| (i) | The      compensation committee of Community Bank Shares of Indiana, Inc. (the      “Company”) has discussed, reviewed, and evaluated with senior risk      officers at least every six months after the period beginning on the later      of September 14, 2009, or ninety days after the closing date of the      agreement (the “Agreement”) between the Company and the United States      Department of the Treasury (the “Treasury”) under the Treasury’s Troubled      Asset Relief Program – Capital Purchase Program (“TARP”), the senior      executive officer (“SEO”) compensation plans and the employee compensation      plans and the risks these plans pose to the Company.  The      requirement to certify compliance with this standard with respect to the      period beginning on the later of September 14, 2009 or ninety days after      the closing of the Agreement and ending on the last day of the Company’s      fiscal year (12/31/2009) was never applicable to the    Company; |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (ii) | The      compensation committee of the Company has identified and limited any      features of the SEO compensation plans that could lead SEOs to take      unnecessary and excessive risks that could threaten the value of the      Company and has identified any features of the employee compensation plans      that pose risks to the Company and has limited those features to ensure      that the Company is not unnecessarily exposed to  risks; |
|------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (iii) | The      compensation committee has reviewed, at least every six months during the      period beginning on the later of September 14, 2009 or ninety days after      the closing of the Agreement (the “Beginning Date”), the terms of each      employee compensation plan and identified any features of the plan that      could encourage the manipulation of reported earnings of the Company to      enhance the compensation of an employee, and has limited any such      features; |
|-------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (iv) | The      compensation committee of the Company will certify to the reviews of the      SEO compensation plans and employee compensation plans required under (i)      and (iii) above; |
|------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (v) | The      compensation committee of the Company will provide a narrative description      of how it limited during any part of the most recently completed fiscal      year when an obligation arising from financial assistance obtained through      TARP remained outstanding (the “TARP Period”) the features    in |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (A) | SEO      compensation plans that could lead SEOs to take unnecessary and excessive      risks that could threaten the value of the  Company; |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------|

|   | (B) | Employee      compensation plans that unnecessarily expose the Company to risks;      and |
|--------|-----|-------------------------------------------------------------------------------------------|

|   | (C) | Employee      compensation plans that could encourage the manipulation of reported      earnings of the Company to enhance the compensation of an      employee; |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (vi) | The      Company has required that bonus payments (“Bonus Payments”), as defined in      the regulations and guidance established under section 111 of the      Emergency Economic Stabilization Act of 2008, as amended (“EESA”), of the      SEOs and twenty next most highly compensated employees be subject to a      recovery or “clawback” provision during the TARP Period if the bonus      payments were based on materially inaccurate financial statements or any      other materially inaccurate performance metric  criteria; |
|------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (vii) | The      Company has prohibited any golden parachute payment, as defined in the      regulations and guidance established under section 111 of EESA, to a SEO      or any of the next five most highly compensated employees during the      period beginning on the later of the closing date of the agreement between      the Company and the Treasury or June 15, 2009, and ending with the last      day of the Company’s fiscal year containing that  date; |
|-------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (viii) | The      Company has limited bonus payments to its applicable employees in      accordance with section 111 of EESA and the regulations and guidance      established thereunder during the period beginning on the later of the      closing date of the Agreement or June 15, 2009, and ending with the last      day of the Company’s fiscal year containing that  date; |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (ix) | The      board of directors of the Company has established an excessive or luxury      expenditures policy, as defined in the regulations and guidance      established under section 111 of EESA, by the later of September 14, 2009,      or ninety days after the closing date of the Agreement; this policy has      been provided to Treasury and its primary regulatory agency; the Company      and its employees have complied with this policy since the Beginning Date;      and any expenses that, pursuant to this policy, required approval of the      board of directors, a committee of the board of directors, an SEO, or an      executive officer with a similar level of responsibility were properly      approved; |
|------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (x) | The      Company will permit a non-binding shareholder resolution in compliance      with any applicable federal securities rules and regulations on the      disclosures provided under the federal securities laws related to SEO      compensation paid or accrued during the period beginning on the later of      the closing date of the Agreement or June 15, 2009 and ending with the      last day of the Company’s fiscal year containing that  date; |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| (xi) | The      Company will disclose the amount, nature, and justification for the      offering during the period beginning on the later of the closing date of      the Agreement or June 15, 2009 and ending with the last day of the      Company’s fiscal year containing that date of any perquisites, as defined      in the regulations and guidance established under section 111 of EESA,      whose total value exceeds $25,000 for any employee who is subject to the      bonus payment limitations identified in paragraph  (viii); |
|------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (xii) | The      Company will disclose whether the Company, the board of directors of the      Company, or the compensation committee of the Company has engaged during      the period beginning on the later of the closing date of the Agreement or      June 15, 2009 and ending with the last day of the Company’s fiscal year      containing that date, a compensation consultant; and the services the      compensation consultant or any affiliate of the compensation consultant      provided during this period; |
|-------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (xiii) | The      Company has prohibited the payment of any gross-ups, as defined in the      regulations and guidance established under section 111 of EESA, to the      SEOs and the next twenty most highly compensated employees during the      period beginning on the later of the closing date of the Agreement or June      15, 2009 and ending with the last day of the Company’s fiscal year      containing that date, with one de minimis exception.  The      Company inadvertently paid tax gross-ups to certain of its twenty-five      most highly paid employees (in the aggregate amount of $80) as part of a      wellness program in which the Company pays a portion of employees’monthly      dues for a YMCA health club.  When this was discovered in      February of 2010, the amounts of the tax gross-ups were reimbursed to the      Company by the affected employees; |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (xiv) | The      Company has substantially complied with all other requirements related to      employee compensation that are provided in the Agreement, including any      amendments; |
|-------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (xv) | The      Company has submitted to Treasury a complete and accurate list of the SEOs      and the twenty next most highly compensated employees for the current      fiscal year and the most recently completed fiscal year, with the non-SEOs      ranked in descending order of level of annual compensation, and with the      name, title, and employer of each SEO and most highly compensated employee      identified; and |
|------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (xvi) | I      understand that a knowing and willful false and fraudulent statement made      in connection with certification may be punished by fine, imprisonment, or      both.  (See, for example, 18 USC  1001). |
|-------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| By:                                        | /s/ James D. Rickard |                                 | By:                          | /s/ Paul A. Chrisco |
|--------------------------------------------|----------------------|--------------------------------------|------------------------------|---------------------|
| James      D. Rickard                      |                 | Paul      A. Chrisco                 |
| President      and Chief Executive Officer |                 | Executive      Vice President and    |
|                                       |                 |                                 | Chief      Financial Officer |
| Date:  March      31, 2010       |                 | Date:  March      31, 2010 |

----