Exhibit 10.6Execution CopyAGREEMENT AND PLAN OF MERGERBETWEENUNISON BANCORP, INC.,BVBC ACQUISITION I, INC.ANDBLUE VALLEY BAN CORP.Dated as of November 2, 2006
 

 
**TABLE OF CONTENTS**               **Page**ARTICLE I — THE MERGER  1   1.1 The Merger  1   1.2 The Closing; Effective Time  1   1.3 Effect of the Merger  2   1.4 Articles of Incorporation; By Laws  2   1.5 Directors and Officers  2   1.6 Conversion of Securities; Dissenting Shares  2   1.7 Exchange of Certificates  5   1.8 Escrow Account  6          ARTICLE II — REPRESENTATIONS AND WARRANTIES OF SELLER  7   2.1 Organization and Qualification; Subsidiaries  7   2.2 Articles of Incorporation and By Laws  8   2.3 Capitalization  8   2.4 Authority  9   2.5 No Conflict; Required Filings and Consents  10   2.6 Compliance; Permits  10   2.7 Banking Reports; Financial Statements  10   2.8 Absence of Certain Changes or Events  11   2.9 Absence of Litigation  13   2.10 Employee Benefit Plans  14   2.11 Title to Property  16   2.12 Environmental Matters  16   2.13 Absence of Agreements  17   2.14 Taxes  17   2.15 Insurance  19   2.16 Brokers  19   2.17 Seller Material Adverse Effect  19   2.18 Material Contracts  19   2.19 Opinion of Financial Advisor  20   2.20 Vote Required  20   2.21 Rights Agreement  20   2.22 Capital Requirements  20   2.23 Solvency  20   2.24 Contracts  21          ARTICLE III — REPRESENTATIONS AND WARRANTIES OF THE SELLER AS TO THE BANK  21   3.1 Loans  21   3.2 Reserve Ratio  21   3.3 Capital Requirements  21 
i

 
               **Page**ARTICLE IV — REPRESENTATIONS AND WARRANTIES OF THE COMPANY  22   4.1 Organization and Qualification; Subsidiaries  22   4.2 Articles of Incorporation and By Laws  23   4.3 Authority  23   4.4 No Conflict; Required Filings and Consents  23   4.5 Absence of Litigation  24   4.6 Brokers  24   4.7 Adequate Resources  24   4.8 Company Material Adverse Effect  24   4.9 CRA Rating  24   4.10 Pro Forma Capital Requirements  24          ARTICLE V — COVENANTS OF SELLER  25   5.1 Affirmative Covenants  25   5.2 Negative Covenants  25   5.3 Intentionally Omitted  28   5.4 No Solicitation of Transactions  28   5.5 Update Disclosure; Breaches  31   5.6 Loan and Investment Policies  31   5.7 Access and Information  32   5.8 Confidentiality Agreement  32   5.9 Rights Agreement  32   5.10 State Takeover Laws  32   5.11 Notification of Certain Matters  33          ARTICLE VI — COVENANTS OF THE COMPANY  33   6.1 Affirmative Covenants  33   6.2 Negative Covenants  33   6.3 Breaches  33   6.4 Confidentiality Agreement  33          ARTICLE VII — ADDITIONAL AGREEMENTS  34   7.1 Meeting of Seller’s Stockholders  34   7.2 Appropriate Action; Consents; Filings  34   7.3 Directors’ and Officers’ Indemnification and Insurance  34   7.4 Notification of Certain Matters  35   7.5 Public Announcements  35   7.6 Customer Retention  35   7.7 Directorships  36   7.8 Employees  36          ARTICLE VIII — CONDITIONS OF MERGER  37   8.1 Conditions to Obligation of Each Party to Effect the Merger  37   8.2 Additional Conditions to Obligations of the Company  37   8.3 Additional Conditions to Obligations of the Seller  39 
ii

 
               **Page**ARTICLE IX — TERMINATION  40   9.1 Termination  40   9.2 Notice of Termination; Effect of Termination  42   9.3 Fees and Expenses  42          ARTICLE X — GENERAL PROVISIONS  43   10.1 Non Survival of Representations, Warranties and Agreements  43   10.2 Notices  43   10.3 Certain Definitions  44   10.4 Headings  47   10.5 Severability  47   10.6 Entire Agreement  48   10.7 Assignment  48   10.8 Parties in Interest  48   10.9 Governing Law  48   10.10 Counterparts  48   10.11 Time is of the Essence  48   10.12 Specific Performance  48   10.13 Interpretation  48 **EXHIBITS**   Exhibit 1.1 Plan of MergerExhibit 1.6(c) Projected Merger ConsiderationExhibit 1.8 Escrow AgreementExhibit 2. l(d) Retention and Severance Payments
iii

 
Index of Defined Terms   Acquisition Proposal SECTION 5.4(c)(i)Acquisition Transaction SECTION 5.4(c)(ii)Adjustment Statement SECTION 1.6(f)(i)(bb)Affiliate SECTION 10.3Agreement PREAMBLEBank SECTION 2.1(a)BHCA SECTION 2.1(a)Business Day SECTION 10.3Certificate SECTION 1.6(d)Classified Loans SECTION 10.3Closing SECTION 1.2(a)Closing Date SECTION 1.2(a)Code SECTION 10.3Company PREAMBLECompany Approvals SECTION 3.1(a)Company Articles SECTION 4.2Company Bank Subsidiary SECTION 4.1Company Bylaws SECTION 4.2Company Disclosure Schedule ARTICLE IIICompany Material Adverse Effect SECTION 4.1(c)Company Reports SECTION 3.6(a)Company SEC Reports SECTION 3.6(a)Company’s Board of Directors PREAMBLEConfidentiality Agreement SECTION 4.7Consent SECTION 10.3Continuing Employees SECTION 7.8(a)Contract SECTION 10.3Control SECTION 10.3Default SECTION 10.3Dispute Notice SECTION 1.6(f)(iii)Dissenting Shares SECTION 1.6(e)Effect SECTION 2.1(d)Effective Time SECTION 1.2(b)Environmental Claims SECTION 2.12(a)Environmental Laws SECTION 2.12(a)ERISA SECTION 2.10(a)Exchange Act SECTION 2.3Exchange Agent SECTION 1.7(a)Exchange Fund SECTION 1.7(a)Existing D&O Policy SECTION 5.l(d)Escrow Account SECTION 1.8Escrow Agreement SECTION 1.8Escrow Deposit SECTION 1.8Escrow Consideration SECTION 1.6(a)(ii)FDIC SECTION 2.1(b)
iv

 
   Federal Reserve Board SECTION 2.1(a)Financial Statements SECTION 2.7(b)GAAP SECTION 2.7(b)Governmental Authority SECTION 1.7(e)Hazardous Materials SECTION 2.12(a)Indemnified Losses SECTION 8.2(m)Indemnified Parties SECTION 6.4(d)Indemnified Person SECTION 8.2(m)Insurance Coverage SECTION 7.3(b)Intellectual Property SECTION 10.3IRS SECTION 2.10(a)Kansas Secretary of State SECTION 1.2(b)KGCC PREAMBLEKnowledge SECTION 10.3Law SECTION 10.3Laws SECTION 2.5(a)Legal Requirements SECTION 2.8(c)Liability SECTION 10.3Lien SECTION 10.3Litigation SECTION 10.3Loan Property SECTION 2.12(a)Material Contracts SECTION 2.19Merger PREAMBLEMerger Consideration SECTION 1.6(b)Net Book Value SECTION 10.3Non Performing Loans SECTION 10.3OCC SECTION 2.l(b)OCC Agreement SECTION 2.13Option Agreement SECTION 1.6(d)Option Consideration SECTION 1.6(b)Order SECTION 10.3OSBC SECTION 2.1(b)Participation Facility SECTION 2.12(a)Patriot Act SECTION 2.9(d)Per Share Consideration SECTION 1.6(a)Permit SECTION 10.3Person SECTION 10.3Permitted Liens SECTION 10.3Plans SECTION 2.10(a)Proxy Statement SECTION 6.1Regulatory Authorities SECTION 10.3Rights SECTION 10.3Reserve Ratio SECTION 10.3Retention and Severance Payments SECTION 2.1(d)Rights Agreement SECTION 2.21Rights Agreement Amendment SECTION 2.21
v

 
   SEC SECTION 3.6(a)Section 409 A SECTION 2.10(e)Securities Act SECTION 4.4(b)Seller PREAMBLESeller Approvals SECTION 2.1(b)Seller Articles SECTION 2.2Seller By Laws SECTION 2.2Seller Common Stock SECTION 1.6(a)Seller Disclosure Schedule ARTICLE IISeller Intellectual Property SECTION 2.8(c)Seller Material Adverse Effect SECTION 2.1(d)Seller Option SECTION 1.6(b)Seller Options SECTION 1.6(b)Seller Reports SECTION 2.7(a)Seller Subsidiaries SECTION 2.1(a)Seller Subsidiary SECTION 2.1 (a)Seller’s Board of Directors PREAMBLESeller’s Board of Directors PREAMBLESettlement Balance Sheets SECTION 1.6(f)(i)(aa)Sub PREAMBLESub Articles SECTION 1.4Sub By Laws SECTION 1.4Sub’s Board of Directors PREAMBLESubsidiaries SECTION 10.3Subsidiary SECTION 10.3Subsidiary Organizational Documents SECTION 2.2Superior Offer SECTION 5.4(c)(iii)Surviving Corporation SECTION 1.1Tax SECTION 2.14(a)(ii)Tax Returns SECTION 2.14Taxes SECTION 2.14(a)(ii)Terminated Employee SECTION 7.8(a)Termination Fee SECTION 8.3(b)Tier 1 Ratio SECTION 10.3Title IV Plan SECTION 2.10(b)
vi

 
**AGREEMENT AND PLAN OF MERGER**     **AGREEMENT AND PLAN OF MERGER,**dated as of November 2, 2006 (the “Agreement”), amongUnison Bancorp, Inc., a Kansas corporation (the “Seller”), Blue Valley Ban Corp., a Kansascorporation (the “Company”), and BVBC Acquisition I, Inc., a Kansas corporation (the “Sub”).     **WHEREAS,**the Boards of Directors of the Company (the “Company’s Board of Directors”), theSeller (the “Seller’s Board of Directors”), and the Sub (the “Sub’s Board of Directors”) have eachdetermined that it is advisable to and in the best interests of their respective stockholders forthe Sub to merge with and into the Seller, with the Seller being the surviving corporation in suchmerger (the “Merger”), upon the terms and subject to the conditions set forth herein and inaccordance with the Kansas General Corporation Code (the “KGCC”);     **WHEREAS,**the Company’s Board of Directors, the Seller’s Board of Directors and the Sub’sBoard of Directors have each approved the Merger of the Sub with and into the Seller, upon theterms and subject to the conditions set forth herein, and approved and adopted this Agreement; and     **NOW, THEREFORE,**in consideration of the foregoing premises and the representations,warranties and agreements contained herein, and subject to the terms and conditions set forthherein, the parties hereto hereby agree as follows:**ARTICLE I — THE MERGER**     1.1 The Merger.     Upon the terms and subject to the conditions set forth in this Agreement, and in accordancewith the KGCC and the Plan of Merger attached hereto asExhibit 1.1, at the Effective Timethe Sub shall be merged with and into the Seller. As a result of the Merger, the separatecorporate existence of the Sub shall cease and the Seller shall continue as the survivingcorporation of the Merger (the “Surviving Corporation”).     1.2 The Closing; Effective Time.          (a) The closing of the Merger and the transactions contemplated hereby (the “Closing”) shallbe held at such time, date (the “Closing Date”) and location as may be mutually agreed by theparties. In the absence of such agreement, the Closing shall be held at the offices of StinsonMorrison Hecker LLP, 1201 Walnut, Kansas City, Missouri, commencing at 9:00 a.m., Kansas City time,on a date specified by either party upon five (5) Business Days’ written notice and not later thanten (10) days following the last to occur of the following events: (a) receipt of all consents andapprovals of government Regulatory Authorities legally required to consummate the Merger and theexpiration of all statutory waiting periods; and (b) approval of this Agreement and the Merger bythe Seller’s stockholders. Scheduling or commencing the Closing shall not constitute a waiver ofthe conditions set forth in ARTICLE VII by either the Company, the Sub or the Seller.
 

 
          (b) As promptly as practicable after the Closing, the parties hereto shall cause the Mergerto be consummated by filing a certificate of merger and articles of merger, as necessary, and anyother required documents, with the Secretary of State of the State of Kansas (the “KansasSecretary of State”), in such form as required by, and executed in accordance with the relevantprovisions of, the KGCC (the date and time of such filing or such date and time as the Company andthe Seller shall agree and specify in the certificate of merger and articles of merger arereferred to herein as the “Effective Time”).     1.3 Effect of the Merger. At the Effective Time, the effect of the Merger will be asprovided in this Agreement and the applicable provisions of the KGCC. Without limiting thegenerality of the foregoing, and subject thereto, at the Effective Time, except as otherwiseprovided herein, all the property, rights, privileges, powers and franchises of the Sub and theSeller shall vest in the Surviving Corporation, and all debts, liabilities and duties of the Suband the Seller shall become the debts, liabilities and duties of the Surviving Corporation.     1.4 Articles of Incorporation; By Laws. At the Effective Time, the Sub’s Articles ofIncorporation, as amended (the “Sub Articles”), and the Sub’s By Laws, as amended (the “Sub ByLaws”), as in effect immediately prior to the Effective Time, shall be the Articles ofIncorporation and the By Laws of the Surviving Corporation.     1.5 Directors and Officers. At the Effective Time, the directors of the Subimmediately prior to the Effective Time shall be the initial directors of the SurvivingCorporation, each to hold office in accordance with the Articles of Incorporation and By Laws ofthe Surviving Corporation. At the Effective Time, the officers of the Sub immediately prior to theEffective Time, shall be the initial officers of the Surviving Corporation, in each case untiltheir respective successors are duly elected or appointed.     1.6 Conversion of Securities; Dissenting Shares.          (a) At the Effective Time, by virtue of the Merger and without action on the part of theCompany, the Sub or the Seller, each share of the common stock, $1.00 par value, of the Seller(“Seller Common Stock”), issued and outstanding immediately prior to the Effective Time, other than(i) shares of Seller Common Stock held in the treasury of the Seller, and (ii) Dissenting Shares(such shares of Seller Common Stock (excluding those shares described in clause (i) and (ii)) arereferred to herein as the “Shares”), will cease to be outstanding and will be converted into theright to receive:     (i) TWELVE DOLLARS AND 75/100 ($12.75) (the “Per Share Consideration”); and     (ii) cash in an amount equal to the quotient of (a) the remainder of theEscrow Deposit, if any, and all proceeds thereon distributed upon closing theEscrow Account divided by (b) (i) the sum of 738,287 plus allSeller Options with an exercise price below $13.25 which are outstanding andunexercised at the Effective Time plus any Shares issued pursuant to anexercise of a Seller Option before the Effective Time minus (ii) any SellerOptions that lapse prior to the Effective Time (the “Escrow Consideration”). TheEscrow Consideration will be
2

 
payable to the Seller’s shareholders in accordance with the procedures outlined inthe Escrow Agreement attached as Exhibit 1.8.          (b) At the Effective Time, each option granted by the Seller pursuant to certain inducementgrants to purchase Seller Common Stock (each, a “Seller Option” and collectively, the “SellerOptions”) that is outstanding and unexercised immediately prior to the Effective Time, will, byvirtue of the Merger and without any action on the part of the Seller or the holder thereof, beconverted into the right to receive an amount of cash equal to the excess, if any, of the Per ShareConsideration over the exercise price of each such Seller Option, minus any applicable withholdingtaxes (the “Option Consideration”). Each unexercised Seller Option with an exercise price below$13.25 will also receive the Escrow Consideration, if any, minus any applicable withholding taxes,to be paid in accordance with the terms of the Escrow Agreement.          (c) The aggregate Per Share Consideration and the aggregate Option Considerationare referred to collectively herein as the “Merger Consideration.” Each of the Per ShareConsideration, the Option Consideration and the Merger Consideration is subject to adjustment asset forth in this Agreement. Exhibit 1.6(c) sets forth the projected MergerConsideration based on the number of Shares and Seller Options.          (d) At the Effective Time, each share of Seller Common Stock held by the Seller as treasurystock immediately prior to the Effective Time shall be canceled and extinguished without anyconversion thereof.          (e) At the Effective Time, by virtue of the Merger and without any action on the part of theSeller, the Company, the Sub or the holders thereof, all shares of Seller Common Stock and SellerOptions shall no longer be outstanding and shall automatically be canceled and shall cease toexist, and each certificate (a “Certificate”) previously representing any Seller Common Stock andeach agreement (an “Option Agreement”) previously representing any such Seller Options shallthereafter represent only the right to receive the Per Share Consideration or the OptionConsideration, as applicable, and the Escrow Consideration, if any. Payments made in respect ofthe Seller Options shall be in full satisfaction of all obligations under the Option Agreements.          (f) Notwithstanding anything in this Agreement to the contrary, shares of Seller Common Stockwhich are issued and outstanding immediately prior to the Effective Time and which are held bystockholders who have validly exercised appraisal rights available under Section 17 6712 of theKGCC (the “Dissenting Shares”) shall not be converted into or be exchangeable for the right toreceive the Per Share Consideration in accordance with this Section 1.6, unless and untilsuch holders shall have failed to perfect or shall have effectively withdrawn or lost theirappraisal rights under the KGCC. Dissenting Shares shall be treated in accordance with Section 176712 of the KGCC, if and to the extent applicable. If any such holder shall have failed toperfect or shall have effectively withdrawn or lost such appraisal rights, such holder’s shares ofSeller Common Stock shall thereupon be converted into and become exchangeable only for the right toreceive, as of the Effective Time, the Per Share Consideration in accordance with this Section1.6. The Seller shall give the Company (a) prompt notice of each and every notice of astockholder’s intent to exercise appraisal rights for the stockholder’s shares of Seller CommonStock, attempted withdrawals of any such notice, and any
3

 
other instruments delivered by a stockholder to the Seller in connection with the exercise of thatstockholder’s appraisal rights pursuant to the KGCC; and (b) the opportunity to participate in allnegotiations and proceedings with respect to demands for appraisal under the KGCC. The Sellershall not, except with the prior written consent of the Company, voluntarily make any payment withrespect to, offer to settle or settle, or approve any withdrawal of any demands for “fair value”under Section 17-6712 of the KGCC.          (g) Adjustment of Merger Consideration.     (i) At least fifteen (15) days prior to the Closing Date, Seller shall prepareand deliver to the Company, the following items: (aa) a consolidated balance sheet ofSeller and Seller Subsidiaries, as of the end of the calendarmonth immediately preceding such delivery date, provided thatsuch calendar month shall not be more than sixty (60) daysprior to the Closing Date (the “Settlement Balance Sheets”),such Settlement Balance Sheets to be certified by the chieffinancial officer of Seller; and  (bb) a Closing Adjustment Statement(the “Adjustment Statement”) indicating any adjustments to bemade to the Merger Consideration pursuant to this Agreement.     (ii) In the event that such Settlement Balance Sheets reveal that the Net BookValue of the Seller on a consolidated basis is less than $5,100,000, the MergerConsideration shall be decreased by an amount equal to the difference between$5,100,000 and the Net Book Value shown on such Settlement Balance Sheets. Uponadjustment of the Merger Consideration, the Per Share Consideration, and the OptionConsideration will be adjusted to reflect such adjustment(s).     (iii) Seller shall permit the Company and its independent certified publicaccountant to review (at the Company’s expense) all accounting records and workpapers and computations used in the preparation of the Settlement Balance Sheets andthe Adjustment Statement. If the Company does not give a dispute notice (a “DisputeNotice”) as to such Settlement Balance Sheets and the Adjustment Statement withinten (10) days after receipt thereof, the Merger Consideration as adjusted and shownin the Adjustment Statement shall be deemed final. If the Company gives the DisputeNotice within the time period indicated above, the parties shall work to resolve anydispute. If the dispute cannot be resolved prior to the Effective Date, theEffective Date shall be extended pending arbitration of the dispute by Rubin, Brown.Costs of such arbitration shall be borne equally by the parties. The parties shallsubmit the claim to arbitration within ten (10) days after reaching impasse on thedispute. The arbitration decision shall be binding upon the parties and may besubmitted
4

 
by either party to the appropriate court in the State of Kansas for enforcementthereof.     1.7 Exchange of Certificates.          (a) Exchange Agent. At or prior to the Effective Time, the Company will deposit, orcause to be deposited, with UMB Bank, N.A. (the “Exchange Agent”), for the benefit of the holdersof Certificates and Option Agreements the Merger Consideration in cash sufficient for the ExchangeAgent to make full payment of the Merger Consideration (the “Exchange Fund”). There shall be awritten agreement between the Sub, the Company and the Exchange Agent in which the Exchange Agentexpressly undertakes, on reasonably customary terms, the obligation to pay the MergerConsideration, which Exchange Agreement shall be subject to Seller’s reasonable prior review andapproval.          (b) Exchange Procedures. As soon as reasonably practicable after the EffectiveTime, the Exchange Agent shall mail to each holder of record of Certificates and Option Agreements,as applicable, (i) a letter of transmittal (which shall specify that delivery shall be effected,and risk of loss and title to the Certificates (and shares underlying the Seller Options) shallpass, only upon delivery of the Certificates or the Option Agreements to the Exchange Agent andshall be in such form and have such other provisions as the Company may reasonably specify) and(ii) instructions for use in effecting the surrender of the Certificates or the Option Agreementsin exchange for the Per Share Consideration or the Option Consideration, as the case may be. Uponsurrender of a Certificate for cancellation to the Exchange Agent together with such letter oftransmittal, duly executed, the holder of such Certificate shall be entitled to receive in exchangetherefor the Per Share Consideration which such holder has the right to receive in respect of theCertificate surrendered pursuant to the provisions of this ARTICLE I (after taking into account allShares then held by such holder) and the Certificate so surrendered will be canceled (retaining theright to receive any Escrow Consideration paid out upon liquidation of the Escrow Account). Uponsurrender of an Option Agreement for cancellation to the Exchange Agent together with such letterof transmittal, duly executed, the holder of such Seller Option shall be entitled to receive inexchange therefor the Option Consideration which such holder has the right to receive in respect ofthe Option Agreement surrendered (after taking into account all Seller Options then held by suchholder), and the Option Agreement so surrendered will be canceled (retaining the right to receiveany Escrow Consideration paid out upon liquidation of the Escrow Account). The right of holders ofShares and holders of Seller Options to receive the Escrow Consideration survives the surrender andcancellation of a Certificate or an Option Agreement to receive the Per Share Consideration or theOption Consideration, respectively.          (c) Unregistered Transfers; Lost, Stolen or Destroyed Certificates. In the event ofa transfer of ownership of Shares which is not registered in the transfer records of the Seller, atransferee may exchange the Certificate representing such Shares for the Per Share Consideration asprovided in this ARTICLE I if the Certificate representing such Shares is presented to the ExchangeAgent, accompanied by all documents required to evidence and effect such transfer, and by evidencethat any applicable stock transfer taxes have been paid. In the event any Certificate has beenlost, stolen or destroyed, upon the making of an affidavit of that fact by the person claiming suchCertificate to be lost, stolen or destroyed and the posting by
5

 
such person of a bond in such amount as the Company may direct as indemnity against any claim thatmay be made against it or the Exchange Agent with respect to such Certificate, the Exchange Agentwill issue in exchange for such lost, stolen or destroyed Certificate the Per Share Consideration,which such holder would have had the right to receive in respect of such lost, stolen or destroyedCertificate. Until surrendered as contemplated by this Section, each Certificate (other thanCertificates representing Shares owned by the Company or any Company subsidiary, and Certificatesrepresenting Dissenting Shares) shall be deemed at any time after the Effective Time to representonly the right to receive upon such surrender the Per Share Consideration and the EscrowConsideration, if any.          (d) No Further Rights in the Shares other than Escrow Consideration. The MergerConsideration issued and paid upon conversion of the Shares and the Seller Options in accordancewith the terms hereof shall be deemed to have been issued and paid in full satisfaction of allrights pertaining to such Shares and the Seller Options, as applicable, other than the right of theShares and the Seller Options to receive the Escrow Consideration in accordance with the terms ofthe Escrow Agreement, which right continues until termination of the Escrow Account and payment ofthe Escrow Consideration, if any.          (e) Termination of Exchange Fund. Any portion of the Exchange Fund which remainsundistributed to the former stockholders of the Seller for six (6) months after the Effective Timeshall be delivered to the Company, upon demand, and any former stockholders of the Seller who havenot theretofore complied with this ARTICLE I shall thereafter look only to the Company to claim thePer Share Consideration or the Option Consideration, in each case without interest thereon. Anyportion of the Exchange Fund remaining unclaimed by holders of Shares as of a date which isimmediately prior to such time as such amounts would otherwise escheat to or become property of anyUnited States federal, state or local or any foreign government, or political subdivision thereof,or any multinational organization or authority or any authority, agency or commission entitled toexercise any administrative, executive, judicial, legislative, police, regulatory or taxingauthority or power, any court or tribunal (or any department, bureau or division thereof), or anyarbitrator or arbitral body (each a “Governmental Authority”) shall, to the extent permitted byapplicable Law, become the property of the Surviving Corporation free and clear of any claims orinterest of any Person previously entitled thereto.          (f) No Liability. None of the Company, the Sub or the Seller is liable to any formerholder of Shares for any such Shares or cash or other payment delivered to a public officialpursuant to any abandoned property, escheat or similar laws.     1.8 Escrow Account. At Closing, the Company, the Sub, and the Seller must enter intoan Escrow Agreement with UMB Bank, N.A. (“Escrow Agent”), substantially in the form of Exhibit1.8 attached hereto (the “Escrow Agreement”), pursuant to which the Company will deposit cashinto escrow in an amount equal to the product of (a) $.50 multiplied by (b) the sum of738,287 plus all Seller Options with an exercise price below $13.25 which are outstandingand unexercised at the Effective Time plus any Shares issued pursuant to an exercise of aSeller Option before the Effective Time minus (ii) any Seller Options that lapse prior tothe Effective Time (the “Escrow Deposit”). Such account is the “Escrow Account.” The Seller willprovide
6

 
the Company a written notice of the number calculated pursuant to clause (b) above no later thanfive Business Days before Closing.**ARTICLE II — REPRESENTATIONS AND WARRANTIES OF SELLER**     Except as disclosed in the disclosure schedule (the “Seller Disclosure Schedule”)delivered by Seller to the Company and the Sub prior to the execution of this Agreement (whichschedule sets forth items of disclosure with specific reference to the particular Section orsubsection of this Agreement to which the information in the Seller Disclosure Schedule relates);provided, however, that any information set forth in one section or subsection of theSeller Disclosure Schedule will be deemed to apply to each other Section or subsection of thisAgreement to which its relevance is reasonably apparent, Seller hereby represents and warrants tothe Company as follows:     2.1 Organization and Qualification; Subsidiaries.          (a) The Seller is a corporation duly organized, validly existing and in good standing underthe laws of the State of Kansas and a registered bank holding company under the Bank HoldingCompany Act of 1956, as amended (the “BHCA”). The Seller is also subject to regulation by theBoard of Governors of the Federal Reserve System (the “Federal Reserve Board”). Seller’s bankingsubsidiary, Western National Bank, is a duly organized and validly existing national bankingassociation (the “Bank”). Each other subsidiary of the Seller (a “Seller Subsidiary,” and togetherwith the Bank, the “Seller Subsidiaries”) is a corporation, limited liability company, limitedpartnership, or trust duly organized, validly existing and in good standing under the laws of thestate of its incorporation or organization. Each of the Seller and the Seller Subsidiaries has therequisite corporate power and authority to own, lease and operate the properties it now owns orholds under lease and to carry on its business as it is now being conducted, is duly qualified orlicensed as a foreign business entity to do business, and is in good standing, in each jurisdictionwhere the character of the properties owned, leased or operated by it or the nature of its businessmakes such qualification or licensing necessary, except for such jurisdictions in which the failureto be so qualified or licensed would not, individually or in the aggregate, have a Seller MaterialAdverse Effect.          (b) Each of the Seller and the Seller Subsidiaries has all material franchises, grants,authorizations, licenses, permits, easements, consents, certificates, approvals and orders (“SellerApprovals”) necessary to own, lease and operate their properties and to carry on its business as itis now being conducted, including all required authorizations from the Federal Reserve Board, theOffice of the Comptroller of the Currency (the “OCC”), the Federal Deposit Insurance Corporation(the “FDIC”), and the Office of the Kansas State Bank Commissioner (the “OSBC”), and neither theSeller nor any Seller Subsidiary has received any notice of proceedings relating to the revocationor modification of any Seller Approvals, except in each case where such revocations ormodifications, or the failure to have such Seller Approvals would not, individually or in theaggregate, have a Seller Material Adverse Effect.          (c) A true and complete list of the Seller Subsidiaries, together with the (i) Seller’spercentage ownership of each Seller Subsidiary, (ii) laws under which the Seller Subsidiary isincorporated or organized, and (iii) Seller Subsidiary lines of business, is set forth
7

 
in the Seller Disclosure Schedule. The Seller or one or more of the Seller Subsidiaries ownsbeneficially and of record all of the outstanding shares of capital stock or other equity interestsof each of the Seller Subsidiaries. Except for the Seller Subsidiaries, the Seller does notdirectly or indirectly own any capital stock or equity interest in, or any interests convertibleinto or exchangeable or exercisable for any capital stock or equity interest in, any corporation,partnership, joint venture or other business association or entity, other than in the ordinarycourse of business, and in no event in excess of 5% of the outstanding equity securities of suchentity.          (d) As used in this Agreement, the term “Seller Material Adverse Effect” means, any effect,change, event, fact, condition, occurrence, or development (each an “Effect”), that, individuallyor in the aggregate with other Effects, (i) is material and adverse to the business, assets,liabilities, results of operations or financial condition of the Seller and Seller Subsidiariestaken as a whole, or (ii) materially impairs the ability of the Seller to consummate thetransactions contemplated hereby. The term “Seller Material Adverse Effect” does not include theimpact of (a) changes in laws and regulations or interpretations thereof that are generallyapplicable to the banking industry, (b) changes in generally accepted accounting principles thatare generally applicable to the banking industry, (c) expenses reasonably incurred in connectionwith the transactions contemplated hereby, which include, without limitation, legal counsel feespayable to Stinson Morrison Hecker LLP, investment banking fees to Hovde Financial, Inc., andaccounting fees to KPMG, LLP, (d) changes attributable to or resulting from changes in generaleconomic conditions affecting banks or their holding companies generally, (e) any Effect to theextent resulting from the announcement of this Agreement or the transactions contemplated thereby,(f) payments by the Seller to reimburse certain directors and former directors for their legalfees incurred in connection with defense of breach of fiduciary duty claims by the OCC, (g)payment of those expenses related to the transactions contemplated by this Agreement which arelisted on the Seller Disclosure Schedule, (h) payment of any amounts due to, or the provision ofany other benefits to, any officers or employees under employment contracts, non competitionagreements, employee benefit plans, severance agreements or other arrangements in existence as ofthe date of or contemplated by this Agreement, provided that the payment of any such amounts orthe provision of any such benefits shall be made in the ordinary course consistent with pastpractices, (i) the taking of any action by the Seller approved or consented to in writing by theCompany, (j) any action taken or not taken by the Seller or Seller’s Subsidiaries in accordancewith the terms and covenants contained in this Agreement or (k) those retention bonus payments andseverance payments made to certain employees of the Seller which are listed on Exhibit 2.1(d) hereto (the “Retention and Severance Payments”).     2.2 Articles of Incorporation and By Laws. The Seller has made available to theCompany a complete and correct copy of the Seller’s Articles of Incorporation and the Seller’s ByLaws, as amended or restated (“Seller Articles” and “Seller By Laws,” respectively), and theArticles of Incorporation and the By Laws, or other organizational documents, as the case may be,of each Seller Subsidiary (the “Subsidiary Organizational Documents”). The Seller Articles, SellerBy Laws and Subsidiary Organizational Documents are in full force and effect. Neither the Sellernor any Seller Subsidiary is in breach of any of the provisions of the Seller Articles, Seller ByLaws or Subsidiary Organizational Documents.     2.3 Capitalization. The authorized capital stock of the Seller consists of 1,250,000shares of Seller Common Stock. As of August 31, 2006, (i) 738,287 shares of Seller Common
8

 
Stock were issued and outstanding, all of which were duly authorized, validly issued, fully paidand non assessable, and not issued in violation of any preemptive right of any Seller stockholder,and (ii) 143,350 shares of Seller Common Stock were subject to Seller Options. Except as set forthin clause (ii) above and in the Rights Agreement (as defined in Section 2.21 below), there are nooutstanding Rights relating to the issued or unissued capital stock or other equity interests ofthe Seller or any Seller Subsidiary or obligating the Seller or any Seller Subsidiary to issue orsell any shares of capital stock or other equity interests of, or other equity interests in, theSeller or any Seller Subsidiary. No shares of Seller Common Stock are fractional shares. There areno obligations, contingent or otherwise, of the Seller or any Seller Subsidiary to repurchase,redeem or otherwise acquire any shares of Seller Common Stock or the capital stock or other equityinterests of any Seller Subsidiary or to provide funds to or make any investment (in the form of aloan, capital contribution or otherwise) in any Seller Subsidiary or any other entity, except forloan commitments and other funding obligations entered into in the ordinary course of business.Each of the outstanding shares of capital stock or other equity interests of each SellerSubsidiary are duly authorized, validly issued, fully paid and non assessable, and not issued inviolation of any preemptive rights of any Seller Subsidiary stockholder or other equity holder,and such shares or other equity interests owned by the Seller or another Seller Subsidiary areowned free and clear of all security interests, liens, claims, pledges, agreements, limitations ofthe Seller’s voting rights, charges or other encumbrances of any nature whatsoever. Seller is nota reporting company, and is not required to be a reporting company under the Securities ExchangeAct of 1934 (the “Exchange Act”).     2.4 Authority. The Seller has the requisite corporate power and authority to executeand deliver this Agreement, to perform its obligations hereunder and to consummate the transactionscontemplated hereby (other than, with respect to the Merger, the approval and adoption of thisAgreement by the Seller’s stockholders in accordance with the KGCC and the Seller Articles andSeller By Laws). The execution and delivery of this Agreement by the Seller and the consummation bythe Seller of the transactions contemplated hereby have been duly and validly authorized by allnecessary corporate action on the part of the Seller, including, without limitation, the Seller’sBoard of Directors. As of the date of this Agreement, the Seller’s Board of Directors, at a meetingduly called, constituted and held, has, by the vote of a sufficient number of directors present atthe meeting, determined: (a) that this Agreement and the transactions contemplated thereby,including the Merger, are advisable to, fair to, and in the bests interests of the Seller and itsstockholders; (b) to submit this Agreement for approval and adoption by the stockholders of theSeller and to declare the advisability of this Agreement; and (c) to recommend that thestockholders of the Seller adopt and approve this Agreement and the transactions contemplatedthereby, including the Merger, and direct that this Agreement be submitted for consideration by thestockholders of the Seller at the Seller Stockholders’ Meeting (the “Seller’s Board of DirectorsRecommendation”). No other corporate proceedings on the part of Seller are necessary to authorizethis Agreement or to consummate the transactions contemplated hereby (other than, with respect tothe Merger, the approval and adoption of this Agreement by the Seller’s stockholders in accordancewith the KGCC and the Seller Articles and Seller By-laws). This Agreement has been duly executedand delivered by, and constitutes a valid and binding obligation of the Seller and assuming dueauthorization, execution and delivery by the Company and the Sub, enforceable against the Seller inaccordance with its terms, except as enforcement may be limited by laws affecting insureddepository institutions, general
9

 
principles of equity whether applied in a court of law or a court of equity and by bankruptcy,insolvency and similar laws affecting creditors’ rights and remedies generally.     2.5 No Conflict; Required Filings and Consents.          (a) The execution and delivery of this Agreement by the Seller do not, and the performance ofthis Agreement and the transactions contemplated hereby by the Seller will not, (i) conflict withor violate the Seller Articles or Seller By Laws or the Subsidiary Organizational Documents, (ii)conflict with or violate any federal, state or local statute, ordinance, rule, regulation, order,judgment or decree (collectively, “Laws”) applicable to the Seller or any Seller Subsidiary or bywhich its or any of their respective properties is bound or affected, or (iii) result in any breachof or constitute a default (or an event that with notice or lapse of time or both would become adefault) under, or give to others any rights of termination, amendment, acceleration orcancellation of, or result in the creation of a lien or encumbrance on any of the properties orassets of the Seller or any Seller Subsidiary pursuant to, any note, bond, mortgage, indenture,contract, agreement, lease, license, permit, franchise or other instrument or obligation to whichthe Seller or any Seller Subsidiary is a party or by which the Seller or any Seller Subsidiary orits or any of their respective properties is bound or affected, except in the case of clauses (ii)and (iii), above, for any such conflicts, violations, breaches, defaults or other occurrences thatwould not, individually or in the aggregate, have a Seller Material Adverse Effect.          (b) The execution and delivery of this Agreement by the Seller do not, and the performance ofthis Agreement by the Seller will not, require any consent, approval, authorization orpermit of, or filing with or notification to, any domestic governmental or regulatory authorityexcept (i) for applicable requirements of the BHCA, the banking laws and regulations of the FederalReserve Board, OCC, the OSBC, the FDIC, and the filing and recordation of appropriate merger orother documents as required by the KGCC and other applicable Laws, and (ii) where the failure toobtain such consents, approvals, authorizations or permits, or to make such filings ornotifications, would not prevent or delay consummation of the Merger or otherwise prevent theSeller from performing its obligations under this Agreement, and would not have a Seller MaterialAdverse Effect. Neither the Seller nor any Seller Subsidiary are subject to any foreignGovernmental Authority or foreign law.     2.6 Compliance; Permits. Neither the Seller nor any Seller Subsidiary is in conflictwith, or in default or violation of, (i) any Law applicable to the Seller or any Seller Subsidiaryor by which its or any of their respective properties is bound or affected, or (ii) any note, bond,mortgage, indenture, contract, agreement, lease, license, permit, franchise or other instrument orobligation to which the Seller or any Seller Subsidiary is a party or by which the Seller or anySeller Subsidiary or its or any of their respective properties is bound or affected, except for anysuch violations, conflicts or defaults which would not, individually or in the aggregate, have aSeller Material Adverse Effect.     2.7 Banking Reports; Financial Statements.          (a) The Seller and each Seller Subsidiary have filed all forms, reports and documentsrequired to be filed with the Federal Reserve Board, the FDIC, the OCC, and any
10

 
other applicable federal or state securities or banking authorities (all such reports andstatements are collectively referred to as the “Seller Reports”). The Seller Reports were preparedin all material respects in accordance with the requirements of applicable Law and did not at thetime they were filed, after giving effect to any amendment thereto filed prior to the date hereof,contain any untrue statement of a material fact or omit to state a material fact required to bestated therein or necessary in order to make the statements therein, in the light of thecircumstances under which they were made, not misleading, except that information as of a laterdate (but before the date of this Agreement) will be deemed to modify information as of an earlierdate.          (b) True, correct and complete copies of (i) audited financial statements of the Seller andSeller Subsidiaries for the period ending December 31, 2004, (ii) unaudited financial statements ofSeller and Seller Subsidiaries for the period ending December 31, 2005, (iii) call reports forSeller and Seller Subsidiaries for the four quarters of 2005 and the first two quarters of 2006,and (iv) FRY-9 SP reports for Seller for 2005 and the first half of 2006 (collectively, the“Financial Statements”) have been provided and made available to the Sub and the Company. Each ofthe Financial Statements (including, if applicable, any related notes thereto) have been preparedin accordance with generally accepted accounting principles (“GAAP”) applied on a consistent basisthroughout the periods involved (except as may be indicated in the notes thereto or required byreason of a concurrent change to GAAP) and each fairly presents in all material respects theconsolidated financial position of the Seller and the Seller Subsidiaries as of the respectivedates thereof and the consolidated results of its operations and cash flows and changes infinancial position for the periods indicated, except that any unaudited interim financialstatements provided as part of the Financial Statements do not contain the footnotes required byGAAP, and were or are subject to normal and recurring year end adjustments, which were not or arenot expected to be material in amount, either individually or in the aggregate.          (c) Except for those liabilities that are reflected or fully reserved against on theconsolidated balance sheet of the Seller as of December 30, 2005, and for liabilities incurred inthe ordinary course of business consistent with past practice since such date, neither the Sellernor any Seller Subsidiary has incurred any liability of any nature whatsoever (whether absolute,accrued, contingent or otherwise due or to become due), that are required to be disclosed on abalance sheet prepared in accordance with GAAP, that, either alone or when combined with allsimilar liabilities, has had, or would reasonably be expected to have, a Seller Material AdverseEffect.     2.8 Absence of Certain Changes or Events.          (a) Since June 30, 2006 to the date of this Agreement, the Seller and the Seller Subsidiarieshave conducted their businesses only in the ordinary course and in a manner consistent with pastpractice and, since June 30, 2006, there has not been (i) any change in the financial condition,results of operations or business of the Seller and any of the Seller Subsidiaries which has had aSeller Material Adverse Effect, (ii) any damage, destruction or loss with respect to any assets ofthe Seller or any of the Seller Subsidiaries which has had a Seller Material Adverse Effect, (iii)any change by the Seller in its accounting methods, principles or practices, (iv) any revaluationby the Seller of any of its assets in any material respect, (v) any declaration setting aside orpayment of any dividends or distributions in respect of shares of
11

 
Seller Common Stock or any redemption, purchase or other acquisition of any of its securities orany of the securities of any Seller Subsidiary, (vi) any increase in the wages, salaries, bonuses,compensation, pension, or other fringe benefits payable to any executive officer, employee, ordirector or any grant of any severance or termination pay, except in the ordinary course ofbusiness consistent with past practices, (vii) any strike, work stoppage, slow down or other labordisturbance, or (viii) the execution of any collective bargaining agreement, contract or otheragreement or understanding with a labor union or organization, or (ix) any union organizingactivities.          (b) Neither Seller nor any Seller Subsidiary is a party to any joint marketing or otheraffinity marketing program with a third party.          (c) The Seller and Seller Subsidiaries own, or are validly licensed or otherwise have theenforceable right to use, in each case free and clear of all Liens except Permitted Liens, allIntellectual Property used in the conduct of the business of the Seller and Seller Subsidiaries ascurrently conducted that is material to the business of the Seller and the Seller Subsidiariestaken as a whole (the “Seller Intellectual Property”). Neither the Seller nor any SellerSubsidiary has entered into any agreements granting sole or exclusive right to any materialIntellectual Property. Except as would not reasonably be expected to have a Seller MaterialAdverse Effect, all patents and patent applications, trademark registration and applicationsfor registration and domain named owned by the Seller or Seller Subsidiaries are subsisting andunexpired and, to Seller’s Knowledge, valid. No claims are pending or, to Seller’s Knowledge,threatened, (a) challenging the ownership, enforceability, validity, or use by the Seller or anySeller Subsidiary of any Seller Intellectual Property, or (b) alleging that the Seller or anySeller Subsidiary is violating, misappropriating or infringing or otherwise adversely affecting therights of any person with regard to any Seller Intellectual Property or the use of any SellerIntellectual Property (including any claim that the Seller or any Seller Subsidiary should licenseor refrain from using any Intellectual Property of a third party) other than claims that would notbe reasonably expect to have a Seller Material Adverse Effect. Except as would not reasonably beexpect to have a Seller Material Adverse Effect, to the Knowledge of Seller, (i) no Person isinfringing, violating, or misappropriating the rights of the Seller or any Seller Subsidiary withrespect to any Seller Intellectual Property, and (ii) the operation of the business of the Sellerand the Seller Subsidiaries as currently conducted does not violate, misappropriate, or infringethe Intellectual Property of any other Person. Except as would not reasonably be expected to havea Seller Material Adverse Affect, the Seller and the Seller Subsidiaries take and have takencommercially reasonable actions to maintain and preserve the material Intellectual Property used inthe conduct of their business as currently conducted. The Seller and the Seller Subsidiaries arein actual possession of or have necessary control over the source code and object code for allmaterial software that they own or propose to own (the “Owned Software”). None of the OwnedSoftware is subject to any contract or other obligation that has or would require the Seller or aSeller Subsidiary to divulge to any third party any source code or trade secret that is part ofOwned Software, to license Owned Software for the purpose of making derivative works, or toredistribute Owned Software to any third party at no or minimal charge. Except as would not bematerial to the business of the Seller and the Seller Subsidiaries taken as a whole, the Seller andthe Seller Subsidiaries maintain policies and procedures regarding data security and privacy thatare commercially reasonable and, in any event, in compliance with all their obligations to theircustomers and under applicable laws, statutes, standards, ordinances, codes,
12

 
rules, and regulations (the “Legal Requirements”). Except as would not be material to thebusiness of the Seller and the Seller Subsidiaries taken as a whole, there have been no securitybreaches relating to, violations of any security policy regarding or any unauthorized access orunauthorized use of any data used in the business of the Seller and the Seller Subsidiaries. To theSeller’s Knowledge, there have been no events of series of events involving the Seller or SellerSubsidiaries that have or would reasonably be expected to trigger a consumer personal informationprivacy breach reporting requirement. Except as would not be material to the business of the Sellerand the Seller Subsidiaries taken as a whole, the use and dissemination of any and all data andinformation concerning individuals by their businesses is in compliance with all applicable privacypolicies, terms of use, customer agreements, and Legal Requirements. The transactions contemplatedto be consummated hereunder as of the Closing Date will not violate any privacy policy, terms ofthe use, customer agreements or Legal Requirements relating to the use, dissemination or transferof any such data or information.     2.9 Absence of Litigation.          (a) There is no Litigation or other proceedings pending or, to Seller’s Knowledge,threatened, against Seller or any Seller Subsidiary or any of their property or assets orchallenging the issuance of any of its capital stock or the transactions contemplated by thisAgreement, as to which there is a reasonable probability of an adverse determination and which, ifadversely determined, would, individually or in the aggregate, have a Seller Material AdverseEffect.          (b) There is no Order imposed upon the Seller, any of the Seller Subsidiaries or the assets ofthe Seller or any of the Seller Subsidiaries which has had a Seller Material Adverse Effect.          (c) Neither the Seller nor any of the Seller’s Subsidiaries is subject to any written order,decree, agreement (including an agreement under Section 4(m) of the BHCA), memorandum ofunderstanding or similar arrangement with, or a commitment letter or similar submission to, orextraordinary supervisory letter from, or adopted any extraordinary board resolutions at therequest of, any Governmental Authority charged with the supervision or regulation of financialinstitutions or engaged in the insurance of deposits or the supervision or regulation of it or anyof its Subsidiaries, nor has any Governmental Authority advised it in writing or, to Seller’sKnowledge, otherwise advised, that it is contemplating issuing or requesting (or is considering theappropriateness of issuing or requesting) any such order, decree, agreement, memorandum ofunderstanding or extraordinary supervisory letter or any such board resolutions, nor, to Seller’sKnowledge, has any Governmental Authority commenced an investigation in connection therewith.          (d) Neither the Seller nor any Seller Subsidiary has received any order, decree, notice orother communication from any Governmental Authority asserting or claiming that the Seller or anySeller Subsidiary is, and to Seller’s Knowledge, no facts or circumstances exist which would causeit or any of the Seller Subsidiaries to be deemed to be, (i) operating in violation of the BankSecrecy Act, the USA PATRIOT ACT of 2001 and the regulations promulgated thereunder (the “PatriotAct”), any order issued with respect to anti money laundering by the U.S. Department of theTreasury’s Office of Foreign Assets Control, or any
13

 
other applicable anti money laundering statute, rule or regulation, except where any suchviolation would not have a Seller Material Adverse Effect; or (ii) not in satisfactory compliance,with the applicable privacy and customer information requirements contained in any federal andstate privacy laws and regulations, including, without limitation, in Title V of the GLB Act, aswell as the provisions of the information security program adopted pursuant to 12 C.F.R Part 40,except where the failure to so comply would not have a Seller Material Adverse Effect. The Seller(or where appropriate the Seller Subsidiary) has adopted and implemented an anti money launderingprogram that contains adequate and appropriate customer identification verification proceduresthat comply with Section 326 of the Patriot Act and such anti money laundering program meets therequirements in all material respects of Section 352 of the Patriot Act and the regulationsthereunder, and it (or such other of the Seller Subsidiaries) has complied in all materialrespects, except where the failure to comply would not have a Seller Material Adverse Effect, withany requirements to file reports and other necessary documents as required by the Patriot Act andthe regulations thereunder.     2.10 Employee Benefit Plans.          (a) Current Plans. The Seller Disclosure Schedule lists all employee benefit plans(as defined in Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended(“ERISA”)), and all bonus, stock option, stock purchase, restricted stock, incentive, deferredcompensation, retiree medical or life insurance, supplemental retirement, severance or otherbenefit plans, programs or arrangements, and all material employment, termination, severance orother employment contracts or employment agreements, with respect to which the Seller or any SellerSubsidiary has any obligation (collectively, the “Plans”). The Seller has furnished or madeavailable to the Company a complete and accurate copy of each Plan (or a description of the Plans,if the Plans are not in writing) and a complete and accurate copy of each material documentprepared in connection with each such Plan, including, without limitation, and where applicable, acopy of (i) each trust or other funding arrangement, (ii) each summary plan description and summaryof material modifications, (iii) the three (3) most recently filed IRS Forms 5500 and relatedschedules, (iv) the most recently issued determination letter from the United States InternalRevenue Service (the “IRS”) for each such Plan and the materials submitted to obtain that letterand (v) the three (3) most recently prepared actuarial and financial statements with respect toeach such Plan.          (b) Absence of Certain Types of Plans. No member of the Seller’s “controlled group,”within the meaning of Section 4001(a)(14) of ERISA, maintains or contributes to, or within the fiveyears preceding the Effective Time has maintained or contributed to, an employee pension benefitplan subject to Title IV of ERISA (“Title IV Plan”). No Title IV Plan is a “multiemployer pensionplan” as defined in Section 3(37) of ERISA. None of the Plans obligates the Seller or any of theSeller Subsidiaries to pay material separation, severance, termination or similar type benefitssolely as a result of any transaction contemplated by this Agreement or as a result of a “change incontrol,” within the meaning of such term under Section 280G of the Code. Except as required byCOBRA, none of the Plans provides for or promises medical, disability or life insurance benefits toany former employee, officer or director of the Seller or any of the Seller Subsidiaries followingsuch person’s termination. Each of the Plans is subject only to the laws of the United States or apolitical subdivision thereof.
14

 
          (c) Compliance with Applicable Law. Each Plan has been operated in all respectsin accordance with the requirements of all applicable Law and all persons who participate in theoperation of such Plans and all Plan “fiduciaries” (within the meaning of Section 3(21) of ERISA)have acted in accordance with the provisions of all applicable Law, except where such operations orviolations of applicable Law would not, individually or in the aggregate, have a Seller MaterialAdverse Effect. The Seller and the Seller Subsidiaries have performed all obligations required tobe performed by any of them under, are not in any respect in default under or in violation of, andthe Seller and the Seller Subsidiaries have no Knowledge of any default or violation by any partyto, any Plan, except where such failures, defaults or violations would not, individually or in theaggregate, have a Seller Material Adverse Effect. No legal action, suit or claim is pending or, toSeller’s Knowledge, threatened with respect to any Plan (other than claims for benefits in theordinary course) and, except as disclosed in the Seller Disclosure Schedule, to Seller’s Knowledge,no fact or event exists that could give rise to any such action, suit or claim. Except asdisclosed in the Seller Disclosure Schedule, neither the Seller nor any Seller Subsidiary hasincurred any material liability under Section 302 of ERISA or Section 412 of the Code that has notbeen satisfied in full and no condition exists that presents a material risk of incurring any suchliability.          (d) Qualification of Certain Plans. Each Plan that is intended to be qualified underSection 401 (a) of the Code or Section 401(k) of the Code (including each trust established inconnection with such a Plan that is intended to be exempt from Federal income taxation underSection 501 (a) of the Code) has received a favorable determination letter from the IRS that it isso qualified or is entitled to rely on a favorable opinion or advisory letter issued to the sponsorof a master and prototype plan, and the Seller is not aware of any fact or event that couldadversely affect the qualified status of any such Plan. No trust maintained or contributed to bythe Seller or any of the Seller Subsidiaries is intended to be qualified as a voluntary employees’beneficiary association or is intended to be exempt from federal income taxation under Section501(c)(9) of the Code.          (e) Non Qualified Deferred Compensation Plans. Except as set forth in the SellerDisclosure Schedule, no Plan that is a non qualified deferred compensation plan subject to Section409A of the Code (“Section 409A”) has been modified (as defined under Section 409A) on or afterOctober 3, 2004 and all such non qualified deferred compensation plans have been operated andadministered in good faith compliance with Section 409A from the period beginning January 1, 2005through the date hereof.          (f) Absence of Certain Liabilities and Events. There has been no non exempt prohibitedtransaction (within the meaning of Section 406 of ERISA or Section 4975 of the Code) with respectto any Plan. The Seller and each of the Seller Subsidiaries has not incurred any liability for anyexcise tax arising under Sections 4971 through 4980G of the Code that would, individually or in theaggregate, have a Seller Material Adverse Effect, and, to Seller’s Knowledge, no fact or eventexists that could give rise to any such liability.          (g) Plan Contributions. All contributions, premiums or payments required to be madewith respect to any Plan have been made on or before their due dates.
15

 
          (h) Employment Contracts. Neither the Seller nor any Seller Subsidiary is aparty to any contracts for employment, severance, consulting or other similar contracts with anyemployees, consultants, officers or directors of the Seller or any of the Seller Subsidiaries.Neither the Seller nor any Seller Subsidiary is a party to any collective bargaining agreements.          (i) Effect of Agreement. The consummation of the transactions contemplated by thisAgreement will not, either alone or in conjunction with another event, entitle any current orformer employee of the Seller or any Seller Subsidiary to severance pay, unemployment compensationor any other payment, including payments constituting “excess parachute payments” within themeaning of Section 280G of the Code, except as expressly provided herein, or accelerate the timeof payment or vesting or increase the compensation due any such employee or former employee, ineach case, except as expressly provided herein.     2.11 Title to Property. The Seller and each of the Seller Subsidiaries has good andmarketable title to all of their respective properties and assets, real and personal, free andclear of all mortgage liens, and free and clear of all other liens, charges and encumbrances exceptliens for taxes not yet due and payable, pledges to secure deposits and such minor imperfections oftitle, if any, as do not materially detract from the value of or interfere with the present use ofthe property affected thereby or which, individually or in the aggregate, would not have a SellerMaterial Adverse Effect; and all leases pursuant to which Seller or any of the Seller Subsidiarieslease from others material amounts of real or personal property are in good standing, valid andeffective in accordance with their respective terms, and there is not, under any of such leases,any existing material default or event of default (or event which with notice or lapse of time, orboth, would constitute a material default and in respect of which the Seller or such SellerSubsidiary has not taken adequate steps to prevent such a default from occurring). The current useand occupancy of any real property owned by the Seller and the Seller Subsidiaries does notmaterially violate any easement, covenant, condition, restriction, or similar provision in anyinstrument of record affecting such property.     2.12 Environmental Matters.          (a) To Seller’s Knowledge: (i) each of the Seller, the Seller’s Subsidiaries, and propertiesowned or operated by the Seller or the Seller’s Subsidiaries are and have been in substantialcompliance with, all applicable federal, state and local laws including common law, rules,guidance, regulations and ordinances and with all applicable decrees, orders, judgments, andcontractual obligations relating to the environment, health, safety, natural resources, wildlifeor “Hazardous Materials” which are hereinafter defined as chemicals, pollutants, contaminants,wastes, toxic substances, compounds, products, solid, liquid, gas, petroleum or other regulatedsubstances or materials which are hazardous, toxic or otherwise harmful to health, safety, naturalresources, or the environment (“Environmental Laws”), except for violations which, eitherindividually or in the aggregate, would not have a Seller Material Adverse Effect; (ii) during theperiod of the Seller’s or any of the Seller’s Subsidiaries’ ownership or operation of any of theirrespective current properties, Hazardous Materials have not been generated, treated, stored,transported, released or disposed of in, on, under, above, from or affecting any such property,except where such release, generation, treatment, storage, transportation, or disposal would nothave, either individually or in the aggregate, a Seller Material Adverse Effect; (iii) there is noasbestos or any material amount of ureaformaldehyde materials in or on any property currently
16

 
or previously owned or operated by Seller or Seller’s Subsidiaries or any ParticipationFacility, and no electrical transformers or capacitors, other than those owned by public utilitycompanies, on any such properties contain any PCBs; (iv) there are no underground or abovegroundstorage tanks and there have never been any underground or aboveground storage tanks located on,in or under any properties currently or formerly owned or operated by the Seller or any ofSeller’s Subsidiaries; (v) neither Seller nor Seller’s Subsidiaries have received any writtennotice from any governmental agency or third party notifying the Seller or Seller’s Subsidiariesof any Environmental Claim; and (vi) there are no circumstances with respect to any propertiescurrently owned or operated by the Seller or any of Seller’s Subsidiaries that could reasonably beanticipated to form the basis for an Environmental Claim against Seller or Seller’s Subsidiariesor any properties currently owned or operated by the Seller or any of Seller’s Subsidiaries.     The following definitions apply for purposes of this Section 2.12: (a) “ParticipationFacility” means any facility in which the Seller or any of the Seller’s Subsidiaries participatesin the management and, where required by the context, said terms means the owner or operator ofsuch property; and (b) “Environmental Claims” means any and all administrative, regulatory,judicial or private actions, suits, demands, demand letters, notices, claims, liens, notices ofnoncompliance or violation, investigations, allegations, injunctions or proceedings relating inany way to (i) any Environmental Law; (ii) any Hazardous Material including without limitation anyabatements, removal, remedial, corrective or other response action in connection with anyHazardous Material, Environmental Law or order of a Governmental Authority; or (iii) any actual oralleged damage, injury, threat or harm to health, safety, natural resources, wildlife, or theenvironment which individually or in the aggregate would have a Seller Material Adverse Effect.     2.13 Absence of Agreements. Neither the Seller nor any Seller Subsidiary is a party toany agreement or memorandum of understanding with, commitment letter or similar undertaking to, oris subject to any order or directive by, or is a recipient of any extraordinary supervisory letterwith any federal, state or governmental agency which restricts materially the conduct of itsbusiness (including any contract containing covenants which limit the ability of the Seller or ofany Seller Subsidiary to compete in any line of business or with any person or which involve anyrestriction of the geographical area in which, or method by which, the Seller or any SellerSubsidiary may carry on its business (other than as may be required by Law or applicable RegulatoryAuthorities)), or in any manner relates to its capital adequacy, its credit policies or itsmanagement, nor has the Seller been advised that any federal, state, or governmental agency iscontemplating issuing or requesting (or is considering the appropriateness of issuing orrequesting) any such order, decree, agreement, memorandum of understanding, extraordinarysupervisory letter, commitment letter or similar submission other than the Agreement by and betweenthe Bank and the OCC dated as of June 24, 2004 (the “OCC Agreement”) and those other agreements setout on the Seller Disclosure Schedule.     2.14 Taxes.          (a) The Seller and the Seller Subsidiaries have timely filed all Tax Returns required to befiled by them on or prior to the date of this Agreement (all such returns being accurate andcomplete in all material respects), and the Seller and the Seller Subsidiaries have timely paidand discharged all Taxes due in connection with or with respect to the filing of such
17

 
Tax Returns, except such as are not yet due or are being contested in good faith by appropriateproceedings and with respect to which the Seller is maintaining reserves adequate for theirpayment or where the failure to make such filings or pay such taxes would not have a SellerMaterial Adverse Effect. For purposes of this Agreement:     (i) “Tax” or “Taxes” means taxes, charges, fees, levies, and othergovernmental assessments and impositions of any kind, payable to any federal,state, or local governmental entity or taxing authority or agency, including,without limitation, (i) income, franchise, profits, gross receipts, estimated, advalorem, value added, sales, use, service, real or personal property, capitalstock, license, payroll, withholding, disability, employment, social security,workers compensation, unemployment compensation, utility, severance, production,excise, stamp, occupation, premiums, windfall profits, transfer and gains taxes,(ii) customs duties, imposts, charges, levies or other similar assessments of anykind, and (iii) interest, penalties and additions to tax imposed with respectthereto; and     (ii) “Tax Returns” means returns, reports, and information statements withrespect to Taxes required to be filed with the IRS or any other governmental entityor taxing authority or agency, including, without limitation, consolidated,combined and unitary tax returns.          (b) To Seller’s Knowledge, neither the IRS nor any other governmental entity or taxingauthority or agency is now asserting, either through audits, administrative proceedings or courtproceedings, any deficiency or claim for additional Taxes. Neither the Seller nor any of the SellerSubsidiaries has granted any waiver of any statute of limitations with respect to, or any extensionof a period for the assessment of, any Tax. Except for statutory liens for current taxes not yetdue, there are no material tax liens on any assets of the Seller or any of the Seller Subsidiaries.Neither the Seller nor any of the Seller Subsidiaries has received a ruling or entered into anagreement with the IRS or any other taxing authority that would have a Seller Material AdverseEffect after December 31, 2004. No agreements relating to allocating or sharing of Taxes existamong the Seller and the Seller Subsidiaries and no tax indemnities given by the Seller or theSeller Subsidiaries in connection with a sale of stock or assets remain in effect. Neither theSeller nor any of the Seller Subsidiaries is required to include in income either (i) any amount inrespect of any adjustment under Section 481 of the Code, or (ii) any installment sale gain. Neitherthe Seller nor any of the Seller Subsidiaries has made an election under Section 341(f) of theCode. Neither the Seller nor any of the Seller Subsidiaries (i) is a member of an affiliated,consolidated, combined or unitary group, other than one of which the Seller was the common parent,or (ii) has any liability for the Taxes of any Person (other than the Seller and the SellerSubsidiaries) under Treasury Regulation Section 1.1502-6 (or any similar provision of state orlocal law) as a transferee or successor, by contract or otherwise.          (c) To the Seller’s Knowledge, neither the Seller nor any of the Seller Subsidiaries is aparty to any joint venture, partnership or other arrangement or contract that could be treated asa partnership for federal income tax purposes.
18

 
          (d) To the Seller’s Knowledge, the Seller and the Seller Subsidiaries have filed with theappropriate Governmental Authority all unclaimed property reports required to be filed and hasremitted to the appropriate Governmental Authority all unclaimed property required to be remitted.          (e) None of the assets of Seller or the Seller Subsidiaries directly or indirectly secure anydebt the interest of which is tax exempt under Section 103(a) of the Code. Neither Seller nor anySeller Subsidiary is a borrower or the guarantor of any outstanding industrial revenue bonds, andneither Seller nor any Seller Subsidiary is a tenant, principal user or related person to anyprincipal user within the meaning of Section 144(a) of the Code or any property that has beenfinance or improved with the proceeds of industrial revenue bonds.          (f) None of the assets of Seller or a Seller Subsidiary is “tax exempt use property” withinthe meaning of Section 168(h) of the Code.     There are currently no audits, examinations, judicial or other administrative proceedingscurrently pending or in progress or, to the Seller’s Knowledge, threatened with respect to anyTaxes of the Seller or any Seller Subsidiary, subject to exceptions for any proceedings that ifresolved in a manner unfavorable to the Seller or any Seller Subsidiary would not, individually orin the aggregate, reasonably be expected to have a Seller Adverse Material Effect. No GovernmentalAuthority has notified the Seller that it or any Seller Subsidiary is or may be subject totaxation in a jurisdiction where the Seller or Seller Subsidiary does not file Tax Returns.     Forpurposes of this Section 2.14, references to the Seller and the SellerSubsidiaries include former subsidiaries of the Seller for the periods during which any suchcorporations were owned, directly or indirectly, by the Seller.     2.15 Insurance. The Seller Disclosure Schedule lists all material policies ofinsurance of the Seller and the Seller Subsidiaries currently in effect. Neither the Seller norany of the Seller Subsidiaries has any liability for unpaid premiums or premium adjustments notproperly reflected on the Seller’s financial statements for the eight months ended August 31,2006.     2.16 Brokers. No broker, finder or investment banker (other than Hovde Financial,Inc.) is entitled to any brokerage, finder’s or other fee or commission in connection with thetransactions contemplated by this Agreement based upon arrangements made by or on behalf of theSeller. Prior to the date of this Agreement, the Seller has furnished to the Company a complete andcorrect copy of all agreements between the Seller and Hovde Financial, Inc. pursuant to which suchfirm would be entitled to any payment relating to the transactions contemplated hereunder.     2.17 Seller Material Adverse Effect. Since January 1, 2006, there has not been anyEffect that has had, individually or in the aggregate, a Seller Material Adverse Effect.     2.18 Material Contracts. Except for (i) loan, credit or similar agreements enteredinto by the Seller or any Seller Subsidiary in the ordinary course of business consistent withpast practice, or (ii) as disclosed in the Seller Disclosure Schedule, neither Seller nor anySeller Subsidiary is a party to or obligated under any contract, agreement or other instrument or
19

 
understanding which obligates the Seller or any Seller Subsidiary for payments or otherconsideration with a value in excess of $25,000 (“Material Contracts”).     2.19 Opinion of Financial Advisor. The Seller has received the written opinion ofHovde Financial, Inc. on the date of this Agreement to the effect that, as of the date of thisAgreement, the consideration to be received in the Merger by the Seller’s stockholders is fair tothe Seller’s stockholders from a financial point of view, and the Seller will promptly, after thedate of this Agreement, deliver a copy of such opinion to the Company and the Sub.     2.20 Vote Required. The affirmative vote of seventy-five percent (75%) of the holdersof the outstanding shares of Seller Common Stock entitled to vote is the only vote of the holdersof any class or series of the Seller capital stock necessary to approve the Agreements and thetransactions contemplated hereby, including the Merger.     2.21 Rights Agreement. The Seller and the Seller’s Board of Directors have taken allnecessary action to render the Rights Agreement dated as of December 16, 1999 between the Sellerand Commerce Bank, N.A. (the “Rights Agreement”) inapplicable to this Agreement and thetransactions contemplated hereby, including the Merger, without any further action on the part ofthe holders of Seller Common Stock or the Seller’s Board of Directors (other than an amendment tothe Rights Agreement that would, among other things, clear up certain ambiguities in the RightsAgreement and terminate the Rights Agreement upon consummation of the transactions discussed herein(the “Rights Agreement Amendment”)), and neither the execution nor the delivery of this Agreementwill cause the Rights (as defined in the Rights Agreement) to become exercisable by the holdersthereof.     2.22 Capital Requirements. The Seller is maintaining such amount of capital as may beprescribed by Regulatory Authorities from time to time, whether by regulation, agreement or orderand is at least “well capitalized” (within the meaning of 12 U.S.C. 1831o, as amended, reenactedor redesignated from time to time). Since December 31, 2004, Seller’s Tier 1 Ratio has not beenless than 6.00% at the end of each of Seller’s fiscal quarters.     2.23 Solvency. As of the Effective Time, and after giving effect to all of thetransactions contemplated by this Agreement, the Seller, the Bank and the other SellerSubsidiaries will be Solvent. “Solvent” means that, with respect to the Seller, the Bank and/orthe other Seller Subsidiaries, and as of any date of determination, (a) the amount of the “presentfair saleable value” of the assets thereof will, as of such date, exceed the amount of all“liabilities thereof, contingent or otherwise,” as of such date, as such quoted terms aregenerally determined in accordance with applicable federal Laws governing determinations of theinsolvency of debtors, (b) the present fair saleable value of the assets of such entity orentities will, as of such date, be greater than the amount that will be required to pay theirliabilities on their indebtedness as their indebtedness becomes absolute and mature, (c) each ofthe Seller, the Bank and the other Seller Subsidiaries will not have, as of such date, anunreasonably small amount of capital with which to conduct their business, and (d) the Seller, theBank and the other Seller Subsidiaries will be able to pay their indebtedness as it matures.“Indebtedness” means a liability in connection with the applicable entity’s (x) right to payment,whether or not such a right is reduced to judgment, liquidated, unliquidated, fixed, contingent,matured, unmatured, disputed, undisputed, legal, equitable, secured or unsecured, or (y) right toany equitable remedy for
20

 
breach of performance if such breach gives rise to a right of payment, whether or not such rightto an equitable remedy is reduced to judgment, fixed, contingent, matured, unmatured, disputed,undisputed, secured or unsecured.     2.24 Contracts. Except as would not reasonably be expected to be material to thebusiness of the Seller and the Seller Subsidiaries, taken as a whole, (i) neither the Seller norany Seller Subsidiary has received any written notice or claim of default under any materialcontract or any written notice of an intention, and to the Seller’s Knowledge, no other party toany material contract intends to terminate, not renew or challenge the validity or enforceabilityof any material contract, (ii) to the Seller’s Knowledge, no event has occurred that, with orwithout notice or lapse of time or both, would result in a breach or a default under any materialcontract, (iii) each of the material contracts is in full force and effect and is the valid,binding and enforceable obligation of the Seller or a Seller Subsidiary, and, to the Seller’sKnowledge, of the other parties thereto (except that such enforceability (a) may be limited bybankruptcy, insolvency, reorganization, moratorium or other similar laws affecting or relating tothe enforcement of creditors’ rights generally, and (b) is subject to general principles of equity(regardless of whether considered in a proceeding in equity or at law), and (iv) the Seller andthe Seller Subsidiaries have performed all respective material obligations required to beperformed by them to date under the material contracts and are not (with or without the lapse oftime or the giving of notice, or both) in material breach thereunder. The Seller has madeavailable to the Company true and complete copies of each material contract, including allmaterial amendments thereto.**ARTICLE III — REPRESENTATIONS AND WARRANTIES OF THE SELLER AS TO THE BANK**     3.1 Loans. During the term of this Agreement, the aggregate amount of the Bank’sClassified Loans will not exceed $2,500,000. The Bank has no outstanding loans, discounts orcommitments to loan or discount which have not or will not be made for good and valuableconsideration in the ordinary course of the Bank’s business and the notes or other evidences ofindebtedness evidencing any loans or discounts are true and genuine and are what they purport tobe.     3.2 Reserve Ratio. During the term of this Agreement, the Bank’s Reserve Ratio, as ofthe end of each of Bank’s fiscal quarters, shall not be less than 100%.     3.3 Capital Requirements. During the term of this Agreement:          (a) the Bank shall maintain such amount of capital as may be prescribed by RegulatoryAuthorities from time to time, whether by regulation, agreement or order and will be at least“well capitalized” (within the meaning of 12 U.S.C. 1831o, as amended, reenacted or designatedfrom time to time)          (b) the Bank’s Tier 1 Ratio shall not be less than 6.0% at the end of each of the Bank’sfiscal quarters.
21

 
**ARTICLE IV — REPRESENTATIONS AND WARRANTIES OF THE COMPANY**     Except as disclosed in the Company Reports or in the disclosure schedule (the “CompanyDisclosure Schedule”) delivered by the Company to the Seller prior to the execution of thisAgreement (which schedule sets forth items of disclosure with specific reference to the particularSection or subsection of this Agreement to which the information in the Company DisclosureSchedule relates) and noting that any information set forth in one section of the CompanyDisclosure Schedule will be deemed to apply to each other Section or subsection of this Agreementto which its relevance is reasonably apparent, the Company hereby represents and warrants to theSeller as follows:     4.1 Organization and Qualification; Subsidiaries.          (a) The Company is a company duly organized, validly existing and in active status under thelaws of the State of Kansas and a registered bank holding company under the BHCA. The Company isalso subject to regulation by the Federal Reserve Board. The Company’s banking subsidiary, Bank ofBlue Valley (the “Company Bank Subsidiary”), is a duly organized and validly existing Kansas statechartered, member bank.          (b) The Company is duly qualified or licensed as a foreign business entity to do business,and is in good standing, in each jurisdiction where the character of its properties owned, leasedor operated by it or the nature of its activities makes such qualification or licensing necessary,except for such failures to be so duly qualified or licensed and in good standing that would not,either individually or in the aggregate, have a Company Material Adverse Effect.          (c) The Company Bank Subsidiary is the only subsidiary of the Company that is a “SignificantSubsidiary” as that term is defined in Rule 1-02 of Regulation S-X.          (d) As used in this Agreement, the term “Company Material Adverse Effect” means any Effectthat, individually or in the aggregate with other Effects, materially impairs the ability of theCompany to consummate the transactions contemplated hereby. The term “Company Material AdverseEffect” does not include the impact of: (i) any Effect to the extent resulting from theannouncement of this Agreement or the transactions contemplated hereby, (ii) any Effect resultingfrom compliance with the terms and conditions of this Agreement, (iii) any decrease in the price ortrading volume of the shares of the Company’s issued and outstanding common stock followingexecution of this Agreement (but not excluding any Effect underlying such decrease to the extentsuch Effect would constitute a Company Material Adverse Effect), (iv) any Effect to the extentresulting from changes in Laws or regulations or interpretations thereof that are generallyapplicable to the banking industry, (v) any Effect to the extent resulting from changes ingenerally accepted accounting principles which the Company or any of its Subsidiaries is requiredto adopt, or (vi) changes attributable to or resulting from changes in general economic conditionsaffecting the banking industry generally (unless such Effect would reasonably be expected to have amaterially disproportionate impact on the business, assets, liabilities, financial condition orresults of operations of the Company its Subsidiaries taken as a whole relative to other bankingindustry participants).
22

 
     4.2 Articles of Incorporation and By Laws. The Company has previously furnished ormade available to the Seller a complete and correct copy of the Company’s Articles ofIncorporation and the Company’s Bylaws (“Company Articles” and “Company Bylaws”, respectively),the Sub Articles and the Sub Bylaws. All such documents are in full force and effect and neitherthe Company nor the Sub is in breach of any of the provisions of its articles or bylaws.     4.3 Authority. The Company and the Sub each has the requisite corporate power andauthority to execute and deliver this Agreement, and to perform its respective obligationshereunder and to consummate the transactions contemplated hereby. The execution and delivery ofthis Agreement by the Company and the Sub and the consummation by the Company and the Sub of thetransactions contemplated hereby have been duly and validly authorized by all corporate action onthe part of the Company and the Sub, including, without limitation, the Company’s and the Sub’sBoards of Directors, and no other corporate proceedings on the part of the Company or the Sub arenecessary to authorize this Agreement or to consummate the transactions so contemplated hereby.This Agreement has been duly and validly executed and delivered by the Company and the Sub andconstitutes a valid and binding obligation of the Company and the Sub assuming the dueauthorization, execution and delivery by the Seller, enforceable against the Company and the Sub inaccordance with its terms, except as enforcement may be limited by laws affecting insureddepository institutions, general principles of equity, whether applied in a court of law or a courtof equity, and by bankruptcy, insolvency and similar laws affecting creditors’ rights and remediesgenerally.     4.4 No Conflict; Required Filings and Consents.          (a) The execution and delivery of this Agreement by the Company and the Sub do not, and theperformance of this Agreement by the Company and the Sub will not, (i) conflict with or violate theCompany Articles or Company By Laws or the Articles of Incorporation or By Laws of the Sub, (ii)conflict with or violate any Laws applicable to the Company or the Sub, or (iii) result in anybreach of or constitute a default (or an event which with notice or lapse of time or both wouldbecome a default) under, or give to others any rights of termination, amendment, acceleration orcancellation of, or result in the creation of a lien or encumbrance on any of the properties orassets of the Company or the Sub pursuant to, any note, bond, mortgage, indenture, contract,agreement, lease, license, permit, franchise or other instrument or obligation to which the Companyor the Sub is a party or by which the Company or the Sub or its or any of their respectiveproperties is bound or affected, except for any such conflicts, violations, breaches, defaults orother occurrences that would not, individually or in the aggregate, have a Company Material AdverseEffect.          (b) The execution and delivery of this Agreement by the Company and the Sub do not, and theperformance of this Agreement by the Company and the Sub will not, require any consent, approval,authorization or permit of, or filing with or notification to, any governmental or regulatoryauthority, domestic or foreign, except (i) for applicable requirements, if any, of the SecuritiesAct of 1933 (the “Securities Act”), the Exchange Act, state securities or blue sky laws, the BHCA,the OSBC, or any other applicable Regulatory Authority and the filing and recordation ofappropriate merger or other documents as required by Kansas law, and (ii) where the failure toobtain such consents, approvals, authorizations or permits, or to make such
23

 
filings or notifications, would not prevent or delay consummation of the Merger, or otherwisewould not prevent or delay consummation of the Merger, or otherwise prevent the Company fromperforming its obligations under this Agreement, and would not have, or be reasonably expected tohave, a Company Material Adverse Effect.     4.5 Absence of Litigation.          (a) Neither the Company nor any of the Company’s subsidiaries is a party to any, and thereare no pending or, to the best of the Company’s Knowledge, threatened, legal, administrative,arbitral or other proceedings, claims, actions or governmental or regulatory investigations of anynature against the Company or any of the Company’s subsidiaries or challenging the validity orpropriety of the transactions contemplated by this Agreement.          (b) Neither the Company nor the Company Bank Subsidiary has received any order, decree,notice or other communication from any Governmental Authority asserting or claiming that theCompany or the Company Bank Subsidiary is operating in violation of the Bank Secrecy Act, thePatriot Act, any order issued with respect to anti-money laundering by the U.S. Department of theTreasury’s Office of Foreign Assets Control, or any other applicable anti-money launderingstatute, rule or regulation, except where any such violation would not have a Company MaterialAdverse Effect.     4.6 Brokers. No broker, finder or investment banker is entitled to any brokerage,finder’s or other fee or commission in connection with the transactions contemplated by thisAgreement based upon arrangements made by or on behalf of the Company.     4.7 Adequate Resources. The Sub has or will have at the Effective Time cash on handor borrowing availability under financing arrangements from financially responsible third parties,or a combination thereof, in an aggregate amount sufficient to enable the Company or the Sub, asapplicable, to pay in full the Merger Consideration and all fees and expenses payable by suchentity in connection with this Agreement and the transactions contemplated thereby.     4.8 Company Material Adverse Effect. Since June 30, 2006, there has not been anyEffect that has had, individually or in the aggregate, a Company Material Adverse Effect.     4.9 CRA Rating. Each of the subsidiaries or affiliates of the Company that is aninsured depository institution was rated “Satisfactory” or “Outstanding” following its most recentCommunity Reinvestment Act examination by the regulatory agency responsible for its supervision.The Company has received no notice of and has no knowledge of any planned or threatened objectionby any community group to the transaction contemplated hereby.     4.10 Pro Forma Capital Requirements. The Company is, and on a pro forma basis givingeffect for this transaction and any financing or capital injection contemplated by the Company,will be “well capitalized”, as defined for purposes of the Federal Deposit Insurance Act, and incompliance with all capital requirements, standards and ratios required by each state or federalbank regulator with jurisdiction over the Company, including without limitation, any such higherrequirement, standard, or ratio as shall apply to institutions engaging in the acquisition ofinsured institution deposits, assets or branches, and no such regulator has indicated
24

 
that it will condition any regulatory approval of the Merger upon an additional increase in theCompany’s capital.**ARTICLE V — COVENANTS OF SELLER**     5.1 Affirmative Covenants. The Seller hereby covenants and agrees with the Companythat, except (i) as permitted by this Agreement; (ii) as disclosed in the Seller DisclosureSchedule; (iii) as required by Law, or by a Governmental Authority of competent jurisdiction,provided that prior to failing to take such action the Seller notifies the Company thereofand, to the extent required by the Company, uses its reasonably best efforts to take any suchaction otherwise subject to such law or Governmental Authority); or (iv) as otherwise consented toin writing by the Company, during the period from the date hereof to the earlier of the EffectiveTime or the termination of this Agreement in accordance with its terms, it will, and it will causeeach Seller Subsidiary, to:          (a) operate its business only in the usual, regular and ordinary course consistent with pastpractices;          (b) use all reasonable efforts to preserve intact its business organization and assets,maintain its rights and franchises, retain the services of its officers and key employees andmaintain its relationships with customers;          (c) use all reasonable efforts to maintain and keep its properties in as good repair andcondition as at present, ordinary wear and tear excepted;          (d) use all commercially reasonable efforts to keep in full force and effect director andofficer liability insurance comparable in amount and scope of coverage to that now maintained byit (the “Existing D&O Policy”);          (e) perform in all material respects all obligations required to be performed by it under allmaterial contracts, leases, and documents relating to or affecting its assets, properties, andbusiness;          (f) comply with and perform in all material respects all obligations and duties imposed uponit by all applicable Laws; and          (g) not take any action or fail to take any action which, individually or in the aggregate,can be expected to have a Seller Material Adverse Effect.     5.2 Negative Covenants. Except (i) as permitted by this Agreement, (ii) as disclosedin the Seller Disclosure Schedule; (iii) as required by Law, or by a Governmental Authority ofcompetent jurisdiction, provided that prior to taking such action, the Seller notifies theCompany thereof and, to the extent required by the Company, uses its reasonably best efforts toavoid having to take such action required by such law or Governmental Authority; or (iv) asotherwise consented to in writing by the Company, during the period from the date hereof to theearlier of the Effective Time or the termination of this Agreement in accordance with its terms,the Seller shall not do, or permit any Seller Subsidiary to do, any of the following:
25

 
          (a) (i) except to maintain qualification pursuant to the Code, adopt, amend, renew orterminate any Plan or any agreement, arrangement, plan or policy between the Seller or any SellerSubsidiary and one or more of its current or former directors, officers or employees, or (ii)increase in any manner the base salary, bonus, incentive compensation or fringe benefits of anydirector, officer or employee or pay any benefit not required by any plan or agreement as ineffect as of the date hereof (including, without limitation, the granting of stock options, stockappreciation rights, restricted stock, restricted stock units or performance units or shares);provided, however, that, the Retention and Severance Payments made to certain employees of theSeller which are listed on Exhibit 2.1(d) hereto are expressly permitted to be made by theSeller without the prior written consent of the Company;          (b) declare or pay any dividend on, or make any other distribution in respect of, itsoutstanding shares of capital stock or limited liability company interests, except for (i)dividends by the Bank or any of the other Seller Subsidiaries either to the Seller, the Bank oranother wholly owned Seller Subsidiary, and (ii) subject to any prohibition or restriction by anyRegulatory Authority, payments by the Seller to reimburse, up to the aggregate amount of $24,400,certain directors and former directors for their legal fees incurred in connection with defense ofbreach of fiduciary duty claims by the OCC;          (c) except as contemplated by this Agreement, merge with or into any other person, permit anyother person to merge into it or consolidate with any other person, or effect any reorganizationor recapitalization;          (d) purchase or otherwise acquire any substantial portion of the assets, or more than 5% ofany class of stock or other equity interests, of any person other than in the ordinary course ofbusiness;          (e) liquidate, sell, dispose of, or encumber any assets or acquire any assets outside of theordinary course of business (including without limitation Seller Intellectual Property);          (f) repurchase, redeem or otherwise acquire, or issue, sell or deliver, split, reclassify,combine or otherwise adjust, or agree to issue, sell or deliver, split, reclassify, combine orotherwise adjust, any stock (except pursuant to exercise of the Seller Options listed on theSeller Disclosure Schedule), bonds or other corporate securities of which the Seller or any of theSeller Subsidiaries is the issuer (whether authorized and unissued or held in treasury), or, grantor issue, or agree to grant or issue, any options, warrants or other Rights (including convertibleSecurities) calling for issue thereof;          (g) propose or adopt any amendments to its articles of incorporation, by laws, articles oforganization, operating agreement, or any stock option plan or agreement, as the case may be, inany way adverse to the Company;          (h) change any of its methods of accounting in effect at December 31, 2005 or change any ofits methods of reporting income or deductions for federal income tax purposes from those employedin the preparation of the federal income tax returns for the taxable year ending December 31,2005, except as may be required by GAAP; and
26

 
          (i) change any lending, investment, liability management or other material policiesconcerning the business or operations of the Seller or any of the Seller Subsidiaries, except asrequired by Law including, without limitation:     (i) acquire or sell any contracts for the purchase or sale of financial orother futures or any put or call options, or enter into any hedges or interest rateswaps relating to cash, securities or any commodities whatsoever or enter into anyother derivative transaction;     (ii) sell, assign, transfer, pledge, mortgage or otherwise encumber or permitany encumbrances to exist with respect to any of its assets;     (iii) make any investment with a maturity of five years or more;     (iv) incur any material liabilities or material obligations, whether directlyor by way of guaranty, including any obligations for borrowed money (other thanindebtedness of the Seller or the Seller Subsidiaries to each other) other thanovernight investments and borrowings undertaken in the ordinary course of businessconsistent with past practices;     (v) enter into any agreement with respect to any acquisition of a materialamount of asset or securities or any discharge, waiver, satisfaction, release orrelinquishment of any material contract rights, liens, encumbrances, debt or claims,not in the ordinary course of business and consistent with past practice (whichshall include creation of deposit liabilities, purchases of federal funds, advancesfrom the Federal Reserve Bank or Federal Home Loan Bank, and entry into anyrepurchase agreement fully secured by U.S. Government or agency securities), orimpose or suffer the imposition on any material asset of the Seller or any SellerSubsidiaries of any Lien or permit any such Lien to exist (other than in connectionwith deposits, repurchase agreements, bankers acceptances, “treasury tax and loan”accounts established in the ordinary course of business, the satisfaction of legalrequirements in the exercise of trust powers, and Liens in effect as of the datehereof that are disclosed in the Financial Statements) and in no event with a termin excess of thirty (30) days;     (vi) settle any claim, action, suit litigation, proceeding, arbitration,investigation or controversy of any kind, for any amount in excess of $50,000 or inany manner which would restrict in any material respect the operations or businessof the Seller or any of the Seller Subsidiaries;     (vii) purchase any new financial product or instrument which involves enteringinto a contract with a term of six months or longer;     (viii) make any capital expenditure, except in the ordinary course andconsistent with past practice and in no event in excess of $10,000;
27

 
     (ix) take any action or fail to take any action which, individually or in theaggregate, would be reasonably expected to have a Seller Material Adverse Effect;or     (x) agree in writing or otherwise to do any of the foregoing.     5.3 Intentionally Omitted.