Document:

Exhibit 10.38

 

Summary
of Unwritten Compensation Arrangements

Applicable to Named Executive Officers of Overstock.com, Inc.

 

The Compensation
Committee (the “Committee”) of the Board of Directors of Overstock.com, Inc.
(the “Company”) oversees and reviews the Company’s executive compensation
policies and programs and approves the form and amount of compensation to be
paid to the Company’s executive officers.

 

Annual
Compensation—Base salaries, bonuses and stock option grants

 

The Company is not a
party to any written employment agreement with any of its named executive
officers.

 

The Company pays each of
its named executive officers (as defined in Item 402(a)(3) of
Regulation S-K) base salaries at the annual rate of $200,000, except for
its President, Jason C. Lindsey, who is paid a base salary of $300,000. The
Company does not pay its Chief Executive Officer, Patrick M. Byrne, any base
salary.  Additionally, the Compensation
Committee of the Board of Directors of the Company approved stock option grants
to named executive officers under the Company’s 2005 Equity Incentive Plan

 

On February 7,
2007, the Committee approved bonus payments to the named executive officers as
a result of the officers’ performance in 2006 as follows:

 

	
  Name and Title

  	
   

  	
  Bonus

  	
   

  	
  2007 Salary

  	
   

  	
  Stock Option

  Grant (1)

  (shares)

  	
   

  
	
  Patrick M.
  Byrne, Chief Executive Officer (2)

  	
   

  	
  0

  	
   

  	
  0

  	
   

  	
  0

  	
   

  
	
  Jason Lindsey,
  President and Chief Operating Officer

  	
   

  	
  $

  	
  180,000

  	
   

  	
  $

  	
  300,000

  	
   

  	
  80,000

  	
   

  
	
  Jonathan E.
  Johnson III, Senior Vice President, Corporate and Legal Affairs

  	
   

  	
  $

  	
  120,000

  	
   

  	
  $

  	
  200,000

  	
   

  	
  40,000

  	
   

  
	
  Stormy Simon,
  Senior Vice President, Branding and Customer Care

  	
   

  	
  $

  	
  120,000

  	
   

  	
  $

  	
  200,000

  	
   

  	
  40,000

  	
   

  
	
  David Chidester,
  Senior Vice President, Finance

  	
   

  	
  $

  	
  120,000

  	
   

  	
  $

  	
  200,000

  	
   

  	
  35,000

  	
   

  
	
  Stephen Tryon,
  Senior Vice President, Logistics

  	
   

  	
  $

  	
  120,000

  	
   

  	
  $

  	
  200,000

  	
   

  	
  35,000

  	
   

  
	
  Russell (Tad)
  Martin, Senior Vice President of Merchandising and Operations (3)

  	
   

  	
  $

  	
  120,000

  	
   

  	
  0

  	
   

  	
  0

  	
   

  

 

(1)           Options vest as to 28% on the first
anniversary of the grant and 2% each month thereafter and have a ten-year term.

(2)           The Chief Executive Officer of the
Company, Dr. Patrick M. Byrne, declined to accept any bonus payment
relating to 2006, any salary for 2007, or any stock option grant.

(3)           As previously reported, Mr. Martin
resigned effective January 11, 2007.Exhibit 10.39

 

Summary
of Unwritten Compensation Arrangements

Applicable
to Non-Employee Directors of Overstock.com, Inc.

 

Overstock.com, Inc.
(the “Company”) pays its non-employee directors $20,000 annually at the rate of
$5,000 per quarter, and reimburses its non-employee directors for out-of-pocket
expenses incurred in connection with attending Board and committee meetings.

 

The Company maintains its
2005 Equity Incentive Plan, under which the Board of Directors has the power to
grant options and other awards to members of the Board.  During 2006 the Board granted options to
non-employee directors as follows:

 

	
  Name

  	
   

  	
  Grant Date

  	
   

  	
  Exercise

  Price ($)

  	
   

  	
  Number of

  Options

  Granted

  	
   

  
	
  John J. Byrne(1)

  	
   

  	
  April 25, 2006

  	
   

  	
  27.40

  	
   

  	
  5,000

  	
   

  
	
  Gordon
  Macklin(2)

  	
   

  	
  April 25, 2006

  	
   

  	
  27.40

  	
   

  	
  5,000

  	
   

  
	
  Allison Abraham

  	
   

  	
  April 25, 2006

  	
   

  	
  27.40

  	
   

  	
  5,000

  	
   

  
	
  John Fisher(3)

  	
   

  	
  April 25, 2006

  	
   

  	
  27.40

  	
   

  	
  5,000

  	
   

  
	
  Ray Groves

  	
   

  	
  April 25, 2006

  	
   

  	
  27.40

  	
   

  	
  5,000

  	
   

  

 

(1)   Mr. Byrne
resigned from the Company’s board of directors on July 31, 2006.

(2)   Mr. Macklin passed away January 30,
2007.

(3)   Mr. Fisher resigned from the
Company’s board of directors on February 23, 2007.Exhibit 10.1

 

	
  

  	
  Overstock.com, Inc.

  6350 South 3000 East

  Salt Lake City, UT 84121

  Phone: (801) 947-3100

  Fax: (801) 947-3144

  

 

February 13, 2007

 

VIA CERTIFIED MAIL AND
FACSIMILE (615) 377-3977

 

Mr. Gary Kimball,
CFO

Ozburn-Hessey Logistics

633 Thompson Lane

Nashville, TN 37204

 

Mr. Gary Kimball,
CFO

Ozburn-Hessey Logistics

7101 Executive Center
Drive, Suite 333

Brentwood, TN 37027

 

Re:                             Notice of Termination of
Logistics Services Agreement and Contract Amendment (2) Indianapolis Ship
Alone Operation

 

Mr. Kimball:

 

Please be advised this
letter shall constitute Overstock.com, Inc’s notice of termination with respect
to the Logistics Services Agreement with an Effective Date of July 9, 2004
as well as any and all addendums related thereto, including, but not limited to
the Contract Amendment (2) Indianapolis Ship Alone Operation which was
executed on September 23, 2005. The notice of termination is made pursuant
to Section 7(A) of the Logistics Services Agreement and shall be
deemed given as of as of February 15, 2007. As such, the effective date of
termination for the Logistics Services Agreement shall be August 15, 2007.

 

Should you have any
questions, you may contact the undersigned.

 

Cordially,

 

	
  /s/ Stephon Tryon

  	
   

  

Stephon Tryon

Senior Vice PresidentExhibit 10.10

 

SUMMARY
OF FEES FOR BOARD OF DIRECTORS

 

Each director of Old Second Bancorp, Inc. also serves as a
director of Old Second National Bank, and may serve on boards of its other
subsidiaries.  In 2007, non-employee
directors received $1,000 for every board meeting attended and $500 for each
committee meeting attended.  Non-employee
directors of Old Second National Bank received a $13,000 annual retainer and
directors that also serve as committee chair of the Audit, Compensation, or
Governance committees receive $18,000 annual retainer.  Additionally, prior to the July 1,2007
statutory merger non-employee directors of Old Second Bank-Yorkville received
$500 for directors and $250 for directors emeriti per meeting, Old Second
Bank-Kane County receive $500 for directors and $300 for directors emeriti per
meeting

 

Non-employee directors of Old Second National Bank are also eligible to
receive options pursuant to the Old Second Bancorp, Inc. 2002 Long Term
Incentive Plan.  The Company also
maintains the Old Second Bancorp Directors Fee Deferral Plan, under which
directors are permitted to defer receipt of their directors’ fees.  The plan is unqualified and the directors
have no interest in the trust.  The
deferred fees and any earnings thereon are unsecured obligations of Old Second.

 

39Exhibit 10.11

 

Execution
Copy

 

 

 

 

 

 

 

 

LOAN AND SUBORDINATED

DEBENTURE PURCHASE AGREEMENT

 

 

between

 

 

LASALLE BANK NATIONAL ASSOCIATION

 

 

and

 

OLD SECOND BANCORP, INC.

 

 

 

 

 

Dated as of January 31, 2008

 

 

 

 

 

 

TABLE OF
CONTENTS

 

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  1.

  	
  DEFINITIONS

  	
  2

  
	
   

  	
  1.1

  	
  Defined Terms

  	
  2

  
	
   

  	
  1.2

  	
  Certain UCC and Accounting Terms; Interpretations

  	
  9

  
	
   

  	
  1.3

  	
  Exhibits and Schedules Incorporated

  	
  10

  
	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
  CREDIT FACILITIES

  	
  10

  
	
   

  	
  2.1

  	
  The Loans

  	
  10

  
	
   

  	
  2.2

  	
  The Notes and the Subordinated Debenture

  	
  11

  
	
   

  	
  2.3

  	
  Maturity Dates

  	
  11

  
	
   

  	
  2.4

  	
  Collateral

  	
  11

  
	
   

  	
  2.5

  	
  The Closing

  	
  11

  
	
   

  	
  2.6

  	
  Interest Rates

  	
  12

  
	
   

  	
  2.7

  	
  Payments

  	
  12

  
	
   

  	
  2.8

  	
  Capital Adequacy

  	
  12

  
	
   

  	
   

  	
   

  	
   

  
	
  3.

  	
  DISBURSEMENTS

  	
  12

  
	
   

  	
  3.1

  	
  Initial and Subsequent Disbursements

  	
  12

  
	
   

  	
  3.2

  	
  Conditions Precedent to Initial Disbursement

  	
  12

  
	
   

  	
  3.3

  	
  Conditions to All Disbursements; Renewals and
  Conversions

  	
  14

  
	
   

  	
   

  	
   

  	
   

  
	
  4.

  	
  GENERAL REPRESENTATIONS AND WARRANTIES

  	
  15

  
	
   

  	
  4.1

  	
  Organization and Authority

  	
  15

  
	
   

  	
  4.2

  	
  No Impediment to Transactions

  	
  16

  
	
   

  	
  4.3

  	
  Purposes of Loans

  	
  17

  
	
   

  	
  4.4

  	
  Financial Condition

  	
  17

  
	
   

  	
  4.5

  	
  Title to Properties

  	
  18

  
	
   

  	
  4.6

  	
  No Material Adverse Change

  	
  19

  
	
   

  	
  4.7

  	
  Compliance with Law

  	
  19

  
	
   

  	
  4.8

  	
  Borrower Status

  	
  21

  
	
   

  	
  4.9

  	
  No Misstatemet

  	
  21

  
	
   

  	
  4.10

  	
  Representations and Warranties Generally

  	
  21

  
	
   

  	
   

  	
   

  	
   

  
	
  5.

  	
  GENERAL COVENANTS, CONDITIONS AND AGREEMENTS

  	
  22

  
	
   

  	
  5.1

  	
  Material Transactions

  	
  22

  
	
   

  	
  5.2

  	
  Pledged Shares

  	
  24

  
	
   

  	
  5.3

  	
  Business Operations

  	
  24

  
	
   

  	
  5.4

  	
  Compliance with Laws

  	
  25

  
	
   

  	
  5.5

  	
  Lender Expenses

  	
  27

  
	
   

  	
  5.6

  	
  Subordinated Debt

  	
  27

  
	
   

  	
  5.7

  	
  Inspection Rights

  	
  27

  
	
   

  	
   

  	
   

  	
   

  
	
  6.

  	
  REPORTING

  	
  28

  
	
   

  	
  6.1

  	
  Annual

  	
  28

  
	
   

  	
  6.2

  	
  Quarterly

  	
  28

  

 

 

i

 

	
   

  	
  6.3

  	
  Compliance Certificate

  	
  28

  
	
   

  	
  6.4

  	
  Copies of Other Reports and Correspondence

  	
  28

  
	
   

  	
  6.5

  	
  Proceedings

  	
  28

  
	
   

  	
  6.6

  	
  Event of Default; Material Adverse Change

  	
  29

  
	
   

  	
  6.7

  	
  Other Information Requested by Lender

  	
  29

  
	
   

  	
   

  	
   

  	
   

  
	
  7.

  	
  FINANCIAL COVENANTS

  	
  29

  
	
   

  	
  7.1

  	
  Capitalization

  	
  29

  
	
   

  	
  7.2

  	
  Regulatory Capital

  	
  29

  
	
   

  	
  7.3

  	
  Minimum Return on Average Assets

  	
  29

  
	
   

  	
  7.4

  	
  Nonperforming Loans Ratio; Loan Loss Reserve

  	
  29

  
	
   

  	
   

  	
   

  	
   

  
	
  8.

  	
  BORROWER’S DEFAULT

  	
  30

  
	
   

  	
  8.1

  	
  Borrower’s Defaults and Lender’s Remedies

  	
  30

  
	
   

  	
  8.2

  	
  Protective Advances

  	
  33

  
	
   

  	
  8.3

  	
  Other Remedies

  	
  34

  
	
   

  	
  8.4

  	
  No Lender Liability

  	
  34

  
	
   

  	
  8.5

  	
  Lender’s Fees and Expenses

  	
  34

  
	
   

  	
  8.6

  	
  Limitation on Remedies with Respect to Subordinated
  Debt

  	
  34

  
	
   

  	
   

  	
   

  	
   

  
	
  9.

  	
  MISCELLANEOUS

  	
  35

  
	
   

  	
  9.1

  	
  Release; Indemnification

  	
  35

  
	
   

  	
  9.2

  	
  Assignment and Participation

  	
  35

  
	
   

  	
  9.3

  	
  Prohibition on Assignment

  	
  36

  
	
   

  	
  9.4

  	
  Time of the Essence

  	
  36

  
	
   

  	
  9.5

  	
  No Waiver

  	
  36

  
	
   

  	
  9.6

  	
  Severability

  	
  36

  
	
   

  	
  9.7

  	
  Usury; Revival of Liabilities

  	
  36

  
	
   

  	
  9.8

  	
  Notices

  	
  37

  
	
   

  	
  9.9

  	
  Successors and Assigns

  	
  38

  
	
   

  	
  9.10

  	
  No Joint Venture

  	
  38

  
	
   

  	
  9.11

  	
  Brokerage Commissions

  	
  38

  
	
   

  	
  9.12

  	
  Publicity

  	
  38

  
	
   

  	
  9.13

  	
  Documentation

  	
  38

  
	
   

  	
  9.14

  	
  Additional Assurances

  	
  39

  
	
   

  	
  9.15

  	
  Entire Agreement

  	
  39

  
	
   

  	
  9.16

  	
  Choice of Law

  	
  39

  
	
   

  	
  9.17

  	
  Forum; Venue

  	
  39

  
	
   

  	
  9.18

  	
  No Third Party Beneficiary

  	
  39

  
	
   

  	
  9.19

  	
  Legal Tender of United States

  	
  39

  
	
   

  	
  9.20

  	
  Captions; Counterparts

  	
  39

  
	
   

  	
  9.21

  	
  Knowledge; Discretion

  	
  39

  
	
   

  	
  9.22

  	
  Customer Identification - USA Patriot Act Notice

  	
  40

  

 

ii

 

EXHIBITS:

 

A             Form of
Term Note

B             Form of
Revolving Note

C             Form of
Subordinated Debenture

D             Form of
Pledge Agreement

E              Form of Quarterly Compliance
Certificate

F              Form of Opinion of Borrower’s
Counsel

 

DISCLOSURE
SCHEDULES:

 

4.1.2        Subsidiaries;
Capital Stock of Borrower

4.1.3        Capital
Stock of the Bank

4.7.3        Pending
Litigation

4.7.5        ERISA

4.8.1        Restrictions
on Borrower

 

 

iii

 

 

LOAN AND SUBORDINATED DEBENTURE PURCHASE AGREEMENT

 

THIS LOAN AND SUBORDINATED DEBENTURE PURCHASE
AGREEMENT (this “Agreement”)
is dated as of January 31, 2008 and is made by and between OLD SECOND BANCORP, INC., a Delaware
corporation (“Borrower”), and LASALLE BANK NATIONAL ASSOCIATION, a
national banking association (“Lender”).

 

R  E  C  I  T  A  L  S:

 

A.            Borrower is a bank
holding company that owns 100% of the issued and outstanding capital stock of
Old Second National Bank, a national banking association (the “Bank”) and is acquiring HeritageBanc, Inc.
(“Heritage”) by causing Old Second
Acquisition, Inc., a Delaware corporation and a wholly owned subsidiary of
Borrower (“Merger Corp”), to merge
with and into Heritage (the “Merger”)
pursuant to the terms and conditions of an Agreement and Plan of Merger, dated
as of November 5, 2007, among Borrower and Merger Corp and Heritage (the “Merger Agreement”), and immediately
thereafter causing Heritage Bank, a wholly owned subsidiary of Heritage (“Heritage Bank”), to merge with and into Old
Second National Bank (the “Bank Merger”)
pursuant to the terms and conditions of a Merger Agreement, dated as of November 20,
2007, between the Bank and Heritage Bank. 
Old Second National Bank and Heritage Bank may be referred to individually
as a “Subsidiary Bank” and
collectively as the “Subsidiary Banks.”
The issued and outstanding capital stock of Old Second National Bank may be
referred to as the “Bank Shares.”

 

B.            Borrower has
requested that Lender provide it with three credit facilities in the aggregate
principal amount of $75,500,000 consisting of (a) a term loan (the “Term Loan”) in the principal amount of
$500,000 (the “Term Loan Amount”);
(b) a revolving loan (the Revolving
Loan”) in the principal amount of up to $30,000,000 (the “Revolving Loan Amount”); and (c) subordinated
debt (the “Subordinated Debt”) in
the principal amount of up to $45,000,000 (the “Subordinated Debt Amount”). The Term Loan and the Revolving
Loan may be referred to collectively as the “Senior
Loans” and the Senior Loans and the Subordinated Debt may be
referred to collectively as the “Loans.”

 

C.            The proceeds of the
Term Loan, the Revolving Loan and the Subordinated Debt shall be used by
Borrower to finance the acquisition of Heritage and to increase the capital of
the Bank, with any remaining proceeds to be used for general corporate
purposes.

 

D.            The Subordinated
Debt is intended to qualify as Tier 2 capital under applicable rules and
regulations promulgated by the Board of Governors of the Federal Reserve System
(the “FRB”).

 

E.             Lender is willing
to lend to Borrower up to an aggregate principal amount of $75,500,000 under
the Loans in accordance with the terms, subject to the conditions and in
reliance on the recitals, representations, warranties, covenants and agreements
set forth herein and in the other Loan Documents (as defined below).

 

NOW, THEREFORE, in
consideration of the mutual covenants, conditions and agreements herein
contained, the parties hereto hereby agree as follows:

 

 

 

A  G  R  E  E  M  E  N  T:

 

1.                                      DEFINITIONS.

 

1.1          Defined
Terms.  The
following capitalized terms generally used in this Agreement and in the other
Loan Documents shall have the meanings defined or referenced below. Certain
other capitalized terms used only in specific sections of this Agreement may be
defined in such sections.

 

“Affiliate(s)” shall mean, with respect to
any Person, such Person’s immediate family members, partners, members or parent
and subsidiary corporations, and any other Person directly or indirectly
controlling, controlled by, or under common control with, said Person, and
their respective Affiliates, members, shareholders, directors, officers,
employees, agents and representatives.

 

“Agreed Upon Terms and Procedures” shall
mean the Agreed Upon Terms and Procedures relating to interest rates, interest
and payments executed by Borrower on the date hereof as such may be amended,
restated, supplemented or modified from time to time.

 

“Assignee Lender” shall have the meaning
ascribed to such term in Section 9.2.

 

“Average Total Assets” shall have the
meaning ascribed to such term in Section 7.2.

 

“Bank” shall have the meaning ascribed to
such term in the recitals hereto.

 

“Bankruptcy Code” shall mean the Bankruptcy
Reform Act of 1978, as amended or recodified.

 

“Bank Shares” shall have the meaning
ascribed to such term in the recitals hereto.

 

“Base Rate” shall mean that rate of interest
(expressed as a percent per annum) equal to Lender’s “base” or “prime” rate
(which is not necessarily the lowest or most favorable rate of interest charged
by Lender on commercial loans at any time) in effect from time to time, which
means a base rate of interest established by Lender from time to time that
serves as the basis upon which effective rates of interest are calculated for
those loans making reference thereto. Any change in the rate of interest
hereunder due to a change in the base or prime rate shall become effective on
the date each change in the base or prime rate is announced by Lender.

 

“Base Rate Tranche” shall mean a Borrowing
Tranche as to which the Base Rate is applicable.

 

“Borrower” shall have the meaning ascribed
to such term in the preamble hereto.

 

“Borrower 2006 Audited Financial Statements”
shall have the meaning ascribed to such term in Section 4.4.1.

 

“Borrower 2006 Audited Financial Statements Date”
shall have the meaning ascribed to such term in Section 4.4.1.

 

 

2

 

“Borrower Financial Statements” shall have
the meaning ascribed to such term in Section 4.4.1.

 

“Borrower Unaudited Financial Statements”
shall have the meaning ascribed to such term in Section 4.4.1.

 

“Borrower’s Accountant” shall mean Ernst &
Young LLP, or such other nationally recognized firm of certified public
accountants selected by Borrower as shall from time to time audit Borrower.

 

“Borrower’s Liabilities” shall mean Borrower’s
obligations under this Agreement, the Term Note, the Revolving Note and any
other Loan Documents (other than the principal, interest and other amounts
payable under the Subordinated Debenture).

 

“Borrowing Date” shall mean the date any
Borrowing Tranche is disbursed, renewed or converted (from a LIBO Tranche to a
Base Rate Tranche or from a Base Rate Tranche to a LIBO Tranche).

 

“Borrowing Tranche” shall mean a disbursement
of proceeds under any Loan pursuant to this Agreement and the Agreed Upon Terms
and Procedures.

 

“Business Day” shall mean (a) for all
purposes other than as covered by clause (b) hereof, a day of the week
(but not a Saturday, Sunday or a legal holiday under the laws of the State of
Illinois or any other day on which banking institutions located in Illinois are
authorized or required by law or other governmental action to close) on which
the Chicago, Illinois offices of Lender are open to the public for carrying on
substantially all of Lender’s business functions and (b) with respect to
determinations in connection with, and payments of principal and interest on
any LIBO Rate Tranche, any day which is a Business Day described in clause (a) and
which is also a day for trading by and between banks in U.S. dollar-denominated
deposits in the London Interbank Eurodollar Market. Unless specifically
referenced in this Agreement as a Business Day, all references to “days” shall
be to calendar days.

 

“Capital Expenditures” shall mean
expenditures made or costs incurred that are required to be capitalized for
financial reporting purposes in accordance with GAAP, but excluding
expenditures made in connection with the replacement or restoration of assets
to the extent reimbursed or financed from insurance proceeds paid on account of
the loss of or damage to the assets being replaced or restored.

 

“Closing” shall have the meaning ascribed to
such term in Section 2.5.

 

“Closing Date” shall mean January 31,
2008.

 

“Code” shall mean the Internal Revenue Code
of 1986, as amended or recodified.

 

“Code Provisions” shall mean Chapter 7 or
Chapter 11 of the Bankruptcy Code, as amended or modified.

 

 

3

 

“Collateral” shall mean all the property
(including all tangible and intangible property) in which the Collateral
Documents grant (or purport to grant) Lender a security interest.

 

“Collateral Documents” shall mean the Pledge
Agreement and such other certificates, documents, and instruments entered into
or delivered in connection with or relating to the Collateral.

 

“Condition or Release” shall mean any
presence, use, storage, transportation, discharge, disposal, release or
threatened release of any Hazardous Materials.

 

“Default Rate” shall have the meaning
ascribed to such term in Section 2.3 of the Agreed Upon Terms and
Procedures.

 

“Disclosure Schedule” shall mean, in
aggregate, the disclosures contemplated herein as included in the Disclosure
Schedule, which has been delivered in connection with the execution of this
Agreement.

 

“Employee Benefit Plan” shall mean an “employee
benefit plan” within the meaning of Section 3(3) of ERISA.

 

“Equity Interest” shall mean any and all
shares, interests, participations or other equivalents (however designated) of
capital stock of a corporation, any and all equivalent ownership interests in a
Person which is not a corporation and any and all warrants, options or other
rights to purchase any of the foregoing.

 

“ERISA” shall mean the Employee Retirement
Income Security Act of 1974, as amended or recodified.

 

“ERISA Affiliate” shall mean any person (as
defined in Section 3(9) of ERISA) which together with Borrower would
be a member of the same “controlled group” within the meaning of Sections 414(b),
(m), (c) and (o) of the Code.

 

“Event of Default” shall have the meaning
ascribed to such term in Section 8.1.1.

 

“FDIC” shall mean the Federal Deposit
Insurance Corporation.

 

“FDI Act” shall mean the Federal Deposit
Insurance Act, as amended or recodified.

 

“Federal Reserve Notice” shall have the
meaning ascribed to such term in Section 8.6.

 

“FRB” shall have the meaning ascribed to
such term in the recitals hereto.

 

“GAAP” shall mean generally accepted
accounting principles in effect from time to time in the United States of
America.

 

“Governmental Agency(ies)” shall mean,
individually or collectively, any federal, state, county or local governmental
department, commission, board, regulatory authority or agency, including,
without limitation, the FRB, the OCC and the FDIC.

 

 

4

 

“Hazardous Materials” shall mean oil,
flammable explosives, asbestos, urea formaldehyde insulation, polychlorinated
biphenyls, radioactive materials, hazardous wastes, toxic or contaminated
substances or similar materials, including, without limitation, any substances
which are “hazardous substances,” “hazardous wastes,” “hazardous materials” or “toxic
substances” under the Hazardous Materials Laws and/or other applicable environmental
laws, ordinances or regulations.

 

“Hazardous Materials Claims” shall have the
meaning ascribed to such term in Section 4.7.6.

 

“Hazardous Materials Laws” shall mean any
laws, regulations, permits, licenses or requirements pertaining to the
protection, preservation, conservation or regulation of the environment which
relates to real property, including, without limitation: the Clean Air Act, as
amended, 42 U.S.C. Section 7401 et seq.; the Federal Water Pollution
Control Act, as amended, 33 U.S.C. Section 1251 et seq.; the Resource
Conservation and Recovery Act of 1976, as amended, 42 U.S.C. Section 6901
et seq.; the Comprehensive Environment Response, Compensation and Liability Act
of 1980, as amended (including the Superfund Amendments and Reauthorization Act
of 1986), 42 U.S.C. Section 9601 et seq.; the Toxic Substances Control
Act, as amended, 15 U.S.C. Section 2601 et seq.; the Occupational Safety
and Health Act, as amended, 29 U.S.C. Section 651, the Emergency Planning
and Community Right-to-Know Act of 1986, 42 U.S.C. Section 11001 et seq.;
the Mine Safety and Health Act of 1977, as amended, 30 U.S.C. Section 801
et seq.; the Safe Drinking Water Act, 42 U.S.C. 
Section 300f et seq.; and all comparable state and local laws, laws
of other jurisdictions or orders and regulations.

 

“Heritage” shall have the meaning ascribed
to such term in the  Recitals hereto.

 

“Heritage Bank” shall have the meaning
ascribed to such term in the Recitals hereto.

 

“IDFPR” shall mean the Illinois Department
of Financial and Professional Regulation.

 

“Indebtedness” shall mean and includes: (a) all
items arising from the borrowing of money that, according to GAAP now in
effect, would be included in determining total liabilities as shown on the
consolidated balance sheet of Borrower or any Subsidiary; (b) all
obligations secured by any lien in property owned by Borrower whether or not
such obligations shall have been assumed; (c) all guaranties and similar
contingent liabilities with respect to obligations of others; and (d) all
other obligations (including, without limitation, letters of credit) evidencing
obligations to others; provided, however, in the case of the Bank, Indebtedness
shall not include deposits or other indebtedness incurred in the ordinary
course of business and in accordance with safe and sound banking practices and
applicable laws and regulations.

 

“Indentures” shall mean the Indenture dated
as of June 30, 2003, between Borrower and Wilmington Trust Company and the
Indenture dated April 30, 2007, between Borrower and Wells Fargo, National
Association.

 

“Initial Disbursement” shall have the
meaning ascribed to such term in Section 3.1.

 

“Instructions” shall mean disbursement
instructions given by Borrower to Lender specifying the manner in which
proceeds of the Loans should be disbursed at Closing.

 

 

5

 

“Interest Rate Protection Agreement” shall
mean an interest rate swap, cap, collar or other hedging or derivative
agreement, to which Lender or any Affiliate of Lender is the counterparty,
intended to mitigate interest rate risk, along with any other related agreement
or instrument executed in connection therewith.

 

“Junior Subordinated Debentures” shall mean
the floating rate junior subordinated debentures due June 30, 2033 and April 30,
2037, issued by Borrower pursuant to the Indentures.

 

“Leases” shall mean all leases, licenses or
other documents providing for the use or occupancy of any portion of any
Property, including all amendments, extensions, renewals, supplements,
modifications, sublets and assignments thereof and all separate letters or
separate agreements relating thereto.

 

“Lender” shall have the meaning ascribed to
such term in the preamble hereto.

 

“LIBO Rate” shall mean that rate of interest
equal to (a) the quotient of (i) the rate of interest, rounded
upward, if necessary, to the nearest whole multiple of .0625% (1/16 of 1%),
quoted by Lender as the London Inter-Bank Offered Rate for deposits in U.S.
Dollars on the date, at approximately 11:00 a.m. London time, that is two
Business Days prior to any applicable Borrowing Date for purposes of
calculating effective rates of interest for Loans or obligations making
reference thereto for an amount approximately equal to a LIBO Rate Tranche and
for a period of time approximately equal to a LIBOR Period, divided by (ii) 100%
minus (b) the Reserve Percentage.

 

“LIBO Rate Tranche” shall mean a Borrowing
Tranche as to which the LIBO Rate is applicable.

 

“LIBOR Period” shall mean a period of 90
days, plus or minus one or two days, with respect to a LIBO Rate Tranche;
provided that no LIBOR Period shall extend beyond any Maturity Date.  If pursuant to the Rate Election Notice
received by Lender, the initial Interest Period of any LIBOR Rate Tranche
commences on any day other than the first Business Day of any month, then the
initial Interest Period of such LIBOR Rate Tranche shall end on the first
Business Day of the following calendar month, notwithstanding the Interest
Period specified in such notice, and the LIBOR Rate for such LIBOR Rate Tranche
shall be equal to the LIBOR Rate for an Interest Period equal to the length of
such partial month.  Thereafter, each
LIBOR Rate Tranche shall automatically renew for the Interest Period specified
in the initial Rate Election Notice received by Lender.

 

“Loans” shall have the meaning ascribed to
such term in the recitals hereto.

 

“Loan Documents” shall mean those documents
and instruments (including, without limitation, all agreements, instruments and
documents, including, without limitation, guaranties, mortgages, deeds of
trust, pledges, powers of attorney, consents, assignments, contracts, notices
and all other written matter heretofore, now and/or from time to time hereafter
executed by and/or on behalf of Borrower in connection with this Agreement and
the Loans) entered into or delivered in connection with or relating to the
Loans, including the Collateral Documents and any other documents listed on the
schedule of closing documents prepared in connection with the 

 

 

6

 

Closing. Loan Documents shall also include any Interest Rate Protection
Agreement between Borrower and Lender.

 

“Maturity Date” shall mean the Term Loan
Maturity Date, the Revolving Loan Maturity Date or the Subordinated Debt
Maturity Date as the context may indicate.

 

“NBA” shall mean the National Banking Act,
as amended or recodified.

 

“Nonperforming Loans” shall have the meaning
ascribed to such term in Section 7.4.

 

“Notes” shall mean the Term Note, the Revolving
Note and the Subordinated Debenture, each as amended, restated, supplemented or
modified from time to time, and each note or debenture, as the case may be,
delivered in substitution or exchange for any of such Notes and, where
applicable, shall include the singular as well as the plural.

 

“OCC” shall mean the Office of the
Comptroller of the Currency.

 

“Other Real Estate Owned” shall have the
meaning ascribed to such term in Section 7.4.

 

“Permitted Bank Indebtedness” shall mean
means obligations incurred by the Bank in the ordinary course of business in
such circumstances as may be incidental or usual in carrying on the banking or
trust or mortgage business of a bank, thrift, trust company, or mortgage
company incurred in accordance with applicable laws and regulations and safe
and sound practices, including obligations incurred in connection with: (a) any
deposits with or funds collected by the Bank; (b) the endorsement of
instruments for deposit or collection in the ordinary course of business, (c) any
bankers acceptance credit of the Bank; (d) any check, note, certificate of
deposit, instrument, money or letter of credit issued by the Bank; (e) any
check, note, certificate of deposit, money order, traveler’s check, draft or
bill of exchange issued, accepted or endorsed by the Bank; (f) any
discount with, borrowing from, or other obligation to, any Federal Home Loan
Bank or Federal Reserve Bank; (g) any agreement made by the Bank to
purchase or repurchase securities, loans or Federal funds or any interest or
participation in any thereof; (h) any guarantee or similar obligation
incurred by the Bank in the ordinary course of its banking or trust business; (i) any
transaction in the nature of an extension of credit, whether in the form or a
commitment or otherwise, undertaken by the Bank for the account of a third
party with the application of the same banking considerations and legal lending
limits that would be applicable if the transaction were a loan to such party; (j) any
transaction in which the Bank acts solely in the fiduciary or agency capacity;
and (k) other short-term liabilities similar to those enumerated in
clauses (a) and (g) above, including United States Treasury tax and
loan borrowings.

 

“Person” shall mean an individual, a
corporation (whether or not for profit), a partnership, a limited liability
company, a joint venture, an association, a trust, an unincorporated
organization, a government or any department or agency thereof (including a
Governmental Agency) or any other entity or organization.

 

“Pledge Agreement” shall mean a Pledge
Agreement dated as of the Closing Date between Borrower and Lender in the form
attached as Exhibit D
hereto (as amended, restated, 

 

 

7

 

supplemented or modified from time to time), pursuant to which the Bank
Shares are pledged to Lender.

 

“Potential Event of Default” shall mean an
event or circumstance that, with the passage of time, the giving of notice or
both, could become an Event of Default.

 

“Primary Capital” shall have the meaning
ascribed to such term in Section 7.4.

 

“Property” shall mean any real property
owned or leased by Borrower or any Subsidiary.

 

“Rate Election Notice” shall mean a verbal
notice conveyed to Lender in accordance with its disbursement procedures from
time to time.

 

“Reserve Percentage” shall mean the
percentage announced within Lender as the reserve percentage under Regulation D
of the FRB for the Loans and obligations making reference to a LIBO Rate for a
LIBOR Period. The Reserve Percentage shall be based on Regulation D or other
regulations from time to time in effect concerning reserves for Eurocurrency
Liabilities as defined in Regulation D from related institutions as though
Lender were in a net borrowing position, as promulgated by the FRB, or its
successor.

 

“Revolving Loan” shall have the meaning
ascribed to such term in the recitals hereto.

 

“Revolving Loan Amount” shall have the
meaning ascribed to such term in the recitals hereto.

 

“Revolving Loan Maturity Date” shall mean March 31,
2010.

 

“Revolving Note” shall mean a promissory
note, in the form attached as Exhibit B
hereto, in the principal amount of the Revolving Loan Amount, as amended,
restated, supplemented or modified from time to time, and each note delivered
in substitution or exchange for such note.

 

“RICO Related Law” shall mean the Racketeer
Influenced and Corrupt Organizations Act of 1970, or any other federal, state
or local law for which forfeiture of assets is a potential penalty.

 

“Risk-Weighted Assets” shall have the
meaning ascribed to such term in Section 7.2.

 

“Senior Loans” shall have the meaning
ascribed to such term in the recitals hereto.

 

“Senior Notes” shall mean the Term Note and
the Revolving Note.

 

“Subordinated Debenture” shall mean a
subordinated debenture note, in the form attached as Exhibit C hereto, in the principal
amount of the Subordinated Debt Amount, as amended, restated, supplemented or
modified from time to time, and each debenture delivered in substitution or
exchange for such subordinated debenture.

 

“Subordinated Debt” shall have the meaning
ascribed to such term in the recitals hereto.

 

 

8

 

“Subordinated Debt Amount” shall have the
meaning ascribed to such term in the recitals hereto.

 

“Subordinated Debt Maturity Date” shall mean
March 31, 2018.

 

“Subsidiary” shall mean the Bank and any
other corporation or other entity of which any Equity Interest is directly or
indirectly owned by Borrower.

 

“Term Loan” shall have the meaning ascribed
to such term in the recitals hereto.

 

“Term Loan Amount” shall have the meaning
ascribed to such term in the recitals hereto.

 

“Term Loan Maturity Date” shall mean March 31,
2018.

 

“Term Note” shall mean a promissory note, in
the form attached as Exhibit A
hereto, in the principal amount of the Term Loan Amount, as amended, restated,
supplemented or modified from time to time, and each note delivered in
substitution or exchange for such note.

 

“Tier 1 Capital” shall have the definition
provided in, and shall be determined in accordance with, the rules and
regulations of the FRB.

 

“Tier 2 Capital” shall have the definition
provided in, and shall be determined in accordance with, the rules and
regulations of the FRB.

 

“Trusts” shall mean those certain Delaware
statutory business trusts known as “Old Second Capital Trust I” and “Old Second
Capital Trust II” which are maintained by Borrower in accordance with those
certain Amended and Restated Trust Agreements, dated as of June 30, 2003
and April 30, 2007, respectively.

 

“UCC” shall mean the Uniform Commercial Code
as enacted in the State of Illinois, as amended or recodified.

 

“Unaudited Financial Statements” shall have
the meaning ascribed to such term in Section 4.4.

 

1.2          Certain
UCC and Accounting Terms; Interpretations.  Except as otherwise defined in this Agreement
or the other Loan Documents, all words, terms and/or phrases used herein and
therein shall be defined by the applicable definition therefore (if any) in the
UCC. Notwithstanding the foregoing, any accounting terms used in this Agreement
which are not specifically defined herein shall have the meaning customarily
given to them in accordance with GAAP. Where the character or amount of any
asset or liability or item of income or expense is required to be determined or
any consolidation or other accounting computation is required to be made for
the purposes of this Agreement, it shall be done in accordance with GAAP except
where such principles are inconsistent with the specific provisions of this Agreement.
The foregoing definitions are equally applicable to both the singular and
plural forms of the terms defined. The words “hereof”, “herein” and “hereunder”
and words of like import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of 

 

 

9

 

this Agreement. The word “including” when used in this Agreement
without the phrase “without limitation,” shall mean “including, without
limitation.” All references to time of day herein are references to Chicago,
Illinois time unless otherwise specifically provided. Any reference contained
herein to attorneys’ fees and expenses shall be deemed to be reasonable fees
and expenses of Lender’s outside counsel and of any other third-party experts
or consultants engaged by Lender’s outside counsel on Lender’s behalf. All
references to any Loan Document shall be deemed to be to such document as
amended, modified or restated from time to time. With respect to any reference
in this Agreement to any defined term, (a) if such defined term refers to
a Person, then it shall also mean all heirs, legal representatives and
permitted successors and assigns of such Person, and (b) if such defined
term refers to a document, instrument or agreement, then it shall also include
any replacement, extension or other modification thereof.

 

1.3          Exhibits
and Schedules Incorporated.  All exhibits and schedules attached hereto or
referenced herein are hereby incorporated into this Agreement.

 

2.                                      CREDIT
FACILITIES.

 

2.1          The
Loans. 
Lender agrees to extend to Borrower the following credit facilities in
the aggregate principal amount of the sum of the Term Loan Amount, the
Revolving Loan Amount plus the Subordinated Debt Amount:

 

2.1.1       The
Term Loan. 
Lender agrees to extend the Term Loan to Borrower in accordance with the
terms of, and subject to the conditions set forth in, this Agreement, the Term
Note and the other Loan Documents. An initial Borrowing Tranche in an amount
equal to the Term Loan Amount shall be borrowed on the Closing Date and,
thereafter, such Borrowing Tranche may be converted or renewed from time to
time in accordance with the terms and subject to the conditions set forth in
this Agreement. Subject to Section 2.6
and any other conditions and limitations set forth in this Agreement, any
Borrowing Tranche under the Term Loan shall be treated as, at Borrower’s
election subject to and in accordance with the terms in this Agreement: (a) a
LIBO Rate Tranche and shall bear interest per annum at a rate equal to 0.90%
(90 basis points) plus the LIBO Rate; or (b) a Base Rate Tranche and shall
bear interest at a rate equal to the Base Rate. The unpaid principal balance
plus all accrued but unpaid interest on the Term Loan shall be due and payable
on the Term Loan Maturity Date, or such earlier date on which such amount shall
become due and payable on account of acceleration by Lender in accordance with
the terms of the Term Note and this Agreement.

 

2.1.2       The
Revolving Loan. Lender agrees to extend
the Revolving Loan to Borrower in accordance with the terms of, and subject to
the conditions set forth in, this Agreement, the Revolving Note and the other
Loan Documents. An initial Borrowing Tranche in an amount equal to
$18,818,651.25 shall be borrowed on February 1, 2008 and, thereafter, any
Borrowing Tranche under the Revolving Loan may be created, converted or renewed
from time to time in accordance with the terms and subject to the conditions
set forth in this Agreement.  Subject to Section 2.6 and any other
conditions and limitations set forth in this Agreement, any Borrowing Tranche
under the Revolving Loan shall be treated as, at Borrower’s election subject to
and in accordance with the terms in this Agreement: (a) a LIBO Rate
Tranche and shall bear interest per annum at a rate equal to 0.90% (90 basis
points) plus the LIBO Rate; or (b) a Base Rate Tranche and shall bear
interest at a rate equal to the Base Rate. The unpaid principal

 

 

10

 

 

balance plus all accrued but unpaid interest on the Revolving Loan
shall be due and payable on the Revolving Loan Maturity Date, or such earlier
date on which such amount shall become due and payable on account of
acceleration by Lender in accordance with the terms of the Revolving Note and
this Agreement.

 

2.1.3                     The
Subordinated Debt.  Lender agrees to extend the Subordinated Debt
to Borrower in accordance with the terms of, and subject to the conditions set
forth in, this Agreement, the Subordinated Debenture and the other Loan
Documents.  No Borrowing Tranche under
the Subordinated Debt shall be created on the Closing Date.  Thereafter, any Borrowing Tranche under the
Subordinated Debt may be created, converted or renewed from time to time in
accordance with the terms and subject to the conditions set forth in this
Agreement; provided, however, that new Borrowing Tranches for the Subordinated
Debt shall not be created after April 30, 2008.  Subject to Section 2.6 and any other conditions and limitations
set forth in this Agreement, any Borrowing Tranche under the Subordinated Debt
shall be treated as, at Borrower’s election subject to and in accordance with
the terms in this Agreement: (a) a LIBO Rate Tranche and shall bear
interest per annum at a rate equal to 1.50% (150 basis points) plus the LIBO
Rate; or (b) a Base Rate Tranche and shall bear interest at a rate equal
to the Base Rate. The unpaid principal balance plus all accrued but unpaid
interest on the Subordinated Debt shall be due and payable on the Subordinated
Debt Maturity Date, or such earlier date on which such amount shall become due
and payable on account of acceleration by Lender in accordance with the terms
of the Subordinated Debenture or this Agreement.

 

2.2                               The
Notes and the Subordinated Debenture.  The Loans shall be evidenced by the Term
Note, the Revolving Note and the Subordinated Debenture.

 

2.3                               Maturity
Dates.  On
the Term Loan Maturity Date, all sums due and owing under this Agreement and
the other Loan Documents with respect to the Term Loan shall be repaid in full.
On the Revolving Loan Maturity Date, all sums due and owing under this
Agreement and the other Loan Documents with respect to the Revolving Loan shall
be repaid in full. On the Subordinated Debenture Maturity Date, all sums due
and owing under this Agreement and the other Loan Documents with respect to the
Subordinated Debenture shall be repaid in full. Borrower acknowledges and
agrees that Lender has not made any commitments, either express or implied, to
extend the terms of the Loans past their Maturity Dates, unless Borrower and
Lender hereafter specifically otherwise agree in writing.

 

2.4                               Collateral.  Borrower’s Liabilities shall be secured by
the collateral pledged pursuant to the Pledge Agreement. Notwithstanding anything
to the contrary in any Loan Document, the obligations of Borrower to Lender
under the Subordinated Debenture shall be unsecured.

 

2.5                               The
Closing.  The
initial funding of the Loans (the “Closing”)
will occur at the offices of Lender, at 135 South LaSalle Street, Chicago,
Illinois at 9:30 a.m. on the Closing Date, or at such other place or time
or on such other date as the parties hereto may agree, by disbursing the
proceeds of the Loans in accordance with any Instructions received at least one
Business Day prior to Closing.

 

 

11

 

2.6                               Interest
Rates. 
Borrower agrees that matters concerning the election, payment,
application, accrual and computation of interest and interest rates shall be in
accordance with the Agreed Upon Terms and Procedures agreed to, as executed, by
Borrower and Lender.

 

2.7                               Payments.  Borrower agrees that matters concerning
prepayments, payments and application of payments shall be in accordance with
the Agreed Upon Terms and Procedures agreed to, as executed by, Borrower and
Lender.

 

2.8                               Capital
Adequacy.  If
Lender shall reasonably determine that the application or adoption of any law,
rule, regulation, directive, interpretation, treaty or guideline regarding
capital adequacy, or any change therein or in the interpretation or
administration thereof, whether or not having the force of law (including,
without limitation, application of changes to Regulation H and Regulation Y of
the FRB issued by the FRB on January 19, 1989 and regulations of the
Comptroller of the Currency, Department of Treasury, 12 CFR Part 3,
Appendix A, issued by the Comptroller of the Currency on January 27, 1989)
increases the capital required or expected to be maintained by Lender or any
person or entity controlling Lender, and such increase is based upon the
existence of Lender’s obligations hereunder and under other commitments of this
type, then, within 10 days after demand from Lender, Borrower shall pay to
Lender, from time to time, such amount or amounts as will compensate Lender or
such controlling person or entity, as the case may be, for such increased
capital requirement. The determination of any amount to be paid by Borrower
under this Section 2.8
shall take into consideration the policies of Lender or of any Person
controlling Lender with respect to capital adequacy and shall be based upon any
reasonable averaging, attribution and allocation methods. A certificate of
Lender setting forth the amount or amounts as shall be necessary to compensate
Lender as specified in this Section 2.8
shall be delivered to Borrower and shall be conclusive in the absence of
manifest error.

 

3.                                      DISBURSEMENTS.

 

3.1                               Initial
and Subsequent Disbursements.  At such time as all of the terms and
conditions set forth in Section 3.2
have been satisfied by Borrower and Borrower has executed and delivered to
Lender each of the Loan Documents and any other related documents in form and
substance satisfactory to Lender, in its sole and absolute discretion, Lender
shall disburse to Borrower an amount equal to $18,818,651.25 (the “Initial Disbursement”), representing a
disbursement of $18,818,651.25 under the Revolving Loan.  In the event Borrower fails to satisfy such
disbursement conditions, Borrower nevertheless shall pay all costs and expenses
incurred by Lender in connection with the transactions contemplated herein
promptly upon receipt of an invoice therefor from Lender.

 

3.2                               Conditions
Precedent to Initial Disbursement.  In conjunction with and as additional (but
independent) supporting evidence for certain of the covenants, representations
and warranties made by Borrower herein, prior to and as a condition of the
Initial Disbursement, Borrower shall deliver or cause to be delivered to Lender
each of the following, each of which shall be in form and substance
satisfactory to Lender, in its sole and absolute discretion:

 

 

12

 

3.2.1                     Opinion.  An opinion of counsel of Borrower in
substantially the form attached as Exhibit F
hereto and otherwise satisfactory to Lender, dated on or about the date of the
Initial Disbursement.

 

3.2.2                     Loan
Documents.  The
Loan Documents, including, without limitation, the Notes and the Collateral
Documents.

 

3.2.3                     Pledged
Securities.  The actual certificates representing all of
the securities constituting the Pledged Stock (as defined in the Pledge
Agreement) together with irrevocable stock powers for each such certificate
endorsed by Borrower in blank.

 

3.2.4                     Authority
Documents. 
Copies certified by the appropriate Secretary of State or Governmental
Agency of the certificate of incorporation of Borrower and the charter of Old
Second National Bank.  Good standing
certificates for (i) Borrower issued by the Secretary of State of Delaware
and the State of Illinois, (ii) Old Second National Bank issued by the
OCC, (iii) Heritage Bank issued by the IDFPR, and (iv) Heritage
issued by the Secretary of State of Illinois. Copies certified by the Secretary
or an Assistant Secretary of Borrower of the certificate of incorporation of
Borrower and the charter of Old Second National Bank, and the bylaws of
Borrower and Old Second National Bank. 
Copies certified by the Secretary or an Assistant Secretary of Borrower
of resolutions of the board of directors of Borrower authorizing the execution,
delivery and performance (including the authority to pledge the Pledged Stock)
of this Agreement, the Notes and the other Loan Documents. An incumbency
certificate of the Secretary or an Assistant Secretary of Borrower certifying
the names of the officer or officers of Borrower authorized to sign this
Agreement, the Notes and the other documents provided for in this Agreement,
together with a sample of the true signature of each such officer (Lender may
conclusively rely on such certificate until formally advised by a like
certificate of any changes therein).

 

3.2.5                     Regulatory
Consents. 
Copies certified by the Secretary or an Assistant Secretary of Borrower
of all documents evidencing all necessary consents, approvals and
determinations of any Governmental Agency with respect to the transactions
contemplated in the Loan Documents, including the required regulatory approvals
of the Merger and the Bank Merger, and any other transactions between Lender
and Borrower or Old Second National Bank.

 

3.2.6                     Instructions.
The Instructions.

 

3.2.7                     Certain
Costs of Lender. Payment of certain costs
and expenses incurred by Lender to date in connection with the transactions
contemplated herein, such as Lender’s attorneys’ fees up to a maximum amount of
$30,000 and expenses and other fees and expenses paid or payable to any other
parties.

 

3.2.8                     Merger
Certificate.  A certificate signed by the President of
Borrower, addressed to Lender, certifying that all conditions to the
consummation of the Merger and the Bank Merger have been satisfied or waived.

 

3.2.9                     Other
Requirements. Such other additional
information regarding Borrower, any Subsidiary and their respective assets,
liabilities (including any liabilities arising 

 

 

13

 

from, or relating to, legal proceedings) and contracts as Lender may
require in its reasonable discretion.

 

3.2.10              Other
Documents. Such other certificates, affidavits,
schedules, resolutions, opinions, notes and/or other documents which are
provided for hereunder or as Lender may reasonably request.

 

3.3                               Conditions
to All Disbursements; Renewals and Conversions.  Notwithstanding anything to the contrary
contained herein, the continued performance, observance and compliance by
Borrower of and with all of the covenants, conditions and agreements of
Borrower contained herein (whether or not non-performance constitutes an Event
of Default) and in the other Loan Documents shall be further conditions
precedent to any disbursements of the proceeds under any Loan. In addition,
Lender shall not be required to disburse proceeds under any Loan or to renew or
convert any Borrowing Tranche at any time that any of the following are true:

 

3.3.1                     Default.
There exists an Event of Default or Potential Event of Default.

 

3.3.2                     Legislation
or Proceedings. Any legislation has been
passed or any suit or other proceeding has been instituted the effect of which
is to prohibit, enjoin (or to declare unlawful or improper) or otherwise
adversely affect in a material respect Borrower’s performance of its
obligations hereunder, or any litigation or governmental proceeding has been
instituted or threatened against Borrower or any Subsidiary or any of their
officers which, in the reasonable discretion of Lender, may materially
adversely affect the financial condition or operations of Borrower or any
Subsidiary.

 

3.3.3                     Collateral.  Lender has reasonable cause to believe that
any Collateral might be subject to forfeiture under any RICO Related Law or any
of the Collateral is subject to any pledge, lien, security interest, charge or
encumbrance other than in favor of Lender.

 

3.3.4                     Material
Adverse Change. There has occurred a
material adverse change in the financial condition or operations of Borrower
and the Subsidiaries taken as a whole since the Borrower 2006 Audited Financial
Statement Date.

 

3.3.5                     Representations
and Warranties. Any representation or
warranty of Borrower contained herein or any information set forth in the
recitals hereto, shall not be true in any material respect on and as of the
date of any Borrowing Tranche, with the same effect as though such
representations and warranties had been made, or such information had been
presented, on and as of such date.

 

3.3.6                     Approvals.
All necessary or appropriate actions and proceedings have not been taken in
connection with, or relating to, the transactions contemplated hereby and all
documents incident thereto have not been completed and tendered for delivery,
in substance and form reasonably satisfactory to Lender, including, without
limitation, if appropriate in the opinion of Lender, Lender’s failure to have
received evidence of all necessary approvals from Governmental Agencies.

 

 

14

 

3.3.7                     Other
Documents. Lender has not received in substance and
form reasonably satisfactory to Lender, all certificates, affidavits,
schedules, resolutions, opinions, notes, and/or other documents which are
provided for hereunder or which it may reasonably request.

 

Lender’s refusal
to disburse any proceeds of the Loans on account of the provisions of this Section 3.3 shall not alter or
diminish any of Borrower’s other obligations hereunder or otherwise prevent any
breach or default of Borrower hereunder from becoming an Event of Default. Each
Rate Election Notice submitted by Borrower hereunder shall constitute an
affirmation that Borrower has performed, observed and complied with its
covenants, conditions and agreements contained herein in all material respects
and that all representations and warranties made by Borrower hereunder continue
to be true and correct in all material respects as of the date of such Rate
Election Notice.

 

4.                                      GENERAL
REPRESENTATIONS AND WARRANTIES. 
Borrower hereby covenants, represents and warrants to Lender as follows:

 

4.1                               Organization
and Authority.

 

4.1.1                     Legal
Matters. Borrower (a) is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware, (b) is duly qualified as a foreign corporation and in good
standing in all states in which it is doing business, except where it is not
required to qualify or where the failure to so qualify would not have a
material adverse effect on the financial condition, business or operations of
Borrower and the Subsidiaries taken as a whole and (c) has all requisite
power and authority, corporate or otherwise, to own, operate and lease its
properties and to carry on its business as now being conducted. Each Subsidiary
is duly organized, validly existing and chartered under the laws of the
jurisdiction of its organization, and has all requisite power and authority,
corporate or otherwise, to own, operate and lease its properties and to carry
on its business as now being conducted. The deposit accounts of the Bank are
insured by the FDIC to the extent provided by law. Borrower and each Subsidiary
has made payment of all franchise and similar taxes in the State of Illinois,
and in all of the other respective jurisdictions in which they are
incorporated, chartered or qualified to do business, so far as such taxes are
due and payable at the date of this Agreement, except for any such taxes (i) where
the failure to pay such taxes will not have a material adverse effect on the
financial condition, business or operations of Borrower and the Subsidiaries
taken as a whole, (ii) the validity of which is being contested in good
faith and (iii) for which proper reserves have been set aside on the books
of Borrower or any applicable Subsidiary, as the case may be.

 

4.1.2                     Capital
Stock of Borrower. Section 4.1.2 of the Disclosure
Schedule correctly sets forth (a) a list of all Subsidiaries of Borrower,
all of which (except as set forth in Section 4.1.2
of the Disclosure Schedule) are directly or indirectly wholly owned by
Borrower, and (b) a list of each class of stock of Borrower and the number
of authorized and issued and outstanding shares of each class of stock of
Borrower as of December 31, 2007. All of the outstanding capital stock of
Borrower has been duly authorized, legally and validly issued, fully paid and
nonassessable.

 

 

15

 

4.1.3                     Capital
Stock of the Bank.  Section 4.1.3
of the Disclosure Schedule correctly sets forth the state or states in which
the Bank conducts its business. Borrower owns 100% of the outstanding shares of
capital stock of the Bank.  There is no
plan, agreement or understanding providing for, or contemplating, the issuance
of any additional shares of capital stock of the Bank.  All of the Bank Shares have been duly
authorized, legally and validly issued, fully paid and nonassessable, and,
following the Closing Date, Borrower will own the Bank Shares free and clear of
all pledges, liens, security interests, charges or encumbrances, except for any
security interest granted herewith by Borrower to Lender. None of the Bank
Shares have been issued in violation of any shareholder’s preemptive rights.
There are, as of the date of this Agreement, no outstanding options, rights,
warrants or other agreements or instruments obligating Borrower to issue,
deliver or sell, or cause to be issued, delivered or sold, additional shares of
the capital stock of the Bank or obligating Borrower or the Bank to grant,
extend or enter into any such agreement or commitment.

 

4.2                               No
Impediment to Transactions.

 

4.2.1                     Transaction
is Legal and Authorized. The borrowing of the
principal amounts of the Loans, the execution of this Agreement and the other
Loan Documents and compliance by Borrower with all of the provisions of this
Agreement and of the other Loan Documents are within the corporate powers of
Borrower. This Agreement and the other Loan Documents have been duly
authorized, executed and delivered, and are the legal, valid and binding
obligations of Borrower, enforceable in accordance with their respective terms,
except as such enforcement may be limited by bankruptcy, insolvency,
reorganization or other laws and subject to general principles of equity.

 

4.2.2                     No
Defaults or Restrictions. Neither the execution and
delivery of the Loan Documents nor compliance with the terms and conditions
thereof will (a) conflict with or result in a material breach of, or
constitute a material default under, any of the terms, obligations, covenants,
conditions or provisions of any indenture, mortgage, deed of trust, pledge or
credit agreement, or any other agreement or instrument to which Borrower or any
Subsidiary is now a party or by which any of them or any of their properties
may be bound or affected, (b) violate any provision of the organizational
documents of Borrower or any Subsidiary, (c) materially contravene any
judgment, order, writ, injunction, decree or demand of any court, arbitrator,
grand jury, or Governmental Agency, or (d) result in the material creation
or imposition of any lien, charge or encumbrance of any nature whatsoever upon
any property or asset of Borrower or any Subsidiary under the terms or
provisions of any of the foregoing. None of Borrower or any Subsidiary is in
material default in the performance, observance or fulfillment of any of the terms,
obligations, covenants, conditions or provisions contained in any indenture or
other agreement creating, evidencing or securing indebtedness of any kind or
pursuant to which any such indebtedness is issued, or other agreement or
instrument to which Borrower or any Subsidiary is a party or by which Borrower
or any Subsidiary or their properties may be bound or affected, which would
have a material adverse effect on the financial condition, business or
operations of Borrower and the Subsidiaries taken as a whole.

 

4.2.3                     Governmental
Consent. No governmental orders, permissions,
consents, approvals or authorizations which have not previously been obtained
are required to be obtained by Borrower and no registrations or declarations
are required to be filed by Borrower in 

 

 

16

 

connection with, or contemplation of, the execution and delivery of,
and performance by Borrower under, this Agreement and the other Loan
Documents.  All required governmental
orders, permissions, consents, approvals or authorizations relating to the
consummation of the Merger and the Bank Merger have been obtained.

 

4.3                               Purposes
of Loans.

 

4.3.1                     Use
of Proceeds.  Borrower shall use the proceeds of the Loans
to finance the acquisition of Heritage and to increase the capital of the Bank,
with any remaining proceeds to be used for general corporate purposes.  Borrower does not own any “margin security”
as such term is defined in Regulation G of the FRB. Borrower will not use any
part of the proceeds of the Loans (a) directly or indirectly to purchase
or carry any margin security or reduce or retire any indebtedness originally
incurred to purchase any such margin security within the meaning of Regulation
U of the FRB, or (b) so as to involve Borrower or Lender in a violation of
Regulation U of the FRB. Borrower agrees to execute, or cause to be executed,
all instruments necessary to comply with all of the requirements of Regulation
U of the FRB.

 

4.3.2                     Usury.
The Loans constitute a transaction within the meaning of 815 ILCS 205/4(1).

 

4.4                               Financial
Condition.

 

4.4.1                     Borrower
Financial Statements. Borrower has delivered to
Lender copies of the consolidated financial statements of Borrower as of and
for the year ending December 31, 2006 (the “Borrower 2006 Audited Financial Statements Date”), audited by
Borrower’s Accountant (the “Borrower 2006
Audited Financial Statements”). 
Borrower has delivered to Lender copies of the unaudited consolidated
financial statements of Borrower as of and for the quarters ending March 31,
2007, June 30, 3007 and September 30, 2007 (the “Borrower Unaudited Financial Statements”).  The Borrower 2006 Audited Financial
Statements and the Borrower Unaudited Financial Statements are true and correct
in all material respects, are prepared in accordance with the respective books
of account and records of Borrower and its Subsidiaries and have been prepared
in accordance with GAAP applied on a basis consistent with prior periods, and
fairly and accurately present in all material respects the consolidated
financial condition of Borrower and its Subsidiaries and their assets and
liabilities and the results of their operations as of such date.  In addition, Borrower has delivered to Lender
copies of call reports filed by the Bank for the periods ending December 31,
2006, March 31, 2007, June 30, 2007, September 30, 2007 and December 31,
2007, and copies of regulatory filings (including Form FRY-9C filings)
(such call reports and regulatory filings, “Unaudited
Financial Statements” and together with the Borrower 2006 Audited
Financial Statements and the Borrower Unaudited Financial Statements, the “Borrower Financial Statements”). The
Unaudited Financial Statements are true and correct in all material respects,
are prepared in accordance with the respective books of account and records of
the Bank and have been prepared in accordance with applicable banking
regulations, rules and guidelines on a basis consistent with prior
periods, and fairly and accurately present in all material respects the
financial condition of the Bank and its assets and liabilities and the results
of its operations as of such date. The Borrower 2006 Audited Financial
Statements contain and reflect provisions for taxes, reserves and other
liabilities of Borrower in accordance with GAAP and applicable banking 

 

 

17

 

regulations, rules and guidelines, respectively. Neither Borrower
nor the Bank has any material debt, liability or obligation of any nature
(whether accrued, contingent, absolute or otherwise) which is not provided for
or disclosed in the Borrower Financial Statements.

 

4.4.2                     Loans.
Each loan having an outstanding balance of more than $1,000,000 and reflected
as an asset of the Bank in the Borrower Financial Statements is the legal,
valid and binding obligation of the obligor named therein, enforceable in
accordance with its terms. To Borrower’s knowledge, no obligor named therein is
seeking to avoid the enforceability of the terms of any loan, and no loan having
an unpaid balance (principal and accrued interest) in excess of $1,000,000 is
subject to any defense, offset or counterclaim.

 

4.4.3                     Allowance
for Loan Losses. The allowance for loan
losses shown in the Borrower Financial Statements is adequate in all material
respects to provide for losses, net of recoveries relating to loans previously
charged off, on loans and leases outstanding and contain an additional amount
of unallocated reserves for unanticipated future losses at levels considered
adequate based upon generally accepted safe and sound banking practices, as of
the date of such statements or reports. To Borrower’s knowledge, the aggregate
principal amount of loans contained in the loan portfolios of the Bank in
excess of corresponding reserves is collectible.

 

4.4.4                     Solvency.
After giving effect to the consummation of the transactions contemplated by
this Agreement (including the Merger and the Bank Merger), Borrower and the
Subsidiaries have capital sufficient to carry on their respective business and
transactions and all businesses and transactions in which they are about to
engage and each is solvent and able to pay its debts as they mature. No
transfer of property is being made and no indebtedness is being incurred in
connection with the transactions contemplated by this Agreement with the intent
to hinder, delay or defraud either present or future creditors of Borrower or
any Subsidiary.

 

4.4.5                     Subordination.
The Junior Subordinated Debentures are expressly subordinate and junior in all
respects (including, without limitation, with respect to the right of payment)
to the Loans to the extent provided in Indentures. The Loans constitute “Senior
Indebtedness” as defined in the Indentures.

 

4.5                               Title
to Properties.

 

4.5.1                     Owned
Property. 
Except for real property and other assets acquired and/or being acquired
from debtors in full or partial satisfaction of obligations owed to the Bank
and property or other assets leased by Borrower or the Bank, Borrower and the
Subsidiaries have, respectively, good and marketable fee title to all of the
Properties, and good and marketable title to all other property and assets
reflected in the latest balance sheet included as part of the Borrower
Financial Statements, excluding property and assets sold or otherwise disposed
of in the ordinary course of business subsequent to the date of such balance
sheet. Except for Properties and other assets acquired and/or being acquired
from debtors in full or partial satisfaction of obligations owed to the Bank
and property or other assets leased by Borrower or any Subsidiary, all property
and assets of any kind (real or personal, tangible or intangible) of Borrower
and any Subsidiary are free from any material liens, encumbrances or defects in
title, except for any liens granted herewith or previously by Borrower to
Lender.  None 

 

 

18

 

of Borrower or any Subsidiary has signed any financing statement or any
pledge agreement authorizing any secured party thereunder to file any such financing
statement.

 

4.5.2                     Leased
Property. For assets or Property leased by Borrower
or any Subsidiary, Borrower and each such Subsidiary enjoy peaceful and
undisturbed possession under all material Leases under which they are
operating, all of which permit the customary operations of Borrower and any
Subsidiary, as applicable. None of such Leases is in material default and no
event has occurred which with the passage of time or the giving of notice, or
both, would constitute a material default under any such Leases.

 

4.6                               No
Material Adverse Change.  Since the Borrower 2006 Audited Financial
Statements Date, none of the business, operations, properties or assets of
Borrower or any Subsidiary have been materially and adversely affected in any
way as the result of any act or event, including, without limitation, fire,
explosion, accident, act of God, strike, lockout, flood, drought, storm,
earthquake, combination of workers or other labor disturbance, riot, activity
of armed forces or of the public enemy, embargo, or nationalization,
condemnation, requisition or taking of property, or cancellation or
modification of contracts, by any domestic or foreign government or any
instrumentality or agency thereof. Since the Borrower 2006 Audited Financial
Statements Date, there have been no material changes in the assets,
liabilities, or condition, financial or otherwise, of Borrower and the
Subsidiaries taken as a whole, other than changes arising from transactions in
the ordinary course of business.

 

4.7                               Compliance
with Law. 
Borrower and the Subsidiaries have complied with all applicable
statutes, rules, regulations, orders and restrictions of any domestic or
foreign government, or any instrumentality or agency thereof, having jurisdiction
over the conduct of their respective businesses or the ownership of their
respective properties, except where any such failure to comply would not
materially and adversely affect the financial condition, business or operations
of Borrower and the Subsidiaries taken as a whole.

 

4.7.1                     Taxes.  Borrower and each Subsidiary have filed all
United States income tax returns and all state and municipal tax returns which
are required to be filed, and have paid, or made adequate provision for the
payment of, all material taxes which have become due pursuant to said returns
or pursuant to any assessment received by Borrower or any Subsidiary, other
than those not yet delinquent and except such taxes, if any, as are being
contested in good faith and as to which adequate reserves have been provided.  Borrower is unaware of any audit, assessment
or other proposed action or inquiry of the Internal Revenue Service with
respect to the United States income tax liability of Borrower or any
Subsidiary. To Borrower’s knowledge, Borrower and each Subsidiary have withheld
amounts from their employees, shareholders or holders of public deposit
accounts in full and complete compliance with the tax withholding provisions of
applicable federal, state and local laws and each has filed all federal, state
and local returns and reports for all years for which any such return or report
would be due with respect to employee income tax withholding, social security,
unemployment taxes, income and other taxes and all payments or deposits with
respect to such taxes have been made within the time period required by law.

 

4.7.2                     Regulatory
Enforcement Actions.  Neither Borrower nor any Subsidiary or any of
their respective officers or directors is now operating under any restrictions,

 

 

19

 

agreements, memoranda, or commitments (other than restrictions of
general application) imposed by any Governmental Agency, nor, to the knowledge
of Borrower, are any such restrictions threatened or agreements, memoranda or
commitments being sought by any Governmental Agency.

 

4.7.3                     Pending
Litigation. Except as otherwise
disclosed in Section 4.7.3
of the Disclosure Schedule, there are no actions, suits, proceedings or written
agreements pending, or, to the knowledge of Borrower, threatened or proposed,
against Borrower or any Subsidiary at law or in equity or before or by any
federal, state, municipal, or other governmental department, commission, board,
or other administrative agency, domestic or foreign, that, if adversely
determined, either separately or in the aggregate, will materially and
adversely affect the financial condition, business, or operations of Borrower
and the Subsidiaries taken as a whole; and none of Borrower or any Subsidiary
is in default with respect to any order, writ, injunction, or decree of, or any
written agreement with, any court, commission, board or agency, domestic or
foreign, that, either separately or in the aggregate, will materially and
adversely affect the financial condition, business, or operations of Borrower
and the Subsidiaries taken as a whole.

 

4.7.4                     RICO.
There are no suits, actions or proceedings pending or, to the knowledge of
Borrower, threatened against Borrower or any Subsidiary, or any of the
principals thereof, under a RICO Related Law.

 

4.7.5                     ERISA.
All Employee Benefit Plans established or maintained by Borrower or any ERISA
Affiliate or to which Borrower or any ERISA Affiliate contributes are in
material compliance with applicable requirements of ERISA, and are in material
compliance with applicable requirements (including qualification and
non-discrimination requirements) of the Code for obtaining the tax benefits the
Code thereupon permits with respect to such plans. Each Employee Benefit Plan
which is a group health plan (within the meaning of Section 5000(b)(1) of
the Code) complies with and has been maintained and operated in material
compliance with each of the requirements of Section 4980B of the Code.
Neither Borrower nor any ERISA Affiliate has failed to make any contributions
or to pay any amounts with respect to any Employee Benefit Plan. No “reportable
event” or “prohibited transaction,” as defined in ERISA, has occurred and is
continuing as to any Employee Benefit Plan and no excise taxes have been
incurred or security is required with respect to any Employee Benefit Plan.
Except as set forth in Section 4.7.5
of the Disclosure Schedule, no Employee Benefit Plan has, or as of the Closing
Date will have, any amount of unfunded benefit liabilities (as defined in Section 4001(a)(18)
of ERISA) for which Borrower or any ERISA Affiliate could be liable to any
Person under Title IV of ERISA if any such plan were terminated. All Employee
Benefit Plans are funded in accordance with Section 412 of the Code (if
applicable). There would be no obligations under Title IV of ERISA relating to
any Employee Benefit Plan that is a multiemployer plan if any such plan were
terminated or if Borrower or any ERISA Affiliate withdrew from any such plan.
Except as required by Section 4980B of the Code or applicable state
insurance laws and except as set forth in Section 4.7.5
of the Disclosure Schedule, neither Borrower nor any ERISA Affiliate has
promised any employee medical coverage after termination of employment, or
promised medical coverage to any former employee or other individual not
employed by Borrower or any ERISA Affiliate, and neither Borrower nor any ERISA
Affiliate maintains or contributes to any plan or arrangement providing medical
benefits

 

 

20

 

 

to employees after their termination of employment or any other
individual not employed by Borrower or any ERISA Affiliate.

 

4.7.6                     Environmental.
No Property is or, to Borrower’s knowledge, has been a site for the use,
generation, manufacture, storage, treatment, release, threatened release,
discharge, disposal, transportation or presence of any Hazardous Materials and
neither Borrower nor any Subsidiary has engaged in such activities. Neither
Borrower nor any Subsidiary is in material violation of any Hazardous Materials
Laws. There are no claims or actions (“Hazardous
Materials Claims”) pending or, to Borrower’s knowledge, threatened,
nor have there been any such claims or actions in the past, against Borrower or
any Subsidiary or any Property by any Governmental Agency or by any other
Person relating to any Hazardous Materials or pursuant to any Hazardous
Materials Law.

 

4.8                               Borrower
Status.

 

4.8.1                     Restrictions
on Borrower. Except as set forth under Section 4.8.1 of the Disclosure
Schedule, none of Borrower or any Subsidiary is a party, nor is bound by, any
material contract or agreement or instrument, or subject to any charter or
other corporate restriction materially and adversely affecting its financial
condition, business or operations or prohibiting it from paying dividends.

 

4.8.2                     Non-Foreign
Status. Borrower is not a nonresident alien for
purposes of U.S. income taxation and is not a foreign corporation, foreign
partnership, foreign trust or foreign estate (as said terms are defined in the
Code and Income Tax Regulations).

 

4.8.3                     Investment
Company Act. Borrower is not an “investment
company” or a company “controlled” by an “investment company,” within the
meaning of the Investment Company Act of 1940, as amended.

 

4.8.4                     No
Burdensome Agreements. None of Borrower or any
Subsidiary is a party to any agreement, instrument or undertaking or subject to
any other restriction which presently has a material adverse effect on the
business, operations or financial condition of Borrower and the Subsidiaries taken
as a whole.

 

4.9                               No
Misstatement.  No information, exhibit, report, schedule or
document furnished by Borrower to Lender in connection with the negotiation or
execution of this Agreement or the other Loan Documents contains any untrue
statement of a material fact, or omits to state a material fact or any fact
necessary to make the statements contained therein not misleading in light of
the circumstances when made or furnished to Lender.

 

4.10                        Representations
and Warranties Generally.  The representations and warranties set forth
in this Agreement or in any other Loan Document will be true and correct in all
material respects on the date of this Agreement and as otherwise provided
herein with the same force and effect as if made on each such date. All representations,
warranties, covenants and agreements made in this Agreement or in any
certificate or other document delivered to Lender by or on behalf of Borrower
pursuant to or in connection with this Agreement shall be deemed to have been
relied upon by Lender notwithstanding Lender’s review of any documents or
materials delivered by Borrower to Lender pursuant to the terms hereof and
notwithstanding 

 

 

21

 

any investigation heretofore or hereafter made by Lender or on its
behalf (and Borrower hereby acknowledges such reliance by Lender in making the
Loans and all disbursements thereunder) and, furthermore, shall survive the
making of any or all of the disbursements of proceeds under the Loans and
continue in full force and effect as long as there remains unperformed any
obligations to Lender hereunder or under any of the other Loan Documents.

 

5.                                      GENERAL
COVENANTS, CONDITIONS AND AGREEMENTS. 
Borrower hereby further covenants and agrees with Lender as follows:

 

5.1                               Material
Transactions.

 

5.1.1                     Structural
Changes. Borrower shall not itself, nor shall it
cause, permit or allow any Subsidiary to, purchase the assets of, merge with or
into or consolidate with or into, any other Person without the prior written consent
of Lender, which consent shall not be unreasonably withheld. Notwithstanding
the foregoing, Borrower may permit or allow any Subsidiary to merge with or
into or consolidate with or into any other Subsidiary without the prior written
consent of Lender and Borrower may consummate the Merger and the Bank Merger in
accordance with the terms and conditions set out in the Merger Agreement
without the prior written consent of Lender.

 

5.1.2                     Incurring
Debt. Borrower shall not itself, nor shall it cause,
permit or allow any Subsidiary to (a) create, assume, incur, have
outstanding, or in any manner become liable in respect of any Indebtedness,
other than that represented by this Agreement and the Notes; provided, however,
that the foregoing shall not restrict or operate to prevent:

 

5.1.2.1           the obligations of Borrower
owing to Lender and other Indebtedness and obligations of Borrower or any
Subsidiary from time to time owing to Lender;

 

5.1.2.2           Permitted Bank Indebtedness;

 

5.1.2.3           any Indebtedness of Borrower
solely to any Subsidiary, any Indebtedness of any Subsidiary solely to Borrower
and any Indebtedness of any Subsidiary solely to another Subsidiary;

 

5.1.2.4           unsecured subordinated
Indebtedness that ranks junior to the Subordinated Debt in all respects, including
as may be issued in connection with trust preferred securities caused to be
issued by Borrower; and

 

5.1.2.5           purchase money Indebtedness
and capitalized obligations secured by liens permitted hereby.

 

5.1.3                     Encumbrances.
Borrower shall not itself, nor shall it cause, permit or allow any Subsidiary
to, create, assume, incur, suffer or permit to exist any mortgage, pledge, deed
of trust, encumbrance, security interest, assignment, lien or charge of any
kind or character upon or with respect to any of their real or personal
property, including, without limitation, any capital stock owned by Borrower or
the Bank whether owned at the date hereof or hereafter acquired, excepting only
liens existing on the date hereof as shown on the Borrower Financial Statements;
provided, however, that the foregoing shall neither restrict nor operate to
prevent:

 

 

22

 

5.1.3.1           liens arising by statute in
connection with worker’s compensation, unemployment insurance, old age benefits,
social security obligations, taxes, assessments, statutory obligations or other
similar charges, good faith cash deposits in connection with tenders, contracts
or leases to which Borrower or any Subsidiary is a party or other cash deposits
in any such foregoing case that is required to be made in the ordinary course
of business, provided in each case that the obligation is not for borrowed
money and that the obligation secured is not overdue or, if overdue, is being
contested in good faith by appropriate proceedings which prevent enforcement of
the matter under contest and adequate reserves have been established therefor;

 

5.1.3.2           mechanics’, workmen’s,
materialmen’s, landlords’, carriers’ or other similar liens arising in the
ordinary course of business with respect to obligations which are not due or
which are being contested in good faith by appropriate proceedings which
prevent enforcement of the matter under contest;

 

5.1.3.3           the pledge of assets for the
purpose of securing an appeal, stay or discharge in the course of any legal
proceeding, provided that the aggregate amount of liabilities of Borrower and
the Subsidiaries secured by a pledge of assets permitted under this subsection,
including interest and penalties thereon, if any, shall not be in excess of
$10,000,000 at any one time outstanding;

 

5.1.3.4           liens, charges and
encumbrances incidental to the conduct of the business of Bank incurred in the
ordinary course of business and not in connection with the borrowing of money,
and liens securing Permitted Bank Indebtedness in the ordinary course of
business;

 

5.1.3.5           liens on property of
Borrower or any Subsidiary created solely for the purpose of securing
Indebtedness permitted by Section 5.1.2.5,
representing or incurred to finance, refinance or refund the purchase price of
property, provided that no such lien shall extend to or cover other property of
Borrower or such Subsidiary other than the respective property so acquired, and
the principal amount of Indebtedness secured by any such lien shall at no time
exceed the original purchase price of such property;

 

5.1.3.6           liens to secure public funds
or other pledges of funds required by law to secure deposits;

 

5.1.3.7           repurchase agreements,
reverse repurchase agreements and other similar transactions entered into by
Bank in the ordinary course of its banking or trust business; and

 

5.1.3.8           utility easements, building
restrictions and such other encumbrances or charges against real property as
are of a nature generally existing with respect to properties of a similar
character and which do not in any material way affect the marketability of the
same or interfere with the use thereof in the business of Borrower or the
Subsidiaries..

 

5.1.4                     Asset
Sales. Borrower shall not itself, nor shall it
cause, permit or allow any Subsidiary to, dispose of by sale, assignment, lease
or otherwise, property or assets now owned or hereafter acquired if such
property or assets plus all other properties and assets sold, 

 

 

23

 

leased, transferred or otherwise disposed of during the 12-month period
ending on the date of such sale, lease or other disposition shall have an
aggregate value of more than 2% of the consolidated assets of Borrower as
reflected in the most recent balance sheet delivered to Lender pursuant to Section 6.1, except in the
ordinary course of business.

 

5.1.5                     Making
Loans. Borrower shall not, nor shall it cause,
permit or allow any Subsidiary to, make any loans or advances, whether secured
or unsecured, to any Person, other than (a) loans or advances made by the
Bank in the ordinary course of business and in accordance with applicable laws
and regulations and safe and sound banking practices and (b) any loan made
to Borrower by a trust that has been established by Borrower in connection with
any trust preferred securities caused to be issued by, or reflected in the
consolidated financial statements of, Borrower, so long as the Indebtedness of
Borrower evidencing such loan is junior to the Subordinated Debt in all
respects.

 

5.2                               Pledged
Shares.

 

5.2.1                     Encumbrance.
Borrower shall not itself, nor shall it cause, permit or allow any Subsidiary
to, directly or indirectly, create, assume, incur, suffer or permit to exist
any pledge, encumbrance, security interest, assignment, lien or charge of any
kind or character on the Bank Shares, except for any security interest granted
herewith or previously by Borrower to Lender. Borrower shall not sell,
transfer, issue, reissue, exchange or grant any option with respect to the Bank
Shares.

 

5.2.2                     Dilution.
Borrower shall not itself, nor shall it cause, permit or allow any Subsidiary
to, cause or allow the percentage of Bank Shares owned by Borrower to diminish
as a percentage of the outstanding capital stock of the Bank.

 

5.2.3                     Structural
Changes. Borrower shall not itself, nor shall it
cause, permit or allow any Subsidiary to, redeem any of the Bank Shares,
declare a stock dividend on the Bank Shares or otherwise change the capital
structure of the Bank.

 

5.3                               Business
Operations.

 

5.3.1                     Compliance
with Loan Documents. Borrower shall not itself,
nor shall it cause, permit or allow any Subsidiary to, breach or fail to
perform or observe any of the material terms and conditions of the Notes, the
Pledge Agreement or any other Loan Document.

 

5.3.2                     Banking
Practices. Borrower shall not itself, nor shall it
cause, permit or allow any Subsidiary to, engage in any unsafe or unsound
banking practices as determined by a Governmental Agency.

 

5.3.3                     Capital
Expenditures. Borrower shall not itself,
nor shall it cause, permit or allow any Subsidiary to, make or incur aggregate
combined Capital Expenditures during any fiscal year in an amount greater than
the total consolidated depreciation of Borrower for the immediately preceding
fiscal year (such amount to be derived from the audited financial statements of
Borrower delivered in accordance with Section 6.1
hereof).

 

 

24

 

5.3.4                     Affiliate
Transactions. Borrower shall not itself,
nor shall it cause, permit or allow any Subsidiary to enter into any
transaction including, without limitation, the purchase, sale or exchange of
property or the rendering of any service, with any Affiliate except in the
ordinary course of business and pursuant to the reasonable requirements of
Borrower’s or such Affiliate’s business and upon terms consistent with
applicable laws and regulations and reasonably found by the appropriate board(s) of
directors to be fair and reasonable and no less favorable to Borrower or such
Affiliate than would be obtained in a comparable arm’s length transaction with
a Person not an Affiliate.

 

5.3.5                     Insurance.  Borrower will maintain, and will cause each
Subsidiary to maintain, bonds and insurance to such extent, covering such risks
as is usual and customary for owners of similar businesses and properties in
the same general area in which Borrower or a Subsidiary operates, including,
without limitation, insurance for fire and other risks insured against by
extended coverage, public liability insurance, workers’ compensation insurance
and such additional bonds and insurance as may reasonably be requested by
Lender. All such bonds and policies of insurance shall be in a form, in an
amount and with issuers/insurers recognized as adequate by prudent business
persons

 

5.3.6                     Trust
Preferred Distributions.  Nothing in this Agreement shall prohibit
Borrower from making such payments as may be required pursuant to the existing
Junior Subordinated Debenture, or any newly issued trust preferred securities
that may be issued by Borrower or any Subsidiary after the date of this
Agreement; provided that the Indebtedness issued in connection with such newly
issued trust preferred securities is junior to the Subordinated Debt in all
respects.

 

5.4                               Compliance
with Laws.

 

5.4.1                     Generally.
Borrower shall comply, and cause each Subsidiary to comply, in all material
respects with all applicable statutes, rules, regulations, orders and
restrictions in respect of the conduct of their respective businesses and the
ownership of their respective properties.

 

5.4.2                     Regulated
Activities. Borrower shall not itself,
nor shall it cause, permit or allow any Subsidiary to (a) engage in any
business or activity not permitted by all applicable laws and regulations,
including without limitation, the Bank Holding Company Act of 1956, as amended,
the NBA, the FDI Act and any regulations promulgated thereunder, or (b) make
any loan or advance secured by the capital stock of another bank or depository
institution, or acquire the capital stock, assets or obligations of or any
interest in another bank or depository institution, other than as contemplated
by the Merger and the Bank Merger, in each case other than in the ordinary
course of business and in accordance with applicable laws and regulations and
safe and sound banking practices.

 

5.4.3                     Taxes.
Borrower shall timely pay and discharge all taxes, assessments and other
governmental charges imposed upon Borrower or any Subsidiary or upon the
income, profits, or property of Borrower or any Subsidiary and all claims for
labor, material or supplies which, if unpaid, might by law become a lien or
charge upon the property of Borrower or any Subsidiary. None of Borrower or any
Subsidiary shall be required to pay any such tax, 

 

 

25

 

assessment, charge or claim, so long as the validity thereof shall be
contested in good faith by appropriate proceedings, and reserves therefor shall
be maintained on the books of Borrower and such Subsidiary as are deemed
adequate by Lender.

 

5.4.4                     ERISA.
As soon as possible, and in any event within ten Business Days, after: (a) Borrower
or any ERISA Affiliate knows that with respect to any Employee Benefit Plan, a “prohibited
transaction,” a “reportable event,” or any other event or condition which could
subject Borrower or any ERISA Affiliate to liability under ERISA or the Code;
or (b) the institution of steps by Borrower or any ERISA Affiliate to
withdraw from, or the institution of any steps by any party to terminate, any
Employee Benefit Plan; has or may have occurred, Borrower shall deliver to
Lender a certificate of a responsible officer setting forth the details of such
matter, the action that Borrower proposes to take with respect thereto, and,
when known, any action taken or threatened by the Internal Revenue Service, the
U.S. Department of Labor, or the Pension Benefit Guarantee Corporation. For
purposes of this covenant, Borrower shall be deemed to have knowledge of all
facts known by the fiduciaries of any plan of Borrower or any ERISA Affiliate.

 

5.4.5                     Environmental
Matters. Borrower shall: (a) comply, and cause
each Subsidiary to comply, in all material respects with all Hazardous
Materials Laws; (b) promptly advise Lender in writing and in reasonable
detail of (i) any Condition or Release required to be reported to any
Governmental Agency under any applicable Hazardous Materials Laws, (ii) any
and all written communications with respect to Hazardous Materials Claims or
any Condition or Release required to be reported to any Governmental Agency, (iii) any
remedial action taken by Borrower or any other Person in response to (A) any
Hazardous Material on, under or about any Property, the existence of which is
reasonably likely to give rise to a Hazardous Materials Claim, or (B) any
Hazardous Materials Claim that could reasonably be expected to have a material
adverse effect on Borrower and the Subsidiaries taken as a whole, (iv) any
request for information from any Governmental Agency indicating that such
agency has initiated an investigation as to whether Borrower or any Subsidiary
may be potentially responsible for a Condition or Release or threatened
Condition or Release of Hazardous Materials; (c) at its own expense,
provide copies of such documents or information as Lender may reasonably
request in relation to any matters disclosed pursuant to this Section 5.4.5; (d) promptly
take any and all necessary remedial action in connection with any Condition or
Release or threatened Condition or Release on, under or about any Property in
order to comply in all material respects with all applicable Hazardous
Materials Laws.  In the event Borrower or
any Subsidiary undertakes any remedial action with respect to such Hazardous
Material on, under or about any Property, Borrower or such Subsidiary shall
conduct and complete such remedial action in compliance with all applicable
Hazardous Materials Laws and in accordance with the policies, orders and
directives of all Governmental Agencies. 
Borrower shall promptly notify Lender of (1) any acquisition of
stock, assets, or property by Borrower or any Subsidiary that reasonably could
be expected to expose Borrower or any Subsidiary to, or result in, a Hazardous
Materials Claim that could have a material adverse effect or that could be
expected to have a material adverse effect on any governmental authorization,
license, permit or approval then held by Borrower or any Subsidiary, and (2) any
proposed action outside the normal course of business to be taken by Borrower
or any Subsidiary to commence industrial or other operations that could subject
Borrower or any Subsidiary to additional laws, rules or regulations,
including, without limitation, laws, rules and regulations requiring
additional environmental permits or licenses.

 

 

26

 

5.4.6                     Corporate
Existence. 
Subject to Section 5.1.1
hereof, Borrower shall do or cause to be done all things necessary to maintain,
preserve and renew its corporate existence and that of the Subsidiaries, except
where the failure to do so would not have a material adverse effect on the
business, operations or financial condition of Borrower and the Subsidiaries
taken as a whole.

 

5.5                               Lender
Expenses. 
Whether or not any Loan is made, Borrower will (a) pay all
reasonable costs and expenses of Lender incident to the transactions
contemplated by this Agreement including, without limitation, all costs and
expenses incurred in connection with the preparation, negotiation and execution
of the Loan Documents, or in connection with any modification, amendment,
alteration, or the enforcement of this Agreement, the Notes, the Subordinated
Debenture or the other Loan Documents, including, without limitation, Lender’s
out-of-pocket expenses and the charges and disbursements to counsel retained by
Lender (in the case of legal fees, up to a maximum amount of $30,000), and (b) pay
and save Lender and all other holders of the Notes and Subordinated Debenture
harmless against any and all liability with respect to amounts payable as a
result of (i) any taxes which may be determined to be payable in
connection with the execution and delivery of this Agreement, the Notes, the
Subordinated Debenture or the other Loan Documents or any modification,
amendment or alteration of the terms or provisions of this Agreement, the
Notes, the Subordinated Debenture or the other Loan Documents, (ii) any
interest or penalties resulting from nonpayment or delay in payment of such
expenses, charges, disbursements, liabilities or taxes, and (iii) any
income taxes in respect of any reimbursement by Borrower for any of such
violations, taxes, interests or penalties paid by Lender. The obligations of
Borrower under this Section 5.5
shall survive the repayment in full of the Notes and the Subordinated Debenture.
Any of the foregoing amounts incurred by Lender and not paid by Borrower upon
demand shall bear interest from the date incurred at the rate of interest in
effect or announced by Lender from time to time as its Base Rate plus two
percent (2%) per annum and shall be deemed part of Borrower’s Liabilities
hereunder.

 

5.6                               Subordinated
Debt.  If the
Subordinated Debt ceases to be deemed to be Tier 2 Capital, other than due to
the limitation imposed by the second sentence of 12 C.F.R. §250.166(e), which limits
the capital treatment of subordinated debt during the five years immediately
preceding the maturity date of the subordinated debt, or if Borrower shall
receive a Federal Reserve Notice (as defined in Section 8.6), Borrower shall: (a) as promptly as practicable
notify Lender; and (b) as promptly as practicable upon request of Lender
execute and deliver all such agreements (including, without limitation, pledge
agreements and replacement notes) as Lender may reasonably request in order to
restructure the obligations evidenced by the Subordinated Debt as a senior
secured obligation of Borrower. Provided no Event of Default or Potential Event
of Default shall have occurred, Lender agrees that it shall engage in good
faith discussions with Borrower to modify the interest rate applicable to the
Subordinated Debt to a rate that is more appropriate for a senior debt
facility.

 

5.7                               Inspection
Rights. 
Borrower shall permit and cause the Subsidiaries to permit Lender,
through Lender’s duly authorized representatives and agents, to inspect any of
the properties, corporate books and financial books and records of Borrower and
any Subsidiary at such reasonable times and reasonable intervals as Lender may
request.

 

 

27

 

6.                                      REPORTING.  Borrower shall furnish and deliver to lender:

 

6.1                               Annual.  As soon as available, but in any event not
more than 90 days after the close of each fiscal year of Borrower, or within
such further time as Lender may permit, consolidated audited financial
statements for Borrower and the Subsidiaries, including a balance sheet and
related profit and loss statement, prepared in accordance with GAAP
consistently applied throughout the periods reflected therein by Borrower’s
Accountant, who shall give their unqualified opinion with respect thereto.

 

6.2                               Quarterly.  Upon the reasonable request of Lender, (a) the
call reports filed by the Bank with state or federal bank regulatory agencies, (b) the
Quarterly Reports on Form 10-Q and Current Reports on Form 8-K filed
by Borrower with the Securities and Exchange Commission and (c) Forms
FRY-9C filed by Borrower with federal bank regulatory agencies.

 

6.3                               Compliance
Certificate.  Borrower shall furnish Lender within 45 days
of the close of each calendar quarter a quarterly compliance certificate in the
form attached as Exhibit E
hereto, which certificate shall state that (a) Borrower is in compliance
in all material respects with all covenants contained in this Agreement, (b) that
no Event of Default has occurred or is continuing, or, if there is any such
event, describing such event, the steps, if any, that are being taken to cure
it, and the time within which such cure will occur and (c) all
representations and warranties made by Borrower herein continue to be true as
of the date of such certificate. Such quarterly compliance certificate shall be
signed by the President and Chief Executive Officer or Chief Financial Officer
of Borrower and shall also contain, in a form and with such specificity as is
reasonably satisfactory to Lender, such additional information as Lender shall
have reasonably requested by Borrower prior to the submission thereof.

 

6.4                               Copies
of Other Reports and Correspondence.  To the extent permitted by law, promptly
after same are available, copies of each annual report, proxy or financial
statement or other report or communication sent by Borrower or any Subsidiary
to the shareholders of Borrower, and copies of all annual, regular, periodic
and special reports and registration statements which Borrower or any
Subsidiary may file or be required to file with any federal or state banking
regulatory agency or any other Governmental Agency or with any securities
exchange, and each call report and Uniform Bank (and Bank Holding Company)
Performance Report with respect to Borrower. Promptly after presentation,
copies of all written reports presented to the board of directors of Borrower,
as Lender may from time to time reasonably request. Promptly upon receipt
thereof, one copy of each written audit report submitted to Borrower by
Borrower’s Accountant.

 

6.5                               Proceedings.  As promptly as practicable after receiving
knowledge thereof, notice in writing of all charges, assessments, actions,
suits and proceedings (as well as notice of the outcome of any such charges,
assessments, actions, suits and proceedings) that are initiated by, or brought
before, any court or Governmental Agency, in connection with Borrower or the
Bank, other than ordinary course of business litigation not involving the FRB,
the FDIC or the OCC, which, if adversely decided, would not have a material
adverse effect on the financial condition or operations of Borrower and the
Subsidiaries taken as a whole.

 

 

28

 

6.6                               Event
of Default; Material Adverse Change.  Promptly after the occurrence thereof, notice
of any other matter which has resulted in, or could reasonably be expected to
result in, an Event of Default or a material adverse change in the financial
condition, business or operations of Borrower and the Subsidiaries taken as a
whole.

 

6.7                               Other
Information Requested by Lender.  Such other information concerning the
business, operations, financial condition and regulatory status of Borrower or
any Subsidiary as Lender may from time to time reasonably request, so long as
such information is not confidential and related to a customer of Borrower or
any Subsidiary.

 

7.                                      FINANCIAL
COVENANTS.

 

7.1                               Capitalization.  Borrower shall cause the Bank to maintain
such capital as may be necessary to cause the Bank to be classified as “well
capitalized” and Borrower shall be “adequately capitalized,” each in accordance
with the rules and regulations of its respective primary federal
regulator, as in effect from time to time and consistent with the financial
information and reports contemplated in Section 6
hereof.

 

7.2                               Regulatory
Capital. 
Borrower shall cause the Bank to maintain (a) a “leverage ratio”
(Tier 1 Capital to Average Total Assets) of at least 5.0%; (b) a “total
risk based capital ratio” (the sum of Tier 1 Capital and Tier 2 Capital to
Risk-Weighted Assets) of at least 10.0%; and (c) a “Tier 1 Capital ratio”
(Tier 1 Capital to Risk-Weighted Assets) of at least 6.0%. The ratios set forth
in this Section 7.2
shall be calculated quarterly beginning with the quarter ended March 31,
2008, shall be derived from the applicable quarterly reports filed by Borrower
and the Bank with its applicable primary federal regulator and shall be
consistent with the financial information and reports contemplated in Section 6 hereof. For purposes of
this Agreement, “Risk-Weighted Assets”
and “Average Total Assets” shall
have the definitions provided in, and shall be determined in accordance with,
the rules and regulations of the primary federal regulator of Borrower and
the Bank, as in effect from time to time.

 

7.3                               Minimum
Return on Average Assets.  Borrower shall cause the Bank to maintain, on
an annualized basis, an annual return on Average Total Assets of at least
0.60%. The covenant set forth in this Section 7.3
shall be calculated quarterly beginning with the test period ending March 31,
2008.  The calculation shall be made by
dividing (a) Bank’s consolidated net income for such test period, as
determined from the quarterly Call Report of Bank, by (b) the simple
average, computed for the four calendar quarters comprising the test period, of
Bank’s Average Total Assets as reported on Bank’s Call Report for each of such
calendar quarters.  As used herein, the
term “test period” means a period of four consecutive calendar quarters.

 

7.4                               Nonperforming
Loans Ratio; Loan Loss Reserve.  Borrower shall cause the Bank to maintain the
ratio of (a) Nonperforming Loans to (b) Primary Capital of not more
than 25.0%.  The ratio set forth in this Section 7.4 shall be calculated
quarterly beginning with the quarter ended March 31, 2008, shall be
derived from the quarterly report filed by the Bank with its primary federal
regulator and shall be consistent with the financial information and reports
contemplated in Section 6
hereof. For purposes of this Agreement, “Nonperforming
Loans” shall mean, on an aggregate basis for the Bank, the sum of
all Other Real Estate Owned and 

 

 

29

 

repossessed assets, non-accrual loans, restructured loans and loans on
which any payment is 90 or more days past due but which continue to accrue
interest, which shall be derived from the applicable quarterly reports filed by
the Bank with its primary federal regulator, which shall be consistent with the
financial information and reports contemplated in Section 6  hereof and “Primary Capital” shall mean Borrower’s Tier 1 Capital which
shall be derived from the quarterly reports filed by Borrower with its
applicable primary federal regulator and shall be consistent with the financial
information and reports contemplated in Section 6
hereof. For purposes of this Agreement, “Other
Real Estate Owned” shall mean the aggregate amount set forth as “other
real estate owned” in the quarterly reports filed by the Bank with its
applicable primary federal regulator, which shall be consistent with the
financial information and reports contemplated in Section 6 hereof.

 

8.                                      BORROWER’S
DEFAULT.

 

8.1                               Borrower’s
Defaults and Lender’s Remedies.

 

8.1.1                     Events
of Default.  Each of the following shall constitute an “Event
of Default” under this Agreement:

 

8.1.1.1           Borrower fails to pay, when
due, any principal of or installment of interest on any Note, and such failure
continues for a period of five Business Days after notice thereof from Lender
to Borrower; or

 

8.1.1.2           Borrower fails to pay, when
due, any other amount payable under this Agreement, the Notes (other than
principal or interest) or any other Loan Document, and such failure continues
for a period of five Business Days after notice thereof from Lender to
Borrower; or

 

8.1.1.3           Borrower fails to keep or
perform any of its agreements, undertakings, obligations, covenants or
conditions under this Agreement not expressly referred to in another clause of
this Section 8.1 and
such failure continues for a period of 30 days after notice thereof from Lender
to Borrower; or

 

8.1.1.4           Any “Event of Default” or “Default”
as defined under, or a default or breach in any respect by Borrower of any
representation, warranty, covenant or agreement under, any of the Loan
Documents occurs and is not cured within any applicable grace period; or

 

8.1.1.5           Any representation, warranty
or certification made in this Agreement by Borrower or otherwise made in
writing in connection with or as contemplated by this Agreement or any of the
other Loan Documents by Borrower shall be or become materially incorrect or
false, or any representation to Lender by Borrower as to the financial
condition or credit standing of Borrower is or proves to be materially false or
misleading; or

 

8.1.1.6           The dissolution of Borrower,
or the occurrence of any material management or organizational change in
Borrower which Lender determines, in its reasonable discretion, shall have a
material adverse effect on any Loan or on the ability of Borrower to perform
its respective obligations under the Loan Documents; or

 

 

30

 

 

8.1.1.7           The execution by Borrower of
any secondary or additional financing agreements or arrangements of any kind
whatsoever secured, in whole or in part, by all or any part of or interest in
any Collateral; or

 

8.1.1.8           There occurs a material
adverse change in the financial condition of Borrower, which Lender determines,
in its reasonable discretion, shall have a material adverse effect on any Loan
or on the ability of Borrower to perform its respective obligations under the
Loan Documents; or

 

8.1.1.9           Any order or decree is
entered by any court of competent jurisdiction directly or indirectly enjoining
or prohibiting Lender or Borrower from performing any of their obligations
under this Agreement or any of the Loan Documents, and such order or decree is
not vacated, and the proceedings out of which such order or decree arose are
not dismissed, within 60 days after the granting of such decree or order; or

 

8.1.1.10    The filing of formal charges
by any governmental or quasi-governmental entity, including, without
limitation, the issuance of an indictment, under a RICO Related Law against
Borrower or any Affiliate of Borrower; or

 

8.1.1.11    Final judgment or judgments
for the payment of money is or are outstanding against any Borrower or against
any of their property or assets, and any one of such judgments has remained
unpaid, unvacated, unbonded or unstayed by appeal or otherwise for a period of
30 days from the date of its entry; or

 

8.1.1.12    The FRB, the FDIC, the OCC
or other Governmental Agency charged with the regulation of bank holding
companies or depository institutions: (a) issues to Borrower or the Bank,
or initiates any action, suit or proceeding to obtain against, impose on or
require from Borrower or the Bank, a cease and desist order or similar regulatory
order, the assessment of civil monetary penalties, articles of agreement, a
memorandum of understanding, a capital directive, a capital restoration plan,
restrictions that prevent or as a practical matter impair the payment of
dividends by the Bank or the payments of any debt by Borrower, restrictions
that make the payment of the dividends by the Bank or the payment of debt by
Borrower subject to prior regulatory approval, a notice or finding under Section 8(a) of
the FDI Act, or any similar enforcement action, measure or proceeding; or (b) proposes
or issues to any executive officer or director of Borrower or the Bank, or
initiates any action, suit or proceeding to obtain against, impose on or
require from any such officer or director, a cease and desist order or similar
regulatory order, a removal order or suspension order, or the assessment of
civil monetary penalties; or

 

8.1.1.13    The Bank is notified that it
is considered an institution in “troubled condition” within the meaning of 12
U.S.C. Section 1831(i) and the regulations promulgated thereunder, or
if a conservator or receiver is appointed for the Bank; or

 

8.1.1.14    Borrower or any Subsidiary
becomes insolvent or is unable to pay its debts as they mature; or makes an
assignment for the benefit of creditors or admits in writing its inability to
pay its debts as they mature; or suspends transaction of its usual business; or
if a trustee of any substantial part of the assets of Borrower or any
Subsidiary is applied for or 

 

 

31

 

appointed, and if appointed in a proceeding brought against Borrower,
Borrower by any action or failure to act indicates its approval of, consent to,
or acquiescence in such appointment, or within 30 days after such appointment,
such appointment is not vacated or stayed on appeal or otherwise, or shall not
otherwise have ceased to continue in effect; or

 

8.1.1.15    Any proceedings involving
Borrower or any Subsidiary are commenced by or against Borrower or any
Subsidiary under any bankruptcy, reorganization, arrangement, insolvency,
readjustment of debt, dissolution or liquidation law or statute of the federal
government or any state government and, with respect to Borrower only, if such
proceedings are instituted against Borrower, Borrower by any action or failure
to act indicates its approval of, consent to or acquiescence therein, or an
order shall be entered approving the petition in such proceedings and within 30
days after the entry thereof such order is not vacated or stayed on appeal or
otherwise, or shall not otherwise have ceased to continue in effect; or

 

8.1.1.16    Borrower applies for,
consents to or acquiesces in the appointment of a trustee, receiver,
conservator or liquidator for itself under the Code Provisions, or in the
absence of such application, consent or acquiescence, a trustee, conservator,
receiver or liquidator is appointed for Borrower under the Code Provisions, and
is not discharged within 30 days, or any bankruptcy, reorganization, debt
arrangement or other proceeding or any dissolution, liquidation, or
conservatorship proceeding is instituted by or against Borrower under the Code
Provisions, and if instituted against Borrower, is consented or acquiesced in
by it or remains for 30 days undismissed, or if Borrower is enjoined,
restrained or in any way prevented from conducting all or any material part of
its business under the Code Provisions; or

 

8.1.1.17    The Bank applies for,
consents to or acquiesces in the appointment of a receiver for itself, or in the
absence of such application, consent or acquiescence, a receiver is appointed
for the Bank and is not discharged within 30 days; or

 

8.1.1.18    If 15 days after notice
thereof, Borrower or any Subsidiary continues to be in default in any payment
of principal or interest for any other obligation of more than $100,000 or in
the performance of any other term, condition or covenant contained in any
material agreement (including, without limitation, an agreement in connection
with the acquisition of capital equipment on a title retention or net lease
basis), under which any such obligation is created the effect of which default
is to cause or permit the holder of such obligation to cause such obligation to
become due prior to its stated maturity; or

 

8.1.1.19    The Pledged Stock (as
defined in the Pledge Agreement) is attached, seized, subjected to a writ of
distress warrant, or is levied upon or becomes subject to any lien, claim,
security interest or other encumbrance of any kind, or comes within the
possession of any receiver, trustee, custodian or assignee for the benefit of
creditors; or

 

8.1.1.20    Any Subsidiary applies for,
consents to or acquiesces in the appointment of a receiver for itself, or in
the absence of such application, consent or acquiescence, a receiver is
appointed for any Subsidiary;

 

8.1.1.21    Either of the Junior
Subordinated Debentures is no longer (or any other Indebtedness incurred in
connection with, or relating to, any trust preferred 

 

 

32

 

securities issued by a trust created by Borrower is not) junior and
subordinate in all respects to the Loans;

 

8.1.1.22    Borrower exercises its right
to defer payment of interest under either of the Junior Subordinated Debentures
pursuant to the Indentures or the Borrower otherwise defers the payment of
interest on either of the Junior Subordinated Debentures (or any other
Indebtedness incurred in connection with, or relating to, any trust preferred
securities issued by a trust created by Borrower) or the payment of
distributions on the securities issued by either of the Trusts (or any trust
created by Borrower); or

 

8.1.1.23    Borrower fails to deliver
proof satisfactory to Lender that each of the Merger and the Bank Merger has
been consummated in accordance with the terms and conditions of the Merger
Agreement within ten days of the Closing Date.

 

8.1.2                     Lender’s
Remedies. 
Subject to Section 8.6,
upon the occurrence of any Event of Default, Lender shall have the right, if
such Event of Default shall then be continuing, in addition to all the remedies
conferred upon Lender by law or equity or the terms of any Loan Document, to do
any or all of the following, concurrently or successively, without notice to
Borrower:

 

8.1.2.1           Declare the Senior Notes to
be, and it shall thereupon become, immediately due and payable without
presentment, demand, protest or notice of any kind, all of which are hereby
expressly waived, anything contained herein or in the Term Note or the
Revolving Note to the contrary notwithstanding; or

 

8.1.2.2           Terminate Lender’s
obligations under this Agreement to extend credit of any kind or to make any
disbursement, whereupon the commitment and obligation of Lender to extend
credit or to make disbursements hereunder shall terminate; or

 

8.1.2.3           Exercise all of its rights
and remedies at law, in equity and/or pursuant to any or all Collateral
Documents, including foreclosing on the Collateral.

 

Borrower shall
pay to Lender, upon demand, all expenses (including, without limitation,
attorneys’ fees and expenses) of obtaining such judgment or decree or of
otherwise seeking to enforce its rights under this Agreement or any of the
other Loan Documents or other related documents; and all such expenses, as
determined by Lender in its sole and absolute discretion, shall, until paid, be
secured by the Loan Documents and shall bear interest at the Default Rate.  Upon the occurrence of an Event of Default,
it is specifically understood and agreed that, notwithstanding the curing of
such Event of Default, Borrower shall not be released from any of its covenants
hereunder unless and until the Senior Notes are paid in full.

 

8.2                               Protective
Advances.  If
an Event of Default occurs, Lender may (but shall in no event be required to)
cure any such Event of Default and any amounts expended by Lender in so doing,
as determined by Lender in its sole and absolute discretion, shall (a) be
deemed advanced by Lender under an obligation to do so regardless of the
identity of the person or persons to whom such funds are furnished, (b) constitute
additional advances hereunder, the payment of which is additional indebtedness
evidenced by the applicable Note(s) that correspond(s) to the 

 

 

33

 

subject Event of Default, and (c) become due and owing, at Lender’s
demand, with interest accruing from the date of disbursement thereof until
fully paid at the Default Rate.

 

8.3                               Other
Remedies.  If
any Event of Default shall occur and be continuing, Lender may, in addition to
any other rights and remedies hereunder, exercise any and all remedies provided
in any of the other Loan Documents and other related documents.

 

8.4                               No
Lender Liability.  To the extent permitted by law, Lender shall
have no liability for any loss, damage, injury, cost or expense resulting from
any action or omission by it, or any of its representatives, which was taken,
omitted or made in good faith.

 

8.5                               Lender’s
Fees and Expenses.  In case of any Event of Default hereunder,
Borrower shall pay Lender’s reasonable fees and expenses including, without
limitation, attorneys’ fees and expenses, in connection with the enforcement of
this Agreement or any of the other Loan Documents or other related documents.

 

8.6                               Limitation
on Remedies with Respect to Subordinated Debt.  If an Event of Default under Sections 8.1.1.16 or 8.1.1.17 shall occur, Lender may
declare the Subordinated Debenture and any other amounts due Lender hereunder
immediately due and payable, whereupon the Subordinated Debenture and such
other amounts payable hereunder shall immediately become due and payable,
without presentment, demand, protest or notice of any kind. If Borrower
receives a written notification from the FRB that the Subordinated Debenture no
longer constitutes Tier 2 Capital of Borrower (the “Federal Reserve Notice”), other than due to the limitation
imposed by the second sentence of 12 C.F.R. §250.166(e), which limits the
capital treatment of subordinated debt during the five years immediately
preceding the maturity date of the subordinated debt, and if thereafter any
Event of Default shall occur under Section 8.1,
Lender may declare the Subordinated Debenture and any other amounts due Lender
hereunder immediately due and payable, whereupon the Subordinated Debenture and
such other amounts payable hereunder shall immediately become due and payable,
without presentment, demand, protest or notice of any kind. Upon the occurrence
of an Event of Default, it is specifically understood and agreed that,
notwithstanding the curing of such Event of Default, Borrower shall not be
released from any of its covenants hereunder unless and until the Subordinated
Debenture is paid in full. Upon the occurrence of an Event of Default without
notice by Lender to or demand by Lender of Borrower, Lender shall have no further
obligation to and may then forthwith cease advancing monies or extending credit
to or for the benefit of Borrower under this Agreement and the other Loan
Documents. The parties agree that until the earlier of the Subordinated Debt
Maturity Date or the delivery of a Federal Reserve Notice, Lender may only
enforce Borrower’s obligations under the Subordinated Debt if (a) Borrower
fails to pay interest when due on the Subordinated Debenture, in which case
Lender may pursue Borrower for such interest, (b) Borrower fails to comply
with any of the covenants set forth in Section 5
in which case Lender may pursue Borrower to ensure that Borrower complies with
such covenants, or (c) an Event of Default occurs under Sections 8.1.1.16 or 8.1.1.17, in which case the first
sentence of this Section 8.6
shall govern.

 

 

34

 

9.                                      MISCELLANEOUS.

 

9.1                               Release;
Indemnification.  Borrower hereby releases Lender from any and
all causes of action, claims or rights which Borrower may now or hereafter have
for, or which may arise from, any loss or damage caused by or resulting from (a) any
failure of Lender to protect, enforce or collect in whole or in part any of the
Collateral and (b) any other act or omission to act on the part of Lender,
its officers, agents or employees, except in each instance for willful
misconduct and gross negligence. Borrower shall indemnify, defend and hold
Lender and its Affiliates harmless from and against any and all losses,
liabilities, obligations, penalties, claims, fines, demands, litigation,
defenses, costs, judgments, suits, proceedings, actual damages, disbursements
or expenses of any kind or nature whatsoever (including, without limitation,
attorneys’ fees and expenses) which may at any time be either directly or
indirectly imposed upon, incurred by or asserted or awarded against Lender or
any of Lender’s Affiliates in connection with, arising from or relating to
Lender’s entering into or carrying out the terms of this Agreement or being the
holder of any Note, other than any loss, liability, damage, suit, claim,
expense, fees or costs arising solely by reason of Lender’s or any of Lender’s
Affiliates’ willful misconduct or gross negligence.

 

9.2                               Assignment
and Participation.  Lender may pledge or otherwise hypothecate
all or any portion of this Agreement or grant participations herein (provided
Lender acts as agent for any participants, except as provided below) or in any
of its rights and security hereunder, including, without limitation, the Notes.
Lender may also assign all or any part of any Loan and Lender’s obligations in
connection therewith to one or more commercial banks or other financial
institutions or investors (each an “Assignee
Lender”). Lender shall notify Borrower in advance of the identity of
any proposed Assignee Lender. Upon delivery to Borrower of an executed copy of
the Assignee Lender’s assignment and acceptance (a) each such Assignee
Lender shall be deemed to be a party hereto and, to the extent that rights and
obligations hereunder have been assigned and delegated to such Assignee Lender,
such Assignee Lender shall have the rights and obligations of Lender hereunder
and under the other Loan Documents and other related documents and (b) Lender,
to the extent that rights and obligations hereunder have been assigned and
delegated by it, shall be released from its obligations hereunder and under the
other Loan Documents (including, without limitation, the obligation to fund the
Assignee Lender’s share of the Loans) and other related documents. Within five
Business Days after receipt of a copy of the executed assignment and acceptance
document, Borrower shall execute and deliver to Lender a new Note or Notes, as
applicable (for delivery to the relevant Assignee Lender), evidencing such Assignee
Lender’s assigned portion of the Loans and a replacement Note or Notes, as
applicable, in the principal amount of the Loans retained by Lender (such Note
to be in exchange for, but not in payment of, the Note then held by Lender).
Such Note shall be dated the date of the predecessor Note. Lender shall mark
the predecessor Note “exchanged” and deliver it to Borrower. Accrued interest
on that part of the predecessor Note evidenced by the new Note, and accrued
fees, shall be paid as provided in the assignment agreement between Lender and
to the Assignee Lender. Accrued interest on that part of the predecessor Note
evidenced by the replacement Note shall be paid to Lender. Accrued interest and
accrued fees shall be so apportioned between the Note and paid at the same time
or times provided in the predecessor Note and in this Agreement. Borrower
authorizes Lender to disclose to any prospective Assignee Lender any financial
or other information pertaining to Borrower or the Loans. In addition, Borrower
agrees that, if so requested by Lender, Borrower will cause all insurance
policies, 

 

 

35

 

binders and commitments (including, without limitation, casualty
insurance and title insurance) required by the Loan Documents or other related
documents to be delivered to Lender to name the Assignee Lender as an
additional insured or obligee, as Lender may request. Anything in this
Agreement to the contrary notwithstanding, and without the need to comply with
any of the formal or procedural requirements of this Agreement, including this Section 9.2, Lender may at any
time and from time to time pledge and assign all or any portion of its rights
under all or any of the Loan Documents and other related documents to a Federal
Reserve Bank; provided that no such pledge or assignment shall release Lender
from its obligations thereunder.

 

9.3                               Prohibition
on Assignment.  Borrower shall not assign or attempt to
assign its rights under this Agreement, either voluntarily or by operation of
law.

 

9.4                               Time
of the Essence.  Time is of the essence of this Agreement.

 

9.5                               No
Waiver.  No
waiver of any term, provision, condition, covenant or agreement herein
contained shall be effective unless set forth in a writing signed by Lender,
and any such waiver shall be effective only to the extent set forth in such
writing. No failure to exercise or delay in exercising, by Lender or any holder
of any Note, of any right, power or privilege hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any right, power or
privilege preclude any other or further exercise thereof, or the exercise of
any other right or remedy provided by law. The rights and remedies provided in
this Agreement are cumulative and not exclusive of any right or remedy provided
by law or equity. No notice or demand on Borrower in any case shall, in itself,
entitle Borrower to any other or further notice or demand in similar or other
circumstances or constitute a waiver of the rights of Lender to any other or
further action in any circumstances without notice or demand. No consent or
waiver, expressed or implied, by Lender to or of any breach or default by
Borrower in the performance of its obligations hereunder shall be deemed or
construed to be a consent or waiver to or of any other breach or default in the
performance of the same or any other obligations of Borrower hereunder. Failure
on the part of Lender to complain of any acts or failure to act or to declare
an Event of Default, irrespective of how long such failure continues, shall not
constitute a waiver by Lender of its rights hereunder or impair any rights,
powers or remedies on account of any breach or default by Borrower.

 

9.6                               Severability.  Any provision of this Agreement which is
unenforceable or invalid or contrary to law, or the inclusion of which would
adversely affect the validity, legality or enforcement of this Agreement, shall
be of no effect and, in such case, all the remaining terms and provisions of
this Agreement shall subsist and be fully effective according to the tenor of
this Agreement the same as though any such invalid portion had never been
included herein. Notwithstanding any of the foregoing to the contrary, if any
provisions of this Agreement or the application thereof are held invalid or
unenforceable only as to particular persons or situations, the remainder of
this Agreement, and the application of such provision to persons or situations
other than those to which it shall have been held invalid or unenforceable,
shall not be affected thereby, but shall continue valid and enforceable to the
fullest extent permitted by law.

 

9.7                               Usury;
Revival of Liabilities.  All agreements between Borrower and Lender
(including, without limitation, this Agreement and any other Loan Documents)
are expressly limited so that in no event whatsoever shall the amount paid or
agreed to be paid to Lender 

 

 

36

 

exceed the highest lawful rate of interest permissible under the laws
of the State of Illinois. If, from any circumstances whatsoever, fulfillment of
any provision hereof or of any other Loan Documents, at the time performance of
such provision shall be due, shall involve exceeding the limit of validity
prescribed by law which a court of competent jurisdiction may deem applicable
hereto, then, ipso facto, the obligation to be fulfilled shall be reduced to
the highest lawful rate of interest permissible under the laws of the State of
Illinois, and if for any reason whatsoever, Lender shall ever receive as
interest an amount which would be deemed unlawful, such interest shall be
applied to the payment of the last maturing installment or installments of the
indebtedness secured by the Collateral (whether or not then due and payable)
and not to the payment of interest. To the extent that Lender received any
payment on account of Borrower’s Liabilities and any such payment(s) and/or
proceeds or any part thereof are subsequently invalidated, declared to be
fraudulent or preferential, set aside, subordinated and/or required to be
repaid to a trustee, receiver or any other Person under any bankruptcy act,
state or federal law, common law or equitable cause, then to the extent of such
payment(s) or proceeds received, Borrower’s Liabilities or part thereof
intended to be satisfied shall be revived and continue in full force and
effect, as if such payment(s) and/or proceeds had not been received by
Lender and applied on account of Borrower’s Liabilities; provided, however, if
Lender successfully contests any such invalidation, declaration, set aside,
subordination or other order to pay any such payment and/or proceeds to any
third party, the revived Borrower’s Liabilities shall be deemed satisfied.

 

9.8                               Notices.  Any notice which either party hereto may be
required or may desire to give hereunder shall be deemed to have been given if
in writing and if delivered personally, or if mailed, postage prepaid, by
United States registered or certified mail, return receipt requested, or if
delivered by a responsible overnight courier, addressed:

 

if to Borrower:                 Old Second Bancorp, Inc.

37 South River Street

Aurora, Illinois 60506

Attn:  Mr. William B. Skoglund 

Telephone No.:  (630) 892-0202

Fax No.:  (630) 892-2412         

E-Mail Address: wskoglund@oldsecond.com

 

with a copy to:                                                         Barack
Ferrazzano Kirschbaum & Nagelberg LLP

200 West Madison Street, Suite 3900

Chicago, IL  60606

Attn:  Mr. Robert M. Fleetwood

Telephone No.: (312) 629-7329

Fax No.:  (312) 984-3150

E-Mail Address: robert.fleetwood@bfkn.com

 

if to Lender:                                                                        LaSalle
Bank National Association

135 South LaSalle Street

Chicago, Illinois  60603

Attn: Mr. Jeffery J. Bowden

Telephone No.: (312) 904-2754

 

37

 

                                                                                                                                         Fax
No.: (312) 904-9450

                                                                                                                                         E-Mail
Address: jeff.bowden@bankofamerica.com

 

with a copy to:                                                          Hinshaw &
Culbertson LLP

                                                                                                                                         222
North LaSalle Street, Suite 300

                                                                                                                                         Chicago,
Illinois 60601

                                                                                                                                         Attn:
Mr. Timothy M. Sullivan

                                                                                                                                         Telephone
No.: (312) 704-3852

                                                                                                                                         Fax
No.: (312) 704-3001         

                                                                                                                                         E-Mail
Address: tsullivan@hinshawlaw.com

 

or to such other
address or addresses as the party to be given notice may have furnished in
writing to the party seeking or desiring to give notice, as a place for the
giving of notice, provided that no change in address shall be effective until
seven days after being given to the other party in the manner provided for
above. Any notice given in accordance with the foregoing shall be deemed given
when delivered personally or, if mailed, five Business Days after it shall have
been deposited in the United States mails as aforesaid or, if sent by overnight
courier, the Business Day following the date of delivery to such courier.  Any notice which either party hereto may be
required or may desire to give hereunder shall not be deemed to have been given
if mailed by electronic mail.

 

9.9                               Successors
and Assigns.  This Agreement shall inure to the benefit of
the parties and their respective heirs, legal representatives, successors and
assigns except that, unless Lender consents in writing, no assignment made by
Borrower in violation of this Agreement shall confer any rights on any assignee
of Borrower.

 

9.10                        No
Joint Venture.  Nothing contained herein or in any document
executed pursuant hereto and no action or inaction whatsoever on the part of
Lender, shall be deemed to make Lender a partner or joint venturer with
Borrower.

 

9.11                        Brokerage
Commissions.  Borrower shall indemnify, defend and hold
Lender and its Affiliates harmless from and against any and all losses,
liabilities, obligations, penalties, claims, fines, lost profits, demands,
litigation, defenses, costs, judgments, suits, proceedings, damages,
disbursements or expenses of any kind or nature whatsoever (including, without
limitation, attorneys’ fees and expenses), consequential or otherwise, which
may at any time be either directly or indirectly imposed upon, incurred by or
asserted or awarded against Lender or any of its Affiliates in connection with,
arising out of or relating to any claim of a broker’s or finder’s fee against
Lender or any person or entity in connection with the transaction herein
contemplated arising out of or relating to Borrower’s or Lender’s action or
inaction.

 

9.12                        Publicity.  Borrower shall not publicize any Loan without
the prior written consent of Lender, except as may be required by law.

 

9.13                        Documentation.  All documents and other matters required by
any of the provisions of this Agreement to be submitted or furnished to Lender
shall be in form and substance satisfactory to Lender.

 

 

38

 

9.14                        Additional
Assurances.  Borrower agrees that, at any time or from
time to time, upon the written request of Lender, it will execute all such
further documents and do all such other acts and things as Lender may
reasonably request to effectuate the transaction herein contemplated.

 

9.15                        Entire
Agreement.  This
Agreement and the Disclosure Schedule and Exhibits hereto constitute the entire
agreement between the parties hereto with respect to the subject matter hereof
and may not be modified or amended in any manner other than by supplemental
written agreement executed by the parties hereto.

 

9.16                        Choice
of Law.  This
Agreement shall be governed by and construed in accordance with the internal
laws of the State of Illinois without regard to conflicts of laws. Nothing
herein shall be deemed to limit any rights, powers or privileges which Lender
may have pursuant to any law of the United States of America or any rule,
regulation or order of any department or agency thereof and nothing herein
shall be deemed to make unlawful any transaction or conduct by Lender which is
lawful pursuant to, or which is permitted by, any of the foregoing.

 

9.17                        Forum;
Venue.  To
induce Lender to accept this Agreement and the other Loan Documents, Borrower
irrevocably agrees that all actions or proceedings in any way, manner, or
respect, arising out of or from or related to this Agreement or the other Loan
Documents shall be litigated only in courts located in Chicago, Illinois.
Borrower hereby consents and submits to the jurisdiction of any local, state,
or federal court located within said city. Borrower hereby waives any right it
may have to transfer or change the venue of any litigation brought against
Borrower by Lender.

 

9.18                        No
Third Party Beneficiary.  This Agreement is made for the sole benefit
of Borrower and Lender, and no other person shall be deemed to have any privity
of contract hereunder nor any right to rely hereon to any extent or for any
purpose whatsoever, nor shall any other person have any right of action of any
kind hereon or be deemed to be a third party beneficiary hereunder.

 

9.19                        Legal
Tender of United States.  All payments hereunder shall be made in coin
or currency which at the time of payment is legal tender in the United States
of America for public and private debts.

 

9.20                        Captions;
Counterparts.  Captions contained in this Agreement in no
way define, limit or extend the scope or intent of their respective provisions.
This Agreement may be executed in any number of counterparts and by different
parties hereto in separate counterparts, each of which when so executed and
delivered shall be deemed to be an original and all of which taken together
shall constitute but one and the same instrument.

 

9.21                        Knowledge;
Discretion.  All references herein to a party’s knowledge
shall be deemed to mean the best knowledge of such party based on commercially
reasonable inquiry. All references herein to Borrower’s knowledge shall be
deemed to refer to the knowledge of Borrower and each Subsidiary. Unless
specified to the contrary herein, all references herein to an exercise of
discretion or judgment by Lender, to the making of a determination or
designation by 

 

 

39

 

Lender, to the application of Lender’s discretion or opinion, to the
granting or withholding of Lender’s consent or approval, to the consideration
of whether a matter or thing is satisfactory or acceptable to Lender, or
otherwise involving the decision making of Lender, shall be deemed to mean that
Lender shall decide unilaterally using its sole and absolute discretion or
judgment.

 

9.22                        Customer
Identification - USA Patriot Act Notice.  Lender hereby notifies Borrower that,
pursuant to the requirements of the USA Patriot Act, Title III of Pub. L.
107-56, signed into law October 26, 2001 (the “Patriot Act”), Lender is
required to obtain, verify and record information that identifies Borrower,
which information includes the name and address of Borrower and other
information that will allow such Lender to identify Borrower in accordance with
the Patriot Act.

 

[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT
BLANK]

 

 

40

 

 

WAIVER
OF RIGHT TO JURY TRIAL. BORROWER HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHT THAT IT MAY HAVE TO A TRIAL
BY JURY IN ANY LITIGATION ARISING IN ANY WAY IN CONNECTION WITH THIS AGREEMENT,
THE NOTES OR ANY OF THE OTHER LOAN DOCUMENTS, OR ANY OTHER STATEMENTS OR
ACTIONS OF BORROWER OR LENDER. BORROWER ACKNOWLEDGES THAT IT HAS BEEN
REPRESENTED IN THE SIGNING OF THIS AGREEMENT AND IN THE MAKING OF THIS WAIVER
BY INDEPENDENT LEGAL COUNSEL SELECTED OF ITS OWN FREE WILL, AND THAT IT HAS DISCUSSED
THIS WAIVER WITH SUCH LEGAL COUNSEL. BORROWER FURTHER ACKNOWLEDGES THAT (A) IT
HAS READ AND UNDERSTANDS THE MEANING AND RAMIFICATIONS OF THIS WAIVER, (B) THIS
WAIVER HAS BEEN REVIEWED BY BORROWER AND BORROWER’S LEGAL COUNSEL AND IS A
MATERIAL INDUCEMENT FOR LENDER TO ENTER INTO THE AGREEMENT AND THE OTHER LOAN
DOCUMENTS AND (C) THIS WAIVER SHALL BE EFFECTIVE AS TO EACH OF SUCH OTHER
LOAN DOCUMENTS AS IF FULLY INCORPORATED THEREIN.

 

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

 

	
   

  	
  OLD SECOND BANCORP, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ William B. Skoglund

  
	
   

  	
   

  	
  Name:

  	
  William B. Skoglund

  
	
   

  	
   

  	
  Title:

  	
  President, Chief Executive Officer and

  
	
   

  	
   

  	
   

  	
  Chairman

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  LASALLE BANK NATIONAL ASSOCIATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jeffrey J. Bowden

  
	
   

  	
   

  	
  Name:

  	
  Jeffery J. Bowden

  
	
   

  	
   

  	
  Title:

  	
  Senior Vice President

  

 

 

S-1

 

EXHIBIT
A

 

FORM OF TERM NOTE

 

	
  $500,000.00

  	
   

  	
  Chicago, Illinois

  
	
   

  	
   

  	
  January 31, 2008

  

 

FOR VALUE RECEIVED, the
undersigned, OLD SECOND BANCORP, INC.,
a Delaware corporation (“Borrower”),
promises to pay to the order of LASALLE BANK
NATIONAL ASSOCIATION, a national banking association, or the holder
hereof from time to time (“Lender”),
at such place as may be designated in writing by Lender, the principal sum of FIVE HUNDRED THOUSAND AND NO/100THS DOLLARS
($500,000.00), with interest thereon as hereinafter provided. This note (this “Note”) is issued pursuant to the terms of a
Loan and Subordinated Debenture Purchase Agreement of even date herewith by and
between Borrower and Lender (said Loan and Subordinated Debenture Purchase
Agreement together with the Agreed Upon Terms and Procedures of even date
herewith, as each may be amended, restated, supplemented or modified from time
to time, is referred to hereinafter as the “Loan
Agreement”). All capitalized terms used but not defined herein shall
have the respective meanings ascribed to them in the Loan Agreement.

 

Interest shall
accrue on all sums as advanced and outstanding from time to time under this
Note and the Loan Agreement as set forth in the Loan Agreement, and such
interest shall be due and payable on the 30th day of each March,
June, September and December as set forth in the Loan Agreement,
commencing March 30, 2008.  All sums
owing hereunder are payable in lawful money of the United States of America, in
immediately available funds.

 

The outstanding
principal balance of this Note, together with all accrued and unpaid interest,
shall be due and payable on the Term Loan Maturity Date. Additional principal
payments shall be made in accordance with the provisions of the Loan Agreement.

 

This Note is
issued pursuant to the terms of the Loan Agreement and is secured by and entitled
to the benefits of, among other things, the Collateral Documents. In case an
Event of Default shall occur and be continuing, the principal of this Note
together with all accrued interest thereon may, at the option of the holder
hereof, immediately become due and payable on demand; provided, however, that
if any document related to this Note provides for automatic acceleration of
payment of sums owing hereunder, all sums owing hereunder shall be
automatically due and payable in accordance with the terms of that document.

 

Unless otherwise
provided in the Loan Agreement, all payments on account of the indebtedness
evidenced by this Note shall be first applied to the payment of costs and
expenses of Lender which are due and payable, then to past-due interest on the
unpaid principal balance and the remainder to principal.

 

Provided that no
Event of Default then exists, this Note may be prepaid only upon those terms
and conditions set forth in the Loan Agreement.

 

If any interest
payment required hereunder is not received by Lender on or before the tenth day
following the date it becomes due, Borrower shall pay, at Lender’s option, a
late or collection charge equal to 4% of the amount of such unpaid interest
payment.

 

 

 

From and after
the Term Loan Maturity Date, or such earlier date as all sums owing on this
Note become due and payable by acceleration or otherwise, or after the
occurrence of an Event of Default, interest shall be computed on all amounts
then due and payable under this Note at the Default Rate (based upon a 360-day
year and charged on the basis of actual days elapsed).

 

If any attorney
is engaged by Lender to enforce or defend any provision of this Note or any of
the other Loan Documents, or as a consequence of any Event of Default, with or
without the filing of any legal action or proceeding, then Borrower shall pay
to Lender immediately upon demand all attorneys’ fees and expenses, together
with interest thereon from the date of such demand until paid at the rate of
interest applicable to the principal balance owing hereunder as if such unpaid
attorneys’ fees and expenses had been added to the principal.

 

No previous
waiver and no failure or delay by Lender in acting with respect to the terms of
this Note or any of the other Loan Documents shall constitute a waiver of any
breach, default or failure of condition under this Note, the Loan Agreement or
any of the other Loan Documents or the obligations secured thereby. A waiver of
any term of this Note or any of the other Loan Documents or of any of the
obligations secured thereby must be made in writing and shall be limited to the
express written terms of such waiver. In the event of any inconsistencies
between the terms of this Note and the terms of any other document related to
the Loan evidenced by this Note, the terms of this Note shall prevail.

 

Except as
otherwise provided in the Loan Agreement, Borrower expressly waives
presentment, demand, notice of dishonor, notice of default or delinquency,
notice of acceleration, notice of protest and nonpayment, notice of costs,
expenses or losses and interest thereon, notice of late charges, and diligence
in taking any action to collect any sums owing under this Note or in proceeding
against any of the rights or interests in or to properties securing payment of
this Note. In addition, Borrower expressly agrees that this Note and any
payment coming due hereunder may be extended from time to time without in any
way affecting the liability of any such party hereunder.

 

Time is of the
essence with respect to every provision hereof. This Note shall be construed
and enforced in accordance with the laws of the State of Illinois, without
regard to conflicts of laws, except to the extent that federal laws preempt the
laws of the State of Illinois, and all persons and entities in any manner
obligated under this Note consent to the jurisdiction of any Federal or State
court located in Chicago, Illinois having proper venue and also consent to
service of process by any means authorized by Illinois or Federal law. Any reference
contained herein to attorneys’ fees and expenses shall be deemed to be to
reasonable fees and expenses and to include all reasonable fees and expenses of
in-house or staff attorneys and the reasonable fees and expenses of any other
experts or consultants.

 

All agreements
between Borrower and Lender (including, without limitation, this Note and the
Loan Agreement, and any other documents securing all or any part of the
indebtedness evidenced hereby) are expressly limited so that in no event
whatsoever shall the amount paid or agreed to be paid to Lender exceed the
highest lawful rate of interest permissible under applicable law. If, from any
circumstances whatsoever, fulfillment of any provision hereof, the Loan
Agreement or any other documents securing all or any part of the indebtedness
evidenced hereby at the time performance of such provisions shall be due, shall
involve exceeding the limit of validity prescribed by law which a court of
competent jurisdiction may deem applicable 

 

 

 

2

 

hereto, then, ipso facto, the obligation to be fulfilled shall be
reduced to the highest lawful rate of interest permissible under such
applicable laws, and if, for any reason whatsoever, Lender shall ever receive
as interest an amount which would be deemed unlawful under such applicable law,
such interest shall be automatically applied to the payment of the principal of
this Note (whether or not then due and payable) and not to the payment of
interest or refunded to Borrower if such principal has been paid in full.

 

Any notice which
either party hereto may be required or may desire to give hereunder shall be
governed by the notice provisions of the Loan Agreement.

 

[THE REMAINDER OF THIS PAGE IS LEFT BLANK
INTENTIONALLY]

 

 

3

 

WAIVER
OF RIGHT TO JURY TRIAL. BORROWER HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHT THAT IT MAY HAVE TO A TRIAL
BY JURY IN ANY LITIGATION ARISING IN ANY WAY IN CONNECTION WITH THIS NOTE OR
ANY OF THE OTHER LOAN DOCUMENTS, OR ANY OTHER STATEMENTS OR ACTIONS OF BORROWER
OR LENDER. BORROWER ACKNOWLEDGES THAT IT HAS BEEN REPRESENTED IN THE SIGNING OF
THIS NOTE AND IN THE MAKING OF THIS WAIVER BY INDEPENDENT LEGAL COUNSEL
SELECTED OF ITS OWN FREE WILL, AND THAT IT HAS DISCUSSED THIS WAIVER WITH SUCH
LEGAL COUNSEL. BORROWER FURTHER ACKNOWLEDGES THAT (A) IT HAS READ AND
UNDERSTANDS THE MEANING AND RAMIFICATIONS OF THIS WAIVER, (B) THIS WAIVER
HAS BEEN REVIEWED BY BORROWER AND BORROWER’S LEGAL COUNSEL AND IS A MATERIAL
INDUCEMENT FOR LENDER TO ENTER INTO THIS NOTE AND THE OTHER LOAN DOCUMENTS, AND
(C) THIS WAIVER SHALL BE EFFECTIVE AS TO EACH OF THE LOAN DOCUMENTS AS IF
FULLY INCORPORATED THEREIN.

 

IN WITNESS WHEREOF, the
undersigned has caused this Note to be executed by its duly authorized
representative as of the date first above written.

 

	
   

  	
  OLD SECOND BANCORP, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

 

 

EXHIBIT
B

 

FORM OF REVOLVING NOTE

 

	
  $30,000,000.00

  	
   

  	
  Chicago,
  Illinois

  
	
   

  	
   

  	
  January 31,
  2008

  

 

FOR VALUE RECEIVED, the
undersigned, OLD SECOND BANCORP, INC., a
Delaware corporation (“Borrower”),
promises to pay to the order of LASALLE BANK
NATIONAL ASSOCIATION, a national banking association, or the holder
hereof from time to time (“Lender”),
at such place as may be designated in writing by Lender, the principal sum of THIRTY MILLION AND NO/100THS DOLLARS
($30,000,000.00) (or so much thereof that has been advanced and remains
outstanding), with interest thereon as hereinafter provided. It is contemplated
that there will be advances and payments under this note (this “Note”) from time to time, but no advances
or payments under this Note (including payment in full of the unpaid balance of
principal hereof prior to maturity) shall affect or impair the validity or
enforceability of this Note as to future advances hereunder. This Note is
issued pursuant to the terms of a Loan and Subordinated Debenture Purchase
Agreement of even date herewith by and between Borrower and Lender (said Loan
and Subordinated Debenture Purchase Agreement together with the Agreed Upon
Terms and Procedures of even date herewith, as each may be amended, restated,
supplemented or modified from time to time, is referred to hereinafter as the “Loan Agreement”). All capitalized terms
used but not defined herein shall have the respective meanings ascribed to them
in the Loan Agreement.

 

Interest shall
accrue on all sums as advanced and outstanding from time to time under this
Note and the Loan Agreement as set forth in the Loan Agreement, and such
interest shall be due and payable on the 30th day of each March,
June, September and December as set forth in the Loan Agreement,
commencing March 30, 2008. All sums owing hereunder are payable in lawful
money of the United States of America, in immediately available funds.

 

The outstanding
principal balance of this Note, together with all accrued and unpaid interest,
shall be due and payable on the Revolving Loan Maturity Date. Additional
principal payments shall be made in accordance with the provisions of the Loan
Agreement.

 

This Note is
issued pursuant to the terms of the Loan Agreement and is secured by and
entitled to the benefits of, among other things, the Collateral Documents. In
case an Event of Default shall occur and be continuing, the principal of this
Note together with all accrued interest thereon may, at the option of the
holder hereof, immediately become due and payable on demand; provided, however,
that if any document related to this Note provides for automatic acceleration of
payment of sums owing hereunder, all sums owing hereunder shall be
automatically due and payable in accordance with the terms of that document.

 

Unless otherwise
provided in the Loan Agreement, all payments on account of the indebtedness
evidenced by this Note shall be first applied to the payment of costs and
expenses of Lender which are due and payable, then to past-due interest on the
unpaid principal balance and the remainder to principal.

 

Provided that no
Event of Default then exists, this Note may be prepaid only upon those terms
and conditions set forth in the Loan Agreement.

 

 

 

If any interest
payment required hereunder is not received by Lender on or before the tenth day
following the date it becomes due, Borrower shall pay, at Lender’s option, a
late or collection charge equal to 4% of the amount of such unpaid interest
payment.

 

From and after
the Revolving Loan Maturity Date, or such earlier date as all sums owing on
this Note become due and payable by acceleration or otherwise, or after the occurrence
of an Event of Default, interest shall be computed on all amounts then due and
payable under this Note at the Default Rate (based upon a 360-day year and
charged on the basis of actual days elapsed)

 

If any attorney
is engaged by Lender to enforce or defend any provision of this Note or any of
the other Loan Documents, or as a consequence of any Event of Default, with or
without the filing of any legal action or proceeding, then Borrower shall pay
to Lender immediately upon demand all attorneys’ fees and expenses, together
with interest thereon from the date of such demand until paid at the rate of
interest applicable to the principal balance owing hereunder as if such unpaid
attorneys’ fees and expenses had been added to the principal.

 

No previous
waiver and no failure or delay by Lender in acting with respect to the terms of
this Note or any of the other Loan Documents shall constitute a waiver of any
breach, default or failure of condition under this Note, the Loan Agreement or
any of the other Loan Documents or the obligations secured thereby. A waiver of
any term of this Note or any of the other Loan Documents or of any of the
obligations secured thereby must be made in writing and shall be limited to the
express written terms of such waiver. In the event of any inconsistencies
between the terms of this Note and the terms of any other document related to
the Loan evidenced by this Note, the terms of this Note shall prevail.

 

Except as
otherwise provided in the Loan Agreement, Borrower expressly waives
presentment, demand, notice of dishonor, notice of default or delinquency,
notice of acceleration, notice of protest and nonpayment, notice of costs,
expenses or losses and interest thereon, notice of late charges, and diligence
in taking any action to collect any sums owing under this Note or in proceeding
against any of the rights or interests in or to properties securing payment of
this Note. In addition, Borrower expressly agrees that this Note and any
payment coming due hereunder may be extended from time to time without in any
way affecting the liability of any such party hereunder.

 

Time is of the
essence with respect to every provision hereof. This Note shall be construed
and enforced in accordance with the laws of the State of Illinois, without
regard to conflicts of laws, except to the extent that federal laws preempt the
laws of the State of Illinois, and all persons and entities in any manner
obligated under this Note consent to the jurisdiction of any Federal or State
court located in Chicago, Illinois having proper venue and also consent to
service of process by any means authorized by Illinois or Federal law. Any
reference contained herein to attorneys’ fees and expenses shall be deemed to
be to reasonable fees and expenses and to include all reasonable fees and
expenses of in-house or staff attorneys and the reasonable fees and expenses of
any other experts or consultants.

 

All agreements
between Borrower and Lender (including, without limitation, this Note and the
Loan Agreement, and any other documents securing all or any part of the
indebtedness evidenced hereby) are expressly limited so that in no event
whatsoever shall the amount paid or agreed to be paid to Lender exceed the
highest lawful rate of interest permissible under 

 

 

2

 

applicable law. If, from any circumstances whatsoever, fulfillment of
any provision hereof, the Loan Agreement or any other documents securing all or
any part of the indebtedness evidenced hereby at the time performance of such
provisions shall be due, shall involve exceeding the limit of validity
prescribed by law which a court of competent jurisdiction may deem applicable
hereto, then, ipso facto, the obligation to be fulfilled shall be reduced to
the highest lawful rate of interest permissible under such applicable laws, and
if, for any reason whatsoever, Lender shall ever receive as interest an amount
which would be deemed unlawful under such applicable law, such interest shall
be automatically applied to the payment of the principal of this Note (whether
or not then due and payable) and not to the payment of interest or refunded to
Borrower if such principal has been paid in full.

 

Any notice which
either party hereto may be required or may desire to give hereunder shall be
governed by the notice provisions of the Loan Agreement.

 

[THE REMAINDER OF THIS PAGE IS LEFT BLANK
INTENTIONALLY]

 

 

3

 

WAIVER
OF RIGHT TO JURY TRIAL. BORROWER HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHT THAT IT MAY HAVE TO A TRIAL
BY JURY IN ANY LITIGATION ARISING IN ANY WAY IN CONNECTION WITH THIS NOTE OR
ANY OF THE OTHER LOAN DOCUMENTS, OR ANY OTHER STATEMENTS OR ACTIONS OF BORROWER
OR LENDER. BORROWER ACKNOWLEDGES THAT IT HAS BEEN REPRESENTED IN THE SIGNING OF
THIS NOTE AND IN THE MAKING OF THIS WAIVER BY INDEPENDENT LEGAL COUNSEL
SELECTED OF ITS OWN FREE WILL, AND THAT IT HAS DISCUSSED THIS WAIVER WITH SUCH
LEGAL COUNSEL. BORROWER FURTHER ACKNOWLEDGES THAT (A) IT HAS READ AND
UNDERSTANDS THE MEANING AND RAMIFICATIONS OF THIS WAIVER, (B) THIS WAIVER
HAS BEEN REVIEWED BY BORROWER AND BORROWER’S LEGAL COUNSEL AND IS A MATERIAL
INDUCEMENT FOR LENDER TO ENTER INTO THIS NOTE AND THE OTHER LOAN DOCUMENTS, AND
(C) THIS WAIVER SHALL BE EFFECTIVE AS TO EACH OF THE LOAN DOCUMENTS AS IF
FULLY INCORPORATED THEREIN.

 

IN WITNESS WHEREOF, the
undersigned has caused this Note to be executed by its duly authorized
representative as of the date first above written.

 

	
   

  	
  OLD SECOND BANCORP, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

 

 

 

EXHIBIT C

 

FORM OF SUBORDINATED
DEBENTURE

 

 

THIS SUBORDINATED
DEBENTURE IS NOT A SAVINGS ACCOUNT OR DEPOSIT AND IT IS NOT INSURED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY FEDERAL AGENCY.

 

 

	
  $45,000,000.00

  	
   

  	
  Chicago, Illinois

  
	
   

  	
   

  	
  January 31, 2008

  

 

FOR VALUE RECEIVED, the undersigned, OLD SECOND BANCORP, INC., a Delaware
corporation (“Borrower”), hereby
promises to pay to the order of LASALLE BANK
NATIONAL ASSOCIATION, a national banking association, or any holder
hereof from time to time (“Lender”),
at such place as may be designated in writing by Lender, the principal sum of FORTY-FIVE MILLION AND NO/100 DOLLARS
($45,000,000.00) (or so much thereof that has been advanced and remains
outstanding), with interest thereon as hereinafter provided. This Subordinated
Debenture (this “Subordinated Debenture”)
is issued pursuant to the terms of a Loan and Subordinated Debenture Purchase
Agreement of even date herewith by and between Borrower and Lender (said Loan
and Subordinated Debenture Purchase Agreement together with the Agreed Upon
Terms and Procedures of even date herewith, as each may be amended, restated,
supplemented or modified from time to time, is referred to hereinafter as the “Loan Agreement”). All capitalized terms
used but not defined herein shall have the respective meanings ascribed to them
in the Loan Agreement.

 

All accrued interest and unpaid principal
due and payable under this Subordinated Debenture shall be paid in full on or
before the Subordinated Debenture Maturity Date.

 

The unpaid principal amount outstanding
under this Subordinated Debenture from time to time shall bear interest before
maturity in accordance with the Loan Agreement, computed on the basis of a
360-day year and charged for actual days elapsed. Under certain circumstances
as provided in the Loan Agreement, overdue interest payments under this
Subordinated Debenture shall bear interest from the due date thereof until paid
at a daily rate equal to the Default Rate of interest, computed on the basis of
a 360-day year and charged for actual days elapsed, except as otherwise
provided in the Loan Agreement.

 

All accrued interest shall be payable at
Lender’s principal place of business on a quarterly basis in arrears on the 30th
day of each March, June, September and December as set forth in the
Loan Agreement, commencing March 30, 2008. 
All sums owing hereunder are payable in lawful money of the United
States of America, in immediately available funds.  The outstanding unpaid principal balance of
this Subordinated Debenture shall be payable in one installment on the
Subordinated Debenture Maturity Date. Whenever any payment to be made under
this Subordinated Debenture shall be due on a day that is not a Business Day,
such payment shall be made on the next succeeding Business Day, and such
extension of time shall be included in the 

 

 

 

 

computation
of interest due upon this Subordinated Debenture. There shall be no penalties
or other charges payable by Borrower to Lender hereunder other than those
payments described in this Subordinated Debenture or in the Loan Agreement.
Borrower may prepay all or, from time to time, part of the outstanding unpaid
principal balance under this Subordinated Debenture at any time without
penalty.

 

This Subordinated Debenture is not secured
by any assets of Borrower.

 

So long as any portion of the unpaid
principal of this Subordinated Debenture is deemed to be Tier 2 Capital of
Borrower in accordance with the rules and regulations of the FRB
applicable to the capital status of the subordinated debt of bank holding
companies, the rights of Lender to the principal sum hereunder or any part
hereof and to any accrued interest thereon shall remain subject and subordinate
(in accordance with SR 92-37 issued by the FRB on October 15, 1992) to the
claims of creditors of Borrower with respect to the following (“Senior Claims”): (a) borrowed and
purchased money; (b) similar obligations arising from off-balance-sheet
guaranties and direct-credit substitutes; and (c) obligations associated
with derivative products such as interest-rate and foreign exchange-rate
contracts, commodity contracts, and similar arrangements (clauses (a), (b) and
(c) expressly exclude Trust Preferred Indebtedness, as defined below, with
respect to which the rights of Lender are not subordinate). Upon dissolution or
liquidation of Borrower, no payment of principal, interest or premium
(including post-default interest) shall be due and payable under the terms of
this Subordinated Debenture until all Senior Claims (which expressly exclude Trust
Preferred Indebtedness) shall have been paid in full. If this Subordinated
Debenture ceases to be deemed to be Tier 2 Capital of Borrower in accordance
with the rules and regulations of the FRB applicable to the capital status
of the subordinated debt of bank holding companies, other than due to the
limitations imposed by the second sentence of 12 C.F.R §250.166(e), which
limits the capital treatment of subordinated debt during the five years
immediately preceding the maturity date of the subordinated debt, Borrower
shall: (i) immediately notify Lender; and (ii) immediately upon
request of Lender execute and deliver all such agreements (including without
limitation pledge agreements and replacement notes) as Lender may request in
order to restructure the obligation evidenced hereby as a senior secured
obligation of Borrower.  In addition, the
parties shall enter into the discussions contemplated in Section 5.7 of the Loan
Agreement.  If Borrower fails to execute
such agreements as required by Lender within thirty days of Lender’s request,
such failure shall be deemed to be an Event of Default as provided in Section 8.1.1 of the Loan
Agreement.

 

As used herein, “Trust Preferred
Indebtedness” means Indebtedness incurred in connection with, or relating to, any
trust preferred securities caused to be issued by, or reflected in the
consolidated financial statements of Borrower, including the subordinated
Indebtedness evidenced by the Junior Subordinated Debentures.

 

It is the intent of Borrower and Lender
that this Subordinated Debenture be treated as Tier 2 Capital of Borrower in
accordance with the rules and regulations of the FRB in effect on the date
hereof.  In the event the FRB notifies
Borrower that this Subordinated Debenture does not constitute Tier 2 Capital of
Borrower due to a defect in the terms of this Subordinated Debenture, the
parties shall negotiate in good faith to cure such defect by amending this
Subordinated Debenture.

 

2

 

If an Event of Default shall occur, Lender
shall have the rights set forth in Section 8.6
of the Loan Agreement.

 

If any attorney is engaged by Lender to
enforce or defend any provision of this Subordinated Debenture or any of the
other Loan Documents, or as a consequence of any Event of Default, with or
without the filing of any legal action or proceeding, then Borrower shall pay
to Lender immediately upon demand all attorneys’ fees and expenses, together
with interest thereon from the date of such demand until paid at the rate of
interest applicable to the principal balance owing hereunder as if such unpaid
attorneys’ fees and expenses had been added to the principal.

 

No previous waiver and no failure or delay
by Lender in acting with respect to the terms of this Subordinated Debenture or
any of the other Loan Documents shall constitute a waiver of any breach,
default or failure of condition under this Subordinated Debenture, the Loan
Agreement or any of the other Loan Documents or the obligations secured
thereby. A waiver of any term of this Subordinated Debenture or any of the
other Loan Documents or of any of the obligations secured thereby must be made
in writing and shall be limited to the express written terms of such waiver. In
the event of any inconsistencies between the terms of this Subordinated
Debenture and the terms of any other document related to the Loan evidenced by
this Subordinated Debenture, the terms of this Subordinated Debenture shall
prevail.

 

Except as otherwise provided in the Loan
Agreement, Borrower expressly waives presentment, demand, notice of dishonor,
notice of default or delinquency, notice of acceleration, notice of protest and
nonpayment, notice of costs, expenses or losses and interest thereon, notice of
late charges, and diligence in taking any action to collect any sums owing
under this Subordinated Debenture. In addition, Borrower expressly agrees that
this Subordinated Debenture and any payment coming due hereunder may be
extended from time to time without in any way affecting the liability of any
such party hereunder.

 

Time is of the essence with respect to
every provision hereof. This Subordinated Debenture shall be construed and
enforced in accordance with the laws of the State of Illinois, without regard
to conflicts of laws, except to the extent that federal laws preempt the laws of
the State of Illinois, and all persons and entities in any manner obligated
under this Subordinated Debenture consent to the jurisdiction of any Federal or
State court located in Chicago, Illinois having proper venue and also consent
to service of process by any means authorized by Illinois or Federal law.  Any reference contained herein to attorneys’
fees and expenses shall be deemed to be to reasonable fees and expenses and to
include all reasonable fees and expenses of in-house or staff attorneys and the
reasonable fees and expenses of any other experts or consultants.

 

All agreements between Borrower and Lender
(including, without limitation, this Subordinated Debenture and the Loan
Agreement, and any other documents securing all or any part of the indebtedness
evidenced hereby) are expressly limited so that in no event whatsoever shall
the amount paid or agreed to be paid to Lender exceed the highest lawful rate
of interest permissible under applicable law. If, from any circumstances
whatsoever, fulfillment of any provision hereof, the Loan Agreement or any
other documents securing all or any part of the indebtedness evidenced hereby
at the time performance of such provisions shall be due, shall involve
exceeding the limit of validity prescribed by law which a court of competent
jurisdiction 

 

3

 

may deem
applicable hereto, then, ipso facto, the obligation to be fulfilled shall be
reduced to the highest lawful rate of interest permissible under such
applicable laws, and if, for any reason whatsoever, Lender shall ever receive
as interest an amount which would be deemed unlawful under such applicable law,
such interest shall be automatically applied to the payment of the principal of
this Subordinated Debenture (whether or not then due and payable) and not to
the payment of interest or refunded to Borrower if such principal has been paid
in full.

 

Lender may sell, assign, pledge or
otherwise transfer or encumber any or all of its interest under this
Subordinated Debenture at any time and from time to time. In the event of a
transfer, all terms and conditions of this Subordinated Debenture shall be
binding upon and inure to the benefit of the transferee after such transfer.

 

Upon receipt of notice from Lender
advising Borrower of the loss, theft, destruction or mutilation of this
Subordinated Debenture, Borrower shall, execute and deliver in lieu thereof a
new debenture in principal amount equal to the unpaid principal amount of such
lost, stolen, destroyed or mutilated debenture, dated the date to which interest
has been paid on such lost, stolen, destroyed or mutilated Subordinated
Debenture.

 

Unless otherwise provided in the Loan
Agreement, all payments on account of the indebtedness evidenced by this
Subordinated Debenture shall be first applied to the payment of costs and
expenses of Lender which are due and payable, then to past-due interest on the
unpaid principal balance and the remainder to principal.

 

Any notice which either party hereto may
be required or may desire to give hereunder shall be governed by the notice
provisions of the Loan Agreement.

 

[THE REMAINDER OF THIS PAGE IS
LEFT BLANK INTENTIONALLY]

 

 

 

 

4

 

WAIVER OF RIGHT TO JURY
TRIAL. BORROWER HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHT THAT IT MAY HAVE TO A TRIAL
BY JURY IN ANY LITIGATION ARISING IN ANY WAY IN CONNECTION WITH THIS
SUBORDINATED DEBENTURE OR ANY OF THE OTHER LOAN DOCUMENTS, OR ANY OTHER
STATEMENTS OR ACTIONS OF BORROWER OR LENDER. BORROWER ACKNOWLEDGES THAT IT HAS
BEEN REPRESENTED IN THE SIGNING OF THIS SUBORDINATED DEBENTURE AND IN THE
MAKING OF THIS WAIVER BY INDEPENDENT LEGAL COUNSEL SELECTED OF ITS OWN FREE
WILL, AND THAT IT HAS DISCUSSED THIS WAIVER WITH SUCH LEGAL COUNSEL. BORROWER
FURTHER ACKNOWLEDGES THAT (A) IT HAS READ AND UNDERSTANDS THE MEANING AND
RAMIFICATIONS OF THIS WAIVER, (B) THIS WAIVER HAS BEEN REVIEWED BY
BORROWER AND BORROWER’S LEGAL COUNSEL AND IS A MATERIAL INDUCEMENT FOR LENDER
TO ENTER INTO THIS SUBORDINATED DEBENTURE AND THE OTHER LOAN DOCUMENTS, AND (C) THIS
WAIVER SHALL BE EFFECTIVE AS TO EACH OF THE LOAN DOCUMENTS AS IF FULLY
INCORPORATED THEREIN.

 

IN WITNESS WHEREOF, the undersigned
has caused this Subordinated Debenture to be executed by its duly authorized
representative as of the date first above written.

	
   

  	
  OLD SECOND BANCORP, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

 

 

 

EXHIBIT D

 

FORM OF PLEDGE AGREEMENT

 

THIS PLEDGE AGREEMENT (this “Pledge Agreement”) is dated as of January 31,
2008 and is made by and between OLD SECOND
BANCORP, INC., a Delaware corporation (“Pledgor”), and LASALLE BANK
NATIONAL ASSOCIATION, a national banking association (“Lender”).

 

R E C
I T A L S :

 

A.                                   Pledgor is a bank holding company that owns 100% of the issued and
outstanding capital stock of Old Second National Bank, a national banking
association (the “Bank”), and is
acquiring HeritageBanc, Inc. (“Heritage”),
by causing Old Second Acquisition, Inc., a Delaware corporation and a
wholly owned subsidiary of Pledgor (“Merger
Corp”), to merge with and into Heritage (the “Merger”) pursuant to the terms and
conditions of an Agreement and Plan of Merger, dated as of November 5,
2007, among Pledgor and Merger Corp and Heritage Bank (the “Merger Agreement”), and immediately
thereafter causing Heritage Bank, a wholly owned subsidiary of Heritage (“Heritage Bank”), to merge with and into Old
Second National Bank (the “Bank Merger”)
pursuant to the terms and conditions of a Merger Agreement, dated as of November 20,
2007, between the Bank and Heritage Bank.

 

C.                                     Pledgor has requested that Lender provide it with three credit
facilities in the aggregate principal amount of $75,500,000 consisting of (a) a
term loan in the principal amount of $500,000, (b) a revolving loan in the
principal amount of up to $30,000,000 and (c) subordinated debt in the
principal amount of up to $45,000,000, to be used to finance the acquisition of
Heritage Bank, to increase the capital of the Bank and for general corporate
purposes.

 

D.                                    This Pledge Agreement has been executed and delivered by Pledgor to
Lender pursuant to Section 3.2.2
of the Loan Agreement (as defined below).

 

NOW, THEREFORE, in consideration of
the mutual covenants, conditions and agreements and to induce Lender to enter
into the Loan Agreement and to make Loans and other financial accommodations to
Pledgor, the parties hereby agree as follows:

 

A  G  R  E  E  M
E  N  T  :

 

1.                                      DEFINITIONS

 

1.1.                            Defined Terms.  The following capitalized
terms generally used in this Pledge Agreement shall have the meanings defined
or referenced below (such meanings to be equally applicable to both the
singular and the plural forms of the term defined). Certain other capitalized
terms used in specific sections of this Pledge Agreement may be defined in such
sections.  Terms not otherwise defined
herein shall have the meaning assigned to them in the Loan Agreement.

 

“Best
Efforts” means commercially reasonable, good faith efforts.

 

 

 

 

“Certificates”
means any and all notes, warrants, options, stock certificates or other
documents or instruments now or hereafter received or receivable by Pledgor and
representing Pledgor’s interest in the Pledged Stock.

 

“Loan
Agreement” means the Loan and Subordinated Debenture Purchase
Agreement of even date herewith between Lender and Pledgor together with the
Agreed Upon Terms and Procedures of even date herewith, as each may be amended,
restated, supplemented or modified from time to time, both of which are hereby
incorporated by reference in this Pledge Agreement.

 

“Pledged
Stock” means: (i) the shares of capital stock of the Bank as
described on the attached Schedule A
hereto and any and all other shares of capital stock issued by the Bank
previously or hereafter acquired by Pledgor, whether directly from the Bank or
otherwise and whether such other shares are now or hereafter in the possession
of Pledgor, Lender or other holder; (ii) all stock and other securities or
property which are issued pursuant to conversion, redemption, exercise of
rights, stock split, recapitalization, reorganization, stock dividends or other
corporate act which are referable to the shares referenced in clause (i) or
this clause (ii) (collectively, the “Additional
Pledged  Securities”); (iii) all
distributions, whether cash or otherwise, in the nature of a partial or
complete liquidation, dissolution or winding up which are referable to the shares
referenced in clause (i) or clause (ii) (such distributions are
hereinafter referred to as “Liquidating
Distributions”); and (iv) all
substitutions for any of the foregoing, proceeds of and from any of the
foregoing and all interest, cash dividends or other payments in respect of any
of the foregoing.

 

1.2.                            Other Defined Terms.  All other capitalized
terms used herein have the meanings assigned to them in the Loan Agreement.

 

1.3.                            Exhibits and Schedules
Incorporated. All exhibits and schedules
attached hereto or referenced herein are hereby incorporated into this Pledge
Agreement.

 

2.                                      PLEDGE AND GRANT OF SECURITY INTERESTS.  Pledgor
hereby pledges, collaterally assigns, hypothecates and transfers to Lender all
of the Pledged Stock, together with appropriate undated assignments separate
from the Certificates duly executed in blank, and hereby grants to and creates
in favor of Lender liens and security interests in the Pledged Stock as
collateral security for: (a) the due and punctual payment when due (whether
at maturity, by acceleration or otherwise) in full of all amounts due under the
Senior Notes (as the same may be amended, restated, supplemented, modified,
extended or replaced from time to time) in the aggregate face amount as of the
date hereof of THIRTY MILLION FIVE HUNDRED THOUSAND DOLLARS ($30,500,000)
executed and delivered by Pledgor to Lender pursuant to the Loan Agreement; (b) the
due and punctual performance and observance by Pledgor of all other Pledgor’s
Liabilities; (c) the due and punctual performance and observance by
Pledgor of all of its agreements, obligations, liabilities and duties under
this Pledge Agreement, the Loan Agreement and the other Loan Documents; (d) all
amounts due to Lender under the Senior Notes, including any and all
modifications, extensions, renewals or refinancings thereof and including,
without limitation, all principal, interest and other amounts due under the
Senior Notes; (e) all sums advanced by, or on behalf of, Lender in
connection with, or relating to, the Loan Agreement, the Senior Notes or the
Pledged Stock including, without limitation, any and all sums advanced to
preserve the Pledged Stock, or to perfect Lender’s security interest in the 

 

2

 

Pledged Stock; (f) in the event of any proceeding to enforce the
satisfaction of the obligations, or any of them, or to preserve and protect
their rights under the Loan Agreement, the Senior Notes, this Pledge Agreement
or any other agreement, document or instrument relating to the transactions
contemplated in the Loan Agreement, the reasonable expenses of retaking,
holding, preparing for sale, selling or otherwise disposing of or realizing on
the Pledged Stock, or of any exercise by Lender of its rights, together with
reasonable attorneys’ fees, expenses and court costs; (g) any
indebtedness, obligation or liability of Pledgor to Lender, whether direct or
indirect, joint or several, absolute or contingent, now or hereafter existing,
however created or arising and however evidenced; (h) any indebtedness,
obligation or liability of Pledgor under or in connection with any Interest
Rate Protection Agreement; and (i) all costs incurred by Lender to obtain,
perfect, preserve and enforce the liens and security interests granted by this
Pledge Agreement, the Loan Agreement and the other Loan Documents, to collect
the Obligations Secured Hereby (as hereinafter defined) and to maintain and
preserve the Pledged Stock, with such costs including, without limitation,
expenditures made by Lender for attorneys’ fees and other legal expenses and
expenses of collection, possession and sale of the Pledged Stock, together with
interest on all such costs at the Default Rate (the foregoing subsections (a) through
(i) are collectively referred to herein as the “Obligations Secured Hereby”). Notwithstanding anything above in this Section 2 to the contrary, the Pledged Stock shall not be collateral
security for amounts outstanding under the Subordinated Debenture that are
deemed to be Tier 2 Capital of Pledgor in accordance with the rules and regulations
of the FRB applicable to the capital status of the subordinated debt of bank
holding companies, without giving effect to the limitation imposed by the
second sentence of 12 C.F.R. §250.166(e), which limits the capital treatment of
subordinated debt during the five years immediately preceding the maturity date
of the subordinated debt.

 

3.                                      DELIVERY OF PLEDGED STOCK.  On the
date hereof, Pledgor shall place the Pledged Stock representing 100% of the
issued and outstanding capital stock of the Bank in pledge by delivering the
Certificates to and depositing them with Lender or its agent appointed in
writing by Lender. Pledgor shall also deliver to Lender or its agent
concurrently therewith undated assignments separate from the Certificates duly
executed in blank and all other applicable and appropriate documents and
assignments in form suitable to enable Lender to effect the transfer of all or
any portion of the Pledged Stock to the extent hereinafter provided.

 

4.                                      ADDITIONAL COLLATERAL

 

4.1                               Delivery of Additional Pledged Securities.  If Pledgor shall hereafter
become entitled to receive or shall receive any interest, cash dividends, cash
proceeds, any Additional Pledged Securities, any Liquidating Distributions, or
any other cash or non-cash payments on account of the Pledged Stock, Pledgor
agrees to accept the same as Lender’s agent and to hold the same in trust on
behalf of and for the benefit of Lender and agrees to promptly deliver the same
or any Certificates therefor forthwith to Lender or its agent in the exact form
received, with the endorsement of Pledgor, when necessary, or appropriate
undated assignments separate from the Certificates duly executed in blank, to
be held by Lender or its agent subject to the terms hereof.

 

4.2          Proceeds; Dividends and Voting.  Notwithstanding
anything contained in this Pledge Agreement to the contrary, Pledgor shall be
entitled to receive for its own account or 

 

3

 

shall receive for its own account such
interest and cash dividends paid on account of the Pledged Stock, and to
exercise voting rights with respect to the Pledged Stock, so long as there has
not occurred any Event of Default under the Loan Agreement or this Pledge
Agreement (an Event of Default under this Pledge Agreement being defined in Section 7.1 hereof).

 

5.                                      REPRESENTATIONS AND WARRANTIES OF PLEDGOR. To induce Lender to enter into this Pledge Agreement and
the Loan Agreement, Pledgor makes the following representations and warranties
to Lender:

 

5.1                               Pledgor is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware and the State of
Illinois.  The Bank is a national banking
association duly organized, validly existing and in good standing under the
laws of the United States.

 

5.2                               The execution and delivery of this Pledge Agreement and the
performance by Pledgor of its obligations hereunder are within Pledgor’s
corporate powers and have been duly authorized by all necessary corporate
action.

 

5.3                               Pledgor beneficially owns and of record all of the issued
and outstanding shares of capital stock of the Bank and has good and marketable
title to the Pledged Stock.

 

5.4                               Following the Closing Date, Pledgor will hold all of the
issued and outstanding capital stock of the Bank free and clear of all liens,
charges, encumbrances, security interests, options, voting trusts and
restrictions of every kind and nature whatsoever except only the liens and
security interests created by this Pledge Agreement or otherwise in favor of
Lender.

 

5.5                               Each security which is a part of the Pledged Stock has been
duly authorized and validly issued and is fully paid and nonassessable.

 

5.6                               This Pledge Agreement has been duly executed and delivered
by Pledgor and constitutes the legal, valid and binding obligation of Pledgor
enforceable against it in accordance with its terms.

 

5.7                               No consent or approval of any governmental body, regulatory
authority or securities exchange or other Person or entity is required to be
obtained by Pledgor in connection with the execution, delivery and performance
of this Pledge Agreement other than those that have been obtained already.

 

5.8                               The execution, delivery and performance of this Pledge
Agreement will not violate any provision of any applicable law or regulation or
of any writ or decree of any court or governmental instrumentality or of any
indenture, contract, agreement or other undertaking to which Pledgor is a party
or which purports to be binding upon Pledgor or upon any of its assets and will
not result in the creation or imposition of any lien, charge or encumbrance on
or security interest in any of the assets of Pledgor except as contemplated by
this Pledge Agreement or otherwise in favor of Lender.

 

 

4

 

5.9                               The pledge, collateral assignment and delivery of the
Pledged Stock pursuant to this Pledge Agreement creates a valid first lien and
first and senior security interest in the Pledged Stock, which lien and
security interest are perfected.

 

6.                                      PLEDGOR’S COVENANTS.

 

6.1                               Pledgor covenants and agrees that it will defend Lender’s
lien and security interest in and to the Pledged Stock against the claims and
demands of all persons whomsoever.

 

6.2                               Pledgor covenants and agrees that without the prior written
consent of Lender, it will not sell, convey or otherwise dispose of any of the
Pledged Stock, or create, incur or permit to exist any pledge, lien, mortgage,
hypothecation, security interest, charge, option or any other encumbrance or
restriction with respect to any of the Pledged Stock, or any interest therein,
or any proceeds thereof, except for the liens and security interests created by
this Pledge Agreement.

 

6.3                               Pledgor covenants and agrees that it will not consent to
the issuance of: (i) any additional shares of capital stock of the Pledged
Stock unless such shares are pledged and the Certificates therefor delivered to
Lender, simultaneously with the issuance thereof, together with appropriate
undated assignments separate from the Certificates duly executed in blank; and (ii) any
options by the issuer of the Pledged Stock obligating such issuer to issue
additional shares of capital stock of any class of such issuer.

 

6.4                               At any time from time to time, upon the written request of
Lender, and at the sole expense of Pledgor, Pledgor covenants and agrees that
it will promptly and duly execute and deliver such further instruments and
documents and take such further actions as Lender may reasonably request for
the purposes of obtaining or preserving the full benefits of this Pledge
Agreement and of the rights and powers herein granted. If any amount payable
under or in connection with any of the Pledged Stock shall be or become
evidenced by any promissory note, other instrument or chattel paper, such note,
instrument or chattel paper shall be immediately delivered to Lender, duly
endorsed in a manner satisfactory to Lender, to be held as Pledged Stock
pursuant to this Pledge Agreement.

 

6.5                               Pledgor covenants and agrees to pay, and to hold Lender
harmless from any and all liabilities with respect to or resulting from any
delay in paying, any and all stamp, excise, sales or other taxes which may be
payable or determined to be payable with respect to any of the Pledged Stock or
in connection with any of the transactions contemplated by this Pledge
Agreement.

 

 

5

 

 

7.                                      RIGHTS AND REMEDIES UPON DEFAULT.

 

7.1          If any Event of Default under the Loan
Agreement or a default or breach in any respect by Pledgor of any
representation, warranty, covenant or agreement of Pledgor under this Pledge
Agreement (after the expiration of any applicable cure period or grace period
hereunder or thereunder, which breach shall be deemed an Event of Default under
the Loan Agreement and an Event of Default hereunder) shall occur, Lender may
do any one or more of the following: (a) declare the Obligations Secured
Hereby to be forthwith due and payable, whereupon such Obligations Secured
Hereby shall become immediately due and payable without presentment, demand,
protest or other notice of any kind; and/or (b) proceed to protect and
enforce its rights under this Pledge Agreement, the Notes, the Loan Agreement,
or any of the other Loan Documents through other appropriate proceedings, and
Lender shall have, without limitation, all of the rights and remedies provided
by applicable law, including, without limitation, the rights and remedies of a
secured party under the Illinois Uniform Commercial Code (the “UCC”) and, in addition thereto, Lender shall be entitled, at
Lender’s option, to exercise all voting and corporate rights with respect to
the Pledged Stock as it may determine, without liability therefor, but Lender
shall not have any duty to exercise any voting and corporate rights in respect
of the Pledged Stock and shall not be responsible or liable to Pledgor or any
other person for any failure to do so or delay in so doing.

 

7.2                               Without limiting the generality of the foregoing, if any
Event of Default hereunder or under the Loan Agreement shall occur, Lender
shall have the right to sell the Pledged Stock, or any part thereof, at public
or private sale or at any broker’s board or on any securities exchange for
cash, upon credit or for future delivery, and at such price or prices as Lender
may deem best, and Lender may be the purchaser of any or all of the Pledged
Stock so sold and thereafter Lender or any other purchaser shall hold the same
free from any right or claim of whatsoever kind. Lender is authorized, at any
such sale, if it deems it advisable so to do, to restrict the number of
prospective bidders or purchasers to persons who will represent and agree that
they are purchasing for their own account, for investment, and not with a view
to the distribution or resale of the Pledged Stock and may otherwise require
that such sale be conducted subject to restrictions as to such other matters as
Lender may deem necessary in order that such sale may be effected in such
manner as to comply with all applicable state and federal securities laws. Upon
any such sale, Lender shall have the right to deliver, assign and transfer to
the purchaser thereof the Pledged Stock so sold.

 

7.3                               Each purchaser at any such sale shall hold the property
sold, absolutely free from any claim or right of whatsoever kind, including any
equity or right of redemption of Pledgor, who hereby specifically waives all
rights of redemption, stay or appraisal which it has or may have under any rule of
law or statute now existing or hereafter adopted. Lender shall give Pledgor not
less than ten days’ written notice of its intention to make any such public or
private sale or at any broker’s board or on any securities exchange (with such
notice to state the time and place of such sale), and Pledgor agrees that such
notice shall be deemed reasonable.

 

7.4                               Any such public sale shall be held at such time or times
within the ordinary business hours and at such place or places as Lender may
fix in the notice of such sale. At any sale, the Pledged Stock may be sold in
one lot as an entirety or in parts, as Lender may determine. Lender shall not
be obligated to make any sale pursuant to any such notice.  Lender 

 

 

6

 

may, without notice or publication,
adjourn any sale, and such sale may be made at any time or place to which the
same may be so adjourned.  In case of any
sale of all or any part of the Pledged Stock on credit or for future delivery,
the Pledged Stock so sold may be retained by Lender until the selling price is
paid by the purchaser thereof, but Lender shall not incur any liability in case
of the failure of such purchaser to take up and pay for the Pledged Stock so
sold and, in case of any such failure, such Pledged Stock may again be sold
upon like notice.

 

7.5                               Lender, instead of exercising the power of sale herein
conferred upon it, may proceed by a suit or suits at law or in equity to
foreclose this Pledge Agreement and sell the Pledged Stock, or any portion
thereof, under a judgment or decree of a court or courts of competent
jurisdiction.

 

7.6                               On any sale of the Pledged Stock, Lender is hereby
authorized to comply with any limitation or restriction in connection with such
sale that it may be advised by counsel is necessary in order to avoid any
violation of applicable law or in order to obtain any required approval of the
purchaser or purchasers by any third party or any governmental regulatory
authority or officer or court, including, without limitation, all limitations
and restrictions imposed by federal and state banking laws and regulations.
Compliance with the foregoing sentence shall result in such sale or disposition
being considered or deemed to have been made in a commercially reasonable
manner.

 

7.7                               In furtherance of the exercise by Lender of the rights and
remedies granted to it hereunder, Pledgor agrees that, upon request of Lender
and at the expense of Pledgor, it will use its Best Efforts to obtain all third
party and governmental approvals necessary for or incidental to the exercise of
remedies by Lender with respect to the Pledged Stock or any part thereof,
including, without limitation, approvals from the FRB, the FDIC and the OCC.

 

8.                                      REGISTRATION RIGHTS; PRIVATE SALES.

 

8.1                               If Lender shall determine to exercise its
right to sell any or all of the Pledged Stock pursuant to Section 7 hereof, and if in the opinion of Lender
it is necessary or advisable to have the Pledged Stock, or that portion thereof
to be sold, registered under the provisions of the Securities Act of 1933, as
amended (the “Securities Act”), Pledgor will cause the issuer of the Pledged Stock to (a) execute
and deliver, and cause to be done all such other acts, as may be, in the
opinion of Lender, necessary or advisable to register the Pledged Stock, or
that portion thereof to be sold, under the provisions of the Securities Act, (b) use
its Best Efforts to cause the registration statement relating thereto to become
effective and to remain effective for a period of one (1) year from the
date of the first public offering of the Pledged Stock, or that portion thereof
to be sold, and (c) make all amendments thereto and/or to the related
prospectus which, in the opinion of Lender, are necessary or advisable, all in
conformity with the requirements of the Securities Act and the rules and
regulations of the SEC applicable thereto. Pledgor agrees to cause such issuer
to comply with the provisions of the securities or “Blue Sky” laws of any and
all jurisdictions which Lender shall designate and to make available to its
security holders, as soon as practicable, an earnings statement (which need not
be audited) which will satisfy the provisions of Section 11(a) of the
Securities Act.

 

 

7

 

8.2                               Pledgor hereby acknowledges that,
notwithstanding that a higher price might be obtained for the Pledged Stock at
a public sale than at a private sale or sales, the making of a public sale of
the Pledged Stock may be subject to registration requirements and other legal
restrictions compliance with which could require such actions on the part of
Pledgor, could entail such expenses and could subject Lender and any
underwriter through whom the Pledged Stock may be sold and any controlling
Person of any thereof to such liabilities as would make the making of a public
sale of the Pledged Stock impractical. Accordingly, Pledgor hereby agrees that
private sales made by Lender in accordance with the provisions of Section 7 hereof may be at prices and on other
terms less favorable to the seller than if the Pledged Stock were sold at
public sale, that Lender shall not have any obligation to take any steps in
order to permit the Pledged Stock to be sold at a public sale complying with
the requirements of federal and state securities and similar laws, and that
such sale shall not be deemed to be made in a commercially unreasonable manner
solely because of its nature as a private sale.

 

8.3                               Pledgor further agrees to use its Best
Efforts to do or cause to be done all such other acts as may be necessary to
make any sale or sales of all or any portion of the Pledged Stock pursuant to Section 7 and this Section 8 valid and binding and in compliance with
any and all other applicable requirements of law. Pledgor further agrees that a
breach of any of the covenants contained in Section 7 and this Section 8 will cause irreparable injury to Lender,
that Lender has no adequate remedy at law in respect of such breach and, as a
consequence, that each and every covenant contained in Section 7 and this Section 8 shall be specifically enforceable
against Pledgor, and Pledgor hereby waives and agrees not to assert any
defenses to the granting of equitable relief (such as, without limitation, any
defense that Lender has an adequate remedy at law or that Lender will not be
irreparably injured) in any action for specific performance of such covenants.

 

9.                                      LIMITATION ON DUTIES REGARDING
PLEDGED STOCK.  Lender’s sole duty with respect to the
custody, safekeeping and physical preservation of the Pledged Stock in its
possession, under Section 9-207 of the UCC or otherwise, shall be to deal
with it in the same manner as Lender deals with similar securities and property
for its own account. Neither Lender nor any of its directors, officers,
employees or agents shall be liable for any good faith failure to demand,
collect or realize upon any of the Pledged Stock or for any delay in doing so
or shall be under any obligation to see or otherwise dispose of any Pledged
Stock or for any good faith delay in doing so or shall be under any obligation
to see or otherwise dispose of any Pledged Stock upon the request of Pledgor or
otherwise.

 

10.                               POWERS COUPLED WITH AN INTEREST. 
All authorizations and agencies herein contained with respect to the
Pledged Stock are irrevocable and are powers coupled with an interest.

 

11.                               INDEMNIFICATION. 
Pledgor agrees to indemnify and hold harmless Lender (to the full extent
permitted by law) from and against any and all claims, demands, losses,
judgments, liabilities for penalties and excise taxes and other damages of
whatever nature, and to reimburse Lender for all costs and expenses, including
reasonable legal fees and disbursements, growing out of or resulting from the
Pledged Stock, this Pledge Agreement, the Loan Agreement or the other Loan
Documents or the administration and enforcement of this Pledge Agreement, the
Loan Agreement or the other Loan Documents or exercise of any right or remedy
granted to 

8

 

 

Lender hereunder except with respect to such claims,
demands, losses, judgments, liabilities for penalties and excise taxes and
other damages of whatever nature arising solely from the gross negligence or
willful misconduct of Lender, but including without limitation, any tax
liability incurred by Lender or any of its affiliates as a result of the
exercise by Lender of any of its rights hereunder. In no event shall Lender be
liable to Pledgor for any action taken by Lender that is permitted under this
Pledge Agreement other than to account for proceeds of the Pledged Stock
actually received by Lender.

 

12.                               DISTRIBUTION OF PLEDGED STOCK. Upon enforcement of this Pledge
Agreement following the occurrence of an Event of Default under this Pledge
Agreement, the Loan Agreement, or the Notes, the proceeds of the Pledged Stock
shall be applied to the Obligations Secured Hereby in such order and manner as
Lender may determine. In the event such monies shall be insufficient to pay all
of the Obligations Secured Hereby, Pledgor shall be liable to Lender for any
deficiency therein.

 

13.                               NO WAIVER; CUMULATIVE REMEDIES. Lender shall not by any act, delay,
omission or otherwise be deemed to have waived any of its rights or remedies
hereunder and no waiver shall be valid unless in writing, signed by Lender, and
then such waiver shall be valid to the extent therein set forth. A waiver by
Lender of any right or remedy hereunder on any one occasion shall not be
construed as a bar to any right or remedy which Lender would otherwise have on
any future occasion. No failure to exercise or any delay in exercising on the part
of Lender any right, power or privilege hereunder shall operate as a waiver
thereof; nor shall any single or partial exercise of any right, power or
privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies herein
provided are cumulative and not exclusive of any rights or remedies provided by
law.

 

14.                               SEVERABILITY OF PROVISIONS. The provisions of this Pledge Agreement
are severable, and if any clause or provision hereof shall be held invalid or
unenforceable in whole or in part, then such invalidity or unenforceability
shall attach only to such clause or provision or part thereof and shall not in
any manner affect any other clause or provision in this Pledge Agreement.

 

15.                               AMENDMENTS; CHOICE OF LAW; BINDING
EFFECT.

 

15.1                        None of the terms or provisions of this Pledge Agreement may be
altered, modified or amended except by an instrument in writing, duly executed
by each of the parties hereto.

 

15.2                        This Pledge Agreement shall be governed by and construed in accordance
with the internal laws of the State of Illinois, without regard to conflicts of
laws. Nothing herein shall be deemed to limit any rights, powers or privileges
which Lender may have pursuant to any law of the United States of America or
any rule, regulation or order of any department or agency thereof and nothing
herein shall be deemed to make unlawful any transaction or conduct by Lender
which is lawful pursuant to, or which is permitted by, any of the foregoing.

 

15.3        This
Pledge Agreement is made for the sole benefit of Pledgor and Lender, and no
other person shall be deemed to have any privity of contract hereunder nor any
right to rely 

 

 

9

 

hereon to any extent or
for any purpose whatsoever, nor shall any other person have any right of action
of any kind hereon or be deemed to be a third party beneficiary hereunder.

 

16.                               NOTICES. All notices, consents, requests,
demands and other communications hereunder shall be in writing and shall be
given in accordance with Section 9.8 of the Loan Agreement.

 

17.                               HEADINGS. The descriptive headings hereunder used
are for convenience only and shall not be deemed to limit or otherwise effect
the construction of any provision hereof.

 

18.                               COUNTERPART EXECUTION. This Pledge Agreement may be executed
in several counterparts, each of which shall constitute an original, but all of
which shall together constitute one and the same agreement.

 

19.                               FORUM; AGENT; VENUE. To induce Lender to accept this Pledge
Agreement and enter into the other Loan Documents, Pledgor irrevocably agrees that all actions or proceedings
in any way, manner, or respect, arising out of or from or related to this
Pledge Agreement or the other Loan Documents shall be litigated only in a court
located in Chicago, Illinois. Pledgor hereby consents and submits to the
jurisdiction of any local, state, or federal court located within said
city.  Pledgor hereby waives any right it
may have to transfer or change the venue of any litigation brought against Pledgor by Lender.

 

20.                               IRREVOCABLE AUTHORIZATION AND
INSTRUCTION TO ISSUERS.
Pledgor hereby authorizes and instructs each issuer of Pledged Stock to comply
with any instruction received by it from Lender in writing that (a) states
that an Event of Default has occurred and (b) is otherwise in accordance
with the terms of this Pledge Agreement, without any other or further
instructions from Pledgor, and Pledgor agrees that the issuer shall be fully
protected in so complying.

 

[THE REMAINDER OF THIS PAGE IS LEFT BLANK
INTENTIONALLY]

 

 

10

 

WAIVER
OF RIGHT TO JURY TRIAL. PLEDGOR HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHT
THAT IT MAY HAVE TO A TRIAL BY JURY IN ANY LITIGATION ARISING IN ANY WAY
IN CONNECTION WITH THIS PLEDGE AGREEMENT, THE NOTES OR ANY OF THE OTHER LOAN
DOCUMENTS, OR ANY OTHER STATEMENTS OR ACTIONS OF PLEDGOR OR LENDER. PLEDGOR
ACKNOWLEDGES THAT IT HAS BEEN REPRESENTED IN THE SIGNING OF THIS AGREEMENT AND
IN THE MAKING OF THIS WAIVER BY INDEPENDENT LEGAL COUNSEL SELECTED OF ITS OWN
FREE WILL, AND THAT IT HAS DISCUSSED THIS WAIVER WITH SUCH LEGAL COUNSEL.
PLEDGOR FURTHER ACKNOWLEDGES THAT (A) IT HAS READ AND UNDERSTANDS THE
MEANING AND RAMIFICATIONS OF THIS WAIVER, (B) THIS WAIVER HAS BEEN
REVIEWED BY PLEDGOR AND PLEDGOR’S LEGAL COUNSEL AND IS A MATERIAL INDUCEMENT
FOR LENDER TO ENTER INTO THIS PLEDGE AGREEMENT AND THE OTHER LOAN DOCUMENTS AND
(C) THIS WAIVER SHALL BE EFFECTIVE AS TO EACH OF SUCH OTHER LOAN DOCUMENTS
AS IF FULLY INCORPORATED THEREIN.

 

IN WITNESS WHEREOF, the parties have caused this Pledge Agreement to be
duly executed and delivered as of the day and year first above written.

 

	
   

  	
  OLD SECOND BANCORP, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

 

 

	
   

  	
  LASALLE BANK NATIONAL ASSOCIATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

 

 

SCHEDULE A

 

ISSUER: OLD SECOND NATIONAL BANK

 

 

 

	
  Owner

  	
   

  	
  Class

  	
   

  	
  Certificate 

  Number

  	
   

  	
  Number of 

  Shares

  	
   

  	
  Percentage of 

  Class

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Old Second 

  Bancorp, Inc.

  	
   

  	
  Common

  	
   

  	
  1R

  	
   

  	
  216,000

  	
   

  	
  100%

  

 

 

 

 

ACKNOWLEDGMENT

 

The undersigned issuer
of the Pledged Stock hereby acknowledges receipt of a copy of this Pledge
Agreement and agrees to (a) note the restrictions herein on its books,
records, ledgers and certificates maintained with respect to its capital stock,
(b) not make or permit any dividends or distributions with respect to its
capital stock except as permitted in this Pledge Agreement, and (c) not
make or permit any sale, transfer or issuance of any of its capital stock or of
any rights to acquire its capital stock except as permitted in this Pledge
Agreement.

 

	
   

  	
  OLD SECOND NATIONAL BANK,

  
	
   

  	
  a national association

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

 

 

 

 

Assignment Separate from Certificate

 

[Deliver one original per pledged
stock certificate]

 

FOR VALUE RECEIVED, Old
Second Bancorp, Inc., does hereby sell, assign and transfer unto
                                       
(      ) Shares of Common Stock of Old Second
National Bank, standing in his/her/its name on the books of such corporation
represented by Certificate(s) No.         ,
          ,
           and
             and
does hereby irrevocably constitute and appoint attorney to transfer such stock
on the books of the within named bank with full power and substitution in the
premises.

 

Further under penalties
of perjury, the undersigned certifies:

 

1.                                             That the number shown on this form is the
undersigned’s correct taxpayer identification number.

 

2.                                             That the undersigned is not subject to
backup withholding either because the undersigned had not been notified that
the undersigned is subject to backup withholding as a result of a failure to
report all interest or dividends, or the Internal Revenue Service has notified
the undersigned that the undersigned is no longer subject to backup
withholding.

 

	
  Taxpayer Identification

  	
  #

  	
   

  
	
   

  	
   

  
	
  Dated:

  	
   

  
				

 

 

	
   

  	
  OLD SECOND BANCORP, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

 

 

EXHIBIT E

 

FORM OF QUARTERLY COMPLIANCE CERTIFICATE

 

for the
Quarter Ended                          

 

The undersigned, the
                                      
of Old Second Bancorp, Inc. (“Borrower”),
hereby delivers this certificate pursuant to Section 6.3 of that certain Loan and Subordinated
Debenture Purchase Agreement, dated as of
              
    , 2008, between Borrower and LaSalle Bank National
Association (as may be amended, restated, supplemented or modified from time to
time, the “Agreement”) and certifies as of the date hereof as follows:

 

1.                                       Attached hereto are the quarterly financial reports described in Section 6.2 of the Agreement for
the above-referenced quarter.

 

2.                                       Borrower is in compliance in all material respects with all
covenants contained in the Agreement and has provided a detailed calculation,
as of the above-referenced quarter-end, of the financial covenants set forth in
Section 7 of the
Agreement on Annex A attached hereto.

 

3.                                       No Event of Default has occurred or is continuing under the
Agreement. [Or, if incorrect, provide detail
regarding the Event of Default and the steps being taken to cure it and the
time within which such cure will occur.]

 

4.                                       All of the representations and warranties of Borrower contained in
the Agreement are true in all material respects as of the date hereof.

 

Capitalized terms in this Quarterly
Compliance Certificate that are otherwise undefined shall have the meanings
given them in the Agreement.

 

Dated: 
[INSERT DATE]

 

	
   

  	
  OLD SECOND BANCORP,
  INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

 

 

 

ANNEX A

 

TO

 

QUARTERLY COMPLIANCE CERTIFICATE

 

 

 

 

 

EXHIBIT F

 

FORM OF OPINION OF BORROWER’S
COUNSEL

 

[LETTERHEAD
OF BORROWER’S COUNSEL]

 

 

1.                                       Borrower is a corporation, duly organized and validly
existing under the laws of the State of Delaware, is qualified to do business
in the State of Illinois, and has the requisite corporate power to conduct its
business as now being conducted. Borrower is registered as a bank holding
company under the Bank Holding Company Act of 1956, as amended.

 

2.                                       Borrower has 20,300,000 shares of authorized stock divided
into two classes, common and preferred, consisting of 5. 20,000,000 shares of
common stock, of which 12,149,296 were issued and outstanding as of December 31,
2007, and 6. 300,000 shares of preferred stock, none of which are currently
issued and outstanding.  To our
knowledge, none of the issued and outstanding shares of capital stock of
Borrower have been issued in violation of any preemptive rights.

 

3.                                       The Bank is a national banking association, duly organized
and validly existing under the laws of the United States.  The deposit accounts of the Bank are insured
by the FDIC, to the extent provided by law. 
The Bank has the requisite power and authority, corporate or otherwise,
to conduct its business as now being conducted.

 

4.                                       To our knowledge, the authorized capital stock of the Bank
is as stated in the Loan Agreement and such stock is validly issued and
outstanding, fully paid and non-assessable. 
To our knowledge, Borrower is the record and beneficial owner of the
Bank Shares, free and clear of all liens, encumbrances and security interests
of others, except for encumbrances in favor of Lender, including the security
interest granted by Borrower to Lender under the Loan Documents. To our
knowledge, none of the Bank Shares have been issued in violation of any
shareholder’s preemptive rights. To our knowledge, there are no options,
warrants, or other rights outstanding to acquire any capital stock of the Bank
and no person or entity has any other right to purchase or acquire any unissued
shares of capital stock of the Bank, nor does the Bank have any obligation of
any nature with respect to its unissued shares of capital stock.

 

5.                                       Provided that Lender is an “accredited investor” within the
meaning of Regulation D as promulgated under the Securities Act of 1933, as
amended (the “Act”), it is not necessary, in conjunction with the issuance of
the Subordinated Debenture, to register the Subordinated Debenture under the
Act or the securities laws of the State of Illinois.

 

6.                                       Except for such approvals as have already been obtained, no
order, permission, consent or approval of any federal or state commission,
board, regulatory authority or Governmental Agency is required for the
execution and delivery or performance by Borrower of the Loan Documents.

 

7.                                       To our knowledge, except as disclosed in the Loan Documents
and the Disclosure Schedule, there are no actions, suits, investigations, or
proceedings pending or threatened against or affecting Borrower or any
Subsidiary, or the business or properties of Borrower or any 

 

 

 

 

Subsidiary, or before or by any
Governmental Agency or any court, arbitrator or grand jury, which can
reasonably be expected to result in a material adverse change in the business,
operations or financial condition of Borrower and the Subsidiaries taken as a
whole, or in the ability of Borrower or any Subsidiary to perform under the
Loan Documents.

 

8.                                       Except as disclosed in the Loan Documents and the
Disclosure Schedule, to our knowledge, there is no default by Borrower or any
Subsidiary under any order, writ, injunction or decree of any court, any
applicable law, instrumentality, any contract, lease, agreement, instrument or
commitment to which any of them is a party or bound, which has or would have a
material adverse effect upon the business, operations or financial condition of
Borrower and the Subsidiaries taken as a whole or in the ability of Borrower or
any Subsidiary to perform under the Loan Documents.

 

9.                                       To our knowledge, no proceeds of the Loans will be used to
purchase or carry any margin stock or to extend credit to others for purposes
of purchasing or carrying margin stock.

 

10.                                 The execution, delivery and performance by Borrower of the
Loan Documents (a) are within its corporate powers, (b) have been
duly authorized by all necessary corporate action of Borrower, (c) do not
contravene (i) Borrower’s or any Subsidiary’s charter or bylaws or (ii) any
law or, to our knowledge, any contractual restriction affecting Borrower or any
Subsidiary, and (d) other than as contained in the Pledge Agreement, to
our knowledge, do not result in the creation of any lien or other encumbrance
upon or with respect to any of the assets or property of Borrower or any
Subsidiary.

 

11.                                 The Loan Documents are legally valid and binding
obligations of Borrower and are enforceable against it in accordance with their
respective terms.

 

12.                                 Under the terms of the Indentures, the Junior Subordinated Debentures
are expressly subordinate and junior in all respects (including, without
limitation, with respect to the right of payment) to the Loans.  The Loans constitute “Senior Indebtedness” as
defined under the Indentures.

 

13.                                 Under the terms of the Indentures, Borrower is not
prohibited from satisfying in full its obligations under the Loan Agreement,
the Notes and the other Loan Documents, including the payment of interest and
principal under any Note when due and payable, if the Borrower exercises its
right to defer the payment of interest on the Junior Subordinated Debentures
pursuant to the terms of the Indentures or the Borrower otherwise defers the
payment of interest on the Junior Subordinated Debentures or the payment of
distributions on the securities issued by the Trusts.

 

14.                                 Except for such approvals as have already been obtained, no
order, permission, consent or approval of any federal or state commission,
board or regulatory authority or Governmental Agency is required in order to
consummate the Merger or the Bank Merger, except for notices of consummation to
be filed with applicable Governmental Agencies, including the FDIC, the OCC and
the IDFPR.

 

 

2

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