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Exhibit 2
PLAN OF MERGER AND REORGANIZATION
BY AND BETWEEN
TWENTIETH BANCORP, INC.
AND
HORIZON BANCORP, INC.
THIS AGREEMENT (hereinafter called "Agreement") is entered into as of the
____ day ______________, 1996, by and between TWENTIETH BANCORP, INC.
("Twentieth Bancorp") and HORIZON BANCORP, INC. ("Horizon Bancorp").
WHEREAS, Twentieth Bancorp is a West Virginia bank holding company with its
principal office and place of business located in Huntington, West Virginia;
and
WHEREAS, Twentieth Bancorp is the sole shareholder of The Twentieth Street
Bank, a West Virginia banking corporation with its principal office and place
of business located in Huntington, West Virginia (the "Bank"); and
WHEREAS, Horizon Bancorp is a West Virginia bank holding company with its
principal office and place of business located in Beckley, West Virginia; and
WHEREAS, Horizon Bancorp and Twentieth Bancorp have agreed that it is in their
mutual best interests and in the best interests of their respective
shareholders for Twentieth Bancorp to be merged with and into Horizon Bancorp
with the effect that each of the outstanding shares of Twentieth Bancorp's
$1.00 par value common stock ("Twentieth Bancorp Stock") will be converted
into newly issued shares of Horizon Bancorp's $1.00 par value common stock
("Horizon Bancorp Stock"), all in the manner and upon the terms and conditions
contained in this Agreement (the "Merger"); and
WHEREAS, to effectuate the foregoing, Horizon Bancorp and Twentieth Bancorp
desire to adopt this Agreement as a plan of reorganization in accordance with
the provisions of Section 368(a) of the Internal Revenue Code of 1986, as
amended; and
WHEREAS, Twentieth Bancorp's Board of Directors has approved this Agreement
and will recommend to Twentieth Bancorp's shareholders that they approve the
transactions described herein; and
WHEREAS, Horizon Bancorp's Board of Directors has approved this Agreement and
will recommend to the Horizon Bancorp's shareholders that they approve the
transactions described herein.
NOW, THEREFORE, in consideration of the premises, the mutual benefits to be
derived from this Agreement, and of the representations, warranties,
conditions, covenants and promises herein contained, and subject to the terms
and conditions hereof, Horizon Bancorp and Twentieth Bancorp hereby adopt and
make this Agreement and mutually agree as follows:
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ARTICLE I. THE PLAN OF MERGER
1.1 NAMES OF MERGING CORPORATIONS. The names of the corporations proposed to
be merged are TWENTIETH BANCORP, INC. ("Twentieth Bancorp") and HORIZON
BANCORP, INC. ("Horizon Bancorp").
1.2. NATURE OF TRANSACTION. Subject to the provisions of this Agreement, at the
"Effective Time", defined below, Twentieth Bancorp shall be merged into and
with Horizon Bancorp (the "Merger").
1.3. EFFECT OF MERGER; SURVIVING CORPORATION; CHANGE OF CORPORATE NAME. At the
Effective Time and by reason of the Merger, the separate corporate existence of
Twentieth Bancorp shall cease while the corporate existence of Horizon Bancorp
as the surviving corporation in the Merger shall continue with all of its
purposes, objects, rights, privileges, powers and franchises, all of which
shall be unaffected and unimpaired by the Merger. Following the Merger, the
Bank shall operate as a wholly-owned banking subsidiary of Horizon Bancorp and,
as a West Virginia banking corporation, will conduct its business at the then
legally established branches and main offices of the Bank.
1.4. ASSETS AND LIABILITIES OF TWENTIETH BANCORP. At the Effective Time and by
reason of the Merger, and in accordance with applicable law, all of the
property, assets and rights of every kind and character of Twentieth Bancorp
(including without limitation all real, personal or mixed property, all of the
Bank's issued and outstanding shares of capital stock, all debts due on
whatever account, all other choses in action, insurance policies, and every
other interest of or belonging to or due to Twentieth Bancorp, whether tangible
or intangible) shall be transferred to and vest in Horizon Bancorp, and Horizon
Bancorp shall succeed to all the rights, privileges, immunities, powers,
purposes and franchises of a public or private nature and shall assume the
liabilities and lawful obligations of Twentieth Bancorp, all without any
conveyance, assignment or further act or deed.
1.5. CONVERSION AND EXCHANGE OF STOCK.
A. CONVERSION OF TWENTIETH BANCORP STOCK. Except as otherwise provided herein,
at the Effective Time all rights of Twentieth Bancorp's shareholders with
respect to all then outstanding shares of Twentieth Bancorp Stock shall
cease to exist and the holders of shares of Twentieth Bancorp Stock shall
cease to be, and shall have no further rights as, shareholders of Twentieth
Bancorp. As consideration for and to effectuate the Merger (and except as
otherwise provided herein), each such outstanding share of Twentieth Bancorp
Stock (other than shares held by Twentieth Bancorp as treasury shares or as
to which "Dissenters Rights" are properly exercised) shall be converted,
without any action on the part of the holder of such share, into 1.01 shares
of Horizon Bancorp common stock (hereinafter the "Exchange Ratio"). For
example, a Twentieth Bancorp shareholder having record ownership of 1,000
shares of Twentieth Bancorp Stock at the Effective Time shall receive in
exchange therefor 1,010 shares of Horizon Bancorp Stock. In the event of
any stock split, stock dividend or other recapitalization by Horizon
Bancorp, the Exchange Ratio shall be adjusted proportionately.
B. EXCHANGE PROCEDURES. Following the Effective Time, certificates representing
shares of Twentieth Bancorp Stock outstanding at the Effective Time (herein
sometimes referred to as "Old Certificates") shall evidence only the right of
the registered holder thereof to receive, and may be exchanged for, Horizon
Bancorp Stock or in the case of shareholders who properly have exercised
Dissenters Rights, cash in an amount determined as provided by law.
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At the Effective Time, Horizon Bancorp shall issue and deliver to ▇▇▇▇▇▇
Trust and Savings Bank, Chicago, Illinois, in its capacity as the transfer
agent of Horizon Bancorp Stock (the "Transfer Agent"), one certificate
representing the aggregate number of whole shares of Horizon Bancorp Stock,
into which outstanding shares of Twentieth Bancorp Stock have been converted
as provided above. As promptly as practicable following the Effective Time,
Horizon Bancorp shall send or cause to be sent to each former shareholder of
Twentieth Bancorp of record immediately prior to the Effective Time written
instructions and transmittal materials (a "Transmittal Letter") for use in
surrendering Old Certificates to the Transfer Agent. Upon the proper
surrender and delivery to the Transfer Agent (in accordance with Horizon
Bancorp's above instructions, and accompanied by a properly completed
Transmittal Letter) by a former shareholder of Twentieth Bancorp of his or
her Old Certificates(s), and in exchange therefor, the Transfer Agent shall
issue, register and deliver to the shareholder a certificate evidencing the
number of shares of Horizon Bancorp Stock to which the shareholder is
entitled.
Following the Effective Time there shall be no further transfers of Twentieth
Bancorp Stock on the stock transfer books of Twentieth Bancorp or the
registration of any transfer of an Old Certificate by any holder thereof, and
the surrender of each Old Certificate as provided herein must be made by, or
on behalf of its holder of record at the Effective Time.
C. TREATMENT OF FRACTIONAL SHARES. No scrip or certificates representing
fractional shares of Horizon Bancorp Stock will be issued to any former
shareholder of Twentieth Bancorp, and, except as provided below, no such
shareholder will have any right to vote or receive any dividend or other
distribution on, or any other right with respect to, any fraction of a share
of Horizon Bancorp Stock resulting from the above exchange. In the event
the exchange of shares results in the creation of fractional shares, in lieu
of the issuance of fractional shares of Horizon Bancorp Stock, Horizon
Bancorp will deliver cash to the Transfer Agent in an amount equal to the
aggregate "Market Value" as defined below, of all such fractional shares,
and in such event the Transfer Agent shall divide such cash among and remit
it (without interest) to the former shareholders of Twentieth Bancorp in
accordance with their respective interests. "Market Value" shall mean the
average of the reported daily closing prices of Horizon Bancorp Stock on the
Nasdaq National Market during the period of ten (10) consecutive trading
days ending on the business day immediately preceding the date of the
special meeting of shareholders of Twentieth Bancorp called for purposes of
approving the Merger.
D. SURRENDER OF CERTIFICATES. Subject to the paragraph below concerning lost
certificates, no Horizon Bancorp Stock certificate shall be delivered to any
former shareholder of Twentieth Bancorp unless and until such shareholder
shall have properly surrendered to the Transfer Agent the old Certificate(s)
formerly representing his or her shares of Twentieth Bancorp Stock, together
with a properly completed Transmittal Letter in such form as shall be
provided to the shareholder by Horizon Bancorp for that purpose. Further,
until such Old Certificate(s) are so surrendered, no dividend or other
distribution payable to holders of record of Horizon Bancorp Stock as of any
date subsequent to the Effective Time shall be delivered to the holder of
such Old Certificate(s). However, subject to prior escheatment under
applicable law, upon the proper surrender of such Old Certificate(s) the
Transfer Agent shall pay to the registered holder of the shares of Horizon
Bancorp Stock represented by such
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Old Certificate(s) the amount of any such dividends or other distributions
which have accrued but remain unpaid with respect to such shares. Neither
Twentieth Bancorp, Horizon Bancorp nor the Transfer Agent shall have any
obligation to pay any interest on any such dividends or distributions for
any period prior to such payment.
E. DISSENTERS. Any shareholder of Twentieth Bancorp who properly exercises the
right of dissent and appraisal with respect to the Merger as provided in
Sections 31-1-122 and 31-1-123 of the West Virginia Code of 1931, as
amended (the "West Virginia Code") ("Dissenters Rights") shall be entitled
to receive payment of the fair value of his or her shares of Twentieth
Bancorp stock in the manner and pursuant to the procedures provided
therein. Shares of Twentieth Bancorp Stock held by persons who exercise
Dissenters Rights shall not be converted into Horizon Bancorp Stock;
provided, however, that if any shareholder of Twentieth Bancorp who
exercises Dissenters Rights shall fail to perfect his or her right to
receive cash or effectively shall waive or lose such right, then each of
his or her shares of Twentieth Bancorp Stock, at Horizon Bancorp's sole
option, shall be deemed to have been converted into Horizon Bancorp Stock
as of the Effective Time. Any shares of Horizon Bancorp Stock authorized
to be issued pursuant to this Agreement but not exchanged for shares of
Twentieth Bancorp Stock because of the exercise of Dissenters Rights may be
sold by the Transfer Agent at public auction or by private sale, or through
a dealer or by any other reasonable method, at its election, for the best
available price, and the net proceeds of any such sale shall be retained by
Horizon Bancorp.
F. LOST CERTIFICATES. Any shareholder of Twentieth Bancorp whose certificate
evidencing shares of Twentieth Bancorp Stock has been lost, destroyed,
stolen or otherwise is missing shall be entitled to receive a certificate
representing the shares of Horizon Bancorp Stock to which he or she is
entitled in accordance with and upon compliance with conditions imposed by
the Transfer Agent or Horizon Bancorp (including without limitation a
requirement that the shareholder provide a lost instruments indemnity or
surety bond in form, substance and amount satisfactory to the Transfer
Agent and Horizon Bancorp).
G. OUTSTANDING HORIZON BANCORP STOCK. The status of the shares of Horizon
Bancorp Stock which are outstanding immediately prior to the Effective Time
shall not be affected by the Merger.
H. OUTSTANDING STOCK OF THE BANK. Except as provided in Paragraph 1.4 above,
the status of the shares of capital stock of the Bank which are outstanding
immediately prior to the Effective Time shall not be affected by the Merger.
1.6. CERTIFICATE OF INCORPORATION, BYLAWS AND MANAGEMENT. The Certificate of
Incorporation and Bylaws of Horizon Bancorp in effect at the Effective Time
shall be the Certificate of Incorporation and Bylaws of Horizon Bancorp as the
surviving corporation. The officers and directors of Horizon Bancorp in office
at the Effective Time shall continue to hold such offices until removed as
provided by law or until the election or appointment of their respective
successors.
1.7. CLOSING AND EFFECTIVE TIME. The closing of the transactions contemplated by
this Agreement (the "Closing") shall take place at the offices of ▇▇▇▇▇▇▇▇ &
▇▇▇▇▇▇▇ in Charleston, West Virginia, or at such other place as Horizon Bancorp
shall designate, on a date specified by Horizon Bancorp (the "Closing Date")
after the expiration of any and all required waiting periods following the
effective date of required approvals of the Merger by governmental or regulatory
authorities. At the
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Closing, Horizon Bancorp and Twentieth Bancorp shall take such actions
(including without limitation the delivery of certain closing documents and the
execution of a Certificate of Merger under West Virginia law) as are required
herein and as otherwise shall be required by law to consummate the Merger and
cause it to become effective.
Subject to the terms and conditions set forth herein (including without
limitation the receipt of all required approvals of governmental and regulatory
authorities), the Merger shall become effective on the date and at the time
(the "Effective Time") specified in the Certificate of Merger filed with the
appropriate governmental body in accordance with law; provided, however, that
the Effective Time shall in no event be more than ten (10) days following the
Closing Date.
1.8 USE OF ACQUISITION SUBSIDIARY. Horizon Bancorp reserves the right to form
a wholly-owned subsidiary to be merged with Twentieth Bancorp in which case all
terms and conditions of this Agreement shall remain the same except that (1)
the subsidiary shall adopt and agree to be bound by this Agreement, (2) if
required by Horizon Bancorp a separate merger agreement reflecting the
substantive terms as stated herein of the transaction shall be entered into by
the subsidiary and Twentieth Bancorp and (3) Twentieth Bancorp shall be merged
into the subsidiary rather than into Horizon Bancorp.
ARTICLE II. REPRESENTATIONS AND WARRANTIES
2.1. REPRESENTATIONS AND WARRANTIES OF TWENTIETH BANCORP. Except as otherwise
disclosed herein or previously disclosed to Horizon Bancorp in writing in the
form of a document specifically designated as a "Disclosure Statement" (the
"Twentieth Bancorp Disclosure Statement") which shall be delivered by Twentieth
Bancorp to Horizon Bancorp within ten (10) days of the execution of this
Agreement, Twentieth Bancorp hereby represents and warrants to Horizon Bancorp
as follows:
A. ORGANIZATION; STANDING; POWER. Twentieth Bancorp and the Bank (i) are
duly organized and incorporated, validly existing and in good standing
(as a holding company and a banking corporation, respectively) under
the laws of the State of West Virginia; (ii) have all requisite power
and authority (corporate and other) to own, lease and operate their
properties and to carry on their business as now being conducted; (iii)
are duly qualified to do business and are in good standing in each
other jurisdiction in which the character of the properties owned,
leased or operated by them therein or in which the transaction of their
business makes such qualification necessary, except where failure so to
qualify would not have a material adverse effect on Twentieth Bancorp
or the Bank; and (iv) are not transacting business or operating any
properties owned or leased by them in violation of any provision of
federal, state or local law or any rule or regulation promulgated
thereunder, which violation would have a material adverse effect on
Twentieth Bancorp or the Bank.
B. CAPITAL STOCK. Twentieth Bancorp's authorized capital stock consists of
Three Million Six Hundred Thousand (3,600,000) shares of Twentieth
Bancorp Stock, of which One Million Eight Hundred Thousand (1,800,000)
shares are issued and outstanding and constitute Twentieth Bancorp's
only outstanding securities.
Each outstanding share of Twentieth Bancorp Stock (i) has been duly
authorized and is validly issued and outstanding, and is fully paid and
nonassessable, (ii) has not been issued in violation of the preemptive rights
of any shareholder, and (iii) is subject to the registration
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and reporting requirements of the Securities Exchange Act of 1934, as amended
(the "1934 Act").
The Bank's authorized capital stock consists of one million eighty eight
thousand two hundred and fifty (1,088,250) shares of common stock, Ten Dollars
($10.00) par value ("Bank Stock"), of which one million eighty eight thousand
two hundred and fifty (1,088,250) shares are outstanding and issued to
Twentieth Bancorp and which constitute the Bank's only outstanding securities.
Each outstanding share of Bank Stock has been duly authorized and is validly
issued and outstanding and is fully paid and nonassessable.
C. PRINCIPAL SHAREHOLDERS. Except as set forth in Twentieth Bancorp's
Disclosure Statement, no person or entity is known to Twentieth Bancorp
to beneficially own, directly or indirectly, more than five percent
(5%) of the outstanding shares of Twentieth Bancorp Stock.
D. SUBSIDIARIES. The Bank is Twentieth Bancorp's only subsidiary. The
Bank has no subsidiaries. Neither Twentieth Bancorp nor the Bank own
any stock or other equity interest in any other corporation, service
corporation, joint venture, partnership or other entity.
E. CONVERTIBLE SECURITIES, OPTIONS, ETC. Twentieth Bancorp and the Bank
do not have any outstanding (i) securities or other obligations
(including debentures or other debt instruments) which are convertible
into shares of Twentieth Bancorp Stock or Bank Stock or any other
securities of Twentieth Bancorp or the Bank, (ii) options, warrants,
rights, calls or other commitments of any nature which entitle any
person to receive or acquire any shares of Twentieth Bancorp Stock, or
Bank Stock or any other securities of Twentieth Bancorp or the Bank, or
(iii) plan, agreement or other arrangement pursuant to which shares of
Twentieth Bancorp Stock or Bank Stock or any other securities of
Twentieth Bancorp or the Bank or options, warrants, rights, calls or
other commitments of any nature pertaining thereto, have been or will
be issued.
F. AUTHORIZATION AND VALIDITY OF AGREEMENT. This Agreement has been duly
and validly approved by Twentieth Bancorp's Board of Directors and
executed and delivered on Twentieth Bancorp's behalf. Subject only to
approval of this Agreement by the shareholders of Twentieth Bancorp in
the manner required by law and required regulatory approval, (i)
Twentieth Bancorp has the corporate power and authority to execute and
deliver this Agreement and to perform its obligations and agreements
and carry out the transactions described herein, (ii) all corporate
proceedings and approvals required to authorize Twentieth Bancorp to
enter into this Agreement and to perform its obligations and agreements
and carry out the transactions described herein have been duly and
properly completed or obtained, and (iii) this Agreement constitutes
the valid and binding agreement of Twentieth Bancorp enforceable in
accordance with its terms (except to the extent enforceability may be
limited by (A) applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws from time to time in effect which affect
creditors' rights generally, (B) legal and equitable limitations on the
availability of injunctive relief, specific performance and other
equitable remedies, and (C) general principles of equity and applicable
laws or court decisions limiting the enforceability of indemnification
provisions).
G. VALIDITY OF TRANSACTIONS AND ABSENCE OF REQUIRED CONSENTS OR WAIVERS.
Neither the execution and delivery of this Agreement, nor the
consummation of the transactions described herein, nor compliance by
Twentieth Bancorp with any of its obligations or agreements
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contained herein, will: (i) conflict with or result in a breach of the
terms and conditions of, or constitute a default or violation under any
provision of, the Articles of Incorporation or Bylaws, of Twentieth
Bancorp or the Bank or any material contract, agreement, lease,
mortgage, note, bond, indenture, license, or obligation or
understanding (oral or written) to which Twentieth Bancorp or the Bank
is bound or by which it, its business, capital stock or any of its
properties or assets may be affected; (ii) result in the creation or
imposition of any lien, claim, interest, charge, restriction or
encumbrance upon any of the properties or assets of Twentieth Bancorp
or the Bank; (iii) violate any applicable federal or state statute,
law, rule or regulation, or any judgment, order, writ, injunction or
decree of any court, administrative or regulatory agency or
governmental body; (iv) result in the acceleration of any obligation or
indebtedness of Twentieth Bancorp or the Bank; or (v) interfere with or
otherwise adversely affect the ability of either Twentieth Bancorp or
the Bank to carry on its business as presently conducted, or interfere
with or otherwise adversely affect the ability of either Horizon
Bancorp or the Bank to carry on such business after the Effective Time.
No consents, approvals or waivers are required to be obtained from any person
or entity in connection with Twentieth Bancorp's execution and delivery of
this Agreement, or the performance of its obligations or agreements or the
consummation of the transactions described herein, except for required
approvals of Twentieth Bancorp's shareholders and of governmental or
regulatory authorities.
H. REGULATORY REPORTS. Twentieth Bancorp and the Bank have timely filed
all reports, registrations and statements, together with any amendments
required to be made with respect thereto, that are required to be filed
with (i) the Board of Governors of the Federal Reserve System (the
"FRB"), (ii) the Federal Deposit Insurance Corporation (the "FDIC") ,
(iii) the West Virginia Board of Banking and Financial Institutions
(the "West Virginia Board"), (iv) the Securities and Exchange
Commission (the "SEC"), and/or (v) any other governmental or regulatory
authorities having jurisdiction over Twentieth Bancorp or the Bank
(including all reports required to be filed under the 1934 Act). All
such reports, registrations and statements filed by Twentieth Bancorp
and the Bank with the FRB, the FDIC, the West Virginia Board, SEC or
other such regulatory authority are collectively referred to
hereinafter as the "Regulatory Reports". As of their respective dates,
the Regulatory Reports complied in all material respects with all the
statutes, rules and regulations enforced or promulgated by the
regulatory authority with which they were filed and did 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
therein, in light of the circumstances under which they were made, not
misleading; and, neither Twentieth Bancorp nor the Bank has been
notified that any such Regulatory Reports were deficient in any
material respect as to form or content. Following the date of this
Agreement, Twentieth Bancorp shall deliver to Horizon Bancorp,
simultaneous with the filing thereof, a copy of each report,
registration, statement or other regulatory filing made by Twentieth
Bancorp or the Bank with the FRB, the FDIC, the West Virginia Board,
the SEC or any other regulatory authority.
I. FINANCIAL STATEMENTS. Twentieth Bancorp has delivered to Horizon
Bancorp a copy of its consolidated balance sheets as of December 31,
1993 and December 31, 1994, and its consolidated statements of
operations, changes in stockholders' equity and cash flows for the
years ended December 31, 1992, December 31, 1993 and December 31, 1994,
together with notes thereto and the audit reports (collectively, the
"Twentieth Bancorp Financial Statements"), and (ii) its consolidated
balance sheet as of September 30, 1995 and its
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statement of operations for the eleven (11) months ended November 31,
1995 (the "Twentieth Bancorp Interim Financial Statements"); and,
following the date of this Agreement, Twentieth Bancorp promptly will
deliver to Horizon Bancorp all other annual or interim financial
statements prepared by or for Twentieth Bancorp or the Bank. The
Twentieth Bancorp Financial Statements and the Twentieth Bancorp
Interim Financial Statements (including any related notes and schedules
thereto) were prepared in accordance with generally accepted accounting
principles ("GAAP") applied on a consistent basis throughout the
periods indicated and with Regulation S-X of the 1934 Securities
Exchange Act and present fairly Twentieth Bancorp's financial position,
results of operations and cash flows as of the dates indicated and for
the periods specified therein. The Twentieth Bancorp Financial
Statements have been audited by Diamond, Leftwich, ▇▇▇▇▇▇ & ▇▇▇▇,
Twentieth Bancorp's independent certified public accountants.
J. TAX RETURNS AND OTHER TAX MATTERS. (i) Twentieth Bancorp and the Bank
have timely filed or caused to be filed all federal, state and local
tax returns and reports which are required by law to have been filed,
and, to the best knowledge and belief of management of Twentieth
Bancorp, all such returns and reports were true, correct and complete
and contained all material information required to be contained
therein; (ii) all federal, state and local income, business and
occupation, franchise, sales, use, property, excise, withholding,
employment and other taxes (including interest and penalties), charges
and assessments which have become due from or been assessed or levied
against Twentieth Bancorp or the Bank or their respective properties
have been fully paid or, if not yet due, a reserve or accrual which is
adequate in all material respects for the payment of all such taxes to
be paid and the obligation for such unpaid taxes is reflected on the
Twentieth Bancorp Financial Statements; (iii) except as set forth in
Twentieth Bancorp's Disclosure Statement, the tax returns and reports
of Twentieth Bancorp and the Bank have not been subject to audit by the
Internal Revenue Service (the "IRS") or the Department of Tax and
Revenue of the State of West Virginia in the last ten (10) years and
neither Twentieth Bancorp nor the Bank has received any indication of
the pendency of any audit or examination in connection with any tax
return or report and have no knowledge that any such return or report
is subject to adjustment; and (iv) neither Twentieth Bancorp or the
Bank has executed any waiver or extended the statute of limitations (or
been asked to execute a waiver or extend a statute of limitation) with
respect to any tax year, the audit of any tax return or report or the
assessment or collection of any tax.
K. ABSENCE OF MATERIAL ADVERSE CHANGES. Since December 31, 1994,
Twentieth Bancorp and the Bank have conducted their business only in
the ordinary course, and there has been no material adverse change, and
there has occurred no event or development and there currently exists
no condition or circumstance which, with the lapse of time or
otherwise, may or could cause, create or result in a material adverse
change, in or affecting the financial condition of Twentieth Bancorp or
the Bank or in their results of operations, prospects, business,
assets, loan portfolio, investments, properties or operations except as
may be set forth in Twentieth Bancorp's Disclosure Statement.
L. ABSENCE OF UNDISCLOSED LIABILITIES. Twentieth Bancorp and the Bank do
not have any liabilities or obligations, whether matured or unmatured,
accrued, absolute, contingent or otherwise, whether due or to become
due (including without limitation tax liabilities or unfunded
liabilities under employee benefit plans or arrangements), other than
(i) those reflected in the Twentieth Bancorp Financial Statements or
the Twentieth Bancorp Interim
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Financial Statements, or (ii) obligations or liabilities incurred in
the ordinary course of their business since November 30, 1995 which are
not individually or in the aggregate, material to Twentieth Bancorp and
the Bank.
M. COMPLIANCE WITH EXISTING OBLIGATIONS. Twentieth Bancorp and the Bank
have performed in all material respects all obligations required to be
performed by them under, and they are not in default in any respect
under, or in violation in any respect of, the terms and conditions of
their respective Articles of Incorporation or Bylaws, and/or any
contract, agreement, lease, mortgage, note, bond, indenture, license,
obligation, understanding or other undertaking (whether oral or
written) to which Twentieth Bancorp and the Bank is bound or by which
the business, capital stock or any property or asset of Twentieth
Bancorp or the Bank may be affected.
N. LITIGATION AND COMPLIANCE WITH LAW.
(i) There are no actions, suits, arbitrations, controversies or
other proceedings or investigations (or, to the best knowledge and
belief of management of Twentieth Bancorp and the Bank any facts or
circumstances which reasonably could result in such), including without
limitation any such action by any governmental or regulatory authority,
which currently exist or are ongoing, pending or, to the best knowledge
and belief of management of Twentieth Bancorp and the Bank threatened,
contemplated or probable of assertion, against, relating to or
otherwise affecting Twentieth Bancorp or the Bank or any of their
properties, assets or employees which, if determined adversely, could
result in liability on the part of Twentieth Bancorp or the Bank for,
or subject Twentieth Bancorp or the Bank to, monetary damages, fines or
penalties or an injunction, or which could have a material adverse
effect on the financial condition, results of operations, prospects,
business, assets, loan portfolio, investments, properties or operations
of Twentieth Bancorp or the Bank or on the ability of Twentieth Bancorp
to consummate the Merger.
(ii) Twentieth Bancorp and the Bank have all licenses, permits,
orders, authorizations or approvals ("Permits") of any federal, state,
local or foreign governmental or regulatory body that are material to
or necessary for the conduct of their business or to own, lease and
operate their properties; all such Permits are in full force and
effect; no violations are or have been recorded in respect of any such
Permits; and no proceeding is pending or, to the best knowledge of
management of Twentieth Bancorp or the Bank, threatened or probable of
assertion to suspend, cancel, revoke or limit any Permit.
(iii) With the exception of that certain Memorandum of
Understanding dated as of December 12, 1994, a copy of which has been
provided to Horizon Bancorp, neither Twentieth Bancorp or the Bank is
subject to any supervisory agreement, enforcement order, writ,
injunction, capital directive, supervisory directive, memorandum of
understanding or other similar agreement, order, directive, memorandum
or consent of, with or issued by any regulatory or other governmental
authority (including without limitation the FRB, the FDIC or the West
Virginia Board) relating to its financial condition, directors or
officers, employees, operations, capital, regulatory compliance or
otherwise; there are no judgments, orders, stipulations, injunctions,
decrees or awards against Twentieth Bancorp or the Bank which in any
manner limit, restrict, regulate, enjoin or prohibit any present or
past business or practice of Twentieth Bancorp or the Bank; and,
neither Twentieth Bancorp nor the Bank has been advised nor has any
reason to believe that any regulatory or other governmental
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authority or any court is contemplating, threatening or requesting the
issuance of any such agreement, order, injunction, directive,
memorandum, judgment, stipulation, decree or award.
(iv) Neither Twentieth Bancorp nor the Bank is in violation or
default in any material respect under, and each has complied in all
material respects with, all laws, statutes, ordinances, rules,
regulations, orders, writs, injunctions or decrees of any court or
federal, state, municipal or other governmental or regulatory authority
having jurisdiction or authority over it or its business operations,
properties or assets (including without limitation all provisions of
West Virginia law relating to usury, the Consumer Credit Protection
Act, and all other laws and regulations applicable to extensions of
credit by the Bank) and to the best of the knowledge and belief of the
directors and officers of Twentieth Bancorp and Bank, there is no basis
for any claim by any person or authority for compensation,
reimbursement or damages or otherwise for any violation of any of the
foregoing.
O. REAL PROPERTIES. The Twentieth Bancorp Disclosure Statement and/or its
Financial Statements lists all real property owned by Twentieth Bancorp
and the Bank including improvements thereon (including the Bank's
banking facilities and all other real estate or foreclosed properties
including improvements thereon owned by the Bank) ("Real Property") and
all leases pertaining to any such Real Property to which Twentieth
Bancorp or the Bank is a party ("Real Property Leases"). With respect
to all Real Property, Twentieth Bancorp or the Bank has good and
marketable fee simple title to such Real Property and owns the same
free and clear of all mortgages, liens, leases, encumbrances, title
defects and exceptions to title other than (i) the lien of current
taxes not yet due and payable, and (ii) such imperfections of title and
restrictions, covenants and easements (including utility easements)
which do not materially affect the value of the Real Property and which
do not and will not materially detract from, interfere with or restrict
the present or future use of the properties subject thereto or affected
thereby. With respect to each Real Property Lease (i) such lease is
valid and enforceable in accordance with its terms, (ii) there
currently exists no circumstance or condition which constitutes an
event of default by Twentieth Bancorp or the Bank (as lessor or lessee)
or its respective lessor or lessee which, with the passage of time or
the giving of required notices will or could constitute such an event
of default, and (iii) the execution and delivery of this Agreement does
not constitute an event of default thereunder.
To the best of the knowledge and belief of management of Twentieth
Bancorp and the Bank, the Real Property complies in all material
respects with all applicable federal, state and local laws,
regulations, ordinances or orders of any governmental authority,
including those relating to zoning, building and use permits, and the
Real Property may be used under applicable zoning ordinances for
commercial purposes as a matter of right rather than as a conditional
or nonconforming use.
All improvements and fixtures included in or on the Real Property are
in good condition and repair, ordinary wear and tear excepted, and
there does not exist any condition which interferes (or will interfere
after the Merger) with the use or affects the economic value thereof.
P. LOANS, ACCOUNTS, NOTES AND OTHER RECEIVABLES.
(i) All loans, accounts, notes and other receivables reflected as
assets on the Bank's books and records (A) have resulted from bona fide
business transactions in the
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ordinary course of the Bank's operations, (B) in all material respects
were made in accordance with the Bank's standard loan policies and
procedures, and (C) are owned by the Bank free and clear of all liens,
encumbrances, assignments, participation or repurchase agreements or
other exceptions to title or to the ownership or collection rights of
any other person or entity.
(ii) All records of the Bank regarding all outstanding loans,
accounts, notes and other receivables, and all other real estate owned,
are accurate in all material respects, and, with respect to each loan
which the Bank's loan documentation indicates is secured by any real or
personal property or property rights ("Loan Collateral"), such loan is
secured by valid, perfected and enforceable liens on all such Loan
Collateral having the priority described in the Bank's records of such
loan.
(iii) To the best knowledge of management of Twentieth Bancorp
and the Bank, each loan reflected as an asset on the Bank's books, and
each guaranty therefor, is the legal, valid and binding obligation of
the obligor or guarantor thereon, and no defense, offset or
counterclaim has been asserted with respect to any such loan or
guaranty.
(iv) Twentieth Bancorp previously has furnished to Horizon
Bancorp (A) a written listing of each loan, extension of credit or
other asset of the Bank which, as of December 31,1995, is classified by
the FRB, the FDIC, the West Virginia Board, or by the Bank as "Loss,"
"Doubtful," "Substandard" or "Special Mention" (or otherwise by words
of similar import), or which the Bank has designated as a special asset
or for special handling or placed on any "watch list" because of
concerns regarding the ultimate collectibility or deteriorating
condition of such asset or any obligor or Loan Collateral therefor, and
(B) a written listing of each loan or extension of credit of the Bank
which, as of December 31, 1995, was past due as to the payment of
principal and/or interest, or as to which any obligor thereon
(including the borrower or any guarantor) otherwise was in default, is
the subject of a proceeding in bankruptcy or otherwise has indicated
any inability or intention not to repay such loan or extension of
credit. Each such listing is accurate and complete as of the date
indicated.
(v) The Bank's reserve for possible losses (the "Loan Loss
Reserve") has been established in conformity with GAAP, sound banking
practices and all applicable requirements of the FRB and rules and
policies of the FRB, the FDIC, the SEC and the West Virginia Board and,
in the best judgment of management of Twentieth Bancorp and the Bank,
is reasonable in view of the size and character of the Bank's loan
portfolio, current economic conditions and other relevant factors, and
is adequate to provide for losses relating to or the risk of loss
inherent in the Bank's loan portfolio and other real estate owned. At
December 31,1995, the Bank's Loan Loss Reserve was Two Million Dollars
($2,000,000).
Q. SECURITIES PORTFOLIO AND INVESTMENTS. All securities owned by
Twentieth Bancorp or the Bank (whether owned of record or beneficially)
are held free and clear of all mortgages, liens, pledges, encumbrances
or any other restriction or rights of any other person or entity,
whether contractual or statutory, which would materially impair the
ability of Twentieth Bancorp or the Bank to dispose freely of any such
security and/or otherwise to realize the benefits of ownership thereof
at any time. There are no voting trusts or other agreements or
undertakings to which Twentieth Bancorp or the Bank is a party with
respect to the voting of any such securities. With respect to all
"repurchase agreements" to which the Bank has "purchased" securities
under agreement to resell, the Bank has a valid, perfected first lien
or
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security interest in the government securities or other collateral
securing the repurchase agreement, and the value of the collateral
securing each such repurchase agreement equals or exceeds the amount of
the debt owed to the Bank which is secured by such collateral.
Except for fluctuations in the market values of United States
Treasury and agency or municipal securities, since December 31, 1994,
there has been no significant deterioration or material adverse change
in the quality, or any material decrease in the value, of Twentieth
Bancorp's or the Bank's securities portfolio as a whole.
R. PERSONAL PROPERTY AND OTHER ASSETS. All assets of Twentieth Bancorp or
the Bank other than those other assets referred to in Paragraphs
2.1.o., 2.1.p. and 2.1.q above (but including all banking equipment,
data processing equipment, vehicles, and all other personal property
located in or used in the operation of each office of the Bank or
otherwise used by either Twentieth Bancorp or the Bank in the
operation of its business) are owned by Twentieth Bancorp or the Bank
free and clear of all liens, encumbrances, leases, title defects or
exceptions to title. All of Twentieth Bancorp's and the Bank's
personal property material to its respective business is in good
operating condition and repair, ordinary wear and tear excepted.
S. PATENTS AND TRADEMARKS. Twentieth Bancorp and the Bank own, possess
or have the right to use any and all patents, licenses, trademarks,
trade names, copyrights, trade secrets and proprietary and other
confidential information necessary to conduct their business as now
conducted; and, neither Twentieth Bancorp nor the Bank has violated,
or currently is in conflict with, any patent, license, trademark,
trade name, copyright or proprietary right of any other person or
entity.
T. ENVIRONMENTAL MATTERS.
(i) Twentieth Bancorp has delivered to Horizon Bancorp
copies of all written reports, correspondence, notices or other
materials, if any, in its possession pertaining to environmental
surveys or assessments of the Real Property or any of the Bank's Loan
Collateral and any improvements thereon, or to any violation of
"Environmental Laws" (as defined below) on, affecting or otherwise the
Real Property, any Loan Collateral or otherwise involving Twentieth
Bancorp or the Bank.
(ii) There has been no presence, use, production,
generation, handling, transportation, treatment, storage, disposal,
distribution, labeling, reporting, testing, processing, emission,
discharge, release, threatened release, control, removal, clean-up or
remediation of any Hazardous Substances (as defined below) by any
person prior to the date hereof on, from or relating to the Real
Property or, to the best of the knowledge and belief of management of
Twentieth Bancorp and the Bank, the Loan Collateral, which constitutes
a violation of any Environmental Laws.
(iii) Neither Twentieth Bancorp nor the Bank is subject to
any claims, demands, causes of action, suits, proceedings, losses,
damages, penalties, liabilities, obligations, costs or expenses of any
kind and nature which arise out of, under or in connection with, or
which result from or are based upon the presence, use, production,
generation, handling, transportation, treatment, storage, disposal,
distribution, labeling, reporting, testing, processing, emission,
discharge, release, threatened release, control, removal, clean-up or
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remediation of any Hazardous Substances on, from or relating to the
Real Property or, to the best of the knowledge and belief of
management of Twentieth Bancorp and the Bank, any Loan Collateral by
the Bank or any other person or entity.
(iv) No facts, events or conditions relating to the Real
Property or, to the best knowledge of management of Twentieth Bancorp
and the Bank, any Loan Collateral, or the operations of the Bank at
any of its office locations, will prevent, hinder or limit continued
compliance with Environmental Laws, or give rise to any investigatory,
emergency removal, remedial or corrective actions, obligations or
liabilities (whether accrued, absolute, contingent, unliquidated or
otherwise) pursuant to Environmental Laws.
(v) For purposes of this Agreement, "Environmental Laws"
shall include:
(A) all federal, state and local statutes, regulations,
ordinances, orders, decrees, and similar provisions
having the force or effect of law,
(B) all contractual agreements, and
(C) all common law, concerning public health and safety,
worker health and safety, and pollution or protection
of the environment, including without limitation all
standards of conduct and bases of obligations
relating to the presence, use, production,
generation, handling, transportation, treatment,
storage, disposal, distribution, labeling, reporting,
testing, processing, discharge, release, threatened
release, control, emergency removal, clean-up or
remediation of any Hazardous Substances (including
without limitation the Comprehensive Environmental
Response, Compensation and Liability Act, the
Superfund Amendment and Reauthorization Act, the
Federal Insecticide, Fungicide and Rodenticide Act,
the Hazardous Materials Transportation Act, the
Resource Conservation and Recovery Act, the Clean
Water Act, the Clean Air Act, the Toxic Substances
Control Act, any "Superfund" or "Superlien" law, the
Americans with Disabilities Act, and the Occupational
Safety and Health Act), as such may now or at any
time hereafter be defined or in effect.
For purposes of this Agreement, "Hazardous Substances" shall include
hazardous, toxic or otherwise regulated materials, substances or
wastes; chemical substances or mixtures; pesticides; pollutants;
contaminants; toxic chemicals; oil or other petroleum products,
byproducts, or constituents (including but not limited to crude oil,
diesel oil, fuel oil, gasoline, lubrication oil, oil refuse, oil mixed
with other waste, oil sludge, and all other liquid hydrocarbons
regardless of specific gravity); asbestos or asbestos containing
material; flammable explosives; polychlorinated biphenyls ("PCBs") or
any material containing PCBS; radioactive materials; biological micro
organisms, viruses, fungi, spores; environmental tobacco smoke; radon
or radon gas; formaldehyde or any material containing formaldehyde;
fumigants; any material or substance comprising or contributing to
conditions known as "sick building syndrome," "building-related
illness" or similar conditions (or exposures; and/or any hazardous,
toxic, regulated or dangerous waste, substance or material defined as
such by the United States Environmental Protection Agency or any other
federal, state or local governmental agency or political subdivision
thereof, or for the purpose of or by any Environmental Laws, as now or
at any time hereafter may be in effect.
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U. ABSENCE OF BROKERAGE OR FINDERS COMMISSIONS. Except as set forth in
Twentieth Bancorp's Disclosure Statement, no person or firm has been
retained by or has acted on behalf of, pursuant to any agreement,
arrangement or understanding with, or under the authority of,
Twentieth Bancorp or its Board of Directors, as a broker, finder or
agent or has performed similar functions or otherwise is or may be
entitled to receive or claim a brokerage fee or other commission in
connection with the transactions described herein, and Twentieth
Bancorp has not agreed to pay any brokerage fee or other commission to
any person or entity in connection with the transactions described
herein.
V. EMPLOYMENT AGREEMENTS AND MATTERS. Neither Twentieth Bancorp nor the
Bank is a party to or bound by any oral or written employment
agreement, express or implied, with any of its directors, officers or
employees, or to any collective bargaining agreement with any of its
employees, any labor union or any other collective bargaining unit or
organization. Each of Twentieth Bancorp and the Bank (i) has paid in
full to or accrued on behalf of all its respective directors, officers
and employees all compensation for labor or services rendered,
including all wages, salaries, commissions, bonuses, fees and other
direct compensation for all labor or services performed by them to the
date of this Agreement and all vacation pay, sick pay, severance pay
and other amounts promised to the extent required by law or when
Twentieth Bancorp or the Bank has a policy or practice of making such
payments, and (ii) is in compliance with all applicable federal, state
and local laws, statutes, rules and regulations with regard to
employment and employment practices, terms and conditions, and wages
and hours and other compensation matters. There is no pending or
threatened dispute or strike involving Twentieth Bancorp or the Bank
and any of their respective employees, or any pending or threatened
proceeding in which it is asserted that Twentieth Bancorp or the Bank
has committed an unfair labor practice; and, none of Twentieth Bancorp
or the Bank is aware of any activity involving it or any of its
employees seeking to certify a collective bargaining unit or engaging
in any other labor organization activity.
W. MATERIAL CONTRACTS. Except for those documents described in the
Twentieth Bancorp Disclosure Statement (true, correct and complete
copies of which have been provided by Twentieth Bancorp to Horizon
Bancorp) neither Twentieth Bancorp nor the Bank is a party to or bound
by any agreement (i) involving money or other property in an amount or
with a value in excess of Fifty Thousand Dollars ($50,000), (ii) which
is not to be performed in full prior to June 30, 1996, (iii) which
calls for the provision of goods or services to Twentieth Bancorp or
the Bank and cannot be terminated without material penalty upon written
notice to the other party thereto, (iv) which is material to Twentieth
Bancorp or the Bank and was not entered into in the ordinary course of
business, (v) which involves hedging, options or any similar trading
activity, or interest rate exchanges or swaps, (vi) which commits the
Bank to extend any loan or credit (with the exception of letters of
credit, lines of credit and loan commitments extended in the ordinary
course of the Bank's business), (vii) which involves the purchase or
sale of any assets of Twentieth Bancorp or the Bank, or the purchase,
sale, issuance, redemption or transfer of any capital stock or other
securities of Twentieth Bancorp or the Bank, or (viii) with any
director, officer or principal shareholder of Twentieth Bancorp or the
Bank including without limitation any employment or consulting
agreement, but not including any agreement relating to loans or other
banking services which were made in the ordinary course of the Bank's
business and on substantially the same terms and conditions as were
prevailing at that time for similar agreements with unrelated persons.
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Neither Twentieth Bancorp nor the Bank is in default in any
material respect, and there has not occurred any event which with the
lapse of time or giving of notice or both would constitute such a
default, under any contract, lease, insurance policy, commitment or
arrangement to which it is a party or by which it or its property is
or may be bound or affected or under which it or its property receives
benefits, where the consequences of such default would have a material
adverse effect on the financial condition, results of operations,
prospects, business, assets, loan portfolio, investments, properties
or operations of Twentieth Bancorp or the Bank.
X. EMPLOYEE BENEFIT PLANS.
(i) The Twentieth Bancorp Disclosure Statement contains a
true and complete list of all bonus, deferred compensation, pension,
retirement, profit-sharing, thrift, savings, employee stock ownership,
stock bonus, stock purchase, restricted stock and stock option plans;
all employment and severance contracts; all medical, dental, health,
and life insurance plans; all vacation, sickness and other leave plans,
disability and death benefit plans; and all other employee benefit
plans, contracts, or arrangements maintained or contributed to by
Twentieth Bancorp or the Bank for the benefit of any employees, former
employees, directors, former directors or any of their beneficiaries
(collectively, the "Plans"). True and complete copies of all Plans,
including, but not limited to, any trust instruments and/or insurance
contracts, if any, forming a part thereof, and all amendments thereto,
will be promptly supplied to Horizon Bancorp. Except as provided in the
Twentieth Bancorp Disclosure Statement, neither Twentieth Bancorp nor
the Bank maintains, sponsors, contributes to or otherwise participates
in any "Employee Benefit Plan" within the meaning of Section 3(3) of
the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), any "Multiemployer Plan" within the meaning of Section 3(37)
of ERISA, or any "Multiple Employer Welfare Arrangement" within the
meaning of Section 3(40) of ERISA. Each Plan which is an "employee
pension benefit plan" within the meaning of Section 3(2) of ERISA and
which is intended to be qualified under Section 401(a) of the Internal
Revenue Code of 1986, as amended (the "Code") has received a
determination letter from the IRS and neither Twentieth Bancorp nor the
Bank is aware of any circumstances reasonably likely to result in the
revocation or denial of any such favorable determination letter. All
reports and returns with respect to the Plans (and any Plans previously
maintained by Twentieth Bancorp or the Bank) required to be filed with
any governmental department, agency, service or other authority,
including without limitation Internal Revenue Service Form 5500 (Annual
Report), have been properly and timely filed.
(ii) All "Employee Benefit Plans" maintained by or
otherwise covering employees or former employees of Twentieth Bancorp
or the Bank to the extent subject to ERISA, currently are, and at all
times have been, in compliance with all material provisions and
requirements of ERISA. There is no pending or threatened litigation
relating to any Plan or any such Plan previously maintained by
Twentieth Bancorp or the Bank. Neither Twentieth Bancorp nor the Bank
has engaged in a transaction with respect to any Plan that could
subject Twentieth Bancorp or the Bank to a tax or penalty imposed by
either Section 4975 of the Code or Section 502(i) of ERISA and neither
has any welfare or benefit plan which promises or provides for
post-retirement or post-employment benefits or payments.
(iii) Twentieth Bancorp will promptly deliver to Horizon
Bancorp a true, correct and complete copy (including copies of all
amendments thereto) of any Retirement Plan of Twentieth Bancorp and
the Bank (the "Retirement Plan"), together with true, correct and
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complete copies of the summary plan description relating to the
Retirement Plan, the most recent determination letter received from
the IRS regarding the Retirement Plan, and the most recent Annual
Report (Form 5500 series) and related schedules, if any, for the
Retirement Plan.
The Retirement Plan is qualified under the provisions
of Section 401(a) of the Code, the trust under the Retirement Plan is
an exempt trust under Section 501(a) of the Code, and a determination
letter with respect to the Retirement Plan to said effect, including a
determination letter covering the current terms and provisions of the
Retirement Plan. There are no issues relating to said qualification
or exemption of the Retirement Plan currently pending before the IRS,
the United States Department of Labor, the Pension Benefit Guaranty
Corporation or any court. The Retirement Plan and the administration
thereof meet (and have met since the establishment of the Retirement
Plan) all of the applicable requirements of ERISA, the Code and all
other laws, rules and regulations applicable to the Retirement Plan
and do not violate (and since the establishment of the Retirement Plan
have not violated) any of the applicable provisions of ERISA, the Code
and such other laws, rules and regulations. Without limiting the
generality of the foregoing, all reports and returns with respect to
the Retirement Plan required to be filed with any governmental
department, agency, service or other authority have been properly and
timely filed. There are no issues or disputes with respect to the
Retirement Plan or the administration thereof currently existing
between Twentieth Bancorp or the Bank, or any trustee or other
fiduciary thereunder, and any governmental agency, any current or
former employee of Twentieth Bancorp or the Bank or beneficiary of any
such employee or any other person or entity. No "reportable event"
within the meaning of Section 4043(b) of ERISA has occurred at any
time with respect to the Retirement Plan.
(iv) No liability under subtitle C or D of Title IV of
ERISA has been or is expected to be incurred by Twentieth Bancorp or
the Bank with respect to the Retirement Plan or with respect to any
other ongoing, frozen or terminated defined benefit pension plan
currently or formerly maintained by Twentieth Bancorp or the Bank.
Neither Twentieth Bancorp nor the Bank presently contributes to a
"Multiemployer Plan" or has contributed to such a plan. All
contributions required to be made pursuant to the terms of each of the
Plans (including without limitation the Retirement Plan and any other
"pension plan" (as defined in Section 3(2) of ERISA) maintained by
Twentieth Bancorp or the Bank) have been timely made. Neither the
Retirement Plan nor any other "pension plan" maintained by Twentieth
Bancorp or the Bank has an "accumulated funding deficiency" (whether
or not waived) within the meaning of Section 412 of the Code or
Section 302 of ERISA. Neither Twentieth Bancorp nor the Bank has
provided, or is required to provide, security to any "pension plan" or
to any "Single Employer Plan" pursuant to Section 401(a)(29) of the
Code. Under the Retirement Plan and any other "pension plan"
maintained by Twentieth Bancorp or the Bank as of the last day of the
most recent plan year ended prior to the date hereof, the actuarially
determined present value of all "benefit liabilities," within the
meaning of Section 4001(a)(16) of ERISA (as determined on the basis
of the actuarial assumptions contained in the plan's most recent
actuarial valuation) did not exceed the then current value of the
assets of such plan, and there has been no material change in the
financial condition of any such plan since the last day of the most
recent plan year.
(v) There are no restrictions on the rights of Twentieth
Bancorp or the Bank to amend or terminate any Plan without incurring
any liability thereunder. Neither the execution and delivery of this
Agreement nor the consummation of the transactions contemplated hereby
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will (except as otherwise specifically provided herein) (A) result in
any payment to any person (including without limitation any severance
compensation or payment, unemployment compensation, "golden parachute"
or "change in control" payment, or otherwise) becoming due under any
plan or agreement to any director, officer, employee or consultant,
(B) increase any benefits otherwise payable under any plan or
agreement, or (C) result in any acceleration of the time of payment or
vesting of any such benefit.
Y. INSURANCE. Twentieth Bancorp and the Bank have in effect a "banker's
blanket bond" and other policies of general liability, casualty,
directors and officers liability, employee fidelity, errors and
omissions and other property and liability insurance as listed in the
Twentieth Bancorp Disclosure Statement (the "Policies") . The Policies
provide coverage in such amounts and against such liabilities,
casualties, losses or risks as is customary or reasonable for entities
engaged in the businesses of Twentieth Bancorp or the Bank or as is
required by applicable law or regulation; and, in the reasonable
opinion of management of Twentieth Bancorp and the Bank, the insurance
coverage provided under the Policies is considered reasonable and
adequate in all respects for Twentieth Bancorp and the Bank. Each of
the Policies is in full force and effect and is valid and enforceable
in accordance with its terms, and is underwritten by an insurer of
recognized financial responsibility and which is qualified to transact
business in West Virginia; and, Twentieth Bancorp and the Bank have
taken all requisite actions (including the giving of required notices)
under each such Policy in order to preserve all rights thereunder with
respect to all matters. Neither Twentieth Bancorp nor the Bank is in
default under the provisions of, has received notice of cancellation
or nonrenewal of or any premium increase on, or has any knowledge of
any failure to pay any premium on or any inaccuracy in any application
for any Policy. There are no pending claims with respect to any
Policy (and neither Twentieth Bancorp or the Bank is aware of any
facts which would form the basis of any such claim), and neither
Twentieth Bancorp or the Bank has knowledge of any facts or of the
occurrence of any event that is reasonably likely to form the basis
for any such claim.
Z. INSURANCE OF DEPOSIT. All deposits of the Bank are insured by the
Bank Insurance Fund of the FDIC to the maximum extent permitted by
law, all deposit insurance premiums due from the Bank to the FDIC have
been paid in full in a timely fashion, and, to the best of the
knowledge and belief of the Bank's executive officers, no proceedings
have been commenced or are contemplated by the FDIC or otherwise to
terminate such insurance.
AA. SALARIES AND WAGES; STOCK OWNERSHIP; OPTIONS GRANTED. The Twentieth
Bancorp Disclosure Statement lists (i) the name and current salary or
wage rate for each present employee of Twentieth Bancorp or the Bank
who presently is scheduled to receive, or who is reasonably likely to
receive, total compensation (including any bonus or incentive
compensation) during or for 1995 or 1996 in an amount exceeding Twenty
Five Thousand Dollars ($25,000.00); (ii) the name of and number of
shares of Twentieth Bancorp Stock beneficially owned by each of the
directors and principal officers of Twentieth Bancorp and the Bank and
by any person or entity known to Twentieth Bancorp to beneficially own
five percent (5%) or more of Twentieth Bancorp Stock; and (iii) the
name of and number of outstanding options held by each person to whom
a stock option has been granted and currently is outstanding under any
stock option or other plan.
BB. AFFILIATES. The Twentieth Bancorp Disclosure Statement lists each of
those persons deemed by Twentieth Bancorp and its counsel as of the
date of this Agreement to be an "Affiliate" of
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Twentieth Bancorp as that term is defined in Rule 405 promulgated
under the Securities Act of 1933, as amended (the "1933 Act").
CC. OBSTACLES TO REGULATORY APPROVAL OR TAX TREATMENT. To the best of the
knowledge and belief of management of Twentieth Bancorp, there exists
no fact or condition (including the Bank's record of compliance with
the Community Reinvestment Act) relating to Twentieth Bancorp or the
Bank that may reasonably be expected to (i) prevent or materially
impede or delay Horizon Bancorp or Twentieth Bancorp from obtaining
the regulatory approvals required in order to consummate transactions
described herein, (ii) prevent the Merger from qualifying to be a
tax-free reorganization under Section 368(a)(1)(A) of the Code; and,
if any such fact or condition becomes known to Twentieth Bancorp or
the Bank, Twentieth Bancorp shall promptly (and in any event within
three (3) days after obtaining such knowledge) communicate such fact
or condition to Horizon Bancorp or (iii) prevent accounting for the
transaction as a pooling of interests.
DD. DISCLOSURE. To the best of the knowledge and belief of management of
Twentieth Bancorp and the Bank, no written statement, certificate,
schedule, list or other written information furnished by or on behalf
of Twentieth Bancorp or the Bank at any time to Horizon Bancorp in
connection with this Agreement (including without limitation the
statements contained herein), when considered as a whole, contains or
will contain any untrue statement of a material fact or omits or will
omit to state a material fact necessary in order to make the
statements herein or therein, in light of the circumstances under
which they were made, not misleading. Each document delivered or to
be delivered by Twentieth Bancorp or the Bank to Horizon Bancorp is or
will be a true and complete copy of such document, unmodified except
by another document delivered thereby.
2.2. REPRESENTATIONS AND WARRANTIES OF HORIZON BANCORP. Except as otherwise
disclosed herein or disclosed to Twentieth Bancorp in writing in the form of a
document specifically designated as a "Disclosure Statement" (the "Horizon
Disclosure Statement") which will be delivered by Horizon Bancorp to Twentieth
Bancorp within ten (10) days of the execution of this Agreement, Horizon Bancorp
hereby represents and warrants to Twentieth Bancorp as follows:
A. ORGANIZATION; STANDING; POWER. Horizon Bancorp (i) is duly organized
and incorporated, validly (existing and in good standing (as a
business corporation) under the laws of West Virginia, (ii) has all
requisite power and authority (corporate and other) to own its
respective properties and conduct its business as now being conducted,
(iii) is duly qualified to do business and is in good standing in each
other jurisdiction in which the character of the properties owned or
leased by it therein or in which the transaction of its business makes
such qualification necessary except where failure so to qualify would
not have a material adverse effect on Horizon Bancorp and its
subsidiaries considered as one enterprise, and (iv) is not transacting
business, or operating any properties owned or leased by it, in
violation of any provision of federal or state law or any rule or
regulation promulgated thereunder, which violation would have a
material adverse effect on Horizon Bancorp and its subsidiaries
considered as one enterprise.
B. CAPITAL STOCK. Horizon Bancorp's authorized capital stock consists of
Five Million (5,000,000) shares of Horizon Bancorp Stock. As of
December 31, 1995, an aggregate of Two Million Thirty Five Thousand
Six Hundred Seventy (2,835,670) shares of Horizon Bancorp Stock had
been issued and were outstanding, and 4,540 shares are held as
treasury
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stock. Horizon Bancorp's outstanding capital stock has been
duly authorized and validly issued, and is fully paid and
nonassessable, and the shares of Horizon Bancorp Stock issued to
Twentieth Bancorp's shareholders pursuant to this Agreement, when
issued as described herein, will be duly authorized, validly issued,
fully paid and nonassessable.
C. CONVERTIBLE SECURITIES, OPTIONS, ETC. Except in connection with
Horizon Bancorp's Incentive Stock Option Plan and its dividend
reinvestment plan, Horizon Bancorp has no outstanding (i) securities
or other obligations (including debentures or other debt instruments)
which are convertible into shares of Horizon Bancorp Stock or any
other securities of Horizon Bancorp, (ii) options, warrants, rights,
calls or other commitments of any nature which entitle any person to
receive or acquire any shares of Horizon Bancorp Stock or any other
securities of Horizon Bancorp, or (iii) plan, agreement or other
arrangement pursuant to which shares of Horizon Bancorp Stock or any
other securities of Horizon Bancorp, or options, warrants, rights,
calls or other commitments of any nature pertaining thereto, have been
or may be issued.
D. AUTHORIZATION AND VALIDITY OF AGREEMENT. This Agreement has been duly
and validly approved by Horizon Bancorp's Board of Directors and
executed and delivered on Horizon Bancorp's behalf. Subject only to
approval of this Agreement by the shareholders of Horizon Bancorp in
the manner required by law and required regulatory approval, (i)
Horizon Bancorp has the corporate power and authority to execute and
deliver this Agreement and to perform its obligations and agreements
and carry out the transactions described herein, (ii) all corporate
proceedings required to be taken to authorize Horizon Bancorp to enter
into this Agreement and to perform its respective obligations and
agreements and carry out the transactions described herein have been
duly and properly taken, and (iii) this Agreement constitutes the valid
and binding agreement of Horizon Bancorp enforceable in accordance with
its terms (except to the extent enforceability may be limited by (A)
applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws from time to time in effect which affect creditors' rights
generally, (B) legal and equitable limitations on the availability of
injunctive relief, specific performance and other equitable remedies,
and (C) general principles of equity and applicable laws or court
decisions limiting the enforceability of indemnification provisions).
E. VALIDITY OF TRANSACTIONS; ABSENCE OF REQUIRED CONSENTS OR WAIVERS.
Except where the same would not have a material adverse effect on
Horizon Bancorp and its subsidiaries considered as one enterprise,
neither the execution and delivery of this Agreement, nor the
consummation of the transactions described herein, nor compliance by
Horizon Bancorp with any of its obligations or agreements contained
herein, will:
(i) conflict with or result in a breach of the terms and
conditions of, or constitute a default or violation under any
provision of, Horizon Bancorp's Certificate of Incorporation or
Bylaws, or any contract, agreement, lease, mortgage, note, bond,
indenture, license, or obligation or understanding (oral or written)
to which Horizon Bancorp is bound or by which it, its business,
capital stock or any of its respective properties or assets may be
affected;
(ii) result in the creation or imposition of any lien,
claim, interest, charge, restriction or encumbrance upon any of
Horizon Bancorp's properties or assets;
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(iii) violate any applicable federal or state statute, law,
rule or regulation, or any order, writ, injunction or decree of any
court, administrative or regulatory agency or governmental body;
(iv) result in the acceleration of any obligation or
indebtedness of Horizon Bancorp; or,
(v) interfere with or otherwise adversely affect Horizon
Bancorp's ability to carry on its business as presently conducted.
No consents, approvals or waivers are required to be obtained
from any person or entity in connection with Horizon Bancorp's
execution and delivery of this Agreement, or the performance of its
obligations or agreements or the consummation of the transactions
described herein, except for required approvals of Horizon Bancorp's
shareholders and of governmental or regulatory authorities.
F. HORIZON BANCORP REPORTS. Horizon Bancorp and its consolidated
subsidiaries have timely filed all required Regulatory Reports. All
such reports and statements are collectively referred to herein as the
"Horizon Bancorp Reports." As of their respective dates, the Horizon
Bancorp Reports complied in all material respects with all the
statutes, rules and regulations enforced or promulgated by the
regulatory authority with which they were filed and did not contain any
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were
made, not misleading; and, Horizon Bancorp has not been notified that
any such Horizon Bancorp Reports were deficient in any material respect
as to form or content. Following the date of this Agreement, Horizon
Bancorp shall deliver to Twentieth Bancorp upon its request a copy of
any report, registration, statement or other regulatory filing made by
Horizon Bancorp or any of Horizon Bancorp's subsidiaries with the SEC,
the FRB, the FDIC, the West Virginia Board or any other such regulatory
authority.
G. HORIZON BANCORP FINANCIAL STATEMENTS. Horizon Bancorp has delivered
to Twentieth Bancorp a copy of (i) Horizon Bancorp's consolidated
balance sheets as of December 31, 1993 and December 31, 1994, and its
consolidated statements of income, changes in shareholders' equity,
and cash flows for the years ended December 31, 1992, December 31,
1993 and December 31, 1994 (the "Horizon Bancorp Financial
Statements"), and (ii) Horizon Bancorp's consolidated balance sheet as
of September 30, 1995 and its consolidated statement of operations for
the eleven (11) months ended November 30, 1995 (the "Horizon Bancorp
Interim Financial Statements"). The Horizon Bancorp Financial
Statements and the Horizon Bancorp Interim Financial Statements were
prepared in accordance with GAAP applied on a consistent basis
throughout the periods indicated, the Horizon Bancorp Financial
Statements have been audited and certified by Horizon Bancorp's
independent accountants, Ernst & Young, L.L.P. and the Horizon Bancorp
Financial Statements and the Horizon Bancorp Interim Financial
Statements present fairly Horizon Bancorp's consolidated financial
position, results of operations, and cash flows as of the dates and
for the periods specified therein.
H. ABSENCE OF MATERIAL ADVERSE CHANGES. Since December 31, 1994, there
has been no material adverse change, and there has occurred no event
or development and there currently exists no condition or circumstance
which, with the lapse of time or otherwise, may or could cause, create
or result in a material adverse change, in or affecting Horizon
Bancorp's
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consolidated financial condition or results of operations,
or in its prospects, business, assets, loan portfolio, investments,
properties or operations.
I. ABSENCE OF BROKERAGE OR FINDERS COMMISSIONS.
Except as set forth in Horizon Bancorp's Disclosure Statement
no person or firm has been retained by or has acted on behalf of,
pursuant to any agreement, arrangement or understanding with, or under
the authority of, Horizon Bancorp or its Board of Directors, as a
broker, finder or agent or has performed similar functions or
otherwise is or may be entitled to receive or claim a brokerage fee or
other commission in connection with the transactions described herein;
and, Horizon Bancorp has not agreed to pay any brokerage fee or other
commission to any person or entity in connection with the transactions
described herein.
J. OBSTACLES TO REGULATORY APPROVAL OR TAX TREATMENT. To the best of the
knowledge and belief of the executive officers of Horizon Bancorp, no
fact or condition (including the record of compliance with the
Community Reinvestment Act by Horizon Bancorp subsidiaries) relating
to Horizon Bancorp exists that may reasonably be expected to (i)
prevent or materially impede or delay Horizon Bancorp or Twentieth
Bancorp from obtaining the regulatory approvals required in order to
consummate transactions described herein, (ii) prevent the Merger
from qualifying to be a tax-free reorganization under Section
368(a)(1)(A) of the Code; and, if any such fact or condition becomes
known to the executive officers of Horizon Bancorp, Horizon Bancorp
promptly (and in any event within three (3) days after obtaining such
knowledge) shall communicate such fact or condition to Twentieth
Bancorp or (iii) prevent accounting for the transaction as a pooling
of interests.
K. DISCLOSURE. To the best of the knowledge and belief of Horizon
Bancorp, no written statement, certificate, schedule, list or written
information furnished by or on behalf of Horizon Bancorp at any time
to Twentieth Bancorp in connection with this Agreement (including
without limitation the statements contained herein), when considered
as a whole, contains or will contain any untrue statement of a
material fact or omits or will omit to state a material fact necessary
in order to make the statements herein or therein, in light of the
circumstances under which they were made, not misleading. Each
document delivered or to be delivered by Horizon Bancorp to Twentieth
Bancorp is or will be a true and complete copy of such document,
unmodified except by another document delivered by Horizon Bancorp.
ARTICLE III. COVENANTS OF TWENTIETH BANCORP
3.1. AFFIRMATIVE COVENANTS OF TWENTIETH BANCORP. Twentieth Bancorp hereby
covenants and agrees as follows with Horizon Bancorp:
A. "AFFILIATES" OF TWENTIETH BANCORP. Twentieth Bancorp will use its
best efforts to cause each Affiliate listed in the Twentieth Bancorp
Disclosure Statement (as well as each additional person who shall
become an Affiliate of Twentieth Bancorp after the date of this
Agreement or who shall be deemed by Horizon Bancorp or its counsel, in
their sole discretion, to be an Affiliate of Twentieth Bancorp, and
including persons, trusts, estates, corporations or other entities
related to persons deemed to be Affiliates of Twentieth Bancorp) to
execute and deliver to Horizon Bancorp prior to the Closing a written
agreement (the "Affiliates' Agreement") relating to restrictions on
shares of Horizon Bancorp Stock to be received by
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such Affiliates pursuant to this Agreement and which Affiliates'
Agreement shall be in form and content reasonably satisfactory to
Horizon Bancorp. Certificates for the shares of Horizon Bancorp Stock
issued to Affiliates of Twentieth Bancorp shall bear a restrictive
legend with respect to the restrictions applicable to such shares.
B. CONDUCT OF BUSINESS PRIOR TO EFFECTIVE TIME. While the parties
recognize that the operation of Twentieth Bancorp until the Effective
Time is the responsibility of Twentieth Bancorp and its Board of
Directors and officers, Twentieth Bancorp agrees that, between the
date of this Agreement and the Effective Time, Twentieth Bancorp will
carry on its business, in and only in the regular and usual course in
substantially, the same manner as such business heretofore was
conducted, and, to the extent consistent with such business and within
its ability to do so, Twentieth Bancorp agrees that it and, where
applicable, the Bank will:
(i) preserve intact their present business organization,
keep available their present officers, and preserve their
relationships with customers, depositors, creditors, correspondents,
suppliers, and others having business relationships with them;
(ii) maintain all of their properties and equipment in
customary repair, order and condition, ordinary wear and tear
excepted;
(iii) maintain their books of account and records in the
usual, regular and ordinary manner in accordance with sound business
practices applied on a consistent basis;
(iv) comply with all laws, rules and regulations
applicable to them, their properties, assets or employees and to the
conduct of their business;
(v) continue to maintain in force insurance; not modify
any bonds or policies of insurance in effect as of the date hereof
unless the same, as modified, provides substantially equivalent
coverage; and, not cancel, allow to be terminated or, to the extent
available, fail to renew, any such bond or policy of insurance unless
the same is replaced with a bond or policy providing substantially
equivalent coverage;
(vi) use their best efforts to modify their lending,
personnel, and other operating policies and procedures prior to the
Effective Time so as to be as consistent as practicable with those of
Horizon Bancorp and its banking corporation subsidiaries; and,
promptly provide to Horizon Bancorp such information about Twentieth
Bancorp and the Bank and their financial condition, results of
operations, prospects, businesses, assets, loan portfolio,
investments, properties or operations, as Horizon Bancorp reasonably
shall request.
C. PERIODIC INFORMATION REGARDING LOANS. All new extensions of credit by
the Bank in excess of $250,000 and any further extensions of credit to
existing borrowers that have not made timely payments in the past will
be submitted to Horizon Bancorp on a before-the-fact basis for Horizon
Bancorp's review but not approval within three (3) business days prior
to the Bank's issuance of a commitment on such loan.
Additionally, Twentieth Bancorp agrees to make available and
provide to Horizon Bancorp the following information with respect to
the Bank's loans and other extensions of credit (such assets herein
referred to as "Loans") as of December 31, 1995, and as of the end of
each month thereafter until the Effective Time, such information for
each month to be in
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form and substance as is usual and customary in the conduct of the
Bank's business and to be furnished within fifteen (15) days of the end
of each month ending after the date hereof:
(i) a list of Loans past due for thirty (30) days or more
as to principal or interest;
(ii) an analysis of the Loan Loss Reserve and management's
assessment of the adequacy of the Loan Loss Reserve (to be furnished
within fifteen (15) days of the end of each calendar quarter after the
date hereof unless prepared on a more frequent basis), which analysis
and assessment shall include a list of all classified or "watch list"
Loans, along with the outstanding balance and amount specifically
allocated to the Loan Loss Reserve for each such classified or "watch
list" Loan;
(iii) a list of Loans in nonaccrual status;
(iv) a list of all Loans over Twenty-Five Thousand Dollars
($25,000.00) without principal reduction for a period of longer than
one year;
(v) a list of all foreclosed real property or other real
estate owned and all repossessed personal property;
(vi) a list of reworked or restructured Loans over
Twenty-Five Thousand Dollars ($25,000.00) and still outstanding,
including original terms, restructured terms and status; and
(vii) a list of all impaired loans as so classified under
GAAP; and
(viii) a list of any actual or threatened litigation by or
against the Bank pertaining to any Loans or credits, which list shall
contain a description of circumstances surrounding such litigation,
its present status and management's evaluation of such litigation.
D. NOTICE OF CERTAIN CHANGES OR EVENTS. Following the execution of this
Agreement and up to the Effective Time, Twentieth Bancorp promptly
will notify Horizon Bancorp in writing of and provide to it such
information as it shall request regarding (i) any material adverse
change in its consolidated financial condition, consolidated results
of operations, prospects, business, assets, loan portfolio,
investments, properties or operations, or of the actual or prospective
occurrence of any condition or event which, with the lapse of time or
otherwise, may or could cause, create or result in any such material
adverse change, or of (ii) the actual or prospective existence or
occurrence of any condition or event which, with the lapse of time or
otherwise, has caused or may or could cause any statement,
representation or warranty of Twentieth Bancorp herein to be or become
inaccurate, misleading or incomplete, or which has resulted or may or
could cause, create or result in the breach or violation of any of
Twentieth Bancorp's covenants or agreements contained herein or in the
failure of any of the conditions described in Paragraphs 6.1. or 6.3.
below.
E. CONSENTS TO ASSIGNMENT OF LEASES. Twentieth Bancorp will use its best
efforts to obtain all required consents of its lessors to the
assignment to Horizon Bancorp of Twentieth Bancorp's rights and
obligations under any personal property leases, each of which consents
shall be in such form as shall be specified by Horizon Bancorp.
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F. FURTHER ACTION; INSTRUMENTS OF TRANSFER, ETC. Twentieth Bancorp
covenants and agrees with Horizon Bancorp that it (i) will use its
best efforts in good faith to take or cause to be taken all action
required of it or the Bank hereunder as promptly as practicable so as
to permit the consummation of the transactions described herein at the
earliest possible date, (ii) shall perform all acts and execute and
deliver to Horizon Bancorp all documents or instruments required
herein or as otherwise shall be reasonably necessary or useful to or
requested of Twentieth Bancorp in consummating such transactions, and,
(iii) will cooperate with Horizon Bancorp in every way in carrying
out, and will pursue diligently the expeditious completion of, such
transactions.
3.2. NEGATIVE COVENANTS OF TWENTIETH BANCORP. Twentieth Bancorp hereby
covenants and agrees that, between the date hereof and the Effective Time,
Twentieth Bancorp or, if applicable, the Bank, will not do any of the following
things or take any of the following actions without the prior written consent
and authorization of Horizon Bancorp:
A. AMENDMENTS TO ARTICLES OF INCORPORATION, ETC. Amend its Articles of
Incorporation or Bylaws.
B. CHANGE IN CAPITAL STOCK. (i) Make any change in its authorized capital
stock, or create any other or additional authorized capital stock or
other securities, or (ii) issue, sell, purchase, redeem, retire,
reclassify, combine or split any shares of its capital stock or other
securities (including securities convertible into capital stock), or
enter into any agreement or understanding with respect to any such
action.
C. OPTIONS, WARRANTS AND RIGHTS. Grant or issue any options, warrants,
calls, puts or other rights of any kind relating to the purchase,
redemption or conversion of shares of its capital stock or any other
securities (including securities convertible into capital stock) or
enter into any agreement or understanding with respect to any such
action.
D. DIVIDENDS. Declare or pay any dividends on outstanding shares of
capital stock or make any other distributions on or in respect of any
shares of its capital stock or otherwise to its shareholders except in
the same manner and amounts no greater than were paid in 1995.
E. EMPLOYMENT, BENEFIT OR RETIREMENT AGREEMENTS OR PLANS. Except as
required by law (i) enter into or become bound by any oral or written
contract, agreement or commitment for the employment or compensation
of any director, officer, employee or consultant which is not
immediately terminable by Twentieth Bancorp or the Bank without cost
or other liability on no more than thirty (30) days' notice; (ii)
adopt, enter into or become bound by any new or additional
profit-sharing, bonus, incentive, change in control or "golden
parachute," stock option, stock purchase, pension, retirement,
insurance (hospitalization, life or other), paid leave (sick leave,
vacation leave or other) or similar contract, agreement, commitment,
understanding, plan or arrangement (whether formal or informal) with
respect to or which provides for benefits for any of its current or
former directors, officers, employees or consultants; or (iii) enter
into or become bound by any contract with or commitment to any labor
or trade union or association or any collective bargaining group.
F. INCREASE IN COMPENSATION. Increase the compensation or benefits of,
or pay any bonus or other special or additional compensation to, any
of its directors, officers, employees or consultants, other than
standard, customary adjustments and merit increases which in the
aggregate do not exceed $120,000 including 1995 officer bonuses.
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G. ACCOUNTING PRACTICES. Make any changes in its accounting methods,
practices or procedures or in depreciation or amortization policies,
schedules or rates heretofore applied (except as required by GAAP or
governmental regulations).
H. ACQUISITIONS; ADDITIONAL BRANCH OFFICES. Directly or indirectly (i)
acquire or merge with, or acquire any branch or all or any significant
part of the assets of, any other person or entity, (ii) open any new
branch office, or (iii) enter into or become bound by any contract,
agreement, commitment or letter of intent relating to, or otherwise
take or agree to take any action in furtherance of, any such
transaction or the opening of a new branch office.
I. CHANGES IN BUSINESS PRACTICES. Except as may be required by the FRB,
the FDIC, the West Virginia Board or any other governmental or other
regulatory agency or as shall be required by applicable law,
regulation or this Agreement, (i) change in any material respect the
nature of its business or the manner in which it conducts its
business, (ii) discontinue any material portion or line of its
business, or (iii) change in any material respect its lending,
investment, asset-liability management or other material banking or
business policies (except to the extent required by Paragraphs 3.1.b.
above).
J. EXCLUSIVE MERGER AGREEMENT. Directly or indirectly, through any
person (i) encourage, solicit or attempt to initiate or procure
discussions, negotiations or offers with or from any person or entity
(other than Horizon Bancorp) relating to a merger or other acquisition
of Twentieth Bancorp or the purchase or acquisition of any Twentieth
Bancorp Stock or any Bank Stock, any branch office of the Bank or all
or any significant part of Twentieth Bancorp's or the Bank's assets;
or provide assistance to any person in connection with any such offer;
(ii) except to the extent required by law, disclose to any person or
entity any information not customarily disclosed to the public
concerning Twentieth Bancorp or the Bank or their respective business,
or afford to any other person or entity access to its properties,
facilities, books or records; (iii) sell or transfer any branch office
of the Bank or all or any significant part of Twentieth Bancorp's or
the Bank's assets to any other person or entity; or (iv) subject to
its fiduciary duty to its shareholders enter into or become bound by
any contract, agreement, commitment or letter of intent relating to,
or otherwise take or agree to take any action in furtherance of, any
such transaction.
K. ACQUISITION OR DISPOSITION OF ASSETS.
(i) Sell or lease (as lessor), or enter into or become
bound by any contract, agreement, option or commitment relating to the
sale, lease (as lessor) or other disposition of any real estate; or
sell or lease (as lessor), or enter into or become bound by any
contract, agreement, option or commitment relating to the sale, lease
(as lessor) or other disposition of any equipment or any other fixed
or capital asset (other than real estate) having a book value or a
fair market value, whichever is greater, of more than Ten Thousand
Dollars ($10,000) for any individual item or asset, or more than
Twenty Five Thousand Dollars ($25,000) in the aggregate for all such
items or assets;
(ii) Purchase or lease (as lessee), or enter into or
become bound by any contract, agreement, option or commitment relating
to the purchase, lease (as lessee) or other acquisition of any real
property; or purchase or lease (as lessee), or enter into or become
bound by any contract, agreement, option or commitment relating to the
purchase, lease (as lessee) or other acquisition of any equipment or
any other fixed assets (other than real estate)
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having a purchase price, or involving aggregate lease payments, in
excess of Fifty Thousand Dollars ($50,000) for any individual item or
asset, or more than One Hundred Thousand Dollars ($100,000) in the
aggregate for all such items or assets;
(iii) Enter into any purchase commitment for supplies or
services which calls for prices of goods or fees for services
materially higher than current market prices or fees or which
obligates Twentieth Bancorp or the Bank for a period longer than
twelve (12) months;
(iv) Sell, purchase or repurchase, or enter into or become
bound by any contract, agreement, option or commitment to sell,
purchase or repurchase, any loan or other receivable or any
participation in any loan or other receivable; or
(v) Sell or dispose of, or enter into or become bound by
any contract, agreement, option or commitment relating to the sale or
other disposition of, any other asset (whether tangible or intangible,
and including without limitation any trade name, trademark,
copyright, service ▇▇▇▇ or intellectual property right or license); or
assign its right to or otherwise give any other person its permission
or consent to use or do business under corporate name of Twentieth
Bancorp or the Bank or any name similar thereto; or release, transfer
or waive any license or right granted to it by any other person to use
any trademark, trade name, copyright, service ▇▇▇▇ or intellectual
property right.
Notwithstanding the foregoing, the Bank may foreclose, bid in or
otherwise dispose of loan collateral (real or personal) according to
its usual and customary practice.
L. DEBT; LIABILITIES. Except in the ordinary course of its business
consistent with its past practices, (i) enter into or become bound by
any promissory note, loan agreement or other agreement or arrangement
pertaining to its borrowing of money, (ii) assume, guarantee, endorse
or otherwise become responsible or liable for any obligation of any
other person or entity, or (iii) incur any other liability or
obligation (absolute or contingent).
M. LIENS; ENCUMBRANCES. Mortgage, pledge or subject any of its assets
to, or permit any of its assets to become or (with the exception of
those liens and encumbrances specifically described in the Twentieth
Bancorp Disclosure Statement) remain subject to, any lien or any other
encumbrance (other than in the ordinary course of business consistent
with its past practices in connection with securing of public funds
deposits, repurchase agreements or other similar operating matters).
N. WAIVER OF RIGHTS. Waive, release or compromise any material rights in
its favor (except in the ordinary course of business) except in good
faith for fair value in money or money's worth, nor waive, release or
compromise any rights against or with respect to any of its officers,
directors or shareholders or members of families of officers,
directors or shareholders.
O. OTHER CONTRACTS. Enter into or become bound by any contracts,
agreements, commitments or understandings (other than those described
elsewhere in this Paragraph 3.2.) (i) for or with respect to any
charitable contributions; (ii) with any governmental or regulatory
agency or authority; (iii) pursuant to which Twentieth Bancorp or the
Bank would assume, guarantee, endorse or otherwise become liable for
the debt, liability or obligation of any other person or entity; (iv)
which is entered into other than in the ordinary course of its
business; or (v) which,
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in the case of any one contract, agreement, commitment or understanding
and whether or not in the ordinary course of its business, would
obligate or commit Twentieth Bancorp or the Bank to make expenditures
of more than Ten Thousand Dollars ($10,000) (other than contracts,
agreements, commitments or understandings entered into in the ordinary
course of the Bank's lending operations).
ARTICLE IV. COVENANTS OF HORIZON BANCORP
4.1. COVENANTS OF HORIZON BANCORP. Horizon Bancorp hereby covenants and
agrees as follows with Twentieth Bancorp:
A. NASDAQ NOTIFICATION OF LISTING OF ADDITIONAL SHARES OF HORIZON BANCORP
STOCK. As soon as possible after the Effective Time, Horizon Bancorp
shall file with Nasdaq such notifications and other materials (and
shall pay such fees) as shall be required for the Nasdaq listing of the
shares of Horizon Bancorp Stock to be issued to Twentieth Bancorp's
shareholders.
B. EMPLOYMENT AGREEMENT. Horizon Bancorp consents and agrees that the
Bank may offer employment contracts to ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, III,
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, and ▇▇▇▇▇ ▇▇▇▇▇▇▇▇. Such employment contracts
shall be for employment by the Bank at the individual's position,
location and compensation as of January 1, 1996. With respect to
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, III and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, the term for the
employment contracts offered shall be three (3) years, from the
Effective Time and the term of the employment contract offered to
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ shall be two (2) years from the Effective Time. Such
employment contracts shall be in substantially the form of Exhibit C
attached hereto and incorporated herein by reference.
C. EMPLOYEE BENEFITS. After the Effective Time, Horizon Bancorp will
review all employee benefits provided by the Bank. If such benefits
are found by Horizon Bancorp to be substantially different in scope
and coverage than the benefits provided to employees of other
subsidiaries of Horizon Bancorp, then Horizon Bancorp may recommend to
the Bank's Board of Directors appropriate modifications to the Bank's
employee benefits. After the Effective Time, Horizon Bancorp shall
cause the Bank to provide appropriate training and educational
opportunities for all eligible employees of the Bank in order to
provide them reasonable opportunity to assimilate with the operations
of Horizon Bancorp.
D. INDEMNIFICATION OF DIRECTORS AND OFFICERS. After the Effective Time,
without releasing any insurance carrier and after exhaustion of all
applicable director and liability insurance coverage for Twentieth
Bancorp or the Bank and their respective directors and officers,
Horizon Bancorp shall indemnify, hold harmless and defend the
directors and officers of Twentieth Bancorp and the Bank in office at
the Effective Time from and against any and all claims, disputes,
demands, causes of action, suits, proceedings, losses, damages,
liabilities, obligations, cost and expenses of every kind and nature
including without limitation reasonable attorneys fees and legal costs
and expenses therewith whether known or unknown and whether now
existing or hereafter arising which may be threatened against,
incurred, undertaken, received or paid by such persons in connection
with or which arise out of or result from or are based upon any action
or failure to act by such person in the ordinary scope of his duties
as a director or officer of Twentieth Bancorp or the Bank through the
Effective Time; provided, however, that Horizon Bancorp shall not be
obligated to indemnify such
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person for (i) any act not available for statutory or permissible
indemnification under West Virginia law, (ii) any act of self-dealing
in violation of federal or state law, (iii) any act or omission which
is ultimately determined to have constituted a breach of any implied or
actual duty of fair dealing in connection with a lending obligation
(such claims being commonly referred to as lender liability claims),
any penalty, decree, order, finding or other action imposed or taken by
any regulatory authority, (v) any violation or alleged violation of any
federal or state law, rule, regulation, order, decree or policy
applicable to banks and bank holding companies, (vi) any violation or
alleged violation of federal or state securities laws, or (vii) any
claim of sexual or other unlawful harassment, or any form of employment
discrimination prohibited by federal or state law.
The indemnification provided by this paragraph is the sole
indemnification provided by Horizon Bancorp to the directors and
officers of Twentieth Bancorp and the Bank for service in such
positions up to and through the Effective Time.
ARTICLE V. MUTUAL AGREEMENTS
5.1. SHAREHOLDERS MEETING; REGISTRATION STATEMENT; PROXY
STATEMENT/PROSPECTUS.
A. MEETING OF SHAREHOLDERS. Twentieth Bancorp shall cause a special
meeting of its shareholders (the "Shareholders Meeting") to be held as
soon as reasonably possible (but in no event less than twenty (20)
business days following the mailing to Twentieth Bancorp's
shareholders of the "Proxy Statement/Prospectus" described below or,
without Horizon Bancorp's approval, no later than June 30, 1996) for
the purpose of Twentieth Bancorp's shareholders voting on the approval
of the Merger and the ratification and adoption of this Agreement. In
connection with the call and conduct of and all other matters relating
to the Shareholders Meetings (including the solicitation of proxies),
Twentieth Bancorp shall fully comply with all provisions of applicable
law and regulations and with Twentieth Bancorp's Articles of
Incorporation and Bylaws.
B. PREPARATION AND DISTRIBUTION OF PROXY STATEMENT/PROSPECTUS. Horizon
Bancorp and Twentieth Bancorp jointly shall prepare a "Proxy
Statement/Prospectus" for distribution to Twentieth Bancorp's
shareholders as Twentieth Bancorp's proxy statement relating to
Twentieth Bancorp's solicitation of proxies for use at the
Shareholders Meeting and as Horizon Bancorp's prospectus relating to
the offer and distribution of Horizon Bancorp Stock as described
herein. The Proxy Statement/Prospectus shall be in such form and
shall contain or be accompanied by such information regarding the
Shareholders Meeting, this Agreement, the parties hereto, the Merger
and other transactions described herein as is required by applicable
law and regulations and otherwise as shall be agreed upon by Horizon
Bancorp and Twentieth Bancorp. Horizon Bancorp shall include the Proxy
Statement/Prospectus as the prospectus in its "Registration Statement"
described below; and, Horizon Bancorp and Twentieth Bancorp shall
cooperate with each other in good faith and shall use their best
efforts to cause the Proxy Statement/Prospectus to comply with any
comments of the SEC thereon.
Horizon Bancorp and Twentieth Bancorp will mail the Proxy
Statement/ Prospectus to Twentieth Bancorp's shareholders not less
than twenty (20) business days prior to the scheduled date of the
Shareholders Meeting; provided, however, that no such materials shall
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be mailed to Twentieth Bancorp's shareholders unless and until Horizon
Bancorp shall have determined to its own satisfaction that the
conditions specified in Paragraph 6.3.d. below have been satisfied and
shall have approved such mailing.
C. REGISTRATION STATEMENT AND "BLUE SKY" APPROVALS. As soon as
practicable following the execution of this Agreement, Horizon Bancorp
shall prepare and file with the SEC a registration statement on Form
S-4 (or on such other form as Horizon Bancorp shall determine to be
appropriate) (the "Registration Statement") covering the Horizon
Bancorp Stock to be issued to shareholders of Twentieth Bancorp
pursuant to this Agreement. Additionally, Horizon Bancorp shall take
all such other actions, if any, as shall be required by applicable
state securities or "blue sky" laws (i) to cause the Horizon Bancorp
Stock to be issued upon consummation of the Merger, and at the time of
the issuance thereof, to be duly qualified or registered (unless
exempt) under such laws, (ii) to cause all conditions to any exemptions
from qualification or registration under such laws to have been
satisfied, and (iii) to obtain any and all required approvals or
consents to the issuance of such stock.
Horizon Bancorp shall deliver to Twentieth Bancorp and its
counsel a preliminary draft of the Registration Statement and the
Proxy Statement/Prospectus not later than sixty (60) days after the
date of this Agreement.
D. RECOMMENDATION OF TWENTIETH BANCORP'S BOARD OF DIRECTORS AND VOTING OF
SHARES. Unless due to a material change in circumstances or for any
other reason Twentieth Bancorp's Board of Directors reasonably
believes that such a recommendation would violate the directors'
duties or obligations as such to Twentieth Bancorp or to its
shareholders, Twentieth Bancorp's Board of Directors shall recommend
to and actively encourage Twentieth Bancorp's shareholders that they
vote their shares of Twentieth Bancorp Stock at the Shareholders
Meeting to ratify and approve this Agreement and the Merger, and the
Proxy Statement/Prospectus mailed to Twentieth Bancorp's shareholders
will so indicate and state that Twentieth Bancorp's Board of Directors
considers the Merger to be advisable and in the best interests of
Twentieth Bancorp and its shareholders. Each director of Twentieth
Bancorp has agreed and represented to Twentieth Bancorp for the
benefit of Horizon Bancorp that he or she intends to vote all shares
of Twentieth Bancorp Stock owned by him or her in favor of the Merger.
Horizon Bancorp represents that at the meeting at which this agreement
was approved, the directors present voted unanimously to approve this
agreement.
E. INFORMATION FOR PROXY STATEMENT/PROSPECTUS AND REGISTRATION STATEMENT.
Horizon Bancorp and Twentieth Bancorp each agrees to promptly and to
use its best efforts to cause its directors, officers, accountants and
affiliates to promptly respond, to requests by any other such party
and its counsel for information for inclusion in the various
applications for regulatory approvals and in the Proxy
Statement/Prospectus. Horizon Bancorp and Twentieth Bancorp each
hereby covenants with the other that none of the information provided
by it for inclusion in the Proxy Statement/Prospectus will, at the
time of its mailing to Twentieth Bancorp's shareholders, contain any
untrue statement of a material fact or omit any material fact required
to be stated therein or necessary in order to make the statements
contained therein, in light of the circumstances under which they were
made, not misleading; and, at all times following such mailing up to
and including the Effective Time, none of such information contained
in the Proxy Statement/Prospectus, as it may be amended or
supplemented, will contain any untrue statement of a material fact or
omit any material fact required to be stated therein or necessary in
order to make the statements contained therein, in light of the
circumstances under which they were made, not misleading.
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5.2. REGULATORY APPROVALS. Within sixty (60) days after the date of this
Agreement, Horizon Bancorp and Twentieth Bancorp each shall prepare and file,
or cause to be prepared and filed, all applications for regulatory approvals
and actions as may be required of them, respectively, by applicable law and
regulations with respect to the transactions described herein (including
applications to the FRB and the West Virginia Board and to any other applicable
federal or state banking, or other regulatory authority). Each such party
shall use their respective best efforts in good faith to obtain all necessary
regulatory approvals required for consummation of the transactions described
herein. Each such party shall cooperate with each other party in the
preparation of all applications to regulatory authorities and, upon request,
promptly shall furnish all documents, information, financial statements or
other material that may be required by any other party to complete any such
application; and, before the filing therefor, each party to this Agreement
shall have the right to review and comment on the form and content of any such
application to be filed by any other party. Should the appearance of any of
the officers, directors, employees or counsel of any of the parties hereto be
requested by any other party or by any governmental agency at any hearing in
connection with any such application, such party shall promptly use its best
efforts to arrange for such appearance.
5.3. ACCESS. Following the date of this Agreement and to and including the
Effective Time, Twentieth Bancorp shall provide Horizon Bancorp and its
employees, accountants, counsel or other representatives, access to all its
books, records, files and other information (whether maintained electronically
or otherwise), to all its properties and facilities, and to all its employees,
accountants, counsel and consultants as Horizon Bancorp shall, in its sole
discretion, consider to be necessary or appropriate; provided, however, that
any investigation or reviews conducted by Horizon Bancorp ("Due Diligence")
shall be performed in such a manner as will not interfere unreasonably with
Twentieth Bancorp's or the Bank's normal operations or with the Bank's
relationship with its customers or employees, and shall be conducted in
accordance with procedures established by the parties having due regard for the
foregoing. Horizon Bancorp shall provide the Twentieth Bancorp and its
representatives with such access to Horizon Bancorp's records as may be
necessary for an evaluation of the exchange ratio as to fairness and other
reasonable purposes.
5.4. COSTS. Subject to the provisions of Paragraph 7.3. below, and whether
or not this Agreement shall be terminated or the Merger shall be consummated,
Horizon Bancorp and Twentieth Bancorp each shall pay its own legal, accounting
and financial advisory fees and all its other costs and expenses incurred or to
be incurred in connection with the execution and performance of its obligations
under this Agreement or otherwise in connection with this Agreement and the
transactions described herein (including without limitation all accounting
fees, legal fees, printing costs, travel expenses, and, in the case of
Twentieth Bancorp, all fees owed its counsel, and the cost of Twentieth
Bancorp's "Fairness Opinion" described in Paragraph 6.1.d. below. However,
subject to the provisions of Paragraph 7.3. below, all costs incurred in
connection with the printing and mailing of the Proxy Statement/Prospectus,
shall be deemed to be incurred and shall be paid fifty percent (50%) by
Twentieth Bancorp and fifty percent (50%) by Horizon Bancorp.
5.5. ANNOUNCEMENTS. Twentieth Bancorp and Horizon Bancorp each agrees that
no person other than the parties to this Agreement is authorized to make any
public announcements or statements about this Agreement or any of the
transactions described herein, and that, without the prior review and consent of
the others (which consent shall not unreasonably be denied or delayed), no party
hereto may make any public announcement, statement or disclosure as to the terms
and conditions of this Agreement or the transactions described herein, except
for such disclosures as may be required incidental to obtaining the prior
approval of any regulatory agency or official to the consummation
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of the transactions described herein. However, notwithstanding anything
contained herein to the contrary, prior review and consent shall not be required
if in the good faith opinion of counsel to Horizon Bancorp any such disclosure
by Horizon Bancorp is required by law or otherwise is prudent.
5.6. CONFIDENTIALITY. Horizon Bancorp, Twentieth Bancorp and the
investment advisor for Twentieth Bancorp each agrees that it shall treat as
confidential and not disclose to any unauthorized person any documents or other
information obtained from or learned about the other during the course of the
negotiation of this Agreement and the carrying out of the events and
transactions described herein (including any information obtained during the
course of any due diligence investigation or review provided for herein or
otherwise) and which documents or other information relates in any way to the
business, operations, personnel, customers or financial condition of such other
party; and, that it will not use any such documents or other information for
any purpose except for the purposes for which such documents and information
were provided to it and in furtherance of the transactions described herein.
However, the above obligations of confidentiality shall not prohibit the
disclosure of any such document or information by any party to this Agreement
to the extent (i) such document or information is then available generally to
the public or is already known to the person or entity to whom disclosure is
proposed to be made (other than through the previous actions of such party in
violation of this Paragraph 5.6), (ii) such document or information was
available to the disclosing party on a nonconfidential basis prior to the same
being obtained pursuant to this Agreement, (iii) disclosure is required by
subpoena or order of a court or regulatory authority of competent jurisdiction,
or by the SEC or other regulatory authorities in connection with the
transactions described herein, or (iv) to the extent that, in the reasonable
opinion of legal counsel to such party, disclosure otherwise is required by
law.
In the event this Agreement is terminated for any reason, then each of
the parties hereto immediately shall return to the other party all copies of
any and all documents or other written materials or information (including
computer generated and stored data) of or relating to such other party which
were obtained from them during the course of the negotiation of this Agreement
and the carrying out of the events and transactions described herein (whether
during the course of any due diligence investigation or review provided for
herein or otherwise) and which documents or other information relates in any
way to the business, operations, personnel, customers or financial condition of
such other party.
The parties' obligations of confidentiality under this Paragraph 5.6.
shall survive and remain in effect following any termination of this Agreement.
5.7. TAX-FREE REORGANIZATION AND POOLING OF INTERESTS. Horizon Bancorp and
Twentieth Bancorp each undertakes and agrees to use its best efforts to cause
the Merger to qualify as a tax-free "reorganization" within the meaning of
Section 368(a)(1)(A) of the Code and as a pooling of interests transaction and
that neither shall take or permit its representatives to take any action that
would cause the Merger to fail to so qualify as a tax-free reorganization and a
pooling of interests.
5.8. TRANSITION TEAM. Horizon Bancorp and Twentieth Bancorp shall create a
transition team comprised of management of Twentieth Bancorp and the Bank and
staff and representatives of Horizon Bancorp (the "Transition Team"). The
purpose of the Transition Team shall be to provide detailed guidance to Horizon
Bancorp in fulfilling and consummating the Merger. The Transition Team shall
meet at least monthly beginning within thirty (30) days of the date of this
Agreement and shall meet until the Effective Time. Members of the Transition
Team shall receive no compensation for such service.
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5.9 BOARD OF DIRECTORS OF THE BANK. At the Effective Time, Horizon
Bancorp shall name two (2) individuals, in its sole discretion, to the Bank's
Board of Directors.
5.10 BOARD OF DIRECTORS OF HORIZON BANCORP. At the Effective Time, Horizon
Bancorp shall appoint six (6) individuals selected by Twentieth Bancorp to its
board of directors and from those six (6), three (3) individuals shall be
appointed to the Horizon Bancorp executive committee.
5.11 SHAREHOLDER NOTIFICATION. Twentieth Bancorp shall notify its
shareholders who are affiliates that Horizon Bancorp Stock cannot be traded or
sold by affiliates of Twentieth Bancorp for a period of thirty (30) days after
such time as consolidated accounting statements have been made publicly
available in accordance with ASR 135.
ARTICLE VI. CONDITIONS PRECEDENT TO MERGER
6.1. CONDITIONS TO ALL PARTIES' OBLIGATIONS. Notwithstanding any other
provision of this Agreement to the contrary, the obligations of each of the
parties to this Agreement to consummate the transactions described herein shall
be conditioned upon the satisfaction of each of the following conditions
precedent on or prior to the Closing Date:
A. APPROVAL BY GOVERNMENTAL REGULATORY AUTHORITIES; NO DISADVANTAGEOUS
CONDITIONS.
(i) The Merger and other transactions described herein
shall have been approved, to the extent required by law, by the FRB
and the West Virginia Board, and by all other governmental or
regulatory agencies or authorities having jurisdiction over such
transactions;
(ii) No governmental or regulatory agency or authority
shall have withdrawn its approval of such transactions or imposed any
condition on such transactions or conditioned its approval thereof,
which condition is reasonably deemed by Horizon Bancorp to be
materially disadvantageous or burdensome or to so adversely impact the
economic or business benefits of this Agreement to Horizon Bancorp as
to render it inadvisable for it to consummate the Merger;
(iii) The thirty (30) day waiting period required following
necessary approvals by the FRB for review of the transactions
described herein by the United States Department of Justice shall have
expired, and, in connection with such review, no objection to the
Merger shall have been raised; and
(iv) All other consents, approvals and permissions, and
the satisfaction of all of the requirements prescribed by law or
regulation, necessary to the carrying out of the transactions
contemplated herein shall have been procured.
B. ADVERSE PROCEEDINGS, INJUNCTION, ETC. There shall not be (i) any
order, decree or injunction of any court or agency of competent
jurisdiction which enjoins or prohibits the Merger or any of the other
transactions described herein or any of the parties hereto from
consummating any such transaction, (ii) any pending or threatened
investigation of the Merger or any of such other transactions by the
United States Department of Justice, or any actual or threatened
litigation under federal antitrust laws relating to the Merger or any
other such transaction, (iii) any suit, action or proceeding by any
person (including any governmental, administrative or
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regulatory agency), pending or threatened before any court or
governmental agency in which it is sought to restrain or prohibit
Twentieth Bancorp or Horizon Bancorp from consummating the Merger or
carrying out any of the terms or provisions of this Agreement, or (iv)
any other suit, claim, action or proceeding pending or threatened
against Twentieth Bancorp or Horizon Bancorp or any of their respective
officers or directors which shall reasonably be considered by
Twentieth Bancorp or Horizon Bancorp to be materially burdensome in
relation to the proposed Merger or materially adverse in relation to
the financial condition, results of operations, prospects, businesses,
assets, loan portfolio, investments, properties or operations of either
such corporation, and which has not been dismissed, terminated or
resolved to the satisfaction of all parties hereto within ninety (90)
days of the institution or threat thereof.
C. APPROVAL BY BOARDS OF DIRECTORS AND SHAREHOLDERS. The shareholders of
Horizon Bancorp and the shareholders of Twentieth Bancorp shall each
have duly approved, ratified and confirmed this Agreement, all to the
extent required by and in accordance with the provisions of this
Agreement, applicable law, and applicable provisions of their
respective Articles of Incorporation and Bylaws.
D. FAIRNESS OPINION. Twentieth Bancorp shall have received from its
financial advisor, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and Co., a written opinion (the
"Fairness Opinion"), dated as of a date prior to the mailing of the
Proxy Statement/Prospectus to Twentieth Bancorp's shareholders in
connection with the Shareholders Meeting, to the effect that the terms
of the Merger are fair, from a financial point of view, to Twentieth
Bancorp and its shareholders.
E. NO TERMINATION OR ABANDONMENT. This Agreement shall not have been
terminated or abandoned by any party hereto.
F. DATE TO COMPLETE. If the merger shall not have been completed by
December 31, 1996.
6.2. ADDITIONAL CONDITIONS TO TWENTIETH BANCORP'S OBLIGATIONS.
Notwithstanding any other provision of this Agreement to the contrary,
Twentieth Bancorp's separate obligation to consummate the transactions
described herein shall be conditioned upon the satisfaction of each of the
following conditions precedent on or prior to the Closing Date:
A. MATERIAL ADVERSE CHANGE. There shall not have been any material
adverse change in the consolidated financial condition, results of
operations, prospects, businesses, assets, loan portfolio,
investments, properties or operations of Horizon Bancorp and its
consolidated subsidiaries considered as one enterprise, and there
shall not have occurred any event or development and there shall not
exist any condition or circumstance which, with the of time or
otherwise, may or could cause, create or result in any such material
adverse change.
B. COMPLIANCE WITH LAWS. Horizon Bancorp shall have complied in all
material respects with all federal and state laws and regulations
applicable to the transactions described herein and where the violation
of or failure to comply with any such law or regulation could or may
have a material adverse effect on the consolidated financial condition,
results of operations, prospects, businesses, assets, loan portfolio,
investments, properties or operations of Horizon Bancorp and its
consolidated subsidiaries considered as one enterprise.
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C. HORIZON BANCORP'S REPRESENTATIONS AND WARRANTIES AND PERFORMANCE OF
AGREEMENTS; OFFICERS' CERTIFICATE. Unless waived in writing by
Twentieth Bancorp as provided in Paragraph 9.2. below, each of the
representations and warranties of Horizon Bancorp contained in this
Agreement as supplemented by Horizon Bancorp Disclosure Statement
shall have been true and correct as of the date hereof and shall
remain true and correct on and as of the Effective Time with the same
force and effect as though made on and as of such date, except (i) for
changes which are not, in the aggregate, material and adverse to the
consolidated financial condition, results of operations, prospects,
businesses, assets, loan portfolio, investments, properties or
operations of Horizon Bancorp and its consolidated subsidiaries
considered as one enterprise, and (ii) as otherwise contemplated by
this Agreement; and Horizon Bancorp shall have performed in all
material respects all of its obligations, covenants and agreements
hereunder to be performed by it on or before the Closing Date.
Twentieth Bancorp shall have received a certificate dated as
of the Closing Date and executed by Horizon Bancorp to the foregoing
effect and as to such other matters as may be reasonably requested by
Twentieth Bancorp.
D. LEGAL OPINION OF HORIZON BANCORP COUNSEL. Twentieth Bancorp shall have
received from ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, counsel for Horizon Bancorp, a
written opinion dated as of the Closing Date and substantially in the
form of Exhibit A attached hereto or otherwise in form and substance
reasonably satisfactory to Twentieth Bancorp.
E. OTHER DOCUMENTS AND INFORMATION FROM HORIZON BANCORP. Horizon Bancorp
shall have provided to Twentieth Bancorp correct and complete copies
of its Bylaws, Certificate of Incorporation and board resolutions (all
certified by its Secretary), together with certificates of the
incumbency of its officers and such other closing documents and
information as may be reasonably requested by Twentieth Bancorp or its
counsel.
F. CERTIFICATE OF MERGER; OTHER ACTIONS. A Certificate of Merger in the
form described in Paragraph 1.7. above shall have been duly executed
and delivered by Horizon Bancorp as provided in that Paragraph.
G. ACCEPTANCE BY TWENTIETH BANCORP'S COUNSEL. The form and substance of
all legal matters described herein or related to the transactions
contemplated herein shall be reasonably acceptable to Twentieth
Bancorp's legal counsel.
H. COMPLETION OF DUE DILIGENCE. Twentieth Bancorp shall have completed
its Due Diligence by no later than February 29, 1996 and be satisfied
in its sole discretion with the results of that examination.
6.3. ADDITIONAL CONDITIONS TO HORIZON BANCORP'S OBLIGATIONS. Notwithstanding
any other provision of this Agreement to the contrary, Horizon Bancorp's
obligations to consummate the transactions described herein shall be conditioned
upon the satisfaction of each of the following conditions precedent on or prior
to the Closing Date:
A. MATERIAL ADVERSE CHANGE. There shall not have occurred any material
adverse change in the consolidated financial condition, results of
operations, prospects, businesses, assets, loan portfolio,
investments, properties or operations of Twentieth Bancorp, and there
shall not have occurred any event or development and there shall not
exist any condition or
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circumstance which, with the lapse of time or otherwise, may or could
cause, create or result in any such material adverse change.
B. COMPLIANCE WITH LAWS. Twentieth Bancorp shall have complied in all
material respects with all federal and state laws and regulations
applicable to the transactions described herein and where the
violation of or failure to comply with any such law or regulation
could or may have a material adverse effect on the consolidated
financial condition, results of operations, prospects, business
assets, loan portfolio, properties or operations of Horizon Bancorp or
Twentieth Bancorp.
C. TWENTIETH BANCORP'S REPRESENTATIONS AND WARRANTIES AND PERFORMANCE OF
AGREEMENTS; OFFICERS' CERTIFICATE. Unless waived in writing by
Horizon Bancorp as provided in Paragraph 9.2. below, each of the
representations and warranties of Twentieth Bancorp contained in this
Agreement as supplemented by the Twentieth Bancorp Disclosure
Statement shall have been true and correct as of the date hereof and
shall remain true and correct on and as of the Effective Time with the
same force and effect as though made on and as of such date, except
(i) for changes which are not, in the aggregate, material and adverse
to the consolidated financial condition, results of operations,
prospects, businesses, assets, loan portfolio, investments, properties
or operations of Twentieth Bancorp and the Bank considered as one
enterprise, and (ii) as otherwise contemplated by this Agreement; and
Twentieth Bancorp shall have performed in all material respects all
its obligations, covenants and agreements hereunder to be performed by
it on or before the Closing Date.
Horizon Bancorp shall have received a certificate dated as of
the Closing Date and executed by Twentieth Bancorp and its President
and Chief Financial Officer to the foregoing effect and as to such
other matters as may be reasonably requested by Horizon Bancorp.
D. EFFECTIVENESS OF REGISTRATION STATEMENT; COMPLIANCE WITH SECURITIES
AND OTHER "BLUE SKY" REQUIREMENTS. The Registration Statement shall be
effective under the 1933 Act and no stop order suspending the
effectiveness of the Registration Statement shall have been issued and
no proceedings for that purpose shall have been initiated (or
threatened by the SEC. Horizon Bancorp shall have taken all such
other actions of, if any, as it shall consider to be required by
applicable state securities laws (i) to cause the Horizon Bancorp
Stock to be issued upon consummation of the Merger and at the time of
the issuance thereof, to be duly qualified or registered (unless
exempt) under such laws, (ii) to cause all conditions to any
exemptions from qualification or registration under such laws to have
been satisfied, and (iii) to obtain any and all required approvals or
consents with respect to the issuance of such stock, and any such
required approvals or consents shall have been obtained and shall
remain in effect.
E. AGREEMENTS FROM TWENTIETH BANCORP AFFILIATES. Horizon Bancorp shall
have received the written Affiliates' Agreements in form and content
satisfactory to Horizon Bancorp and signed by all persons listed in
the Twentieth Bancorp Disclosure Statement or who otherwise are deemed
by Horizon Bancorp or its counsel to be Affiliates of Twentieth
Bancorp.
F. LEGAL OPINION OF BANK COUNSEL. Horizon Bancorp shall have received
from Levy & ▇▇▇▇▇▇▇▇▇ and Pancake, L.C., counsel to Twentieth Bancorp,
a written opinion, dated as of the Closing Date and substantially in
the form of Exhibit B attached hereto or otherwise in form and
substance reasonably satisfactory to Horizon ▇▇▇▇▇▇▇.
▇▇
▇▇
▇. OTHER DOCUMENTS AND INFORMATION FROM TWENTIETH BANCORP. Twentieth
Bancorp shall have provided to Horizon Bancorp correct and complete
copies of Twentieth Bancorp's Articles of Incorporation, Bylaws and
board and shareholder resolutions (all certified by Twentieth
Bancorp's Secretary), together with certificates of the incumbency of
Twentieth Bancorp's officers and such other closing documents and
information as may be reasonably requested by Horizon Bancorp or its
counsel.
H. CONSENTS TO ASSIGNMENT OF LEASES. Twentieth Bancorp shall have
obtained all required consents to the assignment to Horizon Bancorp of
its rights and obligations under any personal property lease material
to the business of Twentieth Bancorp, the Bank or the Subsidiary and
any Real Property Lease, and such consents shall be in such form and
substance as shall be satisfactory to Horizon Bancorp; and, each of
the lessors of Twentieth Bancorp and the Bank shall have confirmed in
writing that neither Twentieth Bancorp nor the Bank is in default
under the terms and conditions of any personal property lease or any
Real Property Lease.
I. CERTIFICATE OF MERGER; OTHER ACTIONS. A Certificate of Merger in the
form described in Paragraph 1.7. above shall have been duly executed
and delivered by Twentieth Bancorp as provided in that Paragraph.
J. COMPLETION OF DUE DILIGENCE. By no later than February 29, 1996,
Horizon Bancorp shall have completed its Due Diligence and shall be
satisfied in its sole discretion with the results of that examination.
K. DISSENTERS. Neither Twentieth Bancorp's shareholders nor Horizon
Bancorp's shareholders shall have exercised Dissenters' Rights in an
amount that would prevent pooling of interests.
L. ACCEPTANCE BY HORIZON BANCORP'S COUNSEL. The form and substance of
all legal matters described herein or related to the transactions
contemplated herein shall be reasonably acceptable to Horizon
Bancorp's legal counsel.
M. FAIRNESS OPINION. Horizon Bancorp shall have received a letter from
the ▇▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ Company prior to mailing the proxy materials to
Horizon Bancorp shareholders in form and substance satisfactory to
Horizon Bancorp that the transaction is fair from a financial
standpoint to the shareholders of Horizon Bancorp.
N. ACCOUNTANTS' LETTERS. Horizon Bancorp shall have received a letter in
form and substance satisfactory to it before the Effective Time from
the accountant for Twentieth Bancorp and for Horizon Bancorp that the
transaction will qualify for pooling of interests treatment.
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ARTICLE VII. TERMINATION; BREACH; REMEDIES
7.1. MUTUAL TERMINATION. At any time prior to the Effective Time (and
whether before or after approval hereof by the shareholders of Twentieth
Bancorp and/or approval by the shareholders of Horizon Bancorp), this Agreement
may be terminated by the mutual agreement of Horizon Bancorp and Twentieth
Bancorp. Upon any such mutual termination, all obligations of Twentieth
Bancorp and Horizon Bancorp hereunder shall terminate and each party shall pay
costs and expenses as provided above.
7.2. UNILATERAL TERMINATION. This Agreement may be terminated by either
Horizon Bancorp or Twentieth Bancorp (whether before or after approval hereof
by Twentieth Bancorp's shareholders and/or approval by the shareholders of
Horizon Bancorp) upon written notice to the other parties and under the
circumstances described below.
A. TERMINATION BY HORIZON BANCORP. This Agreement may be terminated by
Horizon Bancorp by action of its Board of Directors or Executive
Committee:
(i) if any of the conditions to the obligations of
Horizon Bancorp shall not have been materially satisfied or
effectively waived in writing by Horizon Bancorp (except to the extent
that the failure of such condition to be satisfied has been caused by
the failure of Horizon Bancorp to satisfy any of its obligations,
covenants or agreements contained herein);
(ii) if Twentieth Bancorp shall have violated or failed to
fully perform any of its obligations, covenants or agreements
contained herein in any material respect;
(iii) if Horizon Bancorp determines at any time that any of
Twentieth Bancorp's representations or warranties contained herein in
any other certificate or writing delivered pursuant to this Agreement
shall have been false or misleading in any material respect when made,
or that there has occurred any event or development or that there
exists any condition or circumstance which has caused or, with the
lapse of time or otherwise, may or could cause any such
representations or warranties to become false or misleading in any
material respect;
(iv) if, notwithstanding Horizon Bancorp's satisfaction of
its obligations under Paragraphs 5.l.b., 5.l.c. and 5.1.e. above,
Twentieth Bancorp's shareholders do not ratify and approve this
Agreement and approve the Merger at the Shareholders Meeting; or
(vi) if Horizon Bancorp's shareholders do not ratify and
approve this Agreement and approve the Merger at the Shareholders
Meeting.
However, before Horizon Bancorp may terminate this Agreement
for any of the reasons specified above in (i), (ii) or (iii) of this
paragraph, it shall give written notice to Twentieth Bancorp as
provided herein stating its intent to terminate and a description of
the specific breach, default, violation or other condition giving rise
to its right to so terminate, and, such termination by Horizon Bancorp
shall not become effective if, within thirty (30) days following the
giving of such notice, Twentieth Bancorp shall cure such breach,
default or violation or satisfy such condition to the reasonable
satisfaction of Horizon Bancorp. In the event Twentieth Bancorp
cannot or does not cure such breach, default or violation or
satisfy such condition to the reasonable satisfaction of Horizon
Bancorp within such thirty
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(30) day period, Horizon Bancorp shall have thirty (30) days to notify
Twentieth Bancorp of its intention to terminate this Agreement. A
failure to so notify Twentieth Bancorp will be deemed to be a waiver by
Horizon Bancorp of the breach, default or violation pursuant to
Paragraph 9.2. below.
B. TERMINATION BY TWENTIETH BANCORP. This Agreement may be terminated by
Twentieth Bancorp:
(i) if any of the conditions of the obligations of
Twentieth Bancorp shall not have been satisfied or effectively waived
in writing by Twentieth Bancorp (except to the extent that the failure
of such condition to be satisfied has been caused by the failure of
Twentieth Bancorp to satisfy any of its obligations, covenants or
agreements contained herein);
(ii) if Horizon Bancorp shall have violated or failed to
fully perform any of its obligations, covenants or agreements
contained herein in any material respect;
(iii) if Twentieth Bancorp determines that any of Horizon
Bancorp's representations and warranties contained herein or in any
other certificate or writing delivered pursuant to this Agreement
shall have been false or misleading in any material respect when made,
or that there has occurred any event or development or that there
exists any condition or circumstance which has caused or, with the
lapse of time or otherwise, may or could cause any such
representations or warranties to become false or misleading in any
material respect; or
(iv) if Twentieth Bancorp's shareholders do not ratify and
approve this Agreement and approve the Merger at the Shareholders
Meeting;
However, before Twentieth Bancorp may terminate this Agreement
for any of the reasons specified above in clause (i), (ii) or (iii) of
this paragraph, it shall give written notice to Horizon Bancorp as
provided herein stating its intent to terminate and a description of
the specific breach, default, violation or other condition giving rise
to its right to so terminate, and, such termination by Twentieth
Bancorp shall not become effective if, within thirty (30) days
following the giving of such notice, Horizon Bancorp shall cure such
breach, default or violation or satisfy such condition to the
reasonable satisfaction of Twentieth Bancorp. In the event Horizon
Bancorp cannot or does not cure such breach, default or violation or
satisfy such condition to the reasonable satisfaction of Twentieth
Bancorp within such thirty (30) day period, Twentieth Bancorp shall
have thirty (30) days to notify Horizon Bancorp of its intention to
terminate this Agreement. A failure to so notify Horizon Bancorp will
be deemed to be a waiver by Twentieth Bancorp of the breach, default
or violation pursuant to Paragraph 9.2. below.
C. TERMINATION BY EITHER TWENTIETH BANCORP OR HORIZON BANCORP. If the
average closing price for Horizon Bancorp common stock over the ten
trading days prior to the Effective Date is more than $46, then the
exchange ratio shall become $46.46 divided by the average closing
price over the ten trading days. In this event Twentieth's Board can
accept the lower exchange rate at closing or terminate the Agreement.
If the average closing price for Horizon Bancorp common stock over the
ten trading days prior to the Effective Date is less than $34,
then the exchange ratio shall become $34.34 divided by the average
closing price over the ten trading days. In this event Horizon's
Board can terminate the Agreement at closing or permit
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the higher exchange ratio. The party having the option to proceed at
the modified ratio must by board action grant its consent to proceed no
later than seventy two (72) hours after the last of the subject ten
trading days.
7.3. BREACH; REMEDIES. Except as otherwise provided below, in the event of
a material breach by Twentieth Bancorp of any of its representations or
warranties contained in this Agreement or in any other certificate or writing
delivered pursuant to this Agreement, or in the event of its failure to perform
or violation of any of its obligations, agreements or covenants contained in
Paragraph 3.1 or Paragraphs 5.1. through 5.9. of this Agreement, then Horizon
Bancorp's may, in addition to other remedies available to it under law or
equity terminate this Agreement prior to the Effective Time. In the event of
any such termination of this Agreement by Horizon Bancorp, Twentieth Bancorp
shall be obligated to pay Horizon Bancorp the sum of Two Hundred Thousand
Dollars ($200,000).
In the event of a breach by Horizon Bancorp of any of its
representations or warranties contained in this Agreement, or in the event of
its failure to perform or violation of any of its obligations, agreements or
covenants contained in this Agreement, then Twentieth Bancorp's sole right and
remedy shall be to terminate this Agreement prior to the Effective Time. In
the event of any such termination of this Agreement by Twentieth Bancorp, then
Horizon Bancorp shall be obligated to reimburse Twentieth Bancorp for up to
(but not more than) One Hundred Thousand Dollars ($100,000.00) in out-of-pocket
expenses which actually have been incurred by Twentieth Bancorp.
Notwithstanding anything contained herein to the contrary, if either
party to this Agreement breaches this Agreement by wilfully or intentionally
failing to perform or violating any of its obligations, agreements or covenants
contained in this Agreement, such party shall be obligated to pay all expenses
of the other party, together with other damages recoverable at law or in
equity.
ARTICLE VIII. INDEMNIFICATION
8.1. AGREEMENT TO INDEMNIFY. Twentieth Bancorp and Horizon Bancorp hereby
agree that in the event this Agreement is terminated for any reason and the
Merger is not consummated, then they will indemnify each other as provided
below.
A. BY TWENTIETH BANCORP. Twentieth Bancorp shall indemnify, hold harmless
and defend Horizon Bancorp from and against any and all claims,
disputes, demands, causes of action, suits, proceedings, losses,
damages, liabilities, obligations, costs and expenses of every kind
and nature, including without limitation reasonable attorneys' fees
and legal costs and expenses in connection therewith, whether known or
unknown, and whether now existing or hereafter arising, which may be
threatened against, incurred, undertaken, received or paid by Horizon
Bancorp:
(i) in connection with or which arise out of or result from or are
based upon (A) Twentieth Bancorp's operations or business transactions
or its relationship with any of its employees, or (B) Twentieth
Bancorp's failure to comply with any statute or regulation of any
federal, state or local government or agency (or any political
subdivision thereof) in connection with the transactions described in
this Agreement;
(ii) in connection with or which arise out of or result
from or are based upon any fact, condition or circumstance that
constitutes a breach by Twentieth Bancorp of, or any inaccuracy,
incompleteness or
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inadequacy in, any of its representations or warranties under or in
connection with this Agreement, or any failure of Twentieth Bancorp to
perform any of its covenants, agreements or obligations under or in
connection with this Agreement;
(iii) in connection with or which arise out of or result
from or are based upon any information provided by Twentieth Bancorp
which is included in the Proxy Statement/Prospectus and which
information causes the Proxy Statement/Prospectus at the time of its
mailing to Twentieth Bancorp's shareholders and/or Horizon Bancorp's
shareholders to contain any untrue statement of a material fact or to
omit any material fact required to be stated therein or necessary in
order to make the statements contained therein, in light of the
circumstances under which they were made, not false or misleading;
and,
(iv) in connection with or which arise out of or result
from or are based upon the presence, use, production, generation,
handling, transportation, treatment, storage, disposal, distribution,
labeling, reporting, testing, processing, emission, discharge,
release, threatened release, control, removal, clean-up or remediation
on, from or relating to the Real Property by Twentieth Bancorp or any
other person of any Hazardous Substances, or any action taken or any
event or condition occurring or existing with respect to the Real
Property which constitutes a violation of any Environmental Laws by
Twentieth Bancorp or any other person.
B. BY HORIZON BANCORP. Horizon Bancorp shall indemnify, hold harmless
and defend Twentieth Bancorp from and against any and all claims,
disputes, demands, causes of action, suits, proceedings, losses,
damages, liabilities, obligations, costs and expenses of every kind
and nature, including without limitation reasonable attorneys' fees
and legal costs and expenses in connection therewith, whether known or
unknown, and whether now existing or hereafter arising, which may be
threatened against, incurred, undertaken, received or paid by
Twentieth Bancorp:
(i) in connection with or which arise out of or result
from or are based upon (A) Horizon Bancorp's operations or business
transactions or its relationship with any of its employees, or (B)
Horizon Bancorp's failure to comply with any statute or regulation of
any federal, state or local government or agency (or any political
subdivision thereof) in connection with the transactions described in
this Agreement;
(ii) in connection with or which arise out of or result
from or are based upon of any fact, condition or circumstance that
constitutes a breach by Horizon Bancorp of, or any inaccuracy,
incompleteness or inadequacy in, any of its representations or
warranties under or in connection with this Agreement, or any failure
of Horizon Bancorp to perform any of its covenants, agreements or
obligations under or in connection with this Agreement; and,
(iii) in connection with or which arise out of or result
from or are based upon any information provided by it which is
included in the Proxy Statement/Prospectus and which information
causes the Proxy Statement/Prospectus at the time of its mailing to
Twentieth Bancorp's shareholders and/or Horizon Bancorp's shareholders
to contain any untrue statement of a material fact or to omit any
material fact required to be stated therein or necessary in order to
make the statements contained therein, in light of the circumstances
under which they were made, not false or misleading.
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8.2. PROCEDURE FOR CLAIMING INDEMNIFICATION.
A. BY HORIZON BANCORP. If any matter subject to indemnification
hereunder arises in the form of a claim against Horizon Bancorp, its
successors and assigns (collectively, "Indemnitee") (herein referred
to as a "Third Party Claim"), the applicable Indemnitee promptly shall
give notice and details thereof, including copies of all pleadings and
pertinent documents, to Twentieth Bancorp. Within fifteen (15) days
of such notice, Twentieth Bancorp either (i) shall pay the Third Party
Claim either in full or upon agreed compromise or (ii) shall notify
the applicable Indemnitee and Horizon Bancorp that Twentieth Bancorp
disputes the Third Party Claim and intends to defend against it, and
thereafter shall so defend and pay any adverse final judgment or award
in regard thereto. Such defense shall be controlled by Twentieth
Bancorp and the cost of such defense shall be borne by Twentieth
Bancorp except that the applicable Indemnitee shall have the right to
participate in such defense at its own expense and provided that
Twentieth Bancorp shall have no right in connection with any such
defense or the resolution of any such Third Party Claim to impose any
cost, restriction, limitation or condition of any kind upon any of the
parties comprising Indemnitee hereunder. Horizon Bancorp agrees that
it shall cooperate in all reasonable respects in the defense of any
such Third Party Claim, including making personnel, books and records
relevant to the Third Party Claim available to Twentieth Bancorp
without charge therefor except for out-of-pocket expenses. If
Twentieth Bancorp fails to take action within fifteen (15) days as
hereinabove provided or, having taken such action, thereafter fails
diligently to defend and resolve the Third Party Claim, the parties
comprising Indemnitee shall have the right to pay, compromise or
defend the Third Party Claim and to assert the indemnification
provisions hereof. Each of the parties comprising Indemnitee also
shall have the right, exercisable in good faith, to take such action
as may be necessary to avoid a default prior to the assumption of the
defense of the Third Party Claim by Twentieth Bancorp.
B. BY TWENTIETH BANCORP. If any matter subject to indemnification
hereunder arises in the form of a claim against Twentieth Bancorp or
its successors and assigns (herein referred to as a "Third Party
Claim"), Twentieth Bancorp promptly shall give notice and details
thereof, including copies of all pleadings and pertinent documents, to
Horizon Bancorp. Within fifteen (15) days of such notice, Horizon
Bancorp either (i) shall pay the Third Party Claim either in full or
upon agreed compromise or (ii) shall notify Twentieth Bancorp that
Horizon Bancorp disputes the Third Party Claim and intends to defend
against it, and thereafter shall so defend and pay any adverse final
judgment or award in regard thereto. Such defense shall be controlled
by Horizon Bancorp and the cost of such defense shall be borne by
Horizon Bancorp except that Twentieth Bancorp shall have the right to
participate in such defense at its own expense and provided that
Horizon Bancorp shall have no right in connection with any such defense
or the resolution of any such Third Party Claim to impose any cost,
restriction, limitation or condition of any kind upon Twentieth
Bancorp. Twentieth Bancorp agrees that it shall cooperate in all
reasonable respects in the defense of any such Third Party Claim,
including making personnel, books and records relevant to the Third
Party Claim available to Horizon Bancorp without charge therefor except
for out-of-pocket expenses. If Horizon Bancorp fails to take action
within fifteen (15) days as hereinabove provided or, having taken such
action, thereafter fails diligently to defend and resolve the Third
Party Claim, Twentieth Bancorp shall have the right to pay, compromise
or defend the Third Party Claim and to assert the indemnification
provisions hereof. Twentieth Bancorp also shall have the right,
exercisable in good faith, to take such action as may be necessary to
avoid a default prior to the assumption of the defense of the Third
Party Claim by Horizon Bancorp.
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ARTICLE IX. MISCELLANEOUS PROVISIONS
9.1. SURVIVAL OF REPRESENTATIONS, WARRANTIES, INDEMNIFICATION AND OTHER
AGREEMENTS.
A. REPRESENTATIONS, WARRANTIES AND OTHER AGREEMENTS. None of the
representations, warranties or agreements herein shall survive the
effectiveness of the Merger, and no party shall have any right after
the Effective Time to recover damages or any other relief from any
other party to this Agreement by reason of any breach of
representation or warranty, any nonfulfillment or nonperformance of
any agreement contained herein, or otherwise; provided, however, that
the parties' agreements contained with regard to appointment of
directors and Horizon Bancorp's representation and warranty with
regard to its issuance of fully paid and nonassessable stock shall
survive the effectiveness of the Merger.
B. INDEMNIFICATION. The parties' indemnification agreements and
obligations contained herein shall become effective only in the event
this Agreement is terminated, and neither of the parties shall have
any obligations under Paragraph 8.1. in the event of or following
consummation of the Merger.
9.2. WAIVER. Any term or condition of this Agreement may be waived (except
as to matters of regulatory approvals and approvals required by law), either in
whole or in part, at any time by the party which is, and whose shareholders
are, entitled to the benefits thereof; provided, however, that any such waiver
shall be effective only upon a determination by the waiving party (through
action of its Board of Directors) that such waiver would not adversely affect
the interests of the waiving party or its shareholders; and, provided further,
that no waiver of any term or condition of this Agreement by any party shall be
effective unless such waiver is in writing and signed by the waiving party or
as provided in Paragraphs 7.2.a. and 7.2.b. above, or be construed to be a
waiver of any succeeding breach of the same term or condition. No failure or
delay of any party to exercise any power, or to insist upon a strict compliance
by any other party of any obligation, and no custom or practice at variance
with any terms hereof, shall constitute a waiver of the right of any party to
demand full and complete compliance with such terms.
9.3. AMENDMENT. This Agreement may be amended, modified or supplemented at
any time or from time to time prior to the Effective Time, and either before or
after its approval by the shareholders of Twentieth Bancorp, by an agreement in
writing approved by a majority of the Boards of Directors of Horizon Bancorp
and Twentieth Bancorp executed in the same manner as this Agreement; provided
however, that, except with the further approval of Twentieth Bancorp's
shareholders of that change or as otherwise provided herein, following approval
of this Agreement by Twentieth Bancorp's shareholders no change may be made in
the Cash Factor.
9.4. NOTICES. All notices and other communications hereunder shall be in
writing and shall be deemed to have been duly given if delivered personally or
by courier, or mailed by certified mail, return receipt requested, postage
prepaid, and addressed as follows:
If to Twentieth Bancorp, to:
▇▇. ▇. ▇. ▇▇▇▇▇▇▇▇, III
President/CEO
The Twentieth Street Bank
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
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With a copy to:
▇▇▇▇▇▇ ▇. ▇▇▇▇, Esquire
Levy, ▇▇▇▇▇▇▇▇▇ and Pancake, L.C.
Suite 200, ▇▇▇▇▇▇ Building
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
If to Horizon Bancorp, to:
Horizon Bancorp, Inc.
Attn: ▇▇. ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
Chairman
▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇
▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
President/CEO
Horizon Bancorp, Inc.
▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
With copy to:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, III, Esquire
File, ▇▇▇▇▇, ▇▇▇▇▇▇▇ & File
Law Building
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esquire
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
9.5. FURTHER ASSURANCE. Twentieth Bancorp and Horizon Bancorp each agree
to furnish to the other such further assurances with respect to the matters
contemplated herein and their respective agreements, covenants, representations
and warranties contained herein, including the opinion of legal counsel, as
such other party may reasonably request.
9.6. HEADINGS AND CAPTIONS. Headings and captions of the sections and
paragraphs of this Agreement have been inserted for convenience of reference
only and do not constitute a part hereof.
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9.7. ENTIRE AGREEMENT. This Agreement (including all schedules and
exhibits attached hereto and all documents incorporated herein by reference)
contains the entire agreement of the parties with respect to the transactions
described herein and supersedes any and all other oral or written agreements)
heretofore made, and there are no representations or inducements by or to, or
any agreements between, any of the parties hereto other than those contained
herein in writing.
9.8. SEVERABILITY OF PROVISIONS. The invalidity or unenforceability of any
term, phrase, clause, paragraph, restriction, covenant, agreement or other
provision hereof shall in no way affect the validity or enforceability of any
other provision or part hereof.
9.9. ASSIGNMENT. This Agreement may not be assigned by any party hereto
except with the prior written consent of the other parties hereto.
9.10. COUNTERPARTS. Any number of counterparts of this Agreement may be
signed and delivered, each of which shall be considered an original and which
together shall constitute one agreement.
9.11. GOVERNING LAW. This Agreement is made in and shall be construed and
enforced in accordance with the laws of West Virginia.
9.12. INSPECTION. Any right of Horizon Bancorp hereunder to investigate or
inspect the assets, books, records, files and other information of Twentieth
Bancorp in no way shall establish any presumption that Horizon Bancorp should
have conducted any investigation or that such right has been exercised by
Horizon Bancorp, its agents, representatives or others. Any investigations or
inspections that have been made by Horizon Bancorp by its agents,
representatives or others prior to the Closing Date shall not be deemed in any
way in derogation or limitation of the covenants, representations and
warranties made by or on behalf of Twentieth Bancorp in this Agreement.
[THIS SPACE LEFT BLANK INTENTIONALLY]
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IN WITNESS WHEREOF, Twentieth Bancorp and Horizon Bancorp each has
caused this Agreement to be executed in its name by its duly authorized
officers and its corporate seal to be affixed hereto as of the date first above
written.
TWENTIETH BANCORP, INC.
By:____________________________________
Its: ______________________________
[CORPORATE SEAL]
_______________________________________
Secretary
HORIZON BANCORP, INC.
By: ____________________________________
Its: ______________________________
and
By: ____________________________________
Its: ______________________________
[CORPORATE SEAL]
_______________________________________
Secretary
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EXHIBIT A
HORIZON BANCORP COUNSEL OPINION
47
EXHIBIT A
FORM OF LEGAL OPINION OF COUNSEL FOR HORIZON BANCORP, INC.
________________, 199___
Twentieth Bancorp, Inc.
______________________
______________________
Gentlemen and Ladies:
We have acted as counsel to Horizon Bancorp, Inc. ("Horizon Bancorp") in
connection with the Plan of Merger and Reorganization (the "Agreement") dated
________________, 199___, by and between Twentieth Bancorp, Inc. ("Twentieth
Bancorp") and Horizon Bancorp whereunder Twentieth Bancorp will be merged into
Horizon Bancorp (the "Merger"). As such counsel, we have reviewed such
organizational documents, indentures, contracts, deeds, instruments, minutes,
actions of the Board of Directors and shareholders of Horizon Bancorp and such
other documents as we have deemed necessary as a basis for the opinions
expressed herein, which are being delivered to you pursuant to the Agreement.
Capitalized terms appearing herein and not otherwise defined are used as
defined in the Agreement.
In reviewing the documents referred to above, we have assumed without inquiry
the genuineness of all signatures, and the conformity with originals of all
documents submitted to us as copies. We have assumed that Twentieth Bancorp,
has and had the power to enter into and to perform the Merger, and all other
instruments in which its joinder is contemplated in connection with the
Agreement. We have also assumed Twentieth Bancorp's due authorization,
execution and delivery of the Agreement and other instruments described therein
and the validity, binding effect and enforceability thereof with respect to
Twentieth Bancorp in accordance with their respective terms. We have relied as
to certain factual matters on representations of Horizon Bancorp contained in
the Agreement, on certificates of officers of Horizon Bancorp and certain
public officials or agencies.
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Whenever we state our opinion to be to our knowledge, we mean that our
attorneys who have given substantive legal attention to representation of
Horizon Bancorp in the transaction have not made any investigation to acquire
actual knowledge of the existence or absence of the facts forming the basis for
such opinion, but are without information generally which contradicts the
existence or absence of the facts forming the basis for such opinion.
Based upon and subject to the foregoing and the qualifications set forth
below, it is our opinion that, except as disclosed in the Registration
Statement, the Agreement or the Disclosure Statement given by Horizon Bancorp in
connection therewith:
1. Horizon Bancorp (i) is duly organized and incorporated, validly existing and
in good standing (as a business corporation) under the laws of West
Virginia, (ii) has all requisite power and authority (corporate and other)
to own its respective properties and conduct its respective businesses as
now being conducted, (iii) is duly qualified to do business and is in good
standing in West Virginia and, to our knowledge, in each other jurisdiction
in which the character of the properties owned or leased by it therein or in
which the transaction of its respective businesses makes such qualification
necessary, except where failure so to qualify would not have a material
adverse effect on Horizon Bancorp and its subsidiaries considered as one
enterprise, and (iv) to our knowledge, is not transacting business, or
operating any properties owned or leased by it, in violation of any
provision of federal or state law or any rule or regulation promulgated
thereunder, which violation would have a material adverse effect on Horizon
Bancorp and its subsidiaries considered as one enterprise.
2. Horizon Bancorp' authorized capital stock consists of Five Million
(5,000,000) shares of One Dollar ($1.00) par value per share common stock
("Horizon Bancorp Stock"). The shares of Horizon Bancorp Stock to be issued
to Twentieth Bancorp's shareholders pursuant to the Agreement, when issued
as described therein, will be duly authorized, validly issued, fully paid
and nonassessable.
3. (i) Horizon Bancorp has the corporate power and authority to execute and
deliver the Agreement and to perform its obligations and agreements and carry
out the transactions described therein, (ii) all corporate proceedings
required to be taken to authorize Horizon Bancorp to enter into the Agreement
and to perform its obligations and agreements and carry out the transactions
described therein have been duly and properly taken, and (iii) the
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Agreement constitutes the valid and binding agreement of Horizon Bancorp
enforceable in accordance with its terms (except to the extent enforceability
may be limited by (A) applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws from time to time in effect which affect
creditors' rights generally, (B) legal and equitable limitations on the
availability of injunctive relief, specific performance and other equitable
remedies, (C) general principles of equity governing and limiting the
availability of specific performance, injunctive relief and other equitable
remedies and (D) applicable laws and regulations and the application of
principles of public policy underlying such laws and regulations limiting the
enforceability of indemnification provisions).
4. Except where the same would not have a material adverse effect on Horizon
Bancorp and its subsidiaries considered as one enterprise, neither the
execution and delivery of the Agreement, nor the consummation of the
transactions described therein, nor compliance by Horizon Bancorp with any
of its obligations or agreements contained therein, will:
(i) conflict with or result in a breach of the terms and conditions of, or
constitute a default or violation under any provision of, Horizon
Bancorp' Certificate of Incorporation or Bylaws, or, to our knowledge,
any contract, agreement, lease, mortgage, note, bond, indenture,
license, or obligation or understanding (oral or written) to which
Horizon Bancorp is bound or by which it, its business, capital stock
or any of its properties or assets may be affected;
(ii) to our knowledge, result in the creation or imposition of any lien,
claim, interest, charge, restriction or encumbrance upon any of
Horizon Bancorp' properties or assets;
(iii) to our knowledge, violate any applicable federal or state statute,
law, rule or regulation, or, to our knowledge, any order, writ,
injunction or decree of any court, administrative or regulatory agency
or governmental body; or
(iv) to our knowledge, result in the acceleration of any obligation or
indebtedness of Horizon Bancorp.
5. No consents, approvals or waivers are required to be obtained from any person
or entity in connection with Horizon Bancorp's execution and delivery of the
Agreement, or, to our knowledge, the performance of their respective
obligations or agreements or the consummation of the transactions described
therein, except for required approvals of governmental or regulatory
authorities and shareholders which have been obtained.
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We have participated in conferences with representatives of Horizon Bancorp
and their and your respective accountants and counsel in connection with the
preparation of the Registration Statement and the Proxy Statement and have
considered the matters required to be stated therein and the statements
contained therein and, based on the foregoing (and, in certain circumstances
relying as to materiality on the opinions of officers and representatives of
Horizon Bancorp) nothing has come to our attention which would lead us to
believe that the Registration Statement at the time it became effective, or the
Proxy Statement, at the time it was distributed to Twentieth Bancorp's
shareholders, contained any untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading (except that we express no opinion regarding
any information contained in the Registration Statement regarding the Bank, or
as to any financial statements or other financial and statistical data included
therein).
We are licensed to practice in the State of West Virginia, and our opinions
are not intended to, and do not, cover the laws of any other state. To the
extent that matters as to which we have opined may be governed by the laws of
any other state, our opinions are given as if such matters were governed by the
laws of the State of West Virginia. Our opinion is based upon reported
decisions of the West Virginia Supreme Court of Appeals as of the date hereof.
The opinions rendered herein are solely for your benefit and are not to be
used, circulated or otherwise referred to without our prior written consent.
Very truly yours,
____________________
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EXHIBIT B
TWENTIETH BANCORP COUNSEL OPINION
52
EXHIBIT B
FORM OF LEGAL OPINION OF COUNSEL FOR TWENTIETH BANCORP
_________________, 199___
Horizon Bancorp, Inc.
____________________
____________________
Gentlemen and Ladies:
We have acted as counsel to the Twentieth Bancorp, Inc. ("Twentieth
Bancorp") and Twentieth Street Bank (the "Bank"), a West Virginia banking
corporation, in connection with the Plan of Merger and Reorganization dated
_________________, 199___, (the "Agreement") by and between Twentieth Bancorp,
Inc. and Horizon Bancorp, Inc. ("Horizon Bancorp"). As such counsel, we have
reviewed such organizational documents, indentures, contracts, deeds,
instruments, minutes actions of the Boards of Directors and shareholders of
Twentieth Bancorp and the Bank, and such other documents as we have deemed
necessary as a basis for the opinions expressed herein, which are being
delivered to you pursuant to the Agreement. Capitalized terms appearing herein
and not otherwise defined are used as defined in the Agreement.
In reviewing the documents and information referred to above, we have
assumed without inquiry the genuineness of all signatures, and the conformity
with originals of all documents submitted to us as copies. We have assumed that
Horizon Bancorp has and had the power to enter into and to perform the
Agreement, and all other instruments in which their joinder is contemplated in
connection with the Agreement. We have also assumed Horizon Bancorp's due
authorization, execution and delivery of the Agreement and other instruments
described therein and the validity, binding effect and enforceability thereof
with respect to Horizon Bancorp in accordance with their respective terms. We
have relied as to certain factual matters on representations of Twentieth
Bancorp contained in the Agreement, on certificates of officers of Twentieth
Bancorp and certain public officials or agencies.
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Whenever we state our opinion to be to our knowledge, we mean that our
attorneys who have given substantive legal attention to representation of
Twentieth Bancorp and the Bank in the transaction have not made any
investigation to acquire actual knowledge of the existence or absence of the
facts forming the basis for such opinion, but are without information generally
which contradicts the existence or absence of the facts forming the basis for
such opinion.
Based upon and subject to the foregoing and the qualifications set forth
below, it is our opinion that, except as disclosed in the Registration
Statement, the Agreement or the Disclosure Statement given by Twentieth Bancorp
in connection therewith:
1. Twentieth Bancorp and the Bank each (i) is duly organized and incorporated,
validly existing and in good standing (as a business corporation and a
banking corporation, respectively) under the laws of West Virginia; (ii) has
all requisite power and authority (corporate and other) to own, lease and
operate its properties and to carry on its business as now being conducted;
(iii) is duly qualified to do business and is in good standing in West
Virginia, and, to our knowledge, in each other jurisdiction in which the
character of the properties owned, leased or operated by it therein or in
which the transaction of its business makes such qualification necessary,
except where failure so to qualify would not have a material adverse effect
on Twentieth Bancorp or the Bank; and, (iv) to our knowledge, is not
transacting business or operating any properties owned or leased by it in
violation of any provision of federal or state law or any rule or regulation
promulgated thereunder, which violation would have a material adverse effect
on Twentieth Bancorp or the Bank.
2. Twentieth Bancorp's authorized capital stock consists of ___________________
( ) shares of common stock, ___________________ ($ ) par value per
share ("Twentieth Bancorp Stock"), of which _________________ ( )
shares are issued and outstanding and constitute Twentieth Bancorp's only
outstanding securities.
Each outstanding share of Twentieth Bancorp Stock (i) has been duly
authorized and are validly issued and outstanding, and is fully paid and
nonassessable, (ii) has not been issued in violation of the preemptive rights of
any shareholder, and (iii) is exempt from the registration and reporting
requirements of the Securities Exchange Act of 1934, as amended (the "1934
Act").
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3. The Bank does not have any subsidiary (direct or indirect).
4. Neither Twentieth Bancorp nor the Bank has any outstanding (i) securities or
other obligations (including debentures or other debt instruments) which are
convertible into shares of Twentieth Bancorp Stock or any other securities
of Twentieth Bancorp, (ii) options, warrants, rights, calls or other
commitments of any nature which entitle any person to receive or acquire any
shares of Twentieth Bancorp Stock or any other securities of Twentieth
Bancorp, or (iii) plan, agreement or other arrangement pursuant to which
shares of Twentieth Bancorp Stock or any other securities of Twentieth
Bancorp, or options, warrants, rights, calls or other commitments of any
nature pertaining thereto, have been or may be issued.
5. The Agreement has been duly and validly approved by Twentieth Bancorp's
Board of Directors and shareholders to the extent and in the manner required
by applicable law, and has been executed and delivered on Twentieth
Bancorp's behalf,
(i) Twentieth Bancorp has the corporate power and authority to execute and
deliver the Agreement and to perform its obligations and agreements and
carry out the transactions described therein,
(ii) all corporate proceedings and approvals required to authorize Twentieth
Bancorp to enter into the Agreement and to perform its obligations and
agreements and carry out the transactions described herein have been
duly and properly completed or obtained, and
(iii) the Agreement constitutes the valid and binding agreement of
Twentieth Bancorp enforceable in accordance with its terms (except to
the extent enforceability may be limited by (A) applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws from time to
time in effect which affect creditors' rights generally, (B) legal and
equitable limitations on the availability of injunctive relief,
specific performance and other equitable remedies, (C) general
principles of equity governing and limiting the availability of
specific performance, injunctive relief and other equitable remedies,
and (D) applicable laws and regulations and the applications of
principles of public policy underlying such laws and regulations
limiting the enforceability of indemnification provisions).
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6. Neither the execution and delivery of the Agreement, nor the consummation of
the transactions described therein, nor compliance by Twentieth Bancorp with
any of its obligations or agreements contained therein, will:
(i) conflict with or result in a breach of the terms and conditions of, or
constitute a default or violation under any provision of, the Articles
of Incorporation or Bylaws of Twentieth Bancorp or the Bank, or, to our
knowledge, any contract, agreement, lease, mortgage, note, bond,
indenture, license, or obligation or understanding (oral or written) to
which Twentieth Bancorp or the Bank is bound or by which it, its
business, capital stock or any of its properties or assets may be
affected;
(ii) to our knowledge, result in the creation or imposition of any lien,
claim, interest, charge, restriction or encumbrance upon any of the
properties or assets of Twentieth Bancorp or the Bank;
(iii) violate any applicable federal or state statute, law, rule or
regulation, or, to our knowledge, any judgment, order, writ, injunction
or decree of any court, administrative or regulatory agency or
governmental body; or
(iv) to our knowledge, result in the acceleration of any obligation or
indebtedness of Twentieth Bancorp or the Bank.
7. No consents, approvals or waivers are required to be obtained from any
person or entity in connection with Twentieth Bancorp's execution and
delivery of the Agreement, or, to our knowledge, the performance of its
obligations or agreements or the consummation of the transactions described
herein, except for approvals of Twentieth Bancorp's shareholders and of
governmental or regulatory authorities which have been obtained.
8. The Proxy Statement delivered to the shareholders of Twentieth Bancorp
complied as to form in all material respects with applicable regulations of
the Securities and Exchange Commission.
9. There are no actions, suits, arbitrations, controversies or other proceedings
or investigations (or, to our knowledge, any facts or circumstances which
reasonably could result in such), including without limitation any such
action by any governmental or regulatory authority, which currently exists or
is ongoing, pending or, to our knowledge, threatened, contemplated or
probable of assertion, against, relating to or otherwise affecting Twentieth
Bancorp or the Bank or any of its properties or assets which, if determined
adversely, could result in liability
4
56
on the part of Twentieth Bancorp or the Bank for, or subject it to, monetary
damages, fines or penalties, an injunction, or which could have a material
adverse effect on Twentieth Bancorp's consolidated financial condition,
results of operations, prospects, business, assets, loan portfolio,
investments, properties or operations or on the ability of Twentieth Bancorp
to consummate the Agreement;
To our knowledge, Twentieth Bancorp and the Bank have all licenses, permits,
orders, authorizations or approvals ("Permits") of any federal, state, local
or foreign governmental or regulatory body that are material to or necessary
for the conduct of their banking business or to own, lease and operate their
properties; all such Permits are in full force and effect; no material
violations are or have been recorded in respect of any such Permits; and, to
our knowledge, no proceeding is pending, threatened or probable of assertion
to suspend, cancel, revoke or limit any Permit;
Except as reflected in the Twentieth Bancorp Disclosure Statement, neither
Twentieth Bancorp nor the Bank is subject to any supervisory agreement,
enforcement order, writ, injunction, capital directive, supervisory
directive, memorandum of understanding or other similar agreement, order,
directive, memorandum or consent of, with or issued by any regulatory or
other governmental authority (including without limitation the FRB or the
Commission) relating to its financial condition, directors or officers,
operations, capital, regulatory compliance or otherwise; there are no
judgments, orders, stipulations, injunctions, decrees or awards against
Twentieth Bancorp or the Bank which in any manner limit, restrict, regulate,
enjoin or prohibit any present or past business or practice of Twentieth
Bancorp or the Bank; and, to the best of our knowledge and belief, neither
Twentieth Bancorp nor the Bank has been advised nor has any reason to
believe that any regulatory or other governmental authority or any court is
contemplating, threatening or requesting the issuance of any such agreement,
order, injunction, directive, memorandum, judgment, stipulation, decree or
award.
10. When a Certificate of Merger has been duly executed by Twentieth Bancorp
and, with the approval of the West Virginia Board, has been filed with the
Secretary of State of West Virginia in accordance with law, the Merger will
become effective at the time of the issuance of the Certificate of Merger
by the Secretary of State of West Virginia.
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We have participated in conferences with representatives of Twentieth
Bancorp and the Bank and their and your respective accountants and counsel in
connection with the preparation of the Registration Statement and the Proxy
Statement and have considered the matters required to be stated therein and the
statements contained therein and, based on the foregoing (and, in certain
circumstances relying as to materiality on the opinions of officers and
representatives of Twentieth Bancorp and the Bank) nothing has come to our
attention which would lead us to believe that the Registration Statement at the
time it became effective, or the Proxy Statement, at the time it was distributed
to Twentieth Bancorp's shareholders, contained any untrue statement of a
material fact or omitted to state a material fact required to be stated herein
or necessary to make the statements therein not misleading (except that we
express no opinion regarding any information contained in the Registration
Statement regarding Horizon Bancorp, or as to any financial statements or other
financial and statistical data included therein).
We are licensed to practice in the State of West Virginia, and our opinions
are not intended to, and do not, cover the laws of any other state. To the
extent that matters as to which we have opined may be governed by the laws of
any other state, our opinions are given as if such matters were governed by the
laws of the State of West Virginia. Our opinion is based upon the reported
decision of the West Virginia Supreme Court of Appeals as of the date hereof.
The opinions rendered herein are solely for your benefit and are not to be
used, circulated or otherwise referred to without our prior written consent.
Very truly yours,
___________________
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58
EXHIBIT C
EMPLOYMENT AGREEMENT
59
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") made as of ________________, 1996
by and between THE TWENTIETH STREET BANK, a banking corporation organized under
the laws of West Virginia (the "Employer"), and _________________________ (the
"Executive").
W I T N E S S T H T H A T:
WHEREAS, Executive has been employed by Employer as _______________; and
WHEREAS, Executive desires to provide for the continued employment of the
Executive upon the terms and conditions contained herein.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein set forth, the parties covenant and agree as follows:
1. EMPLOYMENT:
(A) POSITION. Executive shall serve as ________________________________.
(B) SERVICES. Employer agrees to employ the Executive to perform services
for the Employer in the capacities indicated above in the Employment Area and
the Executive agrees to perform such services upon the terms and conditions
herein provided. "Employment Area" shall mean the City of Huntington, West
Virginia and any other location within thirty (30) miles of the city limits
of Huntington. The Executive also agrees to perform such managerial duties and
responsibilities as shall be assigned to him by the Board of Directors of the
Employer, which duties
60
and responsibilities shall be of the character required by his assigned offices.
The Executive shall devote his time and attention on a full-time basis to the
discharge of the duties assigned by the Employer and undertaken by him
hereunder. The Executive shall not, during the term of this Agreement, engage
in any activities on behalf of the Employer not sanctioned or approved by
Employer's Board of Directors.
2. TERM AND COMPENSATION:
(A) TERM OF EMPLOYMENT. The term of the employment hereunder shall be
from _______________________ , 1996 to and including the first to occur of:
(i) except as otherwise provided in Section 3 hereof, ______________________,
199___, or (ii) the Executive's death.
(B) COMPENSATION. During the terms of employment hereunder, the
Executive shall receive for his services a base salary (exclusive of incentive
or bonus compensation) in amounts determined by the Board of Directors or an
appropriate committee of the Employer in accordance with the salary
administration program of the Employer as the same may from time to time be in
effect, but in no event shall such base salary be less than $________________,
including all salary and director's and committee fees received from Employer or
any of its affiliates, ("Base Salary"). The Base Salary may be increased, but
not decreased, by the Board of Directors of Employer and, if increased, the new
salary level will constitute the Base Salary for purposes of this Agreement.
Executive shall also be reimbursed for his reasonable expenses associated with
attendance at banking conventions, club membership dues and shall continue to be
provided with a Bank owned automobile for business use. Executive will continue
to receive life insurance protection as previously provided subject to his
continued insurability at reasonable rates.
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(C) BENEFITS. The Executive shall be eligible for full participation in
any additional plan, programs or forms of compensation or benefits that the
Employer's Board of Directors might hereinafter provide to the class of
employees that includes the Executive.
(D) INCAPACITY. In the event of the Executive's physical or mental
incapacity, this Agreement shall terminate and the Employer shall pay or provide
to the Executive the compensation and benefits provided under the Employer's
disability plans in effect at that time. For the purposes of this Agreement,
the term "Executive's physical or mental incapacity" shall mean the Executive's
illness or other involuntary physical or mental condition which prevents the
Executive from performing the essential functions of his duties for a period of
180 days in any 360 day period.
(E) DEATH. In the event that the Executive's death should occur during
the term of this Agreement, this Agreement shall terminate and the Executive or
his estate or beneficiaries, as the case may be, shall be entitled only to any
and all retirement or death benefits payable under the Employer's plans in
effect at that time and no further compensation, including severance
compensation, will be paid under this Agreement.
3. TERMINATION BY THE EMPLOYER.
(A) TERMINATION FOR GOOD CAUSE BY THE EMPLOYER. Nothing hereunder
contained shall prevent the Employer from terminating for good cause the
services of the Executive at any time prior to the expiration of this
Agreement. Termination of employment "for good cause" means a dismissal of the
Executive because of (i) the material failure of the Executive, after written
notice, to render services to the Employer in a manner satisfactory to a
majority of the Employer's Board of Directors, as required herein, (ii) the
Executive's gross or wilful neglect or duty; or (iii) fraudulent or criminal
conduct; (iv) conduct constituting moral turpitude; (v) material breach of any
of the provisions of this Agreement, or (vi) the absence of the Executive from
his position and/or the
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62
failure to perform his duties on a full-time basis for six (6) consecutive
months other than for physical or mental incapacity. If the Employer shall
terminate the Executive's employment for good cause, then the Executive shall
not have any rights or claims against the Employer and the Executive shall be
entitled only to receive his Base Salary in respect of services performed
through the Date of Termination.
(B) TERMINATION BY THE EXECUTIVE. The Executive shall be entitled to
terminate his employment for good reasons, in which event the Employer shall be
obligated to pay the Executive and furnish him the benefits provided in Section
4 hereof. "Good reason" shall mean that Employer has breached this Agreement
and shall not have cured its breach within thirty (30) days of receiving notice
from Executive of the nature of such breach.
The right herein conferred upon the Executive to terminate this employment
agreement for good reason may be exercised by the Executive at any time within
180 days of an event constituting good reason, at his sole discretion, and any
failure by the Executive to exercise this right after he has "good reason" to do
so shall not be deemed a waiver of the right.
In the event the Executive terminates his employment without "good reason"
then he shall be entitled to no further compensation after the "Date of
Termination" as defined in part (d) of this paragraph 3.
In addition, Executive may terminate his employment hereunder during the
first year of this Agreement whereupon he shall be paid his Base Salary for six
(6) months and shall not compete or be employed in competition to Bank during
such period. Violation of this covenant not to compete will obligate Executive
to refund all payments made to him by Bank after his termination of this
Agreement.
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(C) NOTICE OF TERMINATION. Any termination of the Executive's employment
by the Employer or by the Executive shall be communicated by a written Notice of
Termination to the other party hereto. For purposes of this Agreement, a
"Notice of Termination" shall mean a notice which shall indicate the specific
termination provision in this Agreement relied upon and shall set forth in the
facts and circumstances claimed by the party which provides a basis for
termination.
(D) DATE OF TERMINATION. "Date of Termination" shall mean (i) if the
Agreement is terminated by the Executive, the date on which the Notice of
Termination is delivered, or (ii) if the Agreement is terminated by the Employer
for any reason, the date on which a Notice of Termination is given.
4. COMPENSATION UPON TERMINATION. If, without good cause, the Employer
terminates the services of the Executive prior to the expiration of this
Agreement of if the Executive terminates his employment for good reason, then:
(A) ACCRUED BUT UNPAID COMPENSATION. The Employer shall pay the
Executive's full Base Salary through the Date of Termination at the rate then in
effect and the amount, if any, of awards theretofore made which have not yet
been paid.
(B) SEVERANCE ALLOWANCE. The Employer shall pay the Executive a
severance allowance in equal monthly payments commencing on the last day of the
month in which the Date of Termination occurs, equal in amount to one twelfth
(1/12) of the Base Salary paid to the Executive by Employer in the twelve (12)
months preceding the Notice of Termination. Such severance allowance shall
continue until the date mentioned above in paragraph 2(a)(i).
(C) EMPLOYEE BENEFITS. The Employer shall maintain in full force and
effect, for the Executive's continued benefit until the earlier of the first
anniversary of the Date of Termination
5
64
or the date the Executive becomes a participant in similar plans, programs or
arrangements provided by a subsequent employer, all life, accident, medical and
dental insurance benefit plans and programs or arrangements in which the
Executive was entitled to participate immediately prior to the Date of
Termination, provided that the Executive's continued participation is possible
under the general terms and provisions of such plan or program is barred, under
the terms of the group plans in effect, the Employer shall arrange to provide
the Executive with benefits substantially similar to those which the Executive
is entitled to receive under such plans and programs. At the end of the period
of coverage, the Executive shall have the option to have assigned to him at no
cost and with no apportionment of prepaid premiums, any assignable insurance
policy owned by the Employer and relating specifically to the Executive.
5. MISCELLANEOUS:
(A) WAIVER: A waiver by any party of any of the terms and conditions of
this Agreement in any instance shall not be deemed or construed to be a waiver
of such terms and conditions for the future, or of any subsequent breach
thereof.
(B) ARBITRATION. Any dispute among the parties hereto arising out of or
with respect to this Agreement or any of its provisions shall be resolved by the
sole and exclusive remedy of binding arbitration, as follows: the Employer and
Employee shall name one arbitrator; the arbitrators so selected shall each name
a third arbitrator; the decision of the majority of the arbitrators shall be
binding upon the parties and enforceable in a court of competent jurisdiction.
The arbitration proceeding shall be conducted in Huntington, West Virginia.
(C) SEVERABILITY. If any provision of this Agreement, as applied to any
circumstances, shall be adjudged by a court to be void and unenforceable, the
same shall in no way
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65
affect any other provision of this Agreement or the
applicability of such provision to any other circumstances.
(D) AMENDMENT. This Agreement may not be varied, altered, modified,
changed, or in any way amended except by an instrument in writing, executed by
the parties hereto or their legal representatives.
(E) NONASSIGNABILITY. Neither the Executive nor his estate shall have
any right to commute, sell, assign, transfer or otherwise convey the right to
receive any payments hereunder, which payments and the right thereto are
expressly declared to be nonassignable and nontransferable.
(F) BINDING EFFECT. This Agreement shall be binding upon and insure to
the benefit of the Executive (and his personal representative), the Employer and
any successor organization or organizations which shall succeed to substantially
all of the business and property of the Employer, whether by means of merger,
consolidation, acquisition of all or substantially all of the assets of the
Employer or otherwise, including by operation of law.
(G) GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of West Virginia, whether statutory or decisional,
applicable to agreements made and entirely to be performed within such state and
such provisions of federal law as may be applicable.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first above written.
EXECUTIVE:
__________________________________
THE TWENTIETH STREET BANK
By: _____________________________
Its: _______________________
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67
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") made as of ________________, 1996
by and between THE TWENTIETH STREET BANK, a banking corporation organized under
the laws of West Virginia (the "Employer"), and ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ (the
"Executive").
W I T N E S S T H T H A T:
WHEREAS, Executive has been employed by Employer as _______________; and
WHEREAS, Executive desires to provide for the continued employment of the
Executive upon the terms and conditions contained herein.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein set forth, the parties covenant and agree as follows:
1. EMPLOYMENT:
(A) POSITION. Executive shall serve as _____________________________.
(B) SERVICES. Employer agrees to employ the Executive to perform
services for the Employer in the capacities indicated above in the Employment
Area and the Executive agrees to perform such services upon the terms and
conditions herein provided. "Employment Area" shall mean the City of
Huntington, West Virginia and any other location within thirty (30) miles of the
city limits of Huntington. The Executive also agrees to perform such managerial
duties and responsibilities as shall be assigned to him by the Board of
Directors of the Employer, which duties and responsibilities shall be of the
character required by his assigned offices. The Executive shall
68
devote his time and attention on a full-time basis to the discharge of the
duties assigned by the Employer and undertaken by him hereunder. The Executive
shall not, during the term of this Agreement, engage in any activities on
behalf of the Employer not sanctioned or approved by Employer's Board of
Directors.
2. TERM AND COMPENSATION:
(A) TERM OF EMPLOYMENT. The term of the employment hereunder shall be
from _______________________ , 1996 to and including the first to occur of: (i)
except as otherwise provided in Section 3 hereof, ______________________, 1998,
or (ii) the Executive's death.
(B) COMPENSATION. During the terms of employment hereunder, the
Executive shall receive for his services a base salary (exclusive of incentive
or bonus compensation) in amounts determined by the Board of Directors or an
appropriate committee of the Employer in accordance with the salary
administration program of the Employer as the same may from time to time be in
effect, but in no event shall such base salary be less than $________________,
including all salary and director's and committee fees received from Employer or
any of its affiliates, ("Base Salary"). The Base Salary may be increased, but
not decreased, by the Board of Directors of Employer and, if increased, the new
salary level will constitute the Base Salary for purposes of this Agreement.
(C) BENEFITS. The Executive shall be eligible for full participation in
any additional plan, programs or forms of compensation or benefits that the
Employer's Board of Directors might hereinafter provide to the class of
employees that includes the Executive.
(D) INCAPACITY. In the event of the Executive's physical or mental
incapacity, this Agreement shall terminate and the Employer shall pay or provide
to the Executive the compensation and benefits provided under the Employer's
disability plans in effect at that time. For the purposes
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69
of this Agreement, the term "Executive's physical or mental incapacity" shall
mean the Executive's illness or other involuntary physical or mental condition
which prevents the Executive from performing the essential functions of his
duties for a period of 180 days in any 360 day period.
(E) DEATH. In the event that the Executive's death should occur during
the term of this Agreement, this Agreement shall terminate and the Executive or
his estate or beneficiaries, as the case may be, shall be entitled only to any
and all retirement or death benefits payable under the Employer's plans in
effect at that time and no further compensation, including severance
compensation, will be paid under this Agreement.
3. TERMINATION BY THE EMPLOYER.
(A) TERMINATION FOR GOOD CAUSE BY THE EMPLOYER. Nothing hereunder
contained shall prevent the Employer from terminating for good cause the
services of the Executive at any time prior to the expiration of this Agreement.
Termination of employment "for good cause" means a dismissal of the Executive
because of (i) the material failure of the Executive, after written notice, to
render services to the Employer in a manner satisfactory to a majority of the
Employer's Board of Directors, as required herein, (ii) the Executive's gross or
wilful neglect or duty; or (iii) fraudulent or criminal conduct; (iv) conduct
constituting moral turpitude; (v) material breach of any of the provisions of
this Agreement, or (vi) the absence of the Executive from his position and/or
the failure to perform his duties on a full-time basis for six (6) consecutive
months other than for physical or mental incapacity. If the Employer shall
terminate the Executive's employment for good cause, then the Executive shall
not have any rights or claims against the Employer and the Executive shall be
entitled only to receive his Base Salary in respect of services performed
through the Date of Termination.
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(B) TERMINATION BY THE EXECUTIVE. The Executive shall be entitled to
terminate his employment for good reasons, in which event the Employer shall be
obligated to pay the Executive and furnish him the benefits provided in Section
4 hereof. "Good reason" shall mean that Employer has breached this Agreement
and shall not have cured its breach within thirty (30) days of receiving notice
from Executive of the nature of such breach.
The right herein conferred upon the Executive to terminate this employment
agreement for good reason may be exercised by the Executive at any time within
180 days of an event constituting good reason, at his sole discretion, and any
failure by the Executive to exercise this right after he has "good reason" to do
so shall not be deemed a waiver of the right.
In the event the Executive terminates his employment without "good reason"
then he shall be entitled to no further compensation after the "Date of
Termination" as defined in part (d) of this paragraph 3.
In addition, Executive may terminate his employment hereunder during the
first year of this Agreement whereupon he shall be paid his Base Salary for six
(6) months and shall not compete or be employed in competition to Bank during
such period. Violation of this covenant not to compete will obligate Executive
to refund all payments made to him by Bank after his termination of this
Agreement.
(C) NOTICE OF TERMINATION. Any termination of the Executive's
employment by the Employer or by the Executive shall be communicated by a
written Notice of Termination to the other party hereto. For purposes of this
Agreement, a "Notice of Termination" shall mean a notice which shall indicate
the specific termination provision in this Agreement relied upon and shall set
forth in the facts and circumstances claimed by the party which provides a basis
for termination.
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(D) DATE OF TERMINATION. "Date of Termination" shall mean (i) if the
Agreement is terminated by the Executive, the date on which the Notice of
Termination is delivered, or (ii) if the Agreement is terminated by the Employer
for any reason, the date on which a Notice of Termination is given.
4. COMPENSATION UPON TERMINATION. If, without good cause, the Employer
terminates the services of the Executive prior to the expiration of this
Agreement of if the Executive terminates his employment for good reason, then:
(A) ACCRUED BUT UNPAID COMPENSATION. The Employer shall pay the
Executive's full Base Salary through the Date of Termination at the rate then in
effect and the amount, if any, of awards theretofore made which have not yet
been paid.
(B) SEVERANCE ALLOWANCE. The Employer shall pay the Executive a
severance allowance in equal monthly payments commencing on the last day of the
month in which the Date of Termination occurs, equal in amount to one twelfth
(1/12) of the Base Salary paid to the Executive by Employer in the twelve (12)
months preceding the Notice of Termination. Such severance allowance shall
continue until the date mentioned above in paragraph 2(a)(i).
(C) EMPLOYEE BENEFITS. The Employer shall maintain in full force and
effect, for the Executive's continued benefit until the earlier of the first
anniversary of the Date of Termination or the date the Executive becomes a
participant in similar plans, programs or arrangements provided by a subsequent
employer, all life, accident, medical and dental insurance benefit plans and
programs or arrangements in which the Executive was entitled to participate
immediately prior to the Date of Termination, provided that the Executive's
continued participation is possible under the general terms and provisions of
such plan or program is barred, under the terms of the group plans in effect,
the
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Employer shall arrange to provide the Executive with benefits substantially
similar to those which the Executive is entitled to receive under such plans
and programs. At the end of the period of coverage, the Executive shall have
the option to have assigned to him at no cost and with no apportionment of
prepaid premiums, any assignable insurance policy owned by the Employer and
relating specifically to the Executive.
5. MISCELLANEOUS:
(A) WAIVER: A waiver by any party of any of the terms and conditions of
this Agreement in any instance shall not be deemed or construed to be a waiver
of such terms and conditions for the future, or of any subsequent breach
thereof.
(B) ARBITRATION. Any dispute among the parties hereto arising out of or
with respect to this Agreement or any of its provisions shall be resolved by the
sole and exclusive remedy of binding arbitration, as follows: the Employer and
Employee shall name one arbitrator; the arbitrators so selected shall each name
a third arbitrator; the decision of the majority of the arbitrators shall be
binding upon the parties and enforceable in a court of competent jurisdiction.
The arbitration proceeding shall be conducted in Huntington, West Virginia.
(C) SEVERABILITY. If any provision of this Agreement, as applied to any
circumstances, shall be adjudged by a court to be void and unenforceable, the
same shall in no way affect any other provision of this Agreement or the
applicability of such provision to any other circumstances.
(D) AMENDMENT. This Agreement may not be varied, altered, modified,
changed, or in any way amended except by an instrument in writing, executed by
the parties hereto or their legal representatives.
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(E) NONASSIGNABILITY. Neither the Executive nor his estate shall have
any right to commute, sell, assign, transfer or otherwise convey the right to
receive any payments hereunder, which payments and the right thereto are
expressly declared to be nonassignable and nontransferable.
(F) BINDING EFFECT. This Agreement shall be binding upon and insure to
the benefit of the Executive (and his personal representative), the Employer and
any successor organization or organizations which shall succeed to substantially
all of the business and property of the Employer, whether by means of merger,
consolidation, acquisition of all or substantially all of the assets of the
Employer or otherwise, including by operation of law.
(G) GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of West Virginia, whether statutory or decisional,
applicable to agreements made and entirely to be performed within such state and
such provisions of federal law as may be applicable.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first above written.
EXECUTIVE:
__________________________________
THE TWENTIETH STREET BANK
By: _____________________________
Its: _______________________
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