EXHIBIT 10(7)
EXEMPT LOAN AND SHARE PURCHASE AGREEMENT
THIS EXEMPT LOAN AND SHARE PURCHASE AGREEMENT (this "Agreement" or "Loan
Agreement"), dated June 29, 2004, between the Trust (the "Trust") established
pursuant to the provisions of the THIRD CENTURY BANCORP EMPLOYEE STOCK OWNERSHIP
PLAN AND TRUST AGREEMENT (EFFECTIVE AS OF JUNE 1, 2004) (the "ESOP") by
HomeFederal Bank, as Trustee (the "Trustee"), and Third Century Bancorp, an
Indiana corporation (the "Company").
W I T N E S S E T H:
WHEREAS, the Company has duly established the ESOP in connection with which
the Trust has been created;
WHEREAS, pursuant to the ESOP and direction of the Company pursuant to
Section 8.7 of the ESOP, the Trust desires to borrow from the Company, and the
Company desires to lend to the Trust, an aggregate principal amount equal to the
cost of the purchase on the open market of 132,250 shares of Common Stock,
without par value ("Common Stock") of the Company (the "Trust Loan," which shall
include an initial amount of $1,322,500 (the "Initial Trust Loan") and such
additional amounts as may be required to purchase such 132,250 shares (a
"Subsequent Trust Loan or Loans"));
WHEREAS, the parties hereto intend that the Trust Loan constitute an
"exempt loan" within the meaning of Section 4975(d)(3) of the Code, Treasury
Regulation ss. 54.4975-7(b), Section 408(b)(3) of ERISA, and Department of Labor
Regulation ss. 2550.408b-3 (collectively, the "Exempt Loan Rules") and an
"Exempt Loan" within the meaning of Sections 1.17 and 8.7 of the ESOP;
WHEREAS, the parties intend that the Trustee will utilize the Trust Loan
for the purpose of effecting purchases on the open market or otherwise of
132,250 shares of Company Common Stock ("Shares") to be held in the Trust for
participants in the ESOP.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements herein contained and other good and valuable consideration (the
receipt, adequacy and sufficiency of which each party hereto respectively
acknowledges by its execution hereof), the parties hereto intending legally to
be bound do hereby agree as follows:
ARTICLE I
DEFINITIONS AND INTERPRETATION
Section 1.1. General Interpretation. This Agreement shall be construed and
interpreted so as to maintain the status of the ESOP as a qualified leveraged
employee stock ownership plan under Sections 401(a) and 4975(e)(7) of the Code,
the Trust as exempt from taxation under Section 501(a) of the Code, and the
Trust Loan as an "exempt loan" under the Exempt Loan Rules, and as an "Exempt
Loan" under Section 8.7 of the ESOP (collectively, the "Required Status").
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Section 1.2. Certain Definitions. In this Agreement, unless a clear
contrary intention appears, the terms set forth below have the following
meanings when used herein. Other terms are defined elsewhere herein.
(a) "Business Day" means a day, other than a Saturday, Sunday or
public holiday, on which commercial banks are open in Franklin, Indiana for
the purpose of conducting commercial banking business.
(b) "Code" means the Internal Revenue Code of 1986, as amended, and
regulations promulgated thereunder.
(c) "Default" means an event or circumstance which, with notice or
lapse of time or both, would constitute an Event of Default as defined in
Section 6.1.
(d) "ERISA" means the Employee Retirement Income Security Act of 1974,
as amended, and regulations promulgated thereunder.
(e) "Loan Documents" shall mean, collectively, this Agreement, the
Trust Note, the Share Pledge Agreement and any other instruments or
documents required to be delivered pursuant hereto or thereto, in each case
as amended and in effect from time to time.
ARTICLE II
TRUST LOAN; TRUST NOTE; PAYMENTS
Section 2.1. Trust Loan. Subject to the terms and conditions of this
Agreement, the Company agrees to make available to the Trust, and the Trust may
borrow from the Company, on the Initial Closing Date (as hereinafter defined)
and thereafter from time to time, the Trust Loan under this Agreement in an
aggregate amount equal to the cost of 8% of the Shares sold in the Offering. The
Company shall, upon fulfillment of the applicable conditions set forth in
Article V, on the Initial Closing Date make available to the Trustee One Million
Three Hundred Twenty-Two Thousand Five Hundred Dollars ($1,322,500) (the
"Initial Trust Loan") in immediately available funds, at its principal office.
Notwithstanding the foregoing, the Company shall not be obligated to make any
portion of the Initial Trust Loan available to the Trust if the conversion of
Mutual Savings Bank (the "Bank") to stock form (the "Conversion") is not
consummated. The closing of the Initial Trust Loan (the "Initial Closing") will
occur at the offices of ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, on the same date that the Conversion closes, or
such later date as the parties shall agree upon (the "Initial Closing Date").
The Company shall, upon fulfillment of the applicable conditions set forth
in Article V, on a Subsequent Closing Date or Dates (as hereinafter defined)
make available to the Trustee in immediately available funds, at its principal
office, such additional amounts (a "Subsequent Trust Loan") as may be required
to acquire 132,250 shares of Common Stock of the Company. The closing of a
Subsequent Trust Loan (a "Subsequent Closing") will occur at the offices of the
Company on such date as the parties shall agree upon (a "Subsequent Closing
Date").
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Section 2.2. Use of Trust Loan Proceeds. The Trust will use the proceeds of
the Initial Trust Loan and any Subsequent Trust Loans to purchase Shares on the
open market, in accordance with Article VII hereof.
Section 2.3. Trust Notes. The Initial Trust Loan will be represented by a
promissory note of the Trust (the "Initial Trust Note"), substantially in the
form of Exhibit A hereto, appropriately completed, dated the Initial Closing
Date payable to the order of the Company in the amount of the $1,322,500, or so
much thereof as may at any time have been advanced hereunder and thereunder, on
the maturity date thereof. A Subsequent Trust Loan or Loans will be represented
by a promissory note or notes, substantially in the form of Exhibit A hereto,
appropriately complete, dated the appropriate Subsequent Closing Date payable to
the order of the Company in the initial principal amount of a Subsequent Trust
Loan, or so much thereof as may at any time have been advanced hereunder and
thereunder, on the maturity date thereof. The Initial Trust Note and any
Subsequent Trust Note shall be referred to collectively as the Trust Note.
Section 2.4. Interest. The portion of the Trust Loan principal outstanding
at any time shall accrue and bear daily interest at a fixed rate per annum equal
to the prime rate as published in "The Wall Street Journal" on the Initial
Closing Date (the "Interest Rate"), payable annually in accordance with Section
2.5. On any stated or accelerated maturity of the Trust Loan all accrued and
unpaid interest thereon shall be forthwith due and payable.
Section 2.5. Payments. The Trust shall pay the principal amount of the
Trust Loan together with accrued interest as follows:
(a) an initial principal installment of one thirtieth (1/30) of the
initial principal amount of the Trust Loan, shall be due and payable on
December 31, 2004, together with all interest accrued on the Trust Loan
from the date of the Trust Loan through and including December 31, 2004;
(b) thereafter, payments of principal and interest shall be made in
annual installments due and payable on the last business day of December of
each year, commencing on December 31, 2005, through and including December
31, 2018, which annual installments shall include a principal payment in
the amount of one-fifteenth of the initial principal amount of the Trust
Loan, plus all interest accrued on the Trust Loan through and including the
date of such payment; and
(c) a final payment of principal in the amount of one thirtieth (1/30)
of the initial principal amount of the Trust Loan, together with all
interest accrued on the Trust Loan through and including the date of such
payment shall be due and payable on June 30, 2019.
The outstanding principal of the Trust Loan, together with all accrued and
unpaid interest and any other obligations then outstanding, will in any event be
due and payable in full on June 30, 2019.
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Section 2.6. Optional Prepayment.
(a) Upon compliance with this Section 2.6, the Trust, at its option,
may prepay the Trust Note at any time and from time to time, either in
whole or in part, by payment of the principal amount of the Trust Note or
portion thereof to be prepaid and accrued interest thereon to the date of
such prepayment.
(b) The Trustee will give notice of any prepayment of the Trust Note
pursuant to this Section 2.6 to the Company not less than 3 days nor more
than 60 days before the date fixed for such optional prepayment specifying
(i) such date, (ii) that prepayment is to be made under Section 2.6 of this
Agreement, (iii) the principal amount of the Trust Note to be prepaid on
such date, and (iv) accrued interest applicable to the prepayment. Such
notice of prepayment shall be signed by the Trustee. Notice of prepayment
having been so given, the aggregate principal amount of the Trust Note
specified in such notice, together with accrued interest thereon shall
become due and payable on the prepayment date.
(c) Partial prepayments of the Trust Note made pursuant to this
Section 2.6 shall be credited in each case against remaining scheduled
payments on the Trust Note in the inverse order of the due dates of such
payments.
(d) No such prepayment shall, however, be permitted if such prepayment
would adversely affect the Required Status.
Section 2.7. Place and Time of Payment. All payments of principal of, or
interest on, the Trust Note shall be made by the Trust to the Company in same
day funds at Franklin, Indiana, not later than 11:00 a.m. on the date due. Funds
received after that hour shall be deemed to have been received on the next
following Business Day.
Section 2.8. Application of Certain Payments. If, and to the extent, Shares
acquired with proceeds of the Trust Loan, held in the Trust and not yet
allocated to participant accounts are sold, then, to the extent allowable by the
Exempt Loan Rules and applicable law, the Trustee, at the direction of the ESOP
Committee administering the ESOP (the "Committee"), may apply the proceeds
thereof toward the repayment of the Trust Loan. Dividends or other cash
distributions paid on the Shares purchased with the proceeds of the Trust Loan
(whether or not allocated to the accounts of Participants) shall be used by the
Trustee, at the discretion of the Committee, to the extent permissible to repay
the Trust Loan in accordance with the provisions of Section 4.5 of the ESOP.
Section 2.9. Due Date Extension. If any payment of principal of, or
interest on, the Trust Note falls due on a day that is not a Business Day, then
such due date shall be extended to the next following Business Day, and
additional interest shall accrue and be payable for the period of such
extension.
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Section 2.10. Computations. All computations of interest on the Trust Loan
and other amounts due hereunder shall be based on a year of 360 days, comprising
twelve 30-day months.
Section 2.11. Interest on Overdue Amounts. If any payment of principal of,
or interest on, the Trust Note is not made when due, interest shall accrue on
the amount thereof, commencing on such due date through the date on which such
amount is paid in full, at a rate per annum equal to the Interest Rate plus two
percent (2%).
ARTICLE III
SECURITY
Section 3.1. Security. Payment of the Trust Note and performance by the
Trust of its obligations under this Agreement and the Trust Note will be secured
by a pledge of, and the grant of a security interest in, the Shares by the
Trustee on behalf of the Trust to and in favor of the Company under a Share
Pledge Agreement, substantially in the form of Exhibit B hereto (the "Share
Pledge Agreement").
Section 3.2. Release of Shares. Notwithstanding any provision of this
Agreement or the Share Pledge Agreement to the contrary contained or implied,
the Company will release from the pledge and security interest under the Share
Pledge Agreement, such Shares as must be allocated to ESOP participants under
the ESOP pursuant to Section 8.7(h) of the ESOP and otherwise under the Code,
the Exempt Loan Rules or other applicable law, provided that Section 8.7(h) of
the ESOP shall not be amended without the Trustee's prior consent.
ARTICLE IV
REPRESENTATIONS, WARRANTIES AND COVENANTS
Section 4.1. Representations and Warranties of Trustee. To induce the
Company to enter this Agreement and to make the Trust Loan, the Trustee
represents and warrants to the Company as follows:
(a) The Trustee has determined that the Trust Loan is primarily for
the benefit of ESOP participants and their beneficiaries and bears interest
at a rate not in excess of a reasonable rate and that the terms of the loan
are at least as favorable to the Trust and the ESOP participants as the
terms of a comparable loan resulting from arm's-length negotiations between
completely independent parties;
(b) The Trustee is an Indiana commercial bank, legally existing and in
good standing under federal law, has corporate power and authority and is
duly authorized to enter into and perform the Trust;
(c) The Trustee has full right, power and authority to execute,
deliver and perform on behalf of the Trust under the Trust Agreement, the
ESOP and otherwise the obligations set forth in the Loan Documents, and the
execution and performance of such obligations will not conflict with or
result in a breach of the terms of the ESOP or the Trust or result in a
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breach or violation of the Trustee's Articles of Conversion or By-Laws or
of any law or regulation, order, writ, injunction or decree of any court or
governmental authority binding on the Trust or Trustee;
(d) The ESOP (and related Trust) has been duly authorized by all
necessary corporate action on the part of the Trustee and has been duly
executed by an authorized officer of the Trustee and delivered and
constitutes a legal, valid and binding obligation of the Trustee and
declaration of trust enforceable in accordance with its terms;
(e) The Loan Documents have been duly authorized, executed and
delivered by the Trustee and constitute legal, valid and binding
obligations, contracts and agreements of the Trustee on behalf of the
Trust, enforceable in accordance with their respective terms;
(f) The execution, delivery and performance of the Loan Documents do
not conflict with, or result in the creation or imposition of any lien or
encumbrance upon any of the property of the Trustee (other than the
Collateral, as defined in the Share Pledge Agreement) pursuant to the
provisions of the ESOP (and related Trust) or any other agreement or other
instrument to which the Trustee is a party or may be bound; and
(g) No approval, consent or withholding of objection on the part of,
or filing, registration or qualification with, any governmental body,
Federal, state or local, is necessary in connection with the execution,
delivery and performance by the Trustee of the Loan Documents.
Section 4.2. Representations and Warranties of Company. To induce the Trust
to enter this Agreement and undertake the obligations hereunder, the Company
represents and warrants to the Trust as follows:
(a) The Company is a corporation duly organized and validly existing
under the laws of the State of Indiana, has corporate power and authority
and is duly authorized to enter into and perform its obligations under this
Agreement;
(b) Neither the execution and delivery of this Agreement, nor the
performance of the terms hereof nor the establishment of the ESOP or the
Trust violates, conflicts with or constitutes a default under Company's
Articles of Incorporation or By-Laws or any material agreement to which the
Company is a party or by which the Company or any of its assets is bound,
or violates any law, regulation, order or decree of any court, arbitration
or governmental authority applicable to the Company, in any manner that
would have a material adverse effect on the Trust, the ESOP, the Required
Status or the Company;
(c) The Company and the Bank have taken all actions required to be
taken by it to establish the ESOP and the related Trust. The ESOP and
related Trust are intended to, and the terms thereof have been drafted with
the purpose to, comply with the requirements of Sections 401(a) and 501(a)
of the Code, as applicable, with the requirements for treatment as
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a leveraged employee stock ownership plan, as that term is defined in
Section 4975(e)(7) of the Code, and with other applicable laws;
(d) The Bank has duly appointed the Trustee as trustee of the Trust
and the Committee under the ESOP;
(e) The Company has delivered to Trustee copies of its Articles of
Incorporation and its By-Laws, the ESOP, and resolutions of its Board of
Directors with respect to approval of this Agreement and entering into of
the transactions and execution of all documents contemplated by this
Agreement, in each case certified by the Secretary of the Company, which
copies are true, correct and complete. None of such documents or
resolutions has been amended or modified in any respect and such documents
and resolutions remain in full force and in effect, in the form previously
delivered to the Trustee;
(f) Other than the Common Stock, the Company has no other classes of
shares outstanding or treasury shares.
(g) The Company's ability to honor put options (the "Put Options"),
which would obligate the Company to repurchase shares of Common Stock
distributed from time to time to ESOP participants and beneficiaries under
Section 6.14 of the ESOP, is not presently restricted by the provisions of
any law, rule or regulation in effect on the date hereof (except for
capital, liquidation account, requirements to obtain regulatory approval of
repurchase transactions, and similar constraints imposed by regulatory
authorities on savings banks) or by the terms of any loan, financing or
other agreement or instrument to which the Company is a party or by which
the Company is or may be bound.
(h) There are no actions, proceedings, or investigations pending or,
to the Company's knowledge, threatened against or affecting the Company or
any of its property or rights at law or in equity or before or by any court
or tribunal that have not been disclosed to the Trustee and may have a
material adverse effect on the value of the Common Stock.
(i) All employee plans of the Bank and the Company are in compliance,
in all material respects, with all applicable reporting, disclosure and
filing requirements pertaining to employee benefit plans set forth in the
Code and ERISA.
(j) No consent, approval or other authorization or notice to any
governmental authority or expiration of any government-imposed waiting
period is required in connection with the execution or delivery of this
Agreement, except such as has been obtained, given or expired.
(k) The shares of Common Stock constitute "qualifying employer
securities" within the meaning of Section 409(l) of the Code.
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Section 4.3. Covenants of Company. The Company covenants that:
(a) The Company shall submit or cause to be submitted to the Internal
Revenue Service within ninety (90) days following the Initial Closing Date
an application for a determination letter confirming that the ESOP,
effective as of June 1, 2004, and the related Trust are qualified and
exempt from taxation under Sections 401(a) and 501(a), respectively, of the
Code and that the ESOP meets the requirements of Section 4975(e)(7) of the
Code.
(b) The Company and the Bank shall make all changes reasonably
requested by the Internal Revenue Service as a condition of obtaining a
determination letter from the Internal Revenue Service with respect to the
ESOP, effective June 1, 2004. The Company and the Bank shall continue to do
all things necessary to cause the ESOP and the Trust at all times to be
operated and administered such that the ESOP remains qualified under
Section 401(a) and remains an employee stock ownership plan under Section
4975(e)(7) of the Code and the Trust remains tax-exempt under Section
501(a) of the Code.
(c) If at any time the ESOP is required, by applicable law, court
order, or otherwise, to make distributions of Shares that otherwise would
be in violation of Federal or state securities laws, the Company shall take
all actions necessary to permit such required distributions to be made in
full compliance with such laws.
(d) The Company shall honor the Put Options if, and to the extent,
required by Section 409(h) of the Code and regulations thereunder, and
shall not permit its ability to honor such Options to be materially
restricted in any way.
(e) The Company or the Bank shall provide to the Trustee all
governmental filings relating to the ESOP and all ESOP amendments within
sixty days of the date on which such filing or amendment is effected, and,
on an annual basis, shall provide complete financial statements of the ESOP
and the Company.
ARTICLE V
CONDITIONS PRECEDENT
Section 5.1. Documentation Satisfactory to Company. The obligation of the
Company to make the Initial Trust Loan is, in addition to the applicable
conditions precedent contained in Section 5.2, subject to the condition
precedent that the Company shall have received each of the following, duly
executed and dated as of the Initial Closing Date (or such earlier date as shall
be satisfactory to the Company) and in form and substance satisfactory to the
Company:
(a) the Initial Trust Note;
(b) the Share Pledge Agreement; and
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(c) a certificate of the Trustee, substantially in the form of Exhibit
C hereto, with such changes thereto as shall be acceptable to the Company
and its counsel, and with respect to such other matters as the Company may
reasonably request.
The obligation of the Company to make a Subsequent Trust Loan is, in
addition to the applicable conditions precedent contained in Section 5.2,
subject to the condition precedent that the Company shall have received each of
the following, duly executed and dated as of the applicable Subsequent Closing
Date (or such earlier date as shall be satisfactory to the Company) and in form
and substance satisfactory to the Company:
(a) the applicable Subsequent Trust Note; and
(b) a certificate of the Trustee, substantially in the form of Exhibit
C hereto, with such changes as shall be acceptable to the Company and its
counsel, and with respect to such other matters as the Company may
reasonably request.
Section 5.2. Other Conditions Precedent to Company Obligations. In addition
to the condition precedent contained in Section 5.1, the obligation of the
Company to make the Initial Trust Loan available is subject to the conditions
precedent that (i) the Conversion is consummated, (ii) the representations and
warranties made by the Trustee herein shall be true and correct in all material
respects on the Initial Closing Date as if made on and as of the Initial Closing
Date; and (iii) the ESOP shall be permitted to purchase Shares on the open
market.
In addition to the condition precedent contained in Section 5.1, the
obligation of the Company to make a Subsequent Trust Loan available is subject
to the conditions precedent that (1) the representations and warranties made by
the Trust herein shall be true and correct in all material respects on the
applicable Subsequent Closing Date and (2) the ESOP shall be permitted to
purchase Shares on the open market.
Section 5.3. Documentation Satisfactory to Trustee. The obligation of the
Trust to enter into the Initial Trust Loan is subject to the condition precedent
that the Trustee shall have received each of the following, duly executed and
dated as of the Initial Closing Date (or such earlier date as shall be
satisfactory to Trustee) and in form and substance satisfactory to Trustee:
(a) The Share Pledge Agreement; and
(b) A certificate of the Company, substantially in the form of Exhibit
D hereto, with such changes thereto as shall be acceptable to the Trustee
and its counsel, and with respect to such other matters as the Trustee may
reasonably request.
The obligation of the Trust to enter into a Subsequent Trust Loan is
subject to the condition precedent that the Trustee shall have received each of
the following, duly executed and dated as of the applicable Subsequent Closing
Date (or such earlier date as shall be satisfactory to Trustee) and in form and
substance satisfactory to Trustee, a certificate of the Company, substantially
in the form of Exhibit D hereto, with such changes thereto as shall be
acceptable to the Trustee and its counsel,
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and with respect to such other matters as the Trustee may reasonably request.
Section 5.4. Other Conditions Precedent to Trustee's Obligation. The
obligation of the Trustee to enter into the Initial Trust Loan is subject to the
conditions precedent that (i) the Conversion is consummated, (ii) the
representations and warranties made by the Company herein shall be true and
correct in all material respects on the Initial Closing Date as if made on and
as of the Initial Closing Date, and (iii) no injunction or restraining order
shall be in effect or litigation pending or threatened to forbid or enjoin the
consummation of the transactions contemplated by this Agreement.
The obligation of the Trustee to enter into a Subsequent Trust Loan is
subject to the conditions precedent that (1) the representations and warranties
made by the Company herein shall be true and correct in all material respects on
the applicable Subsequent Closing Date as if made on and as of such Subsequent
Closing Date, and (2) no injunction or restraining order shall be in effect or
litigation pending or threatened to forbid or enjoin the consummation of the
transactions contemplated by this Agreement.
ARTICLE VI
EVENTS OF DEFAULT AND THEIR EFFECT
Section 6.1. Events of Default; Effect. If default in the payment when due
of any principal on, or default (and continuance thereof for 5 days) in the
payment when due of interest on, the Trust Note (an "Event of Default") occurs,
unless the effect thereof as an Event of Default has been waived in writing by
the Company, then the Company may declare the Trust Note to be due and payable,
whereupon the Trust Note shall become immediately due and payable, without
presentment, demand, protest or notice to the Trust or other action by the
Company of any kind whatsoever, all of which actions the Trust hereby waives to
the maximum extent permitted by law.
The Company shall promptly advise the Trust of any declaration of default,
but failure to do so or delay in doing so shall not impair the effect of such
declaration. Notwithstanding anything to the contrary herein or in the Trust
Note or the Share Pledge Agreement contained or implied, if a Default or Event
of Default occurs with respect to the Trust Loan by the Trust, the value of
Trust assets transferred in satisfaction thereof shall not exceed the amount of
such default. In addition, such a transfer of such Trust assets shall only occur
upon and to the extent of the failure of the Trust to meet the payment schedule
of the Trust Loan provided in Article II.
ARTICLE VII
SHARE PURCHASES
Section 7.1. Purchase of Shares. The Company is making the Trust Loan
available to the Trustee for the purpose of allowing the Trustee to purchase
132,250 Shares on the open market. To the extent the ESOP is permitted to
purchase up to 132,250 Shares on the open market, the Trustee agrees to use all
of the proceeds of the Trust Loan to purchase 132,250 Shares in accordance with
this Article VII.
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Section 7.2. Manner of Purchase. The Trustee shall draw upon the Trust Loan
and use the proceeds thereof to purchase 132,250 Shares.
Section 7.3. No Prohibited Transactions. The Trustee in the performance of
its obligations under this Agreement, shall observe its fiduciary obligations
under Section 404 of ERISA, shall not engage in any transaction prohibited by
ERISA or contrary to such fiduciary obligations, and, in acquiring Shares, shall
not (and shall not be deemed obligated to) pay more than "adequate
consideration," as defined in Section 3(18) of ERISA.
Section 7.4. Maximum Number of Shares. The Trust shall not purchase Shares
with proceeds of the Trust Loan in excess of 132,250 Shares.
ARTICLE VIII
GENERAL
Section 8.1. Waivers; Amendments. No delay on the part of the Company, or
the holder of the Trust Note in the exercise of any right, power or remedy shall
operate as a waiver thereof, nor shall any single or partial exercise by any of
them of any right, power or remedy preclude other or further exercise thereof,
or the exercise of any other right, power or remedy. No amendment, modification
or waiver of, or consent with respect to, any provision of this Agreement, the
Trust Note or the Share Pledge Agreement shall in any event be effective unless
the same shall be in writing and signed and delivered by the Company and then
any such amendment, modification, waiver or consent shall be effective only in
the specific instance and for the specific purpose for which given.
Section 8.2. Confirmations; Information. The Company and the Trust (or
holder of the Trust Note) agree from time to time, upon written request received
by it from the other, to confirm to the other in writing the aggregate unpaid
principal balance then outstanding under the Trust Note and such other matters
relating to the Trust Loan, the Trust, the ESOP or the purchase of Shares as may
reasonably be the subject of inquiry.
Section 8.3. Captions. Section captions used in this Agreement are for
convenience only, and shall not affect the construction of this Agreement.
Section 8.4. Governing Law. To the extent not preempted by ERISA, this
Agreement and the Trust Note shall be a contract made under and governed by the
laws of the State of Indiana, without regard to conflict of laws principles. All
obligations of the Trust and rights of the Company and other holder of the Trust
Note expressed herein or in such Trust Note shall be in addition to and not in
limitation of those provided by law.
Section 8.5. Notices. All communications and notices hereunder shall be in
writing and shall be deemed to be given when sent by registered or certified
mail, postage prepaid, return receipt requested, or by telecopier, duly
confirmed, and addressed to such party at the address indicated below or to such
other address as such party may designate in writing pursuant to this Section
8.5.
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Third Century Bancorp
▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, President
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HomeFederal Bank
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Section 8.6. Expenses. All expenses of the transaction contemplated by this
Agreement shall be paid by the Company.
Section 8.7. Reimbursement. If the Trustee uses proceeds from the Trust
Loan to purchase Common Stock directly from the Company and it is subsequently
determined by a court of competent jurisdiction that the Trustee paid in excess
of "adequate consideration" within the meaning of ERISA for such shares, the
Company shall, as soon as practicable following such judgment, reimburse the
Trustee for the amount of the excess payment.
Section 8.8. Entire Agreement. This Agreement constitutes the entire
agreement among the parties hereto with respect to the subject matter hereof and
supersedes all prior agreements and understandings between the parties.
Section 8.9. Severability. Should any clause, paragraph or part of this
Agreement be held or declared to be void or illegal for any reason, all other
clauses, paragraphs or parts of this Agreement which can be affected without
such illegal clause, paragraph or part shall nevertheless remain in full force
and effect.
Section 8.10. No Assignment. This Agreement and the obligations of the
parties herein may not be assigned or assumed by any other parties.
Section 8.11. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which put
together shall constitute one and the same instrument.
ARTICLE IX
LIMITED RECOURSE
Section 9.1. Limited Recourse. Notwithstanding anything to the contrary
herein or in the Trust Note, the Share Pledge Agreement or any other instrument,
agreement or document contained or implied, the obligations of the Trust under
this Agreement, the Trust Note and the Share Pledge Agreement (collectively, the
"Trust Loan Obligations") shall be enforceable to the extent permitted under
law, including (without limitation) the Exempt Loan Rules, only against the
Trust to the extent of the Collateral (as defined in the Share Pledge Agreement)
not theretofore released from the pledge and security interest under the Share
Pledge Agreement as provided in Section 3.2 and contributions and other payments
(other than contributions of employer securities) made to the Trust in
accordance with the ESOP to enable the Trust to pay and satisfy the Trust Loan
Obligations and from earnings attributable to the Shares purchased with Trust
Loan proceeds and the investment of such
13
contributions and payments (collectively, the "Trust Loan Collateral"). No
recourse shall be had to or against the Trust or the assets thereof (other than
the Trust Loan Collateral) for any deficiency judgment against the Trust for the
purpose of obtaining payment or other satisfaction of the Trust Loan
Obligations.
Section 9.2. No Personal Recourse Against Trustee. Without limiting the
provisions of Section 9.1, the Trustee of the Trust shall have no personal
liability for any of the Trust Loan Obligations.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed and delivered by their respective representatives thereunto duly
authorized as of the date first above written.
TRUST UNDER THIRD CENTURY BANCORP
EMPLOYEE STOCK OWNERSHIP PLAN AND
TRUST AGREEMENT
By: HomeFederal Bank, Trustee
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------------------
Printed: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------------
Its: Vice President & Senior Trust Officer
THIRD CENTURY BANCORP
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------------------
Printed: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------------
Its: President and Chief Executive Officer
14
Exhibit A
TRUST NOTE
$___________ ____________, 2004
Due: June 30, 2019
FOR VALUE RECEIVED, the undersigned, the Trust (the "Trust") established
pursuant to the provisions of the THIRD CENTURY BANCORP EMPLOYEE STOCK OWNERSHIP
PLAN AND TRUST AGREEMENT, DATED AND EFFECTIVE AS OF JUNE 1, 2004 (the "Plan") by
HOMEFEDERAL BANK, as Trustee (the "Trustee"), promises to pay to the order of
Third Century Bancorp, an Indiana corporation (together with its successors,
endorsees and assigns, the "Company"), at such place and in such other manner as
the Company may direct in writing, and when required pursuant to the provisions
of that certain Exempt Loan and Share Purchase Agreement, dated June ___, 2004
(the "Loan Agreement"), by and among the Trustee and the Company, the principal
amount of ____________________________ Dollars ($__________) or so much thereof
as may be advanced by the Company to the Trust hereunder and under the Loan
Agreement, said amount being due and payable together with accrued interest in
such installments and at such times as provided in the Loan Agreement, with the
entire unpaid principal balance due and payable with accrued interest in full on
June 30, 2019, as provided in the Loan Agreement.
The principal balance hereof from time to time outstanding shall bear
interest from the date of each disbursement of the Trust Loan evidenced by this
Trust Note through and including the date on which such principal amount is paid
in full, at the times provided in the Loan Agreement, at the Interest Rate, as
defined in the Loan Agreement which is _____________ percent (_____%) per annum
(or, in the case of overdue principal and, to the extent legally enforceable,
overdue interest, at the Interest Rate plus two percent (2%) per annum).
This Trust Note has been issued by the Trust in accordance with the terms
of the Loan Agreement to evidence the Trust Loan made by the Company to the
Trust under the Loan Agreement, to which reference is hereby made for the
statement of the terms thereof. This Trust Note and the Company are entitled to
the benefits of the Loan Agreement and the Company may enforce the agreements of
the Trust contained therein and in the Loan Documents, and may exercise the
respective remedies provided for thereby or otherwise available in respect
thereof, all in accordance with the respective terms thereof. All capitalized
terms used in this Trust Note which are not otherwise defined herein have the
respective meanings assigned to them in the Loan Agreement.
The Trust has the right to prepay the principal amount of this Trust Note
without penalty on the terms and conditions specified in the Loan Agreement.
If any Event of Default shall occur, the entire unpaid principal amount of
this Trust Note and all of the accrued but unpaid interest thereon may become or
be due and payable in the manner and with the effect provided in the Loan
Agreement. The collection and enforcement of this Trust Note are subject to the
provisions and limitations of Section 9.1 of the Loan Agreement.
To the extent not preempted by ERISA, this Trust Note and the obligations
of the Trust hereunder shall be governed by the laws of the State of Indiana
without regard to principles of conflict of laws.
All parties to this Trust Note, including endorsers, sureties and
guarantors, if any, hereby waive presentment, demand, protest, notice, relief
from valuation and appraisement laws and any and all other notices and demands
in connection with the delivery, acceptance, performance and enforcement of this
Trust Note and also hereby assent to extensions of the time of payment or
forbearance or other indulgences without notice, and agree to remain bound until
the principal, premium, if any, and interest are paid in full, notwithstanding
any extensions of time for payment which may be granted, even though the period
or periods of extension may be indefinite, and notwithstanding any inaction by,
or failure to assert any legal rights available to, the holder of this Trust
Note.
IN WITNESS WHEREOF, the Trust has caused this instrument to be executed by
the Trustee, the day and year first above written.
TRUST UNDER THIRD CENTURY BANCORP
EMPLOYEE STOCK OWNERSHIP PLAN AND
TRUST AGREEMENT
By: HomeFederal Bank, Trustee
By:
-----------------------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Vice President and Senior
Trust Officer
Exhibit B
SHARE PLEDGE AGREEMENT
between
TRUST UNDER
THIRD CENTURY BANCORP
STOCK OWNERSHIP PLAN AND TRUST AGREEMENT
and
THIRD CENTURY BANCORP
Dated: June ___, 2004
SHARE PLEDGE AGREEMENT
THIS SHARE PLEDGE AGREEMENT (this "Agreement" or "Share Pledge Agreement"),
dated as of June ___, 2004, between the Trust (the "Trust") established pursuant
to the provisions of the THIRD CENTURY BANCORP EMPLOYEE STOCK OWNERSHIP PLAN AND
TRUST AGREEMENT (EFFECTIVE AS OF JUNE 1, 2004) (the "Plan") by HOMEFEDERAL BANK,
as Trustee ("Trustee"), and Third Century Bancorp, an Indiana corporation (the
"Company").
WITNESSETH:
WHEREAS, contemporaneously herewith, the Trust and the Company have entered
into that certain Exempt Loan and Share Purchase Agreement (the "Loan
Agreement"; definitions of terms appearing in which have the same meanings
herein, unless a clear contrary intention appears), dated June ___, 2004,
pursuant to which the Company has agreed to lend to the Trust, and the Trust has
agreed to borrow from the Company, the Trust Loan, and the Trust, to evidence
its indebtedness to the Company with respect to the Trust Loan, has executed and
delivered the Trust Note to the Company; and
WHEREAS, it is a condition precedent to the obligation of the Company to
make the Trust Loan that, among other things, the Trust execute and deliver this
Agreement to the Company,
NOW, THEREFORE, in consideration of the Loan Agreement and the Trust Loan
and other good and valuable consideration (the receipt, adequacy and sufficiency
of which the Trust acknowledges by its execution hereof), the Trust intending to
be legally bound does hereby covenant and agree with the Company as follows:
Section 1. Pledge. To secure the due and punctual payment and performance
of the obligations of the Trust hereunder and under the Loan Agreement and the
Trust Note (collectively, the "Liabilities"), the Trustee on behalf of the Trust
hereby pledges, hypothecates, assigns, transfers, sets over and delivers unto
the Company, its successors and assigns and hereby grants to the Company, its
successors and assigns a security interest in:
(a) all Shares of Company Common Stock purchased or to be purchased
with the proceeds of the Trust Loan (collectively, the "Pledged Shares")
and the certificates representing or evidencing the Pledged Shares, and, to
the extent permitted by Section 4975(e)(7) of the Internal Revenue Code of
1986, as amended, and Reg. ss. 54.4975-7(b)(5) promulgated thereunder, all
cash, securities, interest, dividends, rights and other property at any
time and from time to time received in respect of or in exchange for any or
all of the Pledged Shares; and
(b) all proceeds of all of the foregoing
(all such Pledged Shares, certificates, cash, securities, interest, dividends,
rights and other property, and proceeds thereof, other than as released, sold or
otherwise applied by the Company pursuant to the terms hereof, being herein
collectively called the "Collateral"), TO HAVE AND TO HOLD such Collateral,
together with all rights, titles, interests, privileges and preferences
appertaining or incidental thereto, forever, subject, however, to the terms,
covenants and conditions hereafter set forth.
Section 2. Warranties and Covenants.
(a) The Trust represents and warrants to the Company that the Trust
is, or at the time of any future delivery, pledge, assignment or transfer
will be, the lawful owner of the Collateral, free of all claims and liens
other than the security interest hereunder, with full right to deliver,
pledge, assign and transfer the Collateral to the Company as Collateral
hereunder.
(b) So long as any of the Liabilities remain outstanding, the Trust
will, unless the Company shall otherwise consent in writing:
(i) promptly deliver to the Company from time to time
certificates representing Pledged Shares as the Trustee acquires them
and, upon request of the Company, such stock powers and other
documents, satisfactory in form and substance to the Company, with
respect to the Collateral as the Company may reasonably request to
preserve and protect, and to enable the Company to enforce, its rights
and remedies hereunder;
(ii) not create or suffer to exist any lien, security interest or
other charge or encumbrance against, in or with respect to any of the
Collateral except for the pledge hereunder and the security interest
created hereby;
(iii) not make or consent to any amendment or other modification
or waiver with respect to any of the Collateral or enter into any
agreement or permit to exist any restriction with respect to any of
the Collateral other than pursuant hereto; and
(iv) not take or fail to take any action which would in any
manner impair the value or enforceability of the Company's security
interest in any of the Collateral.
Section 3. Care of Collateral. The Company shall be deemed to have
exercised reasonable care with respect to the interest of the Trust in the
custody and preservation of the Collateral if it takes such action for that
purpose as the Trust shall request in writing or as it would with respect to
similar assets of its own, but failure of the Company to comply with any such
request shall not of itself be deemed a failure to exercise reasonable care.
2
Section 4. Certain Rights Regarding Collateral and Liabilities.
(a) The Company may from time to time, whether before or after any of
the Liabilities shall become due and payable, without notice to the Trust,
to the extent otherwise permitted (i) retain or obtain a security interest
in the Collateral, to secure payment and performance of any of the
Liabilities, (ii) retain or obtain the primary or secondary liability of
any party or parties, in addition to the Trust, with respect to any of the
Liabilities, (iii) extend or renew for any period (whether or not longer
than the original period) or exchange any of the Liabilities or release or
compromise any obligation of any nature of any party with respect thereto,
and (iv) surrender, release or exchange all or any part of any property, in
addition to the Collateral, securing payment and performance of any of the
Liabilities, or compromise or extend or renew for any period (whether or
not longer than the original period) any obligations of any nature of any
party with respect to any such property.
(b) The Company shall have no right to vote the Pledged Shares prior
to the occurrence of an Event of Default (hereinafter in Section 6(a)
hereof defined). After the occurrence of an Event of Default, the Trust
shall have the right to vote any and all of the Pledged Shares in
accordance with the Plan unless and until it receives notice from the
Company that such right has been terminated with respect to shares subject
to execution as a result of the Default.
Section 5. Dividends, etc.
(a) So long as no Default or Event of Default, shall have occurred and
be continuing, the Trust shall be entitled to receive any and all cash
dividends on the Pledged Shares which it is otherwise entitled to receive,
and to vote the Pledged Shares in accordance with the terms of the Plan and
to give consents, waivers and ratifications in respect of the Pledged
Shares, but any and all stock and/or liquidating dividends, distributions
in property, returns of capital or other distributions made on or in
respect of the Pledged Shares, whether resulting from a subdivision,
combination or reclassification of the outstanding capital stock of any
issuer thereof or received in exchange for the Pledged Shares or any part
thereof or as a result of any merger, consolidation, acquisition or other
exchange of assets to which any issuer may be a party or otherwise, and any
and all cash and other property received in exchange for any Collateral
shall be, and become part of the Collateral pledged hereunder and, if
received by the Trust, shall forthwith be delivered to the Company or its
designated nominee (accompanied, if appropriate, by proper instruments of
assignment and/or stock powers executed by the Trust in accordance with the
Company's instructions) to be held subject to the terms of this Agreement
and the Plan.
(b) Upon the occurrence and during the continuance of an Event of
Default, subject to the terms of Section 4(b) hereof, all rights of the
Trust pursuant to Section 5(a) hereof shall cease and the Company shall
have the sole and exclusive right and authority to receive and retain the
dividends which the Trust would otherwise be authorized to retain and, to
the extent permitted by law, to vote and give consents, waivers and
ratifications pursuant to Section 5(a) hereof. Any and all money and other
property paid over to or received by the Company pursuant to the provisions
of this paragraph (b) shall be retained by the Company as additional
Collateral hereunder and be applied in accordance with the provisions
hereof.
3
Section 6. Event of Default.
(a) The occurrence of any of the following shall constitute an Event
of Default hereunder: nonpayment, when due, whether by acceleration or
otherwise, of any amount payable on any of the Liabilities; an Event of
Default as defined in the Loan Agreement; any representation or warranty of
the Trust contained herein or given pursuant hereto being untrue in any
material respect; or the Trust's failure to perform any covenant or
agreement contained herein.
(b) Upon the occurrence of an Event of Default, (i) the Company may
exercise from time to time any rights and remedies available to it under
the Uniform Commercial Code as in effect from time to time in Indiana or
otherwise available to it, including, but not limited to, sale, assignment,
or other disposal of the Pledged Shares in exchange for cash or credit, and
(ii) the Company may, without demand or notice of any kind, but subject to
Section 7, appropriate and apply toward the payment of such of the
Liabilities, and in such order of application, as the Company may from time
to time elect, any balances, credits, deposits, accounts or moneys of the
Trust. If any notification of intended disposition of any of the Collateral
is required by law, such notification, if mailed, shall be deemed
reasonably and properly given if mailed at least five (5) days before such
disposition, postage prepaid, addressed to the Trust, either at the address
of the Trust shown below, or at any other address of the Trust appearing on
the records of the Company. Any proceeds of any disposition of Collateral
shall be applied as provided in Section 7 hereof. All rights and remedies
of the Company expressed hereunder are in addition to all other rights and
remedies possessed by it, including those under any other agreement or
instrument relating to any of the Liabilities or security therefor. No
delay on the part of the Company in the exercise of any right or remedy
shall operate as a waiver thereof, and no single or partial exercise by the
Company of any right or remedy shall preclude other or further exercise
thereof or the exercise of any other right or remedy. No action of the
Company permitted hereunder shall impair or affect the rights of the
Company in and to the Collateral.
(c) The Trust agrees that in any sale of any of the Collateral
whenever an Event of Default hereunder shall have occurred and be
continuing, the Company is hereby authorized to comply with any limitation
or restriction in connection with such sale as it may be advised by counsel
is necessary in order to avoid any violation of law (including, without
limitation, compliance with such procedures as may restrict the number of
prospective bidders and purchasers, require that such prospective bidders
and purchasers have certain qualification, and restrict such prospective
bidders and purchasers to persons who will represent and agree that they
are purchasing for their own account for investment and not with a view to
the distribution or resale of such Collateral), or in order to obtain any
required approval of the sale or of the purchaser by any governmental
regulatory authority or official, and the Trust further agrees that such
compliance shall not result in such sale being considered or deemed not to
have been made in a commercially reasonable manner, nor shall the Company
be liable nor accountable to the Trust for any discount allowed by the
reason of the fact that such Collateral is sold in compliance with any such
limitation or restriction.
4
(d) Notwithstanding anything to the contrary herein or in the Trust
Note or the Loan Agreement contained or implied, if an Event of Default
occurs with respect to the Trust Loan by the Trust, the value of Trust
assets transferred in satisfaction thereof shall not exceed the amount of
such default. In addition, such a transfer of such Trust assets shall only
occur upon, and to the extent of the failure of, the Trust to meet the
payment schedule of the Trust Loan provided in Article II of the Loan
Agreement.
Section 7. Application of Proceeds of Sale or Cash Held as Collateral. The
proceeds of sale of Collateral sold pursuant to the terms of Section 6 hereof
and/or after an Event of Default, the cash held as Collateral hereunder, shall
be applied by the Company, to the extent permitted by applicable law, as
follows:
First: to payment of the costs and expenses of such sale,
including the out-of-pocket costs and expenses of the Company and the
reasonable fees and out-of-pocket costs and expenses of counsel
employed in connection therewith, and to the payment of all advances
made by the Company for the account of the Trust hereunder and the
payment of all costs and expenses incurred by the Company in
connection with the administration and enforcement of this Agreement,
to the extent that such advances, costs and expenses shall not have
been reimbursed to the Company;
Second: to the payment in full of the Liabilities; and
Third: the balance, if any, of such proceeds shall be paid to the
Trust, its successors and assigns, or as a court of competent
jurisdiction may direct.
Section 8. Authority of Company. The Company shall have and be entitled to
exercise all such powers hereunder as are specifically delegated to the Company
by the terms hereof, together with such powers as are incidental thereto. The
Company may execute any of its duties hereunder by or through agents or
employees and shall be entitled to retain counsel and to act in reliance upon
the advice of such counsel concerning all matters pertaining to its duties
hereunder. Neither the Company, nor any director, officer or employee of the
Company, shall be liable for any action taken or omitted to be taken by it or
them hereunder or in connection herewith, except for its or their own gross
negligence or willful misconduct. The Trust hereby agrees, to the extent
permitted by applicable law, to reimburse the Company, on demand, for all costs
and expenses incurred by the Company in connection with the enforcement of this
Agreement (including costs and expenses incurred by any agent employed by the
Company).
Section 9. Termination. This Agreement shall terminate when all the
Liabilities have been fully paid and performed, at which time the Company shall
reassign and redeliver (or cause to be reassigned and redelivered) to the Trust,
or to such person or persons as the Trust shall designate, against receipt, such
of the Collateral (if any) as shall not have been theretofore released, sold or
otherwise applied by the Company pursuant to the terms hereof and shall still be
held by it hereunder, together with any appropriate instruments of reassignment
and release. Any such reassignment shall be without recourse upon, or
representation or warranty by, the Company.
5
Section 10. Required Release of Collateral. Notwithstanding any provision
of this Agreement or the Loan Agreement to the contrary, the Company from time
to time will release from the pledge and security interest under the Loan
Agreement, such Collateral as must be allocated to participants under the Plan
pursuant to Section 8.7(h) of the Plan and otherwise under the Code, the Exempt
Loan Rules or other applicable law.
Section 11. Limited Recourse. Notwithstanding anything to the contrary
herein or in the Trust Note, the Loan Agreement or any other instrument,
agreement or document contained or implied, the Liabilities shall be enforceable
to the extent permitted under applicable law, including, without limitation, the
Exempt Loan Rules, only against the Trust to the extent of the Collateral not
theretofore released from the pledge and security interest under this Agreement
as provided herein and contributions (other than contributions of employer
securities) made to the Trust in accordance with the Plan to enable the Trust to
pay and satisfy the Liabilities and from earnings attributable to the Shares and
the investment of such contributions (collectively, the "`Trust Loan
Collateral"). No recourse shall be had to or against the Trust or the assets
thereof (other than the Trust Loan Collateral) for any deficiency judgment
against the Trust for the purpose of obtaining payment or other satisfaction of
the Liabilities. Without limiting the foregoing, the Trustee of the Trust shall
have no personal liability for any of the Liabilities, other than as required by
or arising under applicable law.
Section 12. Notices. All communications and notices hereunder shall be in
writing and, if mailed, shall be deemed to be given when sent by registered or
certified mail, postage prepaid, return receipt requested, or by telecopier,
duly confirmed, and addressed to such party at the address indicated below or to
such other address as such party may designate in writing pursuant to this
Section 12.
THIRD CENTURY BANCORP
▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, President
HOMEFEDERAL BANK
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Section 13. Binding Agreement Assignment. This Agreement, and the terms,
covenants and conditions hereof, shall be binding upon and inure to the benefit
of the parties hereto, and their respective successors and assigns, except the
Trust shall not be permitted to assign this Agreement or any interest herein or
in the Collateral, or any part thereof, or otherwise grant any option with
respect to the Collateral, or any part thereof and the Company shall not assign
any interest herein or in the Collateral unless such assignment is expressly
made subject to the terms of the Loan Documents.
6
Section 14. Miscellaneous Provisions. Neither this Agreement nor any
provision hereof may be amended, modified, waived, discharged or terminated nor
may any of the Collateral be released or the pledge or the security interest
created hereby extended, except by an instrument in writing duly signed by or on
behalf of the Company hereunder. The section headings used herein are for
convenience of reference only and shall not define or limit the provisions of
this Agreement. This Agreement may be executed in any number of counterparts and
by the different parties on separate counterparts and each such counterpart
shall be deemed to be an original, but all such counterparts shall together
constitute but one and the same Agreement.
Section 15. Governing Law; Interpretation. This Agreement has been made and
delivered at Franklin, Indiana, and, except to the extent preempted by ERISA,
shall be governed by the internal laws of the State of Indiana, without regard
to principles of conflict of laws. Wherever possible each provision of this
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement shall be prohibited by or
invalid under such law, such provision shall be ineffective to the extent of
such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Agreement.
Section 16. Filing as a Financing Statement. At the option of the Company,
this Agreement, or a carbon, photographic or other reproduction of this
Agreement or of any Uniform Commercial Code financing statement covering the
Collateral or any portion thereof shall be sufficient as a Uniform Commercial
Code financing statement and may be filed as such.
7
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective representatives thereunto duly authorized as
of the date first above written.
TRUST UNDER THE THIRD CENTURY
BANCORP EMPLOYEE STOCK OWNERSHIP
PLAN AND TRUST AGREEMENT
By: HomeFederal Bank, Trustee
By:
--------------------------------------------------
Printed: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------
Its: Vice President & Senior Trust Officer
THIRD CENTURY BANCORP
By:
--------------------------------------------------
Printed: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------------------
Its: President and Chief Executive Officer
8
Exhibit C
CERTIFICATE OF TRUSTEE
The undersigned, HomeFederal Bank, an Indiana commercial bank, in its
capacity as Trustee ("Trustee") of the Trust under the Third Century Bancorp
Employee Stock Ownership Plan and Trust Agreement (Effective as of June 1, 2004)
(the "Trust") hereby certifies, pursuant to Section 5.1(c) of that certain
Exempt Loan and Share Purchase Agreement between the Trust and Third Century
Bancorp of even date herewith (the "Loan Agreement") that:
(i) it has determined that the Trust Loan, as defined in the Loan
Agreement, is primarily for the benefit of ESOP participants and their
beneficiaries and bears interest at a rate not in excess of a reasonable
rate and that the terms of the loan are at least as favorable to the Trust
and the ESOP participants as the terms of a comparable loan resulting from
arm's-length negotiations between completely independent parties;
(ii) the other representations and warranties of the Trust contained
in the Loan Agreement are true in all material respects as of the date of
this Certificate; and
(iii) the conditions set forth in Article V of the Loan Agreement, to
the extent their satisfaction depends upon action on the part of the Trust
or the Trustee, have been satisfied as of the date of this Certificate.
EXECUTED this ____ day of _____________, 2004.
HOMEFEDERAL BANK,
as Trustee of the Trust under the Third
Century Bancorp Employee Stock
Ownership Plan and Trust Agreement
(Effective as of June 1, 2004)
By:
--------------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Vice President & Senior Trust Officer
Exhibit D
CERTIFICATE OF THE COMPANY
The undersigned, Third Century Bancorp, an Indiana corporation (the
"Company"), pursuant to Section 5.3(b) of that certain Exempt Loan and Share
Purchase Agreement between HomeFederal Bank, an Indiana commercial bank, in its
capacity as Trustee of the Trust under the Third Century Bancorp Employee Stock
Ownership Plan and Trust Agreement (Effective as of June 1, 2004) and the
Company of even date herewith (the "Loan Agreement"), hereby certifies that the
representations and warranties of the Company contained in the Loan Agreement
are true and correct in all material respects, and the Company is in compliance
with its covenants set forth in the Loan Agreement in all material respects, as
of the date of this Certificate.
EXECUTED as of this ___ day of ____________, 2004.
THIRD CENTURY BANCORP
By:
--------------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, President and
Chief Executive Officer
