board of Directors of Seller,
or its Executive Committee, approving the sale of the Office contemplated
hereby;

 

(11)                            Such certificates and other documents as Buyer
and its counsel may reasonably require to evidence the receipt by Seller of all
necessary corporate and regulatory authorizations and approvals for the
consummation of the transactions provided for in this Agreement;

 

(12)                            Such other documents, instruments and agreements
necessary to transfer and assign to Buyer all Loans, including, without
limitation, all promissory notes duly endorsed and assignments of mortgages,
security agreements, financing statements, guarantees and other collateral
documents in form and content reasonably satisfactory to Buyer; and

 

(13)                            A Closing Statement (which shall be the
Pre-Closing Balance Sheet), substantially in the form attached hereto as
Exhibit 2.2(b)(13) (the “Closing Statement”).

 

(c)                                  At the Closing, subject to all the terms
and conditions of this Agreement, Buyer shall deliver to Seller:

 

(1)                                  The Assignment and Assumption Agreement;

 

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(2)                                  A certificate and receipt acknowledging the
delivery and receipt of possession of the property and records referred to in
this Agreement;

 

(3)                                  A certificate of a proper officer of the
Buyer, dated the Effective Date, certifying to the fulfillment of all conditions
which are the obligations of Buyer and that all of the representations and
warranties of Buyer set forth in this Agreement remain true and correct in all
material respects in the Effective Date;

 

(4)                                  Certified copies of (A) the Articles of
Incorporation and Bylaws of Buyer and (B) a resolution of the Board of Directors
of Buyer, or its Executive Committee, approving the purchase of the Office
contemplated hereby;

 

(5)                                  Such certificates and other documents as
Seller and its counsel may reasonably require to evidence the receipt by Buyer
of all necessary corporate and regulatory authorizations and approvals for the
consummation of the transactions provided for in this Agreement; and,

 

(6)                                  The Closing Statement.

 

(d)                                 Seller shall prepare at its expense and
deliver to Buyer records in Seller’s field format as of the Effective Date,
which records shall contain the information related to the items described in
subsections (b)(5) and (b)(6)  above.  Such records shall be delivered thirty
(30) days prior to Closing, or at such other date as agreed to by the parties.

 

(e)                                  All agreements and certificates described
in this Section 2.2 shall be in form and substance reasonable satisfactory to
the parties’ respective legal counsel.

 

Section 2.3.                                   Post-Closing Adjustments.

 

(a)                                  Not later than fifteen (15) business days
after the Effective Date (the “Post-Closing Balance Sheet Delivery Date”),
Seller shall deliver to Buyer a balance sheet dated as of the Effective Date
reflecting the assets sold and assigned hereunder as set forth in
Section 1.2(a), and the liabilities transferred and assumed hereunder prepared
in accordance with generally accepted accounting principles (the “Post-Closing
Balance Sheet” or “Final Closing Statement”) substantially in the form attached
hereto as Exhibit 2.3(a).  Additionally, Seller shall deliver to Buyer a list of
the Loans purchased, individually identified by account number, which list shall
be appended to the Bill of Sale.  Seller shall afford Buyer and its accountants
and attorneys the opportunity to review all work papers and documents used by
Seller in preparing the Post-Closing Balance Sheet.  Within fifteen (15)
business days following the Post-Closing Balance Sheet Delivery Date (the
“Adjustment Payment Date”), Seller or Buyer, as the case may be, shall effect
the offer of any funds as may be necessary to reflect changes in the Par Value
of the Loans Purchased or the Assumed Liabilities between the Closing Balance
Sheet and the Post-Closing Balance Sheet together with interest thereon computed
from the Effective Date to the Adjustment Payment Date at the applicable
Interest Rate (as hereinafter defined).

 

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(b)                                 In the event that a dispute arises as to the
appropriate amounts to be paid to either party on the Adjustment Payment Date,
each party shall pay to the other on such Adjustment Payment Date, all amounts
other than those as to which a dispute exists.  Any disputed amounts retained by
a party which are later found to be due to the other party shall be paid to such
party promptly upon resolution with interest thereon from the Adjustment Payment
Date to the date paid at the rate of two and one-half percent (2.5%) per annum
(the “Interest Rate”).

 

ARTICLE III

INDEMNIFICATION

 

Section 3.1.                                   Seller’s Indemnification of
Buyer.

 

Seller shall indemnify, hold harmless and defend Buyer from and against any and
all claims, losses, liabilities, demands and obligation, including reasonable
attorney’s fees and expenses, relating to or arising from (i) (subject to the
provisions of Section 9.1 below regarding Seller’s failure to close) a breach by
Seller of any covenant, promise, agreement, representation or warranty contained
herein; or (ii) real estate taxes, intangibles and franchise taxes, sales and
use taxes, social security and unemployment taxes, all accounts payable and
operating expenses (including salaries, rents and utility charges) incurred
prior to the Effective Date and which are claimed or demanded on or after the
Effective Date but not reflected on the Closing Statement.  Seller’s
indemnification shall be limited to the amount as established at Subsection
1.2(a).

 

Section 3.2.                                   Buyer’s Indemnification of
Seller.

 

Buyer shall indemnify, hold harmless and defend Seller from and against any and
all claims, losses, liabilities, demands and obligation, including reasonable
attorney’s fees and expenses, relating to or arising from (i) (subject to the
provisions of Section 9.1 below regarding Buyer’s failure to close) a breach by
Buyer of any covenant, promise, agreement, representation or warranty contained
herein or (ii) real estate taxes, intangibles and franchise taxes, sales and use
taxes, social security and unemployment taxes, all accounts payable and
operating expenses (including salaries, rents and utility charges) incurred on
or after the Effective Date and which involve Buyer’s operation of the Office or
Buyer’s ownership of the Assets; or (iii) Buyer’s failure to pay and discharge
the Assumed Liabilities pursuant to this Agreement.  Buyer’s indemnification
shall be limited to the amount as established as Subsection 1.2(a).

 

Section 3.3.                                   Claims for Indemnity.

 

(a)                                  A claim for indemnity under Sections 3.1 or
3.2 of this Agreement may be made by the claiming party at any time prior to
twelve (12) months after the Effective Date by the giving of a written notice
thereof to the other party.  Such written notice shall set forth in reasonable
detail the basis upon which claim for indemnity is made.  In the event that any
such claim is made within the prescribed twelve (12) month period, the indemnity
relating to such claim shall survive until such claim is resolved.  Claims not
made within such twelve (12) month period shall cease and no indemnity shall be
made therefor.

 

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(b)                                 In the event that any person or entity not a
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 Section 3.1 or 3.2 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 five (5) 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 the 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 settlement as the indemnifying party shall approve (the indemnifying
party’s approval will be implied if it does not respond within ten (10) days of
its receipt of the notice of such settlement offer).

 

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF SELLER

 

Seller hereby represents and warrants to Buyer as follows, which representations
and warranties shall survive the Effective Date for a period of twelve (12)
months:

 

Section 4.1.                                   Corporate Organization.

 

Seller is a banking association organized, validly existing and in good standing
under the laws of the United States and the State of Iowa.  Seller has the
corporate power and authority to own its property, to carry on its business as
currently conducted and to effect the transactions contemplated herein.

 

Section 4.2.                                   No Violation.

 

The Office has been operated by Seller in all material respects in accordance
with applicable laws, rules and regulations.  Neither the execution and delivery
of this agreement, nor the consummation of the transactions contemplated herein,
will violate or conflict with (i) Seller’s Articles of Association or Bylaws,
(ii) any material provision of any material agreement or any other material
restriction of any kind to which Seller is a party or by which Seller is bound,
(iii) any material statute, law, decree, regulation or order of any governmental
authority, or (iv) any material provision which will result in a default under,
or which causes the acceleration of the maturity of, any material obligations or
loan to which the Seller is a party.

 

Section 4.3.                                   Corporate Authority.

 

The execution and delivery of this Agreement, and the consummation of the
transactions contemplated herein, have been duly authorized by the Seller’s
Board of Directors (or the Executive Committee thereof).  No further corporate
authorization is necessary for Seller to consummate the transactions
contemplated hereunder.

 

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Section 4.4.                                   Enforceable Agreement.

 

This Agreement has been duly authorized, executed and delivered by Seller and is
the legal, valid and binding agreement of Seller, enforceable in accordance with
its terms, subject to the receipt of all necessary regulatory approvals and
except as enforcement may be limited by bankruptcy, insolvency or other laws of
general applicability relating to creditor’s rights, or general equitable
principles.

 

Section 4.5.                                   No Brokers.

 

All negotiations relative to this Agreement and the transactions contemplated
hereby have been carried on by Seller and Buyer, and there has been no
participation or intervention by any other persons, firm or corporation employed
or engaged by or on behalf of Seller in such a manner as to give rise to any
valid claim against Seller or Buyer for a brokerage commission, finders fee or
like commission.

 

Section 4.6.                                   Real Property.

 

Seller makes the following representations regarding the Real Property:

 

(a)                                  Seller has and can convey to Buyer good
title to the Real Property, furniture, fixtures and equipment, free and clear of
all liens, security interest and encumbrances of any nature whatsoever.

 

(b)                                 Seller has no knowledge of any condemnation
proceedings pending against the Real Property.

 

(c)                                  Seller has not entered into any agreement
regarding the Real Property, and neither Seller nor the Real Property is subject
to any claim, demand, suit, unfiled lien, charge, encumbrance or conditional
sale or other title retention agreement except for real property taxes not yet
due and payable, and easements and rights of way which do not materially
interfere with the use of the Real Property as an Office.

 

Section 4.7.                                   Condition of Property.

 

The Real Property to be purchased by Buyer hereunder is sold AS IS, WHERE IS,
with no warranties or representations whatsoever, except (i) as to title; and
(ii) as may be expressly represented or warranted in this Agreement.

 

Section 4.8.                                   Certain Loan Representations.

 

Seller represents and warrants to Buyer as of the Effective Date with respect to
each of the Loans as follows: (i) all Loans and all related documentation,
including but not limited to promissory notes, loan agreements, and security
interests, have been made and executed in the ordinary course of business,
contain genuine signatures of the named parties thereto, were given

 

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for valid consideration and are all in full force and effect, and are
enforceable in accordance with this Agreement; (ii) each Loan has been
originated, closed and supervised in substantial accordance with all applicable
laws and regulations; (iii) each security interest (including without
limitation, each deed, mortgage, assignment, pledge and security agreement)
taken or granted in connection with any such Loan creates a valid and
enforceable security interest in the property described therein which has been
duly perfected and has the priority reflected in the loan file relating to such
Loan subject as to enforceability to the subsequent application of bankruptcy,
equity or similar laws; and (iv) Seller is not aware of any claim or dispute
regarding such Loan or any document securing such Loan.

 

Section 4.9.                                   Deposit Liabilities.

 

From the date of this Agreement to and including the Effective Date, the Office
has no liability to pay deposits other than those as shown on the books of
Seller with respect to the Office.

 

Section 4.10.                             Litigation.

 

There is (i) no litigation, action, claim, proceeding, or governmental or
regulatory investigation (collectively “Litigation”) pending or, to the
knowledge of the Board of Directors and/or management of Seller, threatened
against Seller; or (ii) to the knowledge of the Board of Directors, any
undisclosed liabilities relating to the assets and liabilities of the Office;
which may have a material effect upon the deposits or assets of the Office or
the transactions contemplated by this Agreement or upon Seller’s ability to
perform its obligations hereunder.

 

Section 4.11.                             Mechanic’s Liens.

 

There are no unpaid charges, debts, liabilities, claims, or obligations arising
from the construction, ownership, or operation of the Office which could give
rise to any mechanic’s or materialmen’s or other statutory or equitable liens
against the real estate occupied by the Office, or any part thereof, for which
Buyer would be responsible.

 

Section 4.12.                             Accuracy of Representations and
Warranties.

 

No representation or warranty by Seller in this Agreement nor in any certificate
or other instrument furnished or to be furnished to Buyer pursuant hereto
contains or will contain any untrue statement of a material fact or omits or
will omit to state a material fact necessary in order to make the statements
contained therein not misleading.

 

Section 4.13.                             Conduct of Business.

 

The thrift business of Seller, as conducted at the Office, has been conducted in
substantial compliance with all material laws, regulations, judicial writs,
orders, and decrees applicable to such business, including, but not limited to,
laws of the United States and the State of Iowa and rules and regulations of the
Office of Thrift Supervision and the Federal Deposit Insurance

 

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Corporation, where any violation of such laws, rules, or regulations would have
a material adverse impact on such business.

 

Section 4.14.                             Zoning.

 

The premises occupied by the Office to be purchased by Buyer and the occupancy
or operation thereof is not in violation of any law or any building, zoning, or
other ordinance, code, or regulation in such manner as to interfere with the use
and occupancy thereof in the ordinary course of business of Buyer.

 

Section 4.15.                             Environmental Compliance.

 

To the best of Seller’s knowledge, the Office and the operations thereof are in
substantial compliance with all Environmental Laws, and such properties are not
affected or threatened by any condemnation or eminent domain proceeding. 
“Environmental Laws,” as used herein, shall mean all federal, state, and local
laws, including statutes, regulations, ordinances, codes, rules, and other
governmental restrictions and requirements relating to the environmental or
hazardous substances, including, but not limited to, the Toxic Substance Act,
the Clean Air Act, the Clean Water Act, the Resources Conservation and Recovery
Act of 1976, the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, regulations of the Environmental Protection Agency,
regulations of the Nuclear Regulatory Agency, and regulations of the Iowa State
Department of Natural Resources or Iowa State Environmental Protection Agency in
effect now or at any time prior to the Closing Date.  Seller has and will prior
to the Closing Date (i) comply with all applicable Environmental Laws at the
Office; (ii) provide to Buyer, immediately upon receipt, copies of any
correspondence, notice, pleading, citation, indictment, complaint, order,
decree, or other document from any source asserting or alleging a circumstance
or condition which requires or may require a clean up, removal, remediation, or
other response by or on the part of Seller under Environmental Laws at the
Office or which seek criminal or punitive penalties from Seller for an alleged
violation of environmental Laws at the Office; and (iii) advise Buyer, in
writing, as soon as Seller becomes aware of any condition or circumstance which
makes the foregoing representation incomplete or inaccurate.

 

Section 4.16.                             Accounting Records.

 

The financial accounting records regarding the thrift business of Seller
conducted at the Office and which have been or will be provided to Buyer have
been or will be prepared in accordance with generally accepted accounting
principles, as applied to thrift institutions, and do or will present fairly the
financial position and results of operations of the thrift activities of the
Office.

 

Section 4.17.                             Access to Office.

 

Until the Closing Date, Buyer shall have access, at reasonable times mutually
agreeable to Seller and Buyer, to the premises and books and records of the
Office.

 

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Section 4.18.                             Information Reports.

 

Seller shall file with the Internal Revenue Service (“IRS”), in a manner
acceptable to the IRS, all required informational reports, including, without
limitation, all Form 1099s, to the extent interest was paid by Seller on
Deposits at the Office which are transferred to Buyer pursuant to this
Agreement.

 

Section 4.19.                             Processing of Items.

 

Seller shall promptly process, and provide to Buyer supporting documentation
relating thereto, all checks, drafts and withdrawal orders presented to Seller
through the clearing process against depositor accounts assumed by Buyer.

 

Section 4.20.                             Limitation of Representations and
Warranties.

 

Except as may be expressly represented or warranted in this Agreement, Seller
makes no representations of warranties whatsoever with regard to any assets
being transferred to Buyer or any liability or obligation being assumed by Buyer
or as to any other matter or thing.

 

ARTICLE V

REPRESENTATIONS AND WARRANTIES OF BUYER

 

Buyer hereby represents and warrants to Seller as follows, which representations
and warranties shall survive the Effective Date for a period of twelve (12)
months:

 

Section 5.1.                                   Corporate Organization.

 

Buyer is an Iowa banking corporation, duly organized, chartered and validly
existing under the laws of the State of Iowa.  Buyer has the corporate power and
authority to own the properties being acquired, to assume the liabilities being
transferred and to effect the transactions contemplated herein.

 

Section 5.2.                                   No Violation.

 

Neither the execution and delivery of this Agreement, nor the consummation of
the transactions contemplated herein, will violate or conflict with (i) the
Articles of Incorporation or Bylaws of the Buyer, (ii) any material provision of
any material agreement or any other material restriction of any kind to which
Buyer is a party or by which Buyer is bound, (iii) any material statute, law,
decree, regulation or order of any governmental authority, or (iv) any material
provision which will result in a default under, or cause the acceleration of the
maturity of, any material obligation or loan to which Buyer is a party.

 

Section 5.3.                                   Corporate Authority.

 

The Execution and delivery of this agreement, and the consummation of the
transactions contemplated herein, have been duly authorized by the Board of
Directors (or Executive

 

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Committee) of Buyer.  No further corporate authorization on the part of the
Buyer is necessary to consummate the transactions contemplated hereunder.

 

Section 5.4.                                   Enforceable Agreement.

 

This Agreement has been duly authorized, executed and delivered by Buyer and is
the legal, valid and binding agreement of Buyer enforceable in accordance with
its terms, subject to the receipt of all necessary regulatory approvals and
except as enforcement may be limited by bankruptcy, insolvency or other laws of
general applicability relating to creditors’ rights, or by general equitable
principles.

 

Section 5.5.                                   No Brokers.

 

All negotiations relative to this Agreement and the transactions contemplated
hereby have been carried on by Buyer and Seller, and there has been no
participation or intervention by any other person, firm or corporation employed
or engaged by or on behalf of Buyer in such a manner as to give rise to any
valid claim against Buyer or Seller for a brokerage commission, finder’s fee or
like commission.

 

ARTICLE VI

OBLIGATIONS OF PARTIES PRIOR TO AND AFTER

EFFECTIVE DATE

 

Section 6.1.                                   Full Access.

 

Seller shall afford to the officers and authorized representatives of Buyer,
upon prior notice and subject to Seller’s normal security requirements, access
to the properties, books and records pertaining to the Office in order that
Buyer may have full opportunity to make reasonable investigations, at reasonable
times without interfering with the normal business and operations of the Office,
of the affairs of Seller relating to the Office.  The officers of Seller shall
furnish Buyer with such additional financial and operating data and other
information as to the business and properties of the Office, or where otherwise
located, as Buyer 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 this transaction.  Nothing in
this Section 6.1 shall require Seller to breach any obligation of
confidentiality or to reveal any proprietary information, trade secrets or
marketing or strategic plans.  Records, including credit information, relating
to the Loans will be made available for review by Buyer after the execution of
this Agreement.

 

Section 6.2.                                   Applications for Approval to
Effect Purchase of Assets and Assumption of Liabilities.

 

Buyer shall prepare and file applications required by law with the appropriate
regulatory authorities for approval to purchase the Assets and assume the
Assumed Liabilities, and to effect in all other respects the transactions
contemplated herein.  Buyer shall use its best efforts to file such applications
by February 19,  2007, and to process such application(s) in a diligent manner

 

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Buyer shall provide Seller with copies of all applications, materials, notices,
orders, opinions, correspondence and other documents with respect to such
regulatory filings, and shall use its best efforts to obtain all necessary
regulatory approvals.  Buyer shall promptly notify Seller upon receipt by Buyer
of notification that any application provided for hereunder has been denied. 
Seller shall provide such assistance and information to Buyer and shall make
such regulatory filings as shall be reasonably necessary on Seller’s part for
Buyer to comply with the requirements of the applicable regulatory authorities,
including, but not limited to any required notices regarding the closing of the
Office.

 

Section 6.3.                                   Conduct of Business: Maintenance
of Properties.

 

(a)                                  From the date the Agreement is signed until
the Effective Date, Seller covenants that it will:

 

(1)                                  Carry on the business of the Office
substantially in the same manner as on the date hereof, use all reasonable
efforts to preserve intact its current business organization and preserve its
business relationships with depositors, customers and others having business
relationships with it and whose accounts will be retained at the Office;
provided, however, that Seller need not, in its sole discretion, advertise or
promote new or substantially new customer services in the principal market of
the Office.

 

(2)                                  Cooperate with and assist Buyer in assuring
the orderly transition of the business of the Office to Buyer from Seller;

 

(3)                                  Maintain the Real Property, furniture and
equipment in its current condition, ordinary wear and tear excepted; and

 

(4)                                  Create new deposit relationships only in a
manner consistent with past practices and upon rates and terms consistent with
rates and terms provided by competing financial institutions in the market areas
served by the Office.

 

(5)                                  Seller retains all discretion as to the
granting or denial of credit in the making of any loans from the Office from and
after the date of Buyer’s last due diligence examination to and including the
Effective Date and Buyer shall not exercise any decision making power or
authority over Seller’s credit decisions, provided, however, that with regard to
any loan extension and any new loan which exceeds the sum of Fifty Thousand
Dollars ($50,000.00) and with regard to any Loan renewal (of a Loan to be
purchased by Buyer) involving any capitalization of interest, prior to
committing to make, renew or amend the terms of any such Loans, Seller shall
notify Buyer and provide Buyer with access to the Loan file and other relevant
information concerning the credit thus extended by Seller.  Upon receipt of such
notice, Buyer shall make a decision within two (2) business days after the time
of notice to accept or reject any such Loan, and if accepted or not rejected
within the two (2) business days, the Loan shall be purchased by Buyer at the
Closing.  The loans rejected by Buyer, if made by Seller, shall be retained by
the Seller and shall not be included in the Loans acquired pursuant to
Section 1.4(a).

 

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Section 6.4.                                   No Solicitation by Seller.

 

For a period of thirty-six (36) months after the Effective Date, Seller shall
not (i) establish any banking facility within a twenty (20) mile radius of the
Office; or, (ii) solicit any customer of the Office as of the Closing Date with
whom it has no other previously established banking relationship at locations of
the Seller other than the Office; or, (iii) no advertising in Laurens paper;
provided, however, these restrictions shall not restrict general mass mailings
to the public or newspaper, radio or television advertisements of a general
nature, not targeting customers of the Office, or otherwise prevent Seller from
taking such actions as may be required to comply with any applicable federal or
state laws, rules or regulations and provided further that not more than thirty
(30) days after the date of this Agreement, Seller shall provide to Buyer a list
of customers of the Office with whom it has such a previously established
banking relationship at locations other than the Office.  Seller covenants and
agrees to use its best efforts to completely purge its mailing and marketing
lists of all deposit and loan customers of the Office with whom it has no other
previously established banking relationship, provided that Seller shall have the
right to retain records reasonably needed for tax or regulatory purposes.

 

Section 6.5.                                   Further Actions.

 

The parties hereto shall execute and deliver such instruments and take such
other actions as the other party may reasonably require to carry out the intent
of this Agreement.

 

Section 6.6.                                   Fees and Expenses.

 

Buyer shall be responsible for the costs of all surveys, and recording fees
related to the Real Property, and each party shall be responsible for its own
attorneys’ and accountants’ fees and expenses and regulatory filing fees related
to this transaction.

 

Section 6.7.                                   Breaches with Third Parties.

 

Nothing in this Agreement shall constitute an agreement to assign, or the
assignment of, any material claim, contract, license, lease, commitment, sales
order or purchase order or any material claim of right or any benefit arising
thereunder or resulting therefrom, if an assignment or attempted assignment
thereof, without the consent of a third party thereto, would be in violation of
any law or regulation, or would constitute a breach thereof or materially affect
the rights of Buyer or Seller thereunder; and any transfer or assignment to the
Buyer or Seller of any material property or property rights or any contract or
agreement which shall require the consent or approval of any third party, shall
be made subject to such consent or approval being obtained.

 

Section 6.8.                                   Insurance.

 

On the Effective Date, Seller will discontinue its insurance coverage maintained
in connection with the Office and the activities conducted thereon.  Buyer shall
be responsible for all insurance protection for the Office premises and the
activities conducted thereon immediately following the Effective Date.  Pending
the Closing, risk of loss shall be the responsibility of the Seller.

 

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Section 6.9.                                   Public Announcements.

 

Except as is necessary to obtain the regulatory approvals contemplated by this
Agreement, Seller and Buyer agree that, from the date hereof, neither shall make
any public announcement or public comment regarding this Agreement or the
transactions contemplated herein without first consulting with the other party
hereto and reaching an agreement upon the substance and timing of such
announcement or comment.  Further, Seller and Buyer acknowledge the sensitivity
of this transaction to the Employees and no announcement or communication with
the Employees shall be made without the prior approval of the Seller.  However,
the parties may make public announcement as required by law or any governing
regulatory body, including but not limited to the SEC, but only after making
every effort to notify the employees first.

 

Section 6.10.                             Further Negotiations.

 

Each party recognizes and acknowledges that between the date of this Agreement
and the Effective Date, each will expend a great deal of time and expense in
proceeding in good faith to close the transaction.  Accordingly, neither Buyer
or Seller will conduct, initiate or continue any discussions or negotiations or
enter into any understanding, arrangement or agreement with any other party or
entity in connection with the matters set forth herein prior to the Effective
Date.

 

ARTICLE VII

CONDITIONS TO BUYER’S OBLIGATIONS

 

The obligations of Buyer to complete the transactions contemplated in this
Agreement are conditioned upon fulfillment, on or before the Effective Date, of
each of the following conditions:

 

Section 7.1.                                   Representations and Warranties
True.

 

The representations and warranties made by Seller in this Agreement shall be
true and correct in all material respects on and as of the Effective Date as
though such representations and warranties were made at and as of such time,
except for any changes permitted by the terms hereof or consented to by Buyer.

 

Section 7.2.                                   Obligations Performed.

 

Seller shall (i) deliver or make available to Buyer those items required by
Section 2.2 hereof and (ii) perform and comply in all material respects with all
obligations and agreements required by this Agreement to be performed or
complied with by it prior to or on the Effective Date.

 

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Section 7.3.                                   No Adverse Litigation.

 

On the Effective Date, no Litigation shall be pending or threatened against
Seller which is reasonably likely to (i) materially and adversely affect the
business, properties and assets of the Office, or (ii) materially and adversely
affect the transactions contemplated herein.

 

Section 7.4.                                   Regulatory Approval.

 

Each of Buyer and Seller shall have received all necessary regulatory approvals
of the transactions provided in this Agreement, all notices and waiting periods
required by law to pass shall have passed, no proceeding to enjoin, restrain,
prohibit or invalidate such transactions shall have been instituted or
threatened, and any conditions of any regulatory approval shall have been met.

 

Section 7.5.                                   List of Customers.

 

The list of customers with whom Seller claims to have a previously existing
banking relationship at locations other than the Office which Seller shall
deliver to Buyer pursuant to Section 6.5 above, shall be acceptable to Buyer in
its reasonable discretion.

 

Section 7.6.                                   Buyer’s Due Diligence.

 

The results of Buyer’s review of the books and records of the Office relating to
the Assets to be acquired and the Assumed Liabilities, shall be satisfactory to
Buyer in its reasonable discretion.

 

ARTICLE VIII

CONDITIONS TO SELLER’S OBLIGATIONS

 

The obligations of Seller to complete the transactions contemplated in this
Agreement are conditioned upon fulfillment, on or before the Effective Date, of
each of the following conditions:

 

Section 8.1.                                   Representations and Warranties
True.

 

The representations and warranties made by Buyer in this Agreement shall be true
and correct in all material respects on and as of the Effective Date as though
such representations and warranties were made at and as of such time, except for
any changes permitted by the terms hereof or consented to by Seller.

 

Section 8.2.                                   Obligations Performed.

 

Buyer shall (i) deliver or make available to Seller those items required by
Section 2.2 hereof and (ii) perform and comply in all material respects with all
obligations and agreements required by this Agreement to be performed or
complied with by it prior to or on the Effective Date.

 

Section 8.3.                                   No Adverse Litigation.

 

On the Effective Date, no action, suit or proceeding shall be pending or
threatened

 

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against Buyer which is reasonably likely to materially and adversely affect the
transactions contemplated herein.

 

Section 8.4.                                   Regulatory Approval.

 

Each of Buyer and Seller shall have received all necessary regulatory approvals
of the transactions provided in this Agreement, all notices and waiting periods
required by law to pass shall have passed, no proceeding to enjoin, restrain,
prohibit or invalidate such transactions shall have been instituted or
threatened, and any conditions of any regulatory approval shall have been met.

 

ARTICLE IX

LIQUIDATED DAMAGES

 

Section 9.1.                                   Failure of Performance.

 

Unless otherwise agreed in writing by the Seller and Buyer and provided that
(i) the conditions to the Buyer’s obligations as set forth in Section 1.9 and
Article 7 of this Agreement have been satisfied in all material respects, and
(ii) the conditions to Seller’s obligations set forth in Article 8 of this
Agreement have been satisfied in all material respects; if either Buyer or
Seller (either a “Breaching Party”) fails to complete the transactions
contemplated by this Agreement, such Breaching Party shall pay to the other
party (either a “Non-Breaching Party”) the amount of Two Hundred Fifty Thousand
Dollars ($250,000) as liquidated damages, which payment shall be in lieu of all
other remedies or actions at law or in equity available to the Non-Breaching
Party, and shall be entitled to obtain judgment for such amount against the
Breaching Party as permitted by law.

 

ARTICLE X

TERMINATION

 

Section 10.1.                             Methods of Termination.

 

This Agreement may be terminated in any of the following ways:

 

(a)                                  By either Buyer or Seller, in writing five
(5) days in advance of such termination, if the Closing has not occurred by
June 30, 2007 but any such termination shall be subject to Article IX above if
all conditions precedent to Buyer’s and Seller’s obligations have been
satisfied;

 

(b)                                 At any time on or prior to the Effective
Date by the mutual consent in writing of Buyer and Seller;

 

(c)                                  On the Effective Date, by Buyer, in
writing, if the obligations set forth in Article VII of this Agreement shall not
have been met by Seller or waived in writing by Buyer;

 

(d)                                 On the Effective Date, by Seller, in
writing, if the conditions set forth in Article VIII of this Agreement shall not
have been met by Buyer or waived in writing by Seller;

 

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(e)                                  Any time on or prior to the Effective Date,
by Buyer or Seller in writing if the other shall have been in breach of the
representations or warranties in any material respect (as if any 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 a breach of any covenant 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 Effective Date; provided, however, that there shall be no cure
period in connection with any breach of Section 6.2 hereof, so long as such
breach by Buyer was not caused by any action or inaction of Seller;

 

(f)                                    By either Buyer or Seller in writing at
any time after any applicable regulatory authority has denied approval of any
application of Buyer for approval of the transactions contemplated herein or
such application has been withdrawn after Buyer has in good faith met the
requirements of Section 6.2 hereof; or

 

(g)                                 In accordance with the provisions of
Section 1.9 hereof.

 

Section 10.2.                             Procedure Upon Termination.

 

In the event of termination pursuant to Section 10.1 hereof written notice
thereof shall be given to the other party, and this Agreement shall terminate
immediately upon receipt of such notice 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 all documents, work
papers and other materials of the other party, including photocopies or other
duplications thereof, 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 other party (other than information which is a matter
of public knowledge or which has heretofore been published in any publication
for public distribution or filed as public information with any government
authority) shall not at any time be used for any business purpose by such party
or disclosed by any such party to third parties.

 

ARTICLE XI

MISCELLANEOUS PROVISIONS

 

Section 11.1.                             Amendment and Modification.

 

The parties hereto, by mutual consent of their duly authorized officers, may
amend, modify and supplement this Agreement in such manner as may be agreed upon
by them in writing.

 

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Section 11.2.                             Waiver or Extension.

 

Except with respect to required approvals of the applicable governmental
authorities, either party, by written instrument signed by a duly authorized
officer, 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 and 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.

 

Section 11.3.                             Assignment.

 

This Agreement and all of the provisions hereof shall be binding upon, and shall
inure to the benefit of, the parties hereto and their permitted assigns, but
neither this Agreement nor any rights, interests or obligations hereunder shall
be assigned by either of the parties without the prior written consent of the
other.

 

Section 11.4.                             Confidentiality.

 

Seller and Buyer covenant and agree that all information received by either of
them with respect to the business of the other (other than information which is
a matter of public knowledge or which has heretofore been published in any
publication for public distribution or which has heretofore, or which is
hereafter, filed as public information with any governmental authority) shall
not at any time be used for any business purpose or disclosed by such party to
third persons. This covenant and agreement shall survive the consummation of the
transactions contemplated herein.

 

Section 11.5.                             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 mailed (by
registered or certified mail, return receipt requested), telegraphed, telexed,
telecopied or personally delivered (with receipt thereof acknowledged) to the
applicable party at the address indicated below:

 

If to Seller:

 

 

Benjamin Guenther

 

MetaBank

 

Erie at Fifth

 

Storm Lake, Iowa 50588

 

 

 

Telephone: (712) 732-4105

 

Facsimile: (712) 732-7105

 

Email: bguenther@metabankonline.com

 

with a copy to:

 

 

Gary W. Armstrong

 

Mack, Hansen, Gadd, Armstrong & Brown, P.C.

 

316 East Sixth Street

 

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Storm Lake, IA 50588-0278

 

 

 

Telephone: (712) 732-3538

 

Facsimile: (712) 732-7578

 

Email: mhgab@iw.net

 

 

If to Buyer:

 

 

 

Kris Ausborn

 

Iowa Trust & Savings Bank

 

2101 10th Street

 

P.O. Box 159

 

Emmetsburg, IA 50536-0159

 

 

 

Telephone: (712) 852-3451

 

Facsimile: (712) 852-4232

 

Email: kausborn@iowatrustbank.com

 

 

with a copy to:

 

 

 

Robert A. Mullen

 

Belin Law Firm

 

The Financial Center

 

666 Walnut, Suite 2000

 

Des Moines, IA 50309-3989

 

 

 

Telephone: (515) 243-7100

 

Facsimile: (515) 558-0715

 

Email: ramullen@belinlaw.com

 

Section 11.6.                             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 document.

 

Section 11.7.                             Headings.

 

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

 

Section 11.8.                             Governing Law.

 

This Agreement shall be governed by, and construed in accordance with, the laws
of the State of Iowa.

 

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Section 11.9.                             Entire Agreement.

 

This Agreement, the exhibits and attachments hereto, represent the entire
agreement between the parties hereto respecting the matters addressed herein and
supersedes all prior or contemporaneous written or oral proposals, agreements in
principle, representations, warranties and understandings between the parties.

 

Section 11.10.                       Expenses.

 

Except as otherwise provided in this Agreement, all legal, accounting and other
costs and expenses incurred in connection with the execution, delivery and
performance of this Agreement and of the transactions contemplated hereby shall
be borne and paid by the party incurring such costs and expenses, and neither
party shall be obligated for any cost or expense incurred by the other party.

 

Section 11.11.                       Severability.

 

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

 

Section 11.12.                       Parties in Interest.

 

Nothing in this Agreement, expressed or implied, is intended or shall be
construed to confer upon or give to any person (other than the parties hereto,
their successors and permitted assigns) and rights or remedies under or by
reason of this Agreement, or any term, provision, condition, undertaking,
warranty, representation, indemnity, covenant or agreement contained therein.

 

[SIGNATURE PAGE FOLLOWS]

 

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

 

 

SELLER

 

 

 

METABANK

ATTEST:

 

 

 

 

 

By:

/s/ Sandra Hegland

 

By:

/s/ Benjamin Guenther

 

Its: Senior Vice President of HR

Its: President

 

 

 

BUYER

 

 

ATTEST:

IOWA TRUST & SAVINGS BANK

 

 

 

 

By:

/s/ Cleta Ann Frascht

 

By:

/s/ Kris M. Ausborn

 

Its: /s/ Administrative Assistant

Its: President

 

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