BRANCH PURCHASE AND ASSUMPTION AGREEMENT

This BRANCH PURCHASE AND ASSUMPTION AGREEMENT (the “Agreement”), dated as of the 30th day of January, 2015, is made and entered into by and between OLD NATIONAL BANK, a national banking association having its principal office in Evansville, Indiana (the “Seller”), and FIRST MID-ILLINOIS BANK & TRUST, N.A., a national banking association having its principal office in Mattoon, Illinois (the “Purchaser”, and together with the Seller, the “Parties”, and each, a “Party”).

WHEREAS, the Seller conducts banking and other related activities at the branch banking offices set forth on Exhibit A hereto (collectively, the “Branches”);

WHEREAS, the Seller desires to sell certain loans and other assets and assign certain deposit and other liabilities and obligations attributed to the Branches, and the Purchaser desires to purchase such assets and assume such liabilities and obligations upon the terms and conditions hereinafter set forth (the “Acquisition”).

NOW, THEREFORE, in consideration of the foregoing premises, the representations, warranties and mutual agreements and covenants contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

1.1    Branches. Certain assets and liabilities of the Branches are the only assets and liabilities of the Seller which are the subject of this Agreement. For the consideration, in the manner and upon the terms and conditions hereinafter set forth, the Seller hereby agrees to sell, convey, transfer and assign those certain assets and liabilities, set forth in Sections 1.3, 1.5 and 1.7 hereof to the Purchaser, and the Purchaser agrees to accept and assume such assets and liabilities from Seller.

1.2    Time and Place of Closing. The closing of the transaction contemplated hereby (the “Closing”) shall occur at such time and on such date on which the data transfer contemplated by Section 2.4(a) may occur, and as may be mutually agreed to by the parties following the satisfaction or waiver of all conditions to the obligations of the Parties set forth in Article V and Article VI hereof (other than conditions that by their nature are normally satisfied at the Closing or that can be satisfied only by the delivery of certificates or other documents at the Closing) (the “Closing Date”), provided that both parties shall use their reasonable efforts to close the transaction on or before August 31, 2015 (the “Outside Date”). The Closing shall be held at the offices of the Seller in Evansville, Indiana or at such other location as may be mutually agreed to by the parties. The transaction contemplated hereby will become effective at the close of business on the day of the Closing.

1.3    Purchase of Assets. Subject to Section 1.4 hereof and the other terms and conditions of this Agreement, the Seller hereby agrees to sell, transfer, convey, assign and deliver to the Purchaser, and the Purchaser agrees to purchase, accept and receive from the Seller, on the Closing Date the following assets, properties and rights associated with the Branches free and clear of all security interests, liens, mortgages, limitations, restrictions, commitments and encumbrances (“Encumbrances”), except for the security interests, liens, mortgages and encumbrances that are in favor of the Seller with respect to the Loans (as hereinafter defined) or Permitted Encumbrances (as hereinafter defined) (collectively, the “Assets”):

The Purchaser hereby understands and agrees that it is purchasing only the Assets and assuming only the Assumed Liabilities (as hereinafter defined) specifically identified in this Agreement and, except as may be expressly provided for in this Agreement, the Purchaser has no interest in or right to (y) any customers of any affiliate of the Seller and (z) any relationship which the Seller, or any other office or branch of the Seller, may have with any customer of the Branches not related to such customers’ status as a holder of Deposit Liabilities or Loans, including, without limitation, any trust or insurance relationship. No right to the use of any sign, trademark, trade name, service mark or corporate name of the Seller, or any of its affiliates, is being sold hereunder.

1.4    Excluded Assets. All assets, properties and rights of the Seller not expressly included in the Assets are excluded from the transactions contemplated by this Agreement, including, without limitation, the following (collectively, the “Excluded Assets”):

1.5    Assumption of Liabilities. The Purchaser hereby agrees, subject to Section 1.6 hereof and the other terms and conditions of this Agreement, that on and after the Closing Date it shall assume and fully and timely perform, discharge and pay, in accordance with their respective terms, all of the liabilities and obligations of the Seller relating to (collectively, the “Assumed Liabilities”):

The liabilities and obligations described in this Section 1.5 that the Purchaser hereby agrees to assume and fully and timely perform, discharge and pay are referred to collectively in this Agreement as the “Assumed Liabilities”. Notwithstanding anything to the contrary contained in this Agreement, the Purchaser shall not assume or be bound by any duties, responsibilities, obligations or liabilities of the Seller relating to the Seller or arising out of the Assets, the Excluded Assets, or the Branches, of any kind or nature and whether known, unknown, contingent or otherwise, on or before the Closing Date, other than the Assumed Liabilities. After the Closing Date, the Seller shall have no duties, responsibilities, liabilities or obligations under or with respect to the Assumed Liabilities.

1.6    Excluded Liabilities. All liabilities and obligations of the Seller not expressly included in the Assumed Liabilities are excluded from the transactions contemplated in this Agreement, including, without limitation, the following (collectively, the “Excluded Liabilities”):

Exhibit 1.6 hereto contains a list of all items referred to in Sections 1.6(a) and (b), and the Seller shall, on the Measurement Date, provide the Purchaser with an updated version of Exhibit 1.6 as of the Measurement Date.

1.7    Safe Deposit Business.

1.8    Bills of Sale; Deeds; Assignments; Documentation of Assumption. On the Closing Date and pursuant to Section 6.6 hereof, the Seller shall deliver to the Purchaser such bills of sale, deeds, assignments and instruments of transfer, reasonably satisfactory in form and substance to the Seller and the Purchaser, pursuant to which the Seller will transfer title to the Owned Real Property by special warranty deed and all of its right, title and interest in and to the Assets to the Purchaser. On the Closing Date and pursuant to Section 5.6 hereof, the Purchaser shall deliver to the Seller such undertakings and agreements, satisfactory in form and substance to the Seller and the Purchaser, pursuant to which the Purchaser shall assume and agree to fully and timely perform, discharge and pay, in accordance with their respective terms, all of the Assumed Liabilities.

1.9    Calculation of Purchase Price. In consideration of the assumption by the Purchaser of the Assumed Liabilities, the Seller shall transfer the Assets to the Purchaser and shall pay the Purchaser an amount (the “Purchase Price”) equal to (a) the Deposit Liabilities determined in accordance with Section 1.5(a) hereof plus (b) the net amount of any prorated amounts owing by the Seller to the Purchaser pursuant to Section 1.11 hereof, reduced by the sum of (i) the principal amount of the Loans, plus the accrued but unpaid interest and fees thereon and related unamortized origination costs or fees, but net of unearned income and excluding loan loss and general reserves related thereto, as shown on the books and records of the Seller as of the close of business on the Closing Date, (ii) the net book value of the Fixed Assets on the Seller’s books and records as of the close of business on the Closing Date as computed in accordance with accounting principles generally accepted in the United States (“GAAP”), (iii) the Acquired Cash as of the Closing Date, determined in accordance with Section 1.3(g) hereof, (iv) 3.6% multiplied by the Deposit Liabilities less brokered deposits, repurchase agreements and municipal deposits, (v) the amount of $500,000 representing the fixed deposit premium related to the municipal deposits included in the Deposit Liabilities, (vi) the net book value of the Acquired Overdrafts as of the close of business on the day immediately preceding the Closing Date as computed in accordance with GAAP, plus the accrued but unpaid fees related to the Acquired Overdrafts, as shown on the books and records of the Seller as of the close of business on the day immediately preceding the Closing Date, and (vii) the net amount of any prorated amounts owing by the Purchaser to the Seller pursuant to Section 1.11 hereof. The payment formula referred to above is for the sole purpose of determining the amount of cash transferable at the Closing Date and shall not constitute an allocation of the purchase price to any particular asset being transferred or liability being assumed pursuant hereto.

1.10    Closing Date Payment. If the Purchase Price, calculated by the Seller as set forth in Section 1.9 hereof but based upon the relevant values as of the close of business on the second Business Day prior to the Closing Date (the “Measurement Date”), is a positive number, then on the Closing Date the Seller shall transfer to the Purchaser, by wire transfer of immediately available funds to an account designated by the Purchaser, an amount which the Seller estimates to be the amount of the Purchase Price. In the event, however, the preceding formula produces a negative number, the absolute value of such amount shall be paid by the Purchaser to the Seller by wire transfer of immediately available funds on the Closing Date to an account designated by the Seller, and the Seller shall have no obligation to make any payment hereunder to the Purchaser (the Purchase Price so transferred by the Purchaser or the Seller, as the case may be, is referred to herein as the “Estimated Purchase Price”); provided, however, for avoidance of doubt, all Pre-closing Loans transferred to the Purchaser at the Closing and not included in the Seller’s calculation of the Estimated Purchase Price as of the Measurement Date (because such Loans were entered into within the second Business Day prior to the Closing Date), will be included in the Seller’s calculation of the Preliminary Statement (as hereinafter defined). The Estimated Purchase Price amount shall be set forth in a certificate executed by the Seller setting forth in reasonable detail the Seller’s calculation and delivered to the Purchaser by 5:00 p.m. (Central Time) on the Measurement Date, which amount and calculation shall be reasonably acceptable to the Purchaser.

1.11    Pro-Rated Adjustment of Income and Expenses. All utility payments, real and personal property taxes and similar expenses and charges relating to the Branches and the Fixed Assets, all Federal Deposit Insurance Corporation (“FDIC”) or FICO premiums and assessments and all other prepaid expenses relating to the operation of the Branches (but excluding any such prepaid expenses relating to the Excluded Assets or the Excluded Liabilities) shall be prorated between the Parties as of the Closing Date on the basis of a 365-day year. To the extent any of such items has been prepaid by the Seller for a period extending beyond the Closing Date, there shall be a proportionate monetary adjustment in favor of the Seller and, to the extent due and payable after the Closing Date for a period prior to the Closing Date, there shall be a proportionate monetary adjustment in favor of the Purchaser, in each case pursuant to the formula set forth in Section 1.09 hereof. If any installment of real property taxes for the Owned Real Property for the calendar year 2014 or any prior year has not been paid before the Closing Date, the Seller shall pay such installment before the Closing Date, and (b) the real property taxes for the Owned Real Property for the portion of the calendar year 2015 ending on the Closing Date shall be prorated between the Purchaser and the Seller on the basis of 105% of the amount of the most recent full-year real property tax bill, and the amount attributable to the Seller’s period of ownership of the Owned Real Property shall be added to the amount payable by the Seller under Section 1.09 hereof. All taxes, utility payments and other expenses and charges relating to the Branches to the extent not prorated, which arise or are incurred, assessed or imposed on and after the Closing Date for the operation of the Branches after the Closing Date shall be paid by the Purchaser.

1.12    Updates to Loans Prior to the Closing Date. From the date of this Agreement until the Closing Date, the Seller shall promptly provide to the Purchaser: (a) written notice of the occurrence of any Loan becoming an Excluded Loan, (b) written notice of the making of any Pre-Closing Loan, (c) reasonable access to the Seller’s branch loan-staff personnel to facilitate discussions whether any Loan should be designated as an Excluded Loan, and (d) such other information regarding the Loans as is reasonably requested by the Purchaser. At any time prior to the Closing, if any Loan shall become an Excluded Loan, the Purchaser shall have the right to remove such Loan from Exhibit 1.3(a), in the Purchaser’s sole and absolute discretion, and any such loan so removed shall be deemed to be an Excluded Loan for purposes of this Agreement.

1.13    Allocation of Purchase Price. The purchase price for the Assets being purchased and the Assumed Liabilities being assumed by the Purchaser pursuant to this Agreement shall be allocated on an allocation schedule to be agreed upon by the Purchaser and the Seller within thirty (30) days after the Closing Date. This allocation is intended to comply with the allocation method required by Section 1060 of the Internal Revenue Code of 1986, as amended (the “Code”). The Purchaser and the Seller shall cooperate to comply with all substantive and procedural requirements of Section 1060 and any regulations thereunder, and the allocation shall be adjusted if and to the extent necessary to comply with the requirements of Section 1060.

1.14    Transfer Taxes and Recording Fees. The Purchaser and the Seller shall pay one-half of any transfer and conveyance taxes in connection with the transfer of the Assets to the Purchaser. The Purchaser shall pay all recording fees in connection with the transfer of the Assets to the Purchaser and the Seller shall pay all recording fees, if any, necessary to cure any Objections (as hereinafter defined).

1.15    Adjustments.

2.1    Regulatory Approvals.

 

2.2    Access. The Seller shall afford to the Purchaser and its authorized representatives, upon reasonable prior notice (or upon less prior notice as agreed by the Parties), reasonable access to the Branches, employees, properties, books and records, and any other information directly related to the Branches, the Loans and the Assets in order that the Purchaser, at the Purchaser’s sole expense, may have full opportunity to prepare for the and to make a reasonable review and investigation of the Assets and the Assumed Liabilities at reasonable times during the Seller’s regular business hours without materially interfering with the normal business and operations of the Branches or the affairs of the Seller. The Seller shall furnish the Purchaser with such information as to its business, operations and properties relating to the Branches as the Purchaser may, from time to time, reasonably request and as shall be available, which is required for inclusion in all governmental applications necessary to effect the transactions contemplated hereby or the prepare for the data transfer contemplated by Section 2.4(a). Nothing in this Section 2.2 shall be deemed to require the Seller to disclose information it cannot lawfully disclose or to breach any obligation of confidentiality or to reveal any proprietary information, trade secrets or marketing, business or strategic plans.

2.3    Confidentiality. Prior to the Closing, the Purchaser shall, and shall cause its directors, officers, employees, agents and representatives to, hold in strict confidence and not disclose to any other person or entity without the prior written consent of the Seller (a) the terms of this Agreement, and (b) all information received by the Purchaser or its directors, officers, employees, agents or representatives from or with respect to the Seller, the Branches, the Assets, the Assumed Liabilities, the customers or the transactions contemplated hereby, except such information (i) as may be publicly available other than through a breach of this Agreement or the wrongful dissemination of such information by the Purchaser or its directors, officers, employees, agents or representatives, (ii) as may be required to be disclosed by applicable law or regulation, or by any listing agreement with or listing rules of a national securities exchange or trading market or inter-dealer quotation system, or (iii) as required to obtain the Governmental Approvals provided that the Purchaser may make such information available to its agents, attorneys and representatives and any Persons, and their respective agents, attorneys and representatives, interested in providing financing to the Purchaser who agree to keep such information in strict confidence and to use such information only in connection with providing such financing to the Purchaser. The Seller and the Purchaser agree that neither shall issue any news or press release nor provide information to any reporter or the media regarding this Agreement or the transactions contemplated hereby, except as is required by applicable law, without obtaining the prior approval of the other Party. In addition to the foregoing, the Seller and the Purchaser are parties to a separate confidentiality agreement relating to the Branches and the transaction contemplated hereby which shall remain binding upon the Parties and in full force and effect in accordance with its terms (the “Confidentiality Agreement”); provided, that effective upon the Closing, the Confidentiality Agreement shall terminate with respect to information relating solely to Branches; provided, further, that (x) the Purchaser acknowledges that any and all other information provided to it by the Seller concerning the Seller and (y) the Seller acknowledges that any and all other information provided to it by the Purchaser concerning the Purchaser shall, in each case, remain subject to the terms and conditions of the Confidentiality Agreement after the Closing Date.

2.4    Conversion of Accounts; Transfer and Delivery of Assets and Deposit Liabilities.

2.5    Retention of and Access to Files and Records Following the Closing Date.

2.6    Safekeeping. Subject to Section 1.7 hereof and in accordance with customary industry standards, the Seller agrees to transfer and deliver to the Purchaser on the Closing Date all safe deposit box contents, including without limitation, cash, securities, papers, valuables and other items (collectively, “Safekeeping Items”), held by the Seller in safekeeping for its customers at the Branches, together with all records relating thereto (in whatever form or medium is maintained by the Seller). The Purchaser agrees to assume, honor and discharge, from and after the Closing Date, the duties and obligations of the Seller with respect to such safe deposit boxes and the Safekeeping Items and shall be entitled to any right or benefit arising from such safekeeping business from and after the Closing Date. The Purchaser agrees to execute as of the Closing Date a receipt for such Safekeeping Items.

2.7    Employees.

2.8    Payment of Items After the Closing Date.

2.9    Loan Payments and Information Received After the Closing Date.

2.10    Notices to Customers.

2.11    Notices to Obligors on Loans.

2.12    Seller Signage and Other Identification. Beginning ten days prior to the Closing Date, the Purchaser, at its expense, may begin to substitute its name and logo for the name and logo of the Seller on the public signs at the Branches and shall cover, dismantle, or discontinue the use of and make available to the Seller at the Branches all signs which carry the name or logo of the Seller. Until the Closing Date, any signs, logos, and other insignia replaced by the Purchaser identifying or identified with the Purchaser shall be covered by temporary signs, logos, or other insignia identifying or identified with the Seller. If this Agreement is terminated prior to the Closing, the Purchaser shall immediately and at its sole expense restore such signage of the Seller and any other area altered in connection therewith to its pre-existing condition. The Seller agrees, at its expense, to remove from the Branches as promptly as practicable after the Closing Date such signs and/or temporary signs. The Purchaser agrees to replace reasonably promptly all written, printed and electronic materials bearing the Seller’s or any of its affiliate’s name and/or logo used at the Branches with written, printed or electronic materials bearing the Purchaser’s name and/or logo (or such name or logo as shall be utilized by the Purchaser in connection with its operation of the Branches), including, without limitation, coupon books for Loans, stationery, forms and marketing, advertising and other materials or brochures. All such materials so replaced shall be removed by the Seller, at its expense, from the Branches as promptly as practicable after the Closing Date.

2.13    Right to Intervene. In the event that any claim, demand or Proceeding is instituted or threatened against the Purchaser for which the Seller may have liability relating to this Agreement, the Assets or the Assumed Liabilities, the Seller shall have the right, at its discretion and expense, to intervene in such matter, and the Purchaser hereby agrees to give prompt and prior notice thereof to the Seller and consents to such intervention.

2.14    Assumption of Risks.

2.15    Information Reporting. With respect to the Loans purchased and the Deposit Liabilities assumed by the Purchaser pursuant to this Agreement, (a) the Purchaser agrees to report to the customer and to the IRS (and any state or local taxing authority as required) all interest and other amounts paid or earned by the Purchaser and the applicable customer from and after the Closing Date for the year in which the Closing Date occurs, and (b) the Seller agrees to report to the customer and to the IRS (and any state or local taxing authority as required) all interest and other amounts paid or earned by the Seller and the applicable customer prior to the Closing Date for the year in which the Closing Date occurs.

2.16    Cooperation and Further Assurances. Each Party agrees that on and before the Closing Date (a) it shall cooperate with the other in accomplishing the terms and conditions of this Agreement, and (b) at any time and from time to time after the Closing Date, it shall execute and deliver to the other Party such further instruments, agreements and documents as the other Party may reasonably request to give effect to the transactions contemplated by this Agreement.

2.17    Condition of Assets. The Purchaser has inspected the Real Property and Fixed Assets, observed their physical characteristics and existing conditions and has been afforded the opportunity to conduct such inspection, investigation and study on an of the Real Property and Fixed Assets as it deems necessary for the purpose of acquiring the Fixed Assets and assuming the Real Property for the Purchaser’s intended use. On and after the Closing Date, the Purchaser hereby waives any and all objections to or claims with respect to any and all physical characteristics and existing conditions of the Real Property and Fixed Assts. The Purchaser further acknowledges and agrees that the Fixed Assets are to be transferred, assigned, sold and conveyed to, and purchased and accepted by, the Purchaser in their present condition “AS IS, WHERE IS” and without any representations or warranties other than as expressly stated in this Agreement.

2.18    Customers.

(a)     Immediately following the Closing, the Purchaser shall take all actions necessary to effectuate its succession to, and purchase and assumption of, the Assets and the Assumed Liabilities; provided, however, that the Purchaser understands and agrees that the Seller does not make in this Agreement, and has not otherwise made, any representation, warranty, covenant, agreement or assurance that any of the customers attributed to the Branches will become or continue to be customers of the Purchaser, the same being at the sole discretion of such customers.

(b)    The Purchaser understands and agrees that the Seller does not make in this Agreement, and has not otherwise made, any representation, warranty, covenant, agreement or assurance with respect to or relating in any manner to the credit risk or creditworthiness of any obligor or guarantor under, or the collectability of, any of the Loans or the value of any collateral, chattel or asset securing any of the Loans.

2.19    Conduct of Business Pending Closing Date. From the date of this Agreement and until the earlier of the Closing Date or the termination of this Agreement, the Seller shall (w) conduct business at the Branches in the ordinary course substantially in the manner as conducted on the date of this Agreement, except for activities or transactions contemplated by this Agreement, (x) maintain the Branches in their current condition, ordinary wear and tear excepted, (y) use its commercially reasonable efforts to preserve its business relationships with its depositors and customers related to the Loans, and (z) shall not, without the prior written consent of the Purchaser (such consent not to be unreasonably withheld, conditioned or delayed):

2.20    Covenant Not to Solicit Customers.

2.21    Future Filings and Recordings. Following the Closing, the Purchaser shall, at its sole cost and expense, promptly make all filings and recordings with and otherwise take all other actions with respect to all governmental agencies or authorities and recorder’s offices required by law or as the Purchaser may deem necessary or advisable to reflect its purchase of the Assets and assumption of the Assumed Liabilities and to reflect the Purchaser as the holder of all promissory notes and the secured party with respect to all liens, security interests, mortgages, certificates of title and other loan documents relating to the Loans.

2.22    Certain Withholdings. On or before the Closing Date, the Seller shall deliver to the Purchaser a list of all customers who have received “B” or “C” notices issued by the IRS relating to the Deposit Liabilities. On and after the Closing Date, the Seller shall promptly deliver to the Purchaser (a) any and all similar notices regarding the Deposit Liabilities received from the IRS, and (b) all notices received from the IRS releasing any governmental agency restrictions on such Deposit Liabilities. Any amounts required by any governmental agency to be withheld from any Deposit Liabilities (the “Withholding Obligations”) and any related penalties imposed by any governmental agency will be handled as follows:

2.23    Purchaser Financing.  The Purchaser shall, no later than the Closing Date, obtain financing for the transactions contemplated by this Agreement in a manner necessary to achieve regulatory capital levels and ratios on a pro forma basis to the Purchaser’s satisfaction in consultation with the Office of the Comptroller of the Currency or any other state or federal banking regulatory agency that regulates the Purchaser. The Purchaser shall keep the Seller reasonably informed on the progress of such financing.

2.24    Commitment for Title Insurance and Survey Within forty-five (45) days of the date of this Agreement, the Seller shall deliver to the Purchaser, with respect to each parcel of Owned Real Property: (a) a title commitment (including all documents, instruments or agreements evidencing or creating the exceptions to, or encumbrances on, title referenced in such commitment) (the “Commitments”) issued by Chicago Title Insurance Company (the “Title Insurer”) for an owner’s title insurance policy , ALTA Policy Form 2006, and (b) a new ALTA land title survey of each parcel of Owned Real Property prepared and certified as to all matters shown thereon by a surveyor licensed by the respective State where the Owned Real Property is located (the “Surveys”), which Surveys shall (i) be certified to the Purchaser and the Title Insurer, (ii) prepared in accordance with the current Minimum Standard Detail Requirements for ALTA/ACSM Land Surveys, jointly established and adopted by ALTA and NSPS in 2011, and include Items 1-4, 6(b), 7(a), 7(b)(1), 7(c), 8-10, 11(a), 13, 14, 16-19 and 21 of Table A thereof and (iii) show the location of all improvements and shall be sufficient for the Title Insurer to insure over standard survey-related exceptions in the final title insurance policies. The Surveys shall include a notation stating whether any portion of the Owned Real Property is located in a 100-year flood plain, flood-prone area or special flood hazard and shall show the specific location of any portions of such Owned Real Property that may be located in any such flood areas. The Commitments shall reflect that the Seller has good and indefeasible title in and to the Owned Real Property, subject only to (i) taxes for 2015 and subsequent years, (ii) existing easements, restrictions and other encumbrances that do not materially adversely affect the use of the Owned Real Property as a banking branch or the value thereof and (iii) printed exceptions in the Title Commitments generally contained in any ALTA 2006 owner’s standard coverage policy of title insurance (collectively, the “Permitted Exceptions”). The costs of obtaining the Commitments and Surveys shall be borne equally by the Seller and the Purchaser. If any Commitment contains any exceptions other than Permitted Exceptions, the Seller shall make a good faith effort to cure, or cause the Title Insurer to omit, such exceptions prior to the Closing.

2.25    Title Insurance Policy

2.26    Inspection of Real Property. Within forty five (45) calendar days after the date of this Agreement, the Purchaser may, at its sole cost and expense, undertake such environmental inspections and examinations (including any noninvasive sampling) of each Real Property, as the Purchaser reasonably deems necessary or appropriate, which shall be conducted in a manner and at times so as to not disrupt the Seller’s business operations of the Branches (a “Phase I Site Assessment”). The cost of any such Phase I Site Assessment shall solely be the responsibility of the Purchaser. If any such Phase I Site Assessment indicates that any Real Property contains or may contain a Material Defect or further investigation is warranted, the Purchaser, at its option, shall within twenty (20) calendar days after receipt of the Phase I Site Assessment provide notice to the Seller of either (a) its acceptance of such Real Property “as is” to any Material Defect or (b) its option to cause to be prepared, at the Purchaser’s expense, a Phase II environmental survey (a “Phase II Site Assessment”) of such Real Property, or such other appropriate investigation as the Purchaser deems necessary. Upon completion of the investigation conducted in accordance with the Phase II Site Assessment, or an inspection pursuant to Section 2.2 that indicates that any Real Property otherwise contains or may contain a Material Defect, the Purchaser shall develop a plan to remedy any Material Defect and/or a plan to perform further investigation (if necessary) and an estimate of the cost of any remediation or other follow-up work that may be necessary to address, identify or monitor the Material Defect (a “Plan”). Notwithstanding the foregoing, the Purchaser shall not conduct any Phase II Site Assessment on any Real Property, without the prior written consent of the Seller (which consent may be withheld in the Seller’s sole discretion) and coordinating the scope of such work with the Seller or the Seller’s consultants, as applicable. If reasonably necessary for proper conduct and completion of on-site sampling for a Phase II Site Assessment, the forty five (45) day time period shall be subject to reasonable extensions, not to exceed ninety (90) calendar days following the expiration of the initial forty five (45) calendar day period. The Purchaser shall maintain liability insurance and shall indemnify the Seller for any and all losses incurred by the Seller, any of its affiliates and/or third parties while the Purchaser and its agents are performing any inspections under this Section 2.26. In the event of any damage to any of the Owned Real Property, the Seller shall be entitled to require the Purchaser to engage workmen reasonably acceptable to the Seller to restore any such damage to the same condition as the Owned Real Property was in prior to the inspection. With respect to any Leased Property, the Seller will use commercially reasonable efforts to obtain the applicable landlord’s prior approval of the scope of work for any Phase II Site Assessment, and the Seller shall cooperate with the Purchaser to obtain such landlord approval; provided, however, that if the Purchaser is unable to obtain such prior approval from the Seller or such applicable landlord with respect to any Leased Property, the Purchaser may (i) enter into a lease or sublease with the Seller or the landlord for the Leased Property, on terms and conditions agreed to by the Purchaser and the Seller or landlord, if applicable or (ii) exclude the applicable Real Property (an “Excluded Branch”) and any related Fixed Assets from the Acquisition, whereupon the Purchase Price shall not include the net book value of the Real Property and any related Fixed Assets in the calculation set forth in Section 1.9 hereof, and, as applicable, the Acquisition shall exclude any (1) Branch Lease, (2) equipment leases for equipment, (3) subleases listed on Schedule 3.12, and (4) assignable operating contracts, in each case, associated with the Excluded Branch; provided, further, that, for the avoidance of doubt, the Purchaser shall remain obligated to, in accordance with the terms of this Agreement, purchase all other Assets and assume all other Assumed Liabilities associated with the Excluded Branch (other than as provided in this sentence) but, notwithstanding the provisions of Section 2.7, shall not be required to offer employment to or hire any Branch Employee related to the Excluded Branch.

2.27    Objections and Remedies.

(a) If the Purchaser shall discover a Material Defect (as hereinafter defined) as a result of the Purchaser’s inspections and examinations undertaken in accordance with Section 2.2 or Section 2.26, the Purchaser shall give the Seller written notice as soon as possible describing, in reasonable detail, the facts or conditions constituting such Material Defect and the Plan, that the Purchaser reasonably believes is necessary to correct such Material Defect (to be read for this purpose without reference to the $50,000 threshold). Upon receipt of any Plan and the estimate of the costs of all remediation and follow-up work (including investigation, monitoring and obtaining institutional controls), the Purchaser and the Seller shall attempt to agree upon a course of action to implement the Plan.

2.28    Exclusivity. From the date of this Agreement through the Closing Date, the Seller will not and will cause its affiliates not to, directly or indirectly, (a) solicit, initiate, or encourage the submission of any proposal or offer from any Person other than the Purchaser relating to the acquisition of any Branch or any of the assets, properties or deposits thereof or (b) participate in any discussions or negotiations regarding, furnish any information with respect to, assist or participate in, or facilitate in any other manner any effort or attempt by any Person to do or seek any of the foregoing. The Seller will notify the Purchaser immediately if any Person makes any proposal, offer, inquiry, or contact with respect to any of the foregoing.

2.29    Breaches; Consummation of Agreement. Either Party shall, in the event it has Knowledge of the occurrence, or impending or threatened occurrence, of any event or condition which would cause or constitute a breach (or would have caused or constituted a breach had such event occurred or been known prior to the date hereof) of any of its representations or agreements contained or referred to herein, give prompt written notice thereof to the other Party and use its best efforts to prevent or promptly remedy the same. Each Party shall use its commercially reasonable efforts to perform and fulfill all conditions and obligations on its part to be performed or fulfilled under this Agreement and to effect the transactions contemplated by this Agreement in accordance with the terms and provisions hereof.

2.31    Assumption of IRA Deposits.

2.32    Closing Financial Statements. Within ten (10) Business Days following the Closing Date, the Seller shall furnish to the Purchaser Financial Statements of the Branches as of the Closing Date (the “Closing Financial Statements”).

Except as set forth in the specific Section of the written statement identified as the disclosure schedule attached to this Agreement (“Disclosure Schedule”) relating to a specific and corresponding Section below, and as an inducement to cause the Purchaser to enter into this Agreement, the Seller hereby represents and warrants to the Purchaser, as of the date hereof and as of the Closing Date, as follows:

3.1    Corporate Organization. The Seller is a national banking association duly organized, validly existing and in good standing under the laws of the United States of America having its principal office in Evansville, Indiana. The Seller has the power and authority to (a) own the Assets and hold the Deposit Liabilities, (b) carry on its business at the Branches as presently conducted, (c) execute, deliver and perform this Agreement, and (d) effect the transactions contemplated hereby.

3.2    Authorization. The execution, delivery and performance of this Agreement, and the other instruments, agreements and documents contemplated hereby by the Seller, and the consummation by the Seller of the transactions contemplated hereby and thereby, have been duly authorized by all necessary corporate action on the part of the Seller. This Agreement, and all other instruments, agreements and documents contemplated hereby executed and delivered by the Seller, have been duly executed and delivered by the Seller and constitute the valid and binding obligations of the Seller enforceable against the Seller in accordance with their respective terms, subject to the provisions of applicable bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium, receivership and conservatorship laws and all other laws relating to or affecting the enforcement of creditors’ rights generally, now or hereafter in effect, and subject to public policy and general principles of equity.

3.3    No Conflicts. Subject to the Landlord Consents and the consents listed on Schedule 3.3 (collectively, the “Consents”), neither the execution, delivery or performance by the Seller of this Agreement or any of the other instruments, agreements or documents contemplated hereby nor the consummation by the Seller of the transactions contemplated hereby or thereby, does or will (after the giving of notice, the lapse of time or otherwise) violate, conflict with, result in a breach of or result in a default under (a) the Articles of Association or By-Laws of the Seller, (b) any provision of any promissory note, mortgage, indenture, lease or agreement, (c) any material agreement to which the Seller is a party or by which the Seller is bound, (d) any contract or agreement being assumed by the Purchaser pursuant to the terms of this Agreement, or (e) any law, statute, rule or regulation or any decree or order of any court or governmental authority other than in connection with the Governmental Approvals.

3.4    No Litigation. Except as set forth on Schedule 3.4, and for Proceedings involving the collection of delinquent accounts and garnishment Proceedings in the Ordinary Course of Business, there are no Proceedings in any court or before any government agency or authority, arbitration panel or mediator pending or, to the Knowledge of the Seller, threatened against or affecting the Branches, the Assets or the Assumed Liabilities or which would prevent consummation of the transactions contemplated by this Agreement by the Seller. To the Knowledge of the Seller, no event has occurred or circumstances exist that may give rise to or serve as a basis for the commencement of any such Proceeding.

3.5    Assets.

3.6    Loans.

3.7    Deposits. Exhibit 1.5(a) includes a true and accurate list of all Deposit Liabilities (including IRAs) and related information, prepared as of a date within two (2) days prior to the date hereof. The balance of each deposit account included in the Deposit Liabilities as shown on the Seller’s books and records as of the close of business on the Closing Date will be true and correct. All of the Deposit Liabilities are insured by the Bank Insurance Fund of the FDIC to the maximum extent provided by law, and Seller has paid all assessments and has filed all reports required to be paid or filed by it to or with the FDIC. The Seller has the right to transfer or assign each of the Deposit Liabilities to the Purchaser, subject to any pledges, liens, judgments, court orders and restrictions on transfer.

3.8    Compliance with Laws. The Seller has complied with all laws, statutes, rules and regulations applicable to the Fixed Assets, the Deposit Liabilities and the Loans, and since January 1, 2013, has not received any notice or communication from any governmental authority alleging violation, or noncompliance with, any such laws, statutes, rules and regulations applicable to the Fixed Assets, the Deposit Liabilities and the Loans. The Seller has not been advised of any supervisory concerns regarding its compliance with the Community Reinvestment Act in the market served by the Branches, and has no Knowledge of any planned or threatened objections by any governmental authority or community group to the transactions contemplated hereby. As of the date of this Agreement, the Seller was rated “Satisfactory” or “Outstanding” following its most recent Community Reinvestment Act examination by the regulatory agency responsible for its supervision. The Seller has received no notice or communication from any state or federal banking regulatory agency or authority indicating that such agency or authority would, and the Seller has no reason to believe any such agency or authority would, object to, or withhold any approval or consent necessary for, the consummation by the Seller of the transactions contemplated hereby. As of the date of this Agreement, there is no pending or, to the best of the Knowledge of the Seller, threatened legal or governmental Proceedings against the Seller or any affiliate of the Seller that would affect the Seller’s ability to obtain the regulatory approvals required in order to consummate the transactions contemplated hereby.

3.9    No Brokers, Etc. The Seller has not employed or retained any broker, or finder or investment banker or incurred any liability for any brokerage, finder’s, investment banker’s or similar fees, commissions or expenses in connection with this Agreement or the transactions contemplated hereby other than Sterne, Agee & Leach, Inc. (“Sterne”). All fees, commissions, compensation and expenses of Sterne for its services rendered to the Seller shall be paid by the Seller.

3.10    Consents and Approvals. Except for required regulatory approvals, the Landlord Consents and third party consents set forth on Schedule 3.3, no consents, approvals, filings or registrations with any third party or any public body, agency or authority are required in connection with the Seller’s consummation of the transactions contemplated by this Agreement.

3.11    Owned Real Property. Fee simple title to the Owned Real Property is vested in the Seller, free of all Encumbrances, other than the Permitted Exceptions. The Seller has received no written notice of any pending or threatened, nor does the Seller have any Knowledge of any contemplated, condemnation Proceeding, general assessment or similar governmental action affecting or relating to the Owned Real Property.

3.12    Leased Property. Exhibit 1.3(d) lists the Branch Leases, which include all leases, subleases, occupancy agreements or similar agreements, including any amendments, modifications or supplements thereto, under which the Seller occupies (or has the right to occupy) pursuant to a lease, license or similar arrangement any real property interest (a) used as a Branch or (b) used in connection with the operation of any Branch if such real property interest is incidental to and located at or in immediate and close proximity to any Branch (including any separate parking lot leases where customers of such Branch are permitted to park). The Branch Leases are accurately described on Exhibit 1.3(b) and have not been further amended, modified or supplemented. The Seller has delivered to the Purchaser a true, correct and complete copy of each Branch Lease as amended, modified or supplemented. Each Branch Lease is an existing legal, valid and binding obligation of the Seller and, to Knowledge of the Seller, each other party thereto, subject to bankruptcy, insolvency, reorganization, moratorium, receivership, conservatorship and similar laws relating to the rights and remedies of creditors, as well as to general principles of equity; and there does not exist with respect to Seller’s obligations thereunder, or, to the Knowledge of the Seller, with respect to the obligations of the Lessor thereof, any default, or event or condition which constitutes or, after notice or passage of time or both, would constitute a default, on the part of the Seller or the Lessor under any such Branch Lease. Except as set forth on Schedule 3.12, there are no tenants or other parties claiming by, through or under the Seller that have a possessory right in and to any space in respect of the Leased Properties. As used in this Section 3.12, the term “Lessor” includes any sub-lessor of the property to the Seller. There are no subleases relating to any Leased Property created or suffered to exist by the Seller, or to the Knowledge of Seller, created or suffered to exist by any other Person. Subject to the Seller obtaining any consents necessary for the valid assignment to the Purchaser of the Branch Leases, which consents are listed on Schedule 3.12 (the “Landlord Consents”), the assignment of such Branch Leases will transfer to the Purchaser on the Closing Date all of the Seller’s rights under the Leases.

3.13    [Reserved].

3.14    Compliance with Environmental Laws. No environmental clearances or other governmental approvals related to environmental matters are required for the conduct of the business at the Branches or the consummation of the transactions contemplated hereby. The Seller has not received any written notice of any pending or threatened claims, complaints, notices, correspondence or requests for information with respect to any violation or alleged violation of any Environmental Law, any releases of Hazardous Substances or with respect to any corrective or remedial action for, or cleanup of, the Real Property or any portion thereof. Except as in compliance with applicable Environmental Laws, no Hazardous Substances exist at, in, on, under, about, within or emanate from the Real Property, nor (in the case of any period prior to the Seller’s ownership or operation, to the Knowledge of the Seller) have any Hazardous Substances previously existed at, in, on, under, about or have been used, stored, deposited, treated, recycled or disposed of, on or released from the Real Property. There are no above ground storage tanks and, to the Knowledge of the Seller, no underground storage tanks at the Real Property. To the Knowledge of the Seller, the Real Property is in material compliance with Environmental Laws. To the Knowledge of the Seller, no asbestos, mold or lead based paint is contained in any structure located on the Real Property. There are no ongoing, and to the Knowledge of Seller, there have been no and there are no planned environmental investigations, remediations or other Hazardous Substance response actions at, or related to, Real Property, and no such property is currently listed on, or to the Knowledge of Seller, proposed for listing on any listing on the United Stated Environmental Protection Agency’s National Priorities List or any other analogous state governmental list of properties or sites that require investigation, remediation or other Hazardous Substance response action. The Seller has delivered to the Purchaser true and complete copies and results of all reports, studies, analyses, tests or monitoring possessed or initiated by the Seller pertaining to the Real Property, including all documents related to any Phase I environmental assessment or physical examination and investigation of the Real Property.

3.15    Employee Matters. A list of employees associated with the Branches is set forth on Exhibit 2.19 (the “Branch Employees”), including his or her position, exempt or non-exempt status (for purposes of the Fair Labor Standards Act and comparable local wage hours), active or inactive status (and, if inactive, the reason therefor and the expected return date), current annual salary or wage rate, target incentive opportunity, period of service and whether such Branch Employee is a part-time or full-time employee. The Seller has complied in all respects with all material applicable laws relating to the employment of labor, including provisions relating to wages, hours, collective bargaining and the payment of social security or other taxes, and worker’s compensation or other insurance premiums with respect to the Employees. No causes of action, complaints, claims, charges or administrative investigations for unfair labor practices, wrongful discharge, violation of employment contract or employment claims based upon any municipal, state or federal law, statute, public policy, order or regulation is pending, or to the Knowledge of Seller, threatened against the Seller or its affiliates with regard to the Branches. There are no suits, claims, grievances, or causes of action pending, or, to the Knowledge of the Seller, threatened, against the Seller (whether in court or before an administrative agency) arising out of or related to the Seller’s employment, employment status or classification, termination of employment, or consideration for employment of the Branch Employees. There are no written employment contracts or similar agreements between the Seller and any of the Branch Employees. The Seller is not a party to any contract or arrangement with any union relating to the business conducted at the Branches nor does the Seller have any Knowledge of any pending organizational efforts at any Branch.

3.16    Seller’s Benefit Plans. Except for the 401(k) Plan of the Seller, none of the Seller’s Benefit Plans is (and neither the Seller nor any ERISA Affiliate has at any time maintained): (a) a “Multiple Employer Plan” within the meaning of Code Section 413(c), (b) a pension plan subject to Title IV of ERISA or the minimum funding requirements of Code Section 412, or (c) a “Multiemployer Plan” within the meaning of ERISA Section 3(37). With respect to each of the Seller’s Benefit Plans that is a “welfare benefit plan” (as defined in ERISA Section 3(1)), no such plan provides medical or death benefits with respect to current or former employees of the Branches (or their dependents) beyond their termination of employment (other than to the extent required by applicable Legal Requirements, including Code Section 4980B). None of the Seller’s Benefit Plans obligates the Seller or any of its ERISA Affiliates to pay retention, separation, severance, termination or similar benefits as a result of any transaction contemplated hereby and will not accelerate the time of paying or vesting, or increase the amount of compensation, due to any individual.

3.17    Taxes. The Seller has no due and owing unpaid taxes that may result in liens being placed on, or otherwise could adversely affect, the Assets or the Deposit Liabilities, or the use thereof, or could cause the Purchaser to incur any liability. The Seller has filed all required tax returns relating to the Branches and the Assets. All such tax returns are true, correct and complete. The Seller and its affiliates have withheld and paid all taxes required to have been withheld and paid in connection with any amounts paid to any employee, independent contractor, creditor, stockholder, or other third party with respect to the Assets or the Assumed Liabilities or related to the Branches.

3.18    Insurance. The Seller maintains in full force and effect insurance on the Assets in such amounts and against such risks and losses as are (based on advice of its insurance broker) customary and adequate for comparable entities engaged in the same business and industry. Schedule 3.18 lists all insurance policies covering the material properties, assets, employees and operations of the Branches (including policies providing property, casualty, liability, and workers’ compensation coverage).

3.19    Absence of Certain Changes or Events. Since December 31, 2014, the Seller has conducted its business at the Branches only in the ordinary course and has not, other than in the Ordinary Course of Business and consistent with past practices and safe and sound banking practices, taken any of the actions or permitted to occur any event that has had or could reasonably be expected to have a material adverse effect on the Branches.

3.20    Assumed Contracts. The Seller has delivered to the Purchaser a correct and complete copy of each written Assumed Contract (as amended to date) and a written summary setting forth the terms and conditions of each oral Assumed Contract, if any. With respect to each such Assumed Contract: (a) it is a legal, valid, binding and enforceable commitment, and in full force and effect, as against the Seller and, to the Knowledge of Seller, each other party thereto, subject to bankruptcy, insolvency, reorganization, moratorium, receivership, conservatorship and similar laws relating to the rights and remedies of creditors, as well as to general principles of equity; (b) it will continue to be such a legal, valid, binding and enforceable commitment, and in full force and effect, as against the Seller and, to the Knowledge of Seller, each other party thereto on identical terms following the consummation of the transactions contemplated hereby; (c) neither the Seller nor, to the Knowledge of Seller, each other party thereto is in breach or default thereunder and no event has occurred that with notice or lapse of time, or both, would constitute a breach or default thereunder or permit termination, modification, or acceleration thereunder and (d) neither the Seller, nor to the Knowledge of Seller, any other party thereto has repudiated any provision thereof.

3.21    Books and Records. The books and records of the Branches have been kept accurately in the Ordinary Course of Business, the transactions entered therein represent bona fide transactions and the revenues, expenses, assets and liabilities of the Seller have been property recorded in such books and records.

As an inducement to cause the Seller to enter into this Agreement, the Purchaser hereby represents and warrants to the Seller, as of the date hereof and as of the Closing Date, as follows:

4.1    Corporate Organization. The Purchaser is a national banking association duly organized, validly existing and in good standing under the laws of the United States of America having its principal office in Mattoon, Illinois. The Purchaser has the power and authority to (a) own the Assets being acquired hereunder and assume, perform, discharge and pay the Assumed Liabilities, (b) operate the Branches, (c) execute, deliver and perform this Agreement, and (d) effect the transactions contemplated hereby.

4.2    Authorization. The execution and delivery of this Agreement, and all other instruments, agreements and documents contemplated hereby, by the Purchaser, and the consummation of the transactions contemplated hereby, have been duly authorized by all necessary corporate action on the part of the Purchaser; provided, however, that certain additional approvals by the board of directors, and potentially the common shareholders, of the Purchaser will be required in connection with any financing contemplated by Section 2.23 hereof. This Agreement, and all other instruments, agreements and documents contemplated hereby executed and delivered by the Purchaser, have been duly executed and delivered by the Purchaser and constitute the valid and binding obligations of the Purchaser enforceable against the Purchaser in accordance with their respective terms, subject to the provisions of applicable bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium, receivership and conservatorship laws and all other laws relating to or affecting the enforcement of creditors’ rights generally, now or hereafter in effect, and subject to public policy and general principles of equity.

4.3    No Conflicts. Neither the execution, delivery or performance by the Purchaser of this Agreement or any other instruments, agreements or documents contemplated hereby nor the consummation by the Purchaser of the transactions contemplated hereby or thereby does or will (after the giving of notice, the lapse of time or otherwise) violate, conflict with, result in a breach of or result in a default under (a) the Articles of Association or Bylaws of the Purchaser, (b) any provision of any agreement or any other restriction to which the Purchaser is a party or by which the Purchaser or any of its properties is bound, or (c) any law, statute, rule or regulation or any decree or order of any court or governmental authority once the Governmental Approvals are obtained. No approval, authorization or consent of any third party (other than the regulatory approvals and consents referred to in Section 5.5 hereof) is necessary to enable the Purchaser to purchase the Assets and assume the Assumed Liabilities as contemplated by this Agreement or to enable the Purchaser otherwise to perform its obligations hereunder.

4.4    No Litigation. There are no Proceedings in any court or before any government agency or authority, arbitration panel or mediator pending or, to the Knowledge of the Purchaser, threatened against or affecting the Purchaser which would prevent consummation of the transactions contemplated by this Agreement by the Purchaser.

4.5    Regulatory Matters. Subject to the financing described in Section 2.23 hereof, the Purchaser has received no notice or communication from any state or federal banking regulatory agency or authority indicating that such agency or authority would, and the Purchaser has no reason to believe any such agency or authority would, object to, or withhold any approval or consent necessary for, the consummation by the Purchaser of the transactions contemplated hereby. As of the date of this Agreement, there is no pending or, to the best of the Knowledge of Purchaser, threatened legal or governmental Proceedings against the Purchaser or any affiliate of the Purchaser that would affect the Purchaser’s ability to obtain the regulatory approvals required in order to consummate the transactions contemplated hereby.

4.6    No Brokers, Etc. The Purchaser has not employed or retained any broker, finder or investment banker or incurred any liability for any brokerage, finder’s, investment banker’s or similar fees, commissions or expenses in connection with this Agreement or the transactions contemplated hereby other than FIG Partners LLC (“FIG”). All fees, commissions, compensation and expenses of FIG for its services rendered to the Purchaser shall be paid by the Purchaser.

4.7    Pro Forma Capital Requirements. Subject to the financing referred to in Section 2.23 hereof, the Purchaser is and, on a pro forma basis giving effect to the transactions and the financing/capital injection contemplated by the Purchaser, will be (a) at least “adequately capitalized”, as defined for purposes of the Federal Deposit Insurance Act, and (b) in compliance with all capital requirements, standards and ratios required by each state or federal regulator with jurisdiction over the Purchaser, including, without limitation, any such higher requirement, standard or ratio as shall apply to institutions engaging in the acquisition of insured institution deposits, assets or branches, and to the Knowledge of the Purchaser, no such regulator is likely to, or has indicated that it will, condition any of the Governmental Approvals upon an increase in the Purchaser’s capital or compliance with any capital requirement, standard or ratio.

4.8    Antitrust. The Purchaser has no Knowledge that it will be required to divest deposit liabilities, branches, loans or any business or line of business as a condition to the receipt of any of the Governmental Approvals.

4.9    CRA Rating. The Purchaser was rated “Satisfactory” or “Outstanding” following its most recent Community Reinvestment Act examination by the regulator responsible for its supervision. The Purchaser has received no notice of and has no Knowledge of any planned or threatened objection by any community group to the transactions contemplated hereby.

4.10    Operation of the Branches.  Following the Closing, the Purchaser intends to continue to provide retail and business banking services in the geographical area served by the Branches.

4.11    Agreements with Regulatory Agencies. Neither the Purchaser nor any of its affiliates are a party to any written order, decree, agreement or memorandum of understanding with, or commitment letter or similar submission to, any federal or state regulatory agency or authority charged with the supervision or regulation of depository institutions, nor has the Purchaser been advised by any such agency or authority that such agency or authority is contemplating issuing or requesting any such order, decree, agreement, memorandum of understanding, commitment letter or submission, in each case which, individually or in the aggregate, would be reasonably expected to have a material adverse effect with respect to the Purchaser.

The obligation of the Seller to consummate the transactions contemplated by this Agreement are conditioned upon the satisfaction, on or before the Closing Date, of each of the following conditions (all or any of which may be waived in whole or in part by the Seller, except for the conditions in Section 5.5 hereof, which cannot or will not be waived by the Seller):

5.1    Representations and Warranties True. The representations and warranties of the Purchaser contained in this Agreement that are qualified by materiality shall be true and correct on and as of the Closing Date (except to the extent such representations and warranties shall have been expressly made as of an earlier date, in which case such representations and warranties shall have been true and correct as of such earlier date) with the same force and effect as if made on and as of the Closing Date, and the representations and warranties of the Purchaser contained in this Agreement that are not qualified as to materiality shall be true and correct in all material respects on and as of the Closing Date (except to the extent such representations and warranties shall have been expressly made as of an earlier date, in which case such representations and warranties shall have been true and correct as of such earlier date) with the same force and effect as if made on and as of the Closing Date (except that representations and warranties that speak as of a date shall be true and correct as of such date).

5.2    Covenants Performed. The Purchaser shall have performed and complied in all material respects with all obligations, covenants and agreements required by this Agreement to be performed or complied with by it on or prior to the Closing Date.

5.3    No Adverse Litigation. No Proceeding shall be pending or threatened against the Purchaser or the Seller as of the Closing Date which might reasonably be expected to (a) materially and adversely affect the Branches, the Assets or the Assumed Liabilities, or (b) materially and adversely affect the transactions contemplated by this Agreement.

5.4    Officer’s Certificate. The Purchaser shall have delivered to the Seller a certificate of its Chairman, President or any Executive Vice President, dated as of the Closing Date, certifying to the satisfaction of each of the foregoing conditions.

5.5    Regulatory Approvals. The Purchaser shall have received from the appropriate regulatory authorities all Governmental Approvals relating to (a) the transactions contemplated by this Agreement, and (b) the operation of the Branches by the Purchaser. The Seller shall not have been notified by any regulatory authority that the discontinued operation of the Branches by the Seller would be a violation of any law, statute, rule or regulation or any policy of any governmental authority.

5.6    Closing Documents. The Purchaser shall have delivered to the Seller:

The obligation of the Purchaser to consummate the transactions contemplated by this Agreement are conditioned upon the satisfaction, on or before the Closing Date, of each of the following conditions (all or any of which may be waived in whole or in part by the Purchaser, except for the conditions in Section 6.5 hereof, which cannot be waived by the Purchaser):

6.1    Representations and Warranties True. The representations and warranties of the Seller contained in this Agreement that are qualified by materiality shall be true and correct on and as of the Closing Date (except to the extent such representations and warranties shall have been expressly made as of an earlier date, in which case such representations and warranties shall have been true and correct as of such earlier date) with the same force and effect as if made on and as of the Closing Date, and the representations and warranties of the Seller contained in this Agreement that are not qualified as to materiality shall be true and correct in all material respects on and as of the Closing Date (except to the extent such representations and warranties shall have been expressly made as of an earlier date, in which case such representations and warranties shall have been true and correct as of such earlier date) with the same force and effect as if made on and as of the Closing Date.

6.2    Covenants Performed. The Seller shall have performed and complied in all material respects with all obligations, covenants and agreements required by this Agreement to be performed or complied with by it on or prior to the Closing Date.

6.3    No Adverse Litigation. No Proceeding shall be pending or threatened against the Purchaser or the Seller as of the Closing Date which might reasonably be expected to (a) materially and adversely affect the Branches, the Assets or the Assumed Liabilities, or (b) materially and adversely affect the transactions contemplated by this Agreement.

6.4    Officer’s Certificate. The Seller shall have delivered to the Purchaser a certificate of its Chairman, President or any Executive Vice President, dated as of the Closing Date, certifying to the satisfaction of each of the foregoing conditions.

6.5    Regulatory Approvals. The Purchaser shall have received from the appropriate regulatory authorities all Governmental Approvals relating to (a) the transactions contemplated by this Agreement, and (b) the operation of the Branches by the Purchaser. The Seller shall not have been notified by any regulatory authority that the discontinued operation of the Branches by the Seller would be a violation of any law, statute, rule or regulation or any policy of any governmental authority.

6.6    Closing Documents. The Seller shall have delivered to the Purchaser:

6.7    Purchaser Financing. The Purchaser shall have obtained the financing referred to in Section 2.23 hereof.

7.1    Methods of Termination. This Agreement and the transactions contemplated hereby may be terminated in any one of the following ways:

7.2    Procedure Upon Termination. In the event of termination pursuant to Section 7.1 hereof, this Agreement shall thereupon terminate and be of no further force or effect immediately upon receipt of the written notice required hereby or, in the case of Section 7.1(d), upon the passage of fifteen (15) days following such notice if no cure of a breach has occurred. If this Agreement is terminated as provided herein:

The requirements of this Section 7.2 shall be deemed to survive the termination of this Agreement.

7.3    Liabilities Upon Termination. Except as provided in Section 7.4 hereof, in the event of the termination of this Agreement pursuant to the terms and provisions hereof, neither Party hereto shall have any liability hereunder of any nature whatsoever to the other, including, without limitation, any liability for monetary damages; provided, however, that (a) the foregoing shall not preclude liability from attaching to a Party who has intentionally breached or violated any of the provisions hereof, and (b) the termination of this Agreement shall not terminate or affect any of the provisions contained in Article IX hereof or the agreements of the Parties hereto with respect to confidentiality contained in Section 2.3 hereof and in the Confidentiality Agreement.

7.4    Seller Break-up Fee. 

8.1    Indemnification by the Seller. Following the Closing Date, the Seller agrees to indemnify the Purchaser and each of its officers, directors, shareholders and representatives (collectively, the “Purchaser Indemnified Parties”) against, and hold the Purchaser Indemnified Parties harmless from any claim, loss, damage, costs, or expenses (including reasonable attorneys’ fees and costs and expenses of litigation) (collectively, “Losses”) that any Purchaser Indemnified Party may incur or suffer by reason of (a) the inaccuracy or breach of any representation or warranty made by the Seller herein (disregarding, for the amount of determining any Loss, any materiality qualifiers in any such representation and warranty), (b) the breach of any of the agreements or covenants of the Seller contained herein or in accordance with the provisions hereof, (c) any liability or obligation of any nature and any Losses that are incurred or suffered by the Purchaser and that is based upon or pertains to the Excluded Assets or the Excluded Liabilities, (d) any Proceeding arising from or relating to any of the foregoing, (e) any taxes, including interest and penalties, required to be paid by the Seller or its successor, which relate to the Branches at or prior to the Closing Date, and (f) the involuntary termination of employment by the Seller prior to or at the Closing Time of any Remaining Branch Employee.

8.2    Indemnification by the Purchaser. Following the Closing Date, the Purchaser agrees to indemnify the Seller and each of its officers, directors, shareholders and representatives (collectively, the “Seller Indemnified Parties”) against, and hold the Seller Indemnified Parties harmless from any Losses that any Seller Indemnified Party may incur or suffer by reason of (a) the inaccuracy or breach of any representation or warranty made by the Purchaser herein (disregarding, for the amount of determining any Loss, any materiality qualifiers in any such representation and warranty), (b) the breach of any of the agreements or covenants of the Purchaser contained herein or in accordance with the provisions hereof, and (c) the Assumed Liabilities or any responsibility, obligation, duty, legal action, Proceeding, claim, penalty or liability arising out of the Purchaser’s ownership and operation from and after the Closing of the business represented by the Branches, the Assets or the Assumed Liabilities; provided such Losses did not arise out of or relate to, or were not incurred in connection with or as a result of, any Pre-Closing Event Liability or any breach of any representation, warranty, covenant or agreement by the Seller under this Agreement.

8.3    Third-Party Claims. In the event any Proceeding shall be commenced or a claim shall be made against either Party as to which such Party may assert a right of indemnification under this Article VIII (each, an “Indemnified Party”), such Indemnified Party shall give prompt written notice thereof to each person obligated to indemnify the Indemnified Party under this Article VIII (each, an “Indemnifying Party”), and such Indemnifying Party shall be entitled to control the defense thereof, including employment, at such Indemnifying Party’s expense, of counsel reasonably satisfactory to the Indemnified Party; provided, however, that if the Indemnifying Party controls the defense of any such Proceeding (i) it will be conclusively established for purposes of Sections 12.1 or 12.2, as applicable, that the claims made therein are within the scope of and subject to indemnification hereunder, (ii) no compromise or settlement of such claims may be effected by the Indemnifying Party without the Indemnified Party’s consent unless the sole relief provided is monetary damages that are paid in full by the Indemnifying Party, and (iii) the Indemnified Party will have no liability with respect to any compromise or settlement of such claims effected without its consent; provided, further, that the Indemnified Party may employ, at the Indemnifying Party’s expense, its own counsel if its interests are, in its reasonable opinion, in conflict with those of the Indemnifying Party or are not being adequately represented. In the event the Indemnifying Party does not elect to control the defense of any claim within ten (10) Business Days of the notice thereof from the Indemnified Party, the Indemnified Party may contest, or upon prior approval of the Indemnifying Party, settle any claim or liability that, if established, would be subject to indemnification hereunder and, in such event, all reasonable legal fees, disbursements and other costs and expenses of such contest or settlement shall also be an item of indemnification hereunder.

8.4    Survival. Except as waived in accordance with the terms of this Agreement, any provision of this Agreement that imposes an obligation or restriction, or confers a right or benefit, the observance, performance, or exercise of which may or must occur after the Closing Date, shall survive the Closing Date. Notwithstanding the foregoing, the representations and warranties contained in (a) Section 3.1 (Corporate Organization), Section 3.2 (Authorization), Section 3.5(a) (Assets), Section 4.1 (Corporate Organization) and Section 4.2 (Authorization) shall survive for a period of six (6) years following the Closing Date, (b) Section 3.13 (Compliance with Environmental Laws) and Section 3.16 (Taxes) shall survive until 60 days after the expiration of the applicable statute of limitations with respect to the matter to which the claim relates, as such limitation period may be extended from time to time and (c) all other representations and warranties for a period of eighteen (18) months following the Closing Date. The right to indemnification, reimbursement or other remedy based upon such representations, warranties, covenants and obligations (other than those explicitly waived in accordance with the terms of this Agreement) will not be affected by any investigation (including any environmental investigation or assessment) conducted with respect to, or any Knowledge acquired (or capable of being acquired) at any time, whether before or after the execution and delivery of this Agreement or the Closing Date, with respect to the accuracy or inaccuracy of or compliance with any such representation, warranty, covenant or obligation.

8.5    Limitations.

9.1    Entire Agreement. This Agreement, the Exhibits and Schedules hereto, the Confidentiality Agreement and the instruments, agreements, certificates and documents contemplated hereby supersedes all other prior or contemporaneous understandings, commitments, representations, negotiations, discussions and agreements, whether oral or written or express or implied, between the Parties hereto relating to the matters contemplated hereby and constitute the entire agreement between the Parties hereto relating to the transactions contemplated hereby.

9.2    Binding Effect; Assignment. This Agreement shall be binding upon and inure to the benefit of the Parties hereto and their respective successors and assigns; provided, however, that neither Party may assign this Agreement without the prior written consent of the other Party, except that no consent shall be required if this Agreement is assigned to any affiliate of either Party or is assigned by operation of law pursuant to a statutory merger or share exchange involving either Party.

9.3    Amendment and Modification. The Parties hereto may amend, modify or supplement this Agreement only by an agreement in writing executed by the Seller and the Purchaser.

9.4    Waiver or Extension. Either Party hereto may by an instrument in writing waive the performance by the other of any of the covenants or agreements to be performed by such other Party under this Agreement; provided, however, that neither Party may waive the requirement for obtaining the Governmental Approvals. The failure of either Party hereto at any time to insist upon the strict performance of any covenant, agreement or provision of this Agreement shall not be construed as a waiver or relinquishment of the right to insist upon strict performance of such covenant, agreement or provision at a future time. The waiver by any Party hereto of a breach of or noncompliance with any provision of this Agreement shall not operate or be construed as a continuing waiver or a waiver of any other or subsequent breach or noncompliance hereunder.

9.5    Payment of Expenses. Except as otherwise expressly provided in this Agreement, each Party hereto shall bear and pay all costs and expenses incurred by it or on its behalf in connection with this Agreement and the transactions contemplated hereunder. Except as otherwise expressly provided herein, all expenses, fees and costs (including, without limitation, filing fees) necessary for any Governmental Approvals or for any notice to depositors of the assumption of the Deposit Liabilities or to customers of the purchase of the Loans shall be paid by the Purchaser.

9.6    Notices. All notices, requests and other communications hereunder shall be in writing (which shall include facsimile communication) and shall be deemed to have been duly given if (a) delivered by hand and receipted for, (b) sent by certified United States Mail, return receipt requested, first class postage pre-paid, (c) delivered by receipted overnight delivery service or (d) delivered by facsimile transmission if such fax is confirmed immediately thereafter by also mailing a copy of such notice, request or other communication by certified United States Mail, return receipt requested, first class postage pre-paid, as follows:

or such substituted address or person as either Party has given to the other in writing.

All such notices, requests and other communications shall be effective (a) if delivered by hand, when delivered, (b) if mailed in the manner provided herein, two (2) Business Days after deposit with the United States Postal Service, (c) if delivered by overnight express delivery service, on the next Business Day after deposit with such service, and (d) if by facsimile transmission, on the date indicated on the fax confirmation page of the sender if such fax also is confirmed by mail in the manner provided herein.

9.7    Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be an original, but such counterparts shall together constitute one and the same agreement.

9.8    Headings. The headings and defined terms in this Agreement have been inserted and used solely for ease of reference and shall not be considered in the interpretation, construction or enforcement of this Agreement.

9.9    Governing Law Jurisdiction, Venue; Jury Trial. This Agreement (including, without limitation, any and all venue demands, controversies, Proceedings between or among the Parties hereto arising out of or relating to this Agreement or its breach, the construction of its terms or the interpretation of the rights and duties of the Parties) shall be governed by and construed in accordance with the laws of the State of Illinois, without giving effect to any choice or conflict of law provisions, principles or rules (whether of the State of Illinois or any other jurisdiction) that would cause the application of any laws of any jurisdiction other than the State of Illinois. Each of the Parties irrevocably and unconditionally submits, for itself and its property, to the jurisdiction of the Circuit Courts of the States of Illinois and Indiana or any federal courts of the United States of America sitting in the States of Illinois and Indiana, and any appellate court from any thereof, in any Proceeding arising out of or relating to this Agreement or the Acquisition, or for recognition or enforcement of any judgment, and agrees that all claims in respect of any such Proceeding, if brought by the Purchaser, be heard and determined only in the Circuit or Superior Courts of Vanderburgh County, Indiana or the United States District Court for the Southern Division of Indiana, or if brought by the Seller, be heard and determined only in the Circuit or Superior Courts of Coles County, Illinois or the United States District Court for the Southern Division of Illinois.  In connection with the foregoing, the Parties hereto consent to the jurisdiction and venue of such courts and expressly waive any claims or defenses of lack of Personal jurisdiction of or proper venue by such courts. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HEREBY WAIVES TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY, IN ANY MATTERS (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS AGREEMENT OR THE TRANSACTION AGREEMENTS.

9.10    Severability. In case any one or more of the provisions (or any portion thereof) contained herein shall, for any reason, be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provision of this Agreement, but this Agreement shall be construed as if such invalid, illegal or unenforceable provision or provisions (or portion thereof) had never been contained herein.

9.11    No Third-Party Rights. Nothing in this Agreement, expressed or implied, is intended to confer upon any person or entity, other than the Parties hereto, or their respective permitted successors and assigns, any rights, remedies, obligations or liabilities under or by reason of this Agreement.

9.12    Construction. This Agreement is the product of negotiation by both Parties hereto and shall be deemed to have been drafted by both Parties hereto. This Agreement shall be construed in accordance with the fair meaning of its provisions and its language shall not be strictly construed against, nor shall ambiguities be resolved against, either Party.

9.13    Certain References. Whenever in this Agreement a singular word is used, it also shall include the plural wherever required by the context and vice-versa. All references to the masculine, feminine or neuter genders herein shall include any other gender, as the context requires.

9.14    Exhibits and Schedules. The exhibits and schedules attached hereto are incorporated into and made a part of this Agreement.

9.15    Facsimile; PDF. This Agreement may be executed and delivered by either hereto Party by facsimile or PDF transmission. For purposes of this Agreement, any signature page signed and transmitted by facsimile machine, telecopier or electronically in PDF format shall be treated as an original document, and the signature of either Party thereon, for purposes hereof, shall be considered as an original signature and the document transmitted shall be considered to have the same binding effect as an original signature on an original document. Neither Party may raise the use of a facsimile machine, telecopier or other electronic method or the fact that any signature was transmitted through the use of a facsimile machine, telecopier or other electronic method in accordance with this Section as a defense to the enforcement of this Agreement, any amendment hereto or any other document contemplated hereby.

9.16    Limitation on Damages. Notwithstanding anything in this Agreement to the contrary, in no event shall either Party hereto be entitled to recover from the other Party hereto punitive damages (except for any punitive damages actually paid to third parties, which shall constitute Damages) arising out of or relating to a breach by such other parties of any of its representations, warranties, covenants or obligations under this Agreement, even if the Party in breach has been advised of the possibility of such damages.

9.17    Definitions. For purposes of this Agreement,

9.18    Specific Performance. Each of the Parties acknowledges and agrees that the other Party would be damaged irreparably in the event any of the provisions of this Agreement are not performed in accordance with their specific terms or otherwise are breached. Accordingly, each of the Parties agrees that the other Party shall be entitled to seek an injunction or injunctions to prevent breaches of the provisions of this Agreement and to enforce specifically this Agreement and the terms and provisions hereof in any action instituted in any court of the United States or any state thereof having jurisdiction over the Parties and the matter, in addition to any other remedy to which it may be entitled, at law or in equity.

 

By: /s/ Robert G. Jones    

Printed: Robert G. Jones    

Its: President & CEO    

ATTEST:

By: /s/ Jeffrey L. Knight    

Printed: Jeffrey L. Knight    

Its: Chief Legal Officer, EVP    

By: /s/ Joseph R. Dively    

Its: President & CEO    

ATTEST:

By: /s/ Michael L. Taylor                     

Printed: Michael L. Taylor     

Its: SEVP & CFO