Document:

EX-4.1

EXHIBIT 4.1

PAGE 1

Delaware

 
The First State

     I, HARRIET SMITH WINDSOR, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO
HEREBY CERTIFY THE ATTACHED ARE TRUE AND CORRECT COPIES OF ALL DOCUMENTS FILED FROM
AND INCLUDING THE RESTATED CERTIFICATE OR A MERGER WITH A RESTATED CERTIFICATE
ATTACHED OF “PRINCETON NATIONAL BANCORP, INC. ” AS RECEIVED AND FILED IN THIS
OFFICE.

     THE FOLLOWING DOCUMENTS HAVE BEEN CERTIFIED:

     RESTATED CERTIFICATE, FILED THE TWELFTH DAY OF MARCH, A.D. 1992, AT 12
O’CLOCK P.M.

     CERTIFICATE OF OWNERSHIP, FILED THE NINETEENTH DAY OF JANUARY, A.D.
1995, AT 4 O’CLOCK P.M.

     CERTIFICATE OF AMENDMENT, FILED THE FIRST DAY OF AUGUST, A.D. 1997, AT 9
O’CLOCK A.M.

     CERTIFICATE OF AMENDMENT, FILED THE TWENTY-FIFTH DAY OF JULY, A.D. 2003,
AT 12:22 O’CLOCK P.M.

     CERTIFICATE OF DESIGNATION, FILED THE TWENTY-NINTH DAY OF JULY, A.D.
2003, AT 8:26 O’CLOCK P.M.

     CERTIFICATE OF OWNERSHIP, FILED THE TWENTY-NINTH DAY OF JULY, A.D. 2005,
AT 12:16 O’CLOCK P.M.

     AND I DO HEREBY FURTHER CERTIFY THAT THE EFFECTIVE DATE OF

	 	 	 	 	 
	0921760      8100X 

090027051

	 	
	 	
 

Harriet Smith Windsor, Secretary of State 

AUTHENTICATION: 7076955

DATE: 01-12-09

You may verify this certificate online at corp.delaware.gov/authver.shtml

 

 

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Delaware

 

The First State

THE AFORESAID CERTIFICATE OF OWNERSHIP IS THE THIRTY-FIRST DAY OF JULY, A.D.
2005, AT 5:02 O’CLOCK P.M.

	 	 	 	 	 
	0921760       8100X 

090027051

	 	
	 	
 

Harriet Smith Windsor, Secretary of State 

AUTHENTICATION: 7076955

DATE: 01-12-09

You may verify this certificate online at corp.delaware.gov/authver.shtml

 

 

	 	 	 
	 

	 	STATE OF DELAWARE

SECRETARY OF STATE

DIVISION OF CORPORATIONS

FILED 12:00 PM 03/12/1992

920725237 — 921760

AMENDED AND RESTATED

CERTIFICATE OF INCORPORATION

OF

PRINCETON NATIONAL BANCORP, INC.

     Princeton National Bancorp, Inc., a corporation organized and existing under the laws of the
State of Delaware, hereby certifies as follows:

     1. The name of the corporation is Princeton National Bancorp, Inc. (the “Corporation”). The
Corporation filed its original Certificate of Incorporation with the Delaware Secretary of State
on September 4, 1981.

     2. This Amended and Restated Certificate of Incorporation restates, integrates and further
amends the provisions of the Certificate of Incorporation of this Corporation as heretofore
amended or supplemented.

     3. The text of the Certificate of Incorporation as amended or supplemented heretofore is
hereby amended and restated to read as herein set forth in full:

     FIRST: The name of the Corporation is Princeton National Bancorp, Inc.

     SECOND: The address of its registered office in the State of Delaware is 32 Loockerman
Square, Suite L-100, in the City of Dover, County of Kent. The name of its registered agent at
such address is The Prentice-Hall Corporation System, Inc.

     THIRD: The purposes of the Corporation is to engage in any lawful act or activity for
which a corporation may be organized under the General Corporation Law of the State of Delaware.
Without limiting in any manner the scope and generality of the foregoing, it is hereby provided
that the Corporation shall have the following purposes, objects and powers:

	 	(a)	 	To improve, manage, develop, sell, assign, transfer, lease,
mortgage, pledge or otherwise dispose of or turn to account or deal with
all or

 

 

	 	 	 	any part of the property of the Corporation and from time to time to vary any investment
or employment of capital of the Corporation.

	 	(b)	 	To borrow money, and to make and issue notes, bonds, debentures, obligations and evidences
of indebtedness of all kinds, whether secured by mortgage, pledge or otherwise, without limit
as to amount, and to secure the same by mortgage, pledge or otherwise: and generally to make
and perform agreements and contracts to every kind and description, including contracts of
guaranty and suretyship.
	 
	 	(c)	 	To lend money for its corporate purposes, invest and reinvest its funds, and take, hold and
deal with real and personal property as security for the payment of funds so loaned or
invested.
	 
	 	(d)	 	To pay pensions and establish and carry out pension, profit sharing, stock option, stock
purchase, stock bonus, retirement, benefit, incentive and commission plans, trusts and
provisions for any or all of its directors, officers and employees, and for any or all of the
directors, officers and employees of its subsidiaries; and to provide insurance for its
benefit on the life of any of its directors, officers or employees, or on the life of any
stockholder for the purpose of acquiring at his death shares of its stock owned by such
stockholder.
	 
	 	(e)	 	To acquire by purchase, subscription or otherwise, and to hold for investment or otherwise
and to use, sell, assign, transfer, mortgage, pledge or otherwise deal with or dispose of
stocks, bonds or any other obligations or securities of any corporation or corporations

2

 

	 	 	 	(including, but not limited to, stock in a national banking association); to merge or consolidate
with any corporation in such manner as may be permitted by law; to aid in any manner any
corporation whose stocks, bonds or otherwise obligations are held or in any manner guaranteed by
this Corporation, or in which this Corporation is in any way interested; and to do any other acts
or things for the preservation, protection, improvement or enhancement of the value of any such
stock, bonds or other obligations; and while owner of any such stock, bonds or other obligations to
exercise all the rights, powers and privileges of ownership thereof, and to exercise any and all
voting powers thereon; and to guarantee the payment of dividends upon any stock the principal or
interest or both, of any bonds or other obligations, and the performance of any contracts.

	 	(f)	 	To
do all and everything necessary, suitable and proper for the accomplishment of any of the purposes
or the attainment of any of the objects or the furtherance of any of the powers hereinbefore set
forth, either alone or in association with other corporations, firms or individuals, and to do
every other act or acts, thing or things incidental or appurtenant to or growing out of or
connected with the aforesaid business or powers or any part or parts thereof, provided that same be
not inconsistent with the laws under which this Corporation is organized.

3

 

	 	(g)	 	The business or purpose of the Corporation is from time to time to do any one or more of the
acts and things hereinabove set forth, and it shall have power to conduct and carry on its said
business, or any part thereof, and to have one or more offices, and to exercise any or all of its
corporate powers and rights, in the State of Delaware, and in the various other states,
territories, colonies and dependencies of the United States, in the District of Columbia, and in
all or any foreign countries.
	 
	 	(h)	 	The enumeration herein of the objects and purposes of the
Corporation shall be construed as powers as well as objects and purposes and shall not be deemed
to exclude by inference any powers, objects or purposes which the Corporation is empowered to
exercise, whether expressly by force of the laws of the State of Delaware now or hereafter in
effect, or impliedly by the reasonable construction of the said laws.

     FOURTH: The total number of
shares of capital stock which the Corporation shall have authority to issue is four million
(4,000,000) shares of common stock, par value $5.00 per share.

     FIFTH: A. Number, Term and Election. The Board of Directors shall consist
of not less than five nor more than twenty-five directors, with the exact number of directors to be
fixed from time to time by the Board of Directors pursuant to a resolution adopted by a majority of
the Board of Directors then in office. The directors shall be divided into three classes. At the
meeting held for the election of the first board following the classification of directors,
directors of the first class shall be elected for a term which shall expire at the first annual
meeting of stockholders following their election, directors of the second class shall be elected
for a term which

4

 

shall expire at the second annual meeting following their election, and directors of the third
class shall be elected for a term which shall expire at the third annual meeting following their
election. At each annual meeting following such classification and initial election, directors
chosen to succeed those whose terms expire shall be elected for a term which shall expire at the
third annual meeting following their election so that the term of office of one class of directors
shall expire in each year. All directors of the Corporation shall hold office until their
respective successors are duly elected and qualified. Any director elected to a particular class
by the stockholders or appointed by the directors pursuant to paragraph B of Article Fifth shall
be eligible, upon resignation, to be elected to a different class in which a vacancy exists.

     The names and addresses of the persons who shall serve as directors and, effective upon the
filing of this Amended and Restated Certificate of Incorporation, the class in which such
directors shall serve, shall be as follows:

	 	 	 	 	 	 	 	 	 
	Name	 	Address	 	Class	 	Expiration of Term
	 
	 	 	 	 	 	 	 	 
	D.E. Van Ordstrand

	 	606 South Main Street

Princeton, Illinois
61356
	 	 	1	 	 	1993 Annual Meeting
	 
	 	 	 	 	 	 	 	 
	Don S. Browning

	 	606 South Main Street

Princeton, Illinois
61356
	 	 	1	 	 	1993 Annual Meeting
	 
	 	 	 	 	 	 	 	 
	Donald E. Grubb

	 	606 South Main Street

Princeton, Illinois
61356
	 	 	1	 	 	1993 Annual Meeting
	 
	 	 	 	 	 	 	 	 
	Thomas M. Longman

	 	606 South Main Street

Princeton, Illinois 61356
	 	 	2	 	 	1994 Annual Meeting
	 
	 	 	 	 	 	 	 	 
	James P. Monier

	 	606 South Main Street

Princeton, Illinois 61356
	 	 	2	 	 	1994 Annual Meeting
	 
	 	 	 	 	 	 	 	 
	Tony J. Sorcic

	 	606 South Main Street

Princeton, Illinois 61356
	 	 	2	 	 	1994 Annual Meeting
	 
	 	 	 	 	 	 	 	 
	
Dr. Harold C. Hutchinson, Jr.

	 	606 South Main Street

Princeton, Illinois
61356
	 	 	3	 	 	1995 Annual Meeting

5

 

	 	 	 	 	 	 	 	 	 
	Name	 	Address	 	Class	 	Expiration of Term
	 
	 	 	 	 	 	 	 	 
	Thomas R. Lasier

	 	606 South Main
Street 
Princeton,
Illinois 61356
	 	 	3	 	 	1995 Annual Meeting
	 
	 	 	 	 	 	 	 	 
	Stephen W. Samet

	 	606 South Main
Street 
Princeton,
Illinois 61356
	 	 	3	 	 	1995 Annual Meeting

          B. Newly Created Directorships. Unless the Board of Directors
otherwise determines, newly created directorships resulting from any increase in the
authorized
number of directors or any vacancies in the Board of Directors resulting from death,
resignation,
retirement, disqualification, removal from office or other cause may be filled only by a
majority vote
of the directors then in office, though less than a quorum, or by a sole remaining director,
and
directors so chosen shall hold office for a term expiring at the annual meeting of
stockholders at
which the term of office of the class to which they have been elected expires and until each
such
director’s successor shall have been duly elected and qualified. In no case shall a decrease
in the
number of directors shorten the term of any incumbent director.

          C. Removal. Any director or the entire Board of Directors may be
removed from office at any time, but only for cause and by the affirmative vote of the
holders of
at least a majority of the outstanding common stock.

          
D. Amendment, Repeal or Alteration. Notwithstanding any other
provisions of this Amended and Restated Certificate of Incorporation or any provision of law
which
might otherwise permit a lesser vote or no vote, the affirmative vote of the holders of at
least eighty
percent (80%) of the then outstanding shares of the common stock, shall be required to alter,
amend or repeal, or adopt any provision inconsistent with, this Article Fifth.

     SIXTH: The following provisions are inserted for the management of the business and
for the conduct of the affairs of the Corporation, and for further definition, limitation and
regulation of the powers of the Corporation and of its directors and stockholders:

6

 

	 	(a)	 	Election of directors need not be by ballot unless the by-laws so provide.
	 
	 	(b)	 	The Board of Directors shall have power without the assent or vote of the stockholders to
make, alter, amend, change, add to or repeal the by-laws of the Corporation; to fix and vary
the amount to be reserved for any proper purpose; to authorize and cause to be executed
mortgages and liens upon all or any part of the property of the Corporation; to determine the
use and disposition of any surplus or net profits; and to fix the times for the declaration
and payment of dividends.
	 
	 	(c)	 	The directors in their discretion may submit any contract or act for approval or ratification
at any annual meeting of the stockholders or at any meeting of the stockholders called for the
purpose of considering any such act or contract, and any contract or act that shall be
approved or be ratified by the vote of the holders of a majority of the stock of the
Corporation which is represented in person or by proxy at such meeting and entitled to vote
thereat (provided that a lawful quorum of stockholders be there represented in person or by
proxy) shall be as valid and as binding upon the Corporation and upon all stockholders as
though it had been approved or ratified by every stockholder of the Corporation, whether or
not the contract or act would otherwise be open to legal attack because of directors’
interest, or for any other reason. Notwithstanding the foregoing, any vote on any proposition
involving

7

 

	 	 	 	the merger or consolidation of this Corporation with any other corporation or corporations
which proposition has not been recommended for approval by the stockholders of this
Corporation by a majority of this Corporation’s Board of Directors shall require approval or
ratification by the affirmative vote of the holders of two-thirds (2/3) of the common stock of
this Corporation which is represented in person or by proxy at the stockholder’s meeting at which
such resolution is considered.

	 	(d)	 	In addition to the powers and authorities hereinbefore or
by statute expressly conferred upon them, the directors are hereby empowered to exercise all such
powers and do all such acts and things as may be exercised or done by the Corporation; subject,
nevertheless, to the provisions of the statutes of Delaware, of this Certificate, and to any
by-laws from time to time made by the stockholders; provided, however, that no by-laws so made
shall invalidate any prior act of the directors which would have been valid if such by-law had not
been made.

     SEVENTH: The Corporation shall, to the full extent permitted by Section 145 of the
General Corporation Law of the State of Delaware, as amended from time to time, indemnify all
persons whom it may indemnify pursuant thereto.

     EIGHTH: Whenever a compromise or arrangement is proposed between this Corporation and its
creditors or any class of them and/or between this Corporation and its stockholders or any class
of them, any court of equitable jurisdiction within the State of Delaware, may, on the application
in a summary way of this Corporation or of any creditor or stockholder

8

 

thereof or on the application of any receiver or receivers appointed for this Corporation under the
provisions of Section 291 of Title 8 of the General Corporation Law of the State of Delaware or on
the application of trustees in dissolution or of any receiver or receivers appointed for this
Corporation under the provisions of Section 279 of Title 8 of the General Corporation Law of the
State of Delaware order a meeting of the creditors or class of creditors and/or of the stockholders
or class of stockholders of this Corporation, as the case may be, to be summoned in such manner as
the said court directs. If a majority in number representing three-fourths in value of the
creditors or class of creditors, and/or of the stockholders or class of stockholders of this
Corporation, as the case may be, agree to any compromise or arrangement and to any reorganization
of this Corporation as a consequence of such compromise or arrangement, the said compromise or
arrangement and the said reorganization shall, if sanctioned by the court to which the said
application has been made, be binding on all the creditors or class of creditors and/or on all the
stockholders, of this Corporation, as the case may be, and also on this Corporation.

     NINTH: Any action required or permitted to be taken by the stockholders of the
Corporation must be effected at an annual or special meeting of the stockholders of the
Corporation and may not be effected by any consent in writing by such stockholders. In addition to
the voting requirement imposed by law or by any other provision of this Amended and Restated
Certificate of Incorporation, this Article Tenth may not be amended, altered, or repealed, nor may
any provision inconsistent with this Article Tenth be adopted, unless such action is approved by
the affirmative vote of the holders of at least eighty (80%) of the then outstanding shares of the
common stock.

     TENTH: The Corporation shall be governed by the provisions of Section 203 of the
General Corporation Law of the State of Delaware, as amended from time to time, said section being
entitled “Business Combinations with Interested Stockholders”.

9

 

     ELEVENTH: The personal liability of the directors of the Corporation is hereby eliminated
to the fullest extent permitted by paragraph (7) of subsection (b) of Section 102 of the General
Corporation Law of the State of Delaware, as the same my be amended and supplemented.

     TWELFTH: The Corporation reserves the right to amend, alter, change or repeal any provisions
contained in this Amended and Restated Certificate of Incorporation, in the manner now or
hereafter prescribed by law, and all rights and powers conferred herein on stockholders,
directors and officers are subject to this reserved power.

     This Amended and Restated Certificate of Incorporation was duly adopted in accordance with
the provisions of Sections 242 and 245 of the General Corporation Law of the State of Delaware by
affirmative vote of the holders of a majority of all outstanding stock entitled to vote at a
meeting of stockholders.

     IN WITNESS WHEREOF, said Princeton National Bancorp, Inc. has caused this Certificate to be
signed by D. E. Van Ordstrand, its President and attested by Lou Ann Birkey, its Secretary this
10th day of March, 1992.

	 	 	 	 	 
	 	PRINCETON NATIONAL BANCORP, INC.

 	 
	 	By  	/s/ D. E. Van Ordstrand
 	 
	 	 	D. E. Van Ordstrand, President 	 
	 	 	 	 
	 

	 	 	 	 	 
	ATTEST:

 	 	 
	By  	/s/ Lou Ann Birkey
 	 	 
	 	Lou Ann Birkey, Secretary 	 	 
	 	 	 	 
	 

10

 

	 	 	 
	 

	 	STATE OF DELAWARE

SECRETARY OF STATE

DIVISION OF CORPORATIONS

FILED 04:00 PM 01/19/1995

950014270 — 921760

CERTIFICATE OF OWNERSHIP

MERGING

HEART OF ILLINOIS INVESTMENT CORP.

INTO

PRINCETON NATIONAL BANCORP, INC.

(PURSUANT TO SECTION 253 OF THE

GENERAL CORPORATION LAW OF DELAWARE)

     Princeton National Bancorp, Inc., a corporation incorporated pursuant to the provisions of the
General Corporation Law in the State of Delaware does hereby certify that this corporation owns all
the capital stock of Heart of Illinois Investment Corp., a corporation incorporated under the laws
of the State of Illinois, and that this corporation, by a resolution of its board of directors duly
adopted at a meeting held on the 16th day of January, 1995, determined to and did merge
into itself said Heart of Illinois Investment Corp. which resolutions are in the following words to
wit:

     WHEREAS, Princeton National Bancorp, Inc. (the “Corporation”) owns all of the
outstanding stock of Heart of Illinois Investment Corp., an Illinois corporation (“HOIIC”);
and

     WHEREAS, the Board of Directors of the Corporation desires to merge HOIIC with and
into the Corporation pursuant to the terms and provisions of the Plan of Merger attached
hereto as Exhibit A (the “Plan of Merger”).

     NOW, THEREFORE, BE IT RESOLVED that the Board of Directors of the Corporation hereby
authorizes and approves the merger of HOIIC into the Corporation pursuant to the terms and
provisions of the Plan of Merger;

     FURTHER RESOLVED, that the terms and provisions of the Plan of Merger be and hereby
are adopted, approved and confirmed;

     FURTHER RESOLVED, that the officers of the Corporation, and each of them, be and hereby
are authorized and directed to take such actions for and on behalf and in the name of the
Corporation to effect said merger, including without limitation the execution and filing of
a Certificate of Ownership and Merger pursuant to Section 253 of the General Corporation Law
of the State of Delaware and the execution and filing of Articles of Merger with the
Illinois Secretary of State, as they may deem necessary or appropriate in order to carry out
the intent and accomplish the purposes of the foregoing resolutions.

 

 

     IN WITNESS WHEREOF, said corporation has caused this certificate to be signed by its president
and attested by its secretary, and its corporate seal to be hereto affixed, the 16th day of
January, 1995.

	 	 	 	 	 
	 	PRINCETON NATIONAL BANCORP, INC.

 	 
	 	By:  	/s/ D. E. Van Ordstrand
 	 
	 	 	D. E. Van Ordstrand, President 	 
	 	 	 	 

	 	 	 	 	 
	ATTEST:

 	 
	/s/ Lou Ann Birkey
 	 
	Lou Ann Birkey, Secretary
 	 
	
(Seal) 	 

 

 

	 	 	 	 	 

Exhibit A

PLAN OF MERGER

     1. Princeton National Bancorp, Inc., a Delaware corporation (“PNB”), owns 100% of the
outstanding shares of Heart of Illinois Investment Corp., an Illinois corporation (“HOIIC”).

     2. HOIIC shall merge with and into PNB and the separate corporate existence of HOIIC shall
thereupon cease. PNB shall be the surviving corporation in the merger and shall continue to be
governed by the laws of the state of Delaware. The merger shall have the effects specified in the
General Corporation Law of the State of Delaware and the Business Corporation Act of 1983 of the
State of Illinois, as amended.

     3. By virtue of the merger and without any action on the part of the holder of any share of
stock of PNB or HOIIC, the following shall occur:

     (a) each issued and outstanding share of PNB shall be unchanged as a result of the
merger and shall remain an issued and outstanding share of PNB; and

     (b) each issued and outstanding share of HOIIC shall be terminated and canceled and no
consideration shall be provided to PNB as the sole shareholder of HOIIC.

 

 

CERTIFICATE OF AMENDMENT

OF

AMENDED AND RESTATED

CERTIFICATE OF INCORPORATION

OF

PRINCETON NATIONAL BANCORP, INC.

          PRINCETON NATIONAL BANCORP, INC., a corporation organized and existing under and by virtue
of the General Corporation Law of the State of Delaware (the “Corporation”), DOES HEREBY
CERTIFY:

          FIRST: That on February 10, 1997, the Board of Directors of the Corporation duly adopted
resolutions proposing and declaring advisable the following amendment to the Amended and
Restated Certificate of Incorporation of the Corporation:

RESOLVED, that the Board of Directors hereby proposes and declares
it advisable that the Certificate of Incorporation be amended by
changing the article numbered “Fourth” so that, as amended, said
article shall be and read as follows:

“FOURTH: The total number of shares of stock which the Corporation
is authorized to issue is seven million (7,000,000) and the par
value of each such share is $5.00.”

          SECOND: That thereafter, pursuant to a resolution of the Corporation’s Board of Directors,
an Annual Meeting of Stockholders of the Corporation was duly called and held, upon notice in
accordance with Section 222 of the General Corporation Law of the State of Delaware, at which
meeting the necessary number of shares as required by statute were voted in favor of the
amendment.

          THIRD: That said amendment was duly adopted in accordance with the provisions of Section
242 of the General Corporation Law of the State of Delaware.

          IN WITNESS WHEREOF, PRINCETON NATIONAL BANCORP, INC. has caused this certificate to be
executed by Tony J. Sorcic, President of the Corporation, and attested by Lou Ann Birkey, its
Secretary, this 29th day of July, 1997.

	 	 	 	 	 
	 	PRINCETON NATIONAL BANCORP, INC.

 	 
	 	By:  	/s/ Tony J. Sorcic
 	 
	 	 	Tony J. Sorcic, President 	 
	 	 	 	 
	 

	 	 	 	 	 
	ATTEST:

 	 
	/s/ Lou Ann Birkey
 	 
	Lou Ann Birkey, Secretary 	 
	 	 	 
	 

	 	 	 
	 

	 	STATE OF DELAWARE
	 

	 	SECRETARY OF STATE
	 

	 	DIVISION OF CORPORATIONS
	 

	 	FILED 09:00 AM 08/01/1997
	 

	 	971257146 — 0921760

 

 

	 	 	 
	 

	 	State of Delaware
	 

	 	Secretary of State
	 

	 	Division of Corporations
	 

	 	Delivered 12:51 PM 07/25/2003
	 

	 	FILED 12:22 PM 07/25/2003
	 

	 	SRV 030487654 — 0921760 FILE

CERTIFICATE OF AMENDMENT OF

AMENDED AND RESTATED

CERTIFICATE OF INCORPORATION

OF

PRINCETON NATIONAL BANCORP, INC.

     PRINCETON NATIONAL BANCORP, INC., a corporation organized and existing under and
by virtue of the General Corporation Law of the State of Delaware (the “Corporation”)
DOES HEREBY CERTIFY:

     FIRST: That on January 20, 2003, the Board of Directors of the Corporation duly
adopted resolutions proposing and declaring advisable the following amendments to the
Amended and Restated Certificate of Incorporation of the Corporation:

     RESOLVED, that the Amended and Restated Certificate of Incorporation
of the Corporation be amended by deleting in its entirety Article Fourth
and substituting in lieu thereof the following:

     FOURTH: The total number of shares of all classes which the
Corporation has authority to issue is 7,100,000, of which 7,000,000
shares shall be common stock, having $5 par value per share (the
“Common Stock”), and 100,000 shares shall be preferred stock, having
no par value per share (the “Preferred Stock”).

     The designations and the preferences, conversion and other
rights, voting powers, restrictions, limitations as to dividends,
qualifications, and terms and conditions of redemption of the shares
of each class of stock are as follows:

The Preferred Stock

     The Preferred Stock may be issued from time to time by the
Board of Directors in one or more series. The description of shares
of each series, including, without limitation, any preferences,
conversion and other rights, voting and other rights, restrictions,
limitations, qualifications, and terms and conditions of redemption,
shall be as set forth in resolutions from time to time hereafter
adopted by the Board of Directors and in
filings made as required by law from time to time prior to the
issuance of such shares.

     Without limiting the generality of the foregoing, the Board of
Directors is expressly vested with authority to fix and determine as
to each series:

	 	(a)	 	its distinctive designation,
	 
	 	(b)	 	the number of shares to be issuable,

 

 

	 	(c)	 	the rate of dividend, and whether (and, if so, on what terms and
conditions) dividends shall be cumulative or shall be payable in preference or
in any other relation to the dividends payable on any other class or classes of
stock or any other series of the Preferred Stock,
	 
	 	(d)	 	whether the shares may be redeemed and, if so, the terms and conditions on
which they may be redeemed (including, without limitation, the dates upon or after
which they may be redeemed and the price or prices at which they may be redeemed,
which price or prices may be different in different circumstances or at different
redemption dates),
	 
	 	(e)	 	whether the shares shall be issued with the privilege of conversion and,
if so, the terms and conditions of such conversion or exchange (including, without
limitation, the price or prices or the rate or rates of conversion or any terms for
adjustment thereof),
	 
	 	(f)	 	any limitation or denial of voting rights or grant of special voting
rights (it being recited for the avoidance of doubt that the Board of Directors is
granted authority to limit or deny voting rights in its resolution establishing any
series of the Preferred Stock and that the grant of such authority is to be deemed
made under Section 151 of the General Corporation Law of the State of Delaware),
	 
	 	(g)	 	the amounts payable upon the shares in the event of involuntary or
voluntary liquidation, dissolution or winding up of the Corporation, and
	 
	 	(h)	 	sinking fund provisions, if any, for the redemption or purchase of the
shares (the term “sinking fund” being understood to include any similar fund,
however designated).

     In all other respects the rights and preferences of all of the shares
of the Preferred Stock shall be identical.

The Common Stock

     Subject to all of the rights of the Preferred Stock as expressly provided herein, by law or by
the Board of Directors pursuant to this Article Fourth of this Certificate of Incorporation, the
Common Stock of the Corporation shall possess all such rights and privileges as are afforded to
capital stock by applicable law in the absence of any express grant of rights or privileges in this
Certificate of Incorporation including without limitation the followings rights and privileges:

-2-

 

	 	(a)	 	each outstanding share of the Common Stock shall be entitled to one
vote in each matter submitted to a vote at a meeting of stockholders,
	 
	 	(b)	 	dividends may be declared and paid or set apart for
payment upon the Common Stock out of any assets or funds of the Corporation
legally available therefor, and
	 
	 	(c)	 	upon the voluntary or involuntary liquidation,
dissolution or winding up of the Corporation, the assets of the Corporation
shall be distributed pro rata to the holders of the Common Stock in
accordance with their respective rights and interests.

     FURTHER RESOLVED, that the Amended and Restated Certificate of Incorporation of the
Corporation be amended by adding the following as a new Article Eighth and renumbering the
existing articles thereafter:

     EIGHTH:

     Section 1. Vote Required for Certain Business Combinations. Except as
otherwise expressly provided in Section 2 of this Article, in addition to any affirmative
vote required by law or by any other provision of the Certificate of Incorporation of the
Corporation, the affirmative vote of the holders of at least 80% of the outstanding shares
of Stock (as defined below) of the Corporation voting together as a single class shall be
required for the approval or authorization of any Business Combination (as defined below)
of the Corporation with any Related Person (as defined below). For the purpose of this
Article:

     (a) The term “Business Combination” shall mean (i) any merger or consolidation of
the Corporation or a Subsidiary (as defined below) of the Corporation with or into a
Related Person or of a Related Person with or into the Corporation or a Subsidiary of the
Corporation; (ii) any sale, lease, exchange, transfer, or other disposition, including,
without limitation, a mortgage or any other hypothecation or transfer as collateral, of
all or any Substantial Part (as defined below) of the assets either of the Corporation
(including, without limitation, any voting securities of a
Subsidiary) or of a Subsidiary of the Corporation to a Related Person; (iii) the issuance
of any securities (other than by way of a distribution to stockholders made pro rata to
all holders of the class of stock to receive the distribution) of the Corporation or a
Subsidiary of the Corporation to a Related Person; (iv) the acquisition by the Corporation
or a Subsidiary of the Corporation of any securities of a Related Person; (v) any
recapitalization that would have the effect, directly or indirectly, of increasing the
voting power of a Related Person; (vi) any merger of the Corporation into a Subsidiary of
the Corporation; or (vii) any agreement, contract, or other arrangement providing for any
of the transactions described in this definition of Business Combination.

-3-

 

     (b) The term “Continuing Director” shall mean any member of the Board of Directors who is
neither Affiliated (as defined below) nor Associated (as defined below) with the Related Person
and who was a member of the Board of Directors prior to the time that the Related Person became a
Related Person, and any successor of a Continuing Director who is recommended to succeed a
Continuing Director by a majority of Continuing Directors then members of the Board of Directors.

     (c) The term “Related Person” shall mean and include any individual, corporation,
partnership, or other person or entity which, together with its Affiliates (as defined below) and
Associates (as defined below), Beneficially Owns (as defined below), in the aggregate 10% or more
of the outstanding Voting Stock (as defined below) of the Corporation, and any Affiliate or
Associate of any such individual, corporation, partnership, or other person or entity.

     (d) The term “Substantial Part” shall mean more than 80% of the book value of the total
consolidated assets of the Corporation as reported in the consolidated financial statements of the
Corporation and its Subsidiaries as of the end of its most recent fiscal year ending prior to the
time as of which a Substantial Part is to be determined.

     (e) The term “Voting Stock” shall mean all outstanding shares of capital stock of the
Corporation entitled to vote generally in the election of directors of the Corporation and each
reference to a percentage of shares of Voting Stock shall refer to such percentage of the votes
entitled to be cast by such shares.

     (f) The terms “Affiliate” and “Associate” shall have the meanings set forth in Rule 12b-2
under the Securities Exchange Act of 1934, as amended.

     (g) The term “Beneficially Owns” shall have the meaning set forth in Rule 13d-3 under the
Securities Exchange Act of 1934, as amended; provided, however, that any shares of Voting Stock of
the Corporation that any Related Person has the right to acquire pursuant to any agreement, or
upon exercise of conversion rights, warrants or options, or otherwise, shall be deemed
Beneficially Owned by the Related Person whether immediately exercisable or exercisable within ten
years of the date as of which Beneficial Ownership is to be determined.

     (h) The term “Subsidiary” with respect to the Corporation shall mean any corporation,
partnership, limited liability company, business trust or similar entity in which a majority of
any class of any equity security is owned directly or indirectly by the Corporation.

     Section 2. When Higher Vote is Not Required. The
provisions of Section 1 of this Article shall not be applicable to any

-4-

 

particular Business Combination and such Business Combination shall require only such affirmative
vote as may be required by law or by any other provision of the Certificate of Incorporation of
the Corporation, if all of the conditions specified in either of the following paragraphs (a) or
(b) are met:

     (a) the Business Combination shall have been approved by a vote of not less than a majority of
the Continuing Directors; or

     (b) all of the following conditions shall have been met:

     (i) The aggregate amount of cash and the Fair Market Value (as defined
below) as of the date of the consummation of the Business Combination of the
consideration, other than cash, to be received per share by holders of Common
Stock in such Business Combination shall be at least equal to the highest of
the following:

     (A) if applicable, the highest price per share (including any
brokerage commissions, transfer taxes, and soliciting dealer’s fees)
paid by the Related Person for any shares of Common Stock acquired
by it (1) within the two year period immediately prior to the first
public announcement of the proposal of the Business Combination (the
“Announcement Date”) or (2) in the transaction in which it became a
Related Person; or

     (B) the Fair Market Value per share of Common Stock on the
Announcement Date or on the date on which the Related Person became a
Related Person (such latter date is referred to in this Article as
the “Determination Date”), whichever is higher; and

     (ii) The aggregate amount of the cash and the Fair Market Value as of the
date of the consummation of the Business Combination of the consideration,
other than cash, to be received per share by holders of shares of any class or
series of outstanding Voting Stock, other than Common Stock, shall be at least
equal to the highest of the following (it being intended that the requirements
of this subparagraph (b)(ii) shall be required to be met with respect to every
class or series of outstanding capital stock of the Corporation other than
Common Stock, whether or not the Related Person has previously acquired any
shares of such class or series of Voting Stock):

-5-

 

     (A) if applicable, the highest per share price (including any brokerage
commission, transfer taxes, and soliciting dealers’ fees) paid by the Related Person
for any shares of such class or series of Voting Stock acquired by it (1) within the
two year period immediately prior to the Announcement Date or (2) in the transaction
in which it became a Related Person, whichever is higher; or

     (B) if applicable, the redemption price of the shares of such class or series, or
if such shares have no redemption price, the highest amount per share which such class
or series would be entitled to receive upon liquidation of the Corporation on the
Announcement Date or the Determination Date, whichever is higher; or

     (C) the Fair Market Value per share of such class or series of Voting Stock on
the Announcement Date or on the Determination Date, whichever is higher; and

     (iii) the consideration to be received in such Business Combination by holders of each class
or series of outstanding Voting Stock (including Common Stock) shall be in cash or in the same form
as the Related Person has previously paid for shares of such class or series of Voting Stock;
provided, however, that if the Related Person has paid for shares of any class or series of Voting
Stock with varying forms of consideration, the form of consideration for such class or series of
Voting Stock shall be either cash or the form used to acquire the largest number of shares of such
class or series of Voting Stock previously acquired by it; and

     (iv) a proxy statement responsive to the requirements of the Securities Exchange Act of 1934,
as amended, shall have been mailed to public stockholders of the Corporation for the purpose of
soliciting stockholder approval of the Business Combination and shall have contained at the front
thereof, in a prominent place, any recommendations as to the advisability (or inadvisability) of
the Business Combination that the Continuing Directors, or any of them, may choose to state and, if
deemed advisable by a majority of the Continuing Directors, an opinion of a reputable investment
banking firm as to the fairness (or not) of the terms of the Business Combination, from the point
of view of the remaining public stockholders of the Corporation (such investment banking firm to be

-6-

 

selected by a majority of the Continuing Directors and to be paid a reasonable
fee for their services by the Corporation upon receipt of the opinion);
provided, however, that this clause (iv) shall only be applicable if a class of
equity securities of the Corporation is registered pursuant to Section 12 of
the Securities Exchange Act of 1934, as amended.

     Section 3. Certain Definitions and Additional Provisions.

     For the purposes of this Article:

     (a) “Fair Market Value” shall mean:

     (i) in the case of stock, the highest closing bid quotation with respect to a share
of such stock during the 30-day period preceding the date in question on the Nasdaq
National Market or any quotations system then generally in use, or, if no such
quotations are available, the highest closing sale price during the 30-day period
immediately preceding the date in question of a share of such stock on the Composite
Tape for New York Stock Exchange Listed Stocks, or, if such stock is not quoted on the
Composite Tape, on the New York Stock Exchange, or, if such stock is not listed on such
Exchange, on the principal United States securities exchange registered under the
Securities Exchange Act of 1934, as amended, on which such stock is listed, or, if such
stock is not listed on any such exchange, the fair market value on the date in question
of a share of such stock as determined by the Continuing Directors in good faith, which
determination shall be final; and

     (ii) in the case of property other than cash or stock, the fair market value of
such property on the date in question as determined by the Continuing Directors in good
faith, which determination shall be final.

     (b) The Board of Directors, with the approval of a majority of
the total number of Continuing Directors, shall have the power and duty to
determine, on the basis of information known to it after reasonable
inquiry, all facts necessary to determine compliance with this Article,
including, without limitation, (i) whether a person is a Related Person, (ii)
the number of shares of Voting Stock Beneficially Owned by any person,
(iii) whether a person is an Affiliate or Associate of another person, (iv)
whether the applicable conditions set forth in paragraph (b) of Section 2 of
this Article have been met with respect to any Business Combination, and
(v) whether the proposed transaction is a Business Combination. Any such
determinations shall be final.

     Section 4. Amendment of this Article. This Article may be amended, altered, changed,
or repealed only by the affirmative vote of the

-7-

 

holders of at least 80% of the outstanding shares of Voting Stock voting
together as a single class unless the proposed amendment, alteration,
change, or repeal has been recommended to the stockholders by the Board of
Directors with the approval of at least two-thirds of the Continuing
Directors, in which event the proposed amendment, alteration, change, or
repeal shall require for approval the affirmative vote of the holders of at
least 66 2/3% of the outstanding shares of Voting Stock, voting as a single
class.

     SECOND: That thereafter, pursuant to a resolution of the Corporation’s Board of Directors, an
Annual Meeting of Stockholders of the Corporation was duly called and held, upon notice in
accordance with Section 222 of the General Corporation Law of the State of Delaware, at which
meeting the necessary number of shares as required by statute were voted in favor of the
amendments.

     THIRD: That said amendments were duly adopted in accordance with the provisions of Section 242
of the General Corporation Law of the State of Delaware.

     IN WITNESS WHEREOF, PRINCETON NATIONAL BANCORP, INC, has caused this
certificate to be executed by Tony J. Sorcic, President of the Corporation, and attested by
Lou
Ann Birkey, its Secretary, this 25th day of July, 2003.

	 	 	 	 	 
	 	PRINCETON NATIONAL BANCORP, INC.

 	 
	 	By:  	/s/ Tony J. Sorcic
 	 
	 	 	Tony J. Sorcic, President 	 
	 	 	 	 
	 

	 	 	 	 	 
	ATTEST:

 	 
	/s/ Lou Ann Birkey
 	 
	Lou Ann Birkey, Secretary 	 
	 	 	 
	 

-8-

 

	 	 	 
	 

	 	State of Delaware
	 

	 	Secretary of State
	 

	 	Division of Corporations
	 

	 	Delivered 11:20 PM 07/29/2003
	 

	 	FILED 08:26 PM 07/29/2003
	 

	 	SRV 030495797 — 0921760 FILE

CERTIFICATE OF DESIGNATION

OF

SERIES A JUNIOR PARTICIPATING PREFERRED STOCK

of

PRINCETON NATIONAL BANCORP, INC.

Pursuant to Section 151 of the

Delaware General Corporation Act

     Princeton National Bancorp, Inc., a Delaware corporation (the “Corporation”),
through the undersigned duly authorized officer, in accordance with the provisions of
Section 151 of the Delaware General Corporation Act, DOES HEREBY CERTIFY:

     That, the Board of Directors of the Corporation on July 29, 2003, pursuant to the
authority conferred upon the Board of Directors by the Certificate of Incorporation, as
amended, of the Corporation (the “Certificate of Incorporation”) and in accordance with
the provisions of Section 151 of the Delaware General Corporation Act, adopted the
following resolution creating a series of 50,000 Series A Junior Participating
Preferred Stock, no par value per share:

     RESOLVED, that, pursuant to the authority expressly granted to and vested in the
Board of Directors of the Corporation in accordance with the provisions of the
Certificate of Incorporation, a series of the Preferred Stock of the Corporation, no
par value per share, be, and hereby is, created and that the voting powers,
designations, number of shares, preferences and relative, participating, optional and
other special rights of the shares of such series, and the qualifications, limitations
and restrictions thereof are as follows:

Series A Junior Participating Preferred Stock:

     Section 1. Designation and Amount. The shares of such series shall be designated as
“Series A Junior Participating Preferred Stock” (the “Series A Preferred Stock”), the
shares of such series shall be without par value and the number of shares constituting
the Series A Preferred Stock shall be 50,000. Such number of shares may be increased or
decreased by resolution of the Board of Directors; provided, that no decrease shall
reduce the number of shares of Series A Preferred Stock to a number less than the
number of shares then outstanding plus the number of shares reserved for issuance upon
the exercise of outstanding options, rights or warrants or upon the conversion of any
outstanding securities issued by the Corporation convertible into Series A Preferred
Stock.

 

 

     Section 2. Dividends and Distributions.

     (A) Subject to the rights of the holders of any shares of any series of Preferred Stock (or
any similar stock) ranking prior and superior to the Series A Preferred Stock with respect to
dividends, the holders of shares of Series A Preferred Stock, in preference to the holders of
Common Stock, par value $5.00 per share (the “Common Stock”), of the Corporation, and of any other
junior stock, shall be entitled to receive, when, as and if declared by the Board of Directors out
of funds legally available for the purpose, quarterly dividends payable on the last business day
of March, June, September and December in each year (each such date being referred to herein as a
“Quarterly Dividend Payment Date”) as provided in paragraphs (B) and (C) of this Section 2 in an
amount per share (rounded to the nearest cent) equal to the greater of (a) $1,00 in cash or (b)
subject to the provision for adjustment hereinafter set forth, 100 times the aggregate per share
amount (payable in cash) of all cash dividends, and 100 times the aggregate per share amount
(payable in kind) of all non-cash dividends or other distributions, other than a dividend payable
in shares of Common Stock or a subdivision of the outstanding shares of Common Stock (by
reclassification or otherwise), declared on the Common Stock since the immediately preceding
Quarterly Dividend Payment Date or with respect to the first Quarterly Dividend Payment Date,
since the first issuance of any share or fraction of a share of Series A Preferred Stock. If the
Corporation shall at any time declare or pay any dividend on the Common Stock payable in shares of
Common Stock, or effect a subdivision or combination of the outstanding shares of Common Stock (by
reclassification or otherwise) into a greater or lesser number of shares of Common Stock, then in
each such case the amount to which holders of shares of Series A Preferred Stock were entitled
immediately prior to such event under clause (b) of the preceding sentence shall be adjusted by
multiplying such amount by a fraction, the numerator of which is the number of shares of Common
Stock outstanding immediately after such event and the denominator of which is the number of
shares of Common Stock that was outstanding immediately prior to such event.

     (B) The Corporation shall declare a dividend or distribution on the Series A Preferred Stock
as provided in paragraph (A) of this Section 2 immediately after it declares a dividend or
distribution on the Common Stock (other than a dividend payable in shares of Common Stock);
provided that, if no dividend or distribution shall have been declared on the Common Stock during
the period between any Quarterly Dividend Payment Date and the next subsequent Quarterly Dividend
Payment Dale, a dividend of $1.00 per share payable in cash on the Series A Preferred Stock shall
nevertheless accrue and be cumulative on the outstanding shares of Series A Preferred Stock as
provided in paragraph (C) of this Section 2.

     (C) Dividends shall begin to accrue and be cumulative on outstanding shares of Series A
Preferred Stock from the Quarterly Dividend Payment Date next preceding the date of issue of such
shares, unless the date of issue of such shares is prior to the record date for the first Quarterly
Dividend Payment Date, in which case dividends on such shares shall begin to accrue from the date
of issue of such shares, or unless the date of issue is a Quarterly Dividend Payment Date or is a
date after the record date for the determination of holders of shares of Series A Preferred Stock
entitled to receive a quarterly dividend and before such Quarterly Dividend Payment Date, in either
of which events such dividends shall begin to accrue and be cumulative

-2-

 

from such Quarterly Dividend Payment Date. Accrued but unpaid dividends shall not bear interest.
Dividends paid on the shares of Series A Preferred Stock in an amount less than the total amount
of such dividends at the time accrued and payable on such shares shall be allocated pro rata on a
share-by-share basis among all such shares at the time outstanding. The Board of Directors may fix
a record date for the determination of holders of shares of Series A Preferred Stock entitled to
receive payment of a dividend or distribution declared thereon, which record date shall be not
more than 60 days prior to the date fixed for the payment thereof.

     Section 3. Voting Rights. The holders of shares of Series A Preferred Stock shall have the
following voting rights:

     (A) Subject to the provisions for adjustment hereinafter set forth, each share of Series A
Preferred Stock shall entitle the holder thereof to 100 votes on all matters submitted to a vote
of the stockholders of the Corporation. If the Corporation shall at any time declare or pay any
dividend on Common Stock payable in shares of Common Stock, or effect a subdivision or combination
of the outstanding shares of Common Stock (by reclassification or otherwise) into a greater or
lesser number of shares of Common Stock, then in each such case the number of votes per share to
which holders of shares of Series A Preferred Stock were entitled immediately prior to such event
shall be adjusted by multiplying such number by a fraction, the numerator of which is the number
of shares of Common Stock outstanding immediately after such event and the denominator of which is
the number of shares of Common Stock that was outstanding immediately prior to such event.

     (B) Except as otherwise provided herein, in any other Certificate of Designation creating a
series of Preferred Stock or any similar stock, of by law, the holders of shares of Series A
Preferred Stock and the holders of shares of Common Stock and any other capital stock of the
Corporation having general voting rights shall vote together as one class on all matters
submitted to a vote of stockholders of the Corporation.

     (C) Except as set forth herein or as otherwise provided by law, holders of Series A Preferred
Stock shall have no special voting rights and their consent shall not be required (except to the
extent they are entitled to vote with holders of Common Stock as set forth herein) for taking any
corporate action.

     Section 4. Certain Restrictions.

     (A) Whenever quarterly dividends or other dividends or distributions payable on the Series A
Preferred Stock as provided in Section 2 are in arrears, thereafter and until all accrued and
unpaid dividends and distributions, whether or not declared, on shares of Series A Preferred Stock
outstanding shall have been paid in full, or declared and a sum sufficient for the payment
therefor be set apart for payment and be in the process of payment, the Corporation shall not;

	 	(i)	 	declare or pay dividends, or make any other distributions, on
any shares of stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series A Preferred Stock;

-3-

 

	 	(ii)	 	declare or pay dividends, or make any other distributions, on any
shares of stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Series A Preferred Stock,
except dividends paid ratably on the Series A Preferred Stock and all such
parity stock on which dividends are payable or in arrears in proportion to
the total amounts to which the holders of all such shares are then entitled;
	 
	 	(iii)	 	redeem or purchase or otherwise acquire for consideration
shares of any stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series A Preferred Stock,
provided that the Corporation may at any time redeem, purchase or otherwise
acquire shares of any such junior stock in exchange for shares of any stock of
the Corporation ranking junior (as to both dividends and upon dissolution,
liquidation or winding up) to the Series A Preferred Stock; or
	 
	 	(iv)	 	redeem or purchase or otherwise acquire for consideration any
shares of Series A Preferred Stock or any shares of stock ranking on a parity
(either as to dividends or upon liquidation, dissolution or winding up) with
the Series A Preferred Stock, except in accordance with a purchase offer made
in writing or by publication (as determined by the Board of
Directors) to all holders of such shares upon such terms as the Board of
Directors, after consideration of the respective annual dividend rates and
other relative rights and preferences of the respective series and classes,
shall determine in good faith will result in fair and equitable treatment
among the holders of the respective series or classes.

     (B) The Corporation shall not permit any subsidiary of the Corporation to purchase or
otherwise acquire for consideration any shares of stock of the Corporation unless the Corporation
could, under paragraph (A) of this Section 4, purchase or otherwise acquire such shares at such
time and in such manner.

     Section 5. Reacquired Shares. Any shares of Series A Preferred Stock purchased or otherwise
acquired by the Corporation in any manner whatsoever shall be retired and cancelled promptly after
the acquisition thereof. All such shares shall upon their cancellation become authorized but
unissued shares of Preferred Stock and may be reissued as part of a new series of Preferred Stock
subject to the conditions and restrictions on issuance set forth herein, in the Certificate of
Incorporation, or in any other Certificate of Designation creating a series of Preferred Stock or
any similar stock or as otherwise required by law.

     Section 6. Liquidation, Dissolution or Winding Up. Upon any liquidation, dissolution or
winding up of the Corporation, no distribution shall be made (1) to the holders of shares of stock
ranking junior (either as to dividends or as to amounts payable upon liquidation, dissolution or
winding up) to the Series A Preferred Stock unless prior thereto, the holders of Series A Preferred
Stock shall have received an amount per share (rounded to the nearest cent) equal to the greater of
(a) $100 per share, or (b) an amount per share, subject to the provision for adjustment hereinafter
set forth, equal to 100 times the aggregate amount to be distributed per

-4-

 

share to holders of Common Stock, plus, in either case, an amount equal to accrued and unpaid
dividends and distributions thereon, whether or not declared, to the date of such payment, or (2)
to the holders of stock ranking on a parity (either as to dividends or as to amounts payable upon
liquidation, dissolution or winding up) with the Series A Preferred Stock, except distributions
made ratably on the Series A Preferred Stock and all such parity Stock in proportion to the total
amounts to which the holders of all such Shares are entitled upon such liquidation, dissolution or
winding up. If the Corporation shall at any time declare or pay any dividend on Common Stock
payable in shares of Common Stock, or effect a subdivision or combination of the outstanding
shares of Common Stock (by reclassification or otherwise) into a greater or lesser number of
shares of Common Stock, then in each such case the aggregate amount to which holders of shares of
Series A Preferred Stock were entitled immediately prior to such event under the provision clause
(1)(b) of the preceding sentence shall be adjusted by multiplying such amount by a fraction the
numerator of which is the number of shares of Common Stock outstanding immediately after such
event and the denominator of which is the number of shares of Common Stock that was outstanding
immediately prior to such event.

     Section 7. Consolidation, Merger, etc. If the Corporation shall enter into any consolidation,
merger, statutory share exchange, combination or other transaction in which the shares of Common
Stock are exchanged for or changed into other stock or securities cash or any other
property, or any combination thereof then in any such case each share of Series A Preferred Stock
shall at the same time be similarly exchanged or changed into an amount per share, subject to the
provision for adjustment hereinafter set forth, equal to 100 times the aggregate amount of stock,
securities, cash or any other property (payable in kind), or any combination thereof as the case
may be, into which or for which each share of Common Stock is changed or exchanged. If the
Corporation shall at any time declare or pay any dividend on the Common Stock payable in shares of
Common Stock, or effect a subdivision or combination or consolidation of the outstanding shares of
Common Stock (by reclassification or otherwise) into a greater or lesser number of shares of Common
Stock, then in each such case the amount set forth in the preceding sentence with respect to the
exchange or change of shares of Series A Preferred Stock shall be adjusted by multiplying such
amount by a fraction, the numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of shares of Common Stock
that was outstanding immediately prior to such event.

     Section 8. Redemption. The shares of Series A Preferred Stock shall not be redeemable. So
long as any shares of Series A Preferred Stock remain outstanding, the Corporation shall not
purchase or otherwise acquire for consideration any shares of stock ranking junior (either as to
dividends or upon liquidation, dissolving or winding up) to the Series A Preferred Stock unless
the Corporation shall substantially concurrently also purchase or acquire for consideration a
proportionate number of shares of Series A Preferred Stock.

     Section 9. Rank. The Series A Preferred Stock shall rank, with respect to payment of
dividends and the distribution of assets, junior to all series of any other class of the
Corporation’s Preferred Stock.

-5-

 

     IN WITNESS WHEREOF, this Certificate of Designation is executed on behalf of the Corporation
by the undersigned, this 29th day of July, 2003.

	 	 	 	 	 
	 	PRINCETON NATIONAL BANCORP, INC.

 	 
	 	By:  	/s/ Tony J. Sorcic
 	 
	 	 	Tony J. Sorcic, President 	 
	 	 	 	 
	 

	 	 	 	 	 
	ATTEST:

 	 
	/s/ Lou Ann Birkey
 	 
	Lou Ann Birkey, Secretary 	 
	 	 	 
	 

-6-

 

	 	 	 
	 

	 	State of Delaware 

Secretary of State 

Division of Corporations 

Delivered 12:16 PM 07/29/2005

FILED 12:16 PM 07/29/2005 

SRV 050626717 — 0921760 FILE

Certificate of Ownership and Merger

of

Somonauk FSB Bancorp, Inc.

with and into

Princeton National Bancorp, Inc.

     It is hereby certified that:

     1. The name and state of incorporation of each of the constituent corporations are:

     (a) Princeton National Bancorp, Inc., a Delaware corporation (hereinafter
sometimes referred to as the “Company” and sometimes as the “Surviving
Corporation”); and

     (b) Somonauk FSB Bancorp, Inc., a Delaware corporation (hereinafter
sometimes referred to as “FSB”).

     2. FSB shall be merged with and into the Company, with the Company being the
surviving corporation, in accordance with Section 253 of the General Corporation Law
of the State of Delaware (hereinafter referred to as the “Merger”).

     3. The effective time of the Merger shall be 5:02 p.m. local time in Princeton,
Illinois, July 31, 2005 (the “Effective Time”).

     4. At the Effective Time, the Company is the owner of 100% of the outstanding
shares of each class of stock of FSB.

     5. The name of the Surviving Corporation in the Merger is, and after the
effective time of the Merger shall be, “Princeton National Bancorp, Inc.” until
amended in accordance with the provisions of the General Corporation Law of the State
of Delaware.

     6. The Certificate of Incorporation of the Company in effect immediately prior
to the Effective Time shall be from and after the Effective Time the Certificate of
Incorporation of the Surviving Corporation, until thereafter amended as provided
therein and in accordance with the provisions of the General Corporation Law of the
State of Delaware.

     6. By virtue of the Merger, the Company shall assume all of the obligations of FSB.

     7. Resolutions were adopted by the Board of Directors of the Company approving
the
Merger on July 25, 2005, with a copy of the resolutions so adopted attached as
Exhibit A hereto.

 

 

     In Witness Whereof, Princeton National Bancorp, Inc. has caused this Certificate of Ownership
and Merger to be executed as of the 28th day of July, 2005.

	 	 	 	 	 
	 	Princeton National Bancorp, Inc.

 	 
	 	By  	/s/ Tony L Sorcic
 	 
	 	 	Name:  	Tony L Sorcic  	 
	 	 	Its:      President and Chief Executive Officer 	 

-2-

 

EXHIBIT A

     RESOLVED, that pursuant to Section 253 of the General Corporation Law of the State of
Delaware, Somonauk FSB Bancorp, Inc. (“FSB”) be merged with and into this Corporation (the
“Merger”); and

     FURTHER RESOLVED, by virtue of the Merger this Corporation shall assume all obligations of
FSB.exv10w1

Exhibit 10.1

CONSULTING AGREEMENT

     This CONSULTING AGREEMENT (this “Agreement”) is made and entered into as of February
10, 2009 (the “Effective Date”), by and among THE INN OF THE MOUNTAIN GODS RESORT AND
CASINO (the “Enterprise”), a tribal enterprise wholly owned by the MESCALERO APACHE TRIBE,
a federally recognized Indian Tribe (the “Tribe”), the TRIBE (solely as set forth on the
signature pages hereto), CASINO APACHE TRAVEL CENTER, a tribally-chartered subsidiary of the
Enterprise (the “Travel Center Entity”). SKI APACHE, a tribally-chartered subsidiary of
the Enterprise (“Ski Apache”), WG-IMG, LLC, a Nevada limited liability company
(“Consultant”), and William W. Warner (“Warner”) (solely as set forth on the
signature pages hereto).

Recitals

     A. The Enterprise, Ski Apache and the Travel Center Entity (collectively, the “Operating
Companies”) own and operate the Inn of the Mountain Gods Resort & Casino, a mixed-use hotel,
casino and resort complex located at 287 Carrizo Canyon Road, Mescalero, New Mexico 88340 (the
“Resort”), the Casino Apache Travel Center located at 25845 US Highway 70, Mescalero, New
Mexico 88340 (the “Travel Center”), Ski Apache and other recreational properties. The
Resort, the Travel Center, Ski Apache and other recreational ventures are sometimes referred to
herein singly as a “Property” and collectively as the “Properties.”

     B. The Operating Companies wish to retain Consultant to perform, and Consultant wishes to
perform for the Operating Companies, the consulting services and tasks more particularly described
in this Agreement.

     C. The Tribe and the Operating Companies are collectively referred to herein as the
“Tribal Parties.” Consultant and Warner are collectively referred to herein as the
“Warner Parties”.

Agreement

     In consideration of the foregoing premises and the mutual covenants and conditions contained
herein, and for other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:

1. Term.

     (a) The term of this Agreement shall commence on the Effective Date and expire on the last day
of the 36th full calendar month following the Effective Date (the “Expiration
Date”), unless earlier terminated as provided in this Agreement (the period from the Effective
Date through the Expiration Date or the date this Agreement is earlier terminated pursuant to the
terms hereof is referred to herein as the “Term”).

     (b) This Agreement shall terminate immediately (i) upon approval by the National Indian Gaming
Commission of a Management Agreement (as defined below) or (ii) upon the
liquidation or dissolution, or the adoption of a plan with respect to the liquidation or
dissolution, of Consultant.

 

 

     (c) Prior to the Expiration Date, this Agreement may be terminated as follows:

	 	(i)	 	at any time by the mutual written agreement of the parties
hereto;
	 
	 	(ii)	 	by the Enterprise upon 30 days prior written notice that is
provided to Consultant on or prior to July 31, 2009, if the Enterprise does not
receive, on or before June 30, 2009, a written commitment or commitments with
terms and conditions satisfactory to the Enterprise in its sole discretion from
one or more lenders to provide financing sufficient for the Enterprise to
retire or refinance its outstanding $200.0 million aggregate principal amount
of 1.2% Senior Notes due 2010; provided that if this Agreement is terminated
solely pursuant to this clause (ii) and within six months of the date of such
termination, the Enterprise borrows more than $10.0 million in the aggregate
from entities with which the Enterprise entered into negotiations with respect
to a financing transaction in excess of $10.0 million within the 45 days prior
to June 30, 2009, Consultant shall be entitled to the payments set forth in
Section 3(b) hereof;
	 
	 	(iii)	 	by the Enterprise upon a material breach by either of the
Warner Parties of the provisions of Section 6(b) hereof or a material breach by
either of the Warner Parties of any of their respective other material
obligations under this Agreement, in each case that remains uncured for 30 days
following the date that the Tribal Parties have given the Warner Parties
written notice thereof;
	 
	 	(iv)	 	by Consultant upon default by the Operating Companies for 60
days in the payment of any amount due to Consultant pursuant to Section 3(a)
hereof;
	 
	 	(v)	 	by the Enterprise if Warner ceases to directly or indirectly
own a majority of the outstanding equity of Consultant entitled to vote for the
Board of Directors (or any other body with the power to direct the management
and policies of Consultant) or, if no Board of Directors or other such body
exists, entitled to vote to direct the management and policies of Consultant;
	 
	 	(vi)	 	by the Enterprise if Consultant directly or indirectly (A)
consolidates or merges with or into any other entity or (B) sells, assigns,
leases, transfers, conveys or otherwise disposes, in one or a series of
transactions, of all or substantially all of the assets of Consultant to any
person or entity, unless (1) with respect to any such consolidation or merger,
the Consultant is the surviving entity or (2) the entity surviving such
consolidation or merger (if Consultant is not the surviving entity) or the
entity to which such sale, assignment, lease, transfer, conveyance or
disposition is made (x) is an entity with respect to which Warner directly or
indirectly owns a majority

-2-

 

	 	 	 	of the outstanding equity entitled to vote for its Board of Directors (or
any other body with the power to direct its management and policies) or, if
no Board of Directors or other such body exists, entitled to vote to direct
its management and policies and (y) assumes all of Consultant’s obligations
under this Agreement pursuant to documentation reasonably satisfactory to
the Enterprise;

	 	(vii)	 	by the Enterprise if Warner ceases for any reason, including
without limitation death or disability, for a period of more than 30
consecutive days to provide sufficient attention and efforts to Consultant’s
operations to ensure that Consultant is complying with Section 2(a) hereof;
	 
	 	(viii)	 	by the Enterprise if Warner is convicted of, or pleads nolo contendere (or a
similar plea), to any felony, any crime of moral turpitude or any crime
involving any of the Tribal Parties;
	 
	 	(ix)	 	by the Enterprise at any time following the 450th day after the
Effective Date, for any reason or for no reason, upon ten days prior written
notice to Consultant; provided that upon termination solely pursuant to this
clause (ix), Consultant shall be entitled to the payments set forth in Section
3(b) hereof; and
	 
	 	(x)	 	by the Enterprise if, during the Term, gaming operations (or
material aspects thereof) at both the Resort and the Travel Center are
determined by the federal or New Mexico government or any court of competent
jurisdiction to be unlawful;

provided that any such termination pursuant to this Section 1(c) shall terminate this Agreement
with respect to all of the parties hereto and shall be effective immediately, subject in each case,
to any requirement in this Section 1(c) that prior written notice have been provided; provided,
further, notwithstanding any termination of this Agreement pursuant to this Section 1(c), amounts
payable to Consultant under this Agreement shall accrue through and including the last day of the
Term and the obligation to pay such amounts shall survive any such termination.

     (d) This Agreement is intended to terminate not later than the Expiration Date and is not
intended to establish an ongoing relationship between or among the parties hereto.

2. Tasks.

     (a) During the Term and subject to the terms and conditions set forth in this Agreement,
Consultant shall perform the tasks described in Exhibit A attached hereto (“Tasks”), as
such Exhibit A may be amended or supplemented by written mutual agreement of the Operating
Companies and Consultant from time to time. Consultant shall undertake the Tasks in the order set
forth in Exhibit A and shall substantially complete a Task before beginning another Task. Within
15 days after completion of a Task, Consultant shall provide to the Operating Companies a written
report (each a “Report”) describing in reasonable detail the work performed with respect to
the Task and Consultant’s advice with respect thereto. The Operating Companies shall have complete
and absolute discretion with respect to the implementation of

-3-

 

Consultant’s advice. Within five business days preceding each 60-day anniversary of the
delivery of a Report that occurs during the Term, Consultant shall update such Report, taking into
account the Operating Companies’ implementation of the advice set forth in such Report and any
other matters as Consultant deems relevant.

     (b) Consultant is engaged hereunder solely in a consulting and advisory capacity. Nothing
contained in this Agreement permits or authorizes, nor shall anything be construed to permit or to
authorize, Consultant to: (i) operate or manage any gaining conducted at the Properties or to
establish the costs of operating or administering the same; (ii) hire, terminate or determine
wages, salaries or benefits for any employee of any of the Operating Companies or any other person
employed to work at or about the Properties; (iii) establish policies and procedures for the
operation or management of the Properties; (iv) instruct, direct or supervise the Operating
Companies’ employees or any other person employed to work at or about the Properties regarding the
operation or management of the Properties; (v) bind any of the Tribal Parties or to act as an agent
of any of the Tribal Parties with regard to the operation and management of the Properties; (vi)
plan, organize, direct, coordinate or control any part of any gaming operation within the meaning
of the Indian Gaming Regulatory Act, the regulations promulgated thereunder, or case law construing
the provisions thereof (“IGRA”); (vii) undertake any other activity which constitutes
“management” of gaming operations; or (viii) take any other action that could reasonably be
construed as managing or operating the Properties or that would otherwise violate the purpose and
intern of this Agreement.

3. Consulting Fee and Reimbursement Of Expenses.

     (a) The Operating Companies, jointly and severally, agree to pay Consultant a consulting fee
of $60,000 per month (the “Consulting Fee”) during the Term, which shall be pro-rated for
any partial calendar month during the Term. Notwithstanding the foregoing, the Consulting Fee
shall (i) increase to $100,000 per month effective as of the 120th day after the
Effective Date, unless, as of such time, the Tribal Parties and Consultant have entered
into a written agreement pursuant to which Consultant would manage or provide management services
with respect to the operations of the Properties (any such agreement, a “Management
Agreement”) and the Management Agreement has been duly submitted for approval to the National
Indian Gaming Commission (the “NIGC”) and any other governmental or regulatory agency that
the parties mutually and reasonably agree is required to approve the Management Agreement in order
for the Management Agreement to take effect and (ii) increase to $150,000 per month effective as of
the 450th day after the Effective Date, unless, as of such time, the Management Agreement
has received all required approvals from the NIGC and any other governmental or regulatory agency
that the parties mutually and reasonably agree is required to approve the Management Agreement in
order for the Management Agreement to take effect. The Tribal Parties and Consultant agree to use
good faith efforts to cause the Management Agreement to be submitted for approval to the NIGC as
promptly as practicable after the Effective Date. The Consulting Fee payable with respect to each
calendar month during the Term shall be payable to Consultant (without requirement of invoice
therefor) on the final business day of such month, in accordance with payment instructions as
Consultant may provide in writing from time to time. If the amount of the Consulting Fee payable
hereunder has, pursuant to the terms and provisions of this Agreement, changed during a calendar
month, then
the Consulting Fee amounts payable for such month shall be pro-rated based on the number of
days in the applicable calendar month.

-4-

 

     (b) The Operating Companies, jointly and severally, agree that if this Agreement is terminated
(i) solely pursuant to Section 1(c)(ii) hereof and within six months of the date of such
termination, the Enterprise borrows more than $10.0 million in the aggregate from entities with
which the Enterprise entered into negotiations with respect to a financing transaction in excess of
$10.0 million within the 45 days prior to June 30, 2009, or (ii) solely pursuant to Section
1(c)(ix) hereof, then the Operating Companies shall pay to Consultant a termination fee as follows:

	 	(A)	 	an amount equal to (A) the product of (1) the number of days
from and including the Effective Date through and including the last day of the
Term, multiplied by (2) $5,000, less (B) the aggregate Consulting Fees payable
under Section 3(a) hereunder through and including the last day of the Term;
provided that such amount shall be payable in equal installments on each of the
first six 30-day anniversaries of the last day of the Term; and
	 
	 	(B)	 	on each of the first three 30-day anniversaries of the last day
of the Term, $150,000.

     (c) Consultant shall be responsible for Consultant’s own business expenses in connection with
Consultant’s efforts to fulfill Consultant’s services under this Agreement. However, the Operating
Companies, jointly and severally, agree that upon the presentation of appropriate invoices the
Operating Companies shall reimburse Consultant for (i) reasonable out-of-pocket “coach” class
airfare and other travel expenses necessary for Consultant to perform its consulting duties,
including without limitation, lodging, meals and rental cars, (ii) other expenses as agreed by
Consultant and the Enterprise from time to time and (c) any fees, charges, or other expenses
incurred by Consultant in connection with obtaining any governmental or regulatory permit or
license from the Tribe in connection with the Consultant’s fulfillment of its duties hereunder. To
the extent any subcontractors or third-party consultants are retained by the Operating Companies in
connection with performing the Tasks, the Operating Companies shall be responsible for all payments
to such parties. Reimbursement for out-of-pocket expenses shall be for the amount of the actual
cost of the expense, without premium or mark-up.

     (d) Consultant shall submit an invoice to the Enterprise on a monthly basis setting forth the
reimbursable expenses incurred by Consultant in connection with Consultant’s performance of the
Tasks pursuant to this Agreement. With respect to such reimbursable expenses, the invoice shall
include an itemized account of such expenses, together with reasonable and appropriate
documentation and receipts verifying the amounts of the expenses. The Operating Companies shall
pay the invoices submitted by Consultant within 20 days of receipt by the Enterprise.

     (e) Other than the payment of Consulting Fees and the reimbursement of expenses pursuant to
this Section, the Operating Companies shall not be liable for the payment or reimbursement of any
other fees, charges, or expenses in connection with the Tasks performed by Consultant under this
Agreement.

-5-

 

     (f) All amounts payable hereunder that are not paid when due shall accrue interest at a rate
of 1% per month from the date such payment was due until the date such payment is paid in full.

     (g) Nothing in this Agreement is intended to provide Consultant, directly or indirectly, with
any compensation based upon (i) the revenue or net revenue of the Operating Companies or the
Properties or all or any part of a gaming operation, (ii) any percentage fee or (iii) any criteria
for the performance of any Property.

     (h) Consultant shall not be required to make any payments to the Tribal Parties pursuant to
this Agreement under any circumstances, including, without limitation, any minimum guaranteed
payment or any payment related to any liabilities, costs or expenses incurred by the Tribal
Parties.

4. Sole Proprietary Interest.

     (a) The Tribal Parties and the Consultant acknowledge and agree that the Tribal Parties have,
and shall continue to have, the sole proprietary interest in, and ultimate responsibility for, the
Enterprise, the Properties and the gaming operations conducted by the Tribal Parties.

     (b) Nothing in this Agreement is intended to grant Consultant any proprietary interest in, or
responsibility for (i) the Operating Companies, (ii) the Properties, (iii) the gaming operations
conducted by the Tribal Parties or (iv) any real property held in trust by the United States or
restricted as to alienation by the laws of the United States.

5. Confidentiality.

     (a) During the course of the Consultant’s performance of the Tasks, the Tribal Parties may
disclose Tribal Confidential Information to the Consultant and the Consultant may disclose
Consultant Confidential Information to the Operating Companies. “Tribal Confidential
Information” means information, advice or know-how, whether tangible or intangible and in
whatever form or medium and however disclosed, provided or communicated to Consultant with respect
to the Tribal Parties’ businesses or operations, other than any such information, advice or
know-how that (i) is or becomes publicly known or available other than as a result of acts by
Consultant in violation of this Agreement, (ii) is known to or in the possession of Consultant
prior to disclosure by the Tribal Parties, (iii) is or becomes available to Consultant from third
persons that to Consultant’s knowledge are not bound by a confidentiality agreement with any of the
Tribal Parties prohibiting such disclosure or (iv) is independently created or developed by
Consultant without the aid, application or use of the Tribal Confidential Information disclosed.
“Consultant Confidential Information” means information, advice or know-how, whether
tangible or intangible and in whatever form or medium and however disclosed, provided or
communicated to any of the Tribal Parties with respect to any player tracking or other business
management tool, other than any such information, advice or know-how that (i) is or becomes
publicly known or available other than as a result of acts by the Tribal Parties in violation of
this Agreement, (ii) is known to or in the possession of the Tribal Parties prior to disclosure by
Consultant, (iii) is or becomes available to the Tribal Parties from third persons that to the
Tribal

-6-

 

Parties’ knowledge are not bound by a confidentiality agreement with Consultant prohibiting
such disclosure or (iv) is independently created or developed by the Tribal Parties without the
aid, application or use of the Consultant Confidential Information disclosed.

     (b) Subject to Section 5(d) hereof, each of the Warner Parties agree that it and its
affiliates will keep Tribal Confidential Information in strict confidence and not disclose Tribal
Confidential Information to third parties (except as expressly provided below) and that neither
Consultant nor Warner will use Tribal Confidential Information other than for the purpose of
Consultant performing its obligations under this Agreement. Each of the Warner Parties
additionally agree that Tribal Confidential information will be disclosed only to those of
Consultant’s employees, managers or attorneys (collectively, “Representatives”) who need
the Tribal Confidential Information to assist Consultant in performing its obligations under this
Agreement, are advised of the confidentiality provisions of this Agreement and agree to abide by
such provisions. Consultant will be responsible for any violation of the confidentiality
provisions of this Agreement by its Representatives whom Consultant has provided or disclosed
Tribal Confidential Information. Consultant may also disclose Tribal Confidential Information to
any party retained by any of the Operating Companies in connection with performing the Tasks and
will not be responsible for any disclosure of the Tribal Confidential Information by any such
party.

     (c) Subject to Section 5(d) hereof, each of the Tribal Parties agrees that it will keep
Consultant Confidential Information in strict confidence and will not sell or otherwise distribute
Consultant Confidential Information to third parties. Each of the Tribal Parties will be
responsible for any violation of the terms of this Agreement by its employees whom Consultant has
provided or disclosed Consultant Confidential Information. Without limitation of the foregoing,
each of the Tribal Parties agrees that it will not disclose or share the Consultant’s Confidential
Information with any third-party consultants or advisors for the purposes of allowing such third
parties to compete with the Consultant or replicate tasks or services to be provided by the
Consultant hereunder for any party other than the Operating Companies and their affiliates.

     (d) Notwithstanding anything in this Section 5 to the contrary, and subject to all terms and
provisions of this Section 5(d), the Warner Parties may disclose Tribal Confidential Information
and the Tribal Parties may disclose Consultant Confidential Information, in each case if necessary
to comply with any applicable law, order, regulation, ruling, subpoena or order of a governmental
authority or tribunal with competent jurisdiction. If a Tribal Party, on the one hand, or a Warner
Party, on the other hand, is so requested or required to disclose any Tribal Confidential
Information or Consultant Confidential Information, as applicable, such party shall promptly notify
the other parties of such request or requirement prior to disclosure so that such other parties,
may, if they so elect, seek an appropriate protective order or otherwise seek to contest, limit or
protect the confidentiality of any such requested or required disclosure.

     (e) No disclosure of Tribal Confidential Information to the Consultant will in any way he
deemed a license or other grant of proprietary interest in Tribal Confidential Information (except
as set forth in any written agreement or written grant by the applicable Tribal Party). No
disclosure of Consultant Confidential Information to any of the Tribal Parties will in any way be
deemed a license or other grant of proprietary interest in Consultant Confidential Information
(except as set forth in any written agreement or written grant by the Consultant).

-7-

 

6. Nonrecruitment and Noncompete Covenants.

     (a) Nonrecruitment of Employees. The Tribal Parties, on the one hand, and the Warner
Parties, on the other hand, hereby agree that, during the Term and for a period of one year after
termination of this Agreement, they and their respective affiliates shall not directly or
indirectly employ, cause to be employed, solicit or recruit for engagement or employment, or
encourage to leave employment with the other, any employee of the other or any of their affiliates;
provided that the foregoing shall not be deemed to prohibit general advertisement or solicitations
that are not directed to such employees.

     (b) Noncompetition. The Warner Parties hereby agree that, during the Term and for a
period of one year following the termination of this Agreement, neither of the Warner Parties nor
any of their respective affiliates shall conduct any Business Activity (as defined below) within
the Restricted Area (as defined below). “Business Activity” shall mean (i) the provision
of any consulting service to any gaming or hospitality enterprise, business or venture, including
but not limited to any hotel, casino, racetrack, off-track betting parlor or similar enterprise;
(ii) the ownership, operation or management of a hotel, casino, racetrack, off-track betting parlor
or other gaming or hospitality enterprise, business or venture; (iii) entering into a partnership,
joint venture, or similar arrangement, the purpose of which is the ownership, operation or
management of a hotel, casino, racetrack, off-track betting parlor or other gaming or hospitality
enterprise, business or venture; or (iv) the acquisition of an ownership interest in any entity
that operates a hotel, casino, racetrack, off-track betting parlor or gaming or hospitality
enterprise, business or venture, or which provides consulting services to the same.
“Restricted Area” shall mean: Otero County, New Mexico, and each county in New Mexico and
Texas that is contiguous to Otero County, New Mexico.

     (c) Enforceability of
Covenants. Each of the Trivial Parties, on the on hand, and the
Warner Parties, on the other hand, acknowledges and agrees that the obligations set forth in
Sections 6(a) and 6(b) hereof are a direct inducement for the other to enter into this Agreement.
Further, each of the Warner Parties acknowledges that the Operating Companies have a current and
future expectation of business within the Restricted Area. Each party hereto acknowledges that the
term, geographic area, and scope of the covenants set forth in this Section 6 are reasonable, and
agrees that it will not, in any action, suit or other proceeding, deny the reasonableness of, or
assert the unreasonableness of, the premises, consideration or scope of such covenants.
Specifically, the Warner Parties further acknowledge that complying with the provisions contained
in Section 6(b) of this Agreement will not prevent either of them or their affiliates or their
affiliates’ employees, officers, directors or agents from engaging in a lawful profession, trade or
business, or from becoming gainfully employed. Each party hereto agrees that the obligations
undertaken by such party under Sections 6(a) and (b) hereof are separate and distinct under this
Agreement, and the failure or alleged failure of any the other party hereto to perform its
obligations under any other provisions of this Agreement shall not constitute a defense to the
enforceability thereof. Each party hereto agrees that if any portion of Sections 6(a) or 6(b)
hereof is deemed to be unenforceable because the geography, time or scope of activities restricted
is deemed to be too broad, the court shall lie authorized to substitute for the

-8-

 

overbroad term an enforceable term that will enable the enforcement thereof to the maximum
extent possible under applicable law. Each party hereto acknowledges and agrees that any breach or
threatened breach by such party of its obligations under Sections 6(a) or 6(b) hereof will result
in irreparable damage and injury to the other parties hereto and its affiliates and that the
non-breaching parties will be entitled to exercise all rights including, without limitation,
obtaining one or more temporary restraining orders, injunctive relief and other equitable relief,
including specific performance in the event of any breach or threatened breach thereof, in any
federal or state court of competent jurisdiction in New Mexico without the necessity of posting any
bond or security (all of which are waived by the parties hereto), and to exercise all other rights
or remedies, at law or in equity, including, without limitation, the rights to damages.

7. Indemnification; Limitation of Liability.

     (a) The Operating Companies hereby agree to indemnify and hold Consultant, its members,
principals, officers and employees, and the affiliates of all of them (the “Indemnitee
Parties”), harmless from and against any and all claims, liabilities, damages, losses, costs or
expenses (including costs and expenses incurred in defending against the foregoing,
“Losses”) incurred by or sustained by any such Indemnitee Party arising out of or as a
result of the Consultant’s entering into this Agreement and performing the Tasks, except to the
extent of Losses caused by the negligence or intentional misconduct of the Consultant.

     (b) NO PARTY HERETO SHALL BE LIABLE TO ANY OTHER PARTY HERETO FOR ANY PUNITIVE, CONSEQUENTIAL,
INCIDENTAL, SPECIAL OR INDIRECT DAMAGES.

8. No Assignment or Subcontracting; Successors. None of the parties hereto may assign or
subcontract its rights, responsibilities or duties under this Agreement. This Agreement shall be
binding upon and shall inure to the benefit of the parties hereto and their respective successors.

9. Notices. Notices permitted or required to be given hereunder shall be deemed sufficient
if given by registered or certified mail, postage prepaid, return receipt requested, addressed to
the respective addresses of the applicable parties or at such other addresses as the respective
parties may designate by like notice from time to time. Notices so given shall be effective upon
receipt by the party to which notice is given.

If to a Tribal Party:

Inn of the Mountain Gods Resort and Casino

286 Carrizo Canyon Road

P.O. Box 269

Mescalero, NM 88340-0269

Attention: Chief Operating Officer

-with a copy to-

Mescalero Apache Tribe

P.O. Box 227

-9-

 

Mescalero, NM 88340-0227

Attention: Tribal President

-with an additional copy to-

John D. Wheeler

John D. Wheeler & Associates, P.C.

P.O. Box 1810

Alamogordo, NM 88311-1810

If to a Warner Party:

WG-IMG, LLC

c/o Warner Gaming, LLC

2300 West Sahara Avenue

Suite 560

Box 5

Las Vegas, NV 89102

Attention: William W. Warner

10. Amendments. No amendment, modification or waiver of any provision of this Agreement
shall be effective unless the same shall be in writing and signed by
or on behalf of the parties
hereto.

11. Integration. This Agreement, together with all attachments and exhibits hereto (which
are incorporated into and made a part of this Agreement for all purposes), comprises the entire
agreement of the parties with respect to the subject matter hereof and supersedes and replaces all
prior agreements, oral and written, with respect to such subject matter.

12. Not Joint Ventures. The Operating Companies and Consultant agree and acknowledge that
the relationship of Consultant to the Operating Companies is one of an independent contractor.
Consultant is not, and shall not by reason of any provision of this Agreement be deemed to be, a
joint venturer with, or servant, employee, partner or agent of, any of the Tribal Parties.
Consultant shall have no authority to make commitments of any form or enter into agreements on
behalf of any Tribal Party, and any agreements to be entered into relating to the Tasks to be
performed by Consultant shall be entered into in the name of and on behalf of the Tribal Party, as
appropriate. Nothing in this Agreement obligates or is intended to obligate Consultant to enter
into any other agreement, guarantee or other instrument with the Tribal Parties or their
affiliates.

13. Invalid Provisions to Affect No Others. If any provision or the fulfillment of any
provision of this Agreement, or of any transaction related to this Agreement, shall involve
transcending the limit prescribed by applicable law in order to be valid or to not constitute a
“management contract” within the meaning of IGRA, then the provision or obligation to be fulfilled
shall be reduced to the limit prescribed by applicable law in order to be valid and not constitute
such a “management contract” and any provision which cannot be so retained shall be deemed invalid
as though not contained in this Agreement, and the remainder of this Agreement shall remain
operative in full force and effect; provided, however, that if any material provision

-10-

 

or the fulfillment of any material provision of this Agreement, or of any material transaction
related to this Agreement, is reduced or any material provision of this Agreement cannot be
retained, the parties hereto shall negotiate in good faith to reduce the Consulting Fee to reflect
the Consultant’s obligations under this Agreement as so reduced or deemed modified.

14. Governing Law and Construction. This Agreement shall be governed by, and be construed
in accordance with, the internal laws of the State of New Mexico (except its choice of law rules)
and not by the laws of the Tribe. Whenever possible, each provision of this Agreement shall be
interpreted in such a manner as to be effective and valid under such applicable law, but, if any
provision of this Agreement shall be held to be prohibited or invalid under such applicable law,
such provision shall be ineffective only to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this Agreement. The
provisions of this Section are irrevocable and may not be rescinded, revoked or amended without the
prior written consent of the parties hereto.

15. Survival. The provisions of Sections 3, 5, 6, 7, 14, 16 and 17 hereof shall survive
the expiration or termination of this Agreement.

16. Limited Waiver of Sovereign Immunity.

     (a) The Tribe, for itself and on behalf of the Operating Companies, hereby waives its
sovereign immunity from unconsented suit or other legal proceedings, whether such suit or
proceedings be brought in law or in equity, or proceedings in arbitration solely to permit the
commencement and maintenance of any action by Consultant to interpret or enforce the terms of this
Agreement and to enforce and execute any order, judgment or ruling resulting therefrom against all
revenues and assets of the Operating Companies (other than real property held in trust by the
United States and other property restricted as to alienation by the laws of the United States).

     (b) With respect to any suit or other proceeding as to which sovereign immunity is waived
under the preceding subsection (a), each of the Tribal Parties expressly and unequivocally consents
and submits to the jurisdiction of the United States District Court for the District of New Mexico,
the Twelfth Judicial District Court in and for Otero County, New Mexico, and all courts to which
appeals therefrom are available, and enforcement of any judgment of such court or, in the event
that such courts decline jurisdiction, for arbitration proceedings brought before the American
Arbitration Association under the Commercial Arbitration Rules of the American Arbitration
Association, to:

     (i) order performance or compliance with any of the provisions of this Agreement, order
the Operating Companies to perform or comply with any of the provisions of this Agreement,
order amounts payable under this Agreement to be paid in accordance with the terms hereof or
thereof, whether such order or award is the product of litigation, or arbitration, provided
that any damage award (in addition to such amounts payable) is limited to actual damages and
shall not include punitive, consequential, incidental, special or indirect damages;

-11-

 

     (ii) determine whether any consent or approval of the Operating Companies has been
improperly granted; and

     (iii) enforce any judgment prohibiting the Operating Companies from taking any action,
or mandating or obligating the Operating Companies to take any action.

     Each of the Tribal Parties expressly waives any right it may otherwise have to require any
foregoing matter to be considered or heard first in any tribal court of the Tribe or tribal
administrative tribunal, now or hereafter existing, whether because of the doctrine of exhaustion
of tribal remedies or as a matter of comity or abstention.

     (c) The Operating Companies represent that the transaction represented by this Agreement has
not occurred on Indian lands or on lands that could be defined as “Indian Country” pursuant to
federal statutes or case law, but rather outside the territorial boundaries of the Tribe. The
Operating Companies understand that this representation is offered as an inducement to Consultant
to perform the Tasks, which representation is and will be material to the decision of Consultant to
perform the Tasks and without which Consultant would not perform the Tasks. Substantially all of
the negotiations regarding this Agreement, and the execution and delivery of this Agreement have
not occurred on Indian lands or lands which could be defined as “Indian Country” pursuant to
federal statutes or case law, but have occurred outside the territorial boundaries of the Tribe.
The representation of this transaction as occurring substantially off-reservation, and the
representations that substantially all of the negotiations occurred off-reservation, together with
the off-reservation execution and delivery of this Agreement are offered as an inducement by the
Operating Companies to Consultant from time to time, which representations are acknowledged by the
Operating Companies to be material to the decision by Consultant to perform the Tasks.

     Each of the Tribal Parties agrees not to revoke, in whole or in part, the limited waiver of
sovereign immunity hereunder or in any way to attempt to revoke, in whole or in part, such limited
waiver of sovereign immunity. In the event of any such revocation or attempted revocation, the
parties hereto expressly recognize and agree that there remains no adequate remedy at law available
to Consultant. Consultant will be irreparably injured upon any revocation or attempted revocation
of the limited waiver of sovereign immunity hereunder and each of the Tribal Parties consents to
the entry of appropriate injunctive relief, consistent with the terms and conditions of this
Agreement. In the event of any attempted revocation or revocation of the limited waiver of
sovereign immunity granted in this Agreement, Consultant may immediately seek judicial injunctive
relief as provided without first complying with any of the prerequisites contained in this
Agreement to the limited waiver of sovereign immunity granted there. Any action seeking injunctive
relief shall be brought in a federal or state court of competent jurisdiction, and each of the
Tribal Entities expressly consents to the jurisdiction of, and agrees to be bound by any order or
judgment of such court, and any federal or state court with appellate jurisdiction thereover.

     (d) If, and only if, a dispute arises between Consultant, on the one hand, and the Operating
Companies on the other hand, over a matter for which the Tribe has provided a limited waiver of
sovereign immunity (the “Dispute”), and neither a federal or state court of competent
jurisdiction can or is willing to hear the Dispute, then any party hereto may request binding

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arbitration of the Dispute. To initiate binding arbitration of a Dispute, a party shall
notify the other parties in writing. The Dispute shall be settled by binding arbitration in
accordance with the Commercial Arbitration Rules of the American Arbitration Association and
subject to New Mexico law concerning arbitration, and judgment on the award rendered by the
arbitrator may be entered in any court of competent jurisdiction pursuant to New Mexico law
concerning arbitration.

	 	(i)	 	Any party hereto, before or during any arbitration, may apply
to a court having jurisdiction for a temporary restraining order or preliminary
injunction where such relief is necessary to protect its interests pending
completion of the dispute resolution proceedings.
	 
	 	(ii)	 	In the event of arbitration, the prevailing party(ies) shall be
entitled to all of its costs, including reasonable attorneys’ fees, from the
nonprevailing party(ies).
	 
	 	(iii)	 	The arbitration shall take place at a location in New Mexico
agreed upon by the parties hereto. The arbitrator shall render an award within
45 days from the conclusion of the arbitration.

17. Non-Impairment. None of the Tribal Parties nor any of their affiliates will: (a)
adopt, enact, promulgate or otherwise place into effect any law or legal requirement that impairs
or interferes, or could impair or interfere, in any manner, with any right, remedy or obligation of
Consultant under this Agreement or (b) demand, impose or receive any tax, charge, assessment, fee
or other imposition or impose any regulatory or licensing requirement against Consultant or its
successors based solely upon the rights, benefits, duties and obligations of such parties under
this Agreement. The Tribal Parties represent and warrant that (a) their acceptance of this
Agreement complies with all Tribal laws, rules, regulations and ordinances and (b) Consultant’s
obligations are solely as set forth in this Agreement and Tribal law does not place any other
obligations on Consultant.

18. Force Majeure. Consultant shall not be in default in the performance of its
obligations under this Agreement if such failure of performance is due to causes beyond its
reasonable control, including acts of God, war, fires, floods, or accidents causing damage to or
destruction of the facilities of the Operating Companies, or any other causes, contingencies, or
circumstances not subject to Consultant’s reasonable control which prevent or hinder performance of
this Agreement.

19. Representations and Warranties and Covenants.

     (a) Each of the Tribal Parties represents and warrants to Consultant and Consultant represents
and warrants to each of the Operating Companies as follows:

     (i) such entity has the full legal right, power and authority and has taken all
action necessary to enter into this Agreement, to perform its obligations hereunder,
and to consummate all other transactions contemplated hereby;

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     (ii) the person executing and delivering this Agreement is duly authorized to execute
and deliver this Agreement on behalf of such entity;

     (iii) this Agreement has been duly executed and delivered by such entity and
constitutes a valid and binding obligation of such entity, enforceable against such entity
in accordance with its terms; and

     (iv) the execution and delivery of this Agreement, the performance by such entity of
its obligations hereunder, and the consummation by such entity of the transactions
contemplated hereby will not violate any contract or agreement to which such entity or any
of its affiliates is a party or any law, regulation, rule or ordinance or any order,
judgment or decree of any federal, state, tribal or local court or require any regulatory
approval beyond those contemplated herein.

     (b) Warner represents and warrants that the execution and delivery of this Agreement and the
performance of his obligations hereunder will not violate any contract or agreement to which he is
a party or any law, regulation, rule or ordinance or any order, judgment or decree of any federal,
state, tribal or local court.

     (c) Consultant represents and warrants that no officer, director or individual owner of 5% or
more of the equity interests of Consultant or any affiliate of Consultant has been arrested,
indicted for convicted of, or pleaded nolo contendere (or any similar plea) to any felony or any
gaming offense or had any association with individuals or entities known to be connected to
organized crime.

     (d) Consultant covenants as follows:

     (i) Consultant agrees that all of its directors and officers and any individual owners
of 5% or more of the equity interests of Consultant (whether or not involved in Consultant’s
business), shall: (A) consent to background investigations to be conducted by the Tribe, the
State of New Mexico, the Federal Bureau of Investigation or any law enforcement authority to
the extent required by the Indian Gaming Regulatory Act or any tribal-state gaming compact
between the Tribe and the State of New Mexico; (B) consent to a background, criminal and
credit investigation to be conducted by or for the National Indian Gaming Commission, if
required; (C) consent to a financial and credit investigation to be conducted by a
credit-reporting or investigation agency at the request of the Tribe; (D) cooperate fully
with such investigations; and (E) disclose any information requested by the Tribe which
would facilitate the background and financial investigation.

     (ii) Any materially false or materially deceptive disclosures or failure to cooperate
fully with such investigations by an employee of Consultant shall result in the immediate
dismissal of such employee. The results of any such investigation may he disclosed by the
Tribe to federal officials and to such other regulatory authorities as required by law.

     (iii) Consultant will not employ any member of the Tribe, retain any member of the
Tribe or any of their respective affiliates with respect to any of the Tasks, will not

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give any gifts or other items of value or worth to any member of the Tribe, and will
not give, sell, or trade any equity or ownership interest in Consultant to any member of the
Tribe.

[signatures on following page]

-15-

 

     IN WITNESS WHEREOF, each of the parties hereto have executed and delivered his Agreement, by
its authorized officers, effective as of the day and year first set forth above.

	 	 	 	 	 	 	 	 	 	 	 	 	 
	Warner Parties:	 	 	 	Tribal Parties:	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	WG-IMG, LLC	 	 	 	INN OF THE MOUNTAIN GODS RESORT AND CASINO	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	By:	 	WARNER GAMING, LLC, its sole member	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	By:
	 	/s/ Carleton Naiche-Palmer	 	 
	 

	 	 	 	 	 	 	 	Name:
	 	 

Carleton Naiche-Palmer
	 	 
	 

	 	By:
	 	/s/ William W. Warner
	 	 	 	Title:
	 	Chief Executive Officer and 	 	 
	 

	 	Name:
	 	 

William W. Warner
	 	 	 	 	 	Management Board Chairperson 	 	 
	 

	 	Title:
	 	Manager	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	CASINO APACHE TRAVEL CENTER	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	/s/ William W. Warner	 	 	 	By:	 	/s/ Carleton Naiche-Palmer	 	 
	 	 	 	 	 	 	 	 	 
	WILLIAM W. WARNER, individually,	 	 	 	Name:	 	Carleton Naiche-Palmer	 	 
	solely with respect to Sections 1, 5, 6, 7(b),
8, 10, 13, 14, 15, and 19(b) hereof	 	 	 	Title:	 	Chief Executive Officer	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	SKI APACHE	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	By:
	 	/s/ Carleton Naiche-Palmer	 	 
	 

	 	 	 	 	 	 	 	Name:
	 	 

Carleton Naiche-Palmer
	 	 
	 

	 	 	 	 	 	 	 	Title:
	 	Chief Executive Officer	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	MESCALERO APACHE TRIBE, solely with respect to 

Sections 1, 4, 5, 6, 7(b), 8, 10, 13, 14, 15, 16, 17
and 19(a) 
hereof	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	By:
	 	/s/ Carleton Naiche-Palmer	 	 
	 

	 	 	 	 	 	 	 	Name:
	 	 

Carleton Naiche-Palmer
	 	 
	 

	 	 	 	 	 	 	 	Title:
	 	President	 	 

-16-

 

Exhibit A

Tasks

	1)	 	Evaluate and make recommendations with respect to the Properties’ gaming operations and
related marketing, including without limitation:

	 	•	 	evaluate the number, type, placement and mix of gaming machines and table games;
	 
	 	•	 	review of slot club program and other gaming-related promotions and
advertisements;
	 
	 	•	 	review of poker operations; and
	 
	 	•	 	make recommendations with respect to offering other types of gaming.

	2)	 	Evaluate and make recommendations with respect to the Properties’ non-gaming marketing
programs, including without limitation:

	 	•	 	review of promotions, advertisements and entertainment offered; and
	 
	 	•	 	review of public relations and media outlets.

	3)	 	Evaluate and make recommendations with respect to the Properties’ hotel and other operations,
including without limitation:

	 	•	 	review of hotel room pricing and reservation systems; and
	 
	 	•	 	review group sales and service.

	4)	 	Evaluate and make recommendations with respect to the Properties’ food and beverage
operations, including without limitation:

	 	•	 	review of current food and beverage operations; and
	 
	 	•	 	assess demand for additional food and beverage outlets.

	5)	 	Evaluate and make recommendations with respect to the Properties’ human resources, including
without limitation:

	 	•	 	review compensation and benefits and employee training.

	6)	 	Evaluate and make recommendations with respect to the Enterprise’s and the Properties’
finance and accounting, including without limitation:

	 	•	 	review financial reporting, cash management, accounting, audit functions and
information systems.

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