exv10w4






Exhibit 10.4




United States Department of the Treasury

1500 Pennsylvania Avenue, NW

Washington, D.C. 20220




February 20, 2009




Ladies and Gentlemen:




     Reference is made to that certain Letter Agreement incorporating the Securities Purchase
Agreement – Standard Terms dated of as of the date of this letter agreement (the “Securities
Purchase Agreement”) between United States Department of Treasury (“Investor”) and the company
named on the signature page hereto (the “Company”). Capitalized terms used but not defined herein
shall have the meanings assigned to them in the Securities Purchase Agreement.



     The American Recovery and Reinvestment Act of 2009, as it may be amended from time to time
(the “Act”), includes provisions relating to executive compensation and other matters that may be
inconsistent with the Securities Purchase Agreement, the Warrant and the Certificate[s] of
Designation (the “Transaction Documents”). Accordingly, Investor and the Company desire to confirm
their understanding as follows:



     1. Notwithstanding anything in the Transaction Documents to the contrary, in the event that
the Act or any rules or regulations promulgated thereunder are inconsistent with any of the terms
of the Transaction Documents, the Act and such rules and regulations shall control.



     2. For the avoidance of doubt (and without limiting the generality of Paragraph 1):




     (a) the provisions of Section 111 of the Emergency Economic Stabilization Act of 2008,
as amended by the Act or otherwise from time to time (“EESA”), shall apply to the Company;




     (b) the waiver to be delivered by each of the Company’s Senior Executive Officers
pursuant to Section 1.2(d)(v) of the Securities Purchase Agreement shall, in addition, be
delivered by any additional highly compensated employees required by the Act or any rules or
regulations thereunder;




     (c) the Company’s chief executive officer and chief financial officer shall provide the
written certification of compliance by the Company with the requirements of Section 111 of
ESSA, as amended by the Act, in the manner specified by Section 111(b)(4) thereunder or in
any rules or regulations under ESSA; and




     (d) the Company shall be permitted to repay preferred shares, and when such preferred shares are repaid, the Investor shall liquidate warrants associated with such preferred
shares, all in accordance with the Act and any rules and regulations thereunder.


UST
Seq. No. 745




 









 





     From and after the date hereof, each reference in the Securities Purchase Agreement to “this
Agreement” or “this Securities Purchase Agreement” or words of like import shall mean and be a
reference to the Agreement (as defined in the Securities Purchase Agreement) as amended by this
letter agreement.



     This letter agreement will be governed by and construed in accordance with the federal law of
the United States if and to the extent such law is applicable, and otherwise in accordance with the
laws of the State of New York applicable to contracts made and to be performed entirely within such
State.



     This letter agreement, the Securities Purchase Agreement, the Warrant, the Certificate[s] of
Designation and any other documents executed by the parties at the Closing constitute the entire
agreement of the parties with respect to the subject matter hereof.



     Nothing in this letter agreement shall be deemed an admission by Investor as to the necessity
of obtaining the consent of the Company in order to effect the changes to the Transaction Documents
contemplated by this letter agreement, nor shall anything in this letter agreement be deemed to
require Investor to obtain the consent of any other TARP recipient (as defined in the Act)
participating in the Capital Purchase Program (the “CPP”) in order to effect changes to their
documentation under the CPP.



     This letter agreement may be executed in any number of separate counterparts, each such
counterpart being deemed to be an original instrument, and all such counterparts will together
constitute the same agreement. Executed signature pages to this letter agreement may be delivered
by facsimile and such facsimiles will be deemed sufficient as if actual signature pages had been
delivered.



[Remainder of this page intentionally left blank]



UST
Seq. No. 745




-2-









 





     In witness whereof, the parties have duly executed this letter agreement as of the date
first written above.



	 	 	 	 	 	 	 
	 	 	UNITED STATES DEPARTMENT OF
THE TREASURY	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ Neel Kashkari	 	 
	  

	 	    
	 	 

Name: Neel Kashkari
	 	 
	  

	 	   
	 	Title: Interim Assistant Secretary For
Financial Stability	
	 
	 	 	 	 	 	 
	 	 	COMPANY:	 	 
	 
	 	 	 	 	 	 
	 	 	FIRST MERCHANTS CORPORATION	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ Michael C. Rechin	 	 
	  

	 	    
	 	 

Name:   Michael C. Rechin
	 	 
	 

	 	 	 	Title:   President and Chief Executive Officer	 	 





UST
Seq. No. 745



Signature
Page to Letter Agreement