PURCHASE AND ASSUMPTION AGREEMENT

Exhibit 10.1

PURCHASE AND ASSUMPTION AGREEMENT

BY AND BETWEEN

STERLING BANK

AND

FIRST BANK

AUGUST 7, 2009

PURCHASE AND ASSUMPTION AGREEMENT

THIS PURCHASE AND ASSUMPTION AGREEMENT (this “Agreement”) entered into as of August 7, 2009, by and between STERLING BANK , a Texas chartered banking association (“Buyer”), and FIRST BANK , a Missouri state chartered bank (“Seller”). Buyer and Seller are referred to collectively herein as the “Parties.”

W I T N E S S E T H

WHEREAS, Buyer and Seller are each engaged in the business of banking;

WHEREAS, Seller desires to sell certain assets and transfer certain liabilities with respect to Seller’s branch operations which are listed on Exhibit A and referred to herein as the Branches;

WHEREAS, Buyer desires to purchase certain assets and assume certain liabilities of Seller related to the Branches;

WHEREAS, the Parties desire to set forth in writing the terms and conditions under which the transaction will be consummated.

NOW, THEREFORE, in consideration of the foregoing and of the representations, warranties, covenants and agreements set forth herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by the Parties, the Parties hereby agree as follows:

ARTICLE 1

DEFINITIONS

1.1 “Accountant” has the meaning set forth in Section 2.2(d) below.

1.2 “Acquired Assets” means: (a) the cash on hand, cash held in the vaults, and cash items at the Branches as of the Closing Date; (b) Tangible Personal Property; (c) Owned Real Property; (d) all transferable rights and interest of Seller in and to any leased real estate at the Branches (“Leased Property”); (e) Leasehold Improvements; (f) Acquired Contracts; (g) Loans including the collateral for the Loans and any applicable loan instruments or documentation; (h) Intellectual Property; (i) Deposits; (j) Safe Deposit Business, (k) Books and Records relating to such items, and (l) the Fiduciary Account provided all necessary Consents to transfer are obtained; except that the term “Acquired Assets” does not include the Excluded Assets.

1.3 “Acquired Contracts” means: (a) all contracts set forth on Schedule 1.3 ; (b) all Safe Deposit Contracts; and (c) all equipment leases for equipment located at the Branches, including related maintenance agreements.

1.4 “Acquisition” means the acquisition by Buyer of the Acquired Assets and the assumption of the Assumed Liabilities pursuant to the terms of this Agreement.

1.5 “Affiliate” means with respect to any Person, any Person directly or indirectly controlling, controlled by, or under common control with such other Person. For purposes of this

 

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definition, “control” (including with correlative meaning, the terms “controlled by” and “under common control with”) as used with respect to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through ownership of voting securities, by contract or otherwise.

1.6 “Agreement” has the meaning set forth in the preface above.

1.7 “Applicable Laws” means all applicable federal, state, county and municipal laws, codes, injunctions, judgments, orders, decrees, rulings and charges thereunder and other governmental requirements, constitutions, ordinances, statutes, rules, regulations, and administrative interpretations and pronouncements.

1.8 “Assumed Liabilities” means all of Seller’s obligations arising under Acquired Contracts, Deposits, Safe Deposit Business, and Commitments to be discharged, performed, satisfied or paid after the Closing Date, which liabilities Seller will assign and Buyer will assume as of the Closing Date in accordance with the provisions of this Agreement, except that Assumed Liabilities shall not include Excluded Liabilities.

1.9 “Books and Records” has the meaning set forth in Section 7.4 of this Agreement.

1.10 “Book Value” means, with respect to any Acquired Asset and any Assumed Liability, the dollar amount thereof stated on the accounting records of Seller. The Book Value of any item shall be determined as of the Closing Date after adjustments made by Seller for differences in accounts, suspense items, unposted debits and credits, and other similar adjustments or corrections. Without limiting the generality of the foregoing, the Book Value of (i) an Assumed Liability shall include all accrued and unpaid interest thereon as of the Closing Date, (ii) a Loan shall reflect adjustments for earned or unearned interest (as it relates to the “rule of 78s” or add-on-interest loans, as applicable), if any, as of the Closing Date, and adjustments for the portion of earned or unearned loan-related credit life and/or disability insurance premiums, FAS 91 costs, if any, attributable to Seller as of the Closing Date in each case determined for financial reporting purposes, (iii) a Commitment shall be deemed to be zero, and (iv) the Tangible Personal Property shall be the Book Value prorated to the Closing Date. The Book Value of an Assumed Contract shall be zero. The Book Value of an Acquired Asset shall not include any adjustment for any general or specific reserves on the accounting records of Seller. Seller shall continue to depreciate the Acquired Assets in accordance with generally accepted accounting principles applied on a basis consistent with prior periods provided that Seller shall not book depreciation less often than monthly. The Book Value of the Owned Real Property constituting the New Northside Branch shall be deemed to be $1,000,000. The Book Value for all improvements relating to the New Northside Branch shall be deemed to be zero.

1.11 “Branches” means Seller’s branch offices listed on Exhibit A. (Any individual location may be referred to as “Branch” if the context so requires.)

1.12 “Business Day” means a day other than (i) a Saturday, Sunday, or any holiday observed by the Federal Reserve.

1.13 “Buyer” has the meaning set forth in the preface above.

 

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1.14 “Buyer Material Adverse Effect” means, with respect to Buyer, any condition, event, change or occurrence that, individually or collectively, is reasonably likely to have a material adverse effect upon the ability of Buyer to perform its obligations under, and to consummate the transactions contemplated by this Agreement.

1.15 “Closing” has the meaning set forth in Section 2.5 below.

1.16 “Closing Date” has the meaning set forth in Section 2.5 below.

1.17 “Closing Date Balance Sheet” means an unaudited balance sheet listing the assets and liabilities of the Branches as of the close of business on the Closing Date prepared in accordance with generally accepted accounting principles applied on a basis consistent with prior periods, which shall also include any amount due to either party based upon a proration between the parties as required by Section 2.4.

1.18 “Commitments” means unfunded commitments by Seller to lend funds to customers of the Branches on the terms and conditions set forth in the applicable commitment letters or other documentation, as such commitments exist as of the Closing Date.

1.19 “Consent” means any approval, consent, ratification, waiver, or other authorization (including any Governmental Authorization); provided however, Consent shall not include any third party consents necessary for Leased Property.

1.20 “Contract” means any agreement, contract, obligation, promise or undertaking (whether written or oral and whether express or implied) that is legally binding.

1.21 “Deposits” means all deposits (as defined in 12 U.S.C. § 1813(l)), obligations and duties incidental thereto which are assigned to the Branches, including demand deposit accounts, time and savings accounts, interest checking accounts, deposits relating to debit cards / ATM cards, certificates of deposits, individual retirement accounts, sweep accounts and other deposit accounts, including for each, all interest accrued but unpaid and both collected and uncollected funds through the Closing Date; and including the obligations relating to the clearance of checks and drafts drawn against the deposit liabilities, in accordance with the Books and Records of the Branches as of the close of business on the Closing Date; provided however that deposits shall not include (a) deposits constituting official checks, travelers checks, money orders, certified checks or other items in the process of clearing on the Closing Date; (b) deposits pledged as collateral for or required as a compensating balance or commercial deposits having a relationship in respect to any Excluded Loan; (c) any deposit account with an overdraft in excess of $1,000 outstanding as of the calendar month end immediately preceding the Closing Date; (d) individual retirement accounts with respect to which the customer does not consent to the appointment of Buyer or its designee as custodian or does not consent to Buyer’s custodial agreement; (e) Non-Core Deposits excluded by Buyer pursuant to the provisions of Section 6.17; (f) Late Non-Core Deposits, (g) deposits that would be presumed to be abandoned under the Texas Property Code, (h) brokered deposits, and (i) deposits of Branches excluded under Section 6.15 or 6.19 due to the inability to satisfy applicable regulatory requirements with respect to any such Branch prior to the Closing Date.

1.22 “Disagreement” has the meaning set forth in Section 2.2(c) below.

 

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1.23 “Disclosure Schedule” has the meaning set forth in the introductory paragraph of Article 4.

1.24 “Effective Time” has the meaning set forth in Section 2.5(b).

1.25 “Encumbrance” means any charge, claim, community property interest, condition, encumbrance, equitable interest, lien, option, pledge, mortgage, 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.

1.26 “Environmental Law” means any federal, state or local law, statute, ordinance, rule, regulation, code, Consent, Order, or agreement with any Governmental Body in each case as amended from time to time relating to (1) the protection, preservation or restoration of the indoor or outdoor environment (including, without limitation, air, water vapor, surface water, groundwater, drinking water supply, surface soil, subsurface soil, plant and animal life or any other natural resource), or (2) the use, storage, remediation, removal, inspection, monitoring, recycling, treatment, generation, transportation, processing, handling, labeling, production, release or disposal of, or exposure to, or injury or damage by, any Hazardous Materials, including, without limitation, the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (“CERCLA”), as amended; the Hazardous Materials Transportation Act, as amended; the Resource Conservation and Recovery Act of 1976, as amended; the Federal Water Pollution Control Act, as amended; the Toxic Substances Control Act, as amended; the Clean Air Act, as amended; and the Safe Drinking Water Act, as amended.

1.27 “Estimated Payment Amount” has the meaning set forth in Section 2.2(b) of this Agreement.

1.28 “Excluded Assets” means: (a) any assets of the Branches listed on Schedule 1.28(a) which are not being sold, transferred, or assigned to Buyer; (b) Seller’s rights in and to the name “First Bank”; (c) Seller’s rights to and interest in software installed on computers and computer hardware located at the Branches; (d) Seller’s right to recover assets charged off by Seller prior to the Closing; (e) all of Seller’s corporate logos, trademarks and trade names, signs, paper stock, forms and other supplies containing such names and logos; (f) records of Seller that are not required to be physically transferred to Buyer under this Agreement; (g) any other proprietary assets listed on Schedule 1.28(g) ; (h) “other real estate owned”; (i) nonperforming loans; (j) Seller’s credit card portfolio; (k) foreclosed or repossessed personal property; (l) Excluded Loans, (m) any assets of Branches excluded under Section 6.15 or 6.19 due to the inability to satisfy applicable regulatory requirements with respect to any such Branch prior to the Closing Date; (n) the Real Estate Interests constituting the Old Northside Branch; and (o) any Fiduciary Relationship (other than the Fiduciary Account so long as such account is transferred to Buyer).

1.29 “Excluded Liabilities” means Liabilities or obligations with respect to any (a) Proceedings commenced or made known to Seller prior to the Closing Date and related to the Branches; (b) matters listed on Schedule 1.29 ; (c) employee benefit plans, agreements or arrangements of Seller, (d) Proceedings commenced or made known to Seller with respect to matters described in Section 4.9 herein and arising in whole or in part with respect to operations, conditions, events, or activities at the Branches prior to the Closing Date, regardless of when any

 

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claim, demand, Proceeding is made or commenced; (e) any liabilities of Seller relating to Branches excluded under Section 6.15 or 6.19 due to the inability to satisfy applicable regulatory requirements with respect to any such Branch prior to the Closing Date, (f) Liabilities or obligations of Seller with respect to any Fiduciary Relationship (other than the Fiduciary Account if such Fiduciary Account is transferred to Buyer), (g) Liabilities or obligations relating to the Fiduciary Account arising in whole or in part with respect to operations, conditions, events, or activities prior to the Closing Date, regardless of when any claim, demand, Proceeding is made or commenced, (h) Liabilities or obligations relating to the Fiduciary Account if such Fiduciary Account is not transferred to Buyer, (i) Liabilities or obligations of Seller relating to the Real Estate Interests constituting the Old Northside Branch; or (j) Liabilities or obligations of Seller of any kind, character, or description not specifically identified in this Agreement or in the exhibits hereto.

1.30 “Excluded Loan” means any loan or Commitment not constituting a Loan.

1.31 “Fair Market Value” means the fair market value as determined by an appraiser that is mutually agreeable to Seller and Buyer and that is independent and has no fewer than seven (7) years experience appraising similar property in the county in which the parcel of Owned Real Property is located.

1.32 “FDIC” means the Federal Deposit Insurance Corporation.

1.33 “Federal Funds Rate” means the federal funds target rate as quoted by the Federal Reserve Bank of Dallas on the relevant Business Day.

1.34 “Fiduciary Accounts” means the Fiduciary Relationship listed on Schedule 1.34 .

1.35 “Fiduciary Relationships” means (a) any and all common law or other trusts between individual, corporate or other entities with Seller as a trustee or co-trustee, including, without limitation, pension, compensation, testamentary, and charitable trusts and indentures, (b) any and all decedents’ estates where Seller is serving as a co- or sole executor, personal representative or administrator, administrator de bonis non, administrator de bonis non with will annexed, or in any similar fiduciary capacity, (c) any and all guardianships, conservatorships or similar positions where Seller is serving or has served as a co- or sole guardian or conservator, or any similar fiduciary capacity, (d) any and all agency and/or custodial accounts and/or similar arrangements under which Seller is serving or has served as an agent or custodian for the owner or other party establishing the account with or without investment authority and (e) any and all escrow arrangements under which Seller holds or held assets for any party or parties on stated terms and conditions.

1.36 “Governmental Authorization” means any approval, consent, license, permit, registration, certification, exemption, waiver or other authorization issued, granted, given or otherwise made available by or under the authority of any Governmental Body or pursuant to any Applicable Law.

1.37 “Governmental Body” means any (a) federal, state, local, municipal, foreign or other government; (b) governmental or quasi-governmental authority of any nature (including any governmental agency, branch, department, official or entity and any court or other tribunal); or (c) body exercising, or entitled to exercise, any administrative, executive, judicial, legislative, police, regulatory, or taxing authority.

 

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1.38 “Ground Leased Premises” means the Leased Property listed on Schedule 1.38 .

1.39 “Hazardous Materials” means (i) any petroleum or petroleum products, natural gas, or natural gas products, radioactive materials, asbestos, urea formaldehyde foam insulation, transformers or other equipment that contains dielectric fluid containing levels of polychlorinated biphenyls (PCBs) and radon gas; (ii) any chemical, material, waste or substance defined, listed, classified or described as “hazardous substance,” “hazardous waste,” “regulated substance,” “solid waste,” “hazardous material,” “extremely hazardous waste,” “restricted hazardous waste,” “toxic substance,” “toxic pollutant,” “contaminant,” or “pollutant” under any Environmental Laws; and (iii) any material, waste or substance which is in any way regulated as hazardous or toxic or actually or potentially causing damage or injury to human health or the environment by any Governmental Body, including mixtures thereof with other materials, and including any regulated building materials containing asbestos or lead.

1.40 “Indemnifying Party” has the meaning set forth in Section 11.5(a) below.

1.41 “Indemnified Party” has the meaning set forth in Section 11.5(a) below.

1.42 “Intellectual Property” means all confidential business information relating solely to the Branches (and specifically excludes any trade secrets, confidential information or registered or common law trade names or marks of Seller).

1.43 [INTENTIONALLY OMITTED]

1.44 “Knowledge” of a particular fact or other matter means information actually known to a Parties’ officers or directors or such other information that a prudent person could be expected to discover after due inquiry appropriate under the circumstances.

1.45 “Late Non-Core Deposits” shall mean any Non-Core Deposits originated by Seller after the date that Seller’s list of Non-Core Deposits is originated and supplied to Buyer pursuant to Section 6.17 below.

1.46 “Leased Property” means all transferable rights and interest of Seller in and to all real estate and improvements at the Branches.

1.47 “Leasehold Improvements” means all improvements by Seller to the Branches.

1.48 “Liability” means any liability (INCLUDING WITHOUT LIMITATION, ANY STRICT LIABILITY), whether known or unknown, asserted or unasserted, absolute or contingent, accrued or unaccrued, liquidated or unliquidated, and due or to become due, of any nature whatsoever, including any liability for Taxes.

1.49 “Loans” mean (a) the loans and participation interests in the loans (including servicing rights where applicable, accrued but unpaid interest and any accrued but unpaid ancillary income due under the term of the note) and Commitments in the amounts set forth on the Books and Records of the Branches as of the close of business on the Closing Date that are identified by

 

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Buyer to Seller on Schedule 1.49 , as may be supplemented pursuant to Section 6.18 of this Agreement and (b) overdrafts of less than $1,000 in deposit accounts of the Branches. “Loans” does not include any loan or participation interest in loans or Commitments that are excluded by Buyer or repurchased by Seller pursuant to the provisions of Section 11.7 of this Agreement.

1.50 “Loss” means any liability (INCLUDING WITHOUT LIMITATION, ANY STRICT LIABILITY), loss, cost, damage, penalty, fine, interest, obligation or expense of any kind whatsoever (including, without limitation, reasonable attorneys’, accountants’, consultants’ or experts’ fees and disbursements) actually incurred.

1.51 “Loss Threshold” shall have the meaning set forth in Section 11.4 below.

1.52 “New Loan” has the meaning set forth in Section 6.18 below.

1.53 “New Northside Branch” shall mean Seller’s branch operations to be located at 2402 N. Main Street, Houston, Texas.

1.54 “Non-Core Deposit” shall mean certificates of deposit or money market deposit accounts originated by Seller after the date of this Agreement, that had a rate of interest equal to or greater than 2.25% on the date of origination.

1.55 “Non-disclosure Agreement” means letter agreement dated June 26, 2009 between Hovde Financial, Inc. and Sterling Bancshares, Inc.

1.56 [INTENTIONALLY OMITTED]

1.57 “Old Northside Branch” shall mean Seller’s branch operations located at 2010 N. Main, Houston, Texas.

1.58 “Order” means any cease or desist order, written agreement, memorandum of understanding, 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.

1.59 “Ordinary Course of Business” shall mean an action taken by a Person if:

(i) such action is consistent with the past practices of such Person and is taken in the ordinary course of the normal day-to-day operations of such Person;

(ii) if the Person is a corporation, bank, partnership, limited liability company or any other entity of any nature, such action is not required to be authorized by the board of directors of such entity (or by any Person or group of Persons exercising similar authority) and is not required to be authorized by the shareholders or other equity owners (if any) of such entity; and

(iii) such action is similar in nature and magnitude to actions customarily taken in the ordinary course of the normal day-to-day operations of other Persons that are in the same line of business of and of similar size to such Person.

 

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1.60 “Owned Real Property” has the meaning set forth in Section 4.11 below.

1.61 “Parties” has the meaning set forth in the preface above.

1.62 “Payment Amount” has the meaning set forth in Section 2.2 below.

1.63 “Person” means an individual, a partnership, a corporation, a limited liability company, an association, a joint stock company, a joint venture, an unincorporated organization, or a Governmental Body.

1.64 “Phase I Environmental Assessments” means an environmental assessment that is consistent with ASTM 1527.05 and that may include an assessment of the presence, amount, physical condition and location of asbestos-containing materials and lead-based paint.

1.65 “Phase II Environmental Assessments” means an intensified environmental assessment that further defines previously identified conditions, circumstances or risks and that may include physical sampling and analysis of paint, building materials or any environmental medium (including air, indoor air, surface water, groundwater, soil and subsurface strata).

1.66 “Potential Employee” has the meaning set forth in Section 6.7 below.

1.67 “Pre-Closing Balance Sheet” means an unaudited balance sheet listing the assets and liabilities of the Branches (as of the last day of the immediately preceding month end prior to the Closing Date) prepared in accordance with generally accepted accounting principles applied on a basis consistent with prior periods to be prepared by Seller and delivered to Buyer on or before the fifth (5 ^th ) Business Day prior to the Closing Date.

1.68 “Proceeding” means any action, arbitration, audit, proceeding, oversight, 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, involving the Branches, the Acquired Assets or the Assumed Liabilities.

1.69 “Real Estate Interests” means the Owned Real Property and the Leased Property constituting Branch premises.

1.70 “Safe Deposit Business” means the maintenance of all necessary facilities for the use of safe deposit boxes by the renters thereof, subject to the provisions of the applicable leases or other agreements relating to such boxes, and the safekeeping of items maintained by the Branches for the benefit of its customers, pursuant to applicable safekeeping agreements, memoranda or receipts.

1.71 “Safe Deposit Contracts” means all customer agreements, leases, and maintenance agreements related to the Safe Deposit Business.

1.72 “Seller Material Adverse Effect” means, with respect to Seller, any condition, event, change or occurrence that, individually or collectively, is reasonably likely to have a material adverse effect upon (i) the condition, financial or otherwise, properties, business, assets, deposits, earnings or results of operations or cash flows of the Branches, the Acquired Assets or the Assumed Liabilities or (ii) the ability of Seller to perform its obligations under, and to consummate the transactions contemplated by this Agreement.

 

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1.73 “SNDA” has the meaning set forth in Section 6.19 below.

1.74 “Special Assessment” means that portion of any special assessment attributable to the Acquired Assets or the Assumed Liabilities imposed by the FDIC on insured institutions to the extent it is effective with respect to the period prior to and including the Closing Date, including any emergency special assessment imposed on deposits and/or assets as of December 31, 2009 and payable on or after December 31, 2009.

1.75 “Tangible Personal Property” means all of the furniture, fixtures, equipment, and other items of tangible personal property owned by Seller and located in, on or affixed to the premises of the Branches, except for those items which are listed as Excluded Assets.

1.76 “Tax” has the meaning set forth in Section 4.4(c).

1.77 “Tax Return” has the meaning set forth in Section 4.4(c).

1.78 “Third Party Claim” has the meaning set forth in Section 11.5(a).

1.79 “Transferred Records” has the meaning set forth in Section 7.5(b) below.

ARTICLE 2

PURCHASE AND SALE

2.1 The Acquisition . As of the Effective Time, upon the terms and conditions set forth herein, Seller will sell, assign, transfer, convey and deliver to Buyer, and Buyer shall purchase from Seller all of the Acquired Assets (including with respect to Loans the collateral related thereto) free and clear of all Encumbrances. Also, Seller will sell, transfer and assign to Buyer all of Seller’s right, title and interest in (including collateral relating thereto) the Assumed Liabilities and Buyer shall assume and become responsible for all of the obligations arising under Assumed Liabilities.

2.2 Consideration for the Acquisition .

(a) In consideration for the Acquisition, Seller shall make available and transfer to Buyer, or Buyer shall make available and transfer to Seller, the Payment Amount in accordance with this Section 2.2. The “Payment Amount” means an amount equal to the sum of the aggregate balance of all the Deposits (as set forth on the Closing Date Balance Sheet) including interest posted or accrued with respect to the Deposits as of the close of business on the Closing Date, less an amount equal to the sum of:

(i) A premium for the Deposits and franchise value relating to the Branches equal to 6.0% of the average Deposit balances of the Branches for the thirty calendar days immediately preceding and including the Closing Date; provided , however , that Non-Core Deposits shall be excluded from the Deposits for purposes of the calculation of average Deposit balances.

 

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(ii) The amount held as cash and cash items of the Branches as reflected on the Closing Date Balance Sheet;

(iii) The Book Value of all Loans, including accrued interest as reflected on the Closing Date Balance Sheet;

(iv) The Book Value of Owned Real Property;

(v) The net Book Value for Tangible Personal Property and Leasehold Improvements as reflected on the Closing Date Balance Sheet; and

(vi) Buyer’s share of the pro rata adjustment of items required pursuant to Section 2.4.

(b) On the Closing Date, (i) Seller shall deliver to Buyer an amount estimated to be the Payment Amount, calculated as set forth above off of the balances reflected on the Pre-Closing Balance Sheet (the “Estimated Payment Amount”) if the Estimated Payment Amount is a positive number, and (ii) Buyer shall deliver to Seller the absolute value of the Estimated Payment Amount if the Estimated Payment Amount is a negative number.

(c) Within ten (10) Business Days following the Closing Date, Seller shall prepare and deliver to Buyer the Closing Date Balance Sheet. Within ten (10) Business Days after receipt of delivery of the Closing Date Balance Sheet, Buyer may dispute all or any portion of the Closing Date Balance Sheet by giving written notice (a “Notice of Disagreement”) to Seller setting forth in reasonable detail the basis for any such dispute (a “Disagreement”). Seller shall provide Buyer and its designees with full reasonable access, during normal business hours, to relevant books, records, personnel and representatives of Seller and such other information as Buyer may reasonably request in connection with its review of the Closing Date Balance Sheet and with respect to the resolution of any Disagreement. The Parties shall promptly commence good faith negotiations with a view to resolving all such Disagreements. Subject to Sections 2.5(e) and 2.5(f), if Buyer does not give a Notice of Disagreement within the ten (10) Business Day period set forth above, Buyer shall be deemed to have irrevocably accepted such Closing Date Balance Sheet in the form delivered to Buyer by Seller. Seller shall be deemed to have irrevocably accepted the Closing Date Balance Sheet as modified by and disclosed in Buyer’s Notice of Disagreement if Seller does not dispute all or any portion of such Notice of Disagreement by giving its written response to Buyer within ten (10) Business Days following the delivery of such Notice of Disagreement setting forth in reasonable detail the basis for its dispute.

(d) In the event that a dispute arises as to the appropriate amounts to be paid to either party pursuant to the Closing Date Balance Sheet discussed in subsection (c), each party shall pay to the other all amounts other than those as to which a dispute exists. The parties shall refer the disputed amounts to an independent firm of certified public accountants of national standing (an “Accountant”) reasonably acceptable to Buyer and Seller, and Buyer and Seller agree to be bound by the determination of such firm with respect to such disputed matters. Buyer and Seller shall agree upon an Accountant within fourteen (14) calendar days after the date on which either Buyer or Seller notifies the other

 

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in writing that the referral of a disputed matter within the scope of this Section 2.2(d) is necessary. If Buyer and Seller shall fail to agree on an Accountant within such fourteen (14) day period, then Buyer and Seller shall each choose an accountant who will mutually select a third qualifying accountant who shall be the Accountant for purposes of this Section 2.2(d). Buyer and Seller agree to share equally the fees and charges of the Accountant appointed hereunder for its services in resolving disputes within the scope of this Section 2.2(d).

(e) The provisions of Section 2.2(d) are not intended to and shall not be interpreted to require that the Parties refer to an Accountant (a) any dispute arising out of a breach by one of the Parties of its obligations under this Agreement, (b) any dispute the resolution of which requires a construction or interpretation of this Agreement other than this Section 2.2 and the definitions related hereto, or (c) any other dispute other than (in the case of this clause (e)) a dispute related to the mathematical calculation of the Payment Amount or the accounting treatment of any asset or liability, or item of income or expense, that affects the calculation of the Payment Amount, or both. The Parties reserve all rights and remedies, including at law or in equity, to resolve disputes other than those within the scope of Section 2.2(d).

(f) Any disputed amounts retained by a Party that are later found to be due to the other Party shall be paid to such other party promptly upon resolution with interest thereon from the Closing Date to the date paid at the applicable Federal Funds Rate.

2.3 Allocation . Buyer and Seller agree to allocate the purchase price to such Acquired Assets in a manner consistent with the allocation required under Section 1060 of the Internal Revenue Code 1986, as amended, and to file Internal Revenue Form 8594 consistent with such agreed allocation.

2.4 Pro Rata Adjustment and Reimbursement .

(a) Unless otherwise provided herein, it is the intention of the Parties that Seller will operate the Branches for its own account until the close of business on the Closing Date and that Buyer shall operate the Branches, hold the Acquired Assets and assume the Assumed Liabilities for its own account after the close of business on the Closing Date. Thus, except as otherwise specifically provided herein, items of proration and other adjustments shall be prorated as of close of business of the Branches on the Closing Date and settled between Seller and Buyer on the Closing Date whether or not such adjustment would normally be made as of such time. Items of proration and adjustment will be handled at Closing as an adjustment to the amount of funds to be delivered by Seller to Buyer, or Buyer to Seller, as appropriate, unless otherwise agreed.

(b) For purposes of this Agreement, items of proration and other adjustments shall include, without limitation: (i) sales, transfer, excise and use taxes and personal and real property taxes and assessments (including real property sales, transfer and excise taxes); (ii) FDIC deposit insurance assessments (including any Special Assessments); (iii) safe deposit rental payments; and (iv) other prepaid expenses and items and accrued and unpaid liabilities, if any, as of the close of business on the Closing Date. To the extent that the amount of the foregoing items is not known on the Closing Date, such proration shall

 

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be based on the amount of such items for the prior month or year, as appropriate; provided, however, the Parties shall apportion all real property taxes as provided in paragraph (c) below and Special Assessments as provided in paragraph (d) below.

(c) Buyer and Seller shall apportion pro rata all real property taxes paid or payable in connection with the Owned Real Property. Such apportionment shall be made on a per diem basis as of the Closing Date and shall be based upon the fiscal year for which the same are assessed. In the event that the applicable tax bill, or other information reasonably necessary for computing any such apportionment is not available on the Closing Date, the apportionment shall be made at Closing on the basis of the prior period’s real estate taxes. Within thirty (30) days after receipt by the Parties of the applicable tax bill or other information reasonably necessary for computing such apportionment, Buyer and Seller shall apportion the actual taxes and, if either Party paid more than its proper share thereof at Closing, the other party shall within seven (7) Business Days after written request therefore reimburse such party for the amount so expended. If, at Closing, the Owned Real Property is encumbered by an assessment that is a charge or lien against the Owned Real Property arising on or before the Closing Date, and such assessment is payable in installments, then all unpaid installments of such assessments which are due and payable after the Closing shall be paid and discharged by Buyer at or after Closing. Seller shall be responsible for payment at Closing of all accrued but unpaid installments of such assessments which are due and payable for the period prior to the Closing Date.

(d) Buyer and Seller shall apportion pro rata any Special Assessment payable in connection with the Branches. Such apportionment shall be made on a per diem basis as of the Closing Date and shall be based upon the fourth quarter of 2009 even though such Special Assessment may not be due and payable until 2010. In the event that the applicable Special Assessment, or other information reasonably necessary for computing any such apportionment is not available on the Closing Date, the apportionment shall be estimated at Closing on the basis of the FDIC’s May 29, 2009 special assessment payable as of June 30, 2009.

(e) Notwithstanding anything to the contrary contained in the foregoing provisions of this Section 2.4 or otherwise contained in this Agreement, all excise, sales, use, transfer and similar Taxes that are payable or that arise as a result of the consummation of the purchase and sale contemplated by this Agreement shall be borne by Seller whether such Taxes are imposed on Seller or Buyer.

2.5 Closing .

(a) The Closing shall occur by facsimile with deliveries of Closing documents by Federal Express, or in person at a mutually convenient location, or by such other method as shall be mutually agreeable to the parties. Any executed Closing documents sent by a party or its counsel to the other party or its counsel prior to Closing shall be held in escrow by such other party or its counsel until such executed documents are authorized to be released by a senior officer of the sending party or by the sending party counsel. The Closing shall occur on such date on which the parties mutually agree (the “Closing Date”).

 

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(b) The Effective Time shall be at a mutually agreeable time after the close of business for the Branches on the Closing Date.

(c) Promptly after the Closing Date Balance Sheet has been finally determined in accordance with Section 2.2(c), but in no event later than five (5) Business Days following such final determination (the “Supplemental Closing Date”), the parties hereto shall hold a supplemental closing (the “Supplemental Closing”), either by telephone, or in person at a mutually convenient location. On the Supplemental Closing Date, if the Payment Amount is less than the Estimated Payment Amount, Buyer shall refund to Seller cash having an aggregate value equal to the difference between the Estimated Payment Amount and the Payment Amount by wire transfer or other immediately available funds. On the Supplemental Closing Date, if the Payment Amount is more than the Estimated Payment Amount, Seller shall deliver to Buyer, by wire transfer or other immediately available funds, an amount equal to the difference between the Payment Amount and the Estimated Payment Amount.

(d) The post-closing settlement payment shall not bear interest.

(e) In the event any bookkeeping omissions or errors are discovered in preparing the Closing Date Balance Sheet for the Branches or in completing the transfer and assumptions contemplated hereby, the parties agree to correct such errors and omissions, it being understood that no adjustments will be made that are inconsistent with the judgments, methods, policies, or accounting principles utilized by Seller in preparing and maintaining the accounting records of the Branches.

(f) In the event that Buyer or Seller discovers any errors or omissions as contemplated by subsection 2.5(e) above or any error with respect to the payments made under subsection 2.5(c) above after the Supplemental Closing, Buyer and Seller agree to promptly correct any such error or omission, make any payments and effect any transfers or assumptions as may be necessary to reflect any such correction; provided, that interest shall not be paid with respect to any such payments.

ARTICLE 3

REPRESENTATIONS AND WARRANTIES OF SELLER

3.1 Organization, Qualification, and Corporate Power . Seller is a Missouri state chartered bank duly organized and validly existing under the laws of Missouri, with full corporate power and authority to conduct its business as now being conducted and to own or use the properties and assets that it purports to own or use.

3.2 Authorization of Transaction . Seller has the full corporate power and authority to execute and deliver this Agreement. Subject to approval by any necessary federal banking regulatory authority Seller has the corporate power and authority to perform Seller’s obligations hereunder, and to consummate the Acquisition. This Agreement constitutes the valid and legally binding obligation of Seller, enforceable in accordance with its terms and conditions, 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. Except for any applications required by regulatory authorities in connection with the Acquisition, Seller is not required to give any notice to, make any filing with, or obtain any authorization, or Consent of any third party in order to consummate the Acquisition.

 

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3.3 Noncontravention . Subject to the required Consents set forth in Section 3.2 and except for matters which would not have a Seller Material Adverse Effect, neither the execution and the delivery of this Agreement by Seller, nor the consummation of the Acquisition by Seller will, directly or indirectly:

(a) Contravene, conflict with, or result in a violation of (i) any provision of the articles of incorporation or bylaws of Seller or (ii) any resolution adopted by the board of directors of Seller;

(b) Contravene, conflict with, or result in a violation of, or give any Governmental Body or other Person the right to challenge the Acquisition or to exercise any remedy or obtain any relief under, any Applicable Law or any Order to which Seller, or any of the assets owned or used by Seller, may be subject;

(c) Contravene, conflict with, or result in a violation of the terms or requirements of, or give any Governmental Body the right to revoke, withdraw, suspend, cancel, terminate or modify, any Governmental Authorization that is held by Seller or that otherwise relates to the Branches, the Acquired Assets or the Assumed Liabilities; or

(d) Contravene, conflict with, or result in a violation or breach of any provision of, or give any Person the right to declare a default or exercise any remedy under, or to accelerate the maturity or performance of, or to cancel, terminate or modify, any Acquired Contract relating to the Branches to which Seller is a party.

3.4 Brokers’ Fees . With the exception of Hovde Financial, Inc., Seller has no Liability or obligation to pay any fees or commissions to any broker, finder, or agent with respect to the Acquisition.

ARTICLE 4

REPRESENTATIONS AND WARRANTIES CONCERNING THE BRANCHES

Seller represents and warrants to Buyer that the statements contained in this Article 4 are correct and complete as of the date of this Agreement and will be correct and complete as of the Closing Date (as though made then and as though the Closing Date were substituted for the date of this Agreement throughout this Article 4, except for statements made as of a specific date), except as expressly set forth in the disclosure schedule attached hereto (the “Disclosure Schedule”). The Disclosure Schedule will be arranged in paragraphs corresponding to the numbered and lettered paragraphs contained in this Article 4.

4.1 Tangible Personal Property . Seller has good and marketable title to all of the Tangible Personal Property, free and clear of all Encumbrances, except those items under lease, which have been previously disclosed to Buyer. All Tangible Personal Property used by the Branches is in good condition, reasonable wear and tear excepted, and is usable in the Ordinary Course of Business. Any Tangible Personal Property held under lease by Seller is held by Seller under a valid and enforceable lease with such exceptions as are not material and do not interfere in any material respect with the use made and proposed to be made of such property by Seller.

 

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4.2 Deposits . Seller has provided to Buyer a true and accurate data file of all deposits (including IRAs), and related information, which are assigned to the Branches prepared as of a date within 10 days prior to the date of the Agreement, which data shall be updated at and as of a date not earlier than thirty (30) days prior to the Closing Date to list separately Deposits to be assumed under this Agreement and deposits that are not being assumed under this Agreement and which data shall be further updated on the Supplemental Closing Date, and, in each case as updated, shall be true and accurate as of such date. The Deposits are insured by the FDIC to applicable legal limits. The Deposits were solicited and currently exist in material compliance with all applicable requirements of federal laws and regulations promulgated thereunder and to the extent, if any, that their applicability to Seller is not preempted by federal laws and regulations, state and local laws and regulations promulgated thereunder (for purposes of this clause, a Deposit would not be in material compliance if the noncompliance subjects the depository institution to any penalty or liability other than the underlying liability to pay the Deposit).

4.3 Undisclosed Liabilities . The Branches have no Liabilities except for (a) Liabilities reflected or reserved against in the Books previously disclosed to Buyer (b) Liabilities which have arisen in the Ordinary Course of Business and (c) Commitments made in the Ordinary Course of Business.

4.4 Tax Matters .

(a) With respect to all interest bearing accounts assigned to Buyer, the records of Seller transferred to Buyer contain or will contain all information and documents (including without limitation properly completed Forms W 9) necessary to comply with all information reporting and Tax withholding requirements under federal and state laws, rules and regulations, and such records identify with specificity all accounts subject to backup withholding under the Internal Revenue Code.

(b) All Tax Returns required to be filed on or before the Closing Date by Seller or its Affiliates with respect to any Taxes payable in respect of the Acquired Assets or Assumed Liabilities or related to the Branches have been or will be timely filed with the appropriate governmental agencies in all jurisdictions in which such Tax Returns are required to be filed and any inaccuracy in such Tax Returns will not have a material effect on the Acquired Assets or Assumed Liabilities. All Taxes owed by Seller or its Affiliates with respect to the Acquired Assets or Assumed Liabilities or related to the Branches have been or will be paid. There are no claims, assessments, levies, administrative proceedings or lawsuits pending, or to the Knowledge of Seller, threatened by any taxing authority with respect to the Acquired Assets or Assumed Liabilities or related to the Branches; and no audit or investigation of any Tax Return of Seller or its Affiliates with respect to the Acquired Assets or Assumed Liabilities or related to the Branches is currently underway, or to the Knowledge of Seller, threatened.

(c) As used in this Agreement, the term “Taxes” shall mean all taxes, however denominated, including any interest, penalties or other additions to tax that may become payable in respect thereof, imposed by any federal, territorial, state, local or foreign

 

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government or any agency or political subdivision of any such government, which taxes shall include, without limiting the generality of the foregoing, all income or profits taxes (including, but not limited to, federal income taxes and state income taxes), real property gains taxes, payroll and employee withholding taxes, unemployment insurance taxes, social security taxes, sales and use taxes, ad valorem taxes, excise taxes, franchise taxes, gross receipts taxes, business license taxes, occupation taxes, real and personal property taxes, stamp taxes, environmental taxes, transfer taxes, workers’ compensation, and other governmental charges, and other obligations of the same or of a similar nature to any of the foregoing, which the Seller or its subsidiaries or Affiliates is required to pay, withhold or collect. As used in this Agreement, the term “Tax Returns” shall mean all reports, estimates, declarations of estimated tax, information statements and returns relating to, or required to be filed in connection with, any Taxes, including information returns or reports with respect to backup withholding and other payments to third parties.

4.5 Employee Benefits . There are no liens or other claims which affect or could affect the Acquired Assets of any nature, whether at law or in equity, asserted or unasserted, perfected or unperfected, arising out of or relating to any employee, officer, or director of Seller, or the operation, sponsorship or participation of any such persons or by Seller in any employee benefit plan, program, procedure or other employee benefit practice, whether or not subject to the Employee Retirement Insurance Security Act of 1974 (ERISA). There are no liabilities, breaches, violations or defaults under any “Employee Welfare Benefit Plan” or “Employee Pension Benefit Plan” (as such terms are defined in Section 3(1) and Section 3(2) of ERISA, respectively) or any other arrangement, plan, or program or contract sponsored, maintained or contributed to by Seller or any of its Affiliates that would subject the Acquired Assets, Buyer, its employee benefit plans, or any fiduciaries thereof to any Tax, penalties or other liabilities. Seller will retain all liabilities and assume all obligations with regard to all Employee Pension Benefit Plans, Employee Welfare Benefit Plans, deferred compensation plans, early retirement plans, bonus or incentive programs, severance pay plans or programs, or any similar plans, programs or obligations sponsored by the Seller or its Affiliates.

4.6 Compliance with Applicable Laws . The Branches are in compliance with Applicable Laws in all material respects, including without limitation all applicable Environmental Laws. No event has occurred or circumstance exists that constitutes a material violation by the Seller in the operation of the Branches, or a failure on the part of the Seller with respect to the Branches to comply with, any Applicable Law in any material respect, including without limitation any Environmental Law. Except for normal examinations conducted in the ordinary course of Seller’s banking business, no Governmental Body has initiated any formal proceeding or investigation into the business or operations of the Seller or the conditions or operations at the Branches and no Governmental Body has initiated any regulatory proceeding or investigations into the business or operations of the Branches. There is no unresolved violation, criticism or exception by any Governmental Body with respect to any report or statement relating to any examinations of the Seller relating to the Branches, the Acquired Assets or the Assumed Liabilities.

4.7 Legal Proceedings; Orders .

(a) There is no pending Proceeding that has been commenced by or against Seller that relates to or arises from the business conducted by the Branches. To the

 

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Knowledge of Seller, (i) no such Proceeding has been threatened and (ii) no event has occurred or circumstance exists that may give rise to or serve as a basis for the commencement of any such Proceeding.

(b) There is no Order to which Seller, or any of the assets owned or used by Seller, is subject that would have a Seller Material Adverse Effect. Seller is not subject to any Order that relates to the business of, or any of the assets owned or used by, the Branches.

4.8 Employees . No employee of the Branches is a party to, or is otherwise bound by, any employment contract, agreement or arrangement, including any confidentiality, noncompetition, or proprietary rights agreement, between such employee and Seller or to Seller’s Knowledge, between any such employee and any third party, that in any way adversely affects or will affect (i) the performance of his or her duties as an employee of any Branch, or (ii) the ability of the Branches to conduct their business. No employee at the Branches is represented, for purposes of collective bargaining, by a labor organization of any type. Seller is unaware of any efforts during the past three years to unionize or organize any employees at the Branches. In relation to the Branches, no causes of action, claims, charges or administrative investigations for wrongful discharge, violation of employment contract or employment claims based upon any state or federal law, statute, public policy, order or regulation is pending or, to Seller’s Knowledge, threatened against Seller or its Affiliates. In relation to the Branches, Seller and its Affiliates have complied in all material respects with all 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. Buyer will not incur any liability under any severance agreement, deferred compensation agreement, employment agreement, or similar agreement or plan solely as a result of the transaction contemplated by this Agreement. Seller agrees that Buyer will not be bound to the terms of any employment, management, consulting, reimbursement, retirement, early retirement or similar agreement, whether active on the Closing Date or in discussion or negotiation, with any Potential Employee except as expressly agreed to by the Buyer in writing.

4.9 Environmental Matters .

(a) To Seller’s Knowledge, the Branches and the Seller in connection with the Branches (i) have not been and are not now in violation of or subject to liability under any Environmental Law, and (ii) have been and are in full compliance with all applicable Environmental Laws.

(b) To Seller’s Knowledge, none of the Real Estate Interests, or Seller in connection with the Real Estate Interests, have been or are in violation of or subject to liability under, or have failed to comply with, any Environmental Law.

(c) There are no Proceedings pending or, to Seller’s Knowledge, threatened, nor have there been any past Proceedings relating to the Real Estate Interests, or Seller in connection with the Real Estate Interests, under any Environmental Law, including without limitation any notices, demand letters or requests for information from any federal or state Governmental Body relating to any liabilities under or violations of Environmental Law.

 

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(d) Seller has not received any notice or allegation of any violation of or liability or lien pursuant to any Environmental Laws with regard to the Branches.

(e) To Seller’s Knowledge, no Hazardous Materials have been generated, stored, released, disposed or are otherwise present at, in, on, under or about any of the Branches or from any of the Branches except in full compliance with Environmental Laws and in a manner that would not result in any investigation, reporting, remediation or other response pursuant to Environmental Laws.

(f) To Seller’s Knowledge, no release (as defined at CERCLA, 42 U.S.C. 9601(22), without regard for the exclusions at 42 U.S.C. 9601(22)(A) and (C), of Hazardous Materials has occurred at or from any Branch, and no condition exists at or in connection with any Branch for which applicable Environmental Laws required or require notice to any third party, further investigation, or response action.

(g) Except as disclosed in the Disclosure Schedule, no asbestos is contained in any Branch or property owned, leased or operated by the Seller in connection with the Branches.

(h) To Seller’s Knowledge, there are no underground storage tanks on or under any Branch, nor any Hazardous Material at, in, on, or under or emanating from any Branch in any quantity or concentration in violation of any standard or limit established pursuant to Environmental Laws.

(i) Seller is not required to have any Governmental Authorization under Environmental Laws in connection with any of the Branches.

(j) To Seller’s Knowledge, no Hazardous Materials generated from any Branch have been treated, stored, disposed or released at a location that has been nominated or identified as a facility that is subject to any existing or potential claim under Environmental Laws.

4.10 Loans . Seller has provided to Buyer a true and accurate data file of all Loans, including accrued and unpaid interest thereon prepared as of a date within 10 days prior to the date of this Agreement, which data shall be updated at and as of the Closing Date, and, in each case as updated, shall be true and accurate in all material aspects as of such date.

(a) Each Loan included in the Acquired Assets was made or acquired by Seller or its predecessor in the Ordinary Course of Business.

(b) None of the Loans are residential mortgage loans that are serviced by Seller or an Affiliate of Seller. None of the Loans are presently serviced by third parties, and there are no obligations, agreements or understandings whatsoever that could result in any Loan becoming subject to any such third party servicing.

(c) There are no misrepresentations of material facts made by officers or employees of Seller in the credit files relating to the Loans, provided that the term “facts” shall not include judgments or opinions of such officers or employees which were in good faith or information which is reflective of information supplied by the borrower or other third parties.

 

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(d) With respect to each Loan:

(i) Such Loan was solicited, originated and currently exists in material compliance with all applicable requirements of federal laws and regulations promulgated thereunder and to the extent, if any, that their applicability to Seller is not preempted by federal laws and regulations, state and local laws and regulations promulgated thereunder (for purposes of this clause (i), a Loan would not be in material compliance if the noncompliance adversely affects the value or collectibility of the Loan or subjects the lender to any penalty or liability);

(ii) Each note, agreement or other instrument evidencing a Loan and any related security agreement or instrument (including, without limitation, any guaranty or similar instrument) constitutes a valid, legal and binding obligation of the obligor named therein, enforceable in accordance with its terms, subject as to enforcement to bankruptcy, insolvency, reorganization, moratorium, laws governing fraudulent conveyance or equitable subordination principles and other laws of general applicability relating to or affecting creditors’ rights generally and all actions necessary to perfect any related security interest have been duly taken or will be duly taken;

(iii) There has been no material modification to or material waiver of the terms of the applicable loan documents except as reflected in writing in the loan file for such Loan;

(iv) To Seller’s Knowledge, there is no valid claim or valid defense (including the defense of usury) to the enforcement of such Loan or a valid right of setoff or rescission;

(v) No claim or defense (including the defense of usury) to the enforcement of a Loan or a valid right of setoff or rescission has been asserted with respect any Loan;

(vi) Neither Seller nor any predecessor has taken or failed to take any action that would entitle any obligor or other party to assert successfully any claim against Seller or Buyer (including without limitation any right not to repay any such obligation or any part thereof);

(vii) Such Loan was made substantially in accordance with Seller’s or Seller’s predecessor’s standard underwriting and documentation guidelines as in effect at the time of its origination and has been administered substantially in accordance with Seller’s or Seller’s predecessor’s standard loan servicing and operating procedures as in effect from time to time;

(viii) The borrower is not in bankruptcy and, to Seller’s Knowledge, there are no facts, circumstances or conditions with respect to such Loan, the collateral therefor or the borrower’s credit standing, that could reasonably be expected to cause such Loan to become delinquent or adversely affect the collectibility, the value or the marketability of such Loan;

 

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(ix) There is no pending, or to Seller’s Knowledge, threatened, litigation or claims which may affect in any way the title or interest of the Seller or the borrower in and to such Loan, the collateral for such Loan and the promissory note or the mortgage or deed of trust; and

(x) There are no threatened or pending foreclosures, total or partial condemnation (to Seller’s Knowledge) or repossession proceedings or insurance claims (to Seller’s Knowledge) with respect to such Loan or the collateral for such Loan.

(xi) Seller has not directed, controlled or overseen the management of environmental matters of any borrower or any real estate in which the Seller in connection with the Branches holds or has held a security interest and which constitutes a Loan so as to cause the Seller to act outside the exclusion under 42 U.S.C. § 9601(20)(E) or any other analogous provisions under applicable Environmental Laws.

(e) For purposes of the representations made in subsections (a) and (c) above, such representations shall be deemed to Seller’s Knowledge for any Loan originated (and for purposes of (c)(xi) above managed) by a predecessor of Seller.

4.11 Owned Real Property, Ground Leased Premises, and Tangible Personal Property.

(a) Schedule 4.11 of the Disclosure Schedule lists and describes briefly all real property owned by Seller and used as Branch premises (the “Owned Real Property”). With respect to each such parcel of Owned Real Property, and each Ground Leased Premises, Seller has good, indefeasible, and marketable fee or leasehold title to the parcel of real property, free and clear of any Encumbrance, easement, covenant, or other restriction, except for (A) liens for Taxes not yet due and payable and for installments of special assessments not yet delinquent, (B) recorded easements, covenants, and other restrictions which do not materially impair the current use, occupancy, or value, or the marketability of title, of the Real Estate Interests and (C) any other exception to good, indefeasible, and marketable title to the Real Estate Interests to which Buyer in its sole and absolute discretion, shall consent in writing prior to the Closing to accept as a permitted exception to good and marketable title.

(b