Exhibit 10.1

BRANCH PURCHASE AND ASSUMPTION AGREEMENT

BETWEEN

FIRST MID-ILLINOIS BANK & TRUST, N.A.,

AND

FIRST BANK

Dated as of May 7, 2010

 
 

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TABLE OF CONTENTS

Page
 

ARTICLE I
PURCHASE AND SALE OF ASSETS AND ASSUMPTION OF LIABILITIES 
1

 
 
Section 1.1
Purchase of Assets 
1

 
 
Section 1.2
Assumption of Liabilities 
3

 
 
Section 1.3
Excluded Assets 
4

 
 
Section 1.4
Excluded Liabilities 
4

 
 
Section 1.5
Signage 
5

 
ARTICLE II
CLOSING, CALCULATION OF PURCHASE PRICE AND CLOSING DELIVERIES 
5

 
 
Section 2.1
The Closing 
5

 
 
Section 2.2
The Closing Date 
5

 
 
Section 2.3
Calculation and Payment of Purchase Price 
5

 
 
Section 2.4
Prorations 
8

 
 
Section 2.5
Transfer Taxes 
8

 
 
Section 2.6
Purchase Price Allocation 
9

 
 
Section 2.7
Closing Deliveries 
9

 
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLER 
11

 
 
Section 3.1
Organization 
11

 
 
Section 3.2
Authorization 
11

 
 
Section 3.3
Non-Contravention; Consents 
11

 
 
Section 3.4
Compliance with Law 
12

 
 
Section 3.5
Regulatory Enforcement Actions 
12

 
 
Section 3.6
Community Reinvestment Act 
12

 
 
Section 3.7
Litigation 
12

 
 
Section 3.8
Title to Assets 
13

 
 
Section 3.9
Warranties of Condition 
13

 
 
Section 3.10
Environmental Matters 
13

 
 
Section 3.11
Employee Matters 
15

 
 
Section 3.12
Employee Contracts 
15

 
 
Section 3.13
Employee Benefits 
16

 
 
Section 3.14
Taxes 
16

 
 
Section 3.15
Insurance 
17

 
 
Section 3.16
Financial Statements 
17

 
 
 

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Section 3.17
Absence of Certain Changes or Events 
17

 
 
Section 3.18
Undisclosed Liabilities 
17

 
 
Section 3.19
Deposit Liabilities 
18

 
 
Section 3.20
Loans 
18

 
 
Section 3.21
Owned Real Property and Leased Real Property 
21

 
 
Section 3.22
Leased Real Property 
22

 
 
Section 3.23
Assumed Contracts 
23

 
 
Section 3.24
Brokerage 
23

 
 
Section 3.25
Books and Records 
23

 
 
Section 3.26
Representations Not Misleading 
23

 
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYER 
24

 
 
Section 4.1
Organization 
24

 
 
Section 4.2
Authorization 
24

 
 
Section 4.3
Non-Contravention; Consents 
24

 
 
Section 4.4
Litigation 
24

 
 
Section 4.5
Regulatory Condition 
25

 
 
Section 4.6
Financial Condition 
25

 
 
Section 4.7
Community Reinvestment Act 
25

 
 
Section 4.8
Regulatory Enforcement Actions 
25

 
 
Section 4.9
Brokerage 
25

 
ARTICLE V
AGREEMENTS OF SELLER 
25

 
 
Section 5.1
Business in Ordinary Course 
25

 
 
Section 5.2
Breaches 
28

 
 
Section 5.3
Consents 
28

 
 
Section 5.4
Consummation of Agreement 
28

 
 
Section 5.5
Access to Information 
28

 
 
Section 5.6
Transfer of Data 
29

 
 
Section 5.7
Further Assurances 
29

 
 
Section 5.8
Exclusivity 
29

 
 
Section 5.9
Real Property 
29

 
 
Section 5.10
Closing Financial Statements 
32

 
 
 

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ARTICLE VI
AGREEMENTS OF BUYER 
32

 
 
Section 6.1
Breaches 
32

 
 
Section 6.2
Consummation of Agreement 
32

 
 
Section 6.3
Access to Information 
32

 
 
Section 6.4
Loans Related to Seller’s Computation of Interest on a 360-Day Basis 
32

 
 
Section 6.5
Confidential Information 
33

 
 
Section 6.6
Continued Operation of the Branch Offices 
33

 
ARTICLE VII
AGREEMENTS OF SELLER AND BUYER 
33

 
 
Section 7.1
Publicity; Press Releases 
33

 
 
Section 7.2
Regulatory Matters and Approvals 
33

 
 
Section 7.3
Customer Accounts; Conveyance of Customer Accounts 
34

 
 
Section 7.4
Assumption of ESA, IRA and Keogh Account Deposits 
35

 
 
Section 7.5
Employee Matters 
35

 
 
Section 7.6
Loan Exceptions 
38

 
ARTICLE VIII
CONDITIONS PRECEDENT TO THE BRANCH PURCHASE AND ASSUMPTION 
38

 
 
Section 8.1
Conditions to Seller’s Obligations 
38

 
 
Section 8.2
Conditions to Buyer’s Obligations 
38

 
ARTICLE IX
TERMINATION OR ABANDONMENT 
39

 
 
Section 9.1
Termination 
39

 
 
Section 9.2
Procedure and Effect of Termination 
40

 
ARTICLE X
TRANSITIONAL AND POST-CLOSING MATTERS 
41

 
 
Section 10.1
Notification to Customers and Transitional Matters 
41

 
 
Section 10.2
Loans and Participations 
45

 
 
Section 10.3
Continued Cooperation 
45

 
 
Section 10.4
Transitional Matters Concerning Real Property 
45

 
ARTICLE XI
SURVIVAL; INDEMNIFICATION 
46

 
 
Section 11.1
Survival 
46

 
 
Section 11.2
Indemnification by Seller 
46

 
 
Section 11.3
Indemnification by Buyer 
47

 
 
Section 11.4
Limitation on Indemnities 
48

 
 
Section 11.5
Notice and Opportunity to Defend 
49

 
 
Section 11.6
Breach of Representation or Warranty Relating to Evidence of Indebtedness 
49

 
 
 

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ARTICLE XII
GENERAL 
50

 
 
Section 12.1
Notices 
50

 
 
Section 12.2
Expenses 
51

 
 
Section 12.3
Governing Law 
51

 
 
Section 12.4
Jurisdiction 
51

 
 
Section 12.5
Service of Process 
51

 
 
Section 12.6
Recovery of Fees by Prevailing Party 
51

 
 
Section 12.7
Specific Performance 
51

 
 
Section 12.8
Entire Agreement 
52

 
 
Section 12.9
Headings and Captions 
52

 
 
Section 12.10Waiver, Amendment or Modification52

 
 
Section 12.11Counterparts52

 
 
Section 12.12Successors and Assigns52

 
 
Section 12.13Schedules and Exhibits52

 
 
Section 12.14Assignment52

 
 
Section 12.15Interpretation52

 
 
Section 12.16Noncompetition and Nonsolicitation Agreement55

 

 
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LIST OF EXHIBITS AND SCHEDULES

Exhibit 1
Branch Offices

Exhibit 2
Form of Assignment and Assumption of Deposit Liabilities Agreement

Exhibit 3
Form of Assignment and Assumption of Contracts Agreement

Exhibit 4
Form of Bill of Sale

Exhibit 5
Form of Assignment, Transfer and Appointment of Successor Custodian for IRA
Accounts

Exhibit 6
Power of Attorney

Schedule 1.1(a)
Owned Real Property

Schedule 1.1(b)
Real Property Leases

Schedule 1.1(c)
Cash

Schedule 1.1(d)
Loans

Schedule 1.1(d)(i)
Excluded Loans

Schedule 1.1(e)
Personal Property

Schedule 1.1(f)
Assumed Contracts

Schedule 1.2(a)(i)
Assumed Deposit Liabilities

Schedule 1.2(a)(ii)
Excluded Deposit Liabilities

Schedule 1.3(a)                  Excluded Assets
Schedule 2.7(a)(xvii)          Required Consents
Schedule 3.2                       Consents
Schedule 3.5                       Regulatory Enforcement Actions
Schedule 3.7                       Litigation
Schedule 3.8                       Title to Assets
Schedule 3.10                     Environmental Matters
Schedule 3.11(a)                 Branch Employees
Schedule 3.11(b)                Employee Claims
Schedule 3.12(a)                 Employee Contracts
Schedule 3.15                     Insurance Policies
Schedule 3.16                     Branch Financial Statements
Schedule 3.19(f)                 Deposits – Exceptions to Termination
Schedule 3.20(b)                Loans – Employee Loans
Schedule 3.20(c)                Loans – Third-Party Servicing
Schedule 3.20(e)(iii)          Loans – Liens and Enforceability
Schedule 3.20(e)(vi)          Loans – Pledged
Schedule 3.20(e)(vii)         Loans – Notes, Mortgages, Financing Statements
Schedule 3.20(e)(xii)          Loans – Participations
Schedule 3.20(e)(xvi)         Loans – Litigation and Claims
Schedule 3.21(a)                Tenant Leases
Schedule 3.22(i)                 Landlord Consents
Schedule 3.22(ii)                Subleases
Schedule 4.3                       Buyer’s Consents
Schedule 7.4(d)                  ESAs, IRAs and Keogh Accounts
Schedule 12.16                   Customers
 
 
 

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INDEX OF DEFINED TERMS

 
Acquisition............................................................................................................1

 
Adjustment
Payment...........................................................................................8

 
Adjustment Payment
Date..................................................................................8

 
Affiliate.................................................................................................................53

 
Agreement.............................................................................................................1

 
AHC......................................................................................................................42

 
Applicable
Law....................................................................................................11

 
Approval
Date.....................................................................................................41

 
Arbitrator...............................................................................................................7

 
Assets....................................................................................................................1

 
Assumed
Contracts.............................................................................................2

 
Assumed
Liabilities.............................................................................................3

 
ATM......................................................................................................................1

 
Balance Sheet
Date............................................................................................17

 
Branch
Customers..............................................................................................41

 
Branch
Employees..............................................................................................15

 
Branch Financial
Statements............................................................................17

 
Branch
Offices......................................................................................................1

 
Business
Day......................................................................................................53

 
Buyer......................................................................................................................1

 
CAA.....................................................................................................................14

 
Cash on
Hand.......................................................................................................1

 
CERCLA...............................................................................................................14

 
Closing...................................................................................................................5

 
Closing
Date..........................................................................................................5

 
Code.....................................................................................................................16

 
Commercially Reasonable
Efforts.....................................................................53

 
Commitment.........................................................................................................53

 
Confidentiality
Agreement................................................................................33

 
Consent................................................................................................................53

 
CWA.....................................................................................................................14

 
Deposit
Liabilities.................................................................................................3

 
Deposit
Listings....................................................................................................9

 
Deposit
Premium...................................................................................................6

 
Deposits.................................................................................................................3

 
Disclosure
Schedule...........................................................................................11

 
Effective
Time........................................................................................................5

 
Employee Pension Benefit
Plan........................................................................16

 
Employee Welfare Benefit
Plan........................................................................16

 
Encumbrances.....................................................................................................53

 
Environmental
Laws...........................................................................................14

 
EPCRKA...............................................................................................................14

 
ESA.......................................................................................................................53

 
Estimated Purchase
Price....................................................................................6

 
Excluded
Assets...................................................................................................4

 
Excluded
Liabilities...............................................................................................4

 
Excluded
Loans.....................................................................................................2

 
FDIC......................................................................................................................11

 
 
 

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Fiduciary
Relationships.....................................................................................53

 
Financial
Statements...........................................................................................17

 
Governmental
Authorization.............................................................................53

 
Governmental
Entity...........................................................................................53

 
Hazardous
Material.............................................................................................14

 
Holds.....................................................................................................................43

 
Illinois
Courts.......................................................................................................51

 
Indemnified
Party.................................................................................................49

 
Indemnifying
Party..............................................................................................49

 
Insiders.................................................................................................................46

 
IRA........................................................................................................................54

 
Knowledge...........................................................................................................54

 
Landlord
Consents..............................................................................................23

 
Leased Real
Property............................................................................................1

 
Lessor....................................................................................................................23

 
Loan
Exception....................................................................................................38

 
Loan
Listings.......................................................................................................10

 
Loans......................................................................................................................2

 
Losses...................................................................................................................46

 
Measurement
Date................................................................................................6

 
Noncompete
Areas..............................................................................................55

 
Notice of
Disagreement........................................................................................7

 
Objections............................................................................................................30

 
Order.....................................................................................................................54

 
Ordinary Course of
Business............................................................................54

 
Overdraft
Items....................................................................................................42

 
Owned Real
Property............................................................................................1

 
Participation.........................................................................................................45

 
Participation
Agreement....................................................................................20

 
Permitted Commitment
Encumbrances............................................................30

 
Permitted
Encumbrances...................................................................................54

 
Person..................................................................................................................54

 
Personal
Property................................................................................................2

 
Phase I
Assessments........................................................................................31

 
Phase II
Assessments......................................................................................31

 
Plan......................................................................................................................31

 
Pre-Closing Environmental
Liabilities..............................................................5

 
Preclosing
Loans................................................................................................2

 
Preexisting
Presence.........................................................................................55

 
Preliminary
Statement........................................................................................7

 
Prepaid
Expenses................................................................................................3

 
Proceeding.........................................................................................................55

 
Purchase
Price.....................................................................................................5

 
Put
Loan.............................................................................................................45

 
Put Loan Acquisition
Date..............................................................................45

 
Put
Participation................................................................................................45

 
Put Participation Acquisition
Date.................................................................45

 
Real
Property.......................................................................................................1

 
Real Property
Leases........................................................................................23

 
Reclaim
Amount................................................................................................42

 
Records.................................................................................................................3

 
Regulatory
Approvals......................................................................................34

 
Remaining Branch
Employees.........................................................................35

 
Remediation
Cost..............................................................................................31

 
Schedule of
Cash................................................................................................1

 
Seller.....................................................................................................................1

 
Seller Material Adverse
Effect........................................................................55

 
Seller
Plans........................................................................................................16

 
Surveys..............................................................................................................29

 
SWDA...............................................................................................................14

 
Tax
Returns.......................................................................................................17

 
Taxes..................................................................................................................17

 
Tenant
Leases..................................................................................................21

 
Title
Commitments...........................................................................................29

 
Title
Company..................................................................................................29

 
Transferred
Employees...................................................................................36

 
TSCA.................................................................................................................14

 
Withholding
Obligations..................................................................................3

 
 

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BRANCH PURCHASE AND ASSUMPTION AGREEMENT

This BRANCH PURCHASE AND ASSUMPTION AGREEMENT (this “Agreement”) is made and
executed as of the 7th day of May, 2010, by and among First Mid-Illinois Bank &
Trust, N.A., a national association with its main office located in Mattoon,
Illinois (“Buyer”), and First Bank, a Missouri state chartered bank with its
main office located in Creve Coeur, Missouri (“Seller”).
 
RECITALS:
 
A.           Seller owns or leases and operates the branch banking offices
listed on Exhibit 1 and referred to  herein as the “Branch Offices.”
 
B.           Seller desires to sell and Buyer desires to acquire the Branch
Offices, and, in that regard, Seller desires to sell and Buyer desires to
acquire certain assets related thereto maintained at the Branch Offices and
Seller desires to transfer and Buyer desires to assume certain deposit accounts
maintained at the Branch Offices and certain other liabilities pertaining to the
continuing operations thereof (the “Acquisition”).
 
AGREEMENT
 
NOW, THEREFORE, in consideration of the premises and the mutual terms and
provisions set forth in this Agreement, the parties agree as follows:
 
 
ARTICLE I                      
 
 

 
 
PURCHASE AND SALE OF ASSETS AND ASSUMPTION OF LIABILITIES
 
Section 1.1 Purchase of Assets.  Upon the terms and subject to the conditions
and representations set forth herein, Seller shall sell, convey, assign,
transfer and deliver to Buyer at the Closing, and Buyer shall purchase and
accept from Seller, all right, title and interest of Seller in and to the
following assets, whether now existing or hereafter acquired, free and clear of
all Encumbrances other than the Permitted Encumbrances (collectively, the
“Assets”) as of the Effective Time:
 
(a) Owned Real Property.  The owned real estate described on Schedule 1.1(a)
upon which certain of the Branch Offices are operated, including the buildings
and other improvements thereto (the “Owned Real Property”).
 
(b) Real Property Leases.  All Real Property Leases together with all leased
real properties, in each case as described on Schedule 1.1(b) (the “Leased Real
Property”, and together with the Owned Real Property, the “Real Property”), with
all improvements by Seller to the Leased Real Property under such Real Property
Leases.
 
(c) Cash on Hand.  All cash on hand at the Branch Offices as of the close of
business on the Closing Date including vault cash, automated teller machine
(“ATM”) cash, petty cash, tellers’ cash and cash items in the process of
collection (the “Cash on Hand”).  At the Closing, Seller shall deliver to Buyer
Schedule 1.1(c) (“Schedule of Cash”) including the amount and location of
Seller’s Cash on Hand as of the close of business on the Closing Date.
 
 
 

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(d) Loans.            All loans or extensions of credit listed on Schedule
1.1(d) and all loans or extensions of credit made from the date of Schedule
1.1(d) up to the Closing Date and attributable to the Branch Offices (the
“Preclosing Loans,” and together with all loans and extensions of credit listed
on Schedule 1.1(d), the “Loans”), plus accrued but unpaid interest on such Loans
through the Closing Date; provided, however, that the Loans shall not include
(i) any loans or extensions of credit that, at the Measurement Date or the
Closing Date, (A) are on nonaccrual status, (B) are 30 days or more past due,
(C) are classified as “substandard,” “doubtful” or “loss” as of the date of the
most recent examination of Seller or, in the reasonable judgment of Buyer and
applying Seller’s rating system in a manner consistent with its past practices,
would be rated watch or lower, (D) have had insurance force-placed, (E) are in
connection with a borrower that has filed a petition for relief under the United
States Bankruptcy Code prior to the Closing Date, (F) have specific reserves as
shown on Seller’s books and records, of (G) are excluded pursuant to Section
7.6, or (ii) any loans subject to Participation Agreements in the event that
Seller, as of the Closing Date, has not obtained from all participants under the
respective Participation Agreement waivers of the participants’ right to
put-back their portion of any participated loan in the event that Seller assigns
or transfers Seller’s interest in the participated loan.  Notwithstanding the
foregoing, the loans listed on Schedule 1.1(d)(i) shall be excluded from the
Assets and all of such excluded loans shall be retained by Seller (collectively,
with the loans excluded pursuant to clauses (i) and (ii) of this Section 1.1(d),
the “Excluded Loans”).
 
(e) Personal Property. Except for those items that constitute Excluded Assets,
all of the  furniture, equipment (including all cell phones and PDAs used by
Transferred Employees), trade fixtures, shelving, on-premises or off-premises
ATMs, security systems, safety deposit boxes (exclusive of contents) vaults, all
signs, sign framing, structures, posts and other signage infrastructure, all
non-logo office supplies and other items of tangible personal property
(excluding all proprietary and third party software) located at the Branch
Offices as of the close of business on the Closing Date, and any rights to
telephone or facsimile numbers used at the Branch Offices (collectively, the
“Personal Property”).  Set forth on Schedule 1.1(e) is a depreciation schedule
that is a representative listing of the Personal Property as of March 31,
2010.  If, prior to the Closing Date, any item of Personal Property is or is
discovered to be stolen, destroyed, taken out of service or lost, such item
shall be excluded from the sale contemplated hereby, and the term “Personal
Property” as used herein shall exclude any such item(s).  If, prior to the
Closing Date, any item of Personal Property is damaged by fire or other
casualty, such item(s), if repairable using Commercially Reasonable Efforts,
shall, at Seller’s sole discretion, be either (i) sold to Buyer (in accordance
with the provisions hereof) and the insurance proceeds relating to such item
shall be assigned to Buyer or (ii) repaired by Seller prior to the Closing Date,
it being understood that if any such item(s) are not reasonably repairable, it
shall be excluded from the sale contemplated hereby and any insurance proceeds
relating to such items shall be paid to Buyer.
 
(f) Assumed Contracts.  (i) All customer agreements, including those related to
the Branch Offices’ safety deposit boxes and Deposits and Loans and (ii) (A) all
leases and maintenance agreements related to the Branch Offices, including
equipment leases relating to the lease of equipment located at the Branch
Offices and related maintenance agreements and (B) all other Commitments, in
each case as to subclauses (ii)(A) and (ii)(B) solely to the extent listed on
Schedule 1.1(f) attached hereto other than any other Commitments that Buyer has
elected to remove from or add to such Schedule 1.1(f) by giving written notice
of such election to Seller not later than 30 days following the date hereof, in
which case such Schedule delivered on the date hereof, as so modified by such
election notice, shall be deemed to constitute Schedule 1.1(f) for all purposes
of this Agreement (the Commitments listed on Schedule 1.1(f) and all customer
agreements, including those related to the Branch Offices’ safety deposit boxes
and Deposits and Loans are collectively referred to as the “Assumed Contracts”).
 
 
 

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(g) Prepaid Expenses.  All prepaid expenses (the “Prepaid Expenses”) reflected
on the books of Seller attributable to the Branch Offices as of the Closing
Date, which include, but are not limited to, prepaid FICO assessments and
prepaid FDIC insurance premiums,  but only to the extent attributable to the
Assets or any of the Deposits sold, assigned or transferred to or assumed by
Buyer pursuant to this Agreement and only to the extent relating to periods
after the Closing Date.
 
(h) Books and Records.  All books, records, files and original documents
directly relating to the Assets and Assumed Liabilities being transferred to
Buyer hereunder, including all records relating to the Deposit Liabilities
including signature cards, orders and agreements of the Branch Offices
(collectively, the “Records”).
 
(i) Fiduciary Relationships.  All assets, rights and interests of Seller
relating to the Branch Offices in respect of Fiduciary Relationships related to
Deposits in respect of ESAs, IRAs and Keogh Accounts included in the Assets
pursuant to Section 7.4.
 
Section 1.2 Assumption of Liabilities.  Upon the terms and subject to the
conditions set forth herein, at the Closing Seller shall transfer and assign to
Buyer, and Buyer shall assume from Seller and agree to pay, perform and
discharge by documentation reasonably satisfactory as to form and substance to
Seller, as of the close of business on the Closing Date, the following
liabilities, and none other (collectively, the “Assumed Liabilities”):
 
(a) Deposit Liabilities.  All deposit liabilities maintained at the Branch
Offices, in accordance with the terms of the agreements pertaining to such
deposits, as shown on the books and records of Seller as of the close of
business on the Closing Date, including accrued but unpaid interest thereon
through the Closing Date, except for deposit liabilities that are (i) overdrawn,
(ii) represent loan escrow accounts or (iii) as provided in this subsection and
in Section 2.3(c) hereof (the “Deposits” or “Deposit Liabilities”), other than
any Pre-Closing Event Liability related to or in respect of such Deposits.  The
Deposit Liabilities as they existed on April 30, 2010 are identified on Schedule
1.2(a)(i).  As soon as practicable after the date of execution of this
Agreement, Seller will provide Buyer with a listing of the deposits of the
Branch Offices, sorted by postal zip code, and, based on this listing, and any
other information available, Buyer and Seller will use Commercially Reasonable
Efforts to determine jointly any customers who are assigned in Seller’s records
to a Branch Office but who appear to be using one of Seller’s other branch
offices and such customers’ deposits will be deemed to be included on Schedule
1.2(a)(ii) for all purposes of this Agreement; provided, however that such joint
determination will be completed no less than ten days prior to the Measurement
Date.  As used herein, the term “Deposit Liabilities” shall include all of the
deposit accounts evidencing deposit products offered by Seller from the Branch
Offices, including savings accounts, statement accounts, checking accounts,
money market accounts, and certificates of deposit; provided, however, that
there shall be excluded from the term “Deposit Liabilities” the Deposits
identified on Schedule 1.2(a)(ii) with all of such excluded deposits being
retained by Seller.
 
(b) Backup Withholding Liabilities.  All amounts required by any governmental
agency to be withheld from any of the Deposit Liabilities (“Withholding
Obligations”), to the extent provided in Section 10.1(n).
 
(c) Real Property Leases and Assumed Contracts.  Any and all obligations of
Seller pursuant to the Real Property Leases or the Assumed Contracts that are
assignable by Seller to Buyer, other than any Pre-Closing Event Liability
relating to or in respect of such Real Property Leases or Assumed
Contracts.  The Real Property Leases are identified on Schedule 1.1(b) and the
Assumed Contracts as of the date hereof are identified on Schedule 1.1(f), which
may be updated pursuant to the terms of Section 1.1(f).
 
 
 

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(d) Fiduciary Relationships.  All obligations of Seller relating to the Branch
Offices in respect of Fiduciary Relationships related to Deposits in respect of
ESAs, IRAs and Keogh Accounts included in the Assumed Liabilities pursuant to
Section 7.4.
 
Section 1.3 Excluded Assets.  Seller shall not sell and transfer and shall
retain, and Buyer shall not purchase or acquire, all of the following assets and
properties of Seller, as follows (collectively, the “Excluded Assets”):
 
(a) All (i) paper stock, forms and other supplies containing any logos, trade
name, trademark or service mark, if any, of Seller, other than all signage
included in the Assets and (ii) the specific items of tangible personal property
in or at, or affixed to the premises of, the Branches listed on Schedule 1.3(a),
other than any such items that Buyer and Seller have mutually agreed to remove
from or add to Schedule 1.3(a) following the date hereof, in which case such
Schedule delivered on the date hereof, as so modified, shall be deemed to
constitute Schedule 1.3(a) for all purposes of this Agreement.
 
(b) (i) All of Seller’s owned or licensed computer software programs and
associated licenses (other than manufacturer’s firmware on transferred equipment
included in the Personal Property), trade secrets and other intellectual
property (other than customer lists for the Branch Offices), (ii) the names
“First Bank” and “First Banks,” (iii) the names, descriptions and
identifications of all account types and other products offered by Seller
(whether or not offered at the Branch Offices) and (iv) all logos, service
marks, trade names and trademarks, advertising materials, slogans and any
similar items used by Seller in connection with its business, whether or not
such is copyrighted or registered.
 
(c)  The Excluded Loans and any other non-performing loans as of the date hereof
at the Branch Offices that are not listed on Schedule 1.1(d).
 
(d) Any other assets or properties of Seller not included in the Assets,
including all non-divested branches of Seller.
 
(e) All assets, rights and interests of Seller relating to the Branches in
respect of Fiduciary Relationships, except for the Deposits in respect of ESAs,
IRAs and Keogh Accounts included in the Assets or Assumed Liabilities as
contemplated by Section 7.4.
 
Section 1.4 Excluded Liabilities.   Notwithstanding anything to the contrary
contained in this Agreement, Buyer shall not assume or be bound by any duties,
responsibilities, obligations or liabilities of Seller relating to Seller or
arising out of the Assets, the Excluded Assets, the Deposits or the Branch
Offices, of any kind or nature and whether known, unknown, contingent or
otherwise, on or before the Closing Date, other than the Assumed Liabilities
(all such duties, responsibilities, obligations and liabilities, other than the
Assumed Liabilities, the “Excluded Liabilities”); provided, that, for the
avoidance of doubt subject to the provisions of Section 11.4(c), all liabilities
(a) imposed on Buyer with respect to or in respect of the Real Property arising
under any Environmental Law to the extent arising out of or relating to any
release, violation of Applicable Law, event, condition, action, omission or
other circumstance attributable to any period on or prior to the Closing Date,
including any claims, penalties, remediation costs, liabilities arising from the
emission, discharge release or disposal of any Hazardous Materials into the air,
ground or water or the presence of any Hazardous Materials on, at or in any
Branch Offices, and (b) without limiting the provisions of clause (a) above, all
liabilities imposed on Buyer with respect to or in respect of the Real Property
arising out of any underground storage tank located in, or asbestos or asbestos
containing materials, regardless of condition, located in any building upon, any
Real Property at anytime on or prior to the Closing Date, whether or not such
liability shall arise prior to or after the Closing Date, including, without
limitation, in the case of each of clause (a) and clause (b), all such
liabilities arising out of any environmental event or condition disclosed on
Schedule 3.10 or in the documents (or the attachments to the documents)
referenced on Schedule 3.10; provided, however, that (i) Seller shall not be
responsible for any liabilities under this clause (b) arising under any
Environmental Law to the extent such liabilities are caused or made necessary by
(1) Buyer’s changed use of any Real Property following the Closing Date, (2)
changes made by Buyer to any structures on any Real Property following the
Closing Date or (3) exacerbation of any underlying condition by the acts or
omissions of Buyer following the Closing Date (and all environmental liabilities
for which Seller shall be responsible to the extent provided in this Section 1.4
are referred to herein as, collectively, the “Pre-Closing Environmental
Liabilities”), and (ii) Seller’s obligation to indemnify Buyer for the Excluded
Liabilities related to any environmental liabilities described in this Section
1.4 shall survive for a period of only eight years following the Closing Date.
 
 
 

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Section 1.5 Signage.  Beginning ten days prior to the Closing Date, Buyer may
begin to replace the signs, logos, and other insignia identifying or identified
with Seller, and Buyer shall bear the cost of any replacements and shall cause
to be repaired any damage caused by such replacement.  Until the Closing Date,
any signs, logos, and other insignia replaced by Buyer identifying or identified
with Buyer shall be covered by temporary signs, logos, or other insignia
identifying or identified with Seller.  After the Closing Date, the temporary
signs, logos, and other insignia identifying or identified with Seller shall be
removed by Buyer, and on and after the Closing Date, Buyer shall not use any
name, logo, insignia, service mark or trade name of Seller in any manner.  No
activity conducted by Buyer on or after the Closing Date shall state or imply
that Seller is in any way involved as a partner, joint venture or otherwise in
the business of Buyer.  Buyer shall return to Seller any remaining signs, logos
and insignia of Seller removed by Buyer from the Branch Offices after Closing.
 
 
ARTICLE II                                
 
CLOSING, CALCULATION OF PURCHASE PRICE AND CLOSING DELIVERIES
 
Section 2.1 The Closing.  The closing of the transactions contemplated by this
Agreement (the “Closing”) shall occur through the mail (including facsimile or
e-mail) or take place at the offices of Seller, or at such other location as the
parties may agree, at a mutually agreeable time on the Closing Date described in
Section 2.2.
 
Section 2.2 The Closing Date.  The Closing shall take place on such date as the
Buyer and Seller may agree, following receipt of all Regulatory Approvals and on
a date on which the data transfer contemplated by Section 5.6 may occur, if all
conditions and all applicable waiting periods associated with such Regulatory
Approvals have been satisfied, or on such other date as the parties may mutually
agree (the “Closing Date”).  The transactions contemplated by this Agreement
shall become effective at the close of business on the Closing Date (the
“Effective Time”).
 
Section 2.3  Calculation and Payment of Purchase Price.  The calculation and
payment of the Purchase Price shall be made as follows:
 
(a) Purchase Price Calculation.  The “Purchase Price” shall be an amount equal
to the following, with the appropriate value of each category of asset and
liability to be calculated as of the close of business on the Closing Date:
 
 
 

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(i) the net book value of the Real Property and the Personal Property on the
Records of Seller as of the Closing Date (the net book value of which as of
March 31, 2010 is $5,543,087.25); plus
 
(ii) the amount of Cash on Hand; plus
 
(iii) the “Deposit Premium,” which shall be equal to 4.77% of the ending balance
of the Deposit Liabilities as of the Closing Date; provided, however, that no
Deposit Premium will be paid with respect to Deposit Liabilities that are
brokered deposits, CDARs or deposits by municipalities that require the pledging
of investment securities; plus
 
(iv) the aggregate amount of the principal and accrued interest on the Loans,
together with any late charges accrued thereon, as of the close of business on
the Closing Date, excluding any loan loss reserve or general reserve which may
be associated with the Loans; plus
 
(v) the net amount of any prorated items owed by Buyer to Seller pursuant to
Section 2.4; plus
 
(vi) the Prepaid Expenses; minus
 
(vii) the aggregate amount of the principal of and accrued interest on the
Deposit Liabilities; minus
 
(viii) the amount of Withholding Obligations, if any, assumed by Buyer pursuant
to Section 1.2(b); minus
 
(ix) the net amount of any prorated items owed by Seller to Buyer pursuant to
Section 2.4.
 
(b) Closing Date Payment.  If the Purchase Price, calculated by Seller as set
forth above but based upon the relevant values as of the close of business on
the second business day prior to the Closing Date (the “Measurement Date”), is a
positive number, then on the Closing Date Buyer shall transfer to Seller, by
wire transfer in immediately available funds to an account designated by Seller,
an amount which Seller estimates to be the amount of the Purchase Price.  If the
Purchase Price, calculated by Seller as set forth above but based upon the
relevant values as of the close of business on the Measurement Date, is a
negative number, then on the Closing Date Seller shall transfer to Buyer, by
wire transfer in immediately available funds to an account designated by Buyer,
an amount which Seller estimates to be the amount of the Purchase Price (the
Purchase Price so transferred by Buyer or Seller, as the case may be, is
referred to herein as the “Estimated Purchase Price”); provided, however, that
with respect to Seller’s calculation of the Estimated Purchase Price as of the
Measurement Date, only those Preclosing Loans made at least 15 days or more
prior to the Closing Date are required to be included therein; provided,
further, for avoidance of doubt, all Preclosing Loans transferred to Buyer at
the Closing and not included in Seller’s calculation of the Estimated Purchase
Price as of the Measurement Date (because such Loans were entered into between
15 days prior to the Closing Date and the Closing Date), will be included in
Buyer’s calculation of the Preliminary Statement.  The Estimated Purchase Price
amount shall be set forth in a certificate executed by Seller setting forth in
reasonable detail Seller’s calculation and delivered to Buyer by 5:00 pm Chicago
time on the Measurement Date, which amount and calculation shall be reasonably
acceptable to Buyer.
 
 
 

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(c) Purchase Price Adjustment.
 
(i) Within seven Business Days, following the Closing Date, Buyer will prepare
and deliver to Seller a preliminary statement (the “Preliminary
Statement”), consistent with the terms of this Agreement, setting forth the
payment required by Section 2.3(a), and with regard to Loans as described in
Section 2.3(b), as of the Close of Business on the Closing Date, and reconciling
the payment detailed in the Preliminary Statement to the Estimated Purchase
Price.
 
(ii) Seller will have ten Business Days following Buyer’s delivery of the
Preliminary Statement to Seller to review and respond to the Preliminary
Statement.  Unless Seller has delivered to Buyer a written letter of its
disagreement with the Preliminary Statement (the “Notice of Disagreement”) on or
prior to 5:00 p.m. (Central Time) on the tenth Business Day following Buyer’s
delivery of the Preliminary Statement to Seller, the Preliminary Statement will
become the Final Statement.  If the Notice of Disagreement is delivered in a
timely manner, then (i) any amount set forth in the Preliminary Statement as to
which Seller has not objected and properly proposed an adjustment in the Notice
of Disagreement will be deemed to be accepted and will become part of the Final
Statement and (ii) the Preliminary Statement will become the Final Statement on
the earlier of (A) the date that Buyer and Seller resolve in writing all
remaining disputed matters properly specified in the Notice of Disagreement or
(B) the date that the Arbitrator delivers to Buyer and Seller a copy of the
Final Statement and the Adjustment Payment pursuant to Section 2.3(c)(iv).  The
Notice of Disagreement will (x) set forth in reasonable detail any proposed
adjustment to the Preliminary Statement and the basis for such adjustment
(including a specific dollar amount and accompanied by a reasonably detailed
explanation) and (y) only include disagreements based on mathematical errors or
based on the Preliminary Statement not being calculated in accordance with
Section 2.3(c)(i).
 
(iii) As soon as reasonably practicable, but in any event no later than seven
Business Days after Seller’s delivery of the Notice of Disagreement, Buyer and
Seller will meet and endeavor to resolve the unaccepted adjustments described in
the Notice of Disagreement.  If Buyer and Seller reach agreement in writing on
such adjustments, the Final Statement will be the Preliminary Statement modified
to reflect the adjustments accepted pursuant to Section 2.3(c)(ii) and those
otherwise agreed to in writing by the parties pursuant to this Section
2.3(c)(iii).
 
(iv) If Buyer and Seller do not resolve to their mutual satisfaction all
disputed adjustments in the Notice of Disagreement within seven Business Days
following the meeting provided for in Section 2.3(c)(iii), any remaining
disputed adjustments that were properly included in the Notice of Disagreement
will be settled by the Peoria, Illinois office of Clifton Gunderson LLP (or, if
such firm will decline to act or is, at the time of submission thereto, a
principal independent auditor of Buyer or Seller), of another independent
accounting firm of national reputation acceptable to Buyer and Seller (either or
such other accounting firm being the “Arbitrator”) in accordance with the
following provisions of this Section 2.3(c)(iv).  Buyer and Seller will furnish
the Arbitrator with a copy of this Agreement, the Branch Financial Statements,
the Preliminary Statement and the Notice of Disagreement. The Arbitrator’s
engagement will be limited to (i) reviewing the Preliminary Statement and the
amounts properly placed in dispute by the Notice of Disagreement, (ii)
determining (A) whether Buyer’s proposed amount for an item in the Preliminary
Statement or Seller’s proposed adjustment thereto in the Notice of Disagreement
is calculated more nearly in accordance with Section 2.3(c)(i) and (B) whether
there were mathematical errors in the Preliminary Statement, (iii) preparing the
Final Statement, which will include those amounts in the Preliminary Statement
not properly disputed by Seller, those adjustments otherwise agreed to in
writing by the Parties pursuant to Section 2.3(c)(iii) and those amounts
determined by the Arbitrator to be calculated more nearly in accordance with
Section 2.3(c)(i) and (iv) calculating the Adjustment Payment.  Seller and Buyer
agree to share equally the fees and charges of the Arbitrator hereunder for its
services in resolving disputes within this Section 2.3(c)(iv).  The Arbitrator
will complete its preparation of the Final Statement and the Adjustment Payment
within 15 Business Days from the date of submission of the disputed adjustments
to the Arbitrator, and will deliver a copy of the Final Statement and the
Adjustment Payment to Seller and Buyer and, together with a report setting forth
each disputed adjustment, the Arbitrator’s determination with respect thereto,
and a statement of the Arbitrator’s reasons for such determination.  The
Arbitrator’s determination will be conclusive and binding upon the parties and
may be entered and enforced in any court of competent jurisdiction
 
 
 

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(v) The appropriate post-closing adjustment payment (the “Adjustment Payment”)
to reflect the difference, if any, between the amount calculated pursuant to
Section 2.3(c)(i) through Section 2.3(c)(iv) and the amounts calculated as of
the Measurement Date pursuant to Section 2.3(b) hereof shall be paid by Seller
or by Buyer, as the case may be, on or before five Business Days following the
Preliminary Statement becoming the Final Statement (the “Adjustment Payment
Date”).  Interest on the amount of the Adjustment Payment for the period from
the Closing Date to the Adjustment Payment Date shall be due to the party
receiving the Adjustment Payment.  Interest shall be calculated at a rate equal
to the average of the high and low bids for Federal Funds as reported in The
Wall Street Journal, Midwest Edition, on the Closing Date, or, if none, on the
latest date immediately prior to the Closing Date on which such bids were
reported in The Wall Street Journal.
 
Section 2.4 Prorations.  The parties intend that Seller shall operate for its
own account the business conducted at the Branch Offices until the close of
business on the Closing Date, and that the Buyer shall operate such business for
its own account on and after the close of business on the Closing Date.  Thus,
except as otherwise specifically provided in this Agreement, items of expense
directly attributable to the operation of the Branch Offices (which shall not
include any general overhead expenses of Seller) shall be prorated as of the
close of business on the Closing Date, whether or not such adjustment would
normally be made as of such time, which may include, without limitation,
property and casualty insurance (if such prorations are not made by the
applicable insurer(s)), telephone, electric, gas, water, and other utility
services, security services, taxes associated with the Real Property,
assessments (including regulatory assessments) and similar expenses and revenue
related to the operation of the Branch Offices and the Assets transferred
hereunder.  For purposes of calculating the prorations, the parties acknowledge
that Illinois real estate taxes are typically paid in arrears; provided,
however, that all Real Property taxes and assessments, to the extent payable by
Seller and/or Buyer, shall be prorated at the Closing on the basis of 105% of
the most recent ascertainable Real Estate taxes and assessments, and all other
payments shall be prorated on the basis of the best information available at
Closing.   If, at Closing, the Owned Real Property is encumbered by an
assessment that is a charge or lien against the Owned Real Property arising on
or before the Closing Date, and such assessment is payable in installments, then
all unpaid installments of such assessments which are due and payable after the
Closing shall be paid and discharged by Buyer at or after Closing.  Seller shall
be responsible for payment at Closing of all accrued but unpaid installments of
such assessments which are due and payable for the period prior to the Closing
Date.  The proration of FICO assessments and FDIC insurance premiums will be
based on the amount of the Deposit Liabilities as of the Closing Date and the
number of days during any period Buyer will hold the Deposit Liabilities.  The
parties will affect the proration of FDIC insurance premiums through the FDIC
Connect system, as may be required, and will share with each other evidence of
such proration.  For prorations, if any, that cannot be reasonably calculated as
of the Closing, a post-closing adjustment shall be made in the manner specified
in Section 2.3(c).  Notwithstanding anything to the contrary, to the extent that
the FDIC imposes an assessment (special or otherwise) after the Closing Date,
which assessment is applicable to deposits that were attributable to the
Deposits prior to the Closing Date, then such assessment shall be appropriately
apportioned between Seller and Buyer after the Closing Date within five Business
Days after payment of such assessment.
 
Section 2.5 Transfer Taxes.  Buyer and Seller shall each pay one-half of all
sales and transfer taxes, if any, arising from the transfer to Buyer of the
Assets.
 
 
 

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Section 2.6 Purchase Price Allocation.  No later than 60 calendar days after the
later to occur of the determination of the Purchase Price or any Adjustment
Payment (including the final resolution of any dispute related thereto pursuant
to Section 2.3(c)), Buyer and Seller shall agree on the allocation among, and
paid in respect of, the Assets.  The parties will report (including with respect
to the filing of Forms 8594 with the IRS) the sale and purchase for all tax
purposes in a manner consistent with the Allocation and will not, in connection
with the filing of any return, make any allocation of the consideration payable
hereunder that is contrary thereto.  The parties will consult with one another
with respect to any tax audit, controversy, or litigation relating to the
Allocation and IRS Forms 8594.
 
Section 2.7 Closing Deliveries.
 
(a) At the Closing, Seller shall deliver to Buyer:
 
(i) a certificate signed by an appropriate officer of Seller stating that all of
the conditions set forth in Sections 8.2(a), 8.2(b) and 8.2(d) have been
satisfied or waived as provided therein;
 
(ii) a certified copy of currently effective resolutions of the board of
directors of Seller authorizing Seller’s execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby;
 
(iii) a Certificate of the Missouri Division of Finance, dated a recent date,
stating that Seller is in good standing;
 
(iv) an Assignment and Assumption of Deposit Liabilities Agreement in
substantially the form set forth in Exhibit 2;
 
(v) evidence of payment to Buyer, by wire transfer in immediately available
funds to an account designated by Buyer, of the Estimated Purchase Price, if the
Estimated Purchase Price is negative;
 
(vi) if any Commitments are listed on Schedule 1.1(f) to this Agreement, an
Assignment and Assumption of Contracts Agreement in substantially the form set
forth in Exhibit 3;
 
(vii) a Bill of Sale in substantially the form set forth in Exhibit 4;
 
(viii) special warranty deeds conveying the Owned Real Property to the Buyer, in
accordance with Section 5.9 of this Agreement;
 
(ix) an Assignment, Transfer and Appointment of Successor Custodian Agreement
with respect to the transfer of the IRA Accounts in substantially the form set
forth in Exhibit 5;
 
(x) such other bills of sale, assignments and other instruments and documents as
counsel for Buyer may reasonably require as necessary or desirable for
transferring, assigning and conveying to Buyer good and marketable title to the
Assets;
 
(xi) listings of the Deposit Liabilities as of the close of business on the
Measurement Date (the “Deposit Listings”) in a paper format or utilizing such
other method of information transfer as the parties may mutually agree, which
Deposit Listings shall include account number, outstanding principal balance,
accrued interest, and other pertinent information;
 
 
 

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(xii) listings of the Loans as of the close of business on the Measurement Date
(the “Loan Listings”) in a paper format or utilizing such other method of
information transfer as the parties may mutually agree, which Loan Listings
shall include account number, outstanding principal balance, accrued interest,
and other pertinent information; a single assignment instrument for all, notes
and liens for real estate and other secured loans; original promissory notes or
other appropriate documents evidencing each Loan endorsed or executed allonges
with respect to each note, “without recourse” and, except as otherwise
specifically provided in this Agreement, without warranties except for
warranties regarding title thereto and right and authority to transfer; and such
other documents evidencing the transfer to Buyer all of Seller’s interest in all
of the Loans to be transferred at the Closing, the security therefor and the
other rights of Seller pertaining thereto as Buyer shall have reasonably
requested;
 
(xiii) such Records as are capable of being delivered to Buyer (it being
understood that after the Closing Date, Seller shall provide Buyer with
reasonable access to any Records which are not capable of being transferred to
Buyer at the Closing and will thereafter promptly transfer such Records to
Buyer);
 
(xiv) a Limited Power of Attorney in the form of Exhibit 6 hereto to effectuate
the assignment of the Loans (including the security interest in all collateral
therefor);
 
(xv) state, county and, if applicable, municipal transfer tax declarations;
 
(xvi) a pro forma title insurance policy for each Owned Real Property;
 
(xvii) the Landlord Consents and Consents listed on Schedule 2.7(a)(xvii);
 
(xviii) estoppels from the landlords of the Leased Real Property and from all
tenant and subtenants under the Tenant Leases;
 
(xix) Financial Statements of the Branch Offices as of the Measurement Date; and
 
(xx) such other documents as Buyer reasonably determines are necessary to
consummate the transactions contemplated hereby in accordance with the terms and
conditions of this Agreement.
 
(b) At the Closing, Buyer shall deliver to Seller:
 
(i) a certificate signed by an appropriate officer of Buyer stating that all of
the conditions set forth in Sections 8.1(a), 8.1(b) and 8.1(d) have been
satisfied or waived as provided therein;
 
(ii) a certified copy of currently effective resolutions of the Board of
Directors of Buyer authorizing Buyer’s execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby;
 
(iii) an Assignment and Assumption of Deposit Liabilities Agreement in
substantially the form set forth in Exhibit 2;
 
 
 

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(iv) evidence of payment to Seller, by wire transfer in immediately available
funds to an account designated by Seller, of the Estimated Purchase Price, if
the Estimated Purchase Price is positive;
 
(v) if any Commitments are listed on Schedule 1.1(f), an Assignment and
Assumption of Contracts Agreement in substantially the form set forth in Exhibit
3; and
 
(vi) an Assignment, Transfer and Appointment of Successor Custodian Agreement
with respect to the transfer of the IRA Accounts in substantially the form set
forth in Exhibit 5.
 
 
ARTICLE III                                
 
REPRESENTATIONS AND WARRANTIES OF SELLER
 
Except as set forth in the specific Section of the written statement identified
as the disclosure schedule attached to this Agreement (“Disclosure Schedule”)
relating to a specific and corresponding Section below, Seller represents and
warrants to Buyer, as of the date hereof and as of the Closing Date, as follows:

Section 3.1 Organization.  Seller is a Missouri state chartered bank duly
organized, validly existing and in good standing under the laws of the State of
Missouri, the deposits of which are insured by the Federal Deposit Insurance
Corporation (“FDIC”).  Seller has the corporate power and authority to carry on
its business, as the same is being conducted at the Branch Offices, and to own
or use the properties and assets that it purports to own or use, including as
related to the Branch Offices.
 
Section 3.2 Authorization.  Except  for the Regulatory Approvals, the Landlord
Consents and such other Consents as are listed on Schedule 3.2, Seller is not
required to give any notice to, make any filing with, or obtain any
authorization or consent of any kind of any third party, including the
shareholders of Seller, in order to execute and deliver this Agreement or
consummate the transactions contemplated hereby, including the sale, transfer,
and assignment of the Assets and the Assumed Liabilities.  Seller has all
requisite corporate power and authority to execute and deliver this Agreement
with Buyer, to carry out and perform its obligations under this Agreement and to
consummate the transactions contemplated hereby.  The board of directors of
Seller has, by all appropriate action, approved this Agreement and the
transactions contemplated herein and authorized the execution and delivery
hereof on its behalf by its duly authorized officers and the performance by
Seller of its obligations hereunder.  This Agreement has been duly and validly
executed and delivered by Seller and constitutes a legal, valid and binding
obligation of Seller, enforceable against Seller in accordance with its terms,
subject to bankruptcy, insolvency, reorganization or other similar laws
affecting the enforcement of creditors’ rights generally and to general
principles of equity, whether considered in a proceeding at law or in equity.
 
Section 3.3 Non-Contravention; Consents.  Subject to the Regulatory Approvals,
Landlord Consents and the Consents listed on Schedule 3.2, the execution and
delivery of this Agreement by Seller, and the consummation of the transactions
contemplated hereby by Seller, will not, directly or indirectly (a) contravene,
conflict with, or result in a violation of (i) any provision of the articles of
incorporation or bylaws of Seller or (ii) any resolution adopted by the board of
directors of Seller; (b) violate in any material respect any Order, writ,
judgment, injunction, law (including common law), statute, rule or regulation
(each, an “Applicable Law”) applicable to Seller’s execution and delivery of,
and performance under, this Agreement or to the Branch Offices or any of their
respective properties or assets; or (c) require on the part of the Seller any
Consent.
 
 
 

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Section 3.4 Compliance with Law.  Seller has all licenses, franchises, permits
and other Governmental Authorizations that are legally required to enable it to
conduct its business at the Branch Offices as presently conducted in all
material respects.  The Branch Offices are in compliance in all material
respects with all Applicable Laws (a) that regulate or are concerned in any way
with the ownership and operation of the Branch Offices or the business of
banking or of acting as a fiduciary, including those laws and regulations
relating to the investment of funds, the taking of deposits, including the
Deposit Liabilities, the lending of money, including the Loans, the collection
of interest, the extension of credit and the location and operation of banking
facilities or (b) that otherwise relate to or affect the business or assets of
the Branch Offices or the assets owned, used, occupied or managed by the Branch
Offices; provided that to Seller’s Knowledge, the Branch Offices are in
compliance in all material respects with Applicable Laws related to intellectual
property infringement.  To Seller’s Knowledge, the business and operations of
the Branch Offices (including the origination and administration of the Loans
and Deposit Liabilities) have been and are being conducted in accordance with
all Applicable Laws of all Governmental Entities, including all regulations
pertaining to the receipt of customer information required by state and federal
law concerning taxpayer identification numbers, social security numbers and the
like, except such conduct as would not have a Seller Material Adverse
Effect.  To Seller’s Knowledge, no event has occurred or circumstances exist
that constitutes a material violation by Seller in the operation of the Branch
Offices, or a failure on the part of Seller with respect to the Branch Offices
to comply with, any Applicable Law in any material respects.
 
Section 3.5 Regulatory Enforcement Actions.  Except as set forth on Schedule
3.5, Seller is not subject to, and has not received any notice or advice that it
may be subject to, any order, agreement, memorandum of understanding, formal
proceeding, investigation or other regulatory enforcement action or proceeding
with or by any federal or state agency charged with the supervision or
regulation of banks or engaged in the insurance of deposits of banks or any
other Governmental Entity having supervisory or regulatory authority (a) with
respect to Seller or (b) which could have a Seller Material Adverse Effect on
the operation of the Branch Offices after the Closing Date.
 
Section 3.6 Community Reinvestment Act.  Seller is in compliance with the
Community Reinvestment Act and its implementing regulations, and there are no
pending actions, proceedings or, to Seller’s Knowledge, allegations by any
person or Governmental Entities which may cause any applicable Governmental
Entities to deny any application required to be filed pursuant to
Section 7.2.  To Seller’s Knowledge, Seller has not received any notices of and
has not been made aware of any planned or threatened objection by any community
group to the transactions contemplated hereby.  As of the date of this
Agreement, Seller was rated “Satisfactory” or “Outstanding” following its most
recent Community Reinvestment Act examination by the regulatory agency
responsible for its supervision.
 
Section 3.7 Litigation.  Except as set forth on Schedule 3.7, there is no
pending Proceeding that has been commenced by or against Seller that relates to
or arises form the business conducted by the Branch Offices.  To Seller’s
Knowledge, (a) no such Proceeding has been threatened and (b) no event has
occurred or circumstances exist that may give rise to or serve as a basis for
the commencement of any such Proceeding.  There is no Order to which Seller, or
any of the assets owned or used by Seller, is subject that would have a Seller
Material Adverse Effect.  Seller is not subject to any Order that relates to the
business of, or any of the assets owned or used by, the Branch Offices.
 
 
 

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Section 3.8 Title to Assets.  Seller has good and marketable title to or, in the
case of any leased Personal Property and Leased Real Property, good leasehold
interest in, all of the Assets in each case free and clear of all Encumbrances,
other than Permitted Encumbrances.  All Personal Property is in good condition,
reasonable wear and tear excepted, and is usable in the Ordinary Course of
Business.  Any Personal Property held under lease by Seller is held by Seller
under a valid and enforceable lease as against Seller with such exceptions as
are not material and do not interfere in any material respect with the use made
and proposed to be made of such property by Seller.  Such enforceability is
subject to bankruptcy, insolvency, reorganization, moratorium, receivership,
conservatorship and similar laws relating to the rights and remedies of
creditors, as well as to general principles of equity.  Except as set forth on
Schedule 3.8, the Assets that Buyer will acquire on the Closing Date represent
all of the assets necessary to conduct the business of the Branch Offices as
presently conducted and represent all of the assets used or intended for use in
the conduct of the business of the Branch Offices.
 
Section 3.9 Warranties of Condition.  Except as otherwise specifically provided
herein, the Seller makes no warranty of the condition of the Real Property and
the Personal Property which is sold “AS IS”.  Any warranty of condition of the
Real Property or the Personal Property express, implied or statutory, whether of
merchantability, fitness for a particular use or purpose, or otherwise, all of
which warranties is hereby disclaimed by Seller.
 
Section 3.10 Environmental Matters.  Except as set forth in Schedule 3.10, with
respect to the Branch Offices and the Real Property on which each Branch Office
is located:
 
(a) The Branch Offices, the Real Property and their operations are and at all
times during Seller’s ownership or operation have been in material compliance
with all Environmental Laws;
 
(b) To Seller’s Knowledge, at all times prior to Seller’s ownership or
operation, the Branch Offices, the Real Property and their operations have been
in material compliance with all Environmental Laws;
 
(c) Seller is not aware of nor has received notice of, any past or present
conditions, events, activities, practices or incidents that may interfere with
or prevent the compliance of the Branch Offices or the Real Property with all
Environmental Laws;
 
(d) There are no Proceedings pending, or to Seller’s Knowledge, threatened, nor
have there been any past Proceedings (or, in the case of Proceedings during any
period prior to Seller’s ownership or operation, any past Proceedings to
Seller’s Knowledge) relating to the Real Property, or Seller in connection with
the Real Property or the Branch Offices, under any Environmental Law, including
any notices, demand letters or requests for information from any federal or
state Governmental Entity;
 
(e) Seller has not received any written notice of any violation of or obligation
under or liability or Encumbrance pursuant to any Environmental Laws with regard
to the Branch Offices or the Real Property;
 
(f) Except as is in compliance with applicable Environmental Laws, no Hazardous
Materials exist at, in, on or under, about, within, or emanate from any Branch
Offices or the Real Property, nor (in the case of any period during or, to
Seller’s Knowledge, prior to Seller’s ownership or operation of any Branch
Office or the Real Property) have any Hazardous Materials previously existed at,
in, on, under, about, within or been used, generated, stored, transported,
disposed of, on or released from the Real Property;
 
 
 

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(g) To Seller’s Knowledge no asbestos, mold or lead based paint is contained in
any Branch Office, except in such form and amounts as have not and would not
reasonably be expected to create any liability in its current condition under
any Environmental Law;
 
(h) To Seller’s Knowledge, there are no underground or above ground storage
tanks located at any Branch Office or Real Property;
 
(i) Seller is not required to have any Governmental Authorization under
Environmental Laws in connection with any of the Branch Offices;
 
(j) There are no ongoing, and to the Seller's Knowledge, there have been no and
there are no planned environmental investigations, remediations or other
Hazardous Material response actions at, or relating, to Branch Offices or Real
Property and such property is not currently listed on or to Seller’s Knowledge
proposed for listing on any listing on the United States Environmental
Protection Agency's National Priorities List or any other analogous state
governmental list of properties or sites that require investigation, remediation
or other Hazardous Material response action.
 
(k)  Seller has not received any report reflecting the results of any
environmental assessment or survey (including an asbestos survey) performed on
the Branch Offices or the Real Property which indicated the existence of or the
potential for any adverse environmental condition; and
 
(l) Seller has delivered to Buyer on or prior to the date hereof (or, at the
latest, within ten days following the date of this Agreement), true and complete
copies of all documents, records, and information in its possession or control
that identify environmental liabilities and other environmental matters,
including, without limitation, previously conducted environmental site
assessments, reports, studies, surveys and other similar documents or
information, including, without limitation, related correspondence, relating to
each of the Real Properties.
 
For purposes of this Agreement, “Environmental Laws” mean all federal, state and
local laws, regulations, statutes, ordinances, codes, rules, decisions, orders
or decrees relating or pertaining to the public health and safety or the
environment, or otherwise governing the generation, use, handling, collection,
treatment, storage, transportation, recovery, recycling removal, discharge or
disposal of Hazardous Materials, including (i) the Solid Waste Disposal Act, 42
U.S.C. 6901 et seq., as amended “SWDA,” also known as “RCRA” for a subsequent
amending act), (ii) the Comprehensive Environmental Response, Compensation and
Liability Act, 42 U.S.C. §9601 et seq., as amended (“CERCLA”), (iii) the Clean
Water Act, 33 U.S.C. § 251 et seq., as amended (“CWA”), (iv) the Clean Air Act,
42 U.S.C. § 7401 et seq., as amended (“CAA”), (v) the Toxic Substances Control
Act, 15 U.S.C. § 2601 et seq., as amended (“TSCA”), (vi) the Emergency Planning
and Community Right to Know Act, 15 U.S.C. § 2601 et seq., as amended
(“EPCRKA”), and (vii) the Occupational Safety and Health Act, 29 U.S.C. § 651 et
seq., as amended, solely as it relates to hazardous materials.  For purposes of
this Agreement, “Hazardous Material” means, without limitation, (i) any
“hazardous wastes” as defined under RCRA, (ii) any “hazardous substances” as
defined under CERCLA, (iii) any toxic pollutants as defined under CWA, (iv) any
hazardous air pollutants as defined under CAA, (v) any hazardous chemicals as
defined under TSCA, (vi) any hazardous substances or extremely hazardous
substances as defined under EPCRKA, (vii) asbestos or asbestos containing
materials, regardless of condition, (viii) polychlorinated biphenyls, (ix)
underground storage tanks, whether empty, filled or partially filled with any
substance, (x) any substance the presence of which on the property in question
is prohibited or regulated under any Environmental Law, and (xi) any other
substances which under any Environmental Law requires special handling or
notification of or reporting to any federal, state or local Governmental Entity
in its generation, use, handling, collection, treatment, storage, re-cycling,
treatment, transportation, recovery, removal, discharge or disposal.
 
 
 

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Section 3.11 Employee Matters.
 
(a) Schedule 3.11(a) lists the names of all employees of Seller and its
Affiliates working at the Branch Offices (the “Branch Employees”) as of the date
within ten days of the date hereof and states for each such individual his or
her position, exempt or non-exempt status (for purposes of the Fair Labor
Standards Act and comparable local wage hours), active or inactive status (and,
if inactive, the reason therefor and the expected return date), current annual
salary or wage rate, target incentive opportunity and projected incentive
pay-out for 2010 (if any), actual incentive compensation for 2010 (if any),
period of service and whether such Branch Employee is a part-time or full-time
employee, and the information contained in such list remains true and complete
as of the date hereof.  All Branch Employees who continue to be employed by the
Seller and its Affiliates immediately prior to the Closing Date will be
terminated by Seller on the Closing Date and Seller will pay such Branch
Employees in accordance with Applicable Law and the terms of the arrangement
pursuant to which such amounts are payable all accrued vacation or any type of
accrued compensation or fringe benefits owed the Branch Employees.
 
(b) No causes of action, complaints, claims, charges or administrative
investigations for unfair labor practices, wrongful discharge, violation of
employment contract or employment claims based upon any municipal, state or
federal law, statute, public policy, order or regulation is pending, or to
Seller’s Knowledge, threatened against Seller or its Affiliates with regard to
the Branch Offices.  Except as set forth on Schedule 3.11(b), there are no
suits, claims, grievances, or causes of action pending, or, to Seller’s
Knowledge, threatened, against Seller (whether in court or before an
administrative agency) arising out of or related to Seller’s employment,
employment status or classification, termination of employment, or consideration
for employment of the Branch Employees at the Branch Offices.
 
(c) In relation to the Branch Offices, Seller and its Affiliates have complied
in all material respects with all laws (including reporting and disclosure
requirements) relating to the employment of labor, including provisions relating
to wages, hours, bonuses, commissions, overtime pay, holiday pay, sick pay,
vacation pay, collective bargaining, occupational safety, equal employment, fair
employment practices, discrimination, plant closings and mass layoffs,
immigration, legal qualification of employment status, classification of Branch
Employees as exempt or non-exempt for purposes of the Fair Labor Standards Act
and comparable local wage and hour laws, and the payment of social security or
other taxes, and worker’s compensation or other insurance premiums, and Seller
has not received any notice alleging that it has failed to comply in any respect
with such laws.
 
(d) In relation to the Branch Offices, Seller and its Affiliates have not
committed any unfair labor practices and there are no unfair labor practice
charges or complaints against the Seller or its Affiliates pending, or to
Seller’s Knowledge, threatened, before the National Labor Relations Board or any
comparable Governmental Entity.
 
 
 

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Section 3.12 Employee Contracts.
 
(a) Except as set forth on Schedule 3.12(a), there are no employment contracts,
agreements or arrangements, including any confidentiality, noncompetition, or
proprietary rights agreement, between any Branch Employee and Seller, or to
Seller’s Knowledge, between any such Branch Employee and any third
party.  Seller is not a party to any contract or arrangement with any union
relating to the business conducted at the Branch Offices and Seller is not aware
of any pending organizational efforts at the Branch Offices.  There is no labor
strike, arbitration, dispute, or slowdown or stoppage pending, or to Seller’s
Knowledge, threatened, involving the Branch Employees of the Branch Offices, and
Seller is unaware of any efforts during the past three years to unionize or
organize any employees at the Branch Offices.  Seller has not entered into any
agreement or otherwise made any commitment or representation to any Branch
Employees with respect to their employment by Buyer.
 
(b) As a result of the transactions contemplated by this Agreement, Buyer will
not incur any liability under any severance agreement, deferred compensation
agreement, employment agreement, or similar agreement or plan to which Seller is
a party or to which it is bound in respect of any Branch Employees of the Branch
Offices.  Seller agrees that Buyer will not be bound to the terms of any
employment, management, consulting, reimbursement, retirement, early retirement
or similar agreement, whether existing on the Closing Date or in discussion or
negotiation, with any Branch Employees of the Branch Offices as to which Seller
is a party or to which Seller is bound that are inconsistent with the terms of
this Agreement.
 
Section 3.13 Employee Benefits.  There are no liens or other claims which affect
or could affect the Assets of any nature, whether at law or in equity, asserted
or unasserted, perfected or unperfected, arising out of or relating to any
employee, officer, or director of Seller, or the operation, sponsorship or
participation of any such persons or by Seller in any employee benefit plan,
program, procedure or other employee benefit practice, whether or not subject to
the Employee Retirement Insurance Security Act of 1974 (ERISA).  There are no
liabilities, breaches, violations or defaults under any “Employee Welfare
Benefit Plan” or “Employee Pension Benefit Plan” (as such terms are defined in
Section 3(1) and Section 3(2) of ERISA, respectively) or any other compensatory
or benefit arrangement, plan, or program or contract, whether or not subject to
ERISA, sponsored, maintained or contributed to by Seller or any of its
Affiliates (collectively, the “Seller Plans”) that would subject the Assets,
Buyer, its employee benefit plans, or any fiduciaries of Buyer’s employee
benefit plans to any Tax, penalties or other liabilities.  Seller will retain
all liabilities and assume all obligations with regard to all Seller Plans.
 
Section 3.14 Taxes.
 
(a) With respect to all interest bearing accounts assigned to Buyer, the records
of Seller transferred to Buyer will contain all information and documents
(including, without limitation, properly completed Forms W-9) necessary to
comply with all information reporting and Tax withholding requirements under
federal and state laws, rules and regulations, and such records identify with
specificity all accounts subject to backup withholding under Internal Revenue
Code of 1986, as amended (the “Code”).
 
(b) All Tax Returns required to be filed on or before the Closing Date by Seller
and its Affiliates with respect to any Taxes payable in respect of the Assets or
Assumed Liabilities or related to the Branch Offices have been timely filed with
the appropriate Governmental Entity in all jurisdictions in which such Tax
Returns are required to be filed and are true and correct in all material
respects.
 
(c) All Taxes owed by Seller and its Affiliates with respect to the Assets or
Assumed Liabilities or related to the Branch Offices (whether or not shown on
any Tax Return) that are required have been timely paid in full.
 
(d) Seller and its Affiliates have withheld and paid all Taxes required to have
been withheld and paid in connection with any amounts paid to any employee,
independent contractor, creditor, stockholder, or other third party with respect
to the Assets or the Assumed Liabilities or related to the Branch Offices.
 
(e) There are no claims, assessments, levies, administrative proceedings or
lawsuits pending or, to Seller’s Knowledge, threatened by any taxing authority
with respect to the Assets or Assumed Liabilities or related to the Branch
Offices; and no audit or investigation of any Tax Return of Seller or its
Affiliates with respect to the Assets or Assumed Liabilities or related to the
Branches is currently underway or, to Seller’s Knowledge, threatened.
 
(f) As used in this Agreement, the term “Taxes” shall mean all taxes, charges,
fees, levies or other like assessments, however denominated, including any
interest, penalties or other additions to tax that may become payable in respect
thereof and including any obligation to indemnify or otherwise assume or succeed
to the tax liability of another Person, imposed by any federal, territorial,
state, local or foreign government or any agency or political subdivision of any
such government, which taxes shall include, without limiting the generality of
the foregoing, all income or profits taxes (including, but not limited to,
federal income taxes and state income taxes), real property gains taxes, payroll
and employee withholding taxes, unemployment insurance taxes, social security
taxes, sales and use taxes, ad valorem taxes, excise taxes, franchise taxes,
gross receipts taxes, business license taxes, occupation taxes, real and
personal property taxes, stamp taxes, environmental taxes, transfer taxes,
workers’ compensation, and other governmental charges, and other obligations of
the same or of a similar nature to any of the foregoing, which the Seller or its
subsidiaries or Affiliates is required to pay, withhold or collect.  As used in
this Agreement, the term “Tax Returns” shall mean all reports, estimates,
declarations of estimated tax, information statements and returns relating to,
or required to be filed in connection with, any Taxes, including any schedule or
attachment thereto, and including any amendment thereof, and including
information returns or reports with respect to backup withholding and other
payments to third parties.
 
Section 3.15 Insurance.  Seller maintains in full force and effect insurance on
the Assets in such amounts and against such risks and losses as are (based on
advice of its insurance broker) customary and adequate for comparable entities
engaged in the same business and industry.  Schedule 3.15 lists all insurance
policies covering the material properties, assets, employees and operations of
the Branch Offices (including policies providing property, casualty, liability,
and workers’ compensation coverage).
 
Section 3.16 Financial Statements.  Seller has furnished Buyer with true and
complete copies of unaudited statement of financial condition of the Branch
Offices (the “Financial Statements”) as of April 30, 2010 (the “Balance Sheet
Date”) and the related statements of income (the “Branch Financial Statements”),
copies of which are attached as Schedule 3.16.  The Branch Financial Statements
have been prepared on a consistent basis and in accordance with applicable
regulatory requirements.  The Branch Financial Statements present fairly in all
material respects the financial position of the Branch Offices at the dates
shown and the results of its operations and changes in financial position for
the periods then ended.
 
Section 3.17 Absence of Certain Changes or Events.  Since the Balance Sheet
Date, Seller has conducted its business at the Branch Offices only in the
ordinary course and has not, other than in the Ordinary Course of Business and
consistent with past practices and safe and sound banking practices, taken any
of the actions or permitted to occur any events (a) that has had or could
reasonably be expected to have a Seller Material Adverse Effect or (b) specified
in Sections 5.1(b)(i) through (xiii).
 
Section 3.18 Undisclosed Liabilities.  The Branch Offices have no liabilities
except for (a) liabilities set forth in the Branch Financial Statements, (b)
liabilities that have arisen in the Ordinary Course of Business after the
Balance Sheet Date and (c) Commitments made in the Ordinary Course of Business.
 
 
 

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Section 3.19 Deposit Liabilities.
 
(a) Seller has provided to Buyer a true and accurate data file of all deposits
(including ESAs, IRAs and Keogh Accounts), and related information, which are at
the Branch Offices, which data shall be updated at and as of a date first, not
earlier than 30 days prior to the Closing Date and, second, not earlier than
five days prior to the Closing Date to list separately Deposits to be assumed
under this Agreement and deposits that are not being assumed under this
Agreement.
 
(b) The Deposits are insured to applicable limits by the FDIC in accordance with
the Federal Deposit Insurance Act, 12 U.S.C. § 1813, and Seller has paid all
assessments and opt-in fees and has filed all reports required to be paid or
filed by it to or with the FDIC concerning the Deposits.
 
(c) The Deposits were solicited and currently exist in material compliance with
all applicable requirements of federal laws and regulations promulgated
thereunder and to the extent, if any, that their applicability to Seller is not
preempted by federal laws and regulations, state and local laws and regulations
promulgated thereunder (for purposes of this clause, a Deposit would not be in
material compliance if, among other things, the noncompliance subjects the
depository institution to any penalty or liability other than the underlying
liability to pay the Deposit).
 
(d) Seller has the right to transfer or assign each of the Deposits to Buyer,
subject to any pledges, liens, judgments, court orders and restrictions on
transfer.
 
(e) Each of the agreements relating to the Deposits has been duly authorized,
executed, and delivered, and is valid, binding, and enforceable upon its
respective parties in accordance with its terms except as enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium, or other similar
laws affecting creditors’ rights, and by the exercise of judicial discretion in
accordance with general principles applicable to equitable and similar remedies.
 
(f) Except as set forth on Schedule 3.19(f), all agreements relating to the
Deposits other than certificates of deposit legally permit Buyer to unilaterally
terminate or modify such agreements within 30 days after the Closing Date
without the consent of the depositor or depositors and without penalty, subject
to Applicable Law, delivery of any notice as may be specified in such agreements
and any applicable provisions in such agreements.
 
Section 3.20 Loans.
 
(a) Seller has provided to Buyer a true and accurate data file of all Loans,
including the outstanding principal balance of and the amount of accrued and
unpaid interest and fees on such Loans, prepared as of a date within ten days
prior to the date of this Agreement, which data shall be updated at and as of
the Closing Date, and, in each case as updated, shall be true and accurate in
all material aspects as of such date.
 
(b) Each Loan included in the Assets was made or acquired by Seller or its
predecessor in the Ordinary Course of Business.  Except as set forth on Schedule
3.20(b), none of the loans of the Branch Offices (including the Loans) consist
of loans between Seller, on the one hand, and any employee or Affiliate of
Seller or any of Seller’s Affiliates.
 
(c) Except as set forth on Schedule 3.20(c), none of the Loans are presently
serviced by third parties, and there are no obligations, agreements or
understandings whatsoever that could result in any Loan becoming subject to any
such third party servicing.
 
 
 

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(d) To Seller’s Knowledge, there are no misrepresentations of material facts
made by officers or employees of Seller in the credit files relating to the
Loans, provided that the term “facts” shall not include judgments or opinions of
such officers or employees which were in good faith or information which is
reflective of information supplied by the borrower or other third parties.
 
(e) With respect to each Loan:
 
(i) Such Loan was solicited, originated, administered, serviced and currently
exists in material compliance with all applicable requirements of federal laws
and regulations promulgated thereunder, including, as applicable, any written
United States Small Business Administration or United States Department of
Agriculture service guidelines, and to the extent, if any, that their
applicability to Seller is not preempted by federal laws and regulations, state
and local laws and regulations promulgated thereunder (for purposes of this
clause (i), a Loan would not be in material compliance if the noncompliance
adversely affects the value or collectibility of the Loan or subjects the lender
to any penalty or liability);
 
(ii) Each note, agreement or other instrument evidencing a Loan and any related
security agreement and other document securing, governing or otherwise relating
to such Loan (including, without limitation, any guaranty or similar instrument)
is true, genuine and, in all material respects, complete, and constitutes a
valid, legal and binding obligation of the obligor named therein, enforceable in
accordance with its terms, subject as to enforcement to bankruptcy, insolvency,
reorganization, moratorium, laws governing fraudulent conveyance or equitable
subordination principles and other laws of general applicability relating to or
affecting creditors’ rights generally, and all actions necessary to perfect any
related security interest in favor of Seller have been duly taken;
 
(iii) Except as set forth on Schedule 3.20(e)(iii), such Loan (A) to the extent
secured or purported to be secured by a first priority lien in favor of Seller,
is secured by a valid and enforceable, and duly perfected, first priority lien
in favor of Seller in the collateral therefor, which lien is assignable and (B)
contains customary and enforceable provisions such that the rights and remedies
of the holder thereof shall be adequate for the practical realization against
any collateral therefor;
 
(iv) There has been no material modification, amendment or supplement to or
material waiver of the terms of the applicable loan documents except as
reflected in writing in the loan file made available to Buyer in respect of such
Loan;
 
(v) Such Loan is accruing interest in accordance with its terms;
 
(vi) Except as set forth on Schedule 3.20(e)(vi), such Loan is not pledged to a
third party or otherwise encumbered, and no other party has filed a UCC
financing statement in connection therewith;
 
(vii) Except as set forth on Schedule 3.20(e)(vii), Seller is in possession of
all (A) original notes or lost note affidavits, or (B) mortgages or certified
copies of such mortgages and financing statements (or other lien filing
documents), provided that such mortgages and financing statements (or other lien
filing documents) have been returned by the local recording office;
 
(viii) To Seller’s Knowledge, there is no valid claim or valid defense
(including the defense of usury) by any borrower to the enforcement of such Loan
or a valid right of setoff or rescission;
 
 
 

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(ix) No claim or defense (including the defense of usury) to the enforcement of
a Loan or a valid right of setoff or rescission has been asserted with respect
to any Loan by the applicable borrower(s) under such Loan or, to Seller’s
Knowledge, by any other Person;
 
(x) Neither Seller nor, to Seller’s Knowledge, any predecessor has taken or
failed to take any action that would entitle any obligor or other party to
assert successfully any claim against Seller or Buyer (including, without
limitation, any right not to repay any such obligation or any part thereof);
 
(xi) Such Loan was made substantially in accordance with Seller’s or Seller’s
predecessor’s standard underwriting and documentation guidelines as in effect at
the time of its origination, and has been administered substantially in
accordance with Seller’s or, to Seller’s Knowledge, Seller’s predecessor’s
standard loan servicing and operating procedures as in effect from time to time;
 
(xii) Except as set forth on Schedule 3.20(e)(xii), Seller may transfer or
assign such Loan to Buyer without the approval or consent of any obligor
thereunder and without creating any breach of any Commitment pursuant to which
another party has purchased or is participating in the credit of which the Loan
is a part (each, a “Participation Agreement”);
 
(xiii) Such Loan is not as of the date hereof, or is or has not been during the
period beginning on the date hereof and ending on and as of the Closing Date, 30
calendar days or more delinquent (without giving effect to any grace period,
waiver, forbearance, reservation of rights, extension, modification or
amendment);
 
(xiv) Neither the borrower nor any guarantor of the Loan is in bankruptcy and,
to Seller’s Knowledge, there are no facts, circumstances or conditions with
respect to such Loan, the collateral therefor or the borrower’s credit standing,
that could reasonably be expected to cause such Loan to become delinquent or
adversely affect the collectibility, the value or the marketability of such
Loan;
 
(xv) No notice of default has been given or received by Seller with respect to
any Loan and Seller has not received any notice of any violation of law with
respect to any Loan or any collateral for any Loan;
 
(xvi) Except as set forth on Schedule 3.20(e)(xvi), there is no pending, or to
Seller’s Knowledge, threatened, litigation or claims which may affect in any way
the title or interest of the Seller or the borrower in and to such Loan, the
collateral for such Loan and the promissory note or the mortgage or deed of
trust;
 
(xvii) There are no threatened or pending foreclosures, total or partial
condemnation (to Seller’s Knowledge) or repossession proceedings or insurance
claims (to Seller’s Knowledge) with respect to such Loan or the collateral for
such Loan; and
 
(xviii) Seller has not directed, controlled or overseen the management of
environmental matters of any borrower or any real estate in which the Seller in
connection with the Branches holds or has held a security interest and which
constitutes a Loan so as to cause the Seller to act outside the exclusion under
42 U.S.C. § 9601(20)(E) or any other analogous provisions under applicable
Environmental Laws.
 

 
 

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Section 3.21 Owned Real Property and Leased Real Property.
 
(a) The Real Property listed on Schedule 1.1(a) and Schedule 1.1(b) contain a
true and correct list and brief description of all real property used in
connection with the business of the Branch Offices.  With respect to each parcel
of the Owned Real Property, Seller has good and marketable fee title to such
parcel of Owned Real Property free and clear of any Encumbrance except for
Permitted Encumbrances.  With respect to each Leased Real Property, Seller has a
good and valid leasehold interest in such Leased Real Property on and subject to
the terms of its applicable Real Estate Lease, it being understood that Seller
makes no representations or warranties about matters affecting the respective
landlords’ fee title to the Leased Real Properties.  Except as set forth on
Schedule 3.21(a), there are no tenants or other parties claiming by, through or
under Seller that have a possessory right in and to any space in respect of the
Real Property (all such agreements listed on Schedule 3.21(a), the “Tenant
Leases”).  Seller has delivered to Buyer a true, correct and complete copy of
each Tenant Lease as amended, modified or supplemented as of the date
hereof.  Each Tenant Lease is an existing legal, valid and binding obligation of
Seller and, to Seller’s Knowledge, each other party thereto, subject to
bankruptcy, insolvency, reorganization, moratorium, receivership,
conservatorship and similar laws relating to the rights and remedies of
creditors, as well as to general principles of equity; and there does not exist
with respect to Seller’s obligations thereunder, or, to Seller’s Knowledge, with
respect to the obligations of the tenant thereunder, any default, or event or
condition which constitutes or, after notice or passage of time or both, would
constitute a default, on the part of Seller or the tenant under any such Tenant
Lease.
 
(b) With respect to the Owned Real Property and the Leased Real Properties:
 
(i) there are no pending or, to Seller’s Knowledge, threatened, condemnation
proceedings, claim of violation of zoning laws, governmental investigation,
lawsuits, or administrative actions relating to the Owned Real Property,
Seller’s interest in the Leases or the Leased Real Properties, or, to Seller’s
Knowledge, in the case of each Leased Real Property, the real property parcel of
which such Leased Real Property forms a part, affecting, or which might affect,
adversely in any material respect, the current use, occupancy, or value thereof;
 
(ii) there are no outstanding options or rights of first refusal to purchase any
parcel of the Owned Real Property, the Leases or Seller’s interest in the Leased
Real Properties, or any portion thereof or interest therein, or, to Seller’s
Knowledge, in the case of any Leased Real Property, the real property parcel of
which such Leased Real Property forms a part, or any portion thereof or interest
therein except, in the case of the Leased Real Properties, such options or
rights as set forth in the Leases;
 
(iii) no written notice of any violation of zoning laws, building or fire codes
or other statutes, ordinances, or regulations or of restrictive covenants
relating to the use or operation of the Real Property has been received by
Seller which has not been corrected and, if required, accepted in writing by the
applicable Governmental Entity, and Seller has not undertaken or completed any
construction or improvements on the Real Property within the past 150 days which
could result in the imposition of any mechanics, materialmen or other similar
liens on the Real Property (other than minor repairs made in the Ordinary Course
of Business, all of which have been paid in full);
 
(iv) there is no pending or, to Seller’s Knowledge, contemplated rezoning
proceeding or special assessment affecting the Real Property or, to Seller’s
Knowledge, in the case of each Leased Real Property, the real property parcel of
which such Leased Real Property forms a part;
 
 
 

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(v) to Seller’s Knowledge, the Real Property is not subject to any special tax
valuation or special tax exemption, which upon a change in use or ownership of
the Real Property will result in a “rollback tax” or similar assessment, and to
Seller’s Knowledge, with respect to any real property parcel of which any Leased
Real Property forms a part, such parcel is not subject to any special tax
valuation or special tax exemption, which upon a change in use or ownership of
such parcel will result in a “rollback tax” or similar assessment that would be
payable by Seller under any Lease;
 
(vi) to Seller’s Knowledge, (A) access to the Owned Real Property, and in the
case of any Leased Real Property, the real property parcel of which the Leased
Real Property forms a part, is available over public streets, (B) all water,
sewer, gas, electric, telephone, cable, drainage and other utility equipment,
facilities and services required by Applicable Laws or necessary for the current
operation of the Real Property are installed, connected and adequate to serve
the Real Property for their current use and (C) all branch utility lines
servicing the Real Property are located either within the boundaries of the
applicable Owned Real Property, or in the case of any Leased Real Property, the
real property parcel of which such Leased Real Property forms a part, within
lands dedicated to the public use or within recorded easements for such purpose,
and are serviced and maintained by the appropriate public or quasi-public
entity;
 
(vii) to Seller’s Knowledge, Seller possesses all rights, privileges, licenses,
franchises, permits and other authorizations (including certificates of
occupancy, if applicable) that are material to the current use, occupancy, and
operation of the Real Property;
 
(viii) all permits that are material to the current use, occupancy and operation
of the Real Property and, to Seller’s Knowledge, in the case of any Leased Real
Property, the real property parcel of which such Leased Real Property forms a
part, are in full force and effect and Seller has not received written notice of
any pending or threatened revocation, suspension or termination proceedings
concerning such permits;
 
(ix) all improvements located on the Owned Real Property and, to Seller’s
Knowledge, on the Leased Real Properties, the roofs thereon, and all mechanical
systems (including, without limitation, all HVAC, plumbing, electrical,
elevator, security, utility, sprinkler and safety systems) therein, are in good
working order, and, to Seller’s Knowledge, are in sound structural condition and
free from material defect or deficiency;
 
(x) Seller has not received any written notice (which remains outstanding) from
a Governmental Entity or other party alleging the existence of such defect or
deficiency as set forth in subclause (ix) of this Section 3.21(b); and
 
(xi) there has been no casualty damage affecting all or any material portion of
the Owned Real Property or the Leased Real Properties which has not been
restored except for any damage for which either adequate insurance proceeds will
be transferred to Buyer at Closing, with Seller being responsible for
deductibles or, in the case of any Leased Real Property, the landlord under the
Lease is responsible to restore under the terms of such Lease and which damage
has been disclosed to Buyer.
 
 
 

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Section 3.22 Leased Real Property.  Schedule 1.1(b) attached hereto lists all
leases, subleases, occupancy agreements or similar agreements, including any
amendments, modifications or supplements thereto, under which Seller occupies
(or has the right to occupy) pursuant to a lease, license or similar arrangement
any real property interest (i) used as a Branch Offices or (ii) used in
connection with the operation of any Branch Office if such real property
interest is incidental to and located at or in immediate and close proximity to
any Branch Office (including any separate parking lot leases where customers of
such Branch are permitted to park) (collectively, the “Real Property Leases”),
and Seller is entitled to possession of the Leased Real Properties as lessee in
accordance with the terms of the respective Real Property Leases, subject to
bankruptcy, insolvency, reorganization, moratorium, receivership,
conservatorship and similar laws relating to the rights and remedies of
creditors, as well as to general principles of equity.  The Real Property Leases
are accurately described on Schedule 1.1(b) attached hereto and have not been
further amended, modified or supplemented.  Seller has delivered to Buyer a
true, correct and complete copy of each Real Property Leases as amended,
modified or supplemented.  Each Real Property Lease is an existing legal, valid
and binding obligation of Seller and, to Seller’s Knowledge, each other party
thereto, subject to bankruptcy, insolvency, reorganization, moratorium,
receivership, conservatorship and similar laws relating to the rights and
remedies of creditors, as well as to general principles of equity; and there
does not exist with respect to Seller’s obligations thereunder, or, to Seller’s
Knowledge, with respect to the obligations of the Lessor thereof, any default,
or event or condition which constitutes or, after notice or passage of time or
both, would constitute a default, on the part of Seller or the Lessor under any
such Real Property Leases.  Except as set forth on Schedule 3.22(i), there are
no tenants or other parties claiming by, through or under Seller that have a
possessory right in and to any space in respect of the Leased Real
Properties.  As used in this Section 3.22, the term “Lessor” includes any
sub-lessor of the property to Seller.  There are no subleases relating to any
Leased Real Property created or suffered to exist by Seller, or to Seller’s
Knowledge, created or suffered to exist by any other Person.  Subject to Seller
obtaining any consents necessary for the valid assignment to Buyer of the Real
Property Leases, which consents are listed on Schedule 3.22(ii) (the “Landlord
Consents”), the assignment of such Real Property Leases will transfer to Buyer
on the Closing Date all of Seller’s rights under the Leases.
 
Section 3.23 Assumed Contracts.  Seller has delivered to Buyer a correct and
complete copy of each written Assumed Contract (as amended to date) and a
written summary setting forth the terms and conditions of each oral Assumed
Contract, if any.  With respect to each such Assumed Contract: (i) it is a
legal, valid, binding and enforceable Commitment, and in full force and effect,
as against Seller and, to Seller’s Knowledge, each other party thereto, subject
to bankruptcy, insolvency, reorganization, moratorium, receivership,
conservatorship and similar laws relating to the rights and remedies of
creditors, as well as to general principles of equity; (ii) it will continue to
be such a legal, valid, binding and enforceable Commitment, and in full force
and effect, as against Seller and, to Seller’s Knowledge, each other party
thereto on identical terms following the consummation of the transactions
contemplated hereby; (iii) neither Seller nor, to Seller’s Knowledge, each other
party thereto is in breach or default thereunder and no event has occurred that
with notice or lapse of time, or both, would constitute a breach or default
thereunder or permit termination, modification, or acceleration thereunder and
(iv) neither Seller, nor to Seller’s Knowledge, any other party thereto has
repudiated any provision thereof.
 
Section 3.24 Brokerage.  Except for fees payable to Hovde Financial, Inc. (which
Seller agrees to pay), there are no existing claims or agreements for brokerage
commissions, finders’ fees, or similar compensation payable by Seller or any of
its officers, directors, agents or Affiliates in connection with the
transactions contemplated by this Agreement.
 
Section 3.25 Books and Records.  The books and records of the Branch Offices
have been kept accurately in the Ordinary Course of Business, the transactions
entered therein represent bona fide transactions and the revenues, expenses,
assets and liabilities of Seller have been property recorded in such books and
records.
 
 
 

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Section 3.26 Representations Not Misleading.  No representation or warranty by
Seller contained in this Agreement contains or will contain any untrue statement
of material fact or omits or will omit to state any material fact necessary to
make the statements herein or therein, in light of the circumstances under which
it was or will be made, not misleading.  To the knowledge of Seller, except as
disclosed herein, there is no matter that materially adversely affects or will
in the future materially adversely affect the Assets or Liabilities other than
general economic conditions and conditions generally applicable to financial
institutions.
 
 
ARTICLE IV                                
 
REPRESENTATIONS AND WARRANTIES OF BUYER
 
Except as set forth in the specific Section of the Disclosure Schedule relating
to a specific and corresponding Section below, Buyer represents and warrants to
Seller, as of the date hereof and as of the Closing Date, as follows:

Section 4.1 Organization.  Buyer is a banking corporation, duly organized,
validly existing and in good standing under the laws of the United States of
America, the deposits of which are insured by the FDIC.  Buyer has the corporate
power to carry on its business as the same is being conducted and to acquire the
Branch Offices.
 
Section 4.2 Authorization.  Except for the Regulatory Approvals, Buyer is not
required to give any notice to, make any filing with, or obtain any
authorization or consent of any kind of any third party, including the
shareholders of Buyer, in order to execute and deliver this Agreement or
consummate the transactions contemplated hereby, including the purchase and
assumption of the Assets and the Assumed Liabilities.  Buyer has all requisite
corporate power and authority to execute and deliver this Agreement with Seller,
to carry out and perform its obligations under this Agreement and to consummate
the transactions contemplated hereby.  The board of directors of Buyer has, by
all appropriate action, approved this Agreement and the transactions
contemplated herein and authorized the execution and delivery hereof on its
behalf by its duly authorized officers and the performance by Buyer of its
obligations hereunder.  This Agreement has been duly and validly executed and
delivered by Buyer and constitutes a legal, valid and binding obligation of
Buyer, enforceable against Buyer in accordance with its terms, subject to
bankruptcy, insolvency, reorganization or other similar laws affecting the
enforcement of creditors’ rights generally and to general principles of equity,
whether considered in a proceeding at law or in equity.
 
Section 4.3 Non-Contravention; Consents.  Except as set forth on Schedule 4.3
and subject to the Regulatory Approvals, the execution and delivery of this
Agreement by Buyer, and the consummation of the transactions contemplated hereby
by Buyer, will not, directly or indirectly (a) contravene, conflict with, or
result in a violation of (i) any provision of the articles of incorporation or
bylaws of Buyer or (ii) any resolution adopted by the board of directors of
Buyer; (b) violate any Applicable Law applicable to Buyer or its properties or
assets; or (c) require on the part of the Buyer any Consent of any Governmental
Entity.  Except as set forth on Schedule 4.3, the consummation of the
transactions contemplated by this Agreement does not require Buyer to obtain the
prior consent or approval of any Person, other than the Regulatory Approvals.
 
Section 4.4 Litigation.  There are no governmental or administrative proceedings
or other proceedings, litigation, judgment or claims pending or threatened
against Buyer or any of its Affiliates affecting the ability of Buyer to carry
out this Agreement, or any of the transactions contemplated hereby, or which
will materially affect the Assumed Liabilities, Buyer or Buyer’s use of the
Assets after the Closing Date.
 
 
 

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Section 4.5 Regulatory Condition.  Buyer has not received any indication from
any federal or state Governmental Entity that any such entity would oppose or
refuse to grant a Regulatory Approval, and to Buyer’s Knowledge, there exists no
fact or circumstance that would prevent or delay Buyer’s ability to obtain
promptly all Regulatory Approvals.
 
Section 4.6 Financial Condition. The financial condition of Buyer is sufficient
to enable Buyer to consummate the transactions contemplated hereby.
 
Section 4.7 Community Reinvestment Act.  Buyer is in compliance with the
Community Reinvestment Act and its implementing regulations, and there are no
threatened or pending actions, proceedings, or allegations by any person or
regulatory agency which may cause any applicable regulatory authority to deny
any application required to be filed pursuant to Section 7.2 hereof.  In
addition, Buyer has not been advised of any supervisory concerns regarding its
compliance with the Community Reinvestment Act.
 
Section 4.8 Regulatory Enforcement Actions.  Buyer is not subject to, and has
not received any notice or advice that it may be subject to, any order,
agreement, memorandum of understanding or other regulatory enforcement action or
proceeding with or by any federal or state agency charged with the supervision
or regulation of banks or engaged in the insurance of deposits of banks or any
other governmental agency having supervisory or regulatory authority with
respect to Buyer which could have a material adverse effect on the transactions
contemplated by this Agreement.
 
Section 4.9 Brokerage.  Except for fees payable to Sandler O’Neill + Partners,
L.P. (which Buyer agrees to pay), there are no existing claims or agreements for
brokerage commissions, finders’ fees, or similar compensation payable by Buyer
or any of its officers, directors, agents or Affiliates in connection with the
transactions contemplated by this Agreement.
 
 
ARTICLE V  
 
AGREEMENTS OF SELLER
 
Section 5.1 Business in Ordinary Course.
 
(a) Seller shall:  (i) conduct its business with respect to the Branch Offices
and the Loans only in the usual, regular and Ordinary Course of Business; (ii)
service and administer the Loans by employing the same procedures and exercising
the same care that it customarily employs and exercises in servicing and
administering loans for its own account, consistent with accepted banking
practices of prudent lending institutions in the market in which the Branch
Offices are located; (iii) use reasonable efforts to maintain good relations
with employees employed at and customers of the Branch Offices and with the
parties to the Loans; (iv) comply with all Applicable Laws, and all regulatory
agreements, orders and directives, relating to the operation of the Branch
Offices; (v) retain all necessary business permits, licenses, registrations and
Governmental Authorizations relating to the Branch Offices; (vi) use its best
efforts to preserve all of its existing Commitments, customers, account
relationships and all other customer agreements, relationships and business at
the Branch Offices; (vii) use its best efforts to cause the Personal Property
currently located at the Branch Offices to be retained at the Branch Offices at
Closing; and (viii) maintain in full force and effect through the Closing Date
its present insurance coverage as it relates to the Assets.
 
(b) Except as may be required to obtain Regulatory Approvals or as otherwise may
be required by any Governmental Entities, after the date of this Agreement, with
respect to the Branch Offices, Seller shall not, without the prior written
consent of Buyer (which consent shall not be unreasonably withheld or delayed):
 
 
 

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(i) (A) increase the rate of compensation of any of the Branch Offices’ officers
or employees, (B) offer employment to any individual for an annual base salary
of $50,000 or more or (C) move any employees from the Branch Offices to other
locations or branches of Seller;
 
(ii) authorize or make any capital expenditure(s), including any expenditures
with respect to personal property or real property, which, individually or in
the aggregate, exceeds $7,500 for any single Branch Office;
 
(iii) (A) extend any new, or renew any existing, loan (or Commitment), credit,
lease, or other type of financing or renew any such type of financing in which
the maximum principal amount thereunder would pursuant to the terms thereof
exceed $250,000 in principal amount, including when aggregated with any other
such new extension or renewal for the same borrower, or (B)  purchase any loan
participation interest, which does not meet Seller’s loan policy requirements as
of the date of this Agreement; provided, however, that with respect to any
Preclosing Loans which exceed $250,000 in principal amount, including when
aggregated with any other such new extension or renewal for the same borrower,
Buyer shall have five Business Days after receiving notice thereof and copies of
all credit documentation that Seller has in its possession regarding such
proposed loan or advance to advise Seller if it objects to any such loan, and
any such loans so objected to by Buyer shall be excluded from the Assets, and
any such loans consented to by Buyer shall be added to Schedule 1.1(d) and
transferred to Buyer at the Closing;
 
(iv) make any change to (A) the interest rates or price or rates of fees, (B)
the policies or programs or (C) the period of time applicable to any promotional
period, in each case as in existence on the date of this Agreement with respect
to the loans or deposits of, or offered by, the Branch Offices other than in the
Ordinary Course of Business and as determined to be necessary or advisable by
Seller in the reasonable bona fide exercise of its discretion based on changes
in market conditions applicable to the Branches; provided, however, that (1) an
interest rate increase on any deposit in excess of 25 basis points or a decrease
in the interest rate of any loan in excess of 50 basis points shall not be
deemed to be in the Ordinary Course of Business and shall require Buyer’s prior
written consent (it being understood that Buyer shall not unreasonably withhold
or delay its consent with respect to such actions) and (2) Seller shall be
permitted to offer interest rates on any certificates of deposits or money
market deposit accounts at rates that are lower than the rates offered as of the
date of this Agreement without the prior written consent of Buyer;
 
(v) authorize or allow Branch Employees at the level of branch manager or above
to take vacation or other voluntary leaves of absence during the five Business
Day period preceding and the ten Business Day period following, the Closing
Date, other than any leave of absence that is required to be granted pursuant to
the Family Medical Leave Act or other applicable law;
 
(vi) deliver or distribute, in writing or electronically, to any customer of
Seller, any notice, letter or other correspondence that is related to the
Acquisition or matters of transition related thereto, including the status of
such customer’s accounts or loans with Seller;
 
(vii) make any material changes to the terms and conditions governing the
Deposit accounts, other than as required by applicable law, rule or regulation;
 
(viii) enter into any interest rate swap, collar, floor or other hedging or
derivative agreement with respect to any Loan or amend, modify or supplement any
thereof, or agree to any provision in any Loan entered into after the date
hereof under which the borrower under such Loan shall be required or permitted,
with respect to such Loan, to enter into any interest rate swap, collar, floor
or other hedging or derivative agreement;
 
 
 

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(ix) amend, terminate, extend or waive any right in any material respect, with
regard to any Real Estate Lease or Assumed Contract, or sell, assign or
transfer, any Real Estate Lease or Assumed Contract; provided, however, that (A)
in the case of any lease included in the Assumed Contracts, Seller may, without
the consent of Buyer, exercise any renewal option on the renewal terms expressly
set forth under such lease as of the date hereof (and without modification, for
the avoidance of doubt, to the payment amount or obligations thereunder) if such
lease shall expire prior to the Closing Date and Seller shall have delivered
written notice to Buyer of its desire to renew or extend such lease at least 20
calendar days prior to the stated deadline in such lease for exercising such
renewal or extension, and Buyer shall not have delivered to Seller, within ten
calendar days following such notice from Seller, instructions not to renew or
extend such lease and (B) in the case of any Assumed Contract, Seller may,
without the consent of Buyer, amend or extend such Assumed Contract if it (1)
involves the payment or receipt of not more than $2,500 in the aggregate during
any one year period and (2) is for a term of one year or less;
 
(x) except as required by law or the terms of the documents governing any Loan,
(A) release any collateral or any party from any liability on or with respect to
such Loan, (B) compromise or settle any material claims of any kind or character
with respect to such Loan or (C) amend or waive any of the material rights or
other terms of such Loan as set forth in the Loan documents; provided, however,
that Buyer agrees not to unreasonably withhold or delay its consent to any of
the actions described in clause (C) above provided that such actions are taken
in accordance with the underwriting standards, pricing levels and other
parameters or terms of Seller as in effect on the date hereof or as mutually
agreed upon by the Buyer and Seller in writing from time to time;
 
(xi) sell, transfer, assign, encumber or otherwise dispose of, or enter into any
contract, agreement or understanding to sell, transfer, assign, encumber or
dispose of, any of the assets or deposits of the Branch Offices, except in the
Ordinary Course of Business consistent with past practice; provided, however, in
no event shall Seller take any of the foregoing actions with respect to (A) any
of the Owned Real Property, (B) any of the Real Estate Leases, (C) any of the
Deposits or (D) any Loan;
 
(xii) except as permitted by this Section 5.1(b), knowingly take, or knowingly
permit its Affiliates to take, any action (A) impairing Buyer’s rights in any
Deposit or Asset, (B) impairing in any way the ability of Buyer to collect upon
any Loan or (C) waiving any material right, whether in equity or at law, that it
has with respect to any Loan; or
 
(xiii) directly or indirectly agree or commit to take any of the foregoing
actions.
 
(c) From the date of this Agreement through the Closing Date, Seller will not,
and will not cause or allow the Branch Offices to, distribute or deliver any
marketing materials to the customers of the Branch Offices without consulting
with the Buyer other than customary marketing materials in the Ordinary Course
of Business.
 
(d) Seller shall not, without the prior written consent of Buyer, engage in any
transaction or take any action that would render untrue in any material respect
any of the representations and warranties of Seller contained in Article III
hereof, if such representations and warranties were given as of the date of such
transaction or action.
 
 
 

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(e) Seller shall promptly notify Buyer in writing of the occurrence of any
matter or event known to and directly involving Seller, which would not include
any changes in conditions that affect the banking industry generally, that is
materially adverse to the business, operations, properties, assets, or condition
(financial or otherwise) of the Branch Offices.
 
Section 5.2 Breaches.  Seller shall, in the event it has Knowledge of the
occurrence, or impending or threatened occurrence, of any event or condition
which would cause or constitute a breach (or would have caused or constituted a
breach had such event occurred or been known prior to the date hereof) of any of
its representations or agreements contained or referred to herein, give prompt
written notice thereof to Buyer and use its best efforts to prevent or promptly
remedy the same.
 
Section 5.3 Consents.   From the date of this Agreement until all Consents are
obtained, Seller and Buyer shall cooperate with all reasonable requests of each
other, and Seller shall use Commercially Reasonable Efforts, to obtain (i) all
Landlord Consents to transfer Seller’s rights as lessee to each Leased Real
Property (including those rights that are personal to Seller pursuant to the
respective Real Estate Lease) to Buyer and (ii) all other Consents (other than
Regulatory Approvals, as to which the provisions of Section 7.2 shall apply) as
shall be required under the terms of any Assumed Contracts or applicable law to
transfer and assign to Buyer on the Closing Date the Assets and the Assumed
Liabilities.  If Seller is unable to obtain a Landlord Consent with respect to a
Real Estate Lease, and Buyer and Seller fail to reach an agreement within 30
calendar days after receipt of the landlord’s indication that a Landlord Consent
will not be granted in form and substance reasonably satisfactory to Buyer and
Seller, then Buyer may elect to exclude the applicable Leased Real Property (and
the Real Property Lease thereto) from the Acquisition, and either (y) the
parties shall negotiate in good faith to  reduce the Purchase Price accordingly
or (z) Buyer may terminate the Agreement pursuant to Section 9.1(d).
 
Section 5.4 Consummation of Agreement.  Seller shall use its Commercially
Reasonable Efforts to perform and fulfill all conditions and obligations on its
part to be performed or fulfilled under this Agreement and to effect the
transactions contemplated by this Agreement in accordance with the terms and
provisions hereof.  Seller shall furnish to Buyer in a timely manner all
information, data and documents in the possession of Seller reasonably requested
by Buyer as may be required to obtain all necessary Regulatory Approvals or
other approvals of the transactions contemplated by this Agreement and shall
otherwise cooperate fully with Buyer to carry out the purpose and intent of this
Agreement.
 
Section 5.5 Access to Information.  From and after the date of this Agreement
through the Closing Date, Seller shall give Buyer reasonable access, in a manner
that will avoid disruption or interference with Seller’s normal operations, to
the Branch Offices and the Real Property, and shall disclose and make available
to Buyer all books, documents, papers, records and equipment relating to the
Branch Offices, their assets, operations, obligations and liabilities, including
all books of account (including the general ledger), tax records, material
contracts and agreements, filings with any Governmental Entities, litigation
files, the conversion contemplated by Section 5.6 and any other business
activities or prospects in which Buyer may have a reasonable and legitimate
interest in furtherance of the transactions contemplated by this
Agreement.  Within 30 days from the date of this Agreement, Seller will provide
Buyer with copies of the forms of signature cards, deposit account forms,
Regulation E disclosures, Truth-in-Savings disclosures, deposit account
agreements, and IRA custodian agreements and beneficiary designations, as well
as the forms of any other instruments or agreements presently in use at the
Branch Offices in connection with the Deposit Liabilities.  All of such
documents shall be in the form used by Seller for new customers as of the date
of this Agreement.  Buyer will hold any such information that is nonpublic in
confidence in accordance with the provisions of Section 6.5.
 
 
 

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Section 5.6 Transfer of Data.  From the date of this Agreement until the
Effective Time, Seller will provide reasonable cooperation with and assist Buyer
in planning a conversion to transition the business of the Branch Offices from
Seller to Buyer including the transition of Seller’s electronic data (including
data delivered pursuant to ancillary delivery channels, such as internet banking
and bill pay, debit card and all other systems determined beyond the
CBS/Signature system) to an electronic file format mutually agreeable to both
parties on the Closing Date.  Each party shall pay its own cost relating to such
conversion.  Within seven Business Days (or, in the case of Buyer’s initial
request as contemplated by this sentence, three Business Days except with
respect to commercial online banking customers on the Gateway system) of up to
each of three separate requests of Buyer, Seller agrees to provide Buyer a
complete set of data files/conversion tapes prior to the final set of data
files/conversion tapes for the purposes of implementing the conversion as of the
Closing Date (such conversion data files to include, among other things, the
loan, deposit, CIF and other application systems processed on CBS/Signature and
in the native CBS/Signature file format and other data files for systems other
than the CBS/Signature System, including, but not limited to, internet banking
and bill pay, debit card).  On the Closing Date, Seller shall provide a final
set of data files/conversion tapes contemplated in this Section 5.6 to Buyer as
of such date regardless of the number of requests for such information and
material made by Buyer pursuant to this Section 5.6.  Further, Seller agrees
that it will inform Buyer of required changes to record layouts that may be
necessary in the Ordinary Course of Business, and Buyer and Seller agree to
cooperate on timely making such required modifications; provided, however, that
in the event such changes are made by Seller, Seller shall provide to Buyer any
additional files required by Buyer to support Buyer’s testing of such changes
not later than three Business Days following Buyer’s request therefor (except
with respect to commercial online banking customers on the Gateway system).
 
Section 5.7 Further Assurances.  On and after the Closing Date, Seller shall
give such reasonable further assurances to Buyer and, upon Buyer’s request,
shall execute, acknowledge and deliver all such acknowledgments and other
instruments and take such further action as may be reasonably necessary and
appropriate to effectively transfer the Assets and the Deposit Liabilities to
Buyer in accordance with the terms of this Agreement.
 
Section 5.8 Exclusivity.  From the date of this Agreement through the Closing
Date, Seller will not and will cause its Affiliates not to, directly or
indirectly, (a) solicit, initiate, or encourage the submission of any proposal
or offer from any Person other than Buyer relating to the acquisition of any
Branch Office or any of the assets, properties or deposits thereof or (b)
participate in any discussions or negotiations regarding, furnish any
information with respect to, assist or participate in, or facilitate in any
other manner any effort or attempt by any Person to do or seek any of the
foregoing.  Seller will notify Buyer immediately if any Person makes any
proposal, offer, inquiry, or contact with respect to any of the foregoing.
 
 
 

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Section 5.9 Real Property.
 
(a) Title Insurance.
 
(i) Commitment for Title Insurance, Survey and Inspection.  Seller shall deliver
to Buyer with respect to each Owned Real Property (a) within 45 days from the
date of this Agreement, title commitments for each Owned Real Property
(including copies of all documents, instruments or agreements evidencing or
creating the exceptions referenced in such commitment) (the “Title Commitments”)
issued by Central Illinois Title (the “Title Company”) and (b) within 45 days
from the date of this Agreement an ALTA land title survey of each Owned Real
Property, prepared and certified as to all matters shown thereon by a surveyor
licensed by the State of Illinois (the “Surveys”), which Surveys shall show the
location of all improvements and shall be sufficient for the Title Company to
insure over standard survey-related exceptions in the final title insurance
policies.  In addition, the Surveys shall include a notation stating whether or
not a portion of such Owned Real Property is located in a 100-year flood plain,
flood-prone area of special flood hazard and shall show the specific location of
any portions of such Owned Real Property that may be located in any such flood
areas.  The Title Commitments shall each reflect that Buyer has good and
indefeasible title to such Owned Real Property, subject only to (1) any
shortages in area, (2) taxes for 2010 and subsequent years and subsequent
assessments for prior years due to a change in land usage or ownership, (3)
existing building and zoning ordinances, (4) existing easements, restrictions
and other encumbrances that do not materially adversely affect the use of the
Owned Real Property as a banking branch or the value thereof, (5) printed
exceptions in the Title Commitments generally contained in any owner’s or
leasehold standard coverage policy of title insurance and (6) Objections
accepted by Buyer (collectively, the “Permitted Commitment Encumbrances”).  The
cost of the Title Commitments and Surveys shall be borne by Seller.  In
addition, Buyer shall have the right, at its expense, within 45 days following
the date hereof to conduct an inspection of the Real Property and the buildings
thereon, in each case at a reasonable time and with reasonable prior notice to
Seller.
 
(ii) Objections and Remedies. If any Title Commitment contains any exceptions
other than the Permitted Commitment Encumbrances, Seller shall make a good faith
effort to cure such exception.  Buyer may object to any remaining uncured
exceptions relating to such Owned Real Property by providing written notice of
such objection on or before the close of business on the 15th Business Day after
the later of the delivery to Buyer of Title Commitment or the Survey with
respect to such Owned Real Property.  All objections raised by Buyer are
referred to herein as the “Objections.”  Within 30 days after receipt of the
Objections with respect to any Owned Real Property, Seller shall either (i)
remedy or remove all Objections or (ii) notify Buyer that Seller has elected not
to remedy or remove some or all of the Objections.  In the event Seller gives
the notice set forth in the preceding clause (ii) of this Section, or in the
event Seller fails to remedy or remove all Objections within said 30-day period,
Seller and Buyer shall attempt to renegotiate the terms and conditions of the
sale of such Owned Real Property.  If Seller and Buyer are not able to
renegotiate the terms and conditions of such sale, Buyer may on or before close
of business on the 15th Business Day after such 30-day period (or, if
applicable, on or before close of business on the 15th Business Day after
receipt of Seller’s notice), Buyer shall have the right, (a) to waive any
Objection to such defect or encumbrance or other matter in which event such
defect, encumbrance or other matter shall be deemed to be a Permitted Commitment
Encumbrance, (b) to enter into a lease for such Owned Real Property on terms and
conditions agreed to by Buyer and Seller, (c) to exclude the applicable Real
Property and its related other Assets and Assumed Liabilities from the
Acquisition, whereupon the parties shall negotiate in good faith to reduce the
Purchase Price accordingly or (d) to terminate this Agreement pursuant to
Section 9.1(d).
 
(iii) Title Insurance Policy.  Seller shall use Commercially Reasonable Efforts
to cause the Title Company, as soon as practicable after Closing, to issue an
Illinois Owner's Policy of Title Insurance, to Buyer, at Seller's expense,
covering each Owned Real Property in amounts equal to the net book value of such
Owned Real Property as of the Closing Date.  Such policy shall insure Buyer’s
title to such Owned Real Property to be good and indefeasible subject only to
Permitted Commitment Encumbrances and such policy shall contain an endorsement
insuring over standard exceptions.
 
 
 

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(iv) Deeds.  At least 10 days prior to the Closing Date, Seller shall deliver to
Buyer a completed form of the deeds by which it is to convey title to each Owned
Real Property to Buyer on the Closing Date, which shall be special warranty
deeds, subject only to Permitted Exceptions.
 
(b) Environmental Investigations.
 
(i) Buyer may obtain at its expense within 45 days after the date of this
Agreement a Phase I environmental survey of each Real Property (a “Phase I
Assessments”) and furnish to Seller a copy of all Phase I Assessments received
by Buyer.  If any such Phase I Assessment indicates that any Real Property is
not or may not be materially free of environmental contamination, Buyer, at its
option, shall within 20 days after receipt of the Phase I Assessment provide
notice to Seller of either (a) its acceptance of such Real Property “as is” to
the environmental condition or (b) its option to cause to be prepared, at
Buyer’s expense, a Phase II environmental survey (a “Phase II Assessment”) of
such Real Property, or such other appropriate investigation as Buyer deems
necessary, which shall include a plan to remedy the contamination and perform
further investigation (if necessary) and an estimate of the cost of any
remediation or other follow-up work that may be necessary to address, identify
or monitor contamination (a “Plan”).  If necessary, the parties shall postpone
the Closing Date to enable the parties to undertake the preceding
activities.  Upon receipt of any Plan and the estimate of the costs of all
remediation and follow-up work (including investigation, monitoring and
obtaining institutional controls), Buyer and Seller shall attempt to agree upon
a course of action to implement the Plan.  The estimated total cost for
completing a Plan is referred to as the “Remediation Cost” and, subject to the
following sentence, Seller agrees to pay the Remediation Cost related to any
Plan so long as the Remediation Cost does not exceed $25,000.  In the event that
(y) within 20 days following the receipt of any Phase II Assessment (or such
other appropriate investigation as Buyer deems necessary) and any Plan, Buyer
and Seller are unable to agree to a course of action for implementing the Plan
or (z) the Remediation Cost with regard to a Plan exceeds $25,000 and Seller
does not agree to pay the Remediation Cost, Buyer shall have a ten day period to
either (1) enter into a lease or sublease with Seller or the landlord for the
Real Property, on terms and conditions agreed to by Buyer and Seller or the
landlord, if applicable, (2) exclude the applicable Real Property and its
related other Assets and Assumed Liabilities from the Acquisition, whereupon the
parties shall negotiate in good faith to reduce the Purchase Price accordingly
or (3) terminate this Agreement pursuant to Section 9.1(d).
 
(ii) All Phase I Assessments, Phase II Assessments and any additional
assessments shall be conducted at Buyer’s sole cost and expense, and Seller
shall cooperate in the performance of any such assessments, provided that (a)
such assessments are conducted at a mutually agreeable date and time after at
least twenty business days’ prior notice to Seller and landlord, as applicable,
by Buyer, (b) such assessments are accomplished in a manner intended to minimize
disruption to the operations of the Branch Offices and (c) Buyer obtains (A)
with respect to any Owned Real Property or the Quincy Mall Branch Office, which
is subject to a ground lease, Seller’s prior approval, which Seller shall not
unreasonably withhold or delay, of the scope of work for any Phase II
Assessment, or (B) with respect to any Leased Real Property, obtains the
applicable landlord’s prior approval of the scope of work for any Phase II
Assessment, and Seller shall cooperate with Buyer to obtain such landlord
approval; provided, however, that if Buyer is unable to obtain such prior
approval from Seller or such applicable landlord with respect to any Real
Property, Buyer may (1) enter into a lease or sublease with Seller or the
landlord for the Real Property, on terms and conditions agreed to by Buyer and
Seller or landlord, if applicable, (2) exclude the applicable Real Property and
its related other Assets and Assumed Liabilities from the Acquisition, whereupon
the parties shall negotiate in good faith to reduce the Purchase Price
accordingly or (3) terminate this Agreement pursuant to Section 9.1(d).
 
(c) Destruction or Damage Prior to Closing. In the event of damage to or
destruction of all or any portion of any Real Property by fire or other casualty
prior to the Effective Time, Seller will promptly notify Buyer of the nature and
extent of such damage or destruction, the amount estimated to be necessary to
repair or restore the Real Property, the amount, if any, of insurance proceeds
that are available to make such repairs or restoration and the estimated period
of time it will take to make such repairs and restoration.  The rights and
obligations of the parties by reason of such damage or destruction shall be as
follows:
 
 
 

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(i) If the estimated time for completion of the repairs is 12 months or less,
then Buyer, at Buyer’s option, may (1) take title to such Real Property subject
to such damage or destruction with Seller assigning to Buyer all Seller’s rights
to proceeds of insurance carried by Seller and payable as a result of such
damage or destruction or (2) request that Seller cause the repairs to be made,
in which case Seller shall cause the repairs to be made and the Closing Date
shall be extended until the repairs are completed.
 
(ii) If the estimated time for completion of the repairs is more than 12 months,
then Buyer, at Buyer’s option, may (1) take title to the Real Property subject
to such damage or destruction with Seller assigning to Buyer all Seller’s rights
to proceeds of insurance carried by Seller and payable as a result of such
damage or destruction, (2) request in writing that Seller cause the repairs to
be made, in which case Seller shall cause the repairs to be made and the Closing
Date shall be extended until the repairs are completed, (3) exclude the
applicable Real Property and its related other Assets and Assumed Liabilities
from the Acquisition, whereupon the parties shall negotiate in good faith to
reduce the Purchase Price accordingly or (4) terminate this Agreement pursuant
to Section 9.1(d).
 
Section 5.10 Closing Financial Statements.  Within ten Business Days following
the Closing Date, Seller shall furnish to Purchaser Financial Statements of the
Branch Offices as of the Closing Date.
 
 
ARTICLE VI
 
AGREEMENTS OF BUYER
 
Section 6.1 Breaches.  Buyer shall, in the event it has knowledge of the
occurrence, or impending or threatened occurrence, of any event or condition
which would cause or constitute a breach (or would have caused or constituted a
breach had such event occurred or been known prior to the date hereof) of any of
its representations or agreements contained or referred to herein, give prompt
written notice thereof to Seller and use its best efforts to prevent or promptly
remedy the same.
 
Section 6.2 Consummation of Agreement.  Buyer shall use its Commercially
Reasonable Efforts to perform and fulfill all conditions and obligations on its
part to be performed or fulfilled under this Agreement and to effect the
transactions contemplated by this Agreement in accordance with the terms and
conditions hereof.  Buyer shall furnish to Seller in a timely manner all
information, data and documents in the possession of Buyer reasonably requested
by Seller as may be required to obtain all necessary Regulatory Approvals or
other approvals of the transactions contemplated by this Agreement and shall
otherwise cooperate fully with Seller to carry out the purpose and intent of
this Agreement.
 
Section 6.3 Access to Information.  Buyer shall give Seller reasonable access,
in a manner which will avoid disruption or interference with Buyer’s normal
operations, to its properties and shall disclose and make available to Seller
such information of Buyer in which Seller may have a reasonable and legitimate
interest in furtherance of the transactions contemplated by this
Agreement.  Seller will hold any such information which is nonpublic in
confidence in accordance with the provisions of Section 6.5 of this Agreement.
 
 
 

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Section 6.4 Loans Related to Seller’s Computation of Interest on a 360-Day
Basis.  Buyer shall, upon any renewal, extension, or any other modification to
any Loan that may be subject to any Order, action, suit, claim, arbitration,
proceeding, hearing or investigation before any Governmental Entity or
arbitration panel related to Seller’s computation of interest on a 360-day
basis, use Commercially Reasonable Efforts to obtain the applicable borrower’s
consent to modify the computation of interest from a 360-day basis to a 365-day
basis.  Neither the execution of this Agreement nor any provision or term hereof
shall constitute an admission of liability, fault or violation of law on the
part of Seller with respect to any Loan that may be subject to any Order,
action, suit, claim, arbitration, proceeding, hearing or investigation before
any Governmental Entity or arbitration panel related to Seller’s computation of
interest on a 360-day basis.  Seller and Buyer acknowledge and agree that (A)
any Order, action, suit, claim, arbitration, proceeding, hearing or
investigation before any Governmental Entity or arbitration panel related to
Seller’s computation of interest on any Loan on a 360-day basis is believed by
Seller to be without merit and (B) the method of computing, accruing, and
collecting interest on any Loan that may be subject to any Order, action, suit,
claim, arbitration, proceeding, hearing or investigation before any Governmental
Entity or arbitration panel related to Seller’s computation of interest on a
360-day basis is believed Seller to be valid, proper and not in violation of any
Applicable law or contractual provision in the documentation evidencing such
Loans.
 
Section 6.5 Confidential Information.  Prior to the Closing, Buyer agrees that
any information contained in the Disclosure Schedule or otherwise provided to
Buyer pursuant to this Agreement shall be held by Buyer as confidential
information in accordance with, and shall be subject to the terms of, that
certain confidentiality agreement entered into in connection with the
transactions contemplated hereby (the “Confidentiality Agreement”) between Buyer
and Seller.  Effective upon the Closing, the Confidentiality Agreement shall
terminate with respect to information relating solely to Branch Offices;
provided, however, that Buyer acknowledges that any and all other information
provided to it by Seller concerning Seller or concerning any customers of the
Branch Offices shall remain subject to the terms and conditions of the
Confidentiality Agreement after the Closing Date.
 
Section 6.6 Continued Operation of the Branch Offices.  If either or both of the
Branch Offices located at 230 Southwest Adams Street, Suite 100, Peoria,
Illinois or 3037 North Sterling Avenue, Peoria, Illinois are purchased by Buyer
at the Closing, Buyer agrees to continuously operate such Branch Office or
Branch Offices for at least the 150-day period following the Closing Date.
 
 
ARTICLE VII
 
AGREEMENTS OF SELLER AND BUYER
 
Section 7.1 Publicity; Press Releases.  Buyer and Seller shall make a joint
announcement of their entry into this Agreement promptly after its execution,
the form of which the parties have agreed upon.  Prior to the Closing, without
obtaining the prior approval of the other party not to be unreasonably withheld
or delayed, neither of the parties hereto will issue any other press release or
make any other public statement, in each case relating to or connected with or
arising out of this Agreement or the matters contained herein, except as may be
required by Applicable Law or by any listing agreement with or listing rules of
a national securities exchange or trading market or inter-dealer quotation
system in which case, the party proposing to issue such press release or make
such public statement will use Commercially Reasonable Efforts to consult in
good faith with the other party before issuing such press release or making such
public statement.
 
 
 

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Section 7.2 Regulatory Matters and Approvals.  Each party will cooperate and use
Commercially Reasonable Efforts to promptly prepare and file all necessary
documentation, to effect all necessary applications, notices, petitions, filings
and other documents, and to obtain all necessary Regulatory Approvals.  Each
party shall file all requisite applications with the applicable Governmental
Entities no later than 21 calendar days after the date of this Agreement;
provided that the non-filing party has supplied to filing party all necessary
non-filing party information required for such applications and the filing party
shall have provided to the non-filing party a copy of each such application
(excluding confidential sections thereof) not less than three Business Days
prior to the date on which such application is to be filed.  The filing party
shall respond (and the non-filing party shall assist the filing party in
responding) to all requests for information from a Governmental Entity in a
timely manner and shall use their respective Commercially Reasonable Efforts to
respond to any request within three Business Days.  Each of the parties will (a)
permit the other to review in advance and, to the extent practicable, will
consult with the other party on all characterizations of the information
relating to the other party that appear in any filing made with, or written
materials submitted to, any Governmental Entity in connection with the
transactions contemplated hereby, except for any confidential portions thereof,
and (b) consult with the other with respect to obtaining all Regulatory
Approvals necessary or advisable to consummate the transactions contemplated
hereby (unless prohibited by the applicable Governmental Entity) and will keep
the other party apprised of the status of matters relating to completion of the
transactions contemplated hereby.  Each of the parties will promptly furnish the
other party with copies of all written communications received by it, from, or
delivered to, any Governmental Entity in connection with and material to the
transactions contemplated hereby, except for any confidential portions thereof
and shall update the other party on any non-written correspondence with
Governmental Entities relating to Regulatory Approvals.  Notwithstanding the
foregoing, nothing contained herein shall require Buyer or any of its Affiliates
to (x) take or commit to take any action that could limit its freedom of action
with respect to, or its ability to retain, one or more of its businesses,
product lines or assets or (y) litigate, pursue or defend against any
administrative or judicial action or proceeding (including any proceeding
seeking a temporary restraining order or preliminary injunction) challenging any
of the transactions contemplated hereby.  As used in this Agreement, “Regulatory
Approvals” means the following approvals required to consummate the transactions
contemplated hereby: the approval of the Office of the Comptroller of the
Currency, the United States Department of Justice and the Missouri Division of
Finance.
 
Section 7.3 Customer Accounts; Conveyance of Customer Accounts.
 
(a) Deposit and Loan Accounts. The parties specifically acknowledge that Buyer
has the regulatory duty for all communications regarding any change in terms of
Deposit and Loan agreements.  In the event Buyer desires to change any such
terms effective as of the Closing Date, Buyer shall have the right to distribute
written communications to such customers prior to the Closing; provided,
however, that Buyer shall provide proposed written communications for the Loan
and Deposit customers of the Branch Offices to Seller five Business Days prior
to Buyer’s scheduled mailing or other provision of such notices for Seller’s
review and approval.  Such written communications shall be mailed at Buyer’s
expense and shall be mailed or otherwise provided to Loan and Deposit customers
of the Branches at Buyer’s sole discretion.
 
(b) Loans. On the Closing Date, title to the Loans shall be transferred from
Seller to Buyer by a Bill of Sale, together with the instruments and other
documents set forth in Sections 2.7(a)(xii) and (xiv).  In addition, Seller will
cooperate with Buyer and shall execute any other additional assignment documents
(including mortgage assignment and UCC financing statement assignment documents
and forms) that Buyer may reasonably request that are acceptable for filing or
recording in accordance with any applicable law.  Preparation of such additional
documents shall be Buyer’s responsibility and at Buyer’s expense; all recording
fees and expenses related to the recordation of the assignments shall be the
responsibility of Buyer.
 
 
 

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(c) Other Notices Provided by Seller to Customers.  Notices provided by Seller
to customers of the Branches after the date of this Agreement until the Closing
related to the transaction contemplated by this Agreement shall be provided by
Seller to Buyer prior to distribution for Buyer’s prior written approval, which
approval shall not be unreasonably withheld.  For purposes of this Agreement,
the term “customers” includes borrowers under the Loans.
 
(d) General Communications by Buyer to Customers.  In addition to the duties and
rights of Buyer under clause (a) of this Section 7.3 to communicate with
customers, from and after the date of this Agreement, Buyer shall have the right
to deliver one or more communications to the customers of the Branch Offices, by
mail or electronically or otherwise, regarding the pending transaction and the
transition of ownership of the Branch Offices (including a general introductory
letter welcoming such customers to banking with Buyer), subject to the prior
written approval of Seller (which approval shall not be unreasonably withheld,
delayed or conditioned).
 
Section 7.4 Assumption of ESA, IRA and Keogh Account Deposits.
 
(a) With respect to Deposits in ESAs, Seller will use commercially reasonable
efforts and will cooperate with Buyer in taking any action reasonably necessary
to invite depositors of ESAs to accomplish the appointment of Buyer as successor
custodian of all such ESA deposits, including, but not limited to, sending to
the depositors thereof appropriate notices, cooperating with Buyer in soliciting
consents from such depositors, and filing any appropriate applications with
applicable Governmental Entities.  The expenses payable to third parties
associated with Seller’s and Buyer’s efforts to assume ESAs shall be borne by
Buyer.
 
(b) With respect to Deposits in IRAs, Seller will use commercially reasonable
efforts and will cooperate with Buyer in taking any action reasonably necessary
to invite depositors of IRAs to accomplish the appointment of Buyer as successor
custodian of all such IRA deposits (except self-directed IRA deposits),
including, but not limited to, sending to the depositors thereof appropriate
notices, cooperating with Buyer in soliciting consents from such depositors, and
filing any appropriate applications with applicable Governmental Entities.  The
expenses payable to third parties associated with Seller’s and Buyer’s efforts
to assume IRAs shall be borne by Buyer.
 
(c) With respect to Deposits in Keogh Accounts, Seller shall use commercially
reasonable efforts and cooperate with Buyer to invite depositors thereof, at
Buyer’s sole expense, to direct a transfer of each such depositor’s Keogh
Account and the related Deposits to Buyer, as trustee thereof, and to adopt
Buyer’s form of Keogh Master Plan as a successor to that of Seller.  Buyer will
not be required to assume a Keogh Account unless Buyer has received the
documents reasonably necessary for such assumption at or before the
Closing.  With respect to any owner of a Keogh Account who does not adopt
Buyer’s form of Keogh Master Plan, Seller will use commercially reasonable
efforts in order to enable Buyer to retain such Keogh Accounts at the Branch
Offices.  The expenses payable to third parties associated with Seller’s and
Buyer’s efforts to assume Keogh Accounts shall be borne by Buyer.
 
(d) If, notwithstanding the foregoing, as of the Closing Date Buyer shall be
unable to retain deposit liabilities in respect of an ESA, IRA or Keogh Account,
such deposit liabilities, which shall be set forth on Schedule 7.4(d) and
delivered on, and prepared as of, the Closing Date, shall be excluded from
Deposits for purposes of this Agreement.
 
Section 7.5 Employee Matters.  The parties shall follow the following procedures
in dealing with Branch Employees of Seller or any of its Affiliates who are
employed at the Branch Offices at the Closing (the “Remaining Branch
Employees”):
 
 
 

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(a) At least 15 days prior to the Closing Date, Buyer agrees to offer to employ
all Branch Employees employed at the Branch Offices on an at-will basis
following Closing; provided, however, that with respect to those Branch
Employees engaged in Seller’s or its Affiliates’ trust and brokerage business at
the Branch Offices, Buyer may, upon providing written notice to Seller at least
ten days prior to the Closing Date, decline to employee any such Branch
Employee; provided, further, that any Remaining Branch Employee who as of the
Closing is on leave of absence (including pursuant to the Family Medical Leave
Act), short term disability or long term disability shall remain employed by
Seller until such Remaining Branch Employee is able to return to work on a
full-time basis at which time Buyer will offer employment to the Remaining
Branch Employee on an at-will basis beginning upon the Remaining Branch
Employee’s return to work.  Each offer of employment to a Remaining Branch
Employee shall offer a base salary that is comparable to the individual’s base
salary immediately prior to the Closing; provided, however, that for the
avoidance of doubt, such base salary shall not include any commissions earned by
a Remaining Branch Employee while employed by Seller pre-Closing.  Remaining
Branch Employees who become employed by Buyer are referred to as “Transferred
Employees.”  Buyer shall have no obligation to provide any employee benefits to
Transferred Employees.  If any Transferred Employees are provided with employee
benefits following the Closing Date under any employee benefit plan, program,
arrangement or agreement maintained by Buyer or any of its Affiliates, Buyer
shall cause service accrued by such Transferred Employees during their
respective employment with Seller prior to the Closing (to the extent recognized
by Seller) to be recognized by Buyer and its Affiliates (i) for purposes of
eligibility, participation and vesting under any Employee Pension Benefit Plan,
but not the amount of benefits provided thereunder (including the amount of
severance benefits) and (ii) in determining level of benefits with respect to
vacation benefits; provided, however, that the number of vacation days that may
otherwise be accrued by a Transferred Employee in 2010 under Buyer’s vacation
policy shall be reduced by the number of vacation days accrued by the
Transferred Employee in 2010 under Seller’s vacation policy for which the
Transferred Employee was paid by Seller as described in Section 3.11.  Buyer
shall not be required to recognize service accrued by Transferred Employees
during employment with Seller prior to the Closing for any other purpose.
 
(b) With respect to any employee benefit plans of Buyer or its Affiliates that
are Employee Welfare Benefit Plans maintained after the Closing, such plans
shall credit Transferred Employees with the deductibles, annual out-of-pocket
limits or similar costs paid by the Transferred Employees under any
corresponding Seller Plans during the portion of the applicable plan year
preceding the Closing Date and shall waive any pre-existing condition
exclusions, evidence of insurability provisions, waiting period requirements or
any similar provisions, to the extent they were waived or satisfied under
corresponding Seller Plans.
 
(c) Nothing contained in this Agreement shall create any third party beneficiary
rights in any Transferred Employee or any beneficiary or dependents thereof,
with respect to the compensation, terms and conditions of employment and
benefits that may be provided to any Transferred Employee by Buyer.
 
(d) Except to the extent set forth in any written Commitment with such employee
that may be executed in connection with the consummation of the transactions
contemplated hereby, nothing contained in this Agreement shall confer upon any
Transferred Employee any right with respect to continued employment by Buyer,
nor shall anything herein interfere with the right of Buyer to terminate the
employment of any Transferred Employee at any time, with or without cause,
following the effective date of his or her employment with Buyer, or restrict
Buyer in the exercise of its independent business judgment in modifying any of
the terms and conditions of the employment of the Transferred Employees.
 
 
 

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(e) With respect to any bonuses, on the Closing Date, Seller shall, in
accordance with the terms of the arrangement pursuant to which such amounts are
payable (A) compute all performance and incentive bonuses and annual bonuses to
which a Transferred Employee would otherwise be entitled under any existing
formula-based performance or incentive agreement or other existing formula-based
bonus policy or arrangement applicable to such Transferred Employee as though
such Transferred Employee shall have completed his or her service for the
current annual or other period as to which such bonus relates and assuming
attainment of performance goals at target levels, if applicable (with a copy of
such computation delivered to Buyer at least five Business Days prior to the
Closing Date) and (B) pay to such Transferred Employee such bonus or incentive
in an amount equal to the full amount of such bonus or incentive for such annual
or other period multiplied by a fraction, the numerator of which shall be the
number of days from the beginning of such annual or other period and ending on
the Closing Date and the denominator of which shall be the total number of days
in such annual or other period.  Seller will also make all severance and other
payments and perform all obligations to Seller’s employees under any and all
severance or stay-pay agreements executed between Seller and the employees of
the Branch Offices in accordance with the terms of the arrangement pursuant to
which such amounts are payable.  Nothing provided herein shall require Buyer to
pay any portion of such bonus payments to any Transferred Employee or to enroll
any Transferred Employee in any bonus or incentive compensation program or
Buyer.
 
(f) Prior to the Closing Date, Seller and Buyer shall cooperate in order to
permit Buyer to train potential Transferred Employees.  At least three Business
Days prior to any training, orientation or interviews by, or other meetings
with, Buyer, Buyer shall provide to Seller a schedule or schedules prepared by
Buyer describing in reasonable detail the names of the potential Transferred
Employees and the anticipated amount of time each such potential Transferred
Employee will spend involved in the training, orientation and interviews by, and
other meetings with, Buyer.  Based on the schedule or schedules, Seller will
notify Buyer prior to any such scheduled training, orientation, interview or
meeting whether and the extent to which any such potential Transferred Employee
is expected to earn any overtime wages as a result of the training,
orientations, interviews, or other meetings with Buyer.  To the extent that any
Transferred Employee earns, and Seller pays, overtime wages as a result of such
training, orientation and interviews by, and other meetings with, Buyer, Buyer
shall reimburse Seller for such overtime wages.
 
(g) Buyer shall have no liability to any current or former employees of Seller
and/or its Affiliates, including the Transferred Employees, for any accrued
wages, sick leave, vacation time, pension obligations or any other employee
benefits accrued as employees of Seller and/or its Affiliates.  Buyer will have
no liability and will not assume obligations under any Seller Plan, sponsored,
maintained or contributed to by Seller or its Affiliates or any other
obligations (including, without limitation, health continuation coverage,
severance obligations, fringe benefit or deferred compensation arrangements,
bonus plans, incentive programs, or retiree medical coverage) to the employees
or former employees at any of the Branches.  Seller and/or its Affiliates will
be solely responsible for fulfilling, and resolving any disputes concerning, its
liabilities or obligations (including, without limitation, health continuation
coverage, bonus, incentive, severance obligations, fringe benefit or deferred
compensation arrangements, bonus plans, incentive programs, or retiree medical
coverage) to the employees at the Branch Offices under any such employee benefit
plan or with regard to any similar plans, programs, or arrangements.
 
(h) If for any reason the Acquisition is not consummated, in consideration of
the access to and information regarding Branch Employees, for a period of one
year following the date of this Agreement, Buyer and its Affiliates shall not
solicit for employment any Branch Employee without the prior written consent of
the Seller; provided, however, this non-solicitation covenant shall not prohibit
Buyer from employing any Branch Employee who responds to a general solicitation
for employment by Buyer that is not specifically targeted to Branch Employees.
 
 
 

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Section 7.6 Loan Exceptions.  Following the date hereof, Seller will use
Commercially Reasonable Efforts to remedy, correct and/or complete any exception
to either (a) Section 3.20(e)(iii) disclosed on Schedule 3.20(e)(iii) or (b)
Section 3.20(e)(vii) disclosed on Schedule 3.20(e)(vii) (each a “Loan
Exception”).  If any Loan Exception is not remedied, corrected and/or completed
at least two Business Days prior to the Measurement Date, Buyer may elect, in
its sole discretion, to exclude the loan to which any such Loan Exception
relates by providing written notice to Seller that Buyer wishes to exclude such
loan.  Any loans so excluded pursuant to this Section 7.6 will be Excluded Loans
pursuant to Section 1.1(d).
 
 
ARTICLE VIII
 
CONDITIONS PRECEDENT TO THE BRANCH PURCHASE AND ASSUMPTION
 
Section 8.1 Conditions to Seller’s Obligations.  Seller’s obligations to effect
the transactions contemplated by this Agreement shall be subject to the
satisfaction (or waiver by Seller) prior to or on the Closing Date of the
following conditions:
 
(a) All of the representations and warranties of Buyer set forth in this
Agreement shall (i) if qualified by materiality, be true and correct in all
respects or (ii) if not qualified by materiality, be true and correct in all
material respects, in each case, as if all of such representations and
warranties were made at the Closing Date (provided, however, that to the extent
such representations and warranties expressly relate to an earlier date, such
representations and warranties qualified as to materiality shall be true and
correct, and those not so qualified shall be true and correct in all material
respects, on and as of such earlier date);
 
(b) Buyer shall have performed and complied in all material respects with all of
its obligations and agreements hereunder required to be performed prior to the
Closing Date under this Agreement;
 
(c) No temporary restraining order, preliminary or permanent injunction or other
Order issued by any court of competent jurisdiction or other legal restraint or
prohibition preventing the consummation of the transactions contemplated by this
Agreement shall be in effect, nor shall any proceeding by any bank regulatory
authority or other Governmental Entity seeking any of the foregoing be
pending.  There shall not be any action taken, or any statute, rule, regulation
or order enacted, entered, enforced or deemed applicable to the transactions
contemplated by this Agreement which makes the consummation of such transactions
illegal;
 
(d) All necessary Regulatory Approvals, Consents, authorizations and other
approvals required for consummation of the transactions contemplated by this
Agreement shall have been obtained, and all waiting periods required by law
shall have expired; and
 
(e) Seller shall have received all documents required to be received from Buyer
on or prior to the Closing Date, all in form and substance reasonably
satisfactory to Seller.
 
Section 8.2 Conditions to Buyer’s Obligations.  Buyer’s obligations to effect
the transactions contemplated by this Agreement shall be subject to the
satisfaction (or waiver by Buyer) prior to or on the Closing Date of the
following conditions:
 
 
 

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(a) All of the representations and warranties of Seller set forth in this
Agreement shall (i) if qualified by materiality, be true and correct in all
respects or (ii) if not qualified by materiality, be true and correct in all
material respects, in each case, as if all of such representations and
warranties were made at the Closing Date (provided, however, that to the extent
such representations and warranties expressly relate to an earlier date, such
representations and warranties qualified as to materiality shall be true and
correct, and those not so qualified shall be true and correct in all material
respects, on and as of such earlier date);
 
(b) Seller shall have performed and complied in all material respects with all
of its obligations and agreements required to be performed prior to the Closing
Date under this Agreement;
 
(c) No temporary restraining order, preliminary or permanent injunction or other
order issued by any court of competent jurisdiction or other legal restraint or
prohibition preventing the consummation of the transactions contemplated by this
Agreement shall be in effect, nor shall any proceeding by any bank regulatory
authority or other Governmental Entity seeking any of the foregoing be
pending.  There shall not be any action taken, or any statute, rule, regulation
or order enacted, entered, enforced or deemed applicable to the transactions
contemplated by this Agreement which makes the consummation of such transactions
illegal;
 
(d) All necessary Regulatory Approvals, Consents listed on Schedule
2.7(a)(xvii), authorizations and other approvals required for consummation of
the transactions contemplated by this Agreement shall have been obtained, and
all waiting periods required by law shall have expired;
 
(e) Buyer shall have received all documents required to be received from Seller
on or prior to the Closing Date, all in form and substance reasonably
satisfactory to Buyer; and
 
(f) Seller will be a “well capitalized” institution pursuant to Federal banking
regulations, as determined by Seller in good faith and in consultation with
Buyer on a pro forma basis after giving effect to the Acquisition.
 
 
ARTICLE IX
 
TERMINATION OR ABANDONMENT
 
Section 9.1 Termination.  This Agreement may be terminated as follows:
 
(a) Mutual Agreement.  This Agreement may be terminated by the mutual written
agreement of the parties at any time prior to the Closing Date.
 
(b) Breach of Representations or Agreements.  In the event that there is a
material breach of any of the representations and warranties or agreements of
Seller or Buyer (except for a breach of a representation or warranty contained
in Section 3.20, as to which Buyer’s sole remedy is as set forth in Section
11.6), which breach is not cured within 15 days after notice to cure such breach
is given to the breaching party by the non-breaching party, then the
non-breaching party may terminate and cancel this Agreement by providing written
notice of such action to the other party hereto.
 
(c) Failure of Conditions.
 
(i) The Agreement may be terminated by Buyer if (i) any of the conditions in
Section 8.2 of this Agreement has not been satisfied as of the Closing Date or
if satisfaction of such a condition is or becomes impossible (other than through
the failure of Buyer to comply with its obligations under this Agreement) and
(ii) Buyer has not waived such condition on or before the Closing Date.
 
 
 

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(ii) The Agreement may be terminated by Seller if (i) any of the conditions in
Section 8.1 of this Agreement has not been satisfied as of the Closing Date or
if satisfaction of such a condition is or becomes impossible (other than through
the failure of Seller to comply with its obligations under this Agreement) and
(ii) Seller has not waived such condition on or before the Closing Date.
 
(d) Real Property Covenants.  The Agreement may be terminated by Buyer as
provided for in Sections 5.3, 5.9(a)(ii), 5.9(b)(i), 5.9(b)(ii) or 5.9(c)(ii).
 
(e) Denial of Regulatory Approval.  If any regulatory application filed pursuant
to Section 7.2 should be finally denied or disapproved by the respective
Governmental Entities, then this Agreement thereupon shall be deemed terminated
and canceled; provided, however, that a request for additional information from
or undertaking by Buyer, as a condition for approval, shall not be deemed to be
a denial or disapproval so long as Buyer diligently provides the requested
information or undertaking.  Buyer shall make a good faith effort to respond in
a timely manner to any requests made by Governmental Entities with respect to
applications filed pursuant to Section 7.2.  If any Governmental Entity requests
that the respective application be withdrawn and Buyer, in consultation with
Seller, cannot effectively respond to regulatory concerns which have been
raised, then the applicable regulatory application shall be deemed to have been
denied.  In the event an application is denied pending an appeal, petition for
review, or similar such act on the part of Buyer, then the application will be
deemed denied unless Buyer prepares and timely files such appeal and continues
the appellate process for purposes of obtaining the necessary approval.
 
(f) Elapsed Time.  If for any reason the transactions contemplated hereby are
not completed on or before September 30, 2010, then either party may terminate
this Agreement by delivering a written notice of such termination to the other
party.
 
Section 9.2 Procedure and Effect of Termination.
 
(a) In the event of the termination and abandonment of this Agreement by Seller
or Buyer pursuant to Section 9.1(b), Section 9.1(c) or Section 9.1(d), written
notice thereof shall forthwith be given to the other party specifying the
provision hereof pursuant to which such termination is made.
 
(b) If the transactions contemplated by this Agreement are terminated as
provided herein:
 
(i) each party will redeliver all documents, work papers and other material of
any other party relating to the transactions contemplated hereby, whether so
obtained before or after the execution hereof, to the party furnishing the same;
and
 
(ii) all confidential information received by any party hereto with respect to
the business of any other party or its subsidiaries or affiliates shall be
treated in accordance with the provisions of the Confidentiality Agreement,
which shall survive the termination of this Agreement.
 
(c) If this Agreement is terminated and the transactions contemplated hereby are
abandoned as described in this Section 9.2, this Agreement shall become void and
of no further force or effect, except for the provisions of Section 12.1 through
Section 12.14 and this Section 9.2.  Nothing in this Section 9.2 shall be deemed
to release any party from any liability for any breach by such party of the
terms and provisions of this Agreement prior to termination.
 
 
 
 

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ARTICLE X
 
TRANSITIONAL AND POST-CLOSING MATTERS
 
Section 10.1 Notification to Customers and Transitional Matters.
 
(a) On such date as the parties may agree, or in the absence of such an
agreement on the date which is 30 days (or if such date shall not be a Business
Day, the next preceding Business Day) prior to the expected Closing Date, Seller
and Buyer will notify all customers of the Branch Offices (the “Branch
Customers”) whose accounts are to be conveyed to and assumed by Buyer of the
pending transfer of the accounts.  This notice will be in a form acceptable to
both parties and in compliance with all federal regulations.  Seller and Buyer
hereby acknowledge and agree that the notices and other communications to the
Branch Customers contemplated hereby will include information concerning any
plans Buyer may have, after the Closing Date, to change the terms and conditions
with regard to the Deposit Liabilities, and Buyer and Seller will agree as to
the description of any such changes included in any such notices or
communications prior to their distribution to the Branch Customers.  The cost of
such notice shall be borne by Buyer.  Seller will cooperate with Buyer in
providing such other notices to customers of the Branch Offices as Buyer may
reasonably request.  In addition, Buyer may, at its own expense, after the date
on which all Regulatory Approvals contemplated by this Agreement have been
received by the appropriate parties (the “Approval Date”) or earlier with the
written consent of Seller, communicate with and deliver information, brochures,
bulletins, press releases and other communications to Branch Customers
concerning the transactions contemplated by this Agreement and concerning the
business and operations of Buyer; provided, however, that all such
communications shall be subject to the approval by Seller, which shall not be
unreasonably withheld.
 
(b) Following the Effective Time and without limiting the generality of the
other provisions of this Agreement, Buyer will pay in accordance with law,
customary banking practices, and the respective terms of the Deposits and
related Assumed Contracts all properly drawn and presented checks, drafts and
withdrawal orders (including, in all cases under this Section 10.1, transactions
initiated with debit cards used by the Branch Offices) with respect to the
Deposit accounts presented to Buyer by mail, over the counter, through the check
clearing system of the banking industry or any other method of general
acceptance within the banking industry, whether such checks, drafts and
withdrawal orders are on forms provided by Buyer or Seller, and in other
respects to discharge, in the usual course of the banking business, the duties
and obligations of Seller with respect to the Deposits.
 
(c) Buyer agrees, at its cost and expense, to assign new account numbers
effective as of the Effective Time to all deposits of the Branch Offices assumed
by Buyer pursuant to the terms of this Agreement and to furnish such depositors
with a minimum of 50 checks on the forms of Buyer, and to instruct such
depositors to utilize Buyer’s newly furnished checks, drafts and withdrawal
order forms and cease using Seller’s checks, drafts and withdrawal forms
previously supplied by Seller.
 
(d) Seller agrees that it will reimburse Buyer for the amount of any
uncollectible check, draft, or withdrawal order drawn on a Deposit to the extent
such amount is incurred by Buyer as a result of any failure by Seller after the
Closing Date to expeditiously return, revoke any prior settlement of, give
notice of dishonor or nonpayment of, or otherwise reject, before the applicable
midnight deadline or other applicable deadline, any check, draft or withdrawal
order drawn on Seller with regard to the deposit account and presented to Seller
before the Closing Date, that is not properly payable due to insufficient funds
in the applicable deposit account, an outstanding stop payment order, or a
forged check.  Should any of the Branch Office “due from” accounts be charged
any sums with respect to any of the Deposits by reason of a forged endorsement
or otherwise (hereinafter the “Reclaimed Amount”), then Buyer as assignee of
such Deposit shall forthwith upon request by Seller assert a right of setoff
against such Deposit for the whole amount of the Reclaimed Amount or such
portion thereof that may be on deposit with Buyer in such Deposit account from
time to time, and shall remit such sums to Seller forthwith thereafter, in
accordance with this Section 10.1.
 
 
 

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(e) Buyer agrees that it will reimburse Seller for the amount of any
uncollectible check, draft, or withdrawal order drawn on a Deposit to the extent
such amount is incurred by Seller as a result of any failure by Buyer after the
Closing Date to expeditiously return, revoke any prior settlement of, give
notice of dishonor or nonpayment of, or otherwise reject, before the applicable
midnight deadline or other applicable deadline, any check, draft or withdrawal
order drawn on Seller with regard to the Deposit account and presented any date
after the Closing Date, that is not properly payable due to insufficient funds
in the applicable deposit account, an outstanding stop payment order or
otherwise.
 
(f) With respect to any Deposit that has a negative balance as of the close of
business on the Closing Date due to an overdraft caused by Seller’s final
payment and settlement, on or before the Closing Date, of one or more checks,
drafts or other items drawn against such account, other than any Deposit account
that has been excluded as an asset or liability being acquired or assumed under
the terms of this Agreement (the “Overdraft Items”), which negative balance
continues to exist at the close of business on the fifth day after the Closing
Date after exercise by Buyer of any setoff rights of which Buyer is aware, Buyer
shall be entitled to reimbursement in immediately available funds from Seller
for the amount of any such negative balance of which Buyer gives Seller notice
within 15 days after the Closing Date. Thereafter, Buyer shall continue as
Seller’s agent, for a period of 60 days after the Closing Date, or such shorter
period as Seller shall request, to assert set off rights and promptly forward
the amount set off to Seller in immediately available funds.  Buyer shall
immediately deliver to Seller all Overdraft Items in Buyer’s possession (if any)
for which it demands reimbursement and any payments or amounts received in
respect thereof from time to time, and Seller shall be vested with all rights,
title and interest in, to and in connection with such Overdraft Items which
Buyer otherwise would have had, and Seller shall be entitled to enforce and
collect all rights, remedies, claims, and causes of action against all persons
and entities, including, without limitation, the drawer and depositor(s) which
Seller or Buyer shall have or would have had in connection with the Overdraft
Item.
 
(g) Seller and Buyer shall make arrangements to provide for the daily settlement
with immediately available funds by Buyer of checks, drafts, withdrawal orders,
debit card trailing activity and returns presented and paid by Seller for the
period between the Closing Date and 60 days following the Closing Date drawn on
or chargeable to accounts in respect of Deposits assumed by Buyer hereunder;
provided, however, Seller shall be held harmless and indemnified by Buyer for
funds not reimbursed by Buyer for Seller acting in accordance with such
arrangements.  Buyer shall be responsible for any costs incurred for courier or
overnight shipping of information related to the daily settlements.  At any time
prior to the expiration of the 60 days referenced herein, Seller shall
discontinue such payments on behalf of Buyer upon written request by Buyer.  Any
checks, drafts, withdrawal orders, trailing debit card activity and returns
presented to Seller following the expiration of the 60 day period, shall be
returned by Seller.
 
 
 

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(h) Starting on the Business Day following the Closing Date or as otherwise
expressly agreed by the Parties, Seller, at its expense, shall notify all
Automated Clearing House (“ACH”) originators of the transfers and assumptions
and retention of deposits made pursuant to this Agreement by sending a
notification of change (NOC) as transactions are presented; provided, however,
that Buyer may, at its option, notify all such originators itself (on behalf of
Seller), also at Seller’s expense.  For the 60 day period immediately following
the Closing Date, Seller will, without any obligation to investigate the
accuracy of such request or the balance in the accuracy of such request or the
balance in the underlying account, honor all ACH items related to accounts
assumed under this Agreement that are routed or presented to Seller, and Buyer
will reimburse Seller for all such ACH payments on a daily basis.  Seller will
not charge any fee to Buyer for honoring such items and will electronically
transmit such ACH to Buyer.  If Buyer cannot receive such electronic
transmissions, Seller will make available to Buyer, at Seller’s operation
center, receiving items from the ACH tapes containing such ACH data.  Following
the 60 day period referenced herein, Seller will not honor any ACH item
presented to Seller unless Buyer has requested that Seller extend the time for
clearing ACH items.  Upon such request, in the event that Seller agrees to such
an extension of time, Buyer shall pay Seller a One Dollar ($1.00) fee per
transaction cleared during the extension period and Buyer and Seller must agree,
in writing, to the duration period; provided, however, any extension period will
not be greater than 60 days. If no extension period is agreed to by the Parties,
items mistakenly routed or presented to Seller after the 60 day period will be
returned to the presenting party.  At any time prior to the initial 60 days or
prior to the ending date of any extension period, Seller shall discontinue
honoring ACH items upon the written request of Buyer.
 
(i) On the Closing Date, Seller shall provide Buyer with a written listing and
electronic data file of each stop payment order, tax lien, levy, garnishment,
pledge, guardianship agreement, or other hold or restriction then in effect with
respect to any of the Deposits (the “Holds”), and Buyer shall honor and comply
with the terms of all valid Holds described in the above list.   If, following
receipt of such list, Buyer makes any payment in violation of any such Hold,
then it shall be solely liable for such payment and shall indemnify, hold
harmless, and defend Seller from and against all claims, losses and liabilities,
including reasonable attorneys’ fees and expenses, arising out of any such
payment. In the event that Buyer shall make any payment in violation of a Hold
initiated prior to the Closing Date but not reflected in the above list, then
Seller shall be solely liable for such payment and shall indemnify, hold
harmless and defend Buyer from and against all claims, losses, and liabilities,
including reasonable attorneys’ fees and expenses, arising out of any such
payment.
 
(j) On the Closing Date, Seller shall cycle, prepare and pay all accrued
interest for each checking, savings or money market account constituting a
Deposit. Seller shall mail such closing statements within five Business Days
following the Closing Date, and contemporaneously therewith provide Buyer with a
true and correct copy thereof.  Interest on time deposits shall be accrued and
included in the data conversion files.
 
(k) Within 30 days from this Agreement, Seller and Buyer shall establish a
mutually agreeable post-conversion trailing activity process for settlement of
converted account activities relating to trailing transactions.
 
(l) As of the Closing Date, all ATM/debit access cards issued by Seller to
Branch Customers who will not have ATM/POS-accessible accounts with Seller after
the Closing Date, if any, will be void.  In connection with the notices to
Branch Customers described above, Seller will notify Branch Customers in writing
at least 30 calendar days prior to the Closing Date of such cancellation of the
ATM/debit access cards and check guarantee cards, effective as of 5:00 P.M.,
Central Time, on the Closing Date.  Within 30 days after the date of this
Agreement, Seller shall provide Buyer with the information reasonably required,
prior to the Closing Date, to accommodate the processing of ATM/debit cards
which may be issued but not activated prior to the Closing Date.
 
 
 

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(m) As soon as reasonably practicable following the Closing, Buyer, at its
expense, will issue new coupon or payment books for the Loans and will instruct
customers to destroy any coupons furnished by Seller; Buyer will also notify
customers of any applicable change in terms and provide Buyer’s information for
payment remittance.  For a period of 60 days following the Closing, Seller will
forward to Buyer on a daily basis all loan payments received by Seller, in the
form received by Seller, or as established in the post-conversion activity
process referenced in Section 10.1(k).  After such sixty day period, Seller will
forward any loan payments received on a weekly basis.
 
(n) Withholding and Tax reporting obligations will be handled as follows:
 
(i) Seller will report to applicable taxing authorities and holders of Deposits,
with respect to the period from January 1 of the year in which the Closing
occurs through the Closing Date, all interest (including dividends and other
distributions with respect to money market accounts) credited to, withheld from
and any early withdrawal penalties imposed upon the Deposits.  Buyer will report
to the applicable taxing authorities and holders of Deposits, with respect to
all periods from the day after the Closing Date, all such interest credited to,
withheld from and any early withdrawal penalties imposed upon the Deposits.
 
(ii) Any amounts required by any governmental agencies to be withheld from any
of the Deposits through the Closing Date will be withheld by Seller in
accordance with applicable law or appropriate notice from any governmental
agency and will be remitted by Seller to the appropriate agency on or prior to
the applicable due date.  Any such withholding required to be made subsequent to
the Closing Date will be withheld by Buyer in accordance with applicable law or
appropriate notice from any governmental agency and will be remitted by Buyer to
the appropriate agency on or prior to the applicable due date.
 
(iii) Within five calendar days after the date hereof, Seller shall provide
Buyer in an electronic format a file setting forth (i) the names, addresses,
account numbers and federal tax identification numbers of each holder of
Deposits for which Seller has received a certification of such holder’s tax
identification number and (ii) the names, addresses and account numbers of each
holder of Deposits which is subject to back-up withholding.
 
(iv) Within five calendar days after the Closing Date, Seller shall deliver to
Buyer all original forms, records and documents in its possession (or copies
thereof if originals are not in Seller’s possession) regarding tax
identification number certification and back-up holding requests, including,
without limitation, all Forms W-8 and Forms W-9 related to the Deposits,
provided that Seller shall be entitled to retain a copy of all such forms,
records and documents for its files.
 
(v) Seller shall be responsible for delivering to payees all IRS notices with
respect to information reporting and tax identification numbers required to be
delivered through the Closing Date with respect to the Deposits, and Buyer shall
be responsible for delivering to payees all such notices required to be
delivered following the Closing Date with respect to the Deposits.
 
(vi) Seller will make all required reports to applicable taxing authorities and
to obligors on Loans purchased on the Closing Date, with respect to the period
from January 1 of the year in which the Closing occurs through the Closing Date,
concerning all interest and points received by Seller.  Buyer will make all
required reports to applicable taxing authorities and to obligors on Loans
purchased on the Closing Date, with respect to all periods from the day after
the Closing Date, concerning all such interest and points received.
 
 
 

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(o) Seller will report to applicable taxing authorities and holders of IRA
deposits assumed by Buyer, with respect to the period from January 1 of the year
in which the Closing occurs through the Closing Date, all interest (including
dividends and other distributions with respect to money market accounts)
credited to, withheld from and any early withdrawal penalties imposed upon the
such IRA deposits.  Buyer will report to the applicable taxing authorities and
holders of IRA deposits assumed by Buyer, with respect to all periods from the
day after the Closing Date, all such interest credited to, withheld from and any
early withdrawal penalties imposed upon the such IRA deposits.
 
(p) Within 180 days of the receipt of the Records provided by Seller to Buyer
pursuant to this Agreement, Buyer shall notify Seller of any deficiencies or
incomplete items in the Records and request Seller to remedy the same.  Promptly
upon receiving any such notification and request, Seller shall remedy such
deficiencies or incomplete items at Seller’s expense.
 
Section 10.2 Loans and Participations.
 
(a) Following the Closing Date, Buyer shall have the right to put back to Seller
any Loan sold to Buyer at Closing which becomes 30 days or more past due during
the first 90 days following the Closing Date (each, a “Put Loan”).  In the event
Buyer wants to put any Put Loan to Seller pursuant to the prior sentence, Buyer
shall provide notice to Seller within 15 days of such loan being 30 days or more
past due.  Within five Business Days of receiving such notice, Seller shall
purchase any Put Loan from Buyer (each such date, a “Put Loan Acquisition Date”)
for an amount equal to the aggregate amount of the principal and accrued
interest on such Put Loan, together with any late charges accrued thereon, as of
the close of business on day prior to such Put Loan Acquisition Date.
 
(b) Following the Closing Date, Buyer shall have the right to put back to Seller
any Participation Agreement and portion of any Loan related thereto (each, a
“Participation”) sold to Buyer at Closing with regard to which it is discovered
within one year following the Closing Date that the transfer of such
Participation created a breach of a Participation Agreement or require Buyer to
purchase such Participation (each, a “Put Participation”).  In the event Buyer
wants to put any Put Participation to Seller pursuant to the prior sentence,
Buyer shall provide notice to Seller within 15 days of the discovery of any such
Participation breach or purchase requirement.  Within five Business Days of
receiving such notice, Seller shall purchase any Put Participation from Buyer
(each such date, a “Put Participation Acquisition Date”) for an amount equal to
the aggregate amount of the principal and accrued interest on such Put
Participation, together with any late charges accrued thereon, as of the close
of business on day prior to such Put Participation Acquisition Date.
 
Section 10.3 Continued Cooperation.  The parties agree in case at any time after
the Closing any further action is necessary or desirable to carry out the
purposes of this Agreement, each of the parties will take such further action
(including the execution and delivery of such further instruments and documents)
as the other party reasonably may request, all at the sole cost and expense of
the requesting party (unless such expense is otherwise allocated in this
Agreement or the requesting party is entitled to indemnification therefore under
Article XI).
 
Section 10.4 Transitional Matters Concerning Real Property.  For a period of 60
days following the Closing, Seller will forward to Buyer all material
correspondence, notices, documents or other instruments received by Seller
relating to the Real Property within two Business Days following receipt
thereof.  After such 60 day period, Seller will forward any such material
correspondence, notices, documents or other instruments received on a weekly
basis.
 
 
 

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ARTICLE XI
 
SURVIVAL; INDEMNIFICATION
 
Section 11.1 Survival. The representations and warranties of Seller and Buyer
contained in this Agreement shall survive the Effective Time and shall remain in
full force and effect (a) in the case of the representations and warranties
contained in Section 3.1 (Organization), Section 3.2 (Authorization), Section
3.4 (Compliance with Laws), Section 3.8  (Title to Assets), and Section 4.2
(Authorization), at all times from and after the Closing; (b) in the case of the
representations and warranties contained in Section 3.14 (Taxes), until 60 days
after the expiration of the applicable statute of limitations with respect to
the matter to which the claim relates, as such limitation period may be extended
from time to time; (c) in the case of the representations and warranties
contained in Section 3.10 (Environmental Matters), until the date that is eight
years following the Closing Date; and (d) in the case of all other
representations and warranties, until the date which is two years following the
Closing Date; provided, however, that, in each case, such representations and
warranties shall survive beyond their respective periods with respect to any
inaccuracy therein or breach thereof, notice of which shall have been duly given
within such applicable period in accordance with Section 11.5.  Such
representations and warranties shall not be affected by, and shall remain in
full force and effect notwithstanding, any investigation at any time made by or
on behalf of any party hereto or any information any party may have with respect
thereto.  The covenants and agreements of the parties contained in this
Agreement or in any instrument delivered pursuant hereto or in connection
herewith will survive the Closing and will remain in full force and effect at
all times after the Closing.
 
Section 11.2 Indemnification by Seller.  Seller agrees, effective as of the
Closing, to pay, and to indemnify, save, defend and hold harmless Buyer and each
of its officers, directors, shareholders and representatives (collectively,
“Insiders”), from and against, and shall reimburse Buyer and its Insiders with
respect to, any and all damages, liabilities, losses, obligations, actions,
suits, disbursements, claims, deficiencies, penalties, interest, expenses,
fines, assessments, charges and costs (including reasonable attorneys' and
expert witness' fees, costs of investigation and court costs) of every kind
(collectively, “Losses”), imposed on, incurred by or asserted against Buyer or
its Insiders (or any of them) in any way relating to or arising from or out of:
 
(a) A breach of any representation or warranty of Seller contained in this
Agreement or in any agreement or certificate delivered by Seller pursuant to
this Agreement, in each case, without regard to any qualification contained in
any such representation or warranty as to materiality or a Seller Material
Adverse Effect (both for purposes of determining if any inaccuracy or breach
occurred and for determining the amount and extent of Losses);
 
(b) Ownership or operation of the Branch Offices or the business and properties
of the Branch Offices prior to the Effective Time, but excluding any Assumed
Liability;
 
(c) Any Excluded Asset or Excluded Liability;
 
(d) A breach of any express covenant of Seller in this Agreement or any of the
documents entered into pursuant to the terms hereof or the failure of Seller to
perform any agreement, covenant or obligation of Seller contained in this
Agreement or in any other agreement or document executed pursuant to this
Agreement;
 
(e) Any claim, liability, obligation or penalty incurred or suffered by Buyerin
connection with Seller’s failure to pay or discharge any of its liabilities not
assumed by Buyer pursuant to this Agreement;
 
 
 

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(f) Any check or other instrument drawn on or deposited into a Branch Office
Deposit account (i) on or prior to the Closing Date upon which a forgery
(signature or endorsement) or alteration claim is asserted against Buyer or as
to which a proper endorsement is lacking or (ii) prior to or after the Closing
Date that involves a check kiting scheme that was initiated on or prior to the
Closing Date that Seller should have reasonably been aware of after due inquiry;
 
(g) Any chargeback occurring after the Closing Date on a Deposit account to the
extent that such chargeback exceeds the funds in the account on the date of such
chargeback but solely to the extent that such chargeback resulted from a
violation of Seller’s expedited funds availability policy in effect on the date
such funds were deemed collected on the account (provided that Buyer shall
reimburse Seller for any sums so indemnified to the extent that Seller recoups
any funds so charged back from subsequent deposits into the Deposit account so
transferred);
 
(h) The failure to obtain any Consent with respect to any Commitment of the
Seller or any Branch Office which provides for or requires the Consent of the
other party thereto to be obtained in connection with, or as a result of, the
consummation of any of the transactions contemplated by this Agreement;
 
(i) Any Taxes, including interest and penalties, required to be paid by Seller
or its successor, which relate to Seller’s business or assets at or prior to the
Effective Time;
 
(j) The involuntary termination of employment by Seller prior to the Effective
Time of any Branch Employee; or
 
(k) Any Order, action, suit, claim, arbitration, proceeding, hearing or
investigation before any Governmental Entity or arbitration panel related to
Seller’s computation of interest on any Loan on a 360-day basis and Buyer’s
continuation of such computation post-Closing prior to Buyer’s modification of
such computation to a 365-day basis.
 
Any claim for indemnification may independently apply to multiple
representations, irrespective of whether such claim is consistent with any other
representation contained in this Agreement.
 
Section 11.3 Indemnification by Buyer. Buyer hereby agrees, effective as of the
Closing, to pay, and to indemnify, save, defend and hold harmless Seller and
each of its Insiders from and against, and shall reimburse Seller and its
Insiders with respect to, any and all Losses imposed on, incurred by or asserted
against Seller or its Insiders (or any of them) in any way relating to or
arising from or out of:
 
(a) A breach of any representation or warranty of Buyer contained in this
Agreement or in any agreement or certificate delivered by Buyer pursuant to this
Agreement, in each case, without regard to any qualification contained in any
such representation or warranty as to materiality or a material adverse effect
(both for purposes of determining if any inaccuracy or breach occurred and for
determining the amount and extent of Losses);
 
(b) Ownership or operation of the Branch Offices or its business and properties
after the Effective Time, but, except with respect to the Assumed Liabilities,
only to the extent arising solely after, and relating solely and exclusively to
the operation of the Branch Offices after, and not on or prior to, the Closing
Date, and provided such Losses did not arise out of or relate to, or were not
incurred in connection with or as a result of, any breach of any representation,
warranty, covenant or agreement by either the Seller or its Affiliates under
this Agreement or any instrument delivered pursuant hereto;
 
 
 

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(c) Any Asset or Assumed Liability; or
 
(d) A breach of any express covenant of Buyer in this Agreement or any of the
documents entered into pursuant to the terms hereof or the failure of Buyer to
perform any agreement, covenant or obligation of Buyer contained in this
Agreement or in any other agreement or document executed pursuant to this
Agreement.
 
Any claim for indemnification may independently apply to multiple
representations, irrespective of whether such claim is consistent with any other
representation contained in this Agreement.
 
Section 11.4 Limitation on Indemnities.  Notwithstanding any other provision
hereof, the rights of any party to be indemnified shall be subject to the
following limitations:
 
(a) With respect to the indemnification obligations of Seller pursuant Section
11.2(a), Seller shall not be obligated to indemnify Buyer or its Insiders (or
any one of them) under Section 11.2(a), unless the claim is submitted within the
period of survival set forth in Section 11.1 hereof, and (x) unless the
aggregate of all Losses for which Seller would, but for this clause (x), be
liable under Section 11.2(a) exceeds on a cumulative basis $100,000, at which
point the Buyer or its Insiders (or any one of them) shall be entitled to all
indemnification amounts from Seller under Section 11.2(a) including the first
full $100,000 of Losses or (y) for any Losses for which Seller would, but for
this clause (y), be obligated to indemnify the Buyer Indemnified Parties under
Section 11.2(a) in excess of an amount equal to Deposit Premium; provided,
however, that the limitations in this Section 11.4(a) shall not apply to any
indemnification obligations arising from the representations and warranties set
forth in Section 3.1 (Organization), Section 3.2 (Authorization), Section 3.4
(Compliance with Laws), Section 3.8  (Title to Assets), Section 3.10
(Environmental Matters), Section 3.14 (Taxes) and Section 3.20(e)(xii) (Loans).
 
(b) With respect to the indemnification obligations of Buyer pursuant to Section
11.3(a), Buyer shall not be obligated to indemnify Seller or its Insiders (or
any one of them) under Section 11.3(a), unless the claim is submitted within the
period of survival set forth in Section 11.1 hereof, and (x) unless the
aggregate of all Losses for which Buyer would, but for this clause (x), be
liable under Section 11.3(a) exceeds on a cumulative basis $100,000, at which
point Seller shall be entitled to all indemnification amounts under Section
11.3(a) including the first full $100,000 of Losses, or (y) for any Losses for
which Buyer would, but for this clause (y), be obligated to indemnify Seller
under Section 11.3(a) in excess of the Deposit Premium; provided, however, that
the limitations in this Section 11.4(b) shall not apply to any indemnification
obligations arising from the representations and warranties set forth in Section
4.2 (Authorization).
 
(c) Notwithstanding anything to the contrary contained in this Agreement, Buyer
and Seller agree that in the event that there shall arise or exist one or more
Pre-Closing Environmental Liabilities for which Buyer is otherwise entitled to
be indemnified pursuant to Section 11.2(c) hereof, Buyer agrees to share with
Seller, and remain liable for and not seek from Seller indemnification for,
fifty percent (50%) of the first Two Hundred Fifty Thousand Dollars ($250,000)
of Losses arising out of all such Pre-Closing Environmental Liabilities;
provided, however, if any such claims made pursuant to Section 11.2(c) and with
respect to any Pre-Closing Environmental Liability and (i) such Pre-Closing
Environmental Liability is attributable or related to a breach or violation of
the representations and warranties made by Seller pursuant to Article III
hereof, (ii) such Pre-Closing Environmental Liability was disclosed on Schedule
3.10 or in the documents (or attachments to the documents) referred to on
Schedule 3.10 or (iii) such Pre-Closing Environmental Liability was revealed
during or in connection with any Phase I Assessment or Phase II Assessment
conducted by Buyer pursuant to Section 5.9(b) hereof, then, in any such case,
Seller shall indemnify Buyer for one hundred percent (100%) of any such Losses
arising out of any such Pre-Closing Environmental Liability.
 
 
 

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Section 11.5 Notice and Opportunity to Defend.
 
(a) If there occurs an event which a party (an “Indemnified Party”) asserts is
an indemnifiable event pursuant to Section 11.2 or Section 11.3, the Indemnified
Party shall notify the other party obligated to provide indemnification (an
“Indemnifying Party”) promptly.  If such event involves (i) any claim or (ii)
the commencement of any action or proceeding by a third Person, the Indemnified
Party will give such Indemnifying Party prompt written notice of such claim or
the commencement of such action or proceeding.  Such notice shall be a condition
precedent to any liability of the Indemnifying Party hereunder; provided,
however, that the failure to provide prompt notice as provided herein will
relieve the Indemnifying Party of its obligations hereunder only to the extent
that such failure materially prejudices the Indemnifying Party hereunder.  In
case any such action shall be brought against any Indemnified Party and it shall
notify the Indemnifying Party of the commencement thereof, the Indemnifying
Party shall be entitled to participate therein and, to the extent that it shall
wish, to assume the defense thereof, with counsel selected by the Indemnifying
Party and reasonably satisfactory to the Indemnified Party and, after notice
from the Indemnifying Party to the Indemnified Party of such election so to
assume the defense thereof, the Indemnifying Party shall not be liable to the
Indemnified Party for any legal expenses of other counsel or any other expenses
subsequently incurred by such party in connection with the defense thereof.  The
Indemnifying Party shall be liable for the fees and expenses of counsel employed
by the Indemnified Party for any period during which the Indemnifying Party has
not assumed the defense thereof.  The Indemnified Party agrees to reasonably
cooperate with the Indemnifying Party and its counsel in the defense against any
such asserted liability.  The Indemnified Party shall have the right to
participate at its own expense in the defense of such asserted liability.
 
(b) No Indemnifying Party shall consent to the entry of any judgment or enter
into any settlement without the consent of the Indemnified Party (i) if such
judgment or settlement does not include as an unconditional term thereof the
giving by each claimant or plaintiff to each Indemnified Party of a release from
all liability in respect to such claim, (ii) if such judgment or settlement
would result in the finding or admission of any violation of Applicable Law,
(iii) if, as a result of such consent or settlement, injunctive or other
equitable relief would be imposed against the Indemnified Party or such judgment
or settlement could interfere with or adversely affect the business, operations
or assets of the Indemnified Party or (iv) in the case of Taxes, such settlement
results in an increase in Tax liability for any Tax period ending after the
Closing Date.
 
(c) Notwithstanding the foregoing, no Indemnifying Party shall be entitled to
assume the defense of any third party claim (and the Indemnifying Party shall be
liable for the reasonable fees and expenses of counsel incurred by the
Indemnified Party in defending such third party claim) if the third party claim
seeks an Order, injunction or other equitable relief or relief for other than
money damages against the Indemnified Party that the Indemnified Party
reasonably determines, after conferring with its outside counsel, cannot be
separated from any related claim for money damages.  If such equitable relief or
other relief portion of the third party claim can be so separated from that for
money damages, the Indemnifying Party shall be entitled to assume the defense of
the portion relating to money damages.
 
Section 11.6 Breach of Representation or Warranty Relating to Evidence of
Indebtedness.  In the event that Seller and Buyer agree in writing that one or
more of the representations or warranties set forth in Section 3.20 is not true
in all material respects on the Closing Date as to one or more evidences of
indebtedness, each such evidence of indebtedness shall be excluded from the term
“Loan” for all purposes of this Agreement, and Seller shall not transfer, and
Buyer shall not be obligated to accept the transfer of, such evidence of
indebtedness.  Any breach of a representation or warranty relating to a Loan
which is not agreed to by Seller and Buyer in writing on or prior to the Closing
Date pursuant to the prior sentence shall be subject to Sections 11.1, 11.2,
11.4 and 11.5 of this Agreement.
 
 
 

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ARTICLE XII
 
GENERAL
 
Section 12.1 Notices.  All notices, consents and other communications hereunder
shall be in writing and shall be deemed to have been duly given (a) when
delivered by hand or by Federal Express or a similar overnight courier, or when
delivered by e-mail, (b) three days after being deposited in any United States
Post Office enclosed in a postage prepaid, registered or certified envelope
addressed or (c) when successfully transmitted by facsimile (with a confirming
copy of such communication to be sent as provided in clauses (a) or (b) above),
in each case, to the party for whom intended, at the address, e-mail address or
facsimile number for such party set forth below (or at such other address,
e-mail address or facsimile number for a party as shall be specified by like
notice, provided, however, that any notice of change of address, e-mail address
or facsimile number shall be effective only upon receipt):
 
(a) if to Seller:
 
First Bank
135 North Meramec, Suite 410
Mail Stop: M1-821-013
Clayton, Missouri 63105
Attention:                      Terrance M. McCarthy and Peter D. Wimmer, Esq.
Facsimile:                      (314) 854-4617
Email:                                Terry.McCarthy@fbol.com and
Peter.Wimmer@fbol.com
 
with a copy to:
 
Bryan Cave LLP
301 S. College Street, Suite 3700
Charlotte, North Carolina 28202
Attention:                      B.T. Atkinson, Esq. and Dustin G. Hall, Esq.
Facsimile:                      (704) 749-8990
Email:                      BT.Atkinson@bryancave.com and
Dustin.Hall@bryancave.com

and
 
(b) if to Buyer:
 
First Mid-Illinois Bancshares, Inc.
P.O. Box 499
Mattoon, Illinois  61938-0490
Attention:                      William S. Rowland
Facsimile:                      (217) 258-0485
Email:                                browland@firstmid.com

with a copy to:
 
Schiff Hardin LLP
233 South Wacker, Suite 6600
Chicago, Illinois 60606
Attention:                      Peter L. Rossiter, Esq. and Jason L. Zgliniec,
Esq.
Facsimile:                      (312) 258-5700
Email:                                prossiter@schiffhardin.com and
jzgliniec@schiffhardin.com

 
 

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Section 12.2 Expenses.  Except as specifically provided herein, Seller and Buyer
each shall pay all of their own out-of-pocket expenses incurred in connection
with this Agreement, including appraisals, accounting fees, legal fees and data
processing charges, if any, whether or not the transactions contemplated by this
Agreement are consummated.
 
Section 12.3 Governing Law.  This Agreement shall be governed and construed in
accordance with the laws of the State of Illinois applicable to contracts to be
made and performed entirely therein without giving effect to the principles of
conflicts of law thereof or of any other jurisdiction, except that the Federal
Arbitration Act, 9 U.S.C. Sections 1-16, will govern all questions relating to
the arbitrability of claims or disputes relating to the Purchase Price
Adjustment pursuant to Section 2.3(c).
 
Section 12.4 Jurisdiction.  Each of the parties hereto hereby expressly and
irrevocably submits to the non-exclusive personal jurisdiction of the courts of
the State of Illinois (collectively, the “Illinois Courts”), preserving,
however, all rights of removal to any federal court located in the Central
District of the State of Illinois under 28 U.S.C. Section 1441, in connection
with all disputes arising out of or in connection with this Agreement or the
transactions contemplated hereby and agrees not to commence any litigation
relating thereto except in such courts.  Each party hereby waives the right to
any other jurisdiction or venue for any litigation arising out of or in
connection with this Agreement or the transactions contemplated hereby to which
any of them may be entitled by reason of its present or future
domicile.  Notwithstanding the foregoing, each of the parties hereto agrees that
each of the other parties shall have the right to bring any action or proceeding
for enforcement of a judgment entered by the Illinois Courts in any other court
or jurisdiction.
 
Section 12.5 Service of Process.  Each party irrevocably consents to the service
of process outside the territorial jurisdiction of the courts referred to in
Section 12.4 in any such action or proceeding by mailing copies thereof by
registered United States mail, postage prepaid, return receipt requested, to its
address as specified in or pursuant to Section 12.1.  However, the foregoing
shall not limit the right of a party to effect service of process on the other
party by any other legally available method.
 
Section 12.6 Recovery of Fees by Prevailing Party.  In any action at law or in
equity to enforce any of the provisions or rights under this Agreement, the
party which does not prevail in such litigation, as determined by the court in a
final judgment or decree, shall pay to the prevailing party all costs, expenses
and reasonable attorneys’ fees incurred by the prevailing party, including such
costs, expenses and fees of any appeals.  If the prevailing party shall recover
judgment in any action or proceeding, its costs, expenses and attorneys’ fees
shall be included as part of such judgment.
 
Section 12.7 Specific Performance.  Seller acknowledges and agrees that in the
event of any breach of this Agreement, Buyer would be irreparably and
immediately harmed and could not be made whole by monetary damages.  It is
accordingly agreed that (a) Seller will waive, in any action for specific
performance, the defense of adequacy of a remedy at law and (b) Buyer shall be
entitled, in addition to any other remedy to which Buyer may be entitled at law
or in equity, to compel specific performance of this Agreement in any action
instituted in accordance with Section 12.4.
 
 
 

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Section 12.8 Entire Agreement.  This Agreement constitutes the entire agreement
between the parties and supersedes and cancels any and all prior discussions,
negotiations, undertakings, agreements in principle and other agreements between
the parties relating to the subject matter hereof.
 
Section 12.9 Headings and Captions.  The captions of Articles and Sections
hereof are for convenience only and shall not control or affect the meaning or
construction of any of the provisions of this Agreement.
 
Section 12.10 Waiver, Amendment or Modification.  The conditions of this
Agreement that may be waived may only be waived by notice from the party waiving
such condition to the other party.  The failure of any party at any time or
times to require performance of any provision hereof shall in no manner affect
the right at a later time to enforce the same.  This Agreement shall not be
amended or modified except by a written document duly executed by the parties
hereto.
 
Section 12.11 Counterparts.  This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original and all of which shall
be deemed one and the same instrument.
 
Section 12.12 Successors and Assigns.  This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns.  There shall be no third party beneficiaries hereof.
 
Section 12.13 Schedules and Exhibits. The Disclosure Schedule and all Exhibits
attached hereto are hereby incorporated by reference into, and made a part of,
this Agreement.
 
Section 12.14 Assignment.  This Agreement may not be assigned by any parties
hereto.
 
Section 12.15 Interpretation.
 
(a) The words “hereof,” “herein” and “herewith” and words of similar import
shall, unless otherwise stated, be construed to refer to this Agreement as a
whole and not to any particular provision of this Agreement, and article,
section, paragraph, exhibit and schedule references are to the articles,
sections, paragraphs, exhibits and schedules of this Agreement unless otherwise
specified.  Whenever the words “include,” “includes” or “including” are used in
this Agreement they shall be deemed to be followed by the words “without
limitation.”  The words describing the singular number shall include the plural
and vice versa, and words denoting any gender shall include all genders and
words denoting natural persons shall include corporations and partnerships and
vice versa.  The word “written” shall include email communication.  The phrase
“made available” in this Agreement shall mean that the information referred to
has been made available if requested by the party to whom such information is to
be made available.  The phrases “the date of this Agreement,” “the date hereof”
and terms of similar import, unless the context otherwise requires, shall be
deemed to refer to the date first written in the Preamble of this Agreement.
 
 
 

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(b) As used in this Agreement:
 
(i) “Affiliate” shall have the meaning set forth in Rule 12b-2 of the Exchange
Act;
 
(ii) “Business Day” means a day, other than a Saturday or a Sunday, on which
banking institutions in the City of Chicago, Illinois are required to be open;
 
(iii) “Commercially Reasonable Efforts” means efforts that a prudent Person
desirous of achieving a result would use in similar circumstances to achieve
that result; provided, however, that Commercially Reasonable Efforts shall not
be deemed to require a Person to undertake extraordinary or unreasonable
measures, including the payment of amounts in excess of normal and usual filing
fees and processing fees, if any.
 
(iv) “Commitment” means any contract, agreement, plan, understanding,
undertaking, commitment or arrangement, whether written or oral, including any
note, bond, mortgage, indenture, lease, license or deed of trust;
 
(v) “Consent” means any filing or registration with, notification to, or
consent, permit, Order or authorization from any third-party, including any
Governmental Entity;
 
(vi)  “Encumbrances” means all options, pledges, security interests, liens,
mortgages, charges, claims or other encumbrances or restrictions;
 
(vii) “ESA” means a trust created or organized for the purpose of paying the
qualified education expenses of an individual who is the designated beneficiary
of the trust in accordance with the provisions of Section 530 of the Code;
 
(viii) “Fiduciary Relationships” means (a) any and all common law or other
trusts between individual, corporate or other entities with Seller as a trustee
or co-trustee, including, without limitation, pension, compensation,
testamentary, and charitable trusts and indentures, (b) any and all decedents’
estates where Seller is serving as a co- or sole executor, personal
representative or administrator, administrator de bonis non, administrator de
bonis non with will annexed, or in any similar fiduciary capacity, (c) any and
all guardianships, conservatorships or similar positions where Seller is serving
or has served as a co- or sole guardian or conservator, or any similar fiduciary
capacity, (d) any and all agency and/or custodial accounts and/or similar
arrangements under which Seller is serving or has served as an agent or
custodian for the owner or other party establishing the account with or without
investment authority and (e) any and all escrow arrangements under which Seller
holds or held assets for any party or parties on stated terms and conditions;
 
(ix) “Governmental Authorization” means any approval, consent, license, permit,
registration, certification, exemption, waiver or other authorization issued,
granted, given or otherwise made available by or under the authority of any
Governmental Entity or pursuant to any Applicable Law;
 
(x)  “Governmental Entity” means any federal, state, local or foreign
government, court, or legislative, executive or regulatory authority or agency;
 
(xi) “IRA” means an “individual retirement account” or similar account created
by a trust for the exclusive benefit of any individual or his beneficiaries in
accordance with the provisions of Section 408 or Section 408A of the Code;
 
 
 

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(xii) “Keogh Account” means an account created by a trust for the benefit of
employees (some or all of whom are owner-employees) and that complies with the
provisions of Section 401 of the Code;
 
(xiii) “Knowledge” of a particular fact or other matter means information
actually known to a parties’ officers, directors, senior managers or branch
managers or such other information that a prudent person could be expected to
discover after due inquiry appropriate under the circumstances; provided,
however, that Seller shall be deemed to have knowledge of any matter, fact,
event, default, violation, breach, noncompliance, notice, consent or other
circumstance if any of the same shall have been delivered in writing to Seller
at anytime prior to the Closing;
 
(xiv) “Order” means any outstanding injunction, judgment, temporary restraining
order, preliminary or permanent injunction or other order, decree, ruling or
charge;
 
(xv) “Ordinary Course of Business” means the ordinary course of business
consistent with past practice;
 
(xvi) “Permitted Encumbrances” means, with respect to the Real Property, (i)
liens for current taxes or assessments not yet due, or if due not yet
delinquent, or the validity or which is being contested in good faith by
appropriate proceedings, (ii) existing easements, restrictions and other
encumbrances that do not materially adversely affect the use of the Owned Real
Property as a banking branch or the value thereof, (iii) the Tenant Leases and
(iv) such other liens, imperfections in title, charges, easements, restrictions
and encumbrances (but in all cases excluding those that secure borrowed money)
that, individually or in the aggregate, do not in Buyer’s sole discretion
materially detract from the value of, or materially interfere with the present
use of, any property subject thereto or affected thereby or to which Buyer shall
otherwise consent in writing prior to the Closing to accept as a permitted
exception to good and marketable title;
 
(xvii) “Person” means an individual, a partnership, a corporation, an
association, a joint stock company, a trust, a joint venture, limited liability
company, unincorporated organization, Governmental Entity or other entity or
organization;
 
(xviii) “Pre-Closing Event Liability” means, with reference to any item and
whether or not any of the acts, omissions, circumstances, events, violations,
breaches or other matters described in the following clauses are now or
hereafter known, all obligations and liabilities arising out of or relating to
(A) any breach of or noncompliance with any Commitment to the extent such breach
or noncompliance arises out of any act, omission, circumstance or event that
occurred prior to the Effective Time, (B) any Proceeding to the extent such
Proceeding arises out of any act, omission, circumstance or event that occurred
prior to the Effective Time, (C) any violation of or noncompliance with any
Applicable Law to the extent such violation or noncompliance arises out of any
act, omission, circumstance or event that occurred prior to the Effective Time,
(D) any fraudulent or criminal activity or conduct or other wrong doing on the
part of Seller or any of its employees or agents that occurred at any time on or
prior to the Effective Time (or, in the case of a Transferred Employee, at any
time prior to the time such Transferred Employee shall become an employee of
Buyer), (E) any violation of any express policy or standard (including any
underwriting standard) of Seller with respect to the origination, renewal,
waiver, forbearance, extension, renewal, amendment, modification of, or release
of any collateral or guaranty collateralizing or guarantying, any Loan, (F) any
data or security breach or other misappropriation of customer data or
information that occurred prior to the Effective Time and (G) Seller Taxes;
 
 
 

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(xix) “Proceeding” means any action, arbitration, audit, proceeding, oversight,
investigation, litigation, or suit (whether civil, criminal, administrative,
investigative, or informal) commenced brought, conducted, or heard (or capable
of being heard) by or before, or otherwise involving, any Governmental Entity or
arbitrator; and
 
(xx) “Seller Material Adverse Effect” means, with respect  to Seller, any
change, effect, event, occurrence or state of facts that could reasonably be
expected to (A) be materially adverse to the business, condition (financial or
otherwise), assets, liabilities, prospects or results of operations of the
Branch Offices taken as a whole or (B) materially adversely affect the ability
of Seller and Branch Offices to consummate the transactions contemplated by this
Agreement in a timely manner; provided, however, that the effects of changes (1)
that are generally applicable to general economic, political or market
conditions in any country in which Seller and the Branch Offices operate or (2)
from any action that is specifically required to be taken by, or from the
failure to take any action that is specifically prohibited by, this Agreement,
will, in each case, be excluded from the determination of Seller Material
Adverse Effect.
 
Section 12.16 Noncompetition and Nonsolicitation Agreement. For and in
consideration of the purchase by Buyer of the Assets and the assumption of the
Liabilities, the payment of the Deposit Premium and the other agreements and
covenants contained in this Agreement, from the date hereof and for a period of
three years following the Closing Date, none of Seller or any of its Affiliates,
including its directors, will (a) (i) establish, own or operate a branch or
other office within a 25-mile radius of the location of any of the Real Property
located in Quincy, Illinois, or (ii)  establish, own or operate a branch or
other office within a 50-mile radius of the location of any of the Real Property
not located in Quincy, Illinois (collectively, the “Noncompete Areas”) or (b)
solicit the banking business of any current customers of the Branch Offices
whose banking business or any part thereof is transferred to Buyer pursuant to
the terms of this Agreement, and, for a period of four years following the
Closing Date, none of Seller or any of its affiliates, including its directors,
will solicit or initiate communications with any Employee for the purpose of
inducing such Person to become an employee of Seller.  Notwithstanding the
foregoing sentence, Seller shall not be deemed to be in violation of this
Section 12.16 by virtue of (v) Seller’s continued operation of its branch office
located at 1 Professional Plaza, Pittsfield, Illinois 62363, (w) Seller’s
continued operation of any Branch Office or Branch Offices located or operated
on any Real Property excluded by Buyer pursuant to Section 5.9(a)(ii), Section
5.9(b)(i) or Section 5.9(b)(ii), (x) Seller’s continued banking dealings,
including marketing, with current customers of the Branch Offices who also
maintain accounts with Seller at other banking offices of Seller, who are
identified in Schedule 12.16, (y) Seller’s advertising in publications that are
normally distributed in geographic areas that include both the Noncompete Area
and geographic markets served by Seller’s branches other than the Branch Offices
or (z) Seller’s continued servicing of fiduciary relationships (other than ESAs,
IRAs and Keogh Accounts) or brokerage accounts if any such account (1) is at one
of the Branch Offices as of the Closing Date and (2) is maintained with Seller
following the Closing Date.  In the event the Seller engages in a merger or
similar transaction to which it is not the successor, the agreements and
covenants contained in Section 12.16(a) shall not apply to the then existing
operations of such successor in any Noncompete Area in which such successor has
had a continuing presence for at least 12 months prior to consummation of such
successor’s acquisition of Seller, as applicable (a “Preexisting Presence”);
provided, that such successor’s Preexisting Presence in the Noncompete Area may
not be expanded beyond its then existing operations for the term of this Section
12.16.  Nothing in the preceding sentence will release such a successor from the
agreements and covenants contained in Section 12.16(a) in any Noncompete Area in
which such successor did not have a Preexisting Presence.  If any court of
competent jurisdiction should determine that any term or terms of this covenant
are too broad in terms of time, geographic area, lines of commerce or otherwise,
such court shall modify and revise any such term or terms so that they comply
with Applicable Law.  Seller hereby acknowledges and agrees that Buyer will be
irreparably damaged if the provisions of this Section 12.16 are not specifically
enforced.  Accordingly, Buyer shall be entitled to an injunction restraining any
violation of this Section 12.16 by Seller (without any bond or other security
being required), or any other appropriate decree of specific performance.  Such
remedies shall not be exclusive and shall be in addition to any other remedy
that Buyer may have at law or in equity.  The restrictions against competition
set forth above are considered by the parties to be both reasonable and
essential to protect the business and goodwill of the Branch Offices being
acquired by Buyer pursuant to this Agreement.  If any such restriction is found
by any court of competent jurisdiction to be unenforceable because it extends
for too long a period of time or over too broad a range of activities or over
too large a geographic area, such restriction shall be interpreted and reformed
to extend only over the maximum period of time, range of activities or
geographic area as to which it may be enforceable.
 
[Signature Page Follows]
 

 
 

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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of
the day and year first above written.
 

FIRST MID-ILLINOIS BANK & TRUST, N.A.

By    /s/ William S. Rowland 
William S. Rowland
        Chairman and Chief Executive Officer

FIRST BANK

By   /s/ Terrance M. McCarthy 
        Terrance M. McCarthy
        Chairman, President and Chief Executive Officer

 
 

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