Exhibit
10.14


 


AGREEMENT
FOR


PURCHASE
OF SELECTED ASSETS


AND
ASSUMPTION OF CERTAIN LIABILITIES


OF THE
SAC CITY, ODEBOLT AND LAKE VIEW OFFICES OF METABANK


 


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


 


WITNESSETH:


 


WHEREAS, Seller
wishes to divest, upon the terms and conditions set forth herein, certain
assets and certain liabilities of its offices (the “Offices”)
located at Sac City, Odebolt and Lake View, Iowa; and


 


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


 


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


 


ARTICLE I


TRANSFER
OF ASSETS AND LIABILITIES


 


Section 1.1.            Transfer of Assets.


 


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


 


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


 


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


 


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


 


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


 


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


 

















 


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


 


(7)                                  Cash on hand.


 


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


 


Section 1.2.            Purchase Price.


 


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


 


(1)           $2,460,000.00 for assets listed in Section 1.1(a)(1,2,4,5
and 6);


 


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


 


(3)                                  Cash on hand at par.


 


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


 


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


 


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


 


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


 


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


 


(4)           General tort liabilities; or


 

















 


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


 


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


 


Section 1.3.            Liabilities.


 


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


 


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


 


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


 


(d)           Buyer may (i) assign new account numbers to
depositors of assumed accounts, if needed, in the sole discretion of Buyer, (ii) notify
such depositors, on or before the Effective


 

















 


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


 


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


 


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


 


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


 


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


 


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


 


Section 1.4.            Loans Transferred.


 


(a)           Seller will transfer to Buyer on the Effective Date,
subject to the terms and conditions of this agreement, all of Seller’s right,
title and interest (including collateral relating thereto) in loans maintained,
serviced and listed in Seller’s general ledger as loans of the Offices
(severally referred to as “Loan” and
collectively the “Loans”).  Notwithstanding the foregoing, for purposes
of this Agreement, the Loans shall include only those Loans specifically
identified  by Buyer as Loans it will
purchase.  In this regard, it is
understood Buyer shall have the right to purchase or  exclude
any Loan or Loans previously identified as coded to the Seller’s Sac City, 


 

















 


Odebolt and Lake
View offices.  The purchased  loans shall be listed on Exhibit 1.4(a), shall be
prepared by Buyer and furnished to Seller and affixed to this Agreement as a part
hereof within thirty (30) days following Seller’s delivery to Buyer of complete
loan information.


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


Section 1.5.            Employee Matters.


 


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


 


(b)           Seller makes no representations or warranties about
whether any of the Employees will remain employed at the Offices after the
Effective Date.  Seller will use its best
efforts to maintain the Employees as employees of Seller at the Offices until
the Effective Date.  Any Employee whose
employment shall be terminated for any reason prior to the Effective Date or
who shall not be selected by Buyer to become an employee of Buyer shall be
dealt with by Seller in its sole and absolute discretion.  Seller shall be responsible for paying all
federal, state 


 

















 


and local income tax withholding, social security taxes and any other
payroll taxes applicable to the employment of Employees by Seller prior to the
Effective Date.  Seller agrees that, for
a period of thirty-six (36)  months after
the Effective Date, it will not solicit for employment (i) any Employee
who becomes  employed by Buyer or (ii) any
person known to Seller to have been employed by Buyer and whose employment by
Buyer has been terminated, either by the Employee or by Buyer, without Buyer’s prior written permission.


 


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


 


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


 


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


 


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


 


Section 1.6.            Records and Data Processing.


 


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


 


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


 


Section 1.7.            Security.


 


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


 


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


 


(a)           Buyer shall be responsible for the payment of all fees
and taxes related to this transaction; except that Buyer shall not be
responsible for, or have any liability with respect to, sales, transfer, income
or similar taxes arising out of this transaction, if any, and Seller agrees
that it shall pay, or represents that it has paid, in a timely manner any and
all such taxes.  Buyer 


 

















 


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


 


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


 


Section 1.9.            Real Property.


 


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


 


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


 


(c)           Buyer shall have the right to update the title matters
at Closing for any change which may have arisen after the date of Buyer’s
original title search.  If such update
indicates any 


 

















 


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


 


ARTICLE II


CLOSING
AND EFFECTIVE DATE


 


Section 2.1.            Dates.


 


The purchase of
assets and assumption of liabilities provided for in this Agreement shall occur
at a closing (the “Closing”) on March 31,
2007 at a time and place mutually agreed upon by the parties (the  “Closing Date”)
so long as this date follows the receipt of all requisite regulatory approvals
and the expiration of all waiting periods imposed by law or by rule, regulation
or order of any regulatory authority (“Regulatory Prerequisites”).  If Regulatory Prerequisites do not allow the
Closing Date to be March 31, 2007, then the Closing Date shall be on a day
mutually agreeable to the parties, but in no event later than June 30,
2007.  The parties may agree on an
earlier Closing Date if permitted by the satisfaction of the Regulatory
Prerequisites.  The effective date of
this Agreement (the “Effective Date”)
shall be 6:00 p.m. local time on the business day on which the Closing
occurs.


 


Section 2.2.            Closing.


 


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


 


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


 


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


 


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


 


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


 


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


 

















 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


(1)           The Assignment and Assumption Agreement;


 


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


 


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


 

















 


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


 


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


 


(6)           The Closing Statement.


 


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


 


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


 


Section 2.3.            Post-Closing Adjustments.


 


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


 


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


 

















 


ARTICLE III


INDEMNIFICATION


 


Section 3.1.            Seller’s Indemnification of Buyer.


 


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


 


Section 3.2.            Buyer’s Indemnification of Seller.


 


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


 


Section 3.3.            Claims for Indemnity.


 


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


 


(b)           In the event that any person or entity not a party to
this Agreement shall make any demand or claim or file or threaten to file any
lawsuit, which demand, claim or lawsuit may result in any liability, damage or
loss to one party hereto of the kind for which such party is entitled to
indemnification pursuant to Section 3.1 or 3.2 hereof, then, after written
notice is provided by the indemnified party to the indemnifying party of such
demand, claim or lawsuit, the indemnifying party shall have the option, at its
cost and expense, to retain counsel for the indemnified party to defend any
such demand, claim or lawsuit.  In the
event that the indemnifying party shall fail to respond within five (5) days
after receipt of such notice of any such demand, claim or lawsuit, then the
indemnified party shall retain counsel and conduct the defense of such demand,
claim or lawsuit as it may in its discretion deem proper, at the cost and
expense of the indemnifying party.  In
effecting the settlement of any such demand, claim or lawsuit, an indemnified
party shall act in good faith, shall consult with the indemnifying party and
shall enter into only such settlement as the indemnifying party shall approve
(the 


 

















 


indemnifying party’s
approval will be implied if it does not respond within ten (10) days of
its receipt of the notice of such settlement offer).


 


ARTICLE
IV


REPRESENTATIONS
AND WARRANTIES OF SELLER


 


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


 


Section 4.1.            Corporate Organization.


 


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


 


Section 4.2.            No Violation.


 


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


 


Section 4.3.            Corporate Authority.


 


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


 


Section 4.4.            Enforceable Agreement.


 


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


 


Section 4.5.            No Brokers.


 


All negotiations
relative to this Agreement and the transactions contemplated hereby have been
carried on by Seller and Buyer, and there has been no participation or intervention
by any other persons, firm or corporation employed or engaged by or on behalf
of Seller in such a 


 

















 


manner as to give
rise to any valid claim against Seller or Buyer for a brokerage commission,
finders fee or like commission.


 


Section 4.6.            Real Property.


 


Seller makes the
following representations regarding the Real Properties:


 


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


 


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


 


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


 


Section 4.7.            Condition of Property.


 


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


 


Section 4.8.            Certain Loan Representations.


 


Seller represents
and warrants to Buyer as of the Effective Date with respect to each of the
Loans as follows: (i) all Loans and all related documentation, including but
not limited to promissory notes, loan agreements, and security interests, have
been made and executed in the ordinary course of business, contain genuine
signatures of the named parties thereto, were given for valid consideration and
are all in full force and effect, and are enforceable in accordance with this
Agreement; (ii) each Loan has been originated, closed and supervised in
substantial  accordance with all applicable laws and
regulations; (iii) each security interest (including without limitation,
each deed, mortgage, assignment, pledge and security agreement) taken or
granted in connection with any such Loan creates a valid and enforceable
security interest in the property described therein which has been duly
perfected and has the priority reflected in the loan file relating to such Loan
subject as to enforceability to the subsequent application of bankruptcy,
equity or similar laws; and (iv) Seller is not aware of any claim or
dispute regarding such Loan or any document securing such Loan.


 


Section 4.9.            Deposit Liabilities.


 


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


 
















 


Section 4.10.          Litigation.


 


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


 


Section 4.11.          Mechanic’s Liens.


 


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


 


Section 4.12.          Accuracy of Representations and Warranties.


 


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


 


Section 4.13.          Conduct of Business.


 


The thrift
business of Seller, as conducted at the Offices, has been conducted in
substantial compliance with all material laws, regulations, judicial writs,
orders, and decrees applicable to such business, including, but not limited to,
laws of the United States and the State of Iowa and rules and regulations
of the Office of Thrift Supervision and the Federal Deposit Insurance Corporation,
where any violation of such laws, rules, or regulations would have a material
adverse impact on such business.


 


Section 4.14.          Zoning.


 


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


 


Section 4.15.          Environmental Compliance.


 


To the best of
Seller’s knowledge, the Offices and the operations
thereof are in substantial compliance with all Environmental Laws, and such
properties are not affected or threatened by any condemnation or eminent domain
proceeding.  “Environmental Laws,” as
used herein, shall mean all federal, state, and local laws, including statutes,
regulations, ordinances, codes, rules, and other governmental restrictions and
requirements relating to the environmental or hazardous 


 

















 


substances,
including, but not limited to, the Toxic Substance Act, the Clean Air Act, the
Clean Water Act, the Resources Conservation and Recovery Act of 1976, the
Comprehensive Environmental Response, Compensation, and Liability Act of 1980,
regulations of the Environmental Protection Agency, regulations of the Nuclear
Regulatory Agency, and regulations of the Iowa State Department of Natural
Resources or Iowa State Environmental Protection Agency in effect now or at any
time prior to the Closing Date.  Seller has
and will prior to the Closing Date (i) comply with all applicable
Environmental Laws at the Offices; (ii) provide to Buyer, immediately upon
receipt, copies of any correspondence, notice, pleading, citation, indictment,
complaint, order, decree, or other document from any source asserting or
alleging a circumstance or condition which requires or may require a clean up,
removal, remediation, or other response by or on the part of Seller under
Environmental Laws at the Offices or which seek criminal or punitive penalties
from Seller for an alleged violation of environmental Laws at the Offices; and (iii) advise
Buyer, in writing, as soon as Seller becomes aware of any condition or
circumstance which makes the foregoing representation incomplete or inaccurate.


 


Section 4.16.          Accounting Records.


 


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


 


Section 4.17.          Access to Offices.


 


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


 


Section 4.18.          Information Reports.


 


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


 


Section 4.19.          Processing of Items.


 


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


 


Section 4.20.          Limitation of Representations and
Warranties.


 


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


 

















 


ARTICLE V


REPRESENTATIONS
AND WARRANTIES OF BUYER


 


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


 


Section 5.1.            Corporate Organization.


 


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


 


Section 5.2.            No Violation.


 


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


 


Section 5.3.            Corporate Authority.


 


The Execution and
delivery of this agreement, and the consummation of the transactions
contemplated herein, have been duly authorized by the Board of Directors (or
Executive Committee) of Buyer.  No
further corporate authorization on the part of the Buyer is necessary to
consummate the transactions contemplated hereunder.


 


Section 5.4.            Enforceable Agreement.


 


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


 


Section 5.5.            No Brokers.


 


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


 

















 


ARTICLE VI


OBLIGATIONS
OF PARTIES PRIOR TO AND AFTER


EFFECTIVE
DATE


 


Section 6.1.            Full Access.


 


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


 


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


 


Buyer shall prepare
and file applications required by law with the appropriate regulatory
authorities for approval to purchase the Assets  and
assume the Assumed Liabilities, and to effect in all other respects the
transactions contemplated herein.  Buyer
shall use its best efforts to file such applications by February 19,  2007, and to  process
such application(s) in a diligent manner Buyer shall provide Seller with
copies of all applications, materials,
notices, orders, opinions, correspondence and other documents with respect to
such regulatory filings, and shall use its best efforts to obtain all necessary
regulatory approvals.  Buyer shall
promptly notify Seller upon receipt by Buyer of notification that any
application provided for hereunder has been denied.  Seller shall provide such assistance and
information to Buyer and shall make such regulatory filings as shall be
reasonably necessary on Seller’s part for Buyer to comply with the requirements
of the applicable regulatory authorities, including, but not limited to any
required notices regarding the closing of the Offices.


 


Section 6.3.            Conduct of Business: Maintenance of Properties.


 


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


 


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


 

















 


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


 


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


 


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


 


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


 


Section 6.4.            No Solicitation by Seller.


 


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


 


Section 6.5.            Further Actions.


 


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


 

















 


Section 6.6.            Fees and Expenses.


 


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


 


Section 6.7.            Breaches with Third Parties.


 


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


 


Section 6.8.            Insurance.


 


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


 


Section 6.9.            Public Announcements.


 


Except as is
necessary to obtain the regulatory approvals contemplated by this Agreement,
Seller and Buyer agree that, from the date hereof, neither shall make any
public announcement or public comment regarding this Agreement  or the transactions contemplated herein without first
consulting with the other party hereto and reaching an agreement upon the
substance and timing of such announcement or comment.  Further, Seller and Buyer acknowledge the
sensitivity of this transaction to the Employees and no announcement or
communication with the Employees shall be made without the prior approval of
the Seller.


 


However, the parties may
make public announcement as required by law or any governing regulatory body,
including but not limited to the SEC, but only after making every effort to
notify the employees first.


 


Section 6.10.          Further Negotiations.


 


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


 

















 


ARTICLE
VII


CONDITIONS
TO BUYER’S OBLIGATIONS


 


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


 


Section 7.1.            Representations and Warranties True.


 


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


 


Section 7.2.            Obligations Performed.


 


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


 


Section 7.3.            No Adverse Litigation.


 


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


 


Section 7.4.            Regulatory Approval.


 


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


 


Section 7.5.            List of Customers.


 


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


 


Section 7.6.            Buyer’s Due Diligence.


 


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


 

















 


ARTICLE
VIII


CONDITIONS
TO SELLER’S OBLIGATIONS


 


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


 


Section 8.1.            Representations and Warranties True.


 


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


 


Section 8.2.            Obligations Performed.


 


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


 


Section 8.3.            No Adverse Litigation.


 


On the Effective
Date, no action, suit or proceeding shall be pending or threatened against
Buyer which is reasonably likely to materially and adversely affect the
transactions contemplated herein.


 


Section 8.4.            Regulatory Approval.


 


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


 


ARTICLE
IX


LIQUIDATED DAMAGES


 


Section 9.1.            Failure of Performance.


 


Unless otherwise
agreed in writing by the Seller and Buyer and provided that (i) the
conditions to the Buyer’s obligations as set forth in Section 1.9 and Article 7
of this Agreement have been satisfied in all material respects, and (ii) the
conditions to Seller’s obligations set forth in Article 8 of this
Agreement have been satisfied in all material respects; if either Buyer or
Seller (either a “Breaching Party”) fails to complete the transactions
contemplated by this Agreement, such Breaching Party shall pay to the other
party (either a “Non-Breaching Party”) 


 

















 


the amount of Two
Hundred Fifty Thousand Dollars ($250,000) as liquidated damages, which payment
shall be in lieu of all other remedies or actions at law or in equity available
to the Non-Breaching Party, and shall be entitled to obtain judgment for such
amount against the Breaching Party as permitted by law.


 


ARTICLE X


TERMINATION


 


Section 10.1.          Methods of Termination.


 


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


 


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


 


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


 


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


 


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


 


(e)           Any time on or prior to the Effective Date, by Buyer
or Seller in writing if the other shall have been in breach of the
representations or warranties in any material respect (as if any  such representation or warranty had been made on and as of
the date hereof and on the date of the notice of breach referred to below), or
a breach of any covenant or obligation contained herein, and such breach has
not been cured by the earlier of thirty (30) days after the giving of notice to
the breaching party of such breach or the Effective Date; provided, however,
that there shall be no cure period in connection with any breach of Section 6.2
hereof, so long as such breach by Buyer was not caused by any action or
inaction of Seller;


 


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


 


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


 


Section 10.2.          Procedure Upon Termination.


 


In the event of
termination pursuant to Section 10.1 hereof written notice thereof shall
be given to the other party, and this Agreement shall terminate immediately
upon receipt of such 


 

















 


notice unless an
extension is consented to by the party having the right to terminate.  If this Agreement is terminated as provided
herein:


 


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


 


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


 


ARTICLE XI


MISCELLANEOUS
PROVISIONS


 


Section 11.1.          Amendment and Modification.


 


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


 


Section 11.2.          Waiver or Extension.


 


Except with
respect to required approvals of the applicable governmental authorities, either
party, by written instrument signed by a duly authorized officer, may extend
the time for the performance of any of the obligations or other acts of the
other party and may waive (i) any inaccuracies in the representations and
warranties contained herein or in any document delivered pursuant hereto, or (ii) compliance
with any of the undertakings, obligations, covenants or other acts contained
herein.


 


Section 11.3.          Assignment.


 


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


 


Section 11.4.          Confidentiality.


 


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


 

















 


This covenant and
agreement shall survive the consummation of the transactions contemplated
herein.


 


Section 11.5.          Addresses for Notices, Etc.


 


All notices,
requests, demands, consents and other communications provided for hereunder and
under the related documents shall be in writing and mailed (by registered or
certified mail, return receipt requested), telegraphed, telexed, telecopied or
personally delivered (with receipt thereof acknowledged) to the applicable
party at the address indicated below:


 


If to Seller:


 


Benjamin Guenther


MetaBank


Erie at Fifth


Storm Lake, Iowa
50588


 


Telephone: (712)
732-4105


Facsimile: (712) 732-7105


Email:  bguenther@metabankonline.com


 


with a copy to:


 


Gary W. Armstrong


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


316 East Sixth
Street


Storm Lake, IA
50588-0278


 


Telephone: (712)
732-3538


Facsimile: (712)
732-7578


Email:  mhgab@iw.net


 


If to Buyer:


 


Stephen D. Spotts


Iowa State Bank


500 Audubon Street


Sac City, IA 50583


 


Telephone: (712)
662-4721


Facsimile: (712)
662-4950


Email:  sspotts@scsbank.com


 

















 


with a copy to:


 


Robert A. Mullen


Belin Law Firm


The Financial
Center


666 Walnut, Suite 2000


Des Moines, IA
50309-3989


 


Telephone: (515)
243-7100


Facsimile: (515)
558-0715


Email:  ramullen@belinlaw.com


 


Section 11.6.          Counterparts.


 


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


 


Section 11.7.          Headings.


 


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


 


Section 11.8.          Governing Law.


 


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


 


Section 11.9.          Entire Agreement.


 


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


 


Section 11.10.        Expenses.


 


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


 


Section 11.11.        Severability.


 


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


 

















 


Section 11.12.        Parties in Interest.


 


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


 


[SIGNATURE PAGE
FOLLOWS]


 

















 


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


 


	
   

  	
   

  	
  SELLER

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  METABANK

  
	
  ATTEST:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Sandra Hegland

  	
   

  	
   

  	
  By:

  	
  /s/ Benjamin Guenther

  	
   

  
	
  Its: 

  	
  Senior Vice President
  of HR

  	
   

  	
  Its:  

  	
  President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  BUYER

  
	
   

  	
   

  	
   

  
	
  ATTEST:

  	
   

  	
  IOWA STATE BANK

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Bill Hess

  	
   

  	
   

  	
  By:

  	
  /s/ Stephen D. Spotts

  	
   

  
	
  Its:

  	
  Chairman

  	
   

  	
   

  	
  Its:

  	
  President