AMENDED AND RESTATED AGREEMENT AND PLAN OF MERGER among Enterprise Financial Services Corp, Great American Bank, Clayco Banc Corporation and Jeffrey J. Kieffer (as Seller Representative) Date: February 26, 2007

Exhibit 99.1

AMENDED AND RESTATED
AGREEMENT AND PLAN OF MERGER

among

Enterprise Financial Services Corp,
Great American Bank,
Clayco Banc Corporation
and
Jeffrey J. Kieffer (as Seller Representative)

Date: February 26, 2007

AGREEMENT AND PLAN OF MERGER
TABLE OF CONTENTS

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AMENDED AND RESTATED

AGREEMENT AND PLAN OF MERGER

          This Amended and Restated Agreement and Plan of Merger (this “ Agreement ”) is made as of February 26, 2007, by Clayco Banc Corporation, a Missouri corporation (“ Clayco ”), Great American Bank, a bank organized under the laws of the state of Kansas and a wholly-owned subsidiary of Clayco (the “ Bank ”), Jeffrey J. Kieffer as Seller Representative, and Enterprise Financial Services Corp, a Delaware corporation (“ Buyer ”).

RECITALS

          The parties’ Boards of Directors desire to merge Clayco with and into Buyer, resulting in the conversion of all of the issued and outstanding shares of capital stock of Clayco (the “ Shares ”) into the right to receive cash and shares of capital stock of Buyer on the terms and subject to the conditions set forth in this Agreement.

          For federal income tax purposes, it is intended that the merger of Clayco with and into Buyer shall qualify as a reorganization under Section 368 of the IRC and that this Agreement shall constitute the plan of reorganization, but Buyer makes no representation or warranty regarding tax treatment of the merger to any Acquired Company or its shareholders.

          This Agreement amends and restates the Agreement and Plan of Merger executed by the parties on November 22, 2006.

AGREEMENT

          The parties, intending to be legally bound, agree as follows:

          For purposes of this Agreement (including the preamble and the Recitals), the following terms have the meanings specified or referred to in this Section 1:

           “Accountants” —as defined in Section 2.11.

           “Acquired Companies” —Clayco and the Bank, together with any Subsidiaries and any predecessor entities during the six (6) years prior to November 22, 2006, collectively.

           “Agreement” —as defined in the first paragraph.

           “Applicable Contract” —any agreement, contract, obligation, promise, or undertaking (whether written or oral and whether express or implied) that is legally binding (a) under which any Acquired Company has or may acquire any rights, (b) under which any Acquired Company has or may become subject to any obligation or liability, or (c) by which any Acquired Company or any of the assets owned or used by any Acquired Company is or may become bound.

           “Appointment of Representative” —appointment of Seller Representative in the form attached as Exhibit 7.2(j).

           “Audit Adjustment” —the positive or negative difference, if any, between $13,126,000 and Clayco’s consolidated shareholders equity on the audited balance sheet dated as of December 31, 2006; provided, that amounts can be added to the Bank’s loan loss reserves in such audit only for (i) identified losses in any credit that is not a Designated Asset, and (ii) additional identified losses in any credit that is a Designated Asset, and such additions to the Bank’s loan loss reserves shall not, for purposes of this Agreement or the Contemplated Transactions, (A) reduce Clayco’s consolidated shareholders’ equity, or (B) reduce the amount that Clayco can dividend or distribute to its shareholders before the Closing.

           “Balance Sheet” —Clayco’s consolidated unaudited balance sheet as of December 31, 2005, from November 22, 2006 until Clayco delivers to Buyer Clayco’s audited consolidated balance sheet as of such date and then such audited consolidated balance sheet.

           “Balsbaugh Escrow Agreement” —as defined in Section 7.2(d)(vi).

           “Bank” —as defined in the first paragraph of this Agreement.

           “Best Efforts” —the efforts that a prudent Person desirous of achieving a result would use in similar circumstances to ensure that such result is achieved as expeditiously as possible.

           “BHCA” —the Bank Holding Company Act of 1956 and the regulations promulgated thereunder, as amended.

           “Breach” —a “Breach” of a representation, warranty, covenant, obligation, or other provision of this Agreement or any instrument delivered pursuant to this Agreement will be deemed to have occurred if there is or has been (a) any inaccuracy in or breach of, or any failure to perform or comply with, such representation, warranty, covenant, obligation, or other provision, or (b) any claim (by any Person) or other occurrence or circumstance that is or was inconsistent with such representation, warranty, covenant, obligation, or other provision, and the term “Breach” means any such inaccuracy, breach, failure, claim, occurrence, or circumstance.

           “Business Day” —any day other than a day on which banks in the State of Missouri are required or authorized to be closed.

           “Buyer” —as defined in the first paragraph of this Agreement.

           “Buyer Common Stock” —as defined in Section 2.5(c).

           “Buyer Price” —the last reported per share price of Buyer Common Stock at the close of trading, as quoted on Nasdaq, for the last trading day immediately preceding the date Buyer received the Proposed Transfer Notice.

           “Buyer SEC Documents” —as defined in Section 4.5.

           “Buyer’s Advisors” —as defined in Section 5.1.

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           “Buyer’s Closing Documents” —as defined in Section 4.2(a).

           “Cash Amount” —as defined in Section 2.5(c).

           “CERCLA” —the United States Comprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C. § 9601 et seq. , as amended.

           “Certificate” or “Certificates” —as defined in Section 2.7(b)(i).

           “Clayco” —as defined in the first paragraph of this Agreement.

           “Clayco Closing Documents” —as defined in Section 3.2(a).

           “Closing” —as defined in Section 2.2.

           “Closing Date” —the date and time as of which the Closing actually takes place.

           “Closing Balance Sheet” —as defined in Section 2.11.

           “Closing Price” —subject to adjustment as provided in Section 2.10:

           “Competing Business” —as defined in Section 3.25.

           “Condition of Title” —as defined in Section 7.2(i).

           “Consent” —any approval, consent, ratification, waiver, or other authorization (including any Governmental Authorization).

           “Consideration” —as defined in Section 2.5(c).

           “Contemplated Transactions” —all of the transactions contemplated by this Agreement, including:

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           “Copyrights” —as defined in Section 3.22(a)(iii).

           “CRA” —as defined in Section 3.28.

           “Damages” —amounts payable by any party to this Agreement to another party to this Agreement, as described in Section 9.

           “Designated Assets” – those loans designated by Buyer in the aggregate remaining principal and interest amount of $6,090,333.01 as of the date of this Agreement and two pieces of real estate classified as other real estate owned by the Bank to be sold by the Bank in accordance with Section 7.2(h).

           “DGCL” —the Delaware General Corporation Law, as amended.

           “Disclosure Letter” —the disclosure letter delivered by Clayco and the Bank to Buyer on November 22, 2006.

           “Dissenting Shares” —as defined in Section 2.5(e).

           “Effective Time” —as defined in Section 2.2.

           “Election Notice” —as defined in Section 2.6(c).

           “Employment Agreements” —as defined in Section 7.2(d)(ii).

           “Encumbrance” —any charge, claim, community property interest, condition, equitable interest, lien, option, pledge, security interest, right of first refusal, or restriction of any kind, including any restriction on use, voting, transfer, receipt of income, or exercise of any other attribute of ownership.

           “Environment” —soil, land surface or subsurface strata, surface waters (including navigable waters, ocean waters, streams, ponds, drainage basins, and wetlands), groundwaters, drinking water supply, stream sediments, ambient air (including indoor air), plant and animal life, and any other environmental medium or natural resource.

           “Environmental, Health, and Safety Liabilities” —any cost, damages, expense, liability, obligation, or other responsibility arising from or under Environmental Law or Occupational Safety and Health Law and consisting of or relating to:

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The terms “removal,” “remedial,” and “response action,” include the types of activities covered by CERCLA.

           “Environmental Law” — means any Legal Requirement relating to Hazardous Materials and/or the protection of human health or the environment by reason of a Release or Threatened Release or relating to liability for or costs of remediation or prevention of Releases of Hazardous Materials. “Environmental Laws” includes, but is not limited to, the following statutes, as amended, any successor thereto, and any regulations, rulings, orders or decrees promulgated pursuant thereto:  the Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C. §§9601 et seq.; the Emergency Planning and Community Right-to-Know Act, 42  U.S.C. §11001 et seq.; the Hazardous Materials Transportation Act, 49 U.S.C. §5101 et seq.; the Resource Conservation and Recovery Act, 42 U.S.C. §§6901 et seq.; the Clean Water Act, 33  U.S.C. §§1251 et seq.; the Clean Air Act, 42 U.S.C. §§7401 et seq.; the Toxic Substances Control Act, 15 U.S.C. §2601 et seq.; the Safe Drinking Water Act, 42 U.S.C. §§7401 et seq.; the Occupational Safety and Health Act, 29 U.S.C. §651 et seq.; the Federal Insecticide, Fungicide and Rodenticide Act, 7 U.S.C. §§ 136 et seq.; the Endangered Species Act, 16 U.S.C. §§1531 et seq. and the National Environmental Policy Act, 42 U.S.C. §4321 et seq.

           “ERISA” —the Employee Retirement Income Security Act of 1974 or any successor law, and regulations and rules issued pursuant to that Act or any successor law.

           “Escrow” —an amount equal to 20% of the Purchase Price, payable as set forth in Section 7.3(d).

           “Escrow Agreement” —as defined in Section 7.2(d)(iii).

           “Exchange Act” —the Securities Exchange Act of 1934 or any successor law, and regulations and rules issued pursuant to that Act or any successor law.

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           “Exchange Agent” —as defined in Section 2.5(d).

           “Exchange Fund” —as defined in Section 2.7(a).

           “Existing Policies” —as defined in Section 3.6.

           “Facilities” —any Real Property, leaseholds, or other interests currently or formerly owned or operated by any Acquired Company and any buildings, plants, structures, or equipment (including motor vehicles, tank cars, and rolling stock) currently or formerly owned or operated by any Acquired Company.

           “FDIC” —the Federal Deposit Insurance Corporation.

           “Federal Reserve Board” —the Board of Governors of the Federal Reserve System.

           “GAAP” —generally accepted United States accounting principles, applied on a basis consistent with the basis on which the Clayco audited financial statements for the year ended December 31, 2005, were prepared.

           “GBCLM” —the General and Business Corporation Law of Missouri, as amended.

           “GLB Act” —the Graham-Leach-Bliley Act of 1999 and the regulations promulgated thereunder, as amended.

           “Governmental Authorization” —any approval, consent, license, permit, waiver, or other authorization issued, granted, given, or otherwise made available by or under the authority of any Governmental Body or pursuant to any Legal Requirement.

           “Governmental Body” —any:

           “Hazardous Activity” —the distribution, generation, handling, importing, management, manufacturing, processing, production, refinement, Release, storage, transfer, transportation, treatment, or use (including any withdrawal or other use of groundwater) of Hazardous Materials in, on, under, about, or from the Facilities or any part thereof into the Environment, and any other act, business, operation, or thing that increases the danger, or risk of danger, or poses an unreasonable risk of harm to persons or property on or off the Facilities, or that may affect the value of the Facilities or the Acquired Companies.

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           “Hazardous Materials” —any waste or other substance that is listed, defined, designated, or classified as, or otherwise determined to be, hazardous, radioactive, or toxic or a pollutant or a contaminant under or pursuant to any Environmental Law, including any admixture or solution thereof, and specifically including petroleum and all derivatives thereof or synthetic substitutes therefor and asbestos or asbestos-containing materials.

           “Improvements” —all buildings, structures, fixtures and improvements located on the Land or included in the assets of any Acquired Company, including those under construction.

           “Indemnified Persons” —as defined in Section 9.2.

           “Intellectual Property Assets” —as defined in Section 3.22(a).

           “Interim Balance Sheet” —as defined in Section 3.4(b).

           “IRC” —the Internal Revenue Code of 1986 or any successor law, and regulations issued by the IRS pursuant to the Internal Revenue Code or any successor law.

           “IRS” —the United States Internal Revenue Service or any successor agency, and, to the extent relevant, the United States Department of the Treasury.

           “Knowledge” —an individual will be deemed to have “Knowledge” of a particular fact or other matter if (a) such individual is actually aware of such fact or other matter; or (b) a prudent individual could be expected to discover or otherwise become aware of such fact or other matter in the course of conducting a reasonably comprehensive investigation concerning the existence of such fact or other matter.  A Person (other than an individual) will be deemed to have “Knowledge” of a particular fact or other matter if any individual who is serving as a director, executive officer, partner, executor, or trustee of such Person (or in any similar capacity) has Knowledge of such fact or other matter.

           “Land” —all parcels and tracts of land in which an Acquired Company has an ownership interest, including any parcels subject to a ground lease in favor of any Acquired Company.

           “Legal Requirement” —any federal, state, local, municipal, foreign, international, multinational, or other administrative order, constitution, law, ordinance, principle of common law, regulation, statute, or treaty.

           “Loss Amount” —the amount, if any, by which the Buyer Price exceeds the greater of (a) the per share price obtained by the proposed seller for the shares of Buyer Common Stock designated in the Proposed Transfer Notice or (b) the lowest per share price of Buyer Common Stock, as quoted on Nasdaq, during the fourteen (14) day period after the date Buyer received the Proposed Transfer Notice.

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           “Market Price” —the per share average of the last reported sale price of a share of Buyer Common Stock, as quoted on Nasdaq, for the twenty (20) consecutive full trading days ending at the close of trading on the last trading day five (5) Business Days prior to the Closing Date.

           “Marks” —as defined in Section 3.22(a)(i).

           “Material Adverse Effect” —means any event, change or effect that is materially adverse to the business, assets, liabilities, condition (financial or otherwise), prospects or results of operations of the Acquired Companies or Buyer (as the case may be), taken as a whole.

           “Merger” —the merger of Clayco with and into Buyer.

           “Nasdaq” —the Nasdaq National Market or, if Buyer Common Stock is no longer traded on such market, on such other exchange on which such shares are traded.

           “Occupational Safety and Health Law” —any Legal Requirement designed to provide safe and healthful working conditions and to reduce occupational safety and health hazards, and any governmental program or private program in which an Acquired Company participates (including those promulgated or sponsored by industry associations and insurance companies), designed to provide safe and healthful working conditions.

           “Order” —any award, decision, injunction, judgment, order, ruling, subpoena, or verdict entered, issued, made, or rendered by any court, administrative agency, or other Governmental Body or by any arbitrator.

           “Ordinary Course of Business” —an action taken by a Person will be deemed to have been taken in the “Ordinary Course of Business” only if:

except that with respect to the Acquired Companies, (i) reasonable additions to the loan loss reserve and charge-offs respecting the Bank and (ii) a one-year renewal of that certain Data Processing Services Agreement dated as of August 20, 2001, between CSB Bank (a predecessor of the Bank) and Jack Henry and Associates, Inc. will be deemed to be actions taken in the Ordinary Course of Business.

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           “Organizational Documents” —(a) the articles or certificate of incorporation and the bylaws of a corporation; (b) the partnership agreement and any statement of partnership of a general partnership; (c) the limited partnership agreement and the certificate of limited partnership of a limited partnership; (d) any charter or similar document adopted or filed in connection with the creation, formation, or organization of a Person; and (e) any amendment to any of the foregoing.

           “Patents” —as defined in Section 3.22(a)(ii).

           “Patriot Act” —as defined in Section 3.15(e).

           “Per Share Consideration” —an amount equal to the Purchase Price divided by the aggregate number of Shares outstanding on the Closing Date, payable as set forth in Section 2.5. 

           “Per Share Escrow” —an amount equal to the Escrow divided by the aggregate number of Shares outstanding on the Closing Date, payable as set forth in Section 7.3(d).

           “Person” —any individual, corporation (including any non-profit corporation), general or limited partnership, limited liability company, joint venture, estate, trust, association, organization, labor union, or other entity or Governmental Body.

           “Plan of Merger” —as defined in Section 2.1.

           “Preliminary Title Report” —as defined in Section 7.2(i).

           “Proceeding” —any action, arbitration, audit, hearing, investigation, litigation, or suit (whether civil, criminal, administrative, investigative, or informal) commenced, brought, conducted, or heard by or before, or otherwise involving, any Governmental Body or arbitrator.

           “Proposed Transfer Notice” —as defined in Section 2.6(b).

           “Proprietary Rights Agreement” —as defined in Section 3.20(b).

           “Purchase Price” —$37,000,000.

           “Real Property” —the Land and Improvements and all privileges, rights, easements, hereditaments and appurtenances belonging to or for the benefit of the Land, including all easements appurtenant to and for the benefit of any Land for, and as the primary means of access between, such Land and a public way, or for any other use upon which lawful use of such Land for the purposes for which it is presently being used is dependent, and all rights existing in and to any streets, alleys, passages and other rights-of-way included thereon or adjacent thereto (before or after vacation thereof) and vaults beneath any such streets, of any of the Acquired Companies.

           “Regulatory Reports” —as defined in Section 3.4(a).

           “Related Person” —with respect to a particular individual:

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With respect to a specified Person other than an individual:

For purposes of this definition, (a) the “Family” of an individual includes (i) the individual, (ii) the individual’s spouse and minor children, and (iii) any other natural person who resides with such individual, and (b) “ Material Interest ” means direct or indirect beneficial ownership (as defined in Rule 13d-3 under the Exchange Act) of voting securities or other voting interests representing at least 5% of the outstanding voting power of a Person or equity securities or other equity interests representing at least 5% of the outstanding equity securities or equity interests in a Person.

           “Release” —means any spilling, leaking, pumping, emitting, emptying, discharging, injecting, escaping, leaching, dumping, or disposing of Hazardous Materials in excess of any Reportable Quantity as that term is defined by CERCLA.

           “Representative” —with respect to a particular Person, any director, officer, employee, agent, consultant, advisor, or other representative of such Person, including legal counsel, accountants, and financial advisors.

           “Right of First Refusal” —as defined in Section 2.6(a).

           “SEC” —the Securities and Exchange Commission.

           “Securities Act” —the Securities Act of 1933 or any successor law, and regulations and rules issued pursuant to that Act or any successor law.

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           “Seller Representative” —as defined in Section 7.2(j).

           “Shares” —as defined in the Recitals of this Agreement.

           “Stock Amount” —as defined in Section 2.5(c).

           “Subsidiary” —with respect to any Person (the “Owner”), any corporation or other Person of which securities or other interests having the power to elect a majority of that corporation’s or other Person’s board of directors or similar governing body, or otherwise having the power to direct the business and policies of that corporation or other Person (other than securities or other interests having such power only upon the happening of a contingency that has not occurred) are held by the Owner or one or more of its Subsidiaries; when used without reference to a particular Person, “Subsidiary” means a Subsidiary of Clayco or the Bank.  Clayco Statutory Trust I and Clayco Statutory Trust II, Connecticut statutory trusts, are not deemed to be “Subsidiaries” under this Agreement.

           “Tax” —any tax, charge, fee, levy, or other governmental assessment or imposition of any kind payable to any Governmental Body, including, without limitation, (a) income, franchise, profits, gross receipts, estimated, ad valorem, value-added, sales, use, service, Real Property, personal property, capital stock, license, payroll, withholding, disability, employment, social security, worker’s compensation, unemployment compensation, utility, severance, production, excise, stamp, occupation, premiums, windfall profits, transfer, and gains taxes, and (b) interest, penalties, and additions to tax imposed with respect thereto.

           “Tax Return” —any return (including any information return), report, form, or other document (including any related or supporting schedules or statements) filed or required to be filed with or submitted to, any Governmental Body in connection with the determination, assessment, collection, or payment of any Tax or in connection with the administration, implementation, or enforcement of or compliance with any Legal Requirement relating to any Tax.

           “Threat of Release” —a substantial likelihood of a Release that may require action in order to prevent or mitigate damage to the Environment that may result from such Release.

           “Threatened” —a claim, Proceeding, dispute, action, or other matter will be deemed to have been “Threatened” if any demand or statement has been made (orally or in writing) or any notice has been given (orally or in writing), or if any other event has occurred or any other circumstances exist, that would lead a prudent Person to conclude that such a claim, Proceeding, dispute, action, or other matter is likely to be asserted, commenced, taken, or otherwise pursued in the future.

           “Title Company” — Assured Quality Title Company.

           “Title Objections” —as defined in Section 7.2(i).

           “Title Policy” —a title policy which shall not contain any exceptions other than those which constitute the Condition of Title to which the Buyer has not objected pursuant to Section 7.2(i).

           “Trade Secrets” —as defined in Section 3.22(a)(iv).

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          Subject to the terms and conditions of this Agreement, at the Effective Time, Clayco shall be merged with and into Buyer in accordance with the DGCL, the GBCLM, and the Plan of Merger attached as Exhibit 2.1 (the “ Plan of Merger ”). Buyer shall be the surviving corporation resulting from the Merger and shall continue to be governed by the laws of the State of Delaware. The Organizational Documents of Buyer as in effect immediately prior to the Effective Time shall be the Organizational Documents of the surviving corporation until thereafter amended as provided therein and by applicable law.  At the Effective Time, the Shares shall be converted into the right to receive cash and shares of capital stock of Buyer pursuant to this Section 2.

          For federal income tax purposes, it is intended that the merger of Clayco with and into Buyer shall qualify as a reorganization under Section 368 of the IRC and that this Agreement shall constitute the plan of reorganization, but Buyer makes no representation or warranty regarding tax treatment of the merger to any Acquired Company or to the Clayco shareholders, and Clayco shall instruct its shareholders to seek appropriate income tax advice.

          The closing of the Contemplated Transactions except the sale of the Designated Assets (the “ Closing ”), will take place at such date, time, and place as the parties may agree.  In the absence of such agreement, the Closing shall be held at the offices of Buyer’s counsel, Husch & Eppenberger, LLC, at 190 Carondelet Plaza, Suite 600, St. Louis, Missouri 63105, commencing at 10:00 a.m. (St. Louis time) on the date that is five (5) Business Days after receipt of all Consents of Governmental Bodies legally required to consummate the Contemplated Transactions and the expiration of all statutory waiting periods applicable to the Contemplated Transactions. The Merger shall be effective the date and time upon which the Merger is effective in the State of Delaware, or as otherwise stated in such certificate of merger (the “ Effective Time ”). Subject to Section 8, failure to consummate the Contemplated Transactions on the date and time and at the place determined pursuant to this Section 2.2 will not result in the termination of this Agreement and will not relieve any party of any obligation under this Agreement.  

          At the Effective Time, the effect of the Merger shall be as provided in this Agreement, the Plan of Merger, and the applicable provisions of the DGCL and the GBCLM.  At any time after the Effective Time, if Buyer shall consider that any further act is necessary or desirable to (i) vest, perfect, or confirm, of record or otherwise, in Buyer right, title, or interest in, to, or under any of the property, rights, privileges, powers, and franchises of Clayco or (ii) otherwise carry out the purposes of this Agreement, then the Acquired Companies and their respective officers and directors shall be deemed to have granted to Buyer an irrevocable power of attorney to take such action, and the officers and directors of Buyer are fully authorized in the name of any Acquired Company to take such action.

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          At the Effective Time, (a) the directors of Buyer immediately prior to the Effective Time shall be the directors of Buyer, as the surviving corporation, each to hold office in accordance with the Organizational Documents of Buyer; and (b) the officers of Buyer immediately prior to the Effective Time shall be the officers of Buyer, as the surviving corporation, in each case until their respective successors are duly elected or appointed.

                      (a)           Subject to subsection (d) regarding fractional shares, at the Effective Time, by virtue of the Merger and without action on the part of Buyer or Clayco, each Share issued and outstanding immediately prior to the Effective Time, other than (i) Shares held in the treasury of Clayco, and (ii) Dissenting Shares, shall cease to be outstanding and shall be converted into the right to receive the Consideration, subject to the Escrow Agreement with respect to the Escrow.

                      (b)          Each Share held by Clayco as treasury stock immediately prior to the Effective Time shall be canceled and extinguished without any conversion thereof as provided in this Section 2.5.

                      (c)          The “Consideration” shall be, for each Share, (i) an amount in cash equal to 40% of the Per Share Consideration (the “ Cash Amount ”), plus (ii) a number of shares of Buyer common stock, $0.01 par value (“ Buyer Common Stock ”), with a Closing Price equal to 60% of the Per Share Consideration (the “ Stock Amount ”). The shares included in the Stock Amount will not be registered with the SEC under the Securities Act or under any state securities laws, in reliance on the exemptions specified in such laws, and have not been approved or disapproved by the SEC, or by the securities regulatory authority of any state.  Such shares included in the Stock Amount will be subject to Section 2.6 regarding Buyer’s right of first refusal and to restrictions on resale and may not be sold or otherwise transferred without compliance with those rights and restrictions.

                      (d)          No fractional shares of capital stock of Buyer shall be issued in the Merger. In lieu of a fractional share of Buyer Common Stock, the holder of any Shares who would otherwise be entitled to receive such fractional share (after taking into account all Shares delivered by such holder) shall be entitled to receive a cash payment, without interest and rounded-up to the nearest whole cent, in an amount determined by multiplying the Closing Price by the fraction of a share of Buyer Common Stock to which the holder would otherwise have been entitled. As promptly as practicable after the determination of the amount of cash, if any, to be paid to holders of fractional share interests, the bank or trust company designated by Buyer as the exchange agent (the “ Exchange Agent ”) shall so notify Buyer, and Buyer shall deposit that amount with the Exchange Agent and shall cause the Exchange Agent to forward payments to the holders of fractional share interests, subject to and in accordance with the terms of this Section 2.5.

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                      (e)          Notwithstanding anything in this Agreement to the contrary, Shares which are issued and outstanding immediately prior to the Effective Time and which are held by Clayco shareholders who have validly exercised dissenter’s rights available under Section 351.455 of the GBCLM (the “ Dissenting Shares ”) shall not be converted into or be exchangeable for the right to receive the Consideration in accordance with this Section 2.5, unless and until such holders shall have failed to perfect or shall have effectively withdrawn or lost their dissenter’s rights under the GBCLM. Dissenting Shares shall be treated in accordance with Section 351.455 of the GBCLM, if and to the extent applicable.  If any such holder shall have failed to perfect or shall have effectively withdrawn or lost such dissenter’s rights, such holder’s Shares shall thereupon be converted into and become exchangeable only for the right to receive, as of the Effective Time, the Consideration in accordance with this Section 2.5.  Clayco shall give Buyer (i) prompt notice of each and every notice of a Clayco shareholder’s intent to demand payment for the shareholder’s Shares, attempted withdrawals of such demands, and any other instruments served pursuant to the GBCLM and received by Clayco relating to rights to be paid the “fair value” of Dissenting Shares, as provided in Section 351.455 of the GBCLM, and (ii) the opportunity to direct all negotiations and Proceedings with respect to demands for appraisal under the GBCLM. Except with the prior written consent of Buyer, Clayco shall not voluntarily make any payment with respect to, offer to settle or settle, or approve any withdrawal of any demands for “fair value” under Section 351.455 of the GBCLM.

                      (a)          Prior to the second anniversary of the Closing Date, if any Clayco shareholder desires to transfer any shares of Buyer Common Stock acquired in the Merger to a third party such shareholder shall first offer such shares to Buyer pursuant to this Section 2.6 (the “ Right of First Refusal ”).

                      (b)          Such proposed seller shall give written notice to Buyer stating such shareholder’s desire to transfer such shares, the number of shares proposed to be transferred, the exact name in which such shares are held of record and the address of such shareholder, and if a sale price has been negotiated with the third party, the price negotiated for such shares (the “ Proposed Transfer Notice ”). Each such Proposed Transfer Notice shall be deemed to have been duly given when actually received by one of the representatives of Buyer set forth below and shall be sent to the appropriate address and telecopier numbers set forth below (or to such other address and telecopier numbers as Buyer may designate by notice to Seller Representative):

                      (c)          Buyer shall have fourteen (14) days from its receipt of the Proposed Transfer Notice to give the proposed seller written notice of its election to purchase such shares at a per share price equal to the Buyer Price (the “ Election Notice ”).

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                      (d)          The closing of any such purchase by Buyer shall take place at the executive offices of Buyer at 10:00 a.m. local time on the date specified in the Election Notice, which shall not be more than three (3) Business Days after the date of the Election Notice, or at such other time and place as the parties to the transaction may agree.  At the closing, the proposed seller will deliver to Buyer certificates evidencing the shares to be purchased (properly endorsed or accompanied by stock powers, with signature guaranteed or similar appropriate documentation of authority to transfer).  Buyer shall pay the purchase price stated in the Election Notice in cash or immediately available funds.  In the event that the holder of the shares to be purchased by Buyer does not deliver such certificates with the required endorsement or stock powers to Buyer, as required by this subsection (d), such shares shall be deemed assigned and transferred to Buyer upon delivery of the purchase price, and Buyer’s transfer agent shall be authorized to record that the certificates have been acquired by Buyer.

                      (e)          If Buyer does not provide the Election Notice within fourteen (14) days after its receipt of the Proposed Transfer Notice, Buyer shall be deemed to have elected not to purchase the shares identified in the Proposed Transfer Notice, and the proposed seller may transfer such shares to a third party in accordance with the Proposed Transfer Notice for a period ending forty-four (44) days after the date of receipt by Buyer of the Proposed Transfer Notice; provided that such sale is made pursuant to an exemption from registration under the Securities Act and applicable state securities laws.  

                      (f)          If (i) the Clayco shareholder is required to provide a Proposed Transfer Notice under Sections 2.6(a) and (b), and Buyer does not waive its right to purchase such shares within one Business Day after its receipt of the Proposed Transfer Notice, (ii) Buyer does not provide the Election Notice within fourteen (14) days after its receipt of the Proposed Transfer Notice, and (iii) the proposed seller transfers such shares in accordance with the Proposed Transfer Notice and the preceding sentence, Buyer shall pay such proposed seller an amount equal to (A) the Loss Amount (if any) multiplied by (B) the number of shares of Buyer Common Stock designated in the Proposed Transfer Notice, in cash or immediately available funds within five (5) Business Days after the proposed seller notifies Buyer that the transfer has closed.

                      (a)           Exchange Agent . On or before the Closing Date, Buyer shall deliver, or shall cause to be delivered, to the Exchange Agent, for the benefit of the holders of Shares, for exchange in accordance with this Section 2.7: (i) cash in an aggregate amount sufficient to make the appropriate Cash Amount payments to each holder of Shares and (ii) authorization to issue certificates representing Stock Amount to be issued to each holder of Shares, in each case, net of the Escrow and of shares of Buyer Common Stock required to be escrowed under the Balsbaugh Escrow Agreement (such certificates and cash being referred to as the “Exchange Fund”).  The Exchange Fund shall not be used for any other purpose, except as expressly provided in this Agreement.  Buyer shall deposit, or shall cause to be deposited, from time to time, with the Exchange Agent, any dividends or distributions with respect thereto promptly following the declaration and payment thereof, if any, to be paid and issued in exchange for Shares pursuant to this Section 2.7.

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                      (b)           Exchange Procedures .

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                     (c)           Dividends and Distributions with Respect to Unexchanged Shares . No dividends or other distributions declared or made after the Effective Time with respect to Buyer Common Stock with a record date after the Effective Time shall be paid to the holder of any unsurrendered Certificate with respect to the shares of Buyer Common Stock represented thereby, and no cash payment in lieu of fractional shares shall be paid to any such holder pursuant to Section 2.5(d), until the holder of such Certificate shall surrender such Certificate. Subject to the effect of applicable Legal Requirements, following surrender of any such Certificate, there shall be paid to the holder of the Certificates representing whole shares of Buyer Common Stock issued in exchange therefor, without interest, (i) promptly, the amount of any cash payable with respect to a fractional share of Buyer Common Stock to which such holder is entitled pursuant to Section 2.5(d) and the amount of dividends or other distributions with a record date after the Effective Time theretofore paid with respect to such whole shares of Buyer Common Stock, and (ii) at the appropriate payment date, the amount of dividends or other distributions, with a record date after the Effective Time but prior to surrender and a payment date occurring after surrender, payable with respect to such whole shares of Buyer Common Stock.

                     (d)           No Further Rights in the Shares . The Consideration issued and paid upon conversion of the Shares (including the payment of the Escrow and the shares of Buyer Common Stock required to be escrowed under the Balsbaugh Escrow Agreement to the Escrow Agent) in accordance with the terms hereof shall be deemed to have been issued and paid in full satisfaction of all rights pertaining to such Shares.

                     (e)           Termination of Exchange Fund . Any portion of the Exchange Fund which remains undistributed to the former shareholders of Clayco for six (6) months after the Effective Time shall be delivered to Buyer, upon demand, and any former shareholders of Clayco who have not theretofore complied with this Section 2.7 shall thereafter look only to Buyer to claim the Consideration, any cash in lieu of fractional shares of Buyer Common Stock, and any dividends or distributions with respect to Buyer Common Stock, in each case without interest thereon, and subject to Section 2.7(g).  Any portion of the Exchange Fund remaining unclaimed by holders of Shares as of a date which is immediately prior to such time as such amounts would otherwise escheat to or become property of any Governmental Body, to the extent permitted by applicable Legal Requirements, shall become the property of Buyer free and clear of any claims or interest of any Person previously entitled thereto.

                     (f)           No Liability . None of Buyer, Clayco or the Seller Representative shall be liable to any former holder of Shares for any such Shares (or dividends or distributions with respect thereto) or cash or other payment delivered to a Governmental Body pursuant to any abandoned property, escheat, or similar Legal Requirements.  Buyer and the Exchange Agent shall be entitled to rely upon the stock transfer books of Clayco to establish the identity of those Persons entitled to receive the Consideration. Clayco’s stock transfer books shall be conclusive with respect thereto.  

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                     (g)           Withholding Rights . Each of Buyer and the Exchange Agent shall be entitled to deduct and withhold from the consideration otherwise payable pursuant to this Agreement to any former holder of Shares such amounts as it is required to deduct and withhold with respect to the making of such payment under any Legal Requirements relating to Taxes and pay such withholding amount over to the appropriate Governmental Body.  To the extent that amounts are so withheld by Buyer or the Exchange Agent, such withheld amounts shall be treated for all purposes of this Agreement as having been paid to the former holder of the Shares in respect of which such deduction and withholding was made by Buyer or the Exchange Agent, as the case may be.

          At the Effective Time, the stock transfer books of Clayco shall be closed and there shall be no further registration of transfers of Shares thereafter on the records of Clayco.  From and after the Effective Time, the holders of Certificates outstanding immediately prior to the Effective Time shall cease to have any rights with respect to such Shares except as otherwise provided herein or by Legal Requirements.  On or after the Effective Time, any Certificates presented to the Exchange Agent or Buyer for any reason shall be converted into the Consideration in accordance with Section 2.5, subject to applicable Legal Requirements in the case of Dissenting Shares.

          The shares of Buyer Common Stock issued and outstanding immediately prior to the Effective Time shall be unaffected by the Merger, and at the Effective Time, such shares shall remain issued and outstanding.

          If, after November, 22, 2006 and prior to the Effective Time, Buyer or Clayco changes (or establishes a record date for changing) the number of shares of Buyer Common Stock or the number of Shares issued and outstanding as of November 22, 2006, as a result of a stock dividend, stock split, recapitalization, reclassification, combination, or similar transaction with respect to such shares or Shares, and the record date for such transaction is after such date, and prior to the Effective Time, then the Consideration shall be appropriately and proportionately adjusted such that the aggregate consideration to be paid by Buyer to holders of Shares pursuant to Section 2.5 would be the same as if the Effective Time had been the close of business on November 22, 2006.

          From June 30, 2006 to the day prior to the Closing Date, Clayco may distribute to its shareholders by dividend or otherwise an amount of cash less than or equal to $1,300,000.

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          (a)       Buyer agrees that none of the following expenses, whether occurring or incurred before, at or after the Closing, will affect the Clayco’s consolidated shareholders’ equity, reduce the amount that Clayco can dividend or distribute to its shareholders before the Closing, or be treated as a Breach of any representation, warranty, covenant or obligation under this Agreement:  

                      (i)          Any penalties related to cancellation by the Buyer of that certain Data Processing Services Agreement dated as of August 20, 2001, between CSB Bank (a predecessor of the Bank) and Jack Henry and Associates, Inc.

                      (ii)         Severance payments or benefits paid to Clayco or Bank employees, and any payments made to Jeffrey J. Kieffer, Michael D. Balsbaugh and Kenneth M. Hitt under their respective Change of Control Agreements with Clayco and the Bank (in the form provided to the Buyer) because of the Contemplated Transactions.

          (b)        Buyer will reimburse Clayco for an amount equal to 50% of the fees and expenses of KPMG for conducting the audit required by Section 8.1(b)(ii).

          (c)         Buyer will pay for the cost of preparing the Clayco and Bank tax returns and reports for the period beginning January 1, 2007 to the Closing Date.

          As of November 22, 2006 (or such other date specifically indicated below) Clayco and the Bank represent and warrant to Buyer as follows:

                      (a)          Part 3.1 of the Disclosure Letter contains a complete and accurate list for each Acquired Company of its name, its jurisdiction of incorporation, other jurisdictions in which it is authorized to do business, and its capitalization (including the identity of each shareholder and the number of shares held by each).

                      (b)          Clayco is a corporation duly organized, validly existing, and in good standing under the laws of the State of Missouri and a registered bank holding company under the BHCA, with full corporate power and authority to conduct its business as it is now being conducted, to own or use the properties and assets that it purports to own or use, and to perform all its obligations under Applicable Contracts. The Bank is a Kansas state bank that is duly organized, validly existing, and in good standing under the laws of the State of Kansas and a member of the Federal Reserve System, with full power and authority to conduct its business as it is now being conducted, to own or use the properties and assets that it purports to own or use, and to perform all its obligations under Applicable Contracts.  Each Acquired Company is duly qualified to do business as a foreign corporation and is in good standing under the laws of each state or other jurisdiction in which either the ownership or use of the properties owned or used by it, or the nature of the activities conducted by it, requires such qualification.

                      (c)          The deposit accounts of the Bank are insured by the Bank Insurance Fund of the FDIC to the maximum extent permitted by Legal Requirements, and the Bank has paid all deposit insurance premiums and assessments required by such Legal Requirements.

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                      (d)           Clayco and the Bank have delivered to Buyer complete and accurate copies of their Organizational Documents, as currently in effect.

                      (a)          This Agreement constitutes the legal, valid, and binding obligation of Clayco, the Bank, and Seller Representative, enforceable against them in accordance with its terms.  Upon the execution and delivery by the appropriate parties, including Clayco, the Bank, the Seller Representative, and the Escrow Agent of the Escrow Agreement, the Balsbaugh Escrow Agreement, the Employment Agreements and the Plan of Merger, and the execution of the Appointment of Representative by each Clayco shareholder (collectively, the “ Clayco Closing Documents ”), the Clayco Closing Documents will constitute the legal, valid, and binding obligations of such parties, as applicable, enforceable against them in accordance with their respective terms, except as such enforcement may be limited by (i) the effect of bankruptcy, insolvency, reorganization, receivership, conservatorship, arrangement, moratorium or other laws affecting or relating to the rights of creditors generally, or (ii) the rules governing the availability of specific performance, injunctive relief or other equitable remedies and general principles of equity, regardless of whether considered in a proceeding in equity or at law. Assuming the filings and approvals described in Sections 5.4 and 6.1 are made and obtained (as the case may be), and the conditions set forth in Sections 7.1(a), 7.1(b), 7.1(c) and 7.1(d) are satisfied, each of such parties has the absolute and unrestricted right, power, authority, and capacity to execute and deliver and to perform his or its obligations under this Agreement and the Clayco Closing Documents, as applicable.

                      (b)          Assuming the filings and approvals described in Sections 5.4 and 6.1 are made and obtained (as the case may be), and the conditions set forth in Sections 7.1(a), 7.1(b), 7.1(c) and 7.1(d) are satisfied, except as set forth in Part 3.2 of the Disclosure Letter, neither the execution and delivery of this Agreement nor the consummation or performance of any of the Contemplated Transactions will, directly or indirectly (with or without notice or lapse of time):

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Except as set forth in Part 3.2 of the Disclosure Letter or as contemplated by this Agreement, no Acquired Company is or will be required to give any notice to or obtain any Consent from any Person in connection with the execution and delivery of this Agreement or the consummation or performance of any of the Contemplated Transactions.

          The authorized equity securities of Clayco consist of 200,000 shares of common stock, par value $1.00 per share, of which 31,190 shares are issued and outstanding and constitute the Shares. The Clayco shareholders identified on Part 3.3 of the Disclosure Letter are and will be on the Closing Date the record and beneficial owners and holders of the Shares, and all such Shares shall be free and clear of all Encumbrances as of the Closing.  Each such shareholder beneficially owns the number of Shares indicated on Part 3.3 of the Disclosure Letter.  All of the outstanding equity securities of the Bank are owned of record and beneficially by Clayco, free and clear of all Encumbrances.  No legend or other reference to any purported Encumbrance appears upon any certificate representing equity securities of any Acquired Company, except as set forth in Part 3.3 of the Disclosure Letter. All of the outstanding equity securities of each Acquired Company have been duly authorized and validly issued and are fully paid and nonassessable.  Part 3.3 of the Disclosure Letter describes each Applicable Contract relating to the issuance, sale, or transfer of any equity securities or other securities of any Acquired Company.  None of the outstanding equity securities or other securities of any Acquired Company was issued in violation of the Securities Act or any other Legal Requirement.  Except as set forth in Part 3.3 of the Disclosure Letter, no Acquired Company owns, or has any Applicable Contract to acquire, any equity securities or other securities of any Person (other than Acquired Companies) or any direct or indirect equity or ownership interest in any other business (other than those acquired in connection with collection).

                      (a)          Each Acquired Company has filed all forms, reports, and documents required to be filed with the Federal Reserve Board, the FDIC, the Kansas or Missouri banking authorities and any other applicable federal or state securities or banking authorities (collectively, the “ Regulatory Reports ”). The Regulatory Reports (i) were prepared in accordance with Legal Requirements, and (ii) at the time they were filed, did not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading.

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                      (b)           Clayco has delivered to Buyer: the unaudited consolidated balance sheet of Clayco as at December 31, 2005, and the related unaudited consolidated statements of income, changes in shareholders’ equity, and cash flow for the fiscal year then ended, (ii) the unaudited consolidated balance sheet of Clayco as at September 30, 2006 (the “ Interim Balance Sheet ”), and the related unaudited consolidated statement of income for the period then ended, and (iii) all bank financial reports, including all amendments thereto, filed with any Governmental Body by any Acquired Company for the years ended December 31, 2005, 2004 and 2003 and all such reports required to be filed after that date until the Closing Date.  Such financial statements and notes fairly present the financial condition and the results of operations, and, as applicable, the changes in shareholders’ equity, and cash flow, of the Acquired Companies as at the respective dates of and for the periods referred to in such financial statements, all in accordance with GAAP; the financial statements referred to in this Section 3.4 reflect the consistent application of such accounting principles throughout the periods involved.  No financial statements of any Person other than the Acquired Companies are required by GAAP to be included in the consolidated financial statements of Clayco.

          The books of account, minute books, stock record books, and other records of the Acquired Companies, all of which have been made available to Buyer, are complete and correct and have been maintained in accordance with sound business practices, including the maintenance of an adequate system of internal controls.  The minute books and other corporate records of the Acquired Companies contain accurate and complete records of all meetings held of, and action taken by, the shareholders, the Boards of Directors, and committees of the Boards of Directors of the Acquired Companies, and no meeting of any such shareholders, Board of Directors, or committee has been held for which minutes have not been prepared and are not contained in such minute books.  The unexecuted minutes of the shareholders, the Boards of Directors, and committees of the Boards of Directors of the Acquired Companies made available to Buyer prior to Closing are complete and correct and accurately reflect the minutes included in the minute books.  At the Closing, all of those books and records will be in the possession of the Acquired Companies.

                      (a)          Part 3.6 of the Disclosure Letter contains a correct street address and tax parcel identification number of all tracts, parcels and subdivided lots included in the Real Property.

                      (b)           Part 3.6 of the Disclosure Letter contains a correct street address and tax parcel identification number of all tracts, parcels and subdivided lots in which any Acquired Company has a leasehold interest and an accurate description (by location, name of lessor, date of lease and term expiry date) of all leases of Real Property.

                       (c)           The Acquired Companies have provided the Buyer with true and correct copies of all existing title policies (the “ Existing Policies ”) related to the Real Property.

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                       (d)           Except as set forth in Part 3.6 of the Disclosure Letter, the Acquired Companies have not subleased any Real Property.  Clayco has delivered or made available to Buyer copies of any instruments (as recorded, if applicable) by which the Acquired Companies acquired such leaseholds and interests and copies of all opinions, abstracts, and surveys in the possession of the Acquired Companies and relating to such leaseholds or interests.  True and complete copies of (A) all deeds and surveys of or pertaining to the Real Property and in the possession of the Acquired Companies and (B) all instruments, agreements and other documents listed in the Existing Policies or described in Part 3.6 of the Disclosure Letter have been delivered to the Buyer.

                       (e)          The Acquired Companies own all the assets (whether tangible or intangible) that they purport to own and as reflected as owned in the books and records of the Acquired Companies, including all of the assets reflected in the Balance Sheet and the Interim Balance Sheet (except for assets held under capitalized leases disclosed or not required to be disclosed in Part 3.6 of the Disclosure Letter and personal property sold since the date of the Balance Sheet and the Interim Balance Sheet, as the case may be, in the Ordinary Course of Business), and all of the assets purchased or otherwise acquired by the Acquired Companies since the date of the Balance Sheet (except for personal property acquired and sold since the date of the Balance Sheet in the Ordinary Course of Business and consistent with past practice and except for any Real Property that Acquired Companies have acquired in the Ordinary Course of Business by foreclosure or by deed in lieu thereof), which subsequently purchased or acquired assets (other than inventory and short-term investments) are listed in Part 3.6 of the Disclosure Letter.  All material assets reflected in the Balance Sheet and the Interim Balance Sheet are free and clear of all Encumbrances except (a) security interests shown on the Balance Sheet or the Interim Balance Sheet as securing specified liabilities or obligations, with respect to which no default (or event that, with notice or lapse of time or both, would constitute a default) exists, (b) security interests incurred in connection with the purchase of assets after the date of the Interim Balance Sheet (such security interests being limited to the assets so acquired), with respect to which no default (or event that, with notice or lapse of time or both, would constitute a default) exists, and (c) liens for current taxes not yet due.

                      (a)           Use of the Real Property for the various purposes for which it is presently being used is permitted as of right under all applicable zoning legal requirements and is not subject to “permitted nonconforming” use or structure classifications.  Except as set forth in Part 3.7 of the Disclosure Letter, to the Acquired Companies’ Knowledge, all Improvements are in compliance with all applicable Legal Requirements, including those pertaining to zoning, building and the disabled, are in good repair and in good condition, ordinary wear and tear excepted. There is no existing or proposed plan to modify or realign any street or highway or any existing or proposed eminent domain proceeding that would result in the taking of all or any part of any Facility or that would prevent or hinder the continued use of any Facility as heretofore used in the conduct of the business of any Acquired Company.

                      (b)           Each item of tangible personal property is in good repair and good operating condition, ordinary wear and tear excepted, is suitable for immediate use in the Ordinary Course of Business. No item of tangible personal property is in need of repair or replacement other than as part of routine maintenance in the Ordinary Course of business.  All tangible personal property used in any Acquired Company’s business is in its possession.

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          Except as set forth in Part 3.8 of the Disclosure Letter, all loans and discounts shown on the Acquired Companies’ financial statements or that were entered into after the date of the most recent balance sheet included in the Acquired Companies’ financial statements were and shall be made for good, valuable, and adequate consideration in the Ordinary Course of Business of the Acquired Companies, in accordance with sound banking practices, and are not subject to any known defenses, set-offs, or counter-claims, including any such as are afforded by usury or truth in lending laws, except as may be provided by bankruptcy, solvency, or similar laws or by general principles of equity. Except as set forth in Part 3.8 of the Disclosure Letter, the notes and other evidence of indebtedness evidencing such loans and all forms of pledges, mortgages, and other collateral documents and security agreements are valid, true, and genuine and perfected and what they purport to be. The Acquired Companies have complied and, prior to the Closing Date, shall comply with all material Legal Requirements relating to such loans.

          The allowances for loan losses reflected on the Acquired Companies’ financial statements have been calculated, in all material respects, as of their respective dates, in a manner consistent with the requirements of GAAP to provide for reasonably anticipated losses on outstanding loans, net of recoveries.  All material guarantees of indebtedness owed to any Acquired Company, including, but not limited to, those of the Federal Housing Administration, the Small Business Administration, the Farmers Home Administration, or other Governmental Bodies, are valid and enforceable in accordance with their respective terms, except as may be provided by bankruptcy, solvency, or similar laws or by general principles of equity.

          Except as set forth in Part 3.10 of the Disclosure Letter, the Acquired Companies have no liabilities or obligations of any nature (whether known or unknown and whether absolute, accrued, contingent, or otherwise) except for (a) amounts incurred in connection with the Transaction Documents (in an aggregate amount not to exceed $100,000), (b)  liabilities or obligations reflected or reserved against in the Balance Sheet or the Interim Balance Sheet and (c) current liabilities incurred in the Ordinary Course of Business since the date of the Interim Balance Sheet.

                      (a)          The Acquired Companies have filed or caused to be filed all Tax Returns that are or were required to be filed by or with respect to any of them, either separately or as a member of a group of corporations, pursuant to applicable Legal Requirements, and all such federal and state income Tax Returns filed since February 14, 2001, have been timely filed. Clayco has made available to Buyer copies of each such Tax Return filed since the date it was incorporated, and Part 3.11 of the Disclosure Letter contains a complete and accurate list of each

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type of Tax Return filed since the date it was incorporated.  The Acquired Companies have paid, or made provision for the payment of, all Taxes that have or may have become due pursuant to those Tax Returns or otherwise, or pursuant to any assessment received by any Acquired Company, except such Taxes, if any, as are listed in Part 3.11 of the Disclosure Letter and are being contested in good faith and as to which adequate reserves (determined in accordance with GAAP) have been provided in the Balance Sheet and the Interim Balance Sheet.

                      (b)     The United States federal and state income Tax Returns of each Acquired Company subject to such Taxes are closed by the applicable statute of limitations for all taxable years through 2002. Part 3.11 of the Disclosure Letter describes all adjustments to the United States federal income Tax Returns filed by any Acquired Company or any group of corporations including any Acquired Company for all taxable years, and the resulting deficiencies proposed by the IRS. Except as described in Part 3.11 of the Disclosure Letter, no Acquired Company has given or been requested to give waivers or extensions (or is or would be subject to a waiver or extension given by any other Person) of any statute of limitations relating to the payment of Taxes of any Acquired Company or for which any Acquired Company may be liable.

                      (c)     The charges, accruals, and reserves with respect to Taxes on the respective books of each Acquired Company are adequate (determined in accordance with GAAP) and are at least equal to that Acquired Company’s liability for Taxes.  There exists no proposed tax assessment against any Acquired Company except as disclosed in the Balance Sheet or in Part 3.11 of the Disclosure Letter.  No consent to the application of Section 341(f)(2) of the IRC has been filed with respect to any property or assets held, acquired, or to be acquired by any Acquired Company.  All Taxes that any Acquired Company is or was required by Legal Requirements to withhold or collect have been duly withheld or collected and, to the extent required, have been paid to the proper Governmental Body or other Person.

                      (d)     All Tax Returns filed by (or that include on a consolidated basis) any Acquired Company are true, correct, and complete.  There is no tax sharing agreement that will require any payment by any Acquired Company.  No Acquired Company is or ever has been an “S” corporation. During the consistency period (as defined in Section 338(h)(4) of the IRC with respect to conversion of the Shares), no Acquired Company or target affiliate (as defined in Section 338(h)(6) of the IRC with respect to the conversion of the Shares) has sold or will sell any property or assets to Buyer or to any member of the affiliated group (as defined in Section 338(h)(5) of the IRC) that includes Buyer.  Part 3.11 of the Disclosure Letter lists all such target affiliates.

                      (e)     The Acquired Companies have no income tax liability (including interest and penalties) in connection with any deferred compensation agreement between the Bank and any employee under the deferred compensation provisions of the IRC, including Section 409A of the IRC, and any such liability is solely the responsibility of such employee.

          Since the date of the Balance Sheet, there has not been any Material Adverse Effect on the Acquired Companies, and no event has occurred or circumstance exists that may reasonably be expected to result in such a Material Adverse Effect on the Acquired Companies.

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                      (a)          As used in this Section 3.13, the following terms have the meanings set forth below.

                      (b)           Part 3.13(b) of the Disclosure Letter contains a complete and accurate list of all Company Plans and Company Other Benefit Obligations and identifies as such all Company Plans that are Qualified Plans.  Except as set forth in Part 3.13(b) of the Disclosure Letter, the Acquired Companies and their ERISA Affiliates do not, and have not within the 3-year period preceding the Closing Date, participated in or contributed to any (i) voluntary employees’ beneficiary association under Section 501(c)(9) of the IRC, (ii) defined benefit  Pension Plans, (iii) Pension Plans that are subject to Title IV of ERISA, or (iv) Multi-Employer Plans (as defined in Section 3(37)(A) of ERISA).

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                     (c)          Part 3.13(c) of the Disclosure Letter contains a complete and accurate list of (i) all ERISA Affiliates of each Acquired Company and (ii) all Plans.

                      (d)          Part 3.13(d) of the Disclosure Letter sets forth a calculation of the liability of the Acquired Companies for post-retirement benefits other than pensions, made in accordance with Financial Accounting Statement 106 of the Financial Accounting Standards Board, regardless of whether any Acquired Company is required by such statement to disclose such information.

                      (e)          Part 3.13(e) of the Disclosure Letter sets forth the financial cost of all obligations owed under any Company Plan or Company Other Benefit Obligation that is not subject to the disclosure and reporting requirements of ERISA.

                      (f)           With respect to Clayco and the Bank, Clayco and the Bank have delivered or made available to Buyer:

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30

31

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                            (d)          No Acquired Company is subject to and there are no facts and/or circumstances in existence that will result in any Acquired Company becoming subject to, any written Order, agreement (including an agreement under Section 4(m) of the BHCA), memorandum of understanding, or similar arrangement with, or a commitment letter or similar submission to, or extraordinary supervisory letter from, or has adopted any extraordinary board resolutions at the request of, any Governmental Body charged with the supervision or regulation of financial institutions or issuers of securities or engaged in the insurance of deposits or the supervision or regulation of any Acquired Company.  No Governmental Body has advised any Acquired Company that such Governmental Body is contemplating issuing or requesting (or is considering the appropriateness of issuing or requesting) any such Order, agreement, memorandum of understanding, or extraordinary supervisory letter or any such board resolutions, nor has any Governmental Body commenced an investigation in connection therewith.

                            (e)           No facts or circumstances exist which would cause any Acquired Company to be deemed to be (i) operating in violation of The Currency and Foreign Transactions Reporting Act and the regulations promulgated thereunder, as amended, the USA Patriot Act of 2001 and the regulations promulgated thereunder, as amended (the “ Patriot Act ”), any Order issued with respect to anti-money laundering by the United States Department of the Treasury’s Office of Foreign Assets Control, or any other applicable anti-money laundering

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Legal Requirements; or (ii) not in satisfactory compliance with the applicable privacy and customer information requirements contained in any privacy laws and related Legal Requirements, including, without limitation, Title V of the GLB Act, and the provisions of the information security program adopted pursuant to 12 C.F.R. Part 40.  To the extent required by applicable Legal Requirements, each Acquired Company has adopted and implemented an anti-money laundering program that contains customer identification verification procedures that comply with Section 326 of the Patriot Act, and such anti-money laundering program meets the requirements in all material respects of Section 352 of the Patriot Act.  Each Acquired Company has complied in all respects with any applicable requirements to file reports and other necessary documents as required by the Patriot Act.

          Except as set forth in Part 3.16 of the Disclosure Letter, since the date of the Balance Sheet, the Acquired Companies have conducted their businesses only in the Ordinary Course of Business and there has not been any:

                      (a)           change in any Acquired Company’s authorized or issued capital stock; grant of any stock option or right to purchase shares of capital stock of any Acquired Company; issuance of any security convertible into such capital stock; grant of any registration rights; purchase, redemption, retirement, or other acquisition by any Acquired Company of any shares of any such capital stock;

                      (b)           amendment to the Organizational Documents of any Acquired Company;

                      (c)           except as indicated in Part 3.20 of the Disclosure Letter, payment or increase by any Acquired Company of any bonuses, salaries, or other compensation to any shareholder, director, executive officer, or (except in the Ordinary Course of Business) employee or entry into any employment, severance, or similar Applicable Contract with any director, executive officer, or employee;

                      (d)           adoption of, or increase in the payments to or benefits under, any profit sharing, bonus, deferred compensation, savings, insurance, pension, retirement, or other employee benefit plan for or with any employees of any Acquired Company;

                      (e)           damage to, or destruction or loss of, any asset or property of any Acquired Company, whether or not covered by insurance, materially and adversely affecting the properties, assets, business, financial condition, or prospects of the Acquired Companies, taken as a whole;

                      (f)           entry into, termination of, or receipt of notice of termination of (i) any license, joint venture, borrowing by an Acquired Company, or similar agreement, or (ii) any Applicable Contract or transaction involving a total remaining commitment by or to any Acquired Company, of at least $25,000;

                      (g)           sale, lease, or other disposition of any asset or property of any Acquired Company (other than with respect to loans sold in the Ordinary Course of Business) in the aggregate exceeding $25,000, or mortgage, pledge, or imposition of any Encumbrance on any material asset or property of any Acquired Company, including the sale, lease, or other disposition of any of the Intellectual Property Assets;

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                      (h)           cancellation or waiver of any claims or rights with a value to any Acquired Company in excess of $25,000;

                      (i)          material change in the accounting methods used by any Acquired Company;

                      (j)          entry into any derivative instrument in a notional amount in excess of $500,000; or

                      (k)          agreement, whether oral or written, by any Acquired Company to do any  of the foregoing (other than negotiations with Buyer and its Representatives regarding the Contemplated Transactions).

                      (a)          Part 3.17(a) of the Disclosure Letter contains a complete and accurate list, and Clayco and the Bank have delivered or made available to Buyer true and complete copies, of:

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                      (e)          No Acquired Company has received (i) any refusal of coverage or any notice that a defense will be afforded with reservation of rights, or (ii) any notice of cancellation or any other indication that any insurance policy is no longer in full force or effect or will not be renewed or that the issuer of any policy is not willing or able to perform its obligations thereunder.

                      (f)           The Acquired Companies have paid all premiums due, and have otherwise performed all of their respective obligations, under each policy to which any Acquired Company is a party or that provides coverage to any Acquired Company or director thereof.

                      (g)           The Acquired Companies have given notice to the insurer of all claims that may be insured thereby.

          Clayco has provided Buyer with copies of any existing “Phase I” or other environmental studies on any of the Real Property. Except as set forth in Part 3.19 of the Disclosure Letter:

                      (a)           Each Acquired Company is, and at all times has been, in full compliance with, and has not been and is not in violation of or liable under, any Environmental Law.  No Acquired Company has any basis to expect, nor has any of them or any other Person for whose conduct they are or may be held to be responsible received, any actual or Threatened order, notice, or other communication from (i) any Governmental Body or private citizen acting in the public interest, or (ii) the current or prior owner or operator of any Facilities, of any actual or potential violation or failure to comply with any Environmental Law, or of any actual or Threatened obligation to undertake or bear the cost of any Environmental, Health, and Safety Liabilities with respect to any of the Facilities or any other properties or assets (whether real, personal, or mixed) in which any Acquired Company has had an interest, or with respect to any property or Facility at or to which Hazardous Materials were generated, manufactured, refined, transferred, imported, used, or processed by any Acquired Company or any other Person for whose conduct they are or may be held responsible or from which Hazardous Materials have been transported, treated, stored, handled, transferred, disposed, recycled, or received.

                      (b)           There are no pending or, to the Knowledge of the Acquired Companies, Threatened claims, Encumbrances, or other restrictions of any nature, resulting from any Environmental, Health, and Safety Liabilities or arising under or pursuant to any Environmental Law, with respect to or affecting any of the Facilities or any other properties and assets (whether real, personal, or mixed) in which any Acquired Company has or had an interest.

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                      (c)           No Acquired Company has any basis to expect, nor has any of them or any other Person for whose conduct they are or may be held responsible, received, any citation, directive, inquiry, notice, Order, summons, warning, or other communication that relates to Hazardous Activity, Hazardous Materials, or any alleged, actual, or potential violation or failure to comply with any Environmental Law, or of any alleged, actual, or potential obligation to undertake or bear the cost of any Environmental, Health, and Safety Liabilities with respect to any of the Facilities or any other properties or assets (whether real, personal, or mixed) in which any Acquired Company had an interest, or with respect to any property or facility to which Hazardous Materials generated, manufactured, refined, transferred, imported, used, or processed by any Acquired Company, or any other Person for whose conduct they are or may be held responsible, have been transported, treated, stored, handled, transferred, disposed, recycled, or received.

                      (d)           No Acquired Company, or any other Person for whose conduct they are or may be held responsible, has any Environmental, Health, and Safety Liabilities with respect to the Facilities or with respect to any other properties and assets (whether real, personal, or mixed) in which any Acquired Company (or any predecessor) has or had an interest, or at any property geologically or hydrologically adjoining the Facilities or any such other property or assets.