Document:

Exhibit
10.14

 

AGREEMENT
FOR

PURCHASE
OF SELECTED ASSETS

AND
ASSUMPTION OF CERTAIN LIABILITIES

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

 

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

 

WITNESSETH:

 

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

 

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

 

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

 

ARTICLE I

TRANSFER
OF ASSETS AND LIABILITIES

 

Section 1.1.            Transfer of Assets.

 

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

 

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

 

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

 

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

 

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

 

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

 

 

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

 

(7)                                  Cash on hand.

 

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

 

Section 1.2.            Purchase Price.

 

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

 

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

 

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

 

(3)                                  Cash on hand at par.

 

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

 

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

 

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

 

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

 

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

 

(4)           General tort liabilities; or

 

 

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

 

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

 

Section 1.3.            Liabilities.

 

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

 

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

 

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

 

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

 

 

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

 

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

 

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

 

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

 

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

 

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

 

Section 1.4.            Loans Transferred.

 

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

 

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

Section 1.5.            Employee Matters.

 

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

 

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

 

 

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

 

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

 

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

 

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

 

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

 

Section 1.6.            Records and Data Processing.

 

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

 

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

 

Section 1.7.            Security.

 

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

 

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

 

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

 

 

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

 

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

 

Section 1.9.            Real Property.

 

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

 

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

 

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

 

 

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

 

ARTICLE II

CLOSING
AND EFFECTIVE DATE

 

Section 2.1.            Dates.

 

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

 

Section 2.2.            Closing.

 

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

 

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

 

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

 

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

 

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

 

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

 

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(1)           The Assignment and Assumption Agreement;

 

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

 

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

 

 

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

 

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

 

(6)           The Closing Statement.

 

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

 

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

 

Section 2.3.            Post-Closing Adjustments.

 

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

 

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

 

 

ARTICLE III

INDEMNIFICATION

 

Section 3.1.            Seller’s Indemnification of Buyer.

 

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

 

Section 3.2.            Buyer’s Indemnification of Seller.

 

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

 

Section 3.3.            Claims for Indemnity.

 

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

 

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

 

 

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

 

ARTICLE
IV

REPRESENTATIONS
AND WARRANTIES OF SELLER

 

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

 

Section 4.1.            Corporate Organization.

 

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

 

Section 4.2.            No Violation.

 

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

 

Section 4.3.            Corporate Authority.

 

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

 

Section 4.4.            Enforceable Agreement.

 

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

 

Section 4.5.            No Brokers.

 

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

 

 

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

 

Section 4.6.            Real Property.

 

Seller makes the
following representations regarding the Real Properties:

 

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

 

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

 

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

 

Section 4.7.            Condition of Property.

 

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

 

Section 4.8.            Certain Loan Representations.

 

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

 

Section 4.9.            Deposit Liabilities.

 

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

 

 

Section 4.10.          Litigation.

 

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

 

Section 4.11.          Mechanic’s Liens.

 

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

 

Section 4.12.          Accuracy of Representations and Warranties.

 

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

 

Section 4.13.          Conduct of Business.

 

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

 

Section 4.14.          Zoning.

 

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

 

Section 4.15.          Environmental Compliance.

 

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

 

 

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

 

Section 4.16.          Accounting Records.

 

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

 

Section 4.17.          Access to Offices.

 

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

 

Section 4.18.          Information Reports.

 

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

 

Section 4.19.          Processing of Items.

 

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

 

Section 4.20.          Limitation of Representations and
Warranties.

 

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

 

 

ARTICLE V

REPRESENTATIONS
AND WARRANTIES OF BUYER

 

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

 

Section 5.1.            Corporate Organization.

 

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

 

Section 5.2.            No Violation.

 

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

 

Section 5.3.            Corporate Authority.

 

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

 

Section 5.4.            Enforceable Agreement.

 

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

 

Section 5.5.            No Brokers.

 

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

 

 

ARTICLE VI

OBLIGATIONS
OF PARTIES PRIOR TO AND AFTER

EFFECTIVE
DATE

 

Section 6.1.            Full Access.

 

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

 

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

 

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

 

Section 6.3.            Conduct of Business: Maintenance of Properties.

 

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

 

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

 

 

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

 

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

 

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

 

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

 

Section 6.4.            No Solicitation by Seller.

 

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

 

Section 6.5.            Further Actions.

 

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

 

 

Section 6.6.            Fees and Expenses.

 

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

 

Section 6.7.            Breaches with Third Parties.

 

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

 

Section 6.8.            Insurance.

 

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

 

Section 6.9.            Public Announcements.

 

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

 

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

 

Section 6.10.          Further Negotiations.

 

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

 

 

ARTICLE
VII

CONDITIONS
TO BUYER’S OBLIGATIONS

 

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

 

Section 7.1.            Representations and Warranties True.

 

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

 

Section 7.2.            Obligations Performed.

 

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

 

Section 7.3.            No Adverse Litigation.

 

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

 

Section 7.4.            Regulatory Approval.

 

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

 

Section 7.5.            List of Customers.

 

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

 

Section 7.6.            Buyer’s Due Diligence.

 

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

 

 

ARTICLE
VIII

CONDITIONS
TO SELLER’S OBLIGATIONS

 

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

 

Section 8.1.            Representations and Warranties True.

 

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

 

Section 8.2.            Obligations Performed.

 

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

 

Section 8.3.            No Adverse Litigation.

 

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

 

Section 8.4.            Regulatory Approval.

 

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

 

ARTICLE
IX

LIQUIDATED DAMAGES

 

Section 9.1.            Failure of Performance.

 

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

 

 

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

 

ARTICLE X

TERMINATION

 

Section 10.1.          Methods of Termination.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

Section 10.2.          Procedure Upon Termination.

 

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

 

 

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

 

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

 

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

 

ARTICLE XI

MISCELLANEOUS
PROVISIONS

 

Section 11.1.          Amendment and Modification.

 

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

 

Section 11.2.          Waiver or Extension.

 

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

 

Section 11.3.          Assignment.

 

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

 

Section 11.4.          Confidentiality.

 

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

 

 

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

 

Section 11.5.          Addresses for Notices, Etc.

 

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

 

If to Seller:

 

Benjamin Guenther

MetaBank

Erie at Fifth

Storm Lake, Iowa
50588

 

Telephone: (712)
732-4105

Facsimile: (712) 732-7105

Email:  bguenther@metabankonline.com

 

with a copy to:

 

Gary W. Armstrong

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

316 East Sixth
Street

Storm Lake, IA
50588-0278

 

Telephone: (712)
732-3538

Facsimile: (712)
732-7578

Email:  mhgab@iw.net

 

If to Buyer:

 

Stephen D. Spotts

Iowa State Bank

500 Audubon Street

Sac City, IA 50583

 

Telephone: (712)
662-4721

Facsimile: (712)
662-4950

Email:  sspotts@scsbank.com

 

 

with a copy to:

 

Robert A. Mullen

Belin Law Firm

The Financial
Center

666 Walnut, Suite 2000

Des Moines, IA
50309-3989

 

Telephone: (515)
243-7100

Facsimile: (515)
558-0715

Email:  ramullen@belinlaw.com

 

Section 11.6.          Counterparts.

 

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

 

Section 11.7.          Headings.

 

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

 

Section 11.8.          Governing Law.

 

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

 

Section 11.9.          Entire Agreement.

 

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

 

Section 11.10.        Expenses.

 

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

 

Section 11.11.        Severability.

 

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

 

 

Section 11.12.        Parties in Interest.

 

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

 

[SIGNATURE PAGE
FOLLOWS]

 

 

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

 

	
   

  	
   

  	
  SELLER

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  METABANK

  
	
  ATTEST:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Sandra Hegland

  	
   

  	
   

  	
  By:

  	
  /s/ Benjamin Guenther

  	
   

  
	
  Its: 

  	
  Senior Vice President
  of HR

  	
   

  	
  Its:  

  	
  President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  BUYER

  
	
   

  	
   

  	
   

  
	
  ATTEST:

  	
   

  	
  IOWA STATE BANK

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Bill Hess

  	
   

  	
   

  	
  By:

  	
  /s/ Stephen D. Spotts

  	
   

  
	
  Its:

  	
  Chairman

  	
   

  	
   

  	
  Its:

  	
  PresidentExhibit 10.15

 

STOCK PURCHASE AGREEMENT

 

BY AND AMONG

 

ANITA BANCORPORATION,

 

META FINANCIAL GROUP, INC. AND

 

METABANK WEST CENTRAL

 

 

DATED AS OF NOVEMBER 27, 2007

 

 

	
   

  	
   

  	
   

  	
   

  	
  Exhibit List:

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Exhibit A

  	
  -

  	
   

  	
   

  	
  Loans to be Removed Prior
  to Closing

  
	
  Exhibit B

  	
  -

  	
   

  	
   

  	
  Legal Opinion of Seller’s
  Counsel

  
	
  Exhibit C

  	
  -

  	
   

  	
   

  	
  Forms for Redemption of
  Insurance

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Schedule List:

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Schedule 2.01

  	
  -

  	
   

  	
   

  	
  Shares

  
	
  Schedule 2.03(b)

  	
  -

  	
   

  	
   

  	
  Adjustments to Purchase
  Price

  
	
  Schedule 3.01(a)

  	
  -

  	
   

  	
   

  	
  Organization of Seller

  
	
  Schedule 3.01(b)

  	
  -

  	
   

  	
   

  	
  Organization of Bank

  
	
  Schedule 3.06

  	
  -

  	
   

  	
   

  	
  Absence of Undisclosed
  Liabilities

  
	
  Schedule 3.07

  	
  -

  	
   

  	
   

  	
  Absence of Certain Changes

  
	
  Schedule 3.08

  	
  -

  	
   

  	
   

  	
  Litigation

  
	
  Schedule 3.10

  	
  -

  	
   

  	
   

  	
  Regulatory Matters

  
	
  Schedule 3.11

  	
  -

  	
   

  	
   

  	
  Environmental, Health and
  Safety Matters

  
	
  Schedule 3.12

  	
  -

  	
   

  	
   

  	
  Insurance

  
	
  Schedule 3.13

  	
  -

  	
   

  	
   

  	
  Related Party Transactions

  
	
  Schedule 3.14

  	
  -

  	
   

  	
   

  	
  Taxes

  
	
  Schedule 3.15

  	
  -

  	
   

  	
   

  	
  Compliance with Law

  
	
  Schedule 3.16

  	
  -

  	
   

  	
   

  	
  Intellectual Property

  
	
  Schedule 3.18

  	
  -

  	
   

  	
   

  	
  Title to and Condition of
  Properties

  
	
  Schedule 3.19

  	
  -

  	
   

  	
   

  	
  Employee Benefit Plans

  
	
  Schedule 3.20

  	
  -

  	
   

  	
   

  	
  Contracts

  
	
  Schedule 3.21

  	
  -

  	
   

  	
   

  	
  Affiliated Transactions

  
	
  Schedule 3.22

  	
  -

  	
   

  	
   

  	
  No Conflict or Default

  
	
  Schedule 3.24

  	
  -

  	
   

  	
   

  	
  Regulatory Matters

  
	
  Schedule 3.25

  	
  -

  	
   

  	
   

  	
  Loans

  
	
  Schedule 3.28

  	
  -

  	
   

  	
   

  	
  Offices and ATMs

  
	
  Schedule 3.31

  	
  -

  	
   

  	
   

  	
  Community Reinvestment Act

  
	
  Schedule 3.32

  	
  -

  	
   

  	
   

  	
  Investment Management

  
	
  Schedule 3.34

  	
  -

  	
   

  	
   

  	
  Unauthorized Loans

  
	
  Schedule 3.36

  	
  -

  	
   

  	
   

  	
  Insurance Contracts

  
	
  Schedule 6.03

  	
  -

  	
   

  	
   

  	
  Conduct of Business

  
	
  Schedule 8.04

  	
  -

  	
   

  	
   

  	
  Assigned Claims

  

 

 

STOCK PURCHASE AGREEMENT

 

THIS STOCK PURCHASE
AGREEMENT is made this 27 day of November, 2007, by and among ANITA BANCORPORATION, an Iowa corporation (“Purchaser”),
META FINANCIAL GROUP, INC., a
Delaware corporation (“Seller”), and METABANK
WEST CENTRAL, an Iowa state-chartered commercial bank (the “Bank”).
Seller and the Bank are collectively referred to herein as the “Companies” and
individually as a “Company.”

 

RECITALS

 

A.            Seller is the record and beneficial
owner of all of the outstanding shares of capital stock of the Bank (the “Shares”).

 

B.            Seller desires to sell to Purchaser
and Purchaser desires to buy from Seller all of the Shares on the terms and
conditions set forth in this Agreement.

 

AGREEMENTS

 

In consideration of the
Recitals and the mutual agreements set forth below, the parties agree as
follows:

 

1.             Definitions. In addition to the terms defined
elsewhere in this Agreement, the following terms have the following meanings:

 

(a)           The term “Affiliate” means with
respect to any Person, any other person or entity that directly or indirectly
controls, is controlled by, or is under common control with, such other Person
or entity.

 

(b)           The term “Applicable Laws” means all
laws, orders, and regulations, and all judgments, decisions and orders of any
Governmental Authority in effect on the date hereof that are applicable to any
Company.

 

(c)           The term “Claim” means any claim
(including any product liability, malpractice or errors or omission claim),
demand, cause of action, investigation, inquiry, suit, action or legal,
administrative, arbitrative or other proceeding.

 

(d)           The term “Code” means the Internal
Revenue Code of 1986, as amended.

 

(e)           The term “Contracts” mean all
contracts, commitments, agreements (including agreements for the borrowing of
money or the extension of credit), leases or licenses to which any company is a
party or by which any company is bound.

 

(f)            The term “Data Conversion Costs”
means all costs for the conversion of the Bank’s account records from Fiserv to
Precision Computer Systems.

 

 

(g)           The term “Derivative Transactions”
means any swap transaction, option, warrant, forward purchase or sale
transaction, futures transaction, cap transaction, floor transaction or collar
transaction relating to one or more currencies, commodities, bonds, equity
securities, loans, interest rates, credit-related events or conditions or any
indexes, or any other similar transaction or combination of any of these
transactions, including collateralized mortgage obligations or other similar
instruments or any debt or equity instruments evidencing or embedding any such
types of transactions, and any related credit support, collateral or other
similar arrangements related to such transactions.

 

(h)           The term “Environmental Laws” means
all applicable federal, state and local laws, rules, regulations, codes and
ordinances, and binding determinations, orders, permits, licenses, injunctions,
writs, decrees or rulings of any Governmental Authority, relative to or that
govern or purport to govern air quality, soil quality, water quality, wetlands,
natural resources, solid waste, hazardous waste, hazardous or toxic substances,
pollution or the protection of public health, human health or the environment,
including CERCLA, the Hazardous Materials Transportation Act (49 U.S.C. § 1801)
the Federal Water Pollution Control Act (33 U.S.C. § 1251, et seq.), the Safe
Drinking Water Act (42 U.S.C. § 300f, et seq.), the Resource Conservation and
Recovery Act (42 U.S.C. § 6901, et seq.), the Clean Air Act (42 U.S.C. § 7401,
et seq.), the Toxic Substances Control Act (15 U.S.C. § 2601, et seq.), the
Federal Insecticide, Fungicide, and Rodenticide Act (7 U.S.C. § 136, et seq.),
and the Occupational Safety and Health Act of 1970 (29 U.S.C. § 651, et seq.),
as each of these laws is in effect on the date hereof.

 

(i)            The term “FDIC” means the Federal
Deposit Insurance Corporation.

 

(j)            The term “Governmental Authority”
means any federal, state, municipal, foreign, international or other
governmental department, commission, board, court, bureau, agency or
instrumentality, or any arbitration panel or alternative dispute resolution
body.

 

(k)           The term “Hazardous Materials” means
all hazardous substances, as that term is defined in CERCLA, and any other
individual or class of pollutants, contaminants, toxins, chemicals, substances,
wastes or materials in their solid, liquid or gaseous phase, regulated under
any Environmental Law.

 

(l)            The term “Intellectual Property”
means all of the rights arising from or in respect of the following: (i) patents;
(ii) trademarks, service marks, trade names, brand names, Internet domain
names and goodwill associated therewith; (iii) copyrights; (iv) all
trade secrets, inventions, technology, formulas, know-how, confidential
information, computer software programs and applications, tangible and
intangible proprietary information or materials; and (v) all applications
filed, applications to be filed, and registrations relating to any of the
foregoing clauses (i)-(iv) above.

 

(m)          The term “IRS” means the U.S. Internal
Revenue Service.

 

2

 

(n)           The term “Liens” means all mortgages,
security interests, title retention agreements, options to purchase, rights of
first refusal, liens, easements, encumbrances, restrictions and other burdens
of any nature whatsoever.

 

(o)           The term “Material Adverse Effect”
means any change, circumstance or effect individually or in the aggregate with
all other changes, circumstances and effects, that is or would be reasonably
likely to be materially adverse to the business, operations, assets,
liabilities, and financial condition of the Bank, taken as a whole, or the
right or ability of any Company to consummate any of the transactions
contemplated hereby; provided, however, none of the following shall be deemed
in themselves, either alone or in combination, to constitute a Material Adverse
Effect: (i) any changes in general United States or global economic,
regulatory or political conditions generally and which do not have a
disproportionately adverse effect upon the Companies; (ii) any changes
affecting the banking industry in general and which do not have a
disproportionately adverse effect upon the Companies; or (iii) actions
contemplated by the parties in connection with, or attributable to, the
announcement of this Agreement and the transactions contemplated hereby
(including but not limited to loss of personnel, customers or suppliers or the
delay or cancellation of orders for products).

 

(p)           The term “Permits” means all
licenses, permits, approvals and certifications or similar items of any type
necessary for the conduct of the business of the Bank as currently conducted.

 

(q)           The term “Permitted Liens” means (i) liens
created by or resulting from the actions of Purchaser or entities affiliated
with Purchaser, (ii) statutory and contractual landlord liens incurred in
the ordinary course of business for sums [a] not yet due and payable or [b]
being contested in good faith, (iii) pledges or deposits made to secure
any Company’s payment of worker’s compensation, unemployment insurance or other
forms of governmental insurance or benefits or to participate in any fund in
connection with worker’s compensation or unemployment insurance, in each case
incurred in the ordinary course of business consistent with past practice, (iv) zoning
and similar restrictions on the use of, and easements, restrictions, covenants,
title defects and similar encumbrances on, real property that do not impair the
use of such real property (other than of an inconsequential nature) or
materially detract from the value of such real property upon which such
restriction or encumbrance exists and that are not violated by existing
structures or land use, (v) liens for taxes not yet due and payable, (vi) statutory
mechanic’s liens and materialmen’s liens for services or materials and similar
statutory liens for amounts not due and payable incident to construction and
maintenance of real property, and (vii) statutory liens of warehousemen
and carriers and similar statutory liens securing obligations that are not yet
due and payable.

 

(r)            The term “Person” means an
individual, a partnership, a limited liability company, a corporation, an
association, a joint stock company, a trust, a joint venture, an unincorporated
organization or a Governmental Authority.

 

(s)           The term “Related Party” means any
five (5) percent or more shareholder of Seller, any director or officer of
any Company, or any Person related by blood or marriage to any such person and
who lives in the same household of such Person.

 

3

 

(t)            The term “Seller’s Knowledge” means
the current actual knowledge, after due inquiry, of all officers of the
Companies.

 

(u)           The term “Taxes” means any and all
taxes, charges, fees, levies or other assessments, including, without
limitation, income, gross receipts, value added, excise, real or personal
property, sales, withholding, social security, retirement, unemployment,
occupation, use, service, service use, license, net worth, payroll, franchise,
transfer and recording taxes, fees and charges, imposed by the IRS or any
taxing authority (whether domestic or foreign including, without limitation,
any state, county, local or foreign government or any subdivision or taxing
agency thereof (including a United States possession)), whether computed on a
separate, consolidated, unitary, combined or any other basis; and such term
shall include any interest whether paid or received, fines, penalties or
additional amounts imposed by the IRS or any taxing authority attributable to,
or imposed upon, or with respect to, any such taxes, charges, fees, levies or
other assessments.

 

(v)           The term “Tax Returns” means any
return (including any information return), report, statement, schedule, notice,
form, or other document or information filed with or submitted to, or required
to be filed with or submitted to, any Governmental Authority in connection with
the determination, assessment, collection or payment of any Tax or in
connection with the administration, implementation or enforcement of or
compliance with any legal requirement relating to any Tax.

 

(w)          The term “Transaction Expenses” means
any liability or obligation of any Company or any of their Affiliates for any
investment banking fees, financial advisory fees, brokerage fees, commissions,
finder’s fees, attorneys’ fees and expenses, accountants’ fees and expenses or
similar fees incurred by any Company in connection with the transactions
contemplated by this Agreement. “Transaction Expenses” shall not include Data
Conversion Costs.

 

2.                                       Purchase and
Sale.

 

2.01         Purchase and Sale of Shares. Subject to the terms and
conditions of this Agreement, on the Closing Date, Seller shall sell to
Purchaser, and Purchaser shall purchase from Seller, all of the Shares free and
clear of all Liens. As of the date of this Agreement, the number and class of
Shares and the stock certificate numbers representing such Shares owned
beneficially and of record by Seller are listed on Schedule 2.01.

 

2.02         Closing. Subject to the terms and conditions of this Agreement,
the closing of the purchase and sale of the Shares contemplated herein (the “Closing”)
shall take place at the offices of BrownWinick Law Firm, on such date as is
mutually acceptable to Purchaser and Seller (provided that the conditions to
the Closing contained in Sections 8, 9 and 10 below, have been met or waived)
(the “Closing Date”). Except as otherwise provided in this Agreement, the
failure to consummate the purchase and sale provided for in this Agreement on
the date and time and at the place specified herein will not relieve any party
to this Agreement of any obligation under this Agreement.

 

4

 

2.03         Purchase Price.

 

(a)           Amount. The purchase price for
the Shares shall equal Eight Million Four Hundred Seventy-Five Thousand Dollars
($8,475,000) less the adjustments set forth in Section 2.03(b) below
(the “Purchase Price”).

 

(b)           Adjustments to Purchase Price.

 

(i)            Reduction for stale accounts and
outdated equipment in the amount set forth on Schedule 2.03(b).

 

(ii)           Intentionally omitted.

 

(iii) Any Data
Conversion Costs incurred by Purchaser on behalf of Seller or to be incurred by
Purchaser on behalf of Seller in association with this transaction in excess of
$40,000.

 

(iv)          In the event that Total Average
Deposits fall below the levels set forth in Section 3.33, the Purchase
Price shall be adjusted downward by an amount equal to six percent (6%) of the
shortfall. In the event Total Average Deposits rise above the levels set forth
in Section 3.33, the Purchase Price shall not be adjusted upward.

 

(v)           Any amounts payable pursuant to Section 6.03(a)

 

(vi)          Increased by $14,139.99 for Unearned
Insurance Commissions adjustment

 

(vii)         Reduction for value of Life Insurance Redemption of
$141,477.

 

(c)           Payment. The Purchase Price
shall be paid as follows:

 

(i)            $100,000 upon the execution of this
Agreement;

 

(ii)           At Closing, Purchaser shall wire
Seller the balance of the Purchase Price.

 

The $100,000 payment is
non-refundable, except if the Agreement is terminated pursuant to subsections
11.01(a), (b) or (d) or section 10.05

 

2.04         Transaction Expenses. Except as otherwise provided in
this Agreement, each party to this Agreement will bear its respective
Transaction Expenses incurred in connection with the preparation, execution,
and performance of this Agreement and the transactions contemplated hereby,
including all fees and expenses of agents, representatives, counsel, and
accountants. Seller will cause the Bank not to incur any out-of-pocket expenses
in connection with this Agreement. In the event of termination of this
Agreement, the obligation of each party to pay its own expenses will be subject
to any rights of such party arising from a breach of this Agreement by another
party.

 

5

 

3.             Representations and Warranties of Sellers.
Subject to the information disclosed on the disclosure schedule to this
Agreement (the “Disclosure Schedule”), as may be supplemented or amended in
accordance with the terms of this Agreement, the Companies jointly and
severally represent and warrant to Purchaser that:

 

3.01         Organization.

 

(a)           Seller is a corporation duly
organized, existing and in good standing under the laws of the State of
Delaware with full corporate power and authority to own, lease, use and operate
its properties and to conduct its business as it is currently conducted. Except
as set forth in Schedule 3.01(a), Seller is not in default of any
provision of its Certificate of Incorporation, By-laws or other agreement relating
to corporate governance or organization. Seller is qualified to do business in
each jurisdiction where the nature of its activities would require it to
qualify, except where the failure to qualify would not have a Material Adverse
Effect.

 

(b)           The Bank is a duly organized and
validly existing state-chartered bank with full requisite power and authority
to own, lease, use and operate its properties and to conduct its business as it
is currently conducted. Except as set forth in Schedule 3.01(b), the Bank
is not in default of any provision of its Charter, By-laws or other agreement
relating to its governance or organization. The Bank is qualified to do
business in each jurisdiction where the nature of its activities would require
it to qualify, except where the failure to qualify would not have a Material
Adverse Effect.

 

3.02         Authorization of Agreement. Subject to approval of
this Agreement and the transactions contemplated hereby by the appropriate
federal regulator or regulators and the shareholders of Seller, each Company
has all necessary power and authority to execute and deliver this Agreement and
each other agreement contemplated hereby to which such person is a party and to
consummate the transactions provided for herein. Subject to approval of this
Agreement and the transactions contemplated hereby by the shareholders of
Seller, the execution and delivery of this Agreement, and each other agreement
contemplated hereby to which such person is a party, by each Company and the
performance by them of the obligations to be performed hereunder and thereunder
have been duly authorized by all necessary and appropriate action by the Board
of Directors and shareholders of each Company. This Agreement is, and each
other agreement and document to be executed by any Company pursuant hereto,
will be when so executed, a valid and binding obligation of such Company
enforceable in accordance with its terms, except that enforcement may be
limited by bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting creditors’ rights generally and by general equitable principles.

 

3.03         Conflicts; Consents and Approvals. The execution and
delivery of this Agreement and the other agreements to be executed and
delivered pursuant to this Agreement and the consummation of the transactions
contemplated hereby and thereby do not and will not, with or without the giving
of notice or the passage of time, conflict with, result in or constitute a
breach, default, right to accelerate or loss of rights under, or result in the
creation of any Lien pursuant to, the terms or conditions of (a) any
Company’s Articles/Certificate of Incorporation or By-Laws; (b) subject to
approval of the appropriate federal regulator or regulators, any law, rule,

 

6

 

regulation, statute, order,
judgment or decree which any Company is a party or by which any Company is
bound or affected; or (c) any material contract, agreement, lease, license
or instrument to which any Company is a party or by which any Company is bound
or affected.

 

3.04         Capital Stock. Schedule 2.01 sets forth the
number of the issued and outstanding shares of the capital stock of the Bank
and the name of the holders thereof. All shares of the capital stock of the
Bank are legally and beneficially owned as set forth on Schedule 2.01.
All shares of the capital stock of the Bank: (a) are duly and validly
authorized and issued, fully paid and non-assessable; (b) are not subject
to, and were not issued in contravention of, any preemptive or similar rights
pursuant to any provision of law, the Bank’s Articles of Incorporation,
Charter, or any agreement, contract or other obligation to which the Bank is a
party or is subject; and (c) were issued in accordance with all applicable
federal and state securities’ laws as such laws were in effect at the time of
issuance. There are no outstanding options, subscriptions, warrants, puts,
calls, agreements, understandings, claims or other commitments or rights of any
type relating to the issuance, sale or transfer of any securities or interests
of the Bank, nor are there outstanding any securities which are convertible
into or exchangeable for shares or equity interests of the Bank.

 

3.05         Financial Statements. Seller has furnished to
Purchaser Financial Statements (as defined below) of the Bank. The Financial
Statements (including the related notes, where applicable) present (subject, in
the case of the unaudited statements, to audit adjustments normal in nature and
amount and the addition of customary notes) the assets, liabilities, results of
the operations and changes in shareholders’ equity and financial position of
the Bank for the respective periods or as of the respective dates therein set
forth; and the Financial Statements (including the related notes, where
applicable, but subject, in the case of the unaudited statements, to audit
adjustments normal in nature and amount and the addition of customary notes)
have been prepared in accordance with regulatory accounting guidelines
(including Appendix A to 12 CFR Part 225) consistently applied by the Bank
during the periods involved, except as indicated in the financial statements.
The books and records of the Bank are true and complete in all material
respects and have been, and are being, maintained in accordance with applicable
legal and accounting requirements. “Financial Statements” means (i) Consolidated
Reports of Condition filed for the Bank beginning with all reports filed on or
after January 1, 2005 through the date hereof; (ii) the detailed
balance sheet dated July 31, 2007 and the related statements of
operations, (including related notes and schedules, if any) of the Bank for the
period ended as of such date; and (iii) all subsequently filed
Consolidated Reports of Condition filed by the Bank after the date hereof. The
unaudited balance sheet of the Bank as of July 31, 2007 is referred to as
the “Latest Balance Sheet”

 

3.06         Absence of Undisclosed Liabilities. Except as set
forth on Schedule 3.06, there are no liabilities or obligations, direct
or indirect, absolute or contingent, known or unknown, or any outstanding
evidence of indebtedness arising out of or relating to the Bank or its
business, except (a) as fully reflected or as specifically reserved
against on the Latest Balance Sheet; (b) liabilities incurred in the
ordinary course of business after the Latest Balance Sheet Date, consistent
with the Bank’s prior practice, which, in the aggregate, do not exceed $10,000
or result in any Material Adverse Effect; and (c) liabilities or obligations
(which are current)

 

7

 

relating to Contracts, but
in no event any liability or obligation arising out of any breach,
nonperformance or defective performance by the Bank of any Contract.

 

3.07         Absence of Certain Changes. Except as specifically
contemplated by this Agreement and as set forth in Schedule 3.07, since
the Latest Balance Sheet Date, there has not been:

 

(a)           any Material Adverse Effect, or any
event which reasonably could be expected to result in a Material Adverse
Effect;

 

(b)           any declaration relating to a
distribution or payment to any shareholder of Seller or any direct or indirect
redemption, repurchase or other acquisition by any Company of any Shares or the
execution of any agreements to purchase or acquire any Shares, or the issuance
of any option, warrant or right to acquire any Shares;

 

(c)           any transaction entered into or
carried out by the Bank other than in the ordinary and usual course of its
business consistent with past practices;

 

(d)           any borrowing or agreement to borrow
funds, or incurring of any other obligation or liability of any type, except
those incurred in the usual and ordinary course of the business of the Bank
consistent with past practices, nor has the Bank endorsed, assumed or
guaranteed any payment or performance of a loan or obligation of any other
entity;

 

(e)           any material change in the accounting
procedures or practices of the Bank or changes in the method of application of
those procedures or practices;

 

(f)            any mortgage or other encumbrance of
any type whatsoever imposed or agreed to be imposed on or with respect to the
property or assets of the Bank;

 

(g)           any disposition of any type
whatsoever of any of the properties, rights or assets of the Bank other than sales
or dispositions in the ordinary course of business;

 

(h)           any loan, advance or equity
investment made by the Bank to any entity except in the ordinary and usual
course of business;

 

(i)            any modification or amendment of a
Material Contract (as that term is defined in Section 3.20) other than in
the usual and ordinary course of business;

 

(j)            any labor dispute or disturbance
adversely affecting the Bank’s business operations or condition (financial or
otherwise), including, without limitation, the filing of any petition or charge
of unfair or discriminatory labor practice with any governmental or regulatory
authority, efforts to effect a union representation election, actual or
threatened employee strike, work stoppage or slowdown;

 

(k)           any damage, destruction or property
loss, whether or not covered by insurance, in excess of $5,000 to any single
piece of property or $15,000 in the aggregate; or

 

8

 

(l)            any payment or
increase by the Bank of any bonuses, salaries, or other compensation to any
shareholder, director, officer or employee or entry into any employment,
severance, or similar Contract with any director, officer or employee, except
for the normal and customary merit raises that became effective October 1,
2007 and as disclosed to Purchase on Schedule 3.07.

 

3.08        Litigation. Except for the matters described in Schedule
3.08,

 

(a)           the Bank is not a
party to any pending, and to Seller’s Knowledge, threatened, Claim against the
Bank or challenging the validity or propriety of the transactions contemplated
by this Agreement nor is there any judgment, decree, injunction, rule or
order of any Governmental Authority outstanding against the Bank;

 

(b)           to Seller’s
Knowledge, there is no injunction, order, judgment or decree imposed upon the
Bank or its assets; and

 

(c)           there is no
injunction, order, judgment or decree imposed upon the Bank with respect to the
transactions contemplated by this Agreement.

 

3.09        Brokerage and Finder’s Fees.
Except for the engagement of Sandler O’Neill + Partners, L.P., neither the
Seller, nor the Bank, nor any of their respective directors, officers or
employees has incurred, or will incur, any brokerage, finder’s or similar fee
in connection with the execution of this Agreement or the consummation of the
transactions contemplated hereby which is the obligation of the Bank. The
Seller, and not the Purchaser or the Bank, shall be solely liable for any fees
or other compensation due to Sandler, O’Neill + Partners, L.P.

 

3.10        Regulatory Matters. The Bank is a state-chartered
commercial bank. Except as set forth on Schedule 3.10, neither the Bank
nor Seller have received any written or oral information or notice from any
administrative or regulatory governmental agency that grounds do or may exist
for the issuance of any regulatory or supervisory order nor, to Seller’s
Knowledge, is Seller or the Bank aware of the existence of any such grounds.

 

3.11        Environmental, Health and Safety Matters. Except as
set forth on Schedule 3.11:

 

(a)           The Bank is, and at all times has
been, in full compliance with, and has not been and is not in violation of or
liable under, any Environmental Law. The Companies do not have any basis to
expect, nor have the Companies or any other Person for whose conduct the Companies
are or may be held to be responsible received, any actual or threatened order,
notice, or other communication from (i) any governmental body or private
citizen acting in the public interest, or (ii) the current or prior owner
or operator of any facilities of the Bank, of any actual or potential violation
or failure to comply with any Environmental Law, or of any actual or, to Seller’s
Knowledge, threatened obligation to undertake or bear the cost of any liability
relating to compliance with Environmental Laws with respect to any of the
facilities or any other properties or assets (whether real, personal, or mixed)
in which the Bank has had an interest, or with respect to any property or
facility at or to which Hazardous Materials were generated, manufactured,

 

9

 

refined, transferred,
imported, used, or processed by the Bank, or any other Person for whose conduct
they are or may be held responsible, or from which Hazardous Materials have
been transported, treated, stored, handled, transferred, disposed, recycled, or
received.

 

(b)           There are no pending or, to Seller’s
Knowledge, threatened Claims, Liens, or other restrictions of any nature,
resulting from any liability for violation of an Environmental Law or arising
under or pursuant to any Environmental Law, with respect to or affecting any of
the facilities or any other properties and assets (whether real, personal, or
mixed) in which the Bank has or had an interest.

 

(c)           The Companies have no reasonable
basis to expect, nor has any Company or any other Person for whose conduct it
is or may be held responsible, received, any citation, directive, inquiry,
notice, order, summons, warning, or other communication that relates to
Hazardous Materials, or any alleged, actual, or potential violation or failure
to comply with any Environmental Law, or of any alleged, actual, or potential
obligation to undertake or bear the cost of any liabilities for violations of
or arising under Environmental Laws with respect to any of the facilities or
any other properties or assets (whether real, personal, or mixed) in which the
Bank had an interest, or with respect to any property or facility to which
Hazardous Materials generated, manufactured, refined, transferred, imported,
used, or processed by the Bank, or any other Person for whose conduct it is or
may be held responsible, have been transported, treated, stored, handled,
transferred, disposed, recycled, or received.

 

(d)           The Bank, or any other Person for
whose conduct its is or may be held responsible, does not have any liabilities
under applicable Environmental Laws with respect to the facilities or with
respect to any other properties and assets (whether real, personal, or mixed)
in which the Bank (or any predecessor), has or had an interest, or, to Seller’s
Knowledge, at any property geologically or hydrologically adjoining the
facilities or any such other property or assets.

 

(e)           To Seller’s Knowledge, there are no
Hazardous Materials present on or in the environment at the facilities or at
any geologically or hydrologically adjoining property, including any Hazardous
Materials contained in barrels, above or underground storage tanks, landfills,
land deposits, dumps, equipment (whether moveable or fixed) or other containers,
either temporary or permanent, and deposited or located in land, water, sumps,
or any other part of the facilities or such adjoining property, or incorporated
into any structure therein or thereon. The Bank has not permitted or conducted,
nor is the Seller or the Bank aware of, any hazardous activity conducted with
respect to the facilities or any other properties or assets (whether real,
personal, or mixed) in which the Bank has or had an interest except in full
compliance with all applicable Environmental Laws.

 

(f)            There has been no release or, to
Seller’s Knowledge, threat of release, of any Hazardous Materials at or from
the facilities or at any other locations where any Hazardous Materials were
generated, manufactured, refined, transferred, produced, imported, used, or
processed from or by the facilities, or from or by any other properties and
assets (whether real, personal, or mixed) in which the Bank has or had an
interest, or to Seller’s Knowledge, any geologically or hydrologically
adjoining property, whether by the Bank, or any other Person.

 

10

 

(g)           Seller has delivered to Purchaser
true and complete copies and results of any reports, studies, analyses, tests,
or monitoring possessed or initiated by the Bank pertaining to Hazardous
Materials or hazardous activities in, on, or under the facilities, or
concerning compliance by any Company, or any other Person for whose conduct it
is or may be held responsible, with Environmental Laws, a list of all such
reports are set forth in Schedule 3.11.

 

3.12         Insurance. The Companies have been and are insured
with respect to all aspects of their businesses in amounts and against any
risks sufficient to comply with applicable laws. Seller has provided Purchaser
a true, correct and complete list of all policies of insurance covering the
business and operations of the Bank, and the list correctly states the name of
the insurer, the name of each insured party, the type and amount of coverage,
deductible amount, if any, and the expiration date and premium amount of each
policy or bond. All such policies of insurance are listed on Schedule 3.12,
are currently in full force and effect and the Bank has received no written
notice of cancellation or termination for any such policy. All premiums due and
payable on such policies of insurance have been paid.

 

3.13         Related Party Transactions. Except as disclosed in Schedule
3.13, to Seller’s Knowledge, no present or former director or officer of
any Company or five percent (5%) owner of Seller has any financial interest,
direct or indirect, in any vendor, client, or account of, or other outside
business which has transactions with, the Bank involving consideration in
excess of $10,000 over any twelve month period, in the aggregate. None of the
Companies has any agreement or understanding with any person associated with or
employed by any of the Companies which would influence that person not to
remain associated with or employed by the Bank after the Closing or from
serving the Bank after the Closing in a capacity similar to the capacity
presently served.

 

3.14         Taxes. Except as disclosed in Schedule 3.14:

 

(a)           The Bank is a “C” corporation for
federal income tax purposes. The Bank has filed all federal and state income
tax and franchise tax returns required to be filed by it and has paid, or set
up an adequate reserve for the payment of, all taxes required to be paid as
shown on such returns, and the most recent Financial Statements reflect, and
the future financial statements will reflect, an adequate reserve for all taxes
payable by the Bank accrued through the date of such Financial Statements or
future financial statements, as the case may be. Any deferred tax assets
included in such statements shall be recoverable.

 

(b)           There is no pending examination by
the Internal Revenue Service (the “IRS”) or any state taxing authority with
respect to the Bank, and Bank has not executed or filed with the IRS or any
state taxing authority any agreement which is still in effect extending the
period for assessment and collection of any tax, nor is there any deficiency or
refund pending or existing material dispute as to taxes. The Bank has not been
audited by the IRS.

 

(c)           There is no lien for taxes upon the
assets of the Bank, except for statutory liens for taxes not yet delinquent or
the validity of which is being contested in good faith by appropriate

 

11

 

proceedings and, in either
case, only if adequate reserves therefor have been established on the books of
the Bank.

 

(d)           The Bank is not a party to any action
or proceeding by any governmental authority for assessment or collection of
taxes and no claim for assessment and collection of taxes has been asserted
against it.

 

(e)           The Bank has withheld from its
employees and timely paid to the appropriate governmental agency proper and
accurate amounts for all periods through the date hereof in material compliance
with all tax withholding provisions of applicable laws, including, without
limitation, income, social security and employment tax withholding for all
types of compensation.

 

(f)            For the purpose of this Agreement,
the term “tax” (including, with correlative meaning, the terms “taxes” and “taxable”)
shall include all federal, state, local and foreign income, profits, franchise,
gross receipts, payroll, sales, employment, use, personal and real property,
withholding, excise and other taxes, duties or assessments of any nature
whatsoever, together with all interest, penalties and additions imposed with
respect to such amounts.

 

(g)           Any deferred tax assets of the Bank
shall be recoverable within a time period not to exceed five years.

 

3.15         Compliance with Law. Except as set forth in Schedule
3.15, each of the Companies has complied, and is in compliance with
Applicable Laws. Each of the Companies has all Permits. Schedule 3.15
lists all Permits, each of which is valid and in full force and effect, and, to
Seller’s Knowledge, such status would be unaffected by the Closing. To Seller’s
Knowledge: (a) none of the Companies is in violation of any of the
Permits; and (b) there is no pending or threatened proceeding which could
result in the revocation, cancellation or inability to renew any Permit.

 

3.16         Intellectual Property.

 

(a)           Schedule 3.16 sets forth a
true and correct list of all Intellectual Property used or owned by the Bank
and any agreement related to such Intellectual Property.

 

(b)           Except as set forth in Schedule
3.16, the Bank either owns or has the right to use, as they are currently
used (pursuant to a valid, perpetual, fully paid license), the Intellectual
Property used in connection with or necessary to the operation of its business,
without infringing on the proprietary rights or claimed rights of any person.
Except as set forth in Schedule 3.16, the Bank is not obligated to pay
any royalty or other consideration to any person in connection with the use of
its Intellectual Property. Except as set forth in Schedule 3.16, no
written or oral claim has been asserted against the Seller or the Bank to the
effect that such use of any Intellectual Property infringes the rights of any
person.

 

12

 

(c)           Except as set forth on Schedule
3.16:

 

(i)            except with respect to license
agreements disclosed on Schedule 3.16 or on Schedule 3.20, the
Companies have not transferred or encumbered any of the Intellectual Property
used in the Bank’s business in any way;

 

(ii)           to Seller’s Knowledge, the Bank has
not infringed in any way the proprietary rights of any other person or entity;

 

(iii) the Intellectual
Property used by the Bank is not subject to any pending or, to Seller’s
Knowledge, threatened challenge, investigation, proceedings, inquiries,
reviews, and claims of infringement, unfair competition, or other claims of any
entity; and

 

(iv)          the Bank has not given any
indemnification against patent, trademark or copyright infringement to any
entity nor is the Bank restricted by any third party because of any alleged
infringement from using any of the Intellectual Property the Bank uses in its
business.

 

3.17         Bank Accounts. The Bank certifies that it has no bank
accounts or safety deposit boxes, and no person has a power of attorney with
respect to the Bank.

 

3.18         Title to and Condition of Properties. Schedule
3.18 sets forth all real property owned or leased by the Bank and
designates whether such property is owned or leased. Except as set forth in Schedule
3.18, the Bank has good and marketable title to, or a valid leasehold
interest in, held free and clear of any Lien (except Permitted Liens), its
assets and properties of every kind, tangible or intangible, wherever located
and now used in the present conduct of its business. Seller, at its expense,
shall promptly obtain an abstract of title to the real property continued
through the date of this Agreement and deliver it to Purchaser’s attorney for
examination. It shall show merchantable title in the Bank in conformity with
this Agreement, Iowa law and the Title Standards of the Iowa State Bar
Association. The Seller shall make every reasonable effort to promptly perfect
title. All such properties are suitable for their current uses without
violating any Applicable Laws or any private restrictions. Except as set forth
in Schedule 3.18, no financing statement under the Uniform Commercial
Code or similar law has been filed in any applicable jurisdiction naming the
Bank or any of its predecessors, and the Bank is not subject to any agreement
or obligation authorizing any party to file a financing statement of any sort.
All tangible personal property owned, leased or used by the Bank is suitable
for the purpose or purposes for which it is currently being used and has been
maintained in all material respects in accordance with the terms of any
applicable lease and no term of such lease will be materially affected by the
transactions contemplated by this Agreement. Schedule 3.18 sets forth
all tangible personal Property that is subject to a lease.

 

3.19        Employee Benefit Plans.

 

(a)           Except as set forth in Schedule
3.19, the Bank is not a party to an “employee benefit plan,” as defined in Section 3(3) of
the Employee Retirement Income Security Act of 1974 (“ERISA”) which (i) is
subject to any provision of ERISA and (ii) is or was at any time
maintained, administered or contributed to by the Bank or any ERISA Affiliate
(as defined

 

13

 

hereafter) and covers any
employee or former employee of the Bank or any ERISA Affiliate and under which
the Bank or any ERISA Affiliate has any liability. These plans are referred to
collectively in this Agreement as the “Employee Plans.” For purposes of this
section, “ERISA Affiliate” of any person or entity means any other person or
entity which, together with that person or entity, could be treated as a single
employer under Section 414(b), (c) or (m) of the Code, or is an “affiliate,”
whether or not incorporated, as defined in Section 407(d)(7) of
ERISA, of the person or entity.

 

(b)           Schedule 3.19 identifies each
employment, severance or other similar agreement, arrangement or policy and
each plan or arrangement (written or oral) providing for insurance coverage
(including any self-insured arrangements), workers’ compensation, disability
benefits, severance benefits, supplemental unemployment benefits, vacation
benefits, retirement benefits or for deferred compensation, profit-sharing,
bonuses, stock options, stock appreciation or other forms of incentive
compensation, or post-retirement insurance, compensation or benefits which (i) is
not an Employee Plan; (ii) is entered into, maintained or contributed to,
as the case may be, by the Bank or any of its ERISA Affiliates; and (iii) covers
any employee or former employee of the Bank or any of its ERISA Affiliates.
These contracts, plans and arrangements as are described above, copies or
descriptions of all of which have been furnished or made available previously
to Purchaser, are referred to collectively in this Agreement as the “Benefit
Arrangements.” To the Best of Purchasers Knowledge each Benefit Arrangement has
been maintained in compliance with its terms and with requirements prescribed
by any and all statutes, orders, rules and regulations that are applicable
to that Benefit Arrangement.

 

(c)           Except as set forth in Schedule
3.19, there is no liability in respect of post-retirement health and
medical benefits for retired employees of the Bank or any of its ERISA
Affiliates other than medical benefits required to be continued under
applicable law, determined using assumptions that are reasonable in the
aggregate, over the fair market value of any fund, reserve or other assets
segregated for the purpose of satisfying such liability (including for such
purposes any fund established pursuant to Section 401(h) of the
Code). With respect to any Employee Plans which are “group health plans” under Section 4980B
of the Code and Section 607(1) of ERISA, the Bank has complied with
all requirements imposed thereunder such that the Bank and its ERISA Affiliates
have no (and will not incur any) loss, assessment, tax penalty, or other
sanction with respect to any such plan.

 

(d)           Except as set forth in Schedule
3.19, there has been no amendment to, written interpretation or
announcement (whether or not written) by the Bank or any of its ERISA
Affiliates relating to any Employee Plan or Benefit Arrangement which would
increase the expense of maintaining the Employee Plan or Benefit Arrangement
above the level of the expense incurred in respect to the Employee Plan for the
year ended immediately prior to the Closing Date.

 

(e)           Other than as set forth in Schedule
3.19, the Bank is not a party to or subject to any employment contract or
arrangement (written or oral) providing for annual future compensation, or the
opportunity to earn annual future compensation (whether through fixed salary,
bonus, commission, options or otherwise).

 

14

 

(f)            The execution of this Agreement and
consummation of the transactions contemplated hereby do not constitute a
triggering event under any Employee Plan or any other employment contract,
whether or not legally enforceable, which (either alone or upon the occurrence
of any additional or subsequent event) will or may result in any payment (of
severance pay or otherwise), acceleration, increase in vesting, or increase in
benefits to any current or former participant, employee or director of any
Company other than an event that is specifically disclosed on Schedule 3.19.

 

(g)           Any reference to
ERISA or the Code or any section thereof shall be construed to include all
amendments thereto and applicable regulations and administrative rulings issued
thereunder.

 

3.20         Contracts. Schedule 3.20
lists all Contracts of the Bank (a) which either alone or in aggregate
involve the payment or transfer of property (alone or in aggregate with all
other similar contracts) equal to or excess of $10,000; (b) to which any
Related Party is a party; (c) to which any person controlling, controlled
by or under common control with any Related Party or former officer or director
of the Bank is a party; (d) to which any employee, agent or consultant of
the Bank is a party; or (e) is not cancelable upon notice of thirty (30)
days or less without cost or penalty. All such agreements (“Material Contracts”)
are, with respect to those set forth in clause (a), valid and binding on the
parties thereto, are in full force and effect, and are enforceable in
accordance with their terms, and with respect to those set forth in clauses
(b), (c) and (d), are in full force and effect, and are valid and binding
on, and enforceable in accordance with their terms against, the Bank, and the
other parties thereto, in all cases except to the extent enforceability may be
limited by (y) applicable bankruptcy, insolvency, moratorium,
reorganization, fraudulent conveyance or similar laws governing creditors’
rights or (z) general principles of equity, whether considered in a
proceeding at law or in equity. Neither the Bank nor any other party to a
Material Contract is in violation of or in default nor has anything occurred
which could reasonably constitute a default under a Material Contract.

 

3.21        Affiliated Transactions. Schedule
3.21 lists all amounts in excess of $10,000 in the aggregate payable to the
Bank by any Related Party (“Related Party Receivables”) and all amounts in
excess of $10,000 payable by the Bank to any Related Party (“Related Party
Payables”) as of the date of this Agreement. The list includes the payor,
payee, amount, terms of repayment, maturity date and any set off rights of the
payor of each Related Party Receivable and Related Party Payable. Except as
disclosed in Schedule 3.21, to Seller’s Knowledge no Related Party has
any financial interest, direct or indirect, in any vendor, client, or account
of, or other outside business which has transactions with, the Bank.

 

3.22        No Conflict or Default. Other
than as set forth in Schedule 3.22, the execution and performance of
this Agreement by each Company will not: (i) violate any Applicable Laws
or Permits; (ii) create a lien, security interest or encumbrance of any
nature whatsoever with respect to the properties or assets of the Bank; or (iii) give
any entity an interest or rights, including rights of termination, acceleration
or cancellation, with respect to any of the properties, assets, Material
Contracts or business of the Bank.

 

15

 

3.23        Books and Records. The stock
records books, minute books, and other records relating to the assets,
properties, contracts and outstanding legal obligations of the Bank are
complete and correct and have been maintained in accordance with good business
practices.

 

3.24         Regulatory Matters.

 

(a)           The Bank is a state
bank as insured by the FDIC and except as listed on Schedule 3.24, has
been in full compliance with all rules and regulations governing such
institution, except where such noncompliance would not individually or with all
other instances of noncompliance have a Material Adverse Effect. Except as
listed on Schedule 3.24, the Bank is not in violation or breach of any
provision of such rules and regulations, which violation or breach will
not be remedied by the Closing.

 

(b)           Except as listed on Schedule
3.24, neither the Companies, nor their respective officers or directors, is
subject to any cease-and-desist, written directive or other order issued by, or
is a party to any written agreement, consent agreement, memorandum of
understanding or written commitment with, or has adopted any board resolutions
at the request of, any governmental entity that restricts the conduct of its
business or that in any manner relates to its capital adequacy, its credit
policies, its management or its business, nor except as listed on Schedule
3.24 has any Company been advised by any Governmental Authority in writing
that it is considering issuing or requesting any such regulatory restriction.

 

(c)           The Bank has duly
filed with all appropriate governmental authorities in correct form all reports
required to be filed under the rules and regulations governing such
institution, and the Bank has made available to Purchaser accurate and complete
copies of such reports.

 

3.25         Loans.

 

(a)           Schedule 3.25
sets forth an accurate description of all loans as of the date hereof and as of
the Closing Date owned by the Bank or in which the Bank has an interest or for
which the Bank has issued a commitment (the “Loans”).

 

(b)           All Loans comply
with all Applicable Laws, including but not limited to, applicable usury
statutes, underwriting and recordkeeping requirements and the Truth in Lending
Act, the Equal Credit Opportunity Act, and the Real Estate Settlement
Procedures Act, and other applicable consumer protection status and the
regulations thereunder.

 

(c)           All Loans have been
made or acquired by the Bank in accordance with the approved loan policies of
its Board of Directors and all of such Loans are to Seller’s Knowledge
collectible, except to the extent reserves have been made against such Loans in
the Financial Statements. The Bank holds mortgages contained in its loans
portfolio for its own benefit to the extent of its interest shown therein; such
mortgages evidence liens having the priority indicated by their terms, subject,
as of the date of recordation or filing, to such exceptions as are not material
to the collectability of such Loans. All applicable remedies against all
borrowers and guarantors in connection with the Loans are enforceable except as
may be limited by bankruptcy, insolvency, moratorium or other similar laws
affecting creditors’ rights and except as may be

 

16

 

limited by the
exercise of judicial discretion in applying principles of equity. True, correct
and complete copies of Loan delinquency reports as of the date of this
Agreement and the Closing Date prepared by the Bank, which reports include all
Loans delinquent or otherwise in default, are (or will be with respect to such
report as of the Closing Date) attached as Schedule 3.25. Except as set
forth in Schedule 3.25, subject to any reserves on the Financial
Statements, all Loans are with full recourse to the obligors and the Bank has
taken no action which would result in a waiver or negation of any rights or
remedies available against the obligors or guarantors, if any, on any of the
Loans.

 

(d)           Each outstanding
loan participation sold by the Bank was sold with the risk of non-payment of
all or any portion of that underlying loan to be shared by each participant
(including the Bank) proportionately to the share of such loan represented by
such participation without any recourse of such other lender or participant to
the Bank for payment or repurchase of the amount of such loan represented by
the participation or liability under any yield maintenance or similar
obligation. The Bank has properly fulfilled its contractual responsibilities
and duties in any loan in which it acts as the lead lender or servicer and has
complied in all material respects with its duties as required under applicable
regulatory requirements.

 

(e)           The Bank has
properly perfected or caused to be properly perfected all security interests,
liens or other interests in any collateral securing any loans made by it.

 

(f)            Except as set forth
on Schedule 3.25, the Bank does not have properties which have been
repossessed or otherwise acquired in conjunction with a loan in default or at
the time of imminent default.

 

(g)           Each of the
Companies is in compliance with all Applicable Laws pertaining to its or their
lending activities, including, without limitation, the Truth-In-Lending Act and
Regulation Z, the Equal Credit Opportunity Act and Regulation B, the Real
Estate Settlement Procedures Act and Regulation X, the Fair Credit Reporting
Act, the Fair Debt Collection Practices Act, the Office of Foreign Asset
Control rules and regulations and all HUD, Ginnie Mae, Fannie Mae, Freddie
Mac, other investor and mortgage insurance company requirements relating to the
origination, sale and servicing of mortgage and consumer loans.

 

(h)           All United States
Treasury securities, obligations of other United States Government agencies and
corporations, obligations of States of the United States and their political
subdivisions, and other investment securities classified as “held to maturity”
and “available for sale” held by the Bank as reflected in the Financial
Statements, were classified and accounted for in accordance with Statement of
Financial Accounting Standards No. 115 and the intentions of management.

 

3.26         Disclosure. No representation or
warranty made by the Companies contained in this Agreement (including any
schedule, exhibit or attachment hereto) contains or will contain any untrue
statement of material fact or omits or will omit to state any material fact
required to make the statements therein contained not misleading.

 

17

 

3.27         Allowance for Loan Losses.

 

To the best of
Bank’s knowledge:

 

(a)           The allowance for
loan losses shown on the Financial Statements is adequate to provide for
anticipated losses inherent in loans outstanding.

 

(b)           The allowance for
losses in real estate owned, if any, shown on the Financial Statements is or
will be adequate to provide for anticipated losses inherent in real estate
owned by the Bank and the net book value of real estate owned as shown on the
most recent balance sheet included in the Financial Statements is the fair
value of the real estate owned in accordance with Statement of Position 92-3.

 

3.28         Offices and ATMs. Schedule
3.28 sets forth the headquarters of the Bank (identified as such) and, as
of the date hereof, each of the offices and automated teller machines (“ATMs”)
maintained and operated by the Bank (including, without limitation,
representative and loan production offices and operations centers) and the
location thereof. Except as set forth on Schedule 3.28, as of the date
hereof, neither the Bank nor any Subsidiary maintains any other office or ATM
or conducts business at any other location, and the Bank has not applied for or
received permission to open any additional branch or operate at any other
location.

 

3.29         Derivative Transactions. All
Derivative Transactions entered into by the Bank were entered into in
accordance with applicable rules, regulations and policies of applicable
Governmental Authorities, and in accordance with the investment, securities,
commodities, risk management and other policies, practices and procedures
employed by the Bank, and were entered into with counterparties who were
believed at the time to be financially responsible and able to understand
(either alone or in consultation with their advisers) and to bear the risks of
such Derivative Transactions; and the Bank has duly performed all of its obligations
under the Derivative Transactions to the extent that such obligations to
perform have accrued, and, to Seller’s Knowledge, there are no material
breaches, violations or defaults or allegations or assertions of such by any
party thereunder. The Bank has adopted policies and procedures consistent with
the publications of applicable Governmental Authorities with respect to their
derivatives programs.

 

3.30         Trust Powers. The Bank does not
presently maintain or exercise trust powers.

 

3.31         CRA, Anti-Money Laundering, OFAC and
Customer Information Security. The Bank has received a rating of “Satisfactory”
in its most recent examination or interim review with respect to the Community
Reinvestment Act (“CRA”). Except as set forth in Schedule 3.31, the Bank
has not been advised of in writing, or, to Seller’s Knowledge, is not aware of
any facts or circumstances that exist, which would cause the Bank: (i) to
be deemed not to be in satisfactory compliance in any material respect with the
CRA, and the regulations promulgated thereunder, or to be assigned a rating for
CRA purposes by federal or state bank regulators of lower than “satisfactory”;
or (ii) to be deemed to be operating in violation in any material respect
of the Bank Secrecy Act, the Patriot Act, any order issued with respect to
anti-money laundering by the U.S. Department of the Treasury’s Office of
Foreign Assets Control, or any other

 

18

 

applicable
anti-money laundering statute, rule or regulation (collectively, the “anti-money
laundering laws”); or (iii) to be deemed not to be in satisfactory
compliance in any material respect with the applicable privacy of customer
information requirements contained in any federal and state privacy laws and
regulations, including without limitation, in Title V of the Gramm-Leach-Bliley
Act of 1999 and the regulations promulgated thereunder, as well as the
provisions of the information security program adopted by the Bank pursuant to
12 C.F.R. Part 570. The Bank is not aware of any facts or circumstances
which would cause it to believe that any non-public customer information has
been disclosed to or accessed by an unauthorized third party in a manner which
would cause it to undertake any remedial action, except for such facts or
circumstances, individually or in the aggregate, as would not reasonably be
expected to have a Material Adverse Effect. The board of directors of the Bank
has adopted and implemented, an anti-money laundering program that contains
adequate and appropriate customer identification verification procedures that
comply with Section 326 of the Patriot Act and such anti-money laundering
program meets, to Seller’s Knowledge, the requirements in all material respects
of Section 352 of the Patriot Act and the regulations thereunder, and the
Bank has complied in all material respects with any requirements to file
reports and other necessary documents as required by the Patriot Act and the
regulations thereunder.

 

3.32         Investment Management and Related
Activities. Except as set forth in Schedule 3.32, none of the Bank
or its directors, officers or employees is required to be registered, licensed
or authorized under any Applicable Law as an investment adviser, a broker,
dealer, an insurance agency, a commodity trading adviser, a commodity pool
operator, a futures commission merchant, an introducing broker, a registered
representative or associated person, investment adviser representative or
solicitor, a counseling officer, an insurance agent or broker, a sales person
or in any similar capacity with a Governmental Authority.

 

3.33         Total Average Deposits. “Total
Average Deposits” of the Bank shall be in excess of $28,000,000 on average for
the last complete month prior to Closing. “Total Average Deposits” shall be determined
in the same manner as the Bank’s quarterly call reports. Furthermore, the Total
Deposit mix and Total Asset mix shall not materially change from the date
hereof until Closing. The “Total Average Deposits” means total deposits less
all of the following: brokered deposits, internet deposits, inter-company or
Affiliate deposits.

 

3.34         Unauthorized Loans. All
unauthorized loans or other misappropriations made by the former Bank employee
who resigned on August 3, 2007 are listed on the attached Schedule 3.34.

 

3.35         Tier 1 Capital. Tier 1 Capital
as computed in accordance with regulatory accounting standards without
adjustment for FAS 115, shall be in excess of the amount stated in the June 30,
2007 call report filed by the Bank. This minimum amount is $3,930,000.

 

3.36         Life Insurance Redemption. The
redemption of the life insurance policies set forth on Schedule 3.36, are (a) subject
to being redeemed for the amounts set forth on Schedule 3.36; (b) the
forms for redemption of such policies (completed in accordance with all
appropriate instructions) are as set forth on Exhibit C; and (c) if
such forms are filed by the Bank within 10 business days from the date of
closing, the total tax, tax penalty and interest, and redemption fees

 

19

 

associated
with such redemption shall not exceed under any circumstances $141,477. The
Seller agrees to hold the Purchaser harmless from all costs associated with the
early redemption of the insurance polices (including but not limited to any tax
or early redemption penalties and applicable interest or penalty) in excess of
$141,477, as well as any loss of interest incurred between the exercise date of
the redemption and the receipt of the funds from the policy insurer, should such
a gap occur.

 

3.37         As of July 31, 2007, the
self-insured portion of the health account reflected $14,428.00 (“Insurance
Reserve Account”) and was fully accrued and covered all costs, expenses and
claims associated with the health insurance for the company employees (and
their family, if applicable) as of such date.

 

4.             Representations and Warranties
of Purchaser. Purchaser represents and warrants to Seller that:

 

4.01         Corporate Organization.
Purchaser is a corporation duly organized and validly existing under the laws
of the State of Iowa. Purchaser has all requisite power and requisite authority
to own, operate and lease its respective properties and carry on its respective
businesses as now conducted.

 

4.02         Authorization of Agreement.
Purchaser has all requisite power and authority to execute and deliver this
Agreement and to consummate the transactions provided for herein. The execution
and delivery of this Agreement by Purchaser and the performance by it of the
obligations to be performed hereunder have been duly authorized by all
necessary and appropriate action by Purchaser. The execution and delivery of
this Agreement and the other agreements to be executed and delivered pursuant
to this Agreement and the consummation of the transactions contemplated hereby
and thereby do not and will not, with or without the giving of notice or the
passage of time, conflict with, result in or constitute a breach, default,
right to accelerate or loss of rights under, or result in the creation of any
Lien pursuant to, the terms or conditions of Purchaser’s charter documents, any
law, rule, regulation, statute, order, judgment or decree or any contract,
agreement, lease, license or instrument to which Purchaser is a party or by
which Purchaser or its business or assets are bound or affected. This Agreement
is, and each other agreement and document to be executed by Purchaser pursuant
hereto will be when so executed, a valid and binding obligation of Purchaser
enforceable in accordance with its terms except that enforcement may be limited
by bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting creditors’ rights generally and by general equitable principles.

 

4.03         Consents and Approvals. Except
for any approvals, consents or filings required by the appropriate federal
regulator or regulators, Purchaser’s execution, delivery or performance of this
Agreement does not and will not require any consents or approvals of, filings
with, or action by any third party.

 

4.04         Disclosure. No representation or
warranty made by Purchaser contained in this Agreement (including any schedule,
exhibit or attachment hereto) contains or will contain any untrue statement of
material fact or omits or will omit to state any material fact required to make
the statements therein contained not misleading.

 

20

 

5.             Covenants and
Agreements of Purchaser. Purchaser hereby convenants and agrees that:

 

5.01         Record Retention. For a period
of five years following the Closing Date, Purchaser agrees to maintain in a
reasonably accessible place the books and records delivered by the Companies
hereunder, to provide Seller and its representatives reasonable access to such
books and records during normal business hours and to provide copies of such
books and records to Seller or its representatives. Purchaser agrees to notify
Seller prior to disposing of any such books and records before the five year
period specified herein and, upon request made within 60 days after receipt of
such notice, to deliver such books and records to Seller at Seller’s expense.

 

5.02         Efforts to Perform. Purchaser
shall use all commercially reasonable efforts to satisfy the covenants set
forth in this Section 5 and in Section 7 and the conditions precedent
set forth in Sections 8 and 9 of this Agreement in a timely and expeditious
manner.

 

6.                                       Covenants and
Agreements of Seller. Seller hereby covenants and agrees that:

 

6.01         Notice. Seller shall give
Purchaser prompt written notice of: (a) any changes in any of the
information contained in the representations and warranties made in Section 3
or elsewhere in this Agreement or the attached schedules which occurs at or
prior to the Closing; (b) the occurrence of any event which will result,
or has a reasonable prospect of resulting, in a Material Adverse Effect or in
the failure to satisfy a condition specified in Section 8 or 10; or (c) any
notice or other communication from any third person alleging that the consent
of such third person is or may be required in connection with the transactions
contemplated by this Agreement.

 

6.02         Access Prior to Closing. From
the date hereof through the Closing Date, the Companies shall afford Purchaser
and its representatives reasonable access during normal business hours, and in
a manner so as not to interfere in any material respect with the normal
operations of the business of the Bank, to the premises, properties, personnel,
representatives, customers, books and records (including tax records),
contracts and documents of or pertaining to the Bank and its business and such
other additional information with respect thereto as Purchaser shall from time
to time reasonably request.

 

6.03         Indemnification.

 

(a)           Seller covenants and
agrees to indemnify Purchaser against, and to hold Purchaser harmless from, any
and all claims, losses, damage, fines, penalties or liabilities, and all costs
and expenses (including without limitation reasonable legal fees), incurred by
the Purchaser or the Bank resulting from, related to or arising out of: (i) any
breach of any of the representations, warranties, covenants or agreements made
by the Companies in or pursuant to this Agreement, or in any schedule, exhibit,
certificate, financial statement, or other document attached to this Agreement
or delivered pursuant to the terms of this Agreement; (ii) failure of the
Seller to perform any covenant, agreement, obligation or undertaking made by or
imposed upon them pursuant to this Agreement or any exhibit or other document
attached to this Agreement or delivered pursuant hereto; (iii) any

 

21

 

claim against
the Shares of the Bank sold hereunder; (iv) any claim arising out of or in
connection with the any agreements by and between the Seller or the Bank and
Cecorp, Inc related to the Bank’s telephone banking services or otherwise; (v) any
fraudulent or unauthorized loan originated by the employee terminated on August 3,
2007, or any claim or cause of action by such employee against the Bank or (iv) to
the extent that any additional provision is added to the Insurance Reserve
Account after 7/31/07, the purchase price shall be adjusted downward on a
dollar-for-dollar basis, to the extent of any such addition to the reserve and
to the extent that the Bank (or its successor) incurs any health insurance
costs, expenses or claims in connection with the Banks health insurance plan or
plans related to claims arising on or prior to closing, which are not properly
reserved in the Health Insurance Reserve Account at closing, the Seller shall
indemnify and hold the bank and Purchaser harmless for all such costs, expenses
or claims.

 

(b)           Purchaser covenants
and agrees to indemnify Seller against, and to hold Seller harmless from, any
and all claims, losses, damages, fines, penalties or liabilities, and all costs
and expenses (including without limitation reasonable legal fees), incurred by
the Seller resulting from, relating to, or arising out of: (i) any breach
of the representations, warranties, covenants or agreements made by the
Purchaser in or pursuant to this Agreement, or any schedule, exhibit,
certificate, financial statement or other document attached to this Agreement
or delivered pursuant to the terms of this Agreement; or (ii) failure of
the Purchaser to perform any covenant, agreement, obligation or undertaking
made by or imposed upon them pursuant to this Agreement, or any exhibit or
other document attached to this Agreement or delivered pursuant thereto.

 

(c)           All representations,
warranties, covenants, agreements and obligations of the Companies under this
Agreement and any schedule, exhibit, certificate, financial statement or other
document attached to this Agreement or delivered pursuant hereto shall survive
the Closing Date.

 

(d)           Purchaser shall
provide written notice to Seller of any claim for which Purchaser is entitled
to or may seek indemnification within 90 days of discovery by Purchaser of such
claim. Such notice shall state the nature of the claim and the amount of the
claim. Failure to give such notice within 90 days of discovery by Purchaser of
such claim shall in no way abrogate or diminish the Seller’s obligations under
this Section if Seller has or receives knowledge of the existence of any
such claim by any other means or if such failure does not materially prejudice
the Seller’s ability to defend such claim.

 

(e)           Except for claims
arising out of sections 3.01, 3.02, 3.04, 3.36, 3.37, 4.01, 4.02, 6.12 and 7.04
which shall survive until the expiration of the applicable statute of
limitations, no claim may be made after twenty-four (24) months have elapsed
from the Closing Date. In the event that any such claim is made within the
prescribed twenty-four (24) month period, the indemnity relating to such claim
shall survive until such claim is resolved. Claims not made within such
twenty-four (24) period shall cease and no indemnity shall be made therefore.

 

(f)            In the event that
any person or entity not a party to this Agreement shall make a demand or
claim, or file or threaten to file any lawsuit, which demand, claim or lawsuit
may result in any liability, damage or loss to one party hereto of the kind for
which the party is entitled to indemnification, then, after written notice is
provided by the indemnified party to the indemnifying party of such demand,
claim or lawsuit, the indemnifying party shall have the option, at its cost and

 

22

 

expense, to
retain counsel for the indemnified party to defend any such demand, claim or
lawsuit. In the event that the indemnifying party shall fail to respond within
seven (7) days after receipt of such notice of any such demand, claim or
lawsuit, then the indemnified party shall retain counsel and conduct the
defense of such demand, claim or lawsuit as it may, in its discretion, deem
proper, at the cost and expense of the indemnifying party. In effecting the settlement
of any such demand, claim or lawsuit, an indemnified party shall act in good
faith, shall consult with the indemnifying party, and shall enter into only
such settlement as the indemnifying party shall approve. (The indemnifying
party’s approval will be implied if it does not respond within ten (10) days
of its receipt of the notice of such settlement offer).

 

6.04         Conduct of Business. From the
date of this Agreement through the Closing and other than actions contemplated
by this Agreement or necessary to consummate the transactions contemplated
hereby, the Bank shall conduct its business in the ordinary course and
consistent with its past practices including but not limited to compliance with
the Bank’s internal lending policy and procedures, including standards of
creditworthiness, security requirements and lending limits; the Bank shall have
continued to charge off loans in accordance with sound banking practices; the
Bank shall have continued to operate and price deposit offerings in a
reasonable manner as it has done over time in the ordinary course of business;
and the Sellers shall have used their best efforts to operate and preserve the
business, assets, liabilities and organization of the Bank. Without limiting
the generality of the foregoing, the Companies shall not perform or fail to
take any action that would be reasonably likely to result in a breach or
violation of Section 3.07 of this Agreement, and the Sellers covenant and
agree with the Purchaser that from the date hereof until the Closing, the Bank
shall not, without the written consent of Purchaser or except as set forth on Schedule
6.03:

 

(a)           declare or pay any
dividends or make any distributions to its shareholders in cash or in kind;

 

(b)           make any capital
expenditures exceeding $2,000 that are not made in the ordinary course of
business or necessary to maintain existing assets in good repair;

 

(c)           make or permit any
change in its capital stock or capital structure;

 

(d)           increase any
salaries or other benefits to employees or pay any bonuses, except for the
normal and customary merit increases that became effective October 1, 2007
as set forth in the Schedules attached hereto;

 

(e)           increase the current
levels of employment level beyond the existing Full Time Equivalent of 12,
provided however that the Seller shall consult with the Purchaser prior to
replacing any such employee;

 

(f)            acquire or dispose
of material assets other than in the ordinary course of business;

 

(g)           extend or renew
loans or advance additional sums to a borrower whose loans, in whole or in
part, have been classified or listed as special mention, or included on a
problem or watch list, by any regulatory authority or the Bank;

 

23

 

(h)           make loans other
than in accordance with sound management practices; 

 

(i)            Intentionally
omitted;

 

(j)            sell investment
securities prior to maturity;

 

(k)           purchase investment
securities, except for federal funds without Purchaser’s prior consent;

 

(l)            acquire or agree to
acquire, by merging or consolidating with, or by purchasing a substantial
equity interest in or a substantial portion of the assets of, or by any other
manner, any business or any corporation, partnership, association or other
business organization or division thereof or otherwise acquire any assets,
other than in connection with foreclosures, settlements in lieu of foreclosure
or troubled loan or debt restructurings or in the ordinary course of business
consistent with past practices;

 

(m)          take any action that
is intended or may reasonably be expected to result in any of its
representations and warranties set forth in this Agreement being or becoming
untrue in any material respect;

 

(n)           other than
activities in the ordinary course of business consistent with past practice,
sell, lease, encumber, assign or otherwise dispose of, or agree to sell, lease,
encumber, assign or otherwise dispose of, any of its assets, properties or
other rights or agreements;

 

(o)           other than in the
ordinary course of business consistent with past practice, incur any
indebtedness for borrowed money or assume, guarantee, endorse or otherwise as
an accommodation become responsible for the obligations of any other
individual, corporation or other entity;

 

(p)           file any application
to relocate or terminate the operations of any of its banking offices;

 

(q)           incur any
indebtedness for borrowed money or assume, guaranty, endorse or otherwise as an
accommodation become responsible for the obligations of any other person,
except for (i) in connection with banking transactions in the ordinary
course of business; or (ii) short-term borrowings (including refinancings
thereof) made at prevailing market rates and terms consistent with prior
practice; or (iii) interbank borrowings made in the ordinary course of its
banking business;

 

(r)            compromise or
otherwise settle or adjust any assertion or claim of a material deficiency in
taxes (or interest thereon or penalties in connection therewith), extend the
statute of limitations with any tax authority or file any pleading in court in
any tax litigation or any appeal from an asserted deficiency, or file or amend
any income or other material federal, foreign, state or local tax return, or
make any material tax election that is inconsistent with Seller’s current tax
election practices or that concerns a matter as to which Seller has no current
tax election practice;

 

24

 

(s)           make any investment
by purchase of stock or securities (including an Investment Security),
contributions to capital, property transfers or otherwise in any other Person;

 

(t)            amend, modify or
renew any Bank Contract or enter into any agreement or contract that would be
required to be a Contract disclosed hereunder;

 

(u)           make, acquire a
participation in, or reacquire an interest in a participation sold of, any
loan, commitment to make a loan or other extension of credit;

 

(v)           grant any employee a severance
payment or bonus in connection with said employee’s termination.

 

(w)          agree to do any of the foregoing.

 

6.05         Efforts to Perform. The
Companies shall use all reasonable efforts to satisfy the covenants set forth
in this Section 6 and in Section 7 and the conditions precedent set
forth in Sections 8 and 10 of this Agreement in a timely and expeditious
manner.

 

6.06         Exclusivity. In consideration of
the substantial expenditures of time and expense to be undertaken by Purchaser
in connection with the consummation of the transactions contemplated by this
Agreement, for a period ending on the earlier of (a) March 30, 2008, (b) the
termination of this Agreement, (c) the date (i) Purchaser or one of
its Affiliates submits a notice to the appropriate federal regulator or
regulators withdrawing its application to acquire control of the Bank or (ii) the
appropriate federal regulator or regulators notify Seller, the Bank, Purchaser
or one of Purchaser’s Affiliates in writing that the appropriate federal
regulator or regulators will not approve the application to acquire control of
the Bank filed by Purchaser; or (d) the Closing, the Companies shall deal
exclusively with Purchaser with respect to the sale of the Shares, the business
of the Bank, or of the issuance of the equity interests of, or any assets or
properties of, the Bank. In addition, during such time period, Seller shall not,
and shall direct the Companies’ officers, directors, financial advisors,
accountants, attorneys, and other Affiliates (collectively, together with the
Company, the “Company Group”) to not (a) solicit submissions of proposal
or offers from any person or entity other than Purchaser relating to any
acquisition or purchase of all or any part of the equity interests, assets or
properties of the Bank, the sale or issuance of any equity interests of the
Bank or any entity formed by the Bank or any Affiliate of the Bank to which any
of the equity interests or any assets or properties of the Bank may be
contributed, or any merger or consolidation of the Bank or of any entity formed
by the Bank or any Affiliate of the Bank to which any of its business, assets or
properties may be contributed (each an “Acquisition Proposal”); or (b) participate
in any discussions or negotiations regarding, or furnish any information to any
person or entity other than Purchaser, or otherwise cooperate in any way or
assist, facilitate, or encourage any Acquisition Proposal by any person or
entity other than Purchaser; provided, however, nothing herein shall prohibit
any director of any Company from exercising his or her fiduciary duties with
respect to any unsolicited acquisition inquiries.

 

6.07         Approval of Shareholders. As
promptly as practicable after the execution of this Agreement, Seller shall
obtain valid and effective written consents in lieu of a meeting of the

 

25

 

holders of the
minimum number of shares of Seller’s capital stock required to approve this
Agreement and the transactions contemplated by this Agreement (in either case,
the “Shareholder Approval”). Seller shall use its commercially reasonable
efforts to solicit and secure the Shareholder Approval.

 

6.08         Removal of Loans. Prior to the
Closing, Seller shall cause all loans listed on Exhibit A to be
sold at face value (including all principal and accrued interest). In addition,
Purchaser shall have the right to inspect and review all loans and other credit
commitments purchased or initiated by the Bank on or after 8/31/07 (the “Post
Due-Diligence Loans”). Purchaser shall have the right to notify the Seller in
writing ten (10) days prior to the closing of those Post Due Diligence
Loans that it deems unacceptable (in its sole and absolute discretion) and the
Bank and Seller shall cause such unacceptable loans be sold at face value
(including all principal and accrued interest) on or prior to the Closing. No
loans will be made during the ten (10)-day period prior to Closing.

 

6.09         Life Insurance. Intentionally
Omitted

 

6.10         Non-Solicitation. From and after
the Closing Date until the second anniversary of the Closing Date, Seller shall
not, directly or indirectly, (1) solicit, induce or influence to hire, any
individual who is employed by the Bank (other than Gene Richardson) as
of the Closing Date; provided, however, that
neither Seller nor its affiliates shall be prohibited from hiring or otherwise
employing any such individual who shall not have been specifically solicited
for such employment by Seller or its affiliates, (2) solicit, induce or
influence, or attempt to solicit, induce or influence, any banking business of
any borrower or depositor of the Bank as of the Closing Date; provided, however, that neither Seller nor
its affiliates shall be prohibited from accepting unsolicited business from any
such borrower or customer of Bank, or (3) establish a de novo branch or other banking office in
any of the following counties: Adair, Guthrie, Madison, Greene and that portion
of Dallas Counties that is west of Highway 169. From and after the Closing Date
until the second anniversary of the Closing Date, Purchaser shall not, directly
or indirectly (including through the Bank), (1) solicit, induce or
influence to hire, any individual who is employed by Seller as of the Closing
Date, provided, however, that
neither Purchaser nor its affiliates shall be prohibited from hiring or
otherwise employing any such individual who shall not have been specifically
solicited for such employment by Purchaser or its affiliates, or (2) solicit,
induce or influence, or attempt to solicit, induce or influence, any banking
business or any borrower or depositor of the Seller or its affiliates
(including Meta Bank) as of the Closing Date; provided,
however, that neither Purchaser nor its affiliates shall be
prohibited from accepting unsolicited business from any such borrower or
customer of Seller or its affiliates.

 

6.11         Bank Merger and Data Processing Conversion.
Seller agrees to cause the Bank to take such action as is necessary and
appropriate to merge the Bank with and into Purchaser’s subsidiary bank,
Rolling Hills Bank & Trust, immediately after the consummation of the
purchase. Furthermore, until such time after closing as the Bank can convert
its data processing over to the Purchaser’s Data Processing system, the Seller
agrees to continue to provide to the Bank its existing data processing services
upon the same terms and conditions and prices as the Seller currently provides
such services; provided however that the Seller shall not be required to
provide such data processing services more than 90 days after closing.

 

26

 

6.12         2007 Tax Returns and Tax Payments.
The Seller shall cause the Bank to file its 2007 Iowa Franchise Tax return for
the period ended September 30, 2007, and corresponding Iowa net operating
loss carrybacks amendments to prior year Franchise Tax Returns to use all
available loss carry backs and apply for refunds where possible. Such Franchise
Tax Returns shall be filed prior to the closing date. At closing the Seller,
Bank and Purchaser shall examine the tax accruals between the Seller and the
Bank to determine appropriate accrual to be applied at closing. After agreement
by the Parties of the proper accrual of both federal and state income and/or
franchise taxes (in a manner consistent with GAAP, except that no asset shall
be recorded for Iowa franchise tax refunds unless those refunds are reported on
franchise tax returns filed prior to the closing date), the Seller and the Bank
shall transfer funds to bring the inter company federal tax accrual account to
-0- at closing. For example, if the Seller owes the Bank an amount equal to $100,000
at closing for excess payment or tax benefits used by the Company, the Company
would pay to the Bank $100,000 prior to closing. Furthermore, if the Bank owed
the Company $75,000 at closing for accrued taxes payable, the Bank will pay
$75,000 to the Company prior to closing.

 

7.                                       Covenants of
Both Parties. Each party hereby covenants and agrees that:

 

7.01         Confidentiality.

 

(a)           Subject to Section 7.02,
no party shall at any time directly or indirectly copy, disseminate or use, for
such party’s own benefit or the benefit of any third party, any information
that has been disclosed in confidence by the other party (“Confidential
Information”), regardless of how the Confidential Information was acquired,
except for the disclosure or use of the Confidential Information: (x) upon
the advice of counsel required by law or legal process or (y) authorized
in writing by the party that owns the Confidential Information. The parties may
disclose each other’s Confidential Information to their respective responsible
officers, directors or employees (collectively, “Employees”) with a bona fide need-to-know, but only to the
extent necessary to carry out the purpose for which the Confidential
Information was disclosed. The parties each agree to instruct all such
Employees not to disclose such Confidential Information to third parties,
without the prior written permission of the party disclosing such Confidential
Information. Each party agrees to comply with all applicable laws, including
without limitation, the Gramm-Leach-Bliley Act of 1999, in connection with
disclosing any Confidential Information. Notwithstanding anything to the
contrary contained in this paragraph, Confidential Information does not include
information: (i) generally available to the public other than as a direct
or indirect result of a disclosure by a party in violation of this Agreement; (ii) that
is already in the receiving party’s possession at the time of the disclosing
party’s disclosure of such Confidential Information, except as a result of the
receiving party’s or any third party’s breach of a legal obligation; (iii) that
becomes known to the party through disclosure by sources other than another
party having the legal right to disclose such information; or (iv) is
independently developed by the party without reference to or reliance upon the
Confidential Information, where the burden of proof will be on the party to
demonstrate independent development from its written records. Each party
acknowledges that all of the Confidential Information is and shall remain the
exclusive proprietary property of the party that discloses it, whether or not
disclosed in connection with this Agreement.

 

27

 

(b)           If this Agreement is
terminated, upon the written request of the disclosing party, the receiving
party shall return to the disclosing party, within ten days, all Confidential
Information and all copies thereof whether in writing or other tangible form.
Where impractical to return copies, such copies shall be destroyed. Within such
ten-day period, an affidavit of the receiving party shall be delivered to the
disclosing party attesting to the return and destruction of all Confidential
Information.

 

(c)           Each party
acknowledges and agrees that remedies at law for a violation or attempted
violation of any of the obligations in this Section 7.01 would be
inadequate and would cause immediate irreparable harm to the other parties, and
agrees that in the event of any such violation or attempted violation, each
party is entitled to a temporary restraining order, temporary and permanent
injunctions, and other equitable relief, without the necessity of posting any
bond or proving any actual damage, in addition to all other rights and remedies
which may be available.

 

7.02         Announcement. No party to this
Agreement will issue any press release or make any other public disclosures
concerning the transactions contemplated hereby or the terms of this Agreement
without the prior written consent of the other parties. Notwithstanding the above,
nothing in this Section 7.02 will preclude any party from making any
disclosures required by law or necessary and proper in conjunction with the
filing of any tax return or other document required to be filed with any
governmental entity.

 

7.03         Efforts; Consents and Approvals.

 

(a)           General. Each
party shall use its commercially reasonable efforts to take all actions
promptly and do all things necessary, proper or advisable to perform as
required by this Agreement, including, without limitation, using all
commercially reasonable efforts to cause the satisfaction of all conditions set
forth in this Agreement for which the party is responsible as soon as
reasonably practicable and to prepare, execute, acknowledge or verify, deliver,
and file the additional documents, and take or cause to be taken the additional
actions, as any party may reasonably request to carry out the purposes or
intent of this Agreement.

 

(b)           Consents;
Approvals. The parties each will cooperate with one another and will use
all commercially reasonable efforts to prepare all necessary documentation to
effect promptly all necessary filings and to obtain all necessary permits,
consents, approvals, orders and authorizations of or any exemptions by, all
Persons and Governmental Authorities necessary to consummate the transactions
contemplated herein. Each party hereto will keep the other parties hereto
apprised of the status of any inquiries made of such party by any Governmental
Authorities or members of their respective staffs with respect to this
Agreement or the transactions contemplated hereby.

 

7.04         Taxes. The following provisions
shall govern the allocation of responsibility as between Seller and Purchaser
for certain Tax matters following the Closing Date:

 

(a)           Pre-Closing and
Post-Closing Taxes. Seller shall indemnify Purchaser and hold it harmless
from and against any loss, claim, liability, expense, or other damage
attributable to all Taxes, or the nonpayment thereof, of the Bank for all
taxable periods ending on or before the

 

28

 

Closing Date and the portion
through the end of the Closing Date for any taxable period that includes, but
does not end on, the Closing Date (“Pre-Closing Tax Period”). Purchaser shall,
and shall cause Bank to, indemnify Seller, hold it harmless from and against
any loss, claim, liability, expense, or other damage attributable to all Taxes,
or the nonpayment thereof, of the Bank for all taxable periods ending after the
Closing Date and the portion including after the Closing Date for any taxable
period that includes, but does not begin with, the Closing Date (“Post-Closing
Tax Period”). In the case of any taxable period that includes, but does not end
on, the Closing Date (a “Straddle Period”), the amount of any Taxes based on or
measured by income or receipts of the Bank for the Pre-Closing Tax Period, or
any personal property or real estate Taxes, shall be determined based on an
interim closing of the books as of the close of business on the Closing Date
and the amount of other Taxes of the Bank for a Straddle Period that relates to
the Pre-Closing Tax Period shall be deemed to be the amount of such Tax for the
entire taxable period multiplied by a fraction, the numerator of which is the
number of days in the taxable period ending on the Closing Date, and the
denominator of which is the number of days in such Straddle Period.

 

(b)           Responsibility for Filing
Post-Closing Tax Returns. Purchaser shall prepare or cause to be prepared
and file or cause to be filed all Tax Returns for the Bank that are filed after
the Closing Date (other than income Tax Returns with respect to periods for
which a consolidated, unitary or combined income Tax Return of Seller shall
include the operations of the Bank and any separate company Iowa returns
required to be filed for the Bank for the tax period ending at or before the
Closing Date. Purchaser and Seller shall cooperate fully, as and to the extent
reasonably requested by the other Party, in connection with the filing of Tax
Returns pursuant to this Section and any audit, litigation or other
proceeding with respect to Taxes. Such cooperation shall include the retention
and (upon the other Party’s request) the provision of records and information
that are reasonably relevant to any such audit, litigation, or other proceeding
and making employees available on a mutually convenient basis to provide
additional information and explanation of any material provided hereunder.
Purchaser and Seller shall (A) retain all books and records with respect
to Tax matters pertinent to the Bank relating to any taxable period beginning
before the Closing Date until the expiration of the three year (3) statute
of limitation (and, to the extent notified by Seller or Purchaser, any
extensions thereof) of the respective taxable periods, and to abide by all
record retention agreements entered into with any taxing authority; and (B) give
the other Party reasonable written notice prior to transferring, destroying, or
discarding any such books and records and, if the other Party so requests,
Purchaser or Seller, as the case may be, shall allow the other Party to take
possession of such books and records.

 

8.             Conditions Precedent to Both Parties’ Obligations.
The respective obligations of each party to this Agreement to consummate and
effect the transactions contemplated by this Agreement shall be subject to
fulfillment at the Closing of each of the following conditions:

 

8.01         No Action.  No action
or proceeding before any Governmental Authority shall be pending or threatened
wherein a judgment, decree or order would restrain, prohibit or invalidate any
of the transactions contemplated by this Agreement or cause the contemplated
transactions to be declared unlawful or rescinded.

 

29

 

8.02         Corporate Action. All corporate action necessary
to authorize the execution and delivery of this Agreement and consummation of
the transactions contemplated by this Agreement including, without limitation,
that the Agreement shall have been validly approved and adopted by the affirmative
vote of the holders of a majority of the outstanding shares of the capital
stock of Seller entitled to vote thereon and whose approval is required under
applicable law.

 

8.03         Government Approvals. Any governmental or other
approvals or review of this Agreement or the transactions contemplated by this
Agreement required under any Applicable Laws to consummate the transactions
contemplated by this Agreement have been received, including, without
limitation, the approval of the appropriate federal regulator or regulators to
the change in ownership of the Bank, without the imposition of any condition to
that approval which would have a material adverse effect on Purchaser or
otherwise render consummation of the transactions contemplated by this Agreement
unduly burdensome to Purchaser (as determined in Purchaser’s reasonable
discretion).

 

8.04.        Assignment of Rights. Prior to the Closing of the
transactions contemplated herein, the Bank shall assign to the Seller all of
its right, title and interest in all loans, present or past, made to entities
set forth on Schedule 8.04 (which Seller represents and warrants that said
loans (a) are associated with Dan Nelson, Louis Pearlman and/or Stuart Car
Wash, Inc.; and (b) were written off from the Banks books prior to June 30,
2007). The assignment shall include but not be limited to insurance settlements
and other recoveries/compensation. The form and substance of such assignment
shall be mutually agreeable to both the Seller and Purchaser.

 

9.             Conditions Precedent to Seller’s Obligations.   The
obligations of Seller under this Agreement are, at the option of Seller,
subject to the fulfillment at the Closing of each of the following conditions:

 

9.01         Accuracy of Representations and Warranties.   The
representations and warranties of Purchaser contained in this Agreement shall
be true and correct in all respects as of the time immediately prior to the
Closing as though made on and as of such time (other than those representations
and warranties that address matters only as of a particular date or with
respect to a specific period of time, which need only be true and correct as of
such date or with respect to such period), except where the failure or failures
of all such representations and warranties to be so true and correct, either
individually or in the aggregate, do not create a material adverse effect with
respect to Purchaser. Notwithstanding the foregoing, the provisions of Section 4.01
and 4.02 shall be true and correct in all respects.

 

9.02         Performance. Purchaser shall have performed in
all material respects all of its obligations and shall have complied in all
material respects with all agreements and covenants required by this Agreement
to be performed or complied with by it on or before the Closing Date.

 

9.03         Officer’s Certificate.   Purchaser shall
have furnished a certificate, dated the date of the Closing and signed by a
duly authorized officer of Purchaser certifying that the conditions set forth
in Sections 9.01 and 9.02 have been fulfilled.

 

30

 

9.04         Consideration. Purchaser shall have at or prior
to the Closing delivered or caused to be delivered to Seller the Closing Cash
Payment in accordance with Section 2.03(c) above.

 

9.05         Deliveries on or Prior to Closing. Purchaser
shall have delivered the following documents at or prior to the Closing:

 

(a)           certified copies of resolutions
adopted by the Board of Directors of Purchaser authorizing the purchase of the
Shares in accordance with this Agreement and compliance with the terms hereof;

 

(b)           a certificate of status or good
standing, as applicable, for Purchaser issued by the Iowa Secretary of State
dated within one week of the Closing Date;

 

9.06         Other Documents. Purchaser shall have delivered to
Seller such other documents as Seller may reasonably request for purposes of (a) evidencing
the satisfaction of any condition referred to in section 9; or (b) otherwise
facilitating the consummation or performance of any of the transactions
contemplated by this Agreement.

 

10.           Conditions Precedent to Purchaser’s Obligations. The
obligations of Purchaser under this Agreement are, at the option of Purchaser,
subject to the fulfillment at the Closing of each of the following conditions:

 

10.01       Accuracy of Representations and Warranties. The
representations and warranties of the Companies contained in this Agreement
shall be true and correct in all respects as of the time immediately prior to
the Closing as though made on and as of such time (other than those
representations and warranties that address matters only as of a particular
date or only with respect to a specific period of time, which need only be true
and correct as of such date or with respect to such period), except where the
failure or failures of all such representations and warranties to be so true
and correct, either individually or in the aggregate, do not create a Material
Adverse Effect. This Section 10.01 shall give effect to any additions,
deletions or other modifications to the Disclosure Schedule that may be
included in any supplemental Disclosure Schedule delivered by the Companies to
Purchaser during the time between the execution of this Agreement and the
Closing if (a) such additions, deletions or other modifications were
accepted in writing by Purchaser; (b) such additions, deletions or other
modifications do not, together with any other breaches of the representations
and warranties of the Companies contained in this Agreement, individually or in
the aggregate, create a Material Adverse Effect; or (c) the Closing
occurs. Notwithstanding the foregoing, the provisions of Sections 3.01, 3.02,
3.33, 3.35, 6.08, 6.09 and 6.10 shall be true and correct in all respects.

 

10.02       Performance.  The Companies shall have
performed in all material respects all obligations and shall have complied in
all material respects with all agreements and covenants required by this
Agreement to be performed or complied with by them on or before the Closing
Date; provided, however, a breach
of Section 6.01 hereof shall not constitute a basis for asserting a
failure of satisfaction of this Section 10.02 unless such breach was
willful.

 

31

 

10.03       Material Adverse Effect.  Since the date
hereof, a Material Adverse Effect shall not have occurred.

 

10.04       Officer’s Certificate. Purchaser shall have
received a certificate signed by a duly authorized officer of each Company
certifying that all of the conditions in Sections 10.01, 10.02 and 10.03 have
been satisfied.

 

10.05       Due Diligence.   The Purchaser shall complete
its due diligence review of the relationship of the Bank with its employees,
customers, facilities and equipment within 20 days of the date of this
agreement, which review shall be satisfactory to Purchaser in its sole discretion.
Additionally the Purchaser shall have thirty (30) days to perform environmental
due diligence on the Bank’s properties, which review shall be satisfactory to
Purchaser in its sole discretion. If the Purchaser determines not to proceed
with this transaction as a result of such due diligence, the Purchaser shall
deliver notice of termination to the Seller on or prior to the expiration of
the time periods set forth above and neither party shall have any liability
pursuant to this Agreement.

 

10.06       Deliveries on or Prior to Closing.   The
Companies, as applicable, shall have delivered or caused to be delivered to
Purchaser the following documents at or prior to the Closing:

 

(a)           Purchaser shall have received a
certificate executed by Seller which shall (i) attach a copy of
resolutions of the Board of Directors and minutes of the shareholders meeting
of Seller authorizing Seller to enter into and consummate this Agreement and
the transactions contemplated hereby, certified to be true and correct and (ii) attach
current good standing certificates for each Company from the jurisdiction in
which such Company is incorporated.

 

(b)           Seller shall have delivered to
Purchaser all stock certificates evidencing the Shares duly endorsed in blank
or accompanied by stock powers duly endorsed in blank, in proper form for
transfer, and with any required stock transfer stamps affixed.

 

(c)           Seller shall have delivered to
Purchaser a resignation duly executed by each of the directors of the Bank.

 

(d)           Seller shall have delivered a waiver
and release, duly executed by Seller, waiving all Claims it may have against
the Bank and each of its officers and directors in a form and substance
reasonably acceptable to Purchaser.

 

(e)           Purchaser shall have received an
opinion of Seller’s legal counsel, in the form and substance of Exhibit B
attached hereto.

 

10.07       Other Documents. Purchaser shall have received
such other documents as Purchaser may reasonably request for the purpose of (i) evidencing
the satisfaction of any condition referred to in this Section 10; (ii) vesting
in Purchaser good and marketable title to the Shares free and clear of all
Liens; or (iii) otherwise facilitating the consummation or performance of
any of the transactions contemplated by this Agreement.

 

32

 

11.           Termination and Waiver.

 

11.01       Termination. This Agreement
may be terminated as follows:

 

(a)           by mutual written consent of each
Company and Purchaser;

 

(b)           by Purchaser:

 

(i)            if any condition set forth in Section 10
of this Agreement has not been satisfied or waived in writing (if capable of
waiver) and the satisfaction of such condition has become impossible, unless
the failure to satisfy such condition is due to a material breach of this
Agreement by Purchaser;

 

(ii)           if any representation or warranty
made by the Companies is discovered to be or to have become untrue, incomplete
or misleading and such breach (a) would result in the failure to satisfy
the condition set forth in Section 10.01 hereof and (b) if capable of
cure, remains uncured for a period of thirty (30) days after notice of such
breach; or

 

(iii)          if a Company shall have breached one or more agreements or
covenants contained in this Agreement in any respect and such breach (a) would
result in the failure to satisfy the condition set forth in Section 10.02
hereof and (b) if capable of cure, remains uncured for a period of thirty
(30) days after notice of such breach.

 

(c)           by Seller:

 

(i)            if any condition set forth in Section 9
of this Agreement has not been satisfied or waived in writing (if capable of
waiver) and the satisfaction of such condition has become impossible, unless
the failure to satisfy such condition is due to a material breach of this
Agreement by a Company;

 

(ii)           if any representation or warranty
made by Purchaser is discovered to be or to have become untrue, incomplete or
misleading and such breach (a) would result in the failure to satisfy the
condition set forth in Section 9.01 hereof, and (b) if capable of
cure, remains uncured for a period of thirty (30) days after notice of such
breach; or

 

(iii)          if Purchaser shall have breached one or more agreements or
covenants contained in this Agreement in any respect and such breach (a) would
result in the failure to satisfy the condition set forth in Section 9.02
hereof, and (b) if capable of cure, remains uncured for a period of thirty
(30) days after notice of such breach.

 

(d)           by either Purchaser or Seller:

 

(i)            if any condition set forth in Section 8
of this Agreement has not been satisfied and the satisfaction of such
conditions has become impossible, unless the failure to satisfy such condition
is due to a breach of this Agreement by the party seeking termination;

 

33

 

(ii)           if the Closing has not occurred on or
before April 30, 2008, unless the failure of the Closing to occur on or
before such date is due to a breach of this Agreement by the party seeking
termination;

 

(iii)          if the Board of Directors of Seller, in accordance with its
fiduciary duties receives and accepts another Acquisition Proposal pursuant to
the terms of Section 6.06 above and such Acquisition Proposal was received
and accepted by Seller’s Board of Directors prior to approval of this Agreement
by the shareholders of Seller in accordance with Section 6.07 above.

 

11.02       Effect of Termination. In the event of a valid
termination of this Agreement as provided in Section 11.01 of this
Agreement, this Agreement shall forthwith become void and there shall be no
liability or obligation on the part of Purchaser or the Companies, or their
respective officers, directors or owners or Affiliates; provided, however, that
the provisions of Sections 7.01, 7.02, this Section 11.02, and Section 12
shall remain in full force and effect and shall survive any termination of this
Agreement pursuant to this Section 11; provided further that nothing
herein shall relieve a party from liability for a breach of this Agreement
prior to such termination.

 

12.           Miscellaneous.

 

12.01       Amendment and Severability. This Agreement may be
amended only by a written agreement of the parties hereto. If any provision,
clause or part of this Agreement or the application thereof under certain
circumstances, is held invalid, the remainder of such provision and this Agreement,
or the applications of each provision, clause or part under other
circumstances, shall not be affected thereby.

 

12.02       Waiver. The failure of Purchaser or Seller to insist,
in any one or more instances, upon performance of any of the terms or conditions
of this Agreement, shall not be construed as a waiver or relinquishment of any
rights granted hereunder or the future performance of any such term, covenant
or condition.

 

12.03       Notices. Any notice to be given hereunder shall be
deemed given and sufficient if in writing, when personally delivered, or three
days after being deposited in the U.S. mail, postage prepaid, by Registered or
Certified mail, or when deposited with Federal Express, United Parcel Service,
or Airborne Express for delivery by overnight mail, or when sent by facsimile
actually received by the receiving facsimile machine,

 

in the case of the Seller or
the Bank, to:

 

Meta Financial Group, Inc.

Attention: Benjamin R. Guenther

121 East Fifth Street

Storm Lake, IA 50588

Fax: (712) 749-7502

 

34

 

	
  with a copy to:

  	
   

  	
  Gary Armstrong

  
	
   

  	
   

  	
  Mack Hansen Gadd Armstrong
  Brown

  
	
   

  	
   

  	
  316 East Sixth Street

  
	
   

  	
   

  	
  Storm Lake, IA 50588

  
	
   

  	
   

  	
  Fax: (712) 732-7578

  
	
   

  	
   

  	
   

  
	
  and, in the case of
  Purchaser to:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Anita Bancorporation

  
	
   

  	
   

  	
  Attention: Chuck Edwards

  
	
   

  	
   

  	
  1307 East Seventh Street

  
	
   

  	
   

  	
  Atlantic, IA 50022

  
	
   

  	
   

  	
  Fax: (712)243-1423

  
	
   

  	
   

  	
   

  
	
  with a copy to:

  	
   

  	
  BrownWinick Law Firm

  
	
   

  	
   

  	
  Attn: John D. Hunter

  
	
   

  	
   

  	
  4500 Westown Parkway,
  Suite 277

  
	
   

  	
   

  	
  West Des Moines, IA
  50266-6717

  
	
   

  	
   

  	
  Facsimile No. (515)
  323-8520

  

 

or to such other address as
Sellers or Purchaser may designate by notice to the other given in accordance
with this Section 12.03.

 

12.04       Benefit. This Agreement shall be binding upon and inure
to the benefit and burden of and shall be enforceable by the parties, and their
successors and permitted assigns. This Agreement may not be assigned by any
party without the written consent of the other parties. Except as provided in Section 5.03
above, no person not a party to this Agreement shall be entitled to any rights
of enforcement or otherwise under this Agreement.

 

12.05       Specific Performance. In the event of any controversy
concerning the rights or obligations under this Agreement, such rights or
obligations shall be enforceable in a court of equity by a decree of specific
performance. Such remedy shall, however, be cumulative and nonexclusive and
shall be in addition to any other remedy which the parties may have.

 

12.06       Dispute Resolution. This Agreement shall be governed by
the laws of the State of Iowa and the Federal laws of the United States without
giving effect to any rule or provision thereof which would cause the
application of the law of any other state. Any controversy, claim or dispute
arising hereunder or related hereto shall be heard in any court located in the
United States District Court for the Southern District of Iowa. Each of the
parties hereby consents to such jurisdiction and waives any claim of
inconvenient forum.

 

12.07       Counterparts. This Agreement may be signed in any number
of counterparts, and the signatures delivered by telecopy, each of which shall
be an original, with the same effect as if the signatures thereto and hereto
were upon the same instrument and delivered in person. Signatures delivered by
facsimile or in portable document format (“pdf”) shall be binding for all
purposes hereof.

 

35

 

12.08       Entire Agreement. This Agreement (including the
schedules and exhibits referred to herein which are hereby incorporated by
reference) and the other agreements executed simultaneously herewith constitute
the entire agreement of the parties with respect to the subject matter hereof
and supersede all prior agreements, understandings, and negotiations, written
and oral, between the parties with respect to the subject matter of this
Agreement. Except as explicitly set forth herein, neither this Agreement nor
any provision hereof is meant to confer upon any person other than the parties
hereto any rights or remedies hereunder.

 

12.09       Captions. The captions included herein are included for
convenience of reference only and shall not be considered in the construction
or interpretation hereof.

 

12.10       Construction. Each party having participated in the
negotiation and preparation of this Agreement and having been represented by
counsel of its choosing, there shall be no presumption that any ambiguities
herein be construed against any particular party. When a reference is made in
this Agreement to sections, exhibits or schedules, such reference shall be to a
section of or exhibit or schedule to this Agreement unless otherwise indicated.
The table of contents and indices contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement. Whenever the words “include,” “includes” or “including” are
used in this Agreement, they shall be deemed to be followed by the words “without
limitation.”

 

IN WITNESS WHEREOF, the
parties have executed this Agreement as of November 27, 2007.

 

36

 

	
  PURCHASER:

  	
  SELLER:

  
	
   

  	
   

  
	
  ANITA
  BANCORPORATION

  	
  META
  FINANCIAL GROUP, INC.

  
	
   

  	
   

  
	
  BY

  	
  /s/ Charles N. Edwards

  	
   

  	
  BY

  	
  /s/ James S. Haahr

  	
   

  
	
   

  	
  (signature)

  	
   

  	
   

  	
  (signature)

  	
   

  
	
   

  	
   

  
	
  Director / Treasurer

  	
   

  	
  Chairman

  	
   

  
	
  (title)

  	
  (title)

  
	
   

  	
   

  
	
  Charles N. Edwards

  	
   

  	
  James S. Haahr

  	
   

  
	
  (print name)

  	
  (print name)

  
	
   

  	
   

  
	
   

  	
   

  
	
  THE BANK:

  	
   

  
	
   

  	
   

  
	
  META BANK
  WEST CENTRAL

  	
   

  
	
   

  	
   

  
	
  BY

  	
  /s/ I. Eugene Richardson,
  Jr.

  	
   

  	
   

  
	
   

  	
  (signature)

  	
   

  	
   

  
	
   

  	
   

  
	
  President

  	
   

  	
   

  
	
  (title)

  	
   

  
	
   

  	
   

  
	
  I. Eugene Richardson, Jr.

  	
   

  	
   

  
	
  (print name)

  	
   

  
								

 

37

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