AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER (this "Agreement"), dated as of October 8,
1997, among INDIANA UNITED BANCORP, an Indiana corporation ("IUB") and PTC
BANCORP, an Indiana corporation ("PTC").
R E C I T A L S
A. The Boards of Directors of IUB and PTC each have determined that a
business combination involving the merger of PTC with and into IUB is in the
best interests of their respective companies and their respective companies'
shareholders, communities, customers and other constituencies, and presents an
opportunity for IUB and PTC and their respective shareholders to achieve
long-term strategic and financial benefits, and accordingly have agreed to
effect the merger provided for herein (the "Merger") upon the terms and subject
to the conditions set forth herein.
B. IUB and PTC desire to make certain representations, warranties,
covenants and agreements in connection with the Merger and to prescribe various
conditions to the Merger.
C. For federal income tax purposes, it is intended that the Merger qualify
as a reorganization under the provisions of Section 368 of the Internal Revenue
Code of 1986, as amended (the "Code").
D. It is intended that the Merger shall be recorded for accounting and
financial reporting purposes as a pooling of interests.
A G R E E M E N T
NOW, THEREFORE, in consideration of the foregoing and the representations,
warranties, covenants and agreements contained herein, the parties hereto agree
as follows:
ARTICLE I
THE MERGER
1.1 EFFECTIVE TIME OF THE MERGER. Subject to the provisions of this
Agreement, articles of merger (the "Articles of Merger") shall be duly executed
and acknowledged by the Surviving Corporation (as defined in Section l.3) and
thereafter delivered to the Secretary of State of the State of Indiana, for
filing, as provided in the Indiana Business Corporation Law (the "IBCL"), as
soon as practicable on or after the Closing Date (as defined in Section 1.2).
The Merger shall become effective upon the filing of the Articles of Merger with
the Secretary of State of the State of Indiana or at such time thereafter as is
provided in the Articles of Merger (the "Effective Time").
1.2 CLOSING. The closing of the Merger (the "Closing") will take place at
10:00 a.m. on a date to be specified by the parties, which shall be the first
day which is five business days after satisfaction of the latest to occur of the
conditions set forth in Sections 6.1, 6.2(b) and 6.3(b) (other than delivery of
the officers' certificates referred to in Sections 6.2(b) and 6.3(b)), provided
that the other closing conditions set forth in Article VI have been met or
waived as provided in Article VI at or prior to the Closing (the "Closing
Date"), at the offices of Xxxxxxxxx, Daily, Xxxxxxx & XxXxx, 0000 Xxx Xxxxxxx
Xxxxxx, Xxxxxxxxxxxx, Xxxxxxx 00000, unless another time, date or place is
agreed to by the parties hereto.
1.3 EFFECTS OF THE MERGER. At the Effective Time, (a) the separate
existence of PTC shall cease and PTC shall be merged with and into IUB, (b) the
articles of incorporation of IUB as in effect immediately prior to the Effective
Time shall be the articles of incorporation of the Surviving Corporation until
thereafter changed or amended as provided therein or by applicable law and (c)
the bylaws of IUB as in effect immediately prior to the Effective Time shall be
the bylaws of the Surviving Corporation until thereafter changed or amended as
provided therein or by applicable law. As used in this Agreement, "Surviving
Corporation" shall mean IUB. At and after the Effective Time, the Merger will
have the effects set forth in Section 23-1-40-6 of the IBCL.
ARTICLE II
EFFECT OF THE MERGER ON THE STOCK OF PTC;
EXCHANGE OF CERTIFICATES
2.1 EFFECT ON CAPITAL STOCK. At the Effective Time, by virtue of the
Merger and without any action on the part of the holder of any common stock of
PTC ("PTC Common Stock"):
(a) CANCELLATION OF CERTAIN SHARES. All PTC Common Stock that is owned
by PTC as treasury stock or by IUB or by any wholly owned Subsidiary of PTC
or IUB (other than shares in trust accounts, managed accounts and the like
that are beneficially owned by third parties (any such shares, "trust
account shares")) shall be canceled and shall cease to exist and no shares
of common stock of IUB or other consideration shall be delivered in exchange
therefor.
(b) CONVERSION OF PTC COMMON STOCK. Each of the shares of PTC Common
Stock issued and outstanding immediately prior to the Effective Time of the
Merger shall be converted into 1.075 (such number being referred to as the
"Conversion Ratio") fully paid and non-assessable shares of common stock of
IUB, without par value ("IUB Common Stock"), all in accordance with Section
2.2.
(c) DISSENTING SHARES. Notwithstanding any other provisions of this
Agreement to the contrary, PTC Common Stock that is outstanding immediately
prior to the Effective Time and which is held by shareholders who shall not
have voted in favor of the Merger or consented thereto in writing and who
shall have properly delivered in writing notice of intent to demand payment
for such shares in accordance with Section 23-1-44-11 of the IBCL and who
thereafter shall have properly demanded payment and otherwise complied with
the provisions of Section 23-1-44-13 of the IBCL (collectively, the
"Dissenting Shares") shall not be converted into or represent the right to
receive the consideration provided in Section 2.1(b). Such shareholders
("Dissenting Holders") shall be entitled to receive payment of the fair
value of such PTC Common Stock held by them in accordance with the
provisions of Section 23-1-44-15 or 23-1-44-19 of the IBCL, as applicable,
except that all Dissenting Shares held by shareholders who shall have failed
to perfect or who effectively shall have withdrawn or lost their rights to
receive payment of the fair value of such PTC Common Stock under such
provisions of the IBCL shall thereupon be deemed to have been converted into
and to have become exchangeable for, as of the Effective Time, the right to
receive the consideration provided in Section 2.1(b), without any interest
thereon, upon surrender of the certificate or certificates that formerly
evidenced such PTC Common Stock in accordance with Section 2.2.
(d) ADJUSTMENT TO CONVERSION RATIO. If, prior to the Effective Time of
the Merger, IUB shall pay a dividend in, subdivide, combine into a smaller
number of shares or issue by reclassification of its shares any IUB Common
Stock, the Conversion Ratio shall be multiplied by a fraction, the numerator
of which shall be the number of shares of IUB Common Stock outstanding
immediately after, and the denominator of which shall be the number of such
shares outstanding immediately before, the occurrence of such event, and the
product shall be the Conversion Ratio for purposes of Section 2.1(b).
2.2 EXCHANGE OF CERTIFICATES.
(a) EXCHANGE AGENT. IUB shall authorize a commercial bank (or such
other person or persons as shall be acceptable to PTC) to act as exchange
agent hereunder (the "Exchange Agent"). As soon as practicable, but not
later than three business days after the Effective Time, IUB shall deposit
with the Exchange Agent, in trust for the holders of certificates which
immediately prior to the Effective Time represented PTC Common Stock
converted in the Merger ("PTC Certificates"), certificates representing the
shares of IUB Common Stock (such shares of IUB Common Stock, together with
any dividends or distributions with respect thereto in accordance with
Section 2.2(c), being hereinafter referred to as the "Exchange Fund")
issuable pursuant to Section 2.1(b) (less, if applicable, the
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number of Excess Shares that will not be issued and sold because of payment
for fractional shares being made pursuant to Section 2.2(e)(iv)) in exchange
for the outstanding PTC Common Stock (the "IUB Certificates").
(b) EXCHANGE PROCEDURES.
(i) As soon as practicable after the Effective Time, the Exchange
Agent shall mail to each recordholder of a PTC Certificate a letter of
transmittal (which shall specify that delivery shall be effected, and
risk of loss and title to the PTC Certificates shall pass, only upon
actual delivery thereof to the Exchange Agent and shall contain
instructions for use in effecting the surrender of PTC Certificates in
exchange for the consideration described in the next sentence). Upon
surrender for cancellation to the Exchange Agent of all PTC Certificates
held by any recordholder of PTC Certificates, together with such letter
of transmittal duly executed, such holder shall be entitled to receive in
exchange therefor an IUB Certificate(s) representing the number of whole
shares of IUB Common Stock into which the PTC Common Stock represented by
the surrendered PTC Certificate(s) shall have been converted at the
Effective Time pursuant to this Article II, cash in lieu of any
fractional share of IUB Common Stock in accordance with Section 2.2(e)
and certain dividends and other distributions in accordance with Section
2.2(c), and the PTC Certificate(s) so surrendered shall forthwith be
canceled; PROVIDED, HOWEVER, that PTC Certificates surrendered for
exchange by any person constituting an "affiliate" of PTC for purposes of
Rule 145(c) under the Securities Act of 1933, as amended (the "Securities
Act"), shall not be exchanged for IUB Certificates until IUB has received
a written agreement from such person as provided in Section 5.3.
(ii) Until PTC Certificates have been surrendered and exchanged for
IUB Certificates as herein provided, each outstanding PTC Certificate
shall be deemed at any time after the Effective Time to represent only
the right to receive upon such surrender an IUB Certificate(s)
representing a whole number of shares of IUB Common Stock and cash in
lieu of any fractional share as contemplated by this Section 2.2. No
transfer taxes shall be payable in connection with any such exchange,
except that if any IUB Certificate (or any check representing cash in
lieu of a fractional share) is to be issued in the name other than that
in which the PTC Certificate surrendered in exchange therefor is
registered, it shall be a condition of such exchange that the person
requesting such exchange shall pay to the Exchange Agent any transfer or
other taxes required by reason of the issuance of the IUB Certificate (or
check) in a name other than that of the registered holder of the PTC
Certificate, or shall establish to the satisfaction of the Exchange Agent
that such tax has been paid or is not applicable. IUB or the Exchange
Agent shall be entitled to deduct and withhold from the consideration
otherwise payable pursuant to this Agreement to any holder of PTC Common
Stock such amounts as IUB or the Exchange Agent are required to deduct
and withhold under the Code, or any provision of state, local or foreign
tax law, with respect to the making of such payment. To the extent that
amounts are so withheld by IUB or the Exchange Agent, such withheld
amounts shall be treated for all purposes of this Agreement as having
been paid to the holder of PTC Common Stock in respect of whom such
deduction and withholding was made by IUB or the Exchange Agent. If
outstanding PTC Certificates are not surrendered prior to six years after
the Effective Time of the Merger (or, in any particular case, prior to
such earlier date on which dividends and other distributions, if any,
described above would otherwise escheat to or become the property of any
governmental unit or agency), the amount of dividends and other
distributions, if any, that have become payable and that thereafter
become payable on IUB Common Stock evidenced by such PTC Certificates as
provided herein shall, to the extent permitted by applicable law, become
the property of IUB (and, to the extent not in its possession, shall be
paid over to it), free and clear of all claims or interest of any person
previously entitled thereto.
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(c) DISTRIBUTIONS WITH RESPECT TO UNEXCHANGED SHARES. No dividends or
other distributions declared or made after the Effective Time with respect
to IUB Common Stock with a record date after the Effective Time shall be
paid to the holder of any unsurrendered PTC Certificate with respect to the
IUB Common Stock represented thereby, and no cash payment in lieu of
fractional shares shall be paid to any such holder pursuant to Section
2.2(e), until the holder of such PTC Certificate shall surrender it. Subject
to the effect of applicable laws, following surrender of any such PTC
Certificate, there shall be paid to the holder of the IUB Certificate
representing whole shares of IUB Common Stock issued in exchange therefor,
without interest, (i) at the time of such surrender or promptly thereafter
as is practicable, the amount of any cash payable with respect to a
fractional share of IUB Common Stock to which such holder is entitled
pursuant to Section 2.2(e) and the amount of dividends or other
distributions with a record date after the Effective Time theretofore paid
with respect to such whole number of shares of IUB 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 subsequent to surrender payable with respect to such whole
number of shares of IUB Common Stock.
(d) NO FURTHER OWNERSHIP RIGHTS IN PTC COMMON STOCK. All IUB Common
Stock issued upon conversion of PTC Common Stock in accordance with the
terms hereof (including any cash paid pursuant to Section 2.2(e)) shall be
deemed to have been issued in full satisfaction of all rights pertaining to
such PTC Common Stock, SUBJECT, HOWEVER, to the Surviving Corporation's
obligation to pay any dividends or make any other distributions with a
record date prior to the Effective Time that may have been declared or made
by PTC on PTC Common Stock in accordance with the terms of this Agreement on
or prior to the Effective Time and which remain unpaid at the Effective
Time. At the Effective Time, the stock transfer books of PTC shall be closed
to holders of PTC Common Stock immediately prior to the Effective Time and
no transfer of PTC Common Stock by any such holder shall thereafter be made
or recognized. If, after the Effective Time, PTC Certificates are presented
to the Surviving Corporation for any reason, they shall be canceled and
exchanged as provided in this Article II.
(e) NO FRACTIONAL SHARES.
(i) No fractional share of IUB Common Stock and no certificate or
scrip therefor, or other evidence of ownership thereof, will be issued,
and no right to receive cash in lieu thereof shall entitle the holder
thereof to any voting or other rights of a holder of shares or fractional
share interests.
(ii) As promptly as practicable following the Effective Time, the
Exchange Agent shall determine the excess of (i) the number of shares of
IUB Common Stock delivered to the Exchange Agent by IUB pursuant to
Section 2.2(a) over (ii) the aggregate number of whole shares of IUB
Common Stock to be distributed to holders of PTC Common Stock pursuant to
Section 2.2(b) (such excess being herein called the "Excess Shares"). As
promptly as practicable after such determination of the number of Excess
Shares, the Exchange Agent, as agent for the holders of PTC Common Stock,
shall sell the Excess Shares in the over-the-counter market at then
prevailing prices, all in the manner provided in subparagraph (iii) of
this Section 2.2(e).
(iii) The sale of the Excess Shares by the Exchange Agent shall be
executed in the over-the-counter market through one or more market makers
for IUB Common Stock and shall be executed in round lots to the extent
practicable. Until the net proceeds of such sale or sales have been
distributed to the holders of PTC Common Stock, the Exchange Agent will
hold such proceeds in trust for the holders of PTC Common Stock (the
"Excess Shares Trust"). IUB shall pay all commissions, transfer taxes and
other out-of-pocket transaction costs, including the expenses and
compensation of the Exchange Agent, incurred in connection with such sale
of the Excess Shares. The Exchange Agent shall determine the portion of
the Excess Shares Trust to
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which each holder of PTC Common Stock shall be entitled, if any, by
multiplying the amount of the aggregate net proceeds comprising the
Excess Shares Trust by a fraction, the numerator of which is the amount
of the fractional share interest to which such holder of PTC Common Stock
is entitled (after taking into account all shares of PTC Common Stock
then held by such holder) and the denominator of which is the aggregate
amount of fractional share interests to which all holders of PTC Common
Stock are entitled.
(iv) Notwithstanding the provisions of subparagraphs (ii) and (iii)
above, if the parties shall so agree in writing prior to the Closing,
then in lieu of the issuance and sale of Excess Shares and the making of
the payments contemplated in said subparagraphs, each holder of PTC
Common Stock shall be paid an amount in cash equal to the product
obtained by multiplying the fractional share interest to which such
holder (after taking into account all shares of PTC Common Stock then
held by such holder) would otherwise be entitled by the midpoint between
the highest "bid" and lowest "asked" price for a share of IUB Common
Stock in the over-the-counter market for the business day immediately
preceding the Closing Date, and, in such case, all references herein to
the cash proceeds of the sale of the Excess Shares and similar references
shall be deemed to mean and refer to the payments calculated as set forth
in this subparagraph (iv).
(v) As soon as practicable after the determination of the amount of
cash, if any, to be paid to holders of PTC Common Stock with respect to
any fractional share interests, the Exchange Agent shall make available
such amounts to such holders of PTC Common Stock subject to and in
accordance with the terms of Section 2.2(b).
(f) TERMINATION OF EXCHANGE FUND. Any portion of the Exchange Fund
which remains undistributed to the shareholders of PTC for six months after
the Effective Time shall be delivered to the Surviving Corporation, upon
demand, and any shareholders of PTC who have not theretofore complied with
this Article II shall thereafter look only to IUB for payment of their claim
for IUB Common Stock, any cash in lieu of fractional shares of IUB Common
Stock and any dividends or distributions with respect to IUB Common Stock.
(g) NO LIABILITY. Neither IUB, PTC nor the Surviving Corporation shall
be liable to any holder of PTC Common Stock for any amount paid or property
delivered in good faith to a public official pursuant to any applicable
abandoned property, escheat or similar law.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
3.1 REPRESENTATIONS AND WARRANTIES OF PTC. PTC represents and warrants to
IUB that:
(a) ORGANIZATION, STANDING AND POWER. PTC is a corporation duly
organized and validly existing under the laws of the State of Indiana. Each
of PTC's Subsidiaries is a corporation duly organized and validly existing
under the laws of its state of incorporation or organization. Each of PTC
and its Subsidiaries has all requisite power and authority to own, lease and
operate its properties and to carry on its business as now being conducted,
and is duly qualified and in good standing to do business in each
jurisdiction in which the nature of its business or the ownership or leasing
of its properties makes such qualification necessary, except where the
failure to be so qualified would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect on PTC. For
purposes of this Agreement: (i) "Material Adverse Change" or "Material
Adverse Effect" means, when used with respect to IUB, PTC or the Surviving
Corporation, as the case may be, any change or effect that is or would
reasonably be expected (insofar as can reasonably be foreseen at the time)
to be materially adverse to the business, properties, assets, liabilities,
condition (financial or otherwise) or results of operations of IUB and its
Subsidiaries taken as a whole, PTC and its Subsidiaries taken as a whole, or
the Surviving Corporation and its Subsidiaries taken as a whole, as the case
may be; provided,
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however, that no Material Adverse Change or Material Adverse Effect shall be
deemed to have occurred by reason of a change or effect resulting from
general economic conditions, general industry conditions, changes in banking
laws or regulations of general applicability or interpretations thereof, or
a general deterioration in the financial markets; and (ii) "Subsidiary"
means any corporation, partnership, joint venture or other legal entity of
which IUB, PTC or the Surviving Corporation, as the case may be (either
alone or through or together with any other Subsidiary), owns, directly or
indirectly, 50% or more of the capital stock or other equity interest the
holders of which are generally entitled to vote for the election of the
board of directors or other governing body of such corporation, partnership,
joint venture or other legal entity.
(b) CAPITAL STRUCTURE.
(i) The authorized capital stock of PTC consists of 2,000,000 shares
of common stock, without par value ("PTC Common Stock"), 1,026,401 shares
of which are outstanding, an aggregate of 30,731 shares of which are
reserved for issuance in connection with outstanding stock options (each
a "PTC Option") granted under the PTC Incentive Stock Option Plan (the
"PTC Stock Option Plan") and no shares of which are held by PTC in its
treasury; and 1,000,000 shares of preferred stock, no par value, with
respect to which the board of directors is authorized to determine the
series and classes thereof together with the rights, privileges and
voting rights. No shares of preferred stock are outstanding, reserved for
issuance or held by PTC in its treasury.
(ii) No bonds, debentures, notes or other indebtedness having the
right to vote (or convertible into or exercisable for securities having
the right to vote) on any matters on which shareholders of PTC may vote
("Voting Debt") are issued or outstanding. All outstanding shares of PTC
Common Stock are, and any PTC Common Stock that may be issued pursuant to
the exercise of any outstanding stock option will be, duly authorized,
validly issued, fully paid and nonassessable and not subject to
preemptive rights.
(iii) Except as set forth herein, in any PTC SEC Document (as defined
in Section 3.1(d) hereof) filed prior to the date hereof or the letter
dated and delivered to IUB on the date hereof (the "PTC Letter"), which
relates to this Agreement and is designated therein as being the PTC
Letter, there is no option, warrant, call, right (including any
preemptive right), commitment or any other agreement of any character
that PTC or any Subsidiary is a party to, or may be bound by, requiring
it to issue, transfer, sell, purchase or redeem any shares of capital
stock, any Voting Debt, or any securities or rights convertible into,
exchangeable for, or evidencing the right to subscribe for any shares of
capital stock of PTC or any Subsidiary, or to provide funds to, or make
an investment (in the form of a loan, capital contribution or otherwise)
in, any of PTC's Subsidiaries or (excepting loans made in the ordinary
course of a commercial banking business) any other corporation,
partnership, firm, individual, trust or other legal entity (each, and any
group of any two or more of the foregoing, a "Person").
(iv) Except as set forth in any PTC SEC Document filed prior to the
date hereof or the PTC Letter, and except for this Agreement, there is no
voting trust or other agreement or understanding to which PTC or any
Subsidiary is a party, or may be bound by, with respect to the voting of
the capital stock of PTC or any Subsidiary.
(v) Since December 31, 1994, except as set forth in any PTC SEC
Document filed prior to the date hereof or the PTC Letter, PTC has not
(A) issued or permitted to be issued any shares of capital stock, or
securities exercisable for or convertible into shares of capital stock,
of PTC or any Subsidiary; (B) repurchased, redeemed or otherwise
acquired, directly or indirectly through any Subsidiary, any shares of
capital stock of PTC or any Subsidiary (other than the acquisition of
trust account shares); or (C) declared, set aside, made or paid to
shareholders of PTC dividends or other distributions on the outstanding
shares of capital stock of PTC, other than regular quarterly cash
dividends at a rate not in excess of the regular quarterly cash dividend
most recently declared by PTC prior to September 30, 1997.
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(c) AUTHORITY.
(i) PTC has all requisite corporate power and authority to execute
and deliver this Agreement and to consummate the transactions
contemplated hereby. This Agreement and the consummation by PTC of the
transactions contemplated hereby have been duly and validly authorized by
the Board of Directors of PTC and no other corporate proceedings on the
part of PTC are necessary to authorize this Agreement or to consummate
the transactions contemplated hereby (other than the approval of this
Agreement by the shareholders of PTC in accordance with the IBCL and
PTC's articles of incorporation). This Agreement has been duly and
validly executed and delivered by PTC and, assuming this Agreement
constitutes the valid and binding agreement of IUB, constitutes the valid
and binding agreement of PTC, enforceable in accordance with its terms,
except that the enforcement hereof may be limited by (A) bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights generally, (B) general
principles of equity (regardless of whether enforceability is considered
in a proceeding in equity or at law) and (C) judicial discretion.
(ii) Except as set forth in the PTC Letter, the execution and
delivery of this Agreement does not, and the consummation of the
transactions contemplated hereby (subject to approval by the shareholders
of PTC of this Agreement) will not, conflict with or result in any
violation of, or default (with or without notice or lapse of time, or
both) under, or give rise to a right of termination, amendment,
cancellation, acceleration or payment of any obligation or the loss of a
material benefit under, or the creation of a lien, pledge, security
interest, charge or other encumbrance on assets (any such conflict,
violation, default, right of termination, amendment, cancellation,
acceleration or payment, loss or creation, a "Violation") pursuant to,
any provisions of the articles of incorporation or bylaws of PTC or any
Subsidiary or, except as set forth in the PTC Letter, and subject to
obtaining or making the consents, approvals, orders, authorizations,
registrations, declarations and filings referred to in Subsection (iii)
below, result in any Violation of any loan or credit agreement, note,
mortgage, indenture, lease, Benefit Plan (as defined in Section 3.1(o))
or other agreement, obligation, instrument, permit, concession,
franchise, license, judgment, order, decree, statute, law, ordinance,
rule or regulation applicable to PTC or any Subsidiary or their
respective properties or assets.
(iii) No consent, approval, order or authorization of, or
registration, declaration or filing with, any federal or state court,
administrative agency or commission or other governmental authority or
instrumentality (a "Governmental Entity") is required by or with respect
to PTC or any Subsidiary in connection with the execution and delivery of
this Agreement, or the consummation by PTC of the transactions
contemplated hereby, the failure to obtain which would have a Material
Adverse Effect on PTC, except for (A) the filing by IUB of an application
with the Board of Governors of the Federal Reserve System (the "Federal
Reserve") under the Bank Holding Company Act of 1956, as amended ("BHC
Act"), and approval of same, (B) the filing by IUB of a Registration
Statement on Form S-4 ("S-4") with the Securities and Exchange Commission
("SEC"), and the declaration by the SEC of its effectiveness, (C) the
filing by IUB and PTC with the SEC of (x) a joint proxy statement in
definitive form relating to the meetings of IUB's and PTC's shareholders
to be held in connection with the Merger (the "Proxy Statement") and (y)
such reports under Section 13(a) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), as may be required in connection with
this Agreement and the transactions contemplated hereby, (D) the filing
by IUB of Articles of Merger with the Secretary of State of the State of
Indiana, and appropriate documents with the relevant authorities of other
states in which PTC is qualified to do business, (E) the filing of an
application by IUB with the Director of the Department of Financial
Institutions of the State of Indiana ("DFI"), and approval thereof, (F)
notices to or filings with the Small Business Administration ("SBA"), or
the Internal Revenue Service (the "IRS") or the Pension Benefit Guaranty
Corporation (the "PBGC") with respect to
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any Benefit Plans, and (G) such filings and approvals as may be required
under the "blue sky" laws of various states.
(d) PTC SEC DOCUMENTS; FINANCIAL STATEMENTS. PTC has made available to
IUB the Registration Statement on Form 10-SB and Amendment No. 1 thereto
filed by it in April and July, 1997 respectively, with the SEC under the
Exchange Act in the form (including exhibits) filed with the SEC
(collectively, the "PTC Form 10") and its quarterly report on Form 10-QSB
for the quarter ending June 30, 1997, as filed with the SEC in August, 1997
(the "PTC Form 10-Q"). As of their respective dates, the PTC Form 10 and
Form 10-Q did not, and each document filed by PTC with the SEC under the
Securities Act or the Exchange Act subsequent to the date hereof (together
with the PTC Form 10 and Form 10-Q, collectively the "PTC SEC Documents")
will not, contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements made therein, in light of the circumstances in which they were
made, not misleading, PROVIDED, HOWEVER, that PTC makes no representation
with respect to information supplied by IUB for use in PTC SEC Documents
after the date hereof. Each of the consolidated balance sheets included in
or incorporated by reference into the PTC SEC Documents (including their
related notes and schedules) fairly presents the consolidated financial
condition of PTC and its consolidated Subsidiaries as of the date set forth
therein and each of the consolidated statements of income and of changes in
financial position included or incorporated by reference into the PTC SEC
Documents (including any related notes and schedules) fairly presents the
results of operations, retained earnings and changes in financial position,
as the case may be, of PTC and its consolidated Subsidiaries for the periods
set forth therein (subject, in the case of unaudited statements to normal
year-end adjustments and any other adjustments described therein which
individually or in the aggregate will not be material in amount or effect),
in each case in accordance with generally accepted accounting principals
consistently applied during the periods involved, except as may be noted
therein.
(e) ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as set forth in the
PTC Letter or disclosed in any PTC SEC Document filed prior to the date
hereof, since December 31, 1996, neither PTC nor any Subsidiary has incurred
any material liability or obligation (indirect, direct or contingent),
except in the ordinary course of its business consistent with past
practices, taken any of the prohibited actions set forth in Section 4.1, or
suffered any change, or any event involving a prospective change, in its
business, financial condition or results of operations that has had, or is
reasonably likely to have, a Material Adverse Effect on PTC.
(f) ABSENCE OF UNDISCLOSED LIABILITIES. Except as set forth in the PTC
Letter or disclosed in any PTC SEC Document filed prior to the date hereof,
neither PTC nor any Subsidiary has any obligations or liabilities
(contingent or otherwise) that might reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect on PTC. PTC has
set forth in the PTC Letter, as of the date hereof, all interest rate and
currency exchange agreements, and all trading positions regarding any form
or type of derivative financial product the value of which is linked to, or
derived from, the value of an underlying asset, rate or index.
(g) ALLOWANCE FOR CREDIT LOSSES. Except as set forth in the PTC
Letter, the allowance for credit losses (the "Allowance") shown on the
consolidated statements of financial position of PTC and its Subsidiaries as
of June 30, 1997 was, and the Allowance shown on each of the consolidated
statements of condition of PTC and its Subsidiaries as of a date subsequent
to the execution of this Agreement will be, in each case as of the dates
thereof, determined in accordance with safe and sound banking practices and
the guidelines and policies of the Federal Deposit Insurance Corporation
("FDIC"), and was (or will be) adequate, in the reasonable judgment of
management, to provide for losses relating to or inherent in the loan and
lease portfolios (including accrued interest receivables) of PTC and its
Subsidiaries and other extensions of credit (including letters of credit and
commitments to make loans or extend credit) by PTC and its Subsidiaries.
8
(h) ENVIRONMENTAL MATTERS. Except as set forth in the PTC Letter,
neither PTC, any of its Subsidiaries, nor any properties presently or
previously owned or operated by PTC or any of its Subsidiaries has been or
is in violation of or liable under any Environmental Law (as hereinafter
defined). There are no actions, suits or proceedings, or demands, claims,
notices or investigations (including notices, demand letters or requests for
information from any environmental agency) instituted or pending, or to the
knowledge of PTC, threatened, relating to the liability of any properties
owned or operated by PTC or any of its Subsidiaries under any Environmental
Law. "Environmental Law" means any federal, state or local law, statute,
ordinance, rule, regulation, code, license, permit, authorization, approval,
consent, order, judgment, decree, injunction or agreement between PTC or
IUB, as the case may be, and any Governmental Entity relating to (i) the
protection, preservation or restoration of the environment (including,
without limitation, air, water vapor, surface water, ground water, drinking
water supply, surface soil, subsurface soil, plant and animal life or any
other natural resource), and/or (ii) the use, storage, recycling, treatment,
generation, transportation, processing, handling, labeling, production,
release or disposal of any substance presently listed, defined, designated
or classified as hazardous, toxic, radioactive or dangerous, or otherwise
regulated, whether by type or by quantity, including any material containing
any such substance as a component; and includes, without limitation, the
Resource Conservation and Recovery Act, the Clean Air Act, the Federal Water
Pollution Control Act, the Toxic Substances Control Act and the
Comprehensive Environmental Response, Compensation and Liability Act.
(i) INFORMATION SUPPLIED. None of the information supplied or to be
supplied by PTC for inclusion in (i) the S-4 to be filed with the SEC by IUB
in connection with the issuance of IUB Common Stock in the Merger will, at
the time the S-4 is filed with the SEC and at the time it becomes effective
under the Securities Act, contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances under which
they were made, not misleading, and (ii) the Proxy Statement to be filed
with the SEC in connection with the meeting of shareholders will, at the
dates of mailing to shareholders of IUB and PTC and at the times of the
meetings of shareholders of IUB and PTC to be held in connection with the
Merger, contain any untrue statement of a material fact or omit to state any
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. The Proxy Statement (except for such portions thereof
that relate only to IUB) will comply as to form in all material respects
with the provisions of the Exchange Act and the rules and regulations
thereunder. The information set forth in the PTC Letter by PTC for purposes
of this Agreement is true and accurate in all material respects.
(j) NO DEFAULT. Except as set forth in the PTC Letter, no Violation
exists on the part of PTC or any Subsidiary with respect to any term,
condition or provision of (i) its articles of incorporation or bylaws, (ii)
any note, mortgage, indenture, other evidence of indebtedness, guaranty,
license, agreement or other contract, instrument or contractual obligation
to which PTC or any Subsidiary is now a party or by which it or any of its
properties or assets may be bound, or (iii) any order, writ, injunction or
decree applicable to PTC or any Subsidiary, except for possible Violations
that, individually or in the aggregate, do not, and, insofar as reasonably
can be foreseen, in the future will not, have a Material Adverse Effect on
PTC.
(k) COMPLIANCE WITH LICENSES, PERMITS AND APPLICABLE LAWS. PTC and its
Subsidiaries have received such certificates, permits, licenses, franchises,
consents, approvals, orders, authorizations and clearances from appropriate
governmental entities (the "PTC Permits") as are necessary to own or lease
and operate their respective properties and to conduct their respective
businesses as currently owned or leased and conducted, and all such PTC
Permits are valid and in full force and effect. PTC and its Subsidiaries are
in compliance in all material respects with their respective obligations
under the PTC Permits, with only such exceptions as, individually or in the
aggregate, would not reasonably
9
be expected to have a Material Adverse Effect on PTC, and no event has
occurred that allows, or after notice or lapse of time, or both, would
allow, revocation or termination of any material PTC Permit. Except as set
forth in the PTC Letter, the businesses of PTC and its Subsidiaries are not
being conducted in violation of any law, ordinance or regulation of any
Governmental Entity, except for possible violations that individually or in
the aggregate do not, and insofar as reasonably can be foreseen, in the
future will not, have a Material Adverse Effect on PTC. Except for routine
examinations by Governmental Entities charged with the supervision or
regulation of banks or bank holding companies or the insurance of bank
deposits ("Bank Regulators"), as of the date of this Agreement, to the
knowledge of PTC, no investigation by any Governmental Entity with respect
to PTC or any of its Subsidiaries is pending or threatened.
(l) ACTIONS AND PROCEEDINGS. Except as set forth in the PTC Letter,
there are no outstanding orders, judgments, injunctions, awards or decrees
of any Governmental Entity against or affecting PTC or any Subsidiary, any
of its or their current or to its knowledge former directors, employees,
consultants, agents or shareholders, as such, any of its or their
properties, assets or business or any PTC Benefit Plan. Except as set forth
in the PTC Letter, there are no actions, suits or claims or legal,
administrative or arbitration proceedings or investigations pending or, to
the knowledge of PTC, threatened against or affecting PTC or any Subsidiary,
any of its or their current or former directors, officers, employees,
consultants, agents or shareholders, as such, any of its or their
properties, assets or business or any PTC Benefit Plan. There are no
actions, suits or claims or legal, administrative or arbitration proceedings
or investigations or labor disputes pending or, to the knowledge of PTC,
threatened against or affecting PTC or any Subsidiary, any of its or their
current or former directors, officers, employees, consultants, agents or
shareholders, as such, any of its or their properties, assets or business or
any PTC Benefit Plan relating to the transactions contemplated by this
Agreement.
(m) TAXES. To PTC's knowledge, PTC and each of its Subsidiaries have
filed all tax returns required to be filed by any of them and have paid (or
PTC has paid on their behalf), or have set up an adequate reserve for the
payment of, all Taxes required to be paid as shown on such returns, and the
most recent PTC financial statements included or incorporated by reference
in any PTC SEC Document reflect an adequate reserve for all Taxes payable by
PTC and its Subsidiaries accrued through the date of such financial
statements. No material deficiencies for any Taxes have been proposed,
asserted or assessed against PTC or any of its Subsidiaries that are not
adequately reserved for. Except with respect to claims for refund, the
federal income tax returns of PTC and each of its Subsidiaries consolidated
in such returns have been examined by and settled with the IRS, or the
statute of limitations with respect to such years has expired (and no waiver
extending the statute of limitations has been requested or granted), for all
years through 1993. For the purpose of this Agreement, the term "Taxes"
(including, with correlative meaning, the term "tax") shall include, except
where the context otherwise requires, all federal, state, local and foreign
income, profits, franchise, gross receipts, payroll, sales, employment,
unemployment (including unemployment insurance premiums or contributions),
use, property, withholding, excise, occupancy, and other taxes, duties or
assessments of any nature whatsoever, together with all interest, penalties
and additions imposed with respect to such amounts.
(n) CERTAIN AGREEMENTS. Except as set forth in the PTC Letter or
disclosed in any PTC SEC Document filed prior to the date hereof, and except
for this Agreement, as of the date of this Agreement, neither PTC nor any of
its Subsidiaries is a party to any oral or written (i) employment or other
agreement, contract, commitment, program, policy or arrangement requiring
PTC or any Subsidiary to pay compensation (including any salary, bonus,
deferred compensation, incentive compensation, severance, vacation or sick
pay, or any other fringe benefit payment) or any other type of remuneration
to any Person, (ii) agreement or plan, including any stock option plan, any
of the benefits of which will be increased, or the vesting of the benefits
of which will be accelerated, by the occurrence of any of the transactions
contemplated by this Agreement, or the value of any of the
10
benefits of which will be calculated on the basis of any of the transactions
contemplated by this Agreement, (iii) contract or agreement not terminable
on 30 days' or less notice involving the payment of more than $7,500 in any
12 month period; or (iv) contract or agreement that materially limits the
ability of PTC directly or through any of its Subsidiaries to compete in any
line of business or with any Person or in any geographic area or during any
period of time.
(o) BENEFIT PLANS.
(i) PTC has disclosed in the PTC Letter or a PTC SEC Document filed
prior to the date hereof each employee benefit plan (including, without
limitation, any "employee benefit plan," as defined in Section 3(3) of
the Employee Retirement Income Security Act of 1974, as amended,
("ERISA")) (all the foregoing being herein called "Benefit Plans"),
maintained or contributed to by PTC or any Subsidiary (the "PTC Benefit
Plans"). PTC will make available to IUB a true and correct copy of (A)
the most recent annual report (Form 5500) filed with the IRS, (B) each
such PTC Benefit Plan, (C) each trust agreement relating to such PTC
Benefit Plan, (D) the most recent summary plan description for each PTC
Benefit Plan for which a summary plan description is required, (E) the
most recent actuarial report or valuation relating to a PTC Benefit Plan
subject to Title IV of ERISA and (F) the most recent determination letter
issued by the IRS with respect to any PTC Benefit Plan qualified under
Section 401(a) of the Code.
(ii) With respect to the PTC Benefit Plans, individually and in the
aggregate, except as set forth in the PTC Letter or any PTC SEC Document
filed prior to the date hereof, no event has occurred and, to the
knowledge of the PTC, there exists no condition or set of circumstances,
in connection with which PTC or any of its Subsidiaries could be subject
to any liability (except liability for benefits, claims and funding
obligations payable in the ordinary course) under ERISA, the Code or any
other applicable law.
(p) SUBSIDIARIES. PTC has set forth in the PTC Letter the name of each
Subsidiary of it. All of the shares of capital stock of each Subsidiary are
held directly or indirectly by PTC and such shares are validly issued, fully
paid and nonassessable and, except as set forth in the PTC Letter or any PTC
SEC Document filed prior to the date hereof, are owned by PTC free and clear
of any lien, charge, encumbrance, claim, option, right of first refusal,
limitation on voting rights, or other restriction of any nature whatsoever.
The Subsidiary conducting a commercial banking business is a bank duly
organized under Title 28 of the Indiana Code, validly existing and in good
standing with the DFI, and all of the deposits of such Subsidiary are
insured by the Bank Insurance Fund of the FDIC to the maximum extent
permitted by law.
(q) AGREEMENTS WITH BANK REGULATORS. Neither PTC nor any Subsidiary is
a party to any written agreement or memorandum of understanding with, or a
party to any commitment letter or similar undertaking to, or subject to any
order or directive by, or is a recipient of any extraordinary supervisory
letter from, any Bank Regulator which restricts materially the conduct of
its business, or in any manner relates to its capital adequacy, its credit
policies or its management, nor has PTC been advised by any Bank Regulator
that it is contemplating issuing or requesting (or is considering the
appropriateness of issuing or requesting) any such order, directive,
agreement, memorandum of understanding, extraordinary supervisory letter,
commitment letter or similar submission.
(r) VOTE REQUIRED. The affirmative vote of the holders of a majority
of the outstanding shares of PTC Common Stock entitled to vote thereon is
the only vote of the holders of any class or series of PTC capital stock
necessary to approve this Agreement and the transactions contemplated
hereby.
(s) PROPERTIES. Except as set forth in the PTC Letter or disclosed in
any PTC SEC Document filed prior to the date hereof, PTC or one of its
Subsidiaries (A) has good, valid and marketable title to all the properties
and assets reflected in the most recent audited financial statements
included in any PTC SEC Document as being owned by PTC or one of its
Subsidiaries, or acquired after the date
11
thereof (except properties sold or otherwise disposed of since the date
thereof in the ordinary course of business), free and clear of all
mortgages, pledges, security interests, claims, liens, charges, options or
other encumbrances of any nature whatsoever (including, without limitation,
in the case of real property, easements and rights-of-way) (collectively,
"Liens"), except (x) statutory Liens securing payments not yet due, (y)
Liens on assets of any Subsidiary of PTC incurred in the ordinary course of
a commercial banking business and (z) such Liens and imperfections or
irregularities of title that do not materially affect the use of the
properties or assets subject thereto or affected thereby or otherwise
materially impair business operations at such properties, and (B) is the
lessee of all leasehold estates reflected in the most recent audited
financial statements included in any PTC SEC Document or acquired after the
date thereof (except for leases that have expired by their terms since the
date thereof) and is in possession of the properties purported to be leased
thereunder, and each such lease is valid without default thereunder by the
lessee or, to PTC's knowledge, the lessor.
(t) POOLING OF INTERESTS. To PTC's knowledge, neither PTC nor any
Subsidiary has taken or failed to take any action that would prevent the
accounting for the Merger as a pooling of interests in accordance with
Accounting Principles Board Opinion No. 16, the interpretive releases issued
pursuant thereto, and the pronouncements of the SEC.
(u) OWNERSHIP OF IUB STOCK. Neither PTC nor, to its best knowledge,
any of its affiliates or associates (as such terms are defined for purposes
of Section 23-1-43-18 of the IBCL), (i) beneficially owns, directly or
indirectly, or (ii) is a party to any agreement, arrangement or
understanding for the purpose of acquiring, holding, voting or disposing of,
shares of capital stock of IUB which in the aggregate represents 10% or more
of the outstanding shares of capital stock of IUB entitled to vote generally
in the election of directors.
(v) SECTION 23-1-43-18 OF THE IBCL NOT APPLICABLE. The provisions of
Section 23-1-43-18 of the IBCL will not, prior to the termination of this
Agreement, assuming the accuracy of the representations contained in Section
3.2(u) (without giving effect to the knowledge qualification therein), apply
to this Agreement, the Merger or the transactions contemplated hereby.
3.2 REPRESENTATIONS AND WARRANTIES OF IUB. IUB represents and warrants to
PTC as follows:
(a) ORGANIZATION, STANDING AND POWER. IUB is a corporation duly
organized, validly existing and in good standing under the laws of the State
of Indiana. Each of IUB's Subsidiaries is a corporation duly organized,
validly existing and in good standing under the laws of its state of
incorporation or organization. Each of IUB and its Subsidiaries has all
requisite power and authority to own, lease and operate its properties and
to carry on its business as now being conducted, and is duly qualified and
in good standing to do business in each jurisdiction in which the nature of
its business or the ownership or leasing of its properties makes such
qualification necessary, except where the failure to be so qualified would
not reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect on IUB.
(b) CAPITAL STRUCTURE.
(i) The authorized capital stock of IUB consists of 3,000,000 shares
of common stock, without par value ("IUB Common Stock"), 1,250,897 shares
of which are outstanding and none of which are reserved for issuance or
held by IUB in its treasury; and 400,000 shares of preferred stock,
without par value, with respect to which the board of directors is
authorized to determine the series and classes thereof together with the
rights, privileges and voting rights ("IUB Preferred Stock"). There are
no shares of IUB Preferred Stock outstanding, reserved for issuance or
held by IUB in its treasury.
(ii) No Voting Debt of IUB is issued or outstanding. All outstanding
shares of IUB Common Stock are duly authorized, validly issued, fully
paid and nonassessable and not subject to preemptive rights.
12
(iii) Except as set forth in any IUB SEC Document (as defined in
Section 3.2(d) hereof) filed prior to the date hereof or the letter dated
and delivered to PTC on the date hereof (the "IUB Letter"), which relates
to this Agreement and is designated therein as being the IUB Letter,
there is no option, warrant, call, right (including any preemptive
right), commitment or any other agreement of any character that IUB or
any Subsidiary is a party to, or may be bound by, requiring it to issue,
transfer, sell, purchase or redeem any shares of capital stock, any
Voting Debt, or any securities or rights convertible into, exchangeable
for, or evidencing the right to subscribe for any shares of capital stock
of IUB or any Subsidiary, or to provide funds to, or make an investment
(in the form of a loan, capital contribution or otherwise) in, any of
IUB's Subsidiaries or (excepting loans made in the ordinary course of a
commercial banking business) any other Person.
(iv) Except as set forth in any IUB SEC Document filed prior to the
date hereof or the IUB Letter, and except for this Agreement, there is no
voting trust or other agreement or understanding to which IUB or any
Subsidiary is a party, or may be bound by, with respect to the voting of
the capital stock of IUB or any Subsidiary.
(v) Since December 31, 1994, except as set forth in any IUB SEC
Document filed prior to the date hereof or the IUB Letter, IUB has not
(A) issued or permitted to be issued any shares of capital stock, or
securities exercisable for or convertible into shares of capital stock,
of IUB or any Subsidiary; (B) repurchased, redeemed or otherwise
acquired, directly or indirectly through any Subsidiary, any shares of
capital stock of IUB or any Subsidiary (other than the acquisition of
trust account shares); or (C) declared, set aside, made or paid to
shareholders of IUB dividends or other distributions on the outstanding
shares of capital stock of IUB, other than regular quarterly cash
dividends at a rate not in excess of the regular quarterly dividend most
recently declared by IUB prior to September 30, 1997.
(c) AUTHORITY.
(i) IUB has all requisite corporate power and authority to execute
and deliver this Agreement and to consummate the transactions
contemplated hereby. This Agreement and the consummation by IUB of the
transactions contemplated hereby have been duly and validly authorized by
the Board of Directors of IUB, and no other corporate proceedings on the
part of IUB are necessary to authorize this Agreement or to consummate
the transactions contemplated hereby (other than the approval of this
Agreement by the shareholders of IUB in accordance with the IBCL and
IUB's articles of incorporation). This Agreement has been duly and
validly executed and delivered by IUB, and assuming this Agreement
constitutes the valid and binding agreement of PTC, constitutes the valid
and binding agreement of IUB, enforceable in accordance with its terms,
except that the enforcement hereof may be limited by (A) bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights generally, (B) general
principles of equity (regardless of whether enforceability is considered
in a proceeding in equity or at law) and (C) judicial discretion.
(ii) Except as set forth in the IUB Letter, the execution and
delivery of this Agreement does not, and the consummation of the
transactions contemplated hereby (subject to approval by its
shareholders) will not, create any Violation under any provisions of the
articles of incorporation or bylaws of IUB or any Subsidiary or, except
as set forth in the IUB Letter and subject to obtaining or making the
consents, approvals, orders, authorizations, registrations, declarations
and filings referred to in Subsection (iii) below, result in any
Violation of any loan or credit agreement, note, mortgage, indenture,
lease, Benefit Plan (as defined in Section 3.1(o)) or other agreement,
obligation, instrument, permit, concession, franchise, license, judgment,
order, decree, statute, law, ordinance, rule or regulation applicable to
IUB or any Subsidiary or their respective properties or assets.
13
(iii) No consent, approval, order or authorization of, or
registration, declaration or filing with, any Governmental Entity is
required by or with respect to IUB or any Subsidiary in connection with
the execution and delivery of this Agreement, or the consummation by IUB
of the transactions contemplated hereby, the failure to obtain which
would have a Material Adverse Effect on IUB, except for (A) the filing by
IUB of an application with the Federal Reserve under the BHC Act, and
approval of same, (B) the filing by IUB of the S-4 with the SEC, and the
declaration by the SEC of its effectiveness, (C) the filing by IUB and
PTC with the SEC of (x) the Proxy Statement and (y) such reports under
Section 13(a) of the Exchange Act as may be required in connection with
this Agreement and the transactions contemplated hereby, (D) the filing
by IUB of Articles of Merger with the Secretary of State of the State of
Indiana, and appropriate documents with the relevant authorities of other
states in which IUB is qualified to do business, (E) the filing of an
application by IUB with the Director of the DFI, and the approval
thereof, (F) notices to or filings with the SBA, or the IRS or the PBGC
with respect to any Benefit Plans, and (G) such filings and approvals as
may be required under the "blue sky" laws of various states.
(d) IUB SEC DOCUMENTS: FINANCIAL STATEMENTS. IUB has made available to
PTC each document filed by it since December 31, 1994 with the SEC under the
Securities Act or the Exchange Act, including without limitation, (i) IUB's
Annual Report on Form 10-K for the year ended December 31, 1996, (ii) IUB's
Quarterly Report on Form 10-Q for the period ended March 31 and June 30,
1997, and (iii) IUB's definitive proxy statement for its 1997 Annual Meeting
of Shareholders held May 20, 1997, each in the form (including exhibits and
any amendments) filed with the SEC (collectively, together with all reports
and documents filed with the SEC subsequent to the date hereof, the "IUB SEC
Documents"). As of their respective dates, each of the IUB SEC Documents did
not, and each of the IUB SEC Documents filed with the SEC subsequent to the
date hereof will not, contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to
make the statements made therein, in light of the circumstances in which
they were made, not misleading, provided, however that IUB makes no
representation with respect to information supplied by PTC for use in IUB
SEC Documents after the date hereof. Each of the consolidated balance sheets
included in or incorporated by reference into the IUB SEC Documents
(including their related notes and schedules) fairly presents the
consolidated financial condition of IUB and its consolidated Subsidiaries as
of the date set forth therein and each of the consolidated statements of
income and of changes in financial position included or incorporated by
reference into the IUB SEC Documents (including any related notes and
schedules) fairly presents the results of operations, retained earnings and
changes in financial position, as the case may be, of IUB and its
consolidated Subsidiaries for the periods set forth therein (subject, in the
case of unaudited statements to normal year-end adjustments and any other
adjustments described therein which individually or in the aggregate will
not be material in amount or effect), in each case in accordance with
generally accepted accounting principals consistently applied during the
periods involved, except as may be noted therein.
(e) ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as set forth in the
IUB Letter or disclosed in any IUB SEC Document filed prior to the date
hereof, since December 31, 1996, neither IUB nor any Subsidiary has incurred
any material liability obligation (indirect, direct or contingent), except
in the ordinary course of its business consistent with past practices, taken
any of the prohibited actions set forth in Section 4.1, or suffered any
change, or any event involving a prospective change, in its business,
financial condition or results of operations that has had, or is reasonably
likely to have, a Material Adverse Effect on IUB.
(f) ABSENCE OF UNDISCLOSED LIABILITIES. Except as set forth in the IUB
Letter or disclosed in any IUB SEC Document filed prior to the date hereof,
neither IUB nor any Subsidiary has any obligations or liabilities
(contingent or otherwise) that might reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect on IUB. IUB has
set forth in the IUB Letter, as of the date
14
hereof, all interest rate and currency exchange agreements, and all trading
positions regarding any form or type of derivative financial product the
value of which is linked to, or derived from, the value of an underlying
asset, rate or index.
(g) ALLOWANCE FOR CREDIT LOSSES. Except as set forth in the IUB
Letter, the Allowance shown on the consolidated statements of financial
position of IUB and its Subsidiaries as of June 30, 1997 was, and the
Allowance shown on each of the consolidated statements of condition of IUB
and its Subsidiaries as of a date subsequent to the execution of this
Agreement will be, in each case as of the dates thereof, determined in
accordance with safe and sound banking practices and the guidelines and
policies of the FDIC, and was (or will be) adequate, in the reasonable
judgment of management, to provide for losses relating to or inherent in the
loan and lease portfolios (including accrued interest receivables) of IUB
and its Subsidiaries and other extensions of credit (including letters of
credit and commitments to make loans or extend credit) by IUB and its
Subsidiaries.
(h) ENVIRONMENTAL MATTERS. Except as set forth in the IUB Letter,
neither IUB, any of its Subsidiaries, nor any properties presently or
previously owned or operated by IUB or any of its Subsidiaries has been or
is in violation of or liable under any Environmental Law. There are no
actions, suits or proceedings, or demands, claims, notices or investigations
(including notices, demand letters or requests for information from any
environmental agency) instituted or pending, or to the knowledge of IUB,
threatened, relating to the liability of any properties owned or operated by
IUB or any of its Subsidiaries under any Environmental Law.
(i) INFORMATION SUPPLIED. None of the information supplied or to be
supplied by IUB for inclusion in (i) the S-4 to be filed with the SEC by IUB
in connection with the issuance of IUB Common Stock in the Merger will, at
the time the S-4 is filed with the SEC and at the time it becomes effective
under the Securities Act, contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances under which
they were made, not misleading, and (ii) the Proxy Statement to be filed
with the SEC in connection with the meeting of shareholders will, at the
dates of mailing to shareholders of IUB and PTC and at the time of the
meetings of shareholders of IUB and PTC to be held in connection with the
Merger, contain any untrue statement of a material fact or omit to state any
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. The Proxy Statement (except for such portions thereof
that relate only to PTC) will comply as to form in all material respects
with the provisions of the Exchange Act and the rules and regulations
thereunder. The information set forth in the IUB Letter by IUB for purposes
of this Agreement is true and accurate in all material respects.
(j) NO DEFAULT. Except as set forth in the IUB Letter, no Violation
exists on the part of IUB or any Subsidiary with respect to any term,
condition or provision of (i) its articles of incorporation or bylaws, (ii)
any note, mortgage, indenture, other evidence of indebtedness, guaranty,
license, agreement or other contract, instrument or contractual obligation
to which IUB or any Subsidiary is now a party or by which it or any of its
properties or assets may be bound, or (iii) any order, writ, injunction or
decree applicable to IUB or any Subsidiary, except for possible Violations
that, individually or in the aggregate, do not, and, insofar as reasonably
can be foreseen, in the future will not, have a Material Adverse Effect on
IUB.
(k) COMPLIANCE WITH LICENSES, PERMITS AND APPLICABLE LAWS. IUB and its
Subsidiaries have received such certificates, permits, licenses, franchises,
consents, approvals, orders, authorizations and clearances from appropriate
governmental entities (the "IUB Permits") as are necessary to own or lease
and operate their respective properties and to conduct their respective
businesses as currently owned or leased and conducted, and all such IUB
Permits are valid and in full force and effect. IUB and its Subsidiaries are
in compliance in all material respects with their respective obligations
under
15
the IUB Permits, with only such exceptions as, individually or in the
aggregate, would not reasonably be expected to have a Material Adverse
Effect on IUB, and no event has occurred that allows, or after notice of
lapse of time, or both, would allow, revocation or termination of any
material IUB Permit. Except as set forth in the IUB Letter, the businesses
of IUB and its Subsidiaries are not being conducted in violation of any law,
ordinance or regulation of any Governmental Entity, except for possible
violations that individually or in the aggregate do not, and insofar as
reasonably can be foreseen in the future will not, have a Material Adverse
Effect on IUB. Except for routine examinations by Bank Regulators, as of the
date of this Agreement, to the knowledge of IUB, no investigation by any
Governmental Entity with respect to IUB or any of its Subsidiaries is
pending or threatened.
(l) ACTIONS AND PROCEEDINGS. Except as set forth in the IUB Letter,
there are no outstanding orders, judgments, injunctions, awards or decrees
of any Governmental Entity against or affecting IUB or any Subsidiary, any
of its or their current or to its knowledge former directors, employees,
consultants, agents or shareholders, as such, any of its or their
properties, assets or business or any IUB Benefit Plan. Except as set forth
in the IUB Letter, there are no actions, suits or claims or legal,
administrative or arbitration proceedings or investigations pending or, to
the knowledge of IUB, threatened against or affecting IUB or any Subsidiary,
any of its or their current or former directors, officers, employees,
consultants, agents or shareholders, as such, any of its or their
properties, assets or business or any IUB Benefit Plan. There are no
actions, suits or claims or legal, administrative or arbitration proceedings
or investigations or labor disputes pending or, to the knowledge of IUB,
threatened against or affecting IUB or any Subsidiary, any of its or their
current or former directors, officers, employees, consultants, agents or
shareholders, as such, any of its or their properties, assets or business or
any IUB Benefit Plan relating to the transactions contemplated by this
Agreement.
(m) TAXES. To IUB's knowledge, IUB and each of its Subsidiaries have
filed all tax returns required to be filed by any of them and have paid (or
IUB has paid on their behalf), or have set up an adequate reserve for the
payment of, all Taxes required to be paid as shown on such returns, and the
most recent IUB financial statements included or incorporated by reference
in any IUB SEC Document reflect an adequate reserve for all Taxes payable by
IUB and its Subsidiaries accrued through the date of such financial
statements. No material deficiencies for any Taxes have been proposed,
asserted or assessed against IUB or any of its Subsidiaries that are not
adequately reserved for. Except with respect to claims for refund, the
federal income tax returns of IUB and each of its Subsidiaries consolidated
in such returns have been examined by and settled with the IRS, or the
statute of limitations with respect to such years has expired (and no waiver
extending the statute of limitations has been requested or granted), for all
years through 1993.
(n) CERTAIN AGREEMENTS. Except as set forth in the IUB Letter or
disclosed in any IUB SEC Document filed with the SEC prior to the date
hereof, and except for this Agreement, as of the date of this Agreement,
neither IUB nor any of its Subsidiaries is a party to any oral or written
(i) employment or other agreement, contract, commitment, program, policy or
arrangement requiring IUB or any Subsidiary to pay compensation (including
any salary, bonus, deferred compensation, incentive compensation, severance,
vacation or sick pay, or any other fringe benefit payment) or any other type
of remuneration to any Person, (ii) agreement or plan, including any stock
option plan, any of the benefits of which will be increased, or the vesting
of the benefits of which will be accel-erated, by the occurrence of any of
the transactions contemplated by this Agreement, or the value of any of the
benefits of which will be calculated on the basis of any of the transactions
contemplated by this Agreement, (iii) contract or agreement not terminable
on 30 days' or less notice involving the payment of more than $7,500 in any
12 month period; or (iv) contract or agreement that materially limits the
ability of IUB directly or through any of its Subsidiaries to compete in any
line of business or with any Person or in any geographic area or during any
period of time.
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(o) BENEFIT PLANS.
(i) IUB has disclosed in the IUB Letter or a IUB SEC Document filed
prior to the date hereof each Benefit Plan maintained or contributed to
by IUB or any Subsidiary (the "IUB Benefit Plans"). IUB will make
available to PTC a true and correct copy of (A) the most recent annual
report (Form 5500) filed with the IRS, (B) each such IUB Benefit Plan,
(C) each trust agreement relating to such IUB Benefit Plan, (D) the most
recent summary plan description for each IUB Benefit Plan for which a
summary plan description is required, (E) the most recent actuarial
report or valuation relating to an IUB Benefit Plan subject to Title IV
of ERISA and (F) the most recent determination letter issued by the IRS
with respect to any IUB Benefit Plan qualified under Section 401(a) of
the Code.
(ii) With respect to the IUB Benefit Plans, individually and in the
aggregate, except as set forth in the IUB Letter or any IUB SEC Document
filed prior to the date hereof, no event has occurred and, to the
knowledge of the IUB, there exists no condition or set of circumstances,
in connection with which IUB or any of its Subsidiaries could be subject
to any liability (except liability for benefits, claims and funding
obligations payable in the ordinary course) under ERISA, the Code or any
other applicable law.
(p) SUBSIDIARIES. IUB has set forth in the IUB Letter the name of each
Subsidiary of it. All of the shares of capital stock of each Subsidiary are
held directly or indirectly by IUB and such shares are validly issued, fully
paid and nonassessable and, except as set forth in the IUB Letter or
disclosed in any IUB SEC Document filed with the SEC prior to the date
hereof, are owned by IUB free and clear of any lien, charge, encumbrance,
claim, option, right of first refusal, limitation on voting rights, or other
restriction of any nature whatsoever. Each Subsidiary conducting a
commercial banking business is a bank duly organized under Title 28 of the
Indiana Code, validly existing and in good standing with the DFI, and all of
the deposits of each such Subsidiary (except Regional Federal Savings Bank)
are insured by the Bank Insurance Fund of the FDIC (the Savings Association
Insurance Fund of the FDIC with respect to Regional Federal Savings Bank) to
the maximum extent permitted by law.
(q) AGREEMENTS WITH BANK REGULATORS. Neither IUB nor any Subsidiary is
a party to any written agreement or memorandum of understanding with, or a
party to any commitment letter or similar undertaking to, or subject to any
order or directive by, or is a recipient of any extraordinary supervisory
letter from, any Bank Regulator which restricts materially the conduct of
its business, or in any manner relates to its capital adequacy, its credit
policies or its management, nor has IUB been advised by any Bank Regulator
that it is contemplating issuing or requesting (or is considering the
appropriateness of issuing or requesting) any such order, directive,
agreement, memorandum of understanding, extraordinary supervisory letter,
commitment letter or similar submission.
(r) VOTE REQUIRED. The affirmative vote of the holders of a majority
of the outstanding shares of IUB Common Stock entitled to vote thereon is
the only vote of the holders of any class or series of IUB capital stock
necessary to approve this Agreement and the transactions contemplated
hereby.
(s) PROPERTIES. Except as set forth in the IUB Letter or disclosed in
any IUB SEC Document filed prior to the date hereof, IUB or one of its
Subsidiaries (A) has good, valid and marketable title to all the properties
and assets reflected in the most recent audited financial statements
included in any IUB SEC Document as being owned by IUB or one of its
Subsidiaries, or acquired after the date thereof (except properties sold or
otherwise disposed of since the date thereof in the ordinary course of
business), free and clear of all Liens, except (x) statutory Liens securing
payments not yet due, (y) Liens on assets of any Subsidiary of IUB incurred
in the ordinary course of a commercial banking business and (z) such Liens
and imperfections or irregularities of title that do not materially affect
the use of the properties or assets subject thereto or affected thereby or
otherwise materially impair business operations at such properties, and (B)
is the lessee of all leasehold estates reflected in the most recent audited
financial statements included in any IUB SEC Document or acquired after the
17
date thereof (except for leases that have expired by their terms since the
date thereof) and is in possession of the properties purported to be leased
thereunder, and each such lease is valid without default thereunder by the
lessee or, to IUB's knowledge, the lessor.
(t) POOLING OF INTERESTS. To IUB's knowledge, neither IUB nor any
Subsidiary has taken or failed to take any action that would prevent the
accounting for the Merger as a pooling of interests in accordance with
Accounting Principles Board Opinion No. 16, the interpretive releases issued
pursuant thereto, and the pronouncements of the SEC.
(u) OWNERSHIP OF PTC STOCK. Neither IUB nor, to its best knowledge,
any of its affiliates or associates (as such terms are defined for purposes
of Section 23-1-43-18 of the IBCL), (i) beneficially owns, directly or
indirectly, or (ii) is a party to any agreement, arrangement or
understanding for the purpose of acquiring, holding, voting or disposing of,
shares of capital stock of PTC which in the aggregate represents 10% or more
of the outstanding shares of capital stock of PTC entitled to vote generally
in the election of directors.
(v) SECTION 23-1-43-18 OF THE IBCL NOT APPLICABLE. The provisions of
Section 23-1-43-18 of the IBCL will not, prior to the termination of this
Agreement, assuming the accuracy of the representations contained in Section
3.1(u) (without giving effect to the knowledge qualification therein), apply
to this Agreement, the Merger or the transactions contemplated hereby.
ARTICLE IV
COVENANTS OF IUB AND PTC
4.1 BUSINESS IN ORDINARY COURSE.
(a) During the period from the date of this Agreement to the Effective
Time, IUB shall, and shall cause its Subsidiaries to, conduct business only
in the ordinary and usual course consistent with past practices and shall,
and shall cause such Subsidiaries to, use their best efforts to maintain and
preserve its business organization, employees and advantageous business
relationships and retain the services of its officers and key employees.
(b) During the period from the date of this Agreement to the Effective
Time, PTC shall, and shall cause its Subsidiaries to, conduct business only
in the ordinary and usual course consistent with past practices and shall,
and shall cause such Subsidiaries to, use their best efforts to maintain and
preserve its business organization, employees and advantageous business
relationships and retain the services of its officers and key employees.
(c) Without the prior written consent of PTC, IUB shall not declare, set
aside or pay any dividend or make any other distribution with respect to its
capital stock whether in cash, stock or other property, after the date of
this Agreement, except for the declaration and payment of regular quarterly
cash dividends on the IUB Common Stock in an amount not to exceed $0.27 per
share.
(d) Without the prior written consent of IUB, PTC shall not declare, set
aside or pay any dividend or make any other distribution with respect to its
capital stock whether in cash, stock or other property, after the date of
this Agreement, except for the declaration and payment of regular quarterly
cash dividends on the PTC Common Stock in an amount not to exceed the amount
of the most recent quarterly cash dividend paid by PTC prior to the date of
this Agreement; PROVIDED, HOWEVER, that the parties agree that PTC shall
coordinate the declaration of dividends of PTC Common Stock, and the record
date and payment dates relating thereto, with the dividend record and
payment dates for IUB Common Stock so that the holders of PTC common stock
shall not receive two dividends, or fail to receive one dividend, for any
quarter with respect to their shares of IUB Common Stock.
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(e) Except as expressly provided herein or in the IUB Letter or PTC
Letter, during the period from the date hereof to the Effective Time,
neither IUB or any Subsidiary of IUB on the one hand, nor PTC or any
Subsidiary of PTC on the other hand, without the prior written consent of
the other, will:
(i) issue, sell or pledge any capital stock or any options, warrants,
or other rights to subscribe for or purchase capital stock or any
securities convertible into or exchangeable for any capital stock, except
pursuant to options outstanding on the date hereof under the PTC Stock
Option Plans;
(ii) directly or indirectly redeem, purchase or otherwise acquire any
of their respective capital stock or ownership interests (except for the
acquisition of trust account shares or in satisfaction of debts
previously contracted);
(iii) effect a reclassification, recapitalization, split-up, exchange
of shares, readjustment or other similar change in or to any capital
stock or otherwise merge, liquidate, reorganize or recapitalize;
(iv) change its articles of incorporation or bylaws;
(v) enter into, adopt or amend any employment agreement, severance
agreement, change of control agreement or similar agreement or plan
relative to the foregoing; or grant any increase (other than ordinary and
normal increases consistent with past practices) in the compensation
payable or to become payable to directors, officers or employees; or
except as required by law, pay or agree to pay any bonus, or adopt or
make any change in any bonus, insurance, pension, or Benefit Plan;
(vi) except in the ordinary course of its business consistent with
past practice, borrow or agree to borrow any funds, including but not
limited to repurchase transactions, or indirectly guarantee or agree to
guarantee any obligations of others;
(vii) enter into, modify or extend any agreement, contract or
commitment out of the ordinary course of business, other than letters of
credit, loan agreements, deposit agreements, and other lending, credit
and deposit documents made in the ordinary course of business;
(viii) except in the ordinary course of business, place on any of its
assets or properties any mortgage, pledge, lien, charge, or other
encumbrance;
(ix) place on any of its real estate assets or properties any
mortgage, pledge, lien, charge or other encumbrance;
(x) cancel any material indebtedness owing to it or any claims which
it may possess or waive any rights of material value;
(xi) sell or otherwise dispose of any real property or any material
amount of tangible or intangible personal property other than properties
acquired in foreclosure or otherwise in the ordinary collection of
indebtedness;
(xii) knowingly or willfully commit any act or fail to commit any act
which will cause a material breach of any agreement, contract or
commitment;
(xiii) violate any law, statute, rule, governmental regulation, or
order, which violation might have a Material Adverse Effect on IUB or PTC
as the case may be;
(xiv) engage in any activity or transaction outside the ordinary
course of business;
(xv) enter into or acquire any derivatives contract or structured
note;
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(xvi) enter into any new, or modify, amend or extend the terms of any
existing, contracts relating to the purchase or sale of financial or
other futures, or any put or call option relating to cash, securities or
commodities or any interest rate swap agreements or other agreements
relating to the hedging of interest rate risk; or
(xvii) settle any claim, action or proceeding involving monetary
damages, except in the ordinary course of business consistent with past
practice.
(d) IUB shall not, without the prior written consent of PTC, willfully
engage in any transaction or willfully take any action that would render
untrue any of the representations and warranties of IUB contained in Article
III hereof, if such representations and warranties were given as of the date
of such transaction or action.
(e) PTC shall not, without the prior written consent of IUB, willfully
engage in any transaction or willfully take any action that would render
untrue any of the representations and warranties of PTC contained in Article
III hereof, if such representations and warranties were given as of the date
of such transaction or action.
(f) IUB and PTC will each use their best efforts to maintain their
respective properties and assets in their present state of repair, order and
condition, reasonable wear and tear excepted, and to maintain and keep in
full force and effect all policies of insurance presently in effect,
including the insurance of accounts with the FDIC.
4.2 NO SOLICITATION. (a) Each of IUB and PTC respectively agree that it
shall not, nor shall it permit any of it Subsidiaries to, nor shall it authorize
or permit any officer, director or employee of or any investment banker,
attorney or other advisor or representative of, it or any Subsidiary to, (i)
solicit, initiate or encourage the submission of any takeover proposal (as
defined below), (ii) enter into any agreement with respect to any takeover
proposal or (iii) participate in any discussions or negotiations regarding, or
furnish to any person any information with respect to, or take any other action
to facilitate any inquiries or the making of any proposal that constitutes, or
may reasonably be expected to lead to, any takeover proposal; PROVIDED, HOWEVER,
that nothing contained in this Agreement shall prevent either IUB or PTC or the
Board of Directors of either from (A) furnishing nonpublic information to, or
entering into discussions or negotiations with, any person in connection with an
unsolicited bona fide written takeover proposal to IUB or PTC or their
respective shareholders, if and only to the extent that the Board of Directors
of IUB or PTC, as applicable, determines in good faith based on written advice
of its outside legal counsel that such action is necessary for such Board of
Directors to comply with its fiduciary duties to shareholders under applicable
law, or (B) complying with Rule 14e-2 promulgated under the Exchange Act with
regard to a takeover proposal. Without limiting the foregoing, it is understood
that any violation of the restrictions set forth in the preceding sentence by
any executive officer of IUB or PTC or any of its respective Subsidiaries or any
investment banker, attorney or other advisor or representative of IUB or PTC or
any of their respective Subsidiaries, whether or not such person is purporting
to act on behalf of IUB or any Subsidiary or PTC or any Subsidiary, as
applicable, or otherwise, shall be deemed to be a breach of this Section 4.2(a)
by the party for whom such person is an executive officer of, or an investment
banker, attorney or other advisor or representative for, such party or any
Subsidiary. For purposes of this Agreement, "takeover proposal" means any
proposal for a merger, consolidation or other business combination involving IUB
or PTC or any Subsidiary of either or any proposal or offer to acquire in any
manner, directly or indirectly, more than 20% of any class of voting securities
of IUB or PTC or any Subsidiary of either, or assets representing a substantial
portion of the assets of IUB and its Subsidiaries, taken as a whole, or PTC and
its Subsidiaries, taken as a whole, other than the Merger contemplated by this
Agreement. Each of IUB and PTC shall immediately cease and cause to be
terminated any existing activities, discussions or negotiations by it or any of
its officers, investment bankers, attorneys or other advisors or representatives
with any parties conducted heretofore with respect to any of the foregoing.
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(b) Subject to Section 7.1(d) (in the case of IUB) and Section 7.1(e)
(in the case of PTC), neither the Board of Directors of IUB or PTC nor any
committee thereof shall (i) withdraw or modify, or propose to withdraw or
modify, in a manner adverse to the other party, the adoption, approval or
recommendation by such Board of Directors or any such committee of this
Agreement or (ii) approve or recommend, or propose to approve or recommend,
any takeover proposal.
(c) Each of IUB and PTC promptly shall advise the other orally and in
writing of any takeover proposal or any inquiry with respect to or which
could lead to any takeover proposal and the identity of the person making
any such takeover proposal or inquiry. Each of IUB and PTC shall keep the
other promptly and fully informed in all material respects of the status and
details of any such takeover proposal or inquiry.
ARTICLE V
ADDITIONAL AGREEMENTS
5.1 INSPECTION OF RECORDS; CONFIDENTIALITY.
(a) IUB and PTC shall each afford to the other and to the other's
accountants, counsel and other representatives (and their Subsidiaries)
reasonable access during normal business hours during the period prior to
the Effective Time to all of their respective properties, books, contracts,
commitments and records, including all attorneys' responses to auditors'
requests for information, and accountants' work papers, developed by either
of them or their respective Subsidiaries or their respective accountants or
attorneys, and will permit each other and their respective representatives
to discuss such information directly with each other's officers, directors,
employees, attorneys and accountants. IUB and PTC shall each use their best
efforts to furnish to the other all other information concerning its
business, properties and personnel as such other party may reasonably
request. Any failure to comply with this covenant shall be disregarded if
promptly corrected without material adverse consequences to the other party.
The availability or actual delivery of such information (except where set
forth in the IUB Letter or PTC Letter) shall not affect the representations,
warranties, covenants, and agreements of the party providing such
information that are contained in this Agreement or in any certificates or
other documents delivered pursuant hereto.
(b) In the event that this Agreement is terminated, each party shall
return all non-public documents furnished hereunder, shall destroy all
documents or portions thereof prepared by such other party that contain
non-public information furnished by the other party pursuant hereto and, in
any event, shall hold all non-public information confidential unless or
until such information is or becomes a matter of public knowledge or is or
becomes known to the party receiving the information through persons other
than the party providing such information.
5.2 PREPARATION OF S-4 AND THE PROXY STATEMENT. IUB shall prepare and file
with the SEC the S-4, in which the Proxy Statement will be included as a
prospectus. Each of IUB and PTC shall use all reasonable efforts to have the S-4
declared effective under the Securities Act as promptly as practicable after
such filing. IUB shall also take any action (other than qualifying to do
business in any jurisdiction in which it is now not so qualified) required to be
taken under any applicable state securities laws in connection with the issuance
of IUB Common Stock in the Merger and PTC shall furnish all information
concerning PTC and the holders of PTC Common Stock as may be reasonably
requested in connection with any such action.
5.3 SHAREHOLDER MEETINGS.
(a) IUB. IUB shall, as soon as practicable, duly call, give notice of,
convene and hold a meeting of its shareholders (the "IUB Shareholders
Meeting") for the purpose of voting upon the approval of this Agreement and
the transactions contemplated hereby. Subject to Section 7.1(d), IUB shall,
through its Board of Directors, recommend to its shareholders approval of
this Agreement and
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the transactions contemplated by this Agreement. Without limiting the
generality of the foregoing, IUB agrees that its obligations pursuant to the
first sentence of this Section 5.3(a) shall not be altered by the
commencement, public proposal, public disclosure or communication to IUB of
any takeover proposal. IUB shall coordinate and cooperate with PTC with
respect to the timing of such meeting and shall use its best efforts to hold
such meeting within one day of the date on which PTC shall hold a meeting of
its shareholders pursuant to Section 5.3(b), and as soon as practicable
after the date on which the S-4 becomes effective.
(b) PTC. PTC shall, as soon as practicable, duly call, give notice of,
convene and hold a meeting of its shareholders (the "PTC Shareholders
Meeting") for the purpose of voting upon the approval of this Agreement and
the transactions contemplated hereby. Subject to Section 7.1(e), PTC shall,
through its Board of Directors, recommend to its shareholders approval of
this Agreement and the transactions contemplated by this Agreement. Without
limiting the generality of the foregoing, PTC agrees that its obligations
pursuant to the first sentence of this Section 5.3(b) shall not be altered
by the commencement, public proposal, public disclosure or communication to
PTC of any takeover proposal. PTC shall coordinate and cooperate with IUB
with respect to the timing of such meeting and shall use its best efforts to
hold such meeting within one day of the date on which IUB shall hold a
meeting of its shareholders pursuant to Section 5.3(a), and as soon as
practicable after the date on which the S-4 becomes effective.
5.4 AFFILIATES.
(a) OF PTC. At least 30 days prior to the Closing Date, PTC shall
deliver to IUB a list of names and addresses of those persons who were, in
PTC's reasonable judgment, at the record date for its meeting of
shareholders to approve the Merger, "affiliates" (each such person, an
"Affiliate") of PTC within the meaning of Rule 145 of the rules and
regulations promulgated under the Securities Act. PTC shall provide IUB such
information and documents as IUB shall reasonably request for purposes of
reviewing such list. PTC shall use all reasonable efforts to deliver or
cause to be delivered to IUB and PTC, prior to the Closing Date, from each
of the Affiliates of PTC identified in the foregoing list, an Affiliate
Letter in the form attached hereto as Exhibit 5.4(a). IUB shall be entitled
to place legends as specified in such Affiliate Letters on the certificates
evidencing any IUB Common Stock to be received by such Affiliates pursuant
to the terms of this Agreement, and to issue appropriate stop transfer
instructions to the transfer agent for IUB Common Stock, consistent with the
terms of such Affiliate Letters.
(b) OF IUB. At least 30 days prior to the Closing Date, IUB shall
deliver to PTC a list of names and addresses of those persons who were, in
IUB's reasonable judgment, at the record date for its meeting of
shareholders to approve the Merger, Affiliates of IUB. IUB shall provide PTC
such information and documents as PTC shall reasonably request for purposes
of reviewing such list. IUB shall use all reasonable efforts to deliver or
cause to be delivered to IUB, prior to the Closing Date, from each of the
Affiliates of IUB identified in the foregoing list, an Affiliate Letter in
the form attached hereto as Exhibit 5.4(b).
5.5 BROKERS. Each of IUB and PTC represents, as to itself and its
Subsidiaries, that no agent, broker, investment banker or other firm or person
or officer or director of either is or will be entitled to any broker's or
finder's fee or any other commission, bonus or similar fee in connection with
any of the transactions contemplated by this Agreement.
5.6 COOPERATION. Each party covenants that it will use its best efforts to
bring about the transactions contemplated by this Agreement as soon as
practicable, unless this Agreement is terminated as provided herein. Subject to
the terms and conditions herein provided, each of the parties hereto agrees to
use all reasonable efforts to take, or cause to be taken, all action, and to do,
or cause to be done, all things necessary, proper or advisable under applicable
laws and regulations to consummate and make effective the transactions
contemplated by this Agreement at the earliest practicable time. In case at any
time after
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the Effective Time any further action is necessary or desirable to carry out the
purposes of this Agreement, the proper officers and/or directors of IUB or PTC,
as the case may be, shall take all such necessary action. Each party shall use
its reasonable best efforts to preserve for itself and the other party each
available legal privilege with respect to the confidentiality of their
negotiations and related communications, including the attorney-client
privilege.
5.7 REGULATORY APPLICATIONS. IUB and PTC shall, as soon as reasonably
practicable, file all necessary applications relating to the Merger with all
applicable regulatory authorities, and shall use their best efforts to respond
as promptly as practicable to all inquiries received concerning said
applications. In the event of an adverse or unfavorable determination by any
regulatory authority, or in the event the Merger is challenged or opposed by any
administrative or legal proceeding, whether by the United States Department of
Justice or otherwise, the determination of whether and to what extent to seek
appeal or review, administrative or otherwise, or other appropriate remedies
shall be jointly made by IUB and PTC. The party filing an application shall
deliver a copy thereof to the other party in advance of filing with a reasonable
opportunity for such other party to review the application, and copies of all
responses from or written communications from regulatory authorities relating to
the Merger or this Agreement (to the extent permitted by law), and the filing
party shall also deliver a final copy of each regulatory application to the
other party promptly after it is filed with the appropriate regulatory
authority. Each party shall advise the other party periodically of the status of
each regulatory application.
5.8 FINANCIAL STATEMENTS AND REPORTS. From the date of this Agreement and
prior to the Effective Time: (a) each party will make available to the other,
not later than ninety 90 days after the end of any fiscal year, its Annual
Report on Form 10-K or 10-KSB as the case may be (and all schedules and exhibits
thereto) for the fiscal period then ended prepared in conformity with generally
accepted accounting principles; (b) each party will make available to the other
not later than 30 days after the end of any fiscal quarter, the Reports of
Condition and Income filed by each of its subsidiaries that is a financial
institution with its primary regulator which shall be prepared in accordance
with all applicable rules and regulations; (c) each party will make available to
the other not later than 45 days after the end of each quarter, its Report on
Form 10-Q or 10-QSB, as the case may be, for such quarter as filed with the SEC
which shall be prepared in conformity with generally accepted accounting
principles and the rules and regulations of the SEC; and (d) each party will
make available to the other any and all other material reports filed with the
SEC, the Federal Reserve Board, the OCC, the FDIC, the OTS, or any other
regulatory agency within three business days of the filing of any such report.
5.9 NOTICE. At all times prior to the Effective Time, each party shall
promptly notify the other in writing of the occurrence of any event which will
or may result in the failure to satisfy any of the conditions specified in
Sections 6.2 (in the case of PTC) or 6.3 (in the case of IUB). In the event that
either party becomes aware of the occurrence or impending occurrence of any
event which would constitute or cause a breach by it of any of its
representations and warranties, covenants or agreements herein in any material
respect, or would have constituted or caused a breach by it of its
representations and warranties, covenants or agreements herein in any material
respect, had such an event occurred or been known prior to the date hereof, said
party shall immediately give detailed and written notice thereof to the other
party, and shall, unless the same has been waived in writing by the other party,
use its reasonable efforts to remedy the same, provided that such efforts, if
not successful, shall not be deemed to satisfy any condition precedent to the
Merger.
5.10. PUBLIC ANNOUNCEMENTS. Subject to each party's disclosure obligations
imposed by law, IUB and PTC will cooperate with each other in the development
and distribution of all news releases and other public information disclosures
with respect to this Agreement or any of the transactions contemplated hereby
and shall not issue any public announcement or statement with respect hereto or
thereto without the consent of the other party (which consent shall not be
unreasonably withheld).
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5.11 EXPENSES. Subject to Section 7.2, all costs and expenses incurred in
connection with this Agreement and the transactions contemplated hereby shall be
paid by the party incurring such expenses, except that those expenses incurred
in connection with printing the S-4 and the Proxy Statement, as well as the
filing fee relating thereto, shall be shared equally by IUB and PTC.
5.12 PTC OPTIONS.
(a) As of the Effective Time, each of the PTC Options that is
outstanding as of the Effective Time shall be assumed by IUB and converted
into an option to purchase the number of shares of IUB Common Stock (rounded
up to the nearest whole share) equal to the number of shares of PTC Common
Stock subject to such option multiplied by the Conversion Ratio at an
exercise price per share of IUB Common Stock (rounded down to the nearest
xxxxx) equal to the former exercise price per share of PTC Common Stock
under such option immediately prior to the Effective Time divided by the
Conversion Ratio; PROVIDED, HOWEVER, that to the extent any PTC Option
constitutes an "incentive stock option" (within the meaning of Section 422
of the Code) immediately prior to the Effective Time, such PTC Option shall
continue to qualify as an incentive stock option to the maximum extent
permitted by Section 422 of the Code, and the assumption of the PTC Option
provided by this Section 5.12 shall satisfy the conditions of Section 424(a)
of the Code.
(b) Except as provided in Section 5.12(a), each PTC Option assumed by
IUB as of the Effective Time shall continue to have, and shall be subject
to, the same terms and conditions set forth in or otherwise established
pursuant to the PTC Stock Option Plan (as defined in Section 3.1(b))
pursuant to which such PTC Option was granted.
(c) As of the Effective Time of the Merger, IUB shall enter into an
assumption agreement with respect to each PTC Option which shall provide for
IUB's assumption of the obligations of PTC under the PTC Stock Option Plan.
Prior to the Effective Time, PTC shall make such amendments, if any, to the
PTC Stock Option Plan as shall be necessary to permit such assumption in
accordance with this Section 5.12.
5.13 SURVIVING CORPORATION BENEFIT PLANS.
(a) GENERAL. Unless otherwise mutually determined, and subject to the
provisions of Section 5.13(c), the PTC Benefit Plans in effect on the date
of this Agreement shall remain in effect after the Effective Time. Following
the Effective Time of the Merger, the Surviving Corporation shall formulate
Benefit Plans for the Surviving Corporation and its Subsidiaries, with
respect both to employees who were covered by the PTC Benefit Plans and IUB
Benefit Plans at the Effective Time and employees who were not covered by
such plans at the Effective Time, that provide benefits for services after
the Effective Time on a basis that does not discriminate between employees
who were covered by PTC Benefit Plans and employees who were covered by IUB
Benefit Plans.
(b) CREDIT FOR PAST SERVICE. Without limitation on the foregoing
provisions of this Section 5.13, each participant of any PTC Benefit Plan
shall receive credit for purposes of (i) eligibility to participate, vesting
and eligibility to receive benefits under any IUB Benefit Plan or any
benefit plan of the Surviving Corporation or any of its Subsidiaries that
replaces a PTC Benefit Plan or IUB Benefit Plan, and (ii) benefit accrual
under any severance, sickness or vacation pay plan, for service credited for
the corresponding purpose under such PTC Benefit Plan; PROVIDED, HOWEVER,
that such crediting of service shall not operate to duplicate any benefit to
any such participant or the funding for any such benefit.
(c) PTC 401K PENSION PLAN. Pursuant to its terms, PTC's 401K Pension
Plan (the "Plan") will terminate as of the Effective Time of the Merger and
all PTC employees who have elected to participate in the Plan will become
fully vested. Accordingly, at the Effective Time of the Merger, IUB shall
take such actions as are necessary to permit employees of PTC and its
Subsidiaries, who so elect,
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to participate in IUB's existing retirement or pension plan until such time
as the Surviving Corporation formulates benefit plans to be applicable to
all employees of the Surviving Corporation and its Subsidiaries. For those
employees who elect to transfer their 401K pension funds to IUB, IUB shall
provide benefits and services after the Effective Time on a basis that does
not discriminate between employees who were covered by PTC's 401K Pension
Plan and IUB's retirement or pension plan. Employees of PTC and its
Subsidiaries shall receive credit for purposes of eligibility to
participate, vesting and eligibility to receive benefits in IUB's retirement
or pension plan consistent with their number of years of service with PTC.
5.14 EXTENT OF KNOWLEDGE. For purposes of this Agreement and any other
certificate or document delivered by one party to the other pursuant hereto, the
"best knowledge" of IUB or PTC shall be limited to matters actually known to any
of its executive officers.
5.15 POOLING AND TAX-FREE REORGANIZATION TREATMENT. Neither IUB nor PTC
shall intentionally cause to be taken any action, whether before or after the
Effective Time, that would disqualify the Merger as a "pooling of interests" for
accounting and financial reporting purposes or as a "reorganization" within the
meaning of Section 368(a) of the Code.
5.16 NASDAQ STOCK MARKET LISTING. IUB shall use its best efforts to list
on the Nasdaq Stock Market, Inc.'s National Market, subject to official notice
of issuance, the shares of IUB Common Stock to be issued in the Merger.
5.17 DIRECTORS' AND OFFICERS' INDEMNIFICATION AND INSURANCE. IUB agrees
that the Merger shall not affect or diminish any of PTC's duties and obligations
of indemnification existing immediately prior to the Effective Time in favor of
employees, agents, directors, or officers of PTC arising by virtue of the
Articles of Incorporation, or Bylaws of PTC in the form in effect at the date of
this Agreement or arising by operation of law or arising by virtue of any
contract, resolution or other agreement or document existing at the date of this
Agreement, and such duties and obligations shall continue in full force and
effect for so long as they would (but for the Merger) otherwise survive and
continue in full force and effect. IUB shall cause the persons serving as
officers and directors of PTC immediately prior to the Effective Time to be
covered for a period of three years from the Effective Time by the directors'
and officers' liability insurance and indemnification policy maintained by PTC
on the date hereof (provided that IUB may substitute therefor policies of at
least the same coverage and amounts containing terms and conditions which are
not materially less advantageous than such policy) with respect to acts or
omissions occurring prior to the Effective Time which were committed by such
officers and directors in their capacity as such so long as the annual premium
therefor does not exceed 200% of the annual premium in effect on the date
hereof.
5.18 SURVIVING CORPORATION BOARD OF DIRECTORS. The Board of Directors of
IUB will take such action as may be necessary (including the amendment of the
IUB bylaws) to cause the number of directors comprising the full Board of
Directors of IUB immediately prior to or at the Effective Time to be 10 persons,
5 of whom shall be existing directors of IUB prior to the Effective Time
designated by IUB and 5 of whom shall be existing directors of PTC prior to the
Effective Time designated by PTC. If, prior to the Effective Time, any such
designees shall decline or be unable to serve, the party that designated such
person shall designate another person to serve in such person's stead. Each such
person so designated shall be a director of the Surviving Corporation until the
earlier of his resignation or removal or until his successor is duly elected or
appointed, as the case may be.
5.19 SURVIVING CORPORATION OFFICERS. At the Effective Time, pursuant to
the terms hereof (and, in the case of Xxxxx X. Xxxxx, the employment contract
referred to in Section 5.20), (a) Xxxxxx X. Xxxxxx shall hold the positions of
Chairman of the Board and Chief Executive Officer of the Surviving Corporation
and shall be entitled to serve in such capacities until his resignation or
removal or until his successor is elected or appointed, as the case may be, and
(b) Xxxxx X. Xxxxx shall hold the position of President and Chief Operating
Officer of the Surviving Corporation and shall be entitled to serve in such
capacity until
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his resignation or removal or until his successor is duly elected or appointed
in accordance with the articles of incorporation and bylaws of the Surviving
Corporation. At or promptly after the Effective Time, the Board of Directors of
the Surviving Corporation will take such action as may be necessary (including
the amendment of the Surviving Corporation's bylaws) to cause Xxxxxx X. Xxxxxxxx
to be elected to the honorary position of Vice Chairman of the Board. If any of
such persons is unable or unwilling to hold such office(s) as set forth above,
his successor shall be selected by the Board of Directors of the Surviving
Corporation in accordance with its bylaws. At the Effective Time, each of the
other officers of IUB immediately prior to the Effective Time shall continue to
hold his or her respective office as an officer of the Surviving Corporation
until the earlier of his or her resignation or removal or until his or her
successor is duly elected or appointed, as the case may be.
5.20 EMPLOYMENT CONTRACT. IUB shall, as of or prior to the Effective Time,
enter into an employment contract with Xxxxx X. Xxxxx in the form set forth in
Exhibit 5.20.
5.21 IUB CONTEMPLATED OFFERING. PTC acknowledges that IUB has informed it,
on a confidential basis, that IUB is contemplating an underwritten public
offering of securities of a newly formed Subsidiary to be guaranteed by IUB, as
more fully described in the IUB Letter (the "Contemplated Offering"). PTC hereby
consents to the Contemplated Offering, should IUB determine to commence it. Any
decision not to commence the Contemplated Offering by IUB, or any failure to
consummate the Contemplated Offering for any reason (other than a material
breach by PTC of its obligations under this Section 5.21), shall not affect the
obligations of IUB or PTC under this Agreement. With respect to the Contemplated
Offering, PTC shall provide IUB and its legal counsel, accountants and other
representatives, and to the underwriter of the Contemplated Offering and its
legal counsel and other representatives, with such information about the
business and condition (financial and otherwise) of PTC as they collectively
shall deem necessary or appropriate in connection with the registration and
consummation of the Contemplated Offering under the Securities Act and any
applicable state securities or blue sky laws. PTC shall instruct and otherwise
use its best efforts to cause its directors, officers, employees, agents and
advisors to cooperate with IUB and the underwriter of the Contemplated Offering,
and the respective representatives and advisors of each, with respect to the
provision of such information regarding PTC. PTC shall consent, and shall use
its best efforts to cause its independent certified accountants to consent, in
such form as may be reasonably required by IUB, to the inclusion of such
information about PTC in the registration statement (including any amendments or
supplements thereto) relating to the Contemplated Offering (and in the
prospectus constituting a part thereof) to the extent such consent is required
by the SEC. None of the information supplied or to be supplied by PTC for
inclusion in the registration statement relating to the Contemplated Offering
(and in the prospectus constituting a part thereof) will, at the time the
registration statement is filed with the SEC, at the time it becomes effective
and at the time of consummation of the Contemplated Offering, contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. Prior to filing the
registration statement relating to the Contemplated Offering (or any amendment
or supplement thereto), IUB will take such actions as are reasonable under the
circumstances to provide PTC, on a confidential basis, with copies of such
registration statement (or amendment or supplement) proposed to be filed with
the SEC, and to allow PTC the opportunity to comment promptly thereon with
respect to information disclosed about PTC. In the event the Merger is not
consummated (other than (i) because of a breach by PTC of any representation,
warranty, covenant or other agreement contained in this Agreement which would
give rise to the failure of a condition set forth in Section 6.2(a) or 6.2(b) or
(ii) the termination of this Agreement by PTC pursuant to Section 7.1(e)), IUB
shall reimburse PTC for all its reasonable out-of-pocket expenses actually
incurred in connection with the performance of its obligations under this
Section 5.21, up to a maximum of $10,000, which amount shall be payable by wire
transfer of same day funds within 5 business days of written demand, accompanied
by a reasonably detailed statement of such expenses and appropriate supporting
documentation therefor.
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5.22 PTC ALLOWANCE PROVISION. On or before December 15, 1997, PTC shall
increase its Allowance by such amount as shall be necessary to cause its
Allowance to be 1.2% of the gross amount of its loans, leases and other
extensions of credit at November 30, 1997.
ARTICLE VI
CONDITIONS PRECEDENT
6.1 CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE MERGER. The
respective obligation of each party to effect the Merger shall be subject to the
satisfaction prior to the Closing Date of the following conditions:
(a) SHAREHOLDER APPROVALS. This Agreement shall have been respectively
approved by the affirmative vote of the holders of the outstanding shares of
IUB Common Stock and PTC Common Stock.
(b) OTHER APPROVALS. Other than the filing of the Articles of Merger
provided for by Section 1.1, all authorizations, consents, orders or
approvals of, or declarations or filings with, and all expirations of
waiting periods imposed by, any Governmental Entity (all of the foregoing,
"Consents") that are necessary for the consummation of the Merger, other
than immaterial Consents the failure to obtain which would not have a
significant adverse effect on the consummation of the Merger or on the
Surviving Corporation and its Subsidiaries, taken as a whole, after
consummation of the Merger, shall have been filed, occurred or been obtained
(all such permits, approvals, filings and consents and the lapse of all such
waiting periods being referred to as the "Requisite Regulatory Approvals")
and all such Requisite Regulatory Approvals shall be in full force and
effect. IUB shall have received all state securities or blue sky permits and
other authorizations necessary to issue the IUB Common Stock in exchange for
PTC Common Stock and to consummate the Merger.
(c) S-4. The S-4 shall have become effective under the Securities Act
and shall not be the subject of any stop order or proceeding seeking a stop
order.
(d) POOLING. IUB and PTC shall have received a letter from Geo. S.
Olive & Co., LLC, IUB's independent public accountants, and Xxxxx Xxxxxx and
Company, LLP, PTC's independent public accountants, to the effect that the
Merger qualifies for "pooling of interests" accounting treatment under
Accounting Principles Board Opinion No. 16, the interpretive releases issued
pursuant thereto, and the pronouncements of the SEC if consummated in
accordance with this Agreement.
(e) NO INJUNCTIONS OR RESTRAINTS; ILLEGALITY. No temporary restraining
order, preliminary or permanent injunction or other order issued by any
court of competent jurisdiction or other legal restraint or prohibition (an
"Injunction") preventing the consummation of the Merger shall be in effect,
nor shall any proceeding by any Governmental Entity seeking any of the
foregoing be pending. There shall not be any action taken, or any statute,
rule, regulation or order enacted, entered, enforced or deemed applicable to
the Merger, which makes the consummation of the Merger illegal.
(f) BURDENSOME CONDITION. There shall not be any action taken, or any
statute, rule, regulation or order enacted, entered, enforced or deemed
applicable to the Merger, by any Governmental Entity which, in connection
with the grant of a Requisite Regulatory Approval, imposes any condition or
restriction upon IUB or its Subsidiaries, PTC or its Subsidiaries, or the
Surviving Corporation or its Subsidiaries, that would so materially
adversely impact the economic or business benefits of the transactions
contemplated by this Agreement as to render inadvisable the consummation of
the Merger.
(g) NMS LISTING. The shares of IUB Common Stock issuable pursuant to
this Agreement shall have been approved for listing on the National Market
of the Nasdaq Stock Market, Inc., subject to official notice of issuance.
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6.2 CONDITIONS TO OBLIGATIONS OF IUB. The obligations of IUB to effect the
Merger are subject to the satisfaction of the following conditions or waiver by
IUB on or prior to the Closing Date:
(a) REPRESENTATIONS AND WARRANTIES. The representations and warranties
of PTC set forth in this Agreement that are qualified as to materiality
shall be true and correct, and the representations and warranties of PTC set
forth in this Agreement that are not so qualified shall be true and correct
in all material respects, in each case as of the date of this Agreement and
as of the Closing Date as though made on and as of the Closing Date, except
to the extent such representation or warranty expressly relates to an
earlier date ( in which case as of such date), and IUB shall have received a
certificate signed on behalf of PTC by the Chief Executive Officer and the
Chief Financial Officer of PTC to such effect.
(b) PERFORMANCE OF OBLIGATIONS OF PTC. PTC shall have performed in all
material respects all obligations required to be performed by it under this
Agreement, at or prior to the Closing Date, and IUB shall have received a
certificate signed on behalf of PTC by the Chief Executive Officer and the
Chief Financial Officer of PTC to such effect.
(c) CONSENTS UNDER AGREEMENTS. PTC shall have obtained the consent or
approval of each person (other than the Governmental Entities referred to in
Section 6.1(b)) whose consent or approval shall be required in order to
permit the succession by the Surviving Corporation pursuant to the Merger to
any obligation, right or interest of PTC or any Subsidiary of PTC under any
loan or credit agreement, note, mortgage, indenture, lease license or other
agreement or instrument, except those for which failure to obtain such
consents and approvals would not, in the reasonable opinion of IUB,
individually or in the aggregate, have a Material Adverse Effect on the
Surviving Corporation or upon the consummation of the transactions
contemplated hereby.
(d) TAX OPINION. IUB shall have received an opinion of Geo. S. Olive &
Co., LLC, dated the Closing Date, in form and substance satisfactory to IUB,
to the effect that the Merger will be treated for federal income tax
purposes as a reorganization within the meaning of Section 368(a) of the
Code.
(e) LETTERS FROM PTC AFFILIATES. IUB shall have received from each
person named in the letter referred to in Section 5.4(a) an executed copy of
an agreement in the form of Exhibit 5.4(a).
6.3 CONDITIONS TO OBLIGATIONS OF PTC. The obligations of PTC to effect the
Merger are subject to the satisfaction or waiver by PTC on or prior to the
Closing Date of the following conditions:
(a) REPRESENTATIONS AND WARRANTIES. The representations and warranties
of IUB set forth in this Agreement that are qualified as to materiality
shall be true and correct, and the representations and warranties of IUB set
forth in this Agreement that are not so qualified shall be true and correct
in all material respects, in each case as of the date of this Agreement and
as of the Closing Date as though made on and as of the Closing Date, except
to the extent such representation or warranty expressly relates to another
date (in which case as of such date), and PTC shall have received a
certificate signed on behalf of IUB by the Chief Executive Officer and the
Chief Financial Officer of IUB to such effect.
(b) PERFORMANCE OF OBLIGATIONS OF IUB. IUB shall have performed in all
material respects all obligations required to be performed by it under this
Agreement at or prior to the Closing Date, and PTC have received a
certificate signed on behalf of IUB by the Chief Executive Officer and the
Chief Financial Officer of IUB to such effect.
(c) CONSENTS UNDER AGREEMENTS. IUB shall have obtained the consent or
approval of each person (other than the Governmental Entities referred to in
Section 6.1(b)) whose consent or approval shall be required in connection
with the transactions contemplated hereby under any loan or credit
agreement, note, mortgage, indenture, lease, license or other agreement or
instrument, except those for which failure to obtain such consents and
approvals would not, in the reasonable opinion of
28
PTC, individually or in the aggregate, have a Material Adverse Effect on the
Surviving Corporation or upon the consummation of the transactions
contemplated hereby.
(d) TAX OPINION. PTC shall have received an opinion of Xxxxx Xxxxxx
and Company, LLP, dated the Closing Date, in form and substance satisfactory
to PTC, to the effect that the Merger will be treated for federal income tax
purposes as a reorganization within the meaning of Section 368(a) of the
Code.
(e) LETTERS FROM IUB AFFILIATES. IUB shall have received from each
person named in the letter referred to in Section 5.4(b) an executed copy of
an agreement substantially in the form of Exhibit 5.4(b).
ARTICLE VII
TERMINATION; EXPENSES; AMENDMENT; WAIVER
7.1 TERMINATION. This Agreement may be terminated at any time prior to the
Effective Time of the Merger, whether before or after the approval of this
Agreement by the shareholders of IUB and/or PTC:
(a) by mutual written consent of IUB and PTC;
(b) by either IUB or PTC:
(i) if, at a duly held shareholders meeting of IUB or any adjournment
thereof at which approval of this Agreement is voted upon, the approval of
the shareholders of IUB shall not have been obtained;
(ii) if, at a duly held shareholders meeting of PTC or any adjournment
thereof at which approval of this Agreement is voted upon, the approval of
the shareholders of PTC shall not have been obtained;
(iii) if the Merger shall not have been consummated on or before March
31, 1998, unless the failure to consummate the Merger is the result of a
willful and material breach of this Agreement by the party seeking to
terminate this Agreement; PROVIDED, HOWEVER, that if all the conditions set
forth in Sections 6.1 (other than 6.1(b)), 6.2 and 6.3 have been satisfied
by or prior to such date, either IUB or PTC may, by notice to the other on
or prior to such date, extend such date to the latest date so extended by
either party but in no event later than May 31, 1998;
(iv) if any court of competent jurisdiction or other Governmental Entity
shall have issued an order, decree or ruling or taken any other action
permanently enjoining, restraining or otherwise prohibiting the Merger and
such order, decree, ruling or other action shall have become final and
non-appealable;
(v) in the event of a breach by the other party of any representation,
warranty, covenant or other agreement contained in this Agreement which (A)
would give rise to the failure of a condition set forth in Section 6.2(a) or
6.2(b) or Section 6.3(a) or 6.3(b), as applicable, and (B) cannot be or has
not been cured within 30 days after the giving of written notice to the
breaching party of such breach ("Material Breach") (PROVIDED that the
terminating party is not then in breach of any representation, warranty,
covenant or other agreement that would give rise to a failure of a condition
described in clause (A) above);
(c) by either IUB or PTC in the event that (i) all the conditions to the
obligation of such party to effect the Merger set forth in Section 6.1 shall
have been satisfied and (ii) any condition to the obligation of such party to
effect the Merger set forth in Section 6.2 (in the case of IUB) or Section 6.3
(in the case of PTC) is not capable of being satisfied prior to the end of the
period referred to in Section 7.1(b)(iii);
29
(d) by IUB, subject to Section 7.5(b), if the Board of Directors of IUB
shall concurrently approve, and IUB shall concurrently enter into, a definitive
agreement providing for the implementation of the transactions contemplated by a
takeover proposal; PROVIDED, HOWEVER, that (i) IUB is not then in breach of
Section 4.2 or in breach of any other representation, warranty, covenant or
agreement that would give rise to a failure of a condition set forth in Section
6.3(a) or 6.3(b); (ii) the Board of Directors of IUB shall have complied with
Section 7.5(b) in connection with such takeover proposal and (iii) no
termination pursuant to this Section 7.1(d) shall be effective unless IUB shall
simultaneously make the payment required by Section 7.2(a); or
(e) by PTC, subject to Section 7.5(c), if the Board of Directors of PTC
shall concurrently approve, and PTC shall concurrently enter into, a definitive
agreement providing for the implementation of the transactions contemplated by a
takeover proposal; PROVIDED, HOWEVER that (i) PTC is not then in breach of
Section 4.2 or in breach of any other representation, warranty, covenant or
agreement that would give rise to a failure of a condition set forth in Section
6.2(a) or 6.2(b); (ii) the Board of Directors of PTC shall have complied with
Section 7.5(c) in connection with such takeover proposal and (iii) no
termination pursuant to this Section 7.1(e) shall be effective unless PTC shall
simultaneously make the payment required by Section 7.2(b).
7.2 EFFECT OF TERMINATION.
(a) In the event that any person shall make a takeover proposal with respect
to IUB and thereafter (i) this Agreement is terminated (A) pursuant to Section
7.1(b)(i), (B) pursuant to Section 7.1(b)(iii) (if at the time of termination
(x) IUB is in breach of any representation, warranty, covenant or other
agreement that would give rise to a failure of a condition set forth in Section
6.3(a) or 6.3(b) and (y) such breach cannot be or has not been cured within 30
days after IUB becomes aware of such breach or such shorter period as may elapse
between the date IUB becomes aware of such breach and the time of termination),
(C) pursuant to Section 7.1(b)(iv) (if at the time of termination (x) IUB is in
breach of any representation, warranty, covenant or other agreement that would
give rise to a failure of a condition set forth in Section 6.3(a) or 6.3(b) and
(y) such breach cannot be or has not been cured within 30 days after IUB becomes
aware of such breach), (D) by PTC pursuant to Section 7.1(b)(v), (E) by PTC
pursuant to Section 7.1(c) or (F) by IUB pursuant to Section 7.1(d), and (ii) a
definitive agreement with respect to a takeover proposal is executed, or a
takeover proposal is consummated, at or within 12 months after such termination,
then PTC shall be paid a fee of $1,000,000 in connection with such termination,
which amount shall be payable by wire transfer of same day funds on the date
such agreement is executed, or such takeover proposal is consummated, as
applicable. IUB acknowledges that the agreements contained in this Section
7.2(a) are an integral part of the transactions contemplated by this Agreement,
and that without these agreements, PTC would not enter into this Agreement;
accordingly, if IUB fails to promptly pay the amount due pursuant to this
Section 7.2(a), and, in order to obtain such payment, PTC commences a suit that
results in a judgment against IUB for the fees set forth in this Section 7.2(a),
IUB shall also pay to PTC its costs and expenses (including reasonable
attorneys' fees) in connection with such suit.
(b) In the event that any person shall make a takeover proposal with respect
to PTC and thereafter (i) this Agreement is terminated (A) pursuant to Section
7.1(b)(ii), (B) pursuant to Section 7.1(b)(iii) (if at the time of termination
(x) PTC is in breach of any representation, warranty, covenant or other
agreement that would give rise to a failure of a condition set forth in Section
6.2(a) or 6.2(b) and (y) such breach cannot be or has not been cured within 30
days after PTC becomes aware of such breach or such shorter period as may elapse
between the date PTC becomes aware of such breach and the time of termination),
(C) pursuant to Section 7.1(b)(iv) (if at the time of termination (x) PTC is in
breach of any representation, warranty, covenant or other agreement that would
give rise to a failure of a condition set forth in Section 6.2(a) or 6.2(b) and
(y) such breach cannot be or has not been cured within 30 days after PTC becomes
aware of such breach), (D) by IUB pursuant to Section 7.1(b)(v), (E) by IUB
pursuant to Section 7.1(c) or (F) by PTC pursuant to Section 7.1(e), and (ii) a
definitive agreement with respect to a takeover proposal is executed, or a
takeover proposal is consummated, at or within 12 months after such termination,
then
30
IUB shall be paid a fee of $1,000,000 in connection with such termination, which
amount shall be payable by wire transfer of same day funds on the date such
agreement is executed, or such takeover proposal is consummated, as applicable.
PTC acknowledges that the agreements contained in this Section 7.2(b) are an
integral part of the transactions contemplated by this Agreement, and that
without these agreements, IUB would not enter into this Agreement; accordingly,
if PTC fails to promptly pay the amount due pursuant to this Section 7.2(b),
and, in order to obtain such payment, IUB commences a suit that results in a
judgment against PTC for the fees set forth in this Section 7.2(b), PTC shall
also pay to IUB its costs and expenses (including reasonable attorneys' fees) in
connection with such suit.
(c) In the event of termination of this Agreement by either IUB or PTC as
provided in Section 7.1, this Agreement shall forthwith become void and have no
effect, without any liability or obligation on the part of IUB or PTC, other
than the provisions of Section 5.1(b), Section 5.11, this Section 7.2 and
Article VIII and except to the extent that such termination results from the
willful and material breach by a party of any its representations, warranties,
covenants or other agreements set forth in this Agreement.
7.3 AMENDMENT. This Agreement may be amended by the parties at any time
before or after the approval of this Agreement by the shareholders of IUB and/or
PTC; PROVIDED, HOWEVER, that after such approval by the shareholders of IUB
and/or PTC, there shall be made no amendment that pursuant to the IBCL requires
further approval by the shareholders of IUB and/or PTC without the further
approval of such shareholders. This Agreement may not be amended except by an
instrument in writing signed on behalf of each of the parties
7.4 EXTENSION WAIVER. At any time prior to the Effective Time of the
Merger, the parties may (i) extend the time for the performance of any of the
obligations or other acts of the other parties; (ii) waive any inaccuracies in
the representations and warranties contained n this Agreement or in any document
delivered pursuant to this Agreement; or (iii) subject to the proviso of Section
7.3, waive compliance with any of the agreements or conditions contained in this
Agreement. Any agreement on the part of a party to any such extension or waiver
shall be valid only if set forth in an instrument in writing signed on behalf of
such party. The failure of any party to this Agreement to assert any of its
rights under this Agreement or otherwise shall not constitute a waiver of such
rights.
7.5 PROCEDURE FOR TERMINATION, AMENDMENT, EXTENSION OR WAIVER.
(a) A termination of this Agreement pursuant to Section 7.1, an amendment of
this Agreement pursuant to Section 7.3 or an extension or waiver pursuant to
Section 7.4 shall, in order to be effective, require, in the case of IUB and/or
PTC, action by its Board of Directors or, in the case of an extension or waiver
pursuant to Section 7.4, the duly authorized designee of its Board of Directors.
(b) IUB shall provide to PTC written notice prior to any termination of this
Agreement pursuant to Section 7.1(d) advising PTC (i) that the Board of
Directors of IUB in the exercise of its good faith judgment as to its fiduciary
duties to the shareholders of IUB under applicable law, after receipt of written
advice of outside legal counsel, has determined (on the basis of such takeover
proposal and the terms of this Agreement, as then in effect) that such
termination is required in connection with a takeover proposal that is more
favorable to the shareholders of IUB than the transactions contemplated by this
Agreement (taking into account all terms of such takeover proposal and this
Agreement, including all conditions) and (ii) as to the material terms of any
such takeover proposal. At any time after five business days following receipt
of such notice, IUB may terminate this Agreement as provided in Section 7.1(d)
only if the Board of Directors of IUB determines that such takeover proposal is
more favorable to the shareholders of IUB than the transactions contemplated by
this Agreement (taking into account all terms of such takeover proposal and this
Agreement, including all conditions, and which determination shall be made in
light of any revised proposal made by PTC prior to the expiration of such five
business day period) and IUB concurrently enters into a definitive agreement
providing for the implementation of the transactions contemplated by such
takeover proposal.
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(c) PTC shall provide to IUB written notice prior to any termination of this
Agreement pursuant to Section 7.1(e) advising IUB (i) that the Board of
Directors of PTC in the exercise of its good faith judgment as to its fiduciary
duties to the shareholders of PTC under applicable law, after receipt of written
advice of outside legal counsel, has determined (on the basis of such takeover
proposal and the terms of this Agreement, as then in effect) that such
termination is required in connection with a takeover proposal that is more
favorable to the shareholders of PTC than the transactions contemplated by this
Agreement (taking into account all terms of such takeover proposal and this
Agreement, including all conditions) and (ii) as to the material terms of any
such takeover proposal. At any time after five business days following receipt
of such notice, PTC may terminate this Agreement as provided in Section 7.1(e)
only if the Board of Directors of PTC determines that such takeover proposal is
more favorable to the shareholders of PTC than the transactions contemplated by
this Agreement (taking into account all terms of such takeover proposal and this
Agreement, including all conditions, and which determination shall be made in
light of any revised proposal made by IUB prior to the expiration of such five
business day period) and PTC concurrently enters into a definitive agreement
providing for the implementation of the transactions contemplated by such
takeover proposal.
ARTICLE VIII
GENERAL PROVISIONS
8.1 NON-SURVIVAL OF REPRESENTATIONS AND WARRANTIES. None of the
representations and warranties in this Agreement or in any instrument delivered
pursuant to this Agreement shall survive the Effective Time of the Merger. This
Section 8.1 shall not limit any covenant or agreement of the parties that by its
terms contemplates performance after the Effective Time of the Merger.
8.2 NOTICES. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be deemed given (i) on
the first business day following the date received, if delivered personally or
by telecopy (with telephonic confirmation of receipt by the addressee), (ii) on
the business day following timely deposit with an overnight courier service, if
sent by overnight courier specifying next day delivery and (iii) on the first
business day that is at least two days following deposit in the mails, if sent
by first class mail, to the parties at the following addresses (or at such other
address for a party as shall be specified by like notice):
(a) If to IUB, to it at: Indiana United Bancorp
000 X. Xxxxxxxx
X.X. Xxx 00
Xxxxxxxxxx, XX 00000-0000
Attn: Xxxxxx X. Xxxxxx, Chairman,
President
and Chief Executive Officer
Telecopy No. (000) 000-0000
With a copy (which shall not Xxxxx X. Xxxxxx, Esq.
constitute notice) to: 0000 Xxxxxxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Telecopy No. (000) 000-0000
and
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(b) If to PTC, to it at: P.T.C. Bancorp
0000 Xxxxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attn: Xxxxx X. Xxxxx, President and
Chief Executive Officer
Telecopy No. (000) 000-0000
With a copy (which shall not Xxxxxx X. Xxxxxxx, Esq.
constitute notice) to: Xxxxxxxxx, Daily, Xxxxxxx & XxXxx
0000 Xxx Xxxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Telecopy No. (000) 000-0000
8.3 INTERPRETATION. Unless the context otherwise requires, words
describing the singular number shall include the plural and vice versa, and
words denoting any gender shall include all genders and words denoting natural
persons shall include corporations and other entities and vice versa. The
headings contained in this Agreement are for reference purposes only and shall
not affect in any way the meaning or interpretation of this Agreement. When a
reference is made in this Agreement to any "Section" or "Exhibit," such
reference shall be to a section or exhibit to this Agreement unless otherwise
indicated. Whenever the words "include," "includes" or "including" are used in
this Agreement, they shall be deemed to be followed by the words "without
limitation." Whenever the words "or any Subsidiary," "or any Subsidiaries," "nor
any "Subsidiary" or "nor any Subsidiaries" are used in this Agreement in
connection with a preceding reference to a party to this Agreement, they shall
be deemed to refer to a Subsidiary or Subsidiaries of that party. The phrase
"made available" in this Agreement shall mean that the information referred to
has been made available if requested by the party to whom such information is to
be made available, and the correlative phrase "make available" shall mean that
such information shall be promptly made available if so requested. The phrases
"the date of this Agreement," "the date hereof" and terms of similar import,
unless the context otherwise requires, shall be deemed to refer to October 8,
1997.
8.4 ASSIGNMENT; BINDING EFFECT; BENEFIT. Neither this Agreement nor any of
the rights, interests or obligations hereunder shall be assigned by any of the
parties hereto (whether by operation of law or otherwise) without the prior
written consent of the other parties. Subject to the preceding sentence, this
Agreement shall be binding upon and shall inure to the benefit of the parties
hereto and their respective successors and assigns. Notwithstanding anything
contained in this Agreement to the contrary, except for the provisions of
Article II and Sections 5.12, 5.13 and 5.17 (collectively, the "Third Party
Provisions"), nothing in this Agreement, express or implied, is intended to
confer on any person other than the parties hereto any rights, remedies,
obligations or liabilities under or by reason of this Agreement. The Third Party
Provisions may be enforced on behalf of PTC or the other respective
beneficiaries thereof by those individuals who were the directors of PTC
immediately prior to the Effective Time. IUB shall pay all expenses, including
attorneys' fees, that may be incurred by such directors in enforcing the Third
Party Provisions.
8.5 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Indiana regardless of the laws that
might otherwise govern under applicable principles of conflicts of laws thereof.
8.6 COUNTERPARTS. This Agreement may be executed in separate counterparts,
each of which when so executed and delivered shall be an original, but all of
which shall together constitute one and the same instrument. It shall not be
necessary, in making proof of this Agreement or any counterpart hereof, to
produce or account for any of the other counterparts.
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8.7 SEVERABILITY. Any term or provision of this Agreement that is invalid
or unenforceable shall be ineffective to the extent of such invalidity or
unenforceability without rendering invalid or unenforceable the remaining terms
and provisions of this Agreement. If any provision of this Agreement is so broad
as to be unenforceable, the provision shall be interpreted to be only so broad
as is enforceable.
8.8 INCORPORATION OF DOCUMENTS. The PTC Letter, the IUB Letter, and all
Exhibits attached hereto and referred to herein are hereby incorporated herein
and made a part hereof for all purposes as if fully set forth herein.
8.9 ENFORCEMENT. The parties agree that irreparable damage would occur in
the event that any of the provisions of this Agreement were not performed in
accordance with its specific terms or were otherwise breached. It is accordingly
agreed that any party shall be entitled to seek an injunction or injunctions to
prevent breaches of this Agreement and to enforce specifically the terms and
provisions of this Agreement in any court of the United States located in the
State of Indiana or in Indiana state court, this being in addition to any other
remedy to which it is entitled at law or in equity.
8.10 WAIVERS. Except as provided in this Agreement or in any waiver
pursuant to Section 7.4, no action taken pursuant to this Agreement, including
any investigation by or on behalf of any party, shall be deemed to constitute a
waiver by the party taking such action of compliance with any representations,
warranties, covenants or agreements contained in this Agreement. The waiver by
any party hereto of a breach of any provision hereunder shall not operate or be
construed as a waiver of any prior or subsequent breach of the same or any other
provision hereunder.
8.11 ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties with respect to the subject matter hereof and supersedes all
prior agreements and understandings, both written and oral, among the parties
with respect to the subject matter hereof.
IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
signed on its behalf by its officers thereunto duly authorized, all as of the
day and year first above written.
INDIANA UNITED BANCORP
By: XXXXXX X. XXXXXX
-----------------------------------------
Xxxxxx X. Xxxxxx,
CHAIRMAN, PRESIDENT AND
CHIEF EXECUTIVE OFFICER
P.T.C. BANCORP
By: XXXXX X. XXXXX
-----------------------------------------
Xxxxx X. Xxxxx,
PRESIDENT AND CHIEF EXECUTIVE OFFICER
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