EXHIBIT 10(8)
SHARE PLEDGE AGREEMENT
between
TRUST UNDER
THIRD CENTURY BANCORP
STOCK OWNERSHIP PLAN AND TRUST AGREEMENT
and
THIRD CENTURY BANCORP
Dated: June 29, 2004
SHARE PLEDGE AGREEMENT
THIS SHARE PLEDGE AGREEMENT (this "Agreement" or "Share Pledge Agreement"),
dated as of June 29, 2004, between the Trust (the "Trust") established pursuant
to the provisions of the THIRD CENTURY BANCORP EMPLOYEE STOCK OWNERSHIP PLAN AND
TRUST AGREEMENT (EFFECTIVE AS OF JUNE 1, 2004) (the "Plan") by HOMEFEDERAL BANK,
as Trustee ("Trustee"), and Third Century Bancorp, an Indiana corporation (the
"Company").
WITNESSETH:
WHEREAS, contemporaneously herewith, the Trust and the Company have entered
into that certain Exempt Loan and Share Purchase Agreement (the "Loan
Agreement"; definitions of terms appearing in which have the same meanings
herein, unless a clear contrary intention appears), dated June ___, 2004,
pursuant to which the Company has agreed to lend to the Trust, and the Trust has
agreed to borrow from the Company, the Trust Loan, and the Trust, to evidence
its indebtedness to the Company with respect to the Trust Loan, has executed and
delivered the Trust Note to the Company; and
WHEREAS, it is a condition precedent to the obligation of the Company to
make the Trust Loan that, among other things, the Trust execute and deliver this
Agreement to the Company,
NOW, THEREFORE, in consideration of the Loan Agreement and the Trust Loan
and other good and valuable consideration (the receipt, adequacy and sufficiency
of which the Trust acknowledges by its execution hereof), the Trust intending to
be legally bound does hereby covenant and agree with the Company as follows:
Section 1. Pledge. To secure the due and punctual payment and performance
of the obligations of the Trust hereunder and under the Loan Agreement and the
Trust Note (collectively, the "Liabilities"), the Trustee on behalf of the Trust
hereby pledges, hypothecates, assigns, transfers, sets over and delivers unto
the Company, its successors and assigns and hereby grants to the Company, its
successors and assigns a security interest in:
(a) all Shares of Company Common Stock purchased or to be purchased
with the proceeds of the Trust Loan (collectively, the "Pledged Shares")
and the certificates representing or evidencing the Pledged Shares, and, to
the extent permitted by Section 4975(e)(7) of the Internal Revenue Code of
1986, as amended, and Reg. ss. 54.4975-7(b)(5) promulgated thereunder, all
cash, securities, interest, dividends, rights and other property at any
time and from time to time received in respect of or in exchange for any or
all of the Pledged Shares; and
(b) all proceeds of all of the foregoing
(all such Pledged Shares, certificates, cash, securities, interest, dividends,
rights and other property, and proceeds thereof, other than as released, sold or
otherwise applied by the Company pursuant to the terms hereof, being herein
collectively called the "Collateral"), TO HAVE AND TO HOLD such Collateral,
together with all rights, titles, interests, privileges and preferences
appertaining or incidental thereto, forever, subject, however, to the terms,
covenants and conditions hereafter set forth.
Section 2. Warranties and Covenants.
(a) The Trust represents and warrants to the Company that the Trust
is, or at the time of any future delivery, pledge, assignment or transfer
will be, the lawful owner of the Collateral, free of all claims and liens
other than the security interest hereunder, with full right to deliver,
pledge, assign and transfer the Collateral to the Company as Collateral
hereunder.
(b) So long as any of the Liabilities remain outstanding, the Trust
will, unless the Company shall otherwise consent in writing:
(i) promptly deliver to the Company from time to time
certificates representing Pledged Shares as the Trustee acquires them
and, upon request of the Company, such stock powers and other
documents, satisfactory in form and substance to the Company, with
respect to the Collateral as the Company may reasonably request to
preserve and protect, and to enable the Company to enforce, its rights
and remedies hereunder;
(ii) not create or suffer to exist any lien, security interest or
other charge or encumbrance against, in or with respect to any of the
Collateral except for the pledge hereunder and the security interest
created hereby;
(iii) not make or consent to any amendment or other modification
or waiver with respect to any of the Collateral or enter into any
agreement or permit to exist any restriction with respect to any of
the Collateral other than pursuant hereto; and
(iv) not take or fail to take any action which would in any
manner impair the value or enforceability of the Company's security
interest in any of the Collateral.
Section 3. Care of Collateral. The Company shall be deemed to have
exercised reasonable care with respect to the interest of the Trust in the
custody and preservation of the Collateral if it takes such action for that
purpose as the Trust shall request in writing or as it would with respect to
similar assets of its own, but failure of the Company to comply with any such
request shall not of itself be deemed a failure to exercise reasonable care.
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Section 4. Certain Rights Regarding Collateral and Liabilities.
(a) The Company may from time to time, whether before or after any of
the Liabilities shall become due and payable, without notice to the Trust,
to the extent otherwise permitted (i) retain or obtain a security interest
in the Collateral, to secure payment and performance of any of the
Liabilities, (ii) retain or obtain the primary or secondary liability of
any party or parties, in addition to the Trust, with respect to any of the
Liabilities, (iii) extend or renew for any period (whether or not longer
than the original period) or exchange any of the Liabilities or release or
compromise any obligation of any nature of any party with respect thereto,
and (iv) surrender, release or exchange all or any part of any property, in
addition to the Collateral, securing payment and performance of any of the
Liabilities, or compromise or extend or renew for any period (whether or
not longer than the original period) any obligations of any nature of any
party with respect to any such property.
(b) The Company shall have no right to vote the Pledged Shares prior
to the occurrence of an Event of Default (hereinafter in Section 6(a)
hereof defined). After the occurrence of an Event of Default, the Trust
shall have the right to vote any and all of the Pledged Shares in
accordance with the Plan unless and until it receives notice from the
Company that such right has been terminated with respect to shares subject
to execution as a result of the Default.
Section 5. Dividends, etc.
(a) So long as no Default or Event of Default, shall have occurred and
be continuing, the Trust shall be entitled to receive any and all cash
dividends on the Pledged Shares which it is otherwise entitled to receive,
and to vote the Pledged Shares in accordance with the terms of the Plan and
to give consents, waivers and ratifications in respect of the Pledged
Shares, but any and all stock and/or liquidating dividends, distributions
in property, returns of capital or other distributions made on or in
respect of the Pledged Shares, whether resulting from a subdivision,
combination or reclassification of the outstanding capital stock of any
issuer thereof or received in exchange for the Pledged Shares or any part
thereof or as a result of any merger, consolidation, acquisition or other
exchange of assets to which any issuer may be a party or otherwise, and any
and all cash and other property received in exchange for any Collateral
shall be, and become part of the Collateral pledged hereunder and, if
received by the Trust, shall forthwith be delivered to the Company or its
designated nominee (accompanied, if appropriate, by proper instruments of
assignment and/or stock powers executed by the Trust in accordance with the
Company's instructions) to be held subject to the terms of this Agreement
and the Plan.
(b) Upon the occurrence and during the continuance of an Event of
Default, subject to the terms of Section 4(b) hereof, all rights of the
Trust pursuant to Section 5(a) hereof shall cease and the Company shall
have the sole and exclusive right and authority to receive and retain the
dividends which the Trust would otherwise be authorized to retain and, to
the extent permitted by law, to vote and give consents, waivers and
ratifications pursuant to Section 5(a) hereof. Any and all money and other
property paid over to or received by the Company pursuant to the provisions
of this paragraph (b) shall be retained by the Company as additional
Collateral hereunder and be applied in accordance with the provisions
hereof.
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Section 6. Event of Default.
(a) The occurrence of any of the following shall constitute an Event
of Default hereunder: nonpayment, when due, whether by acceleration or
otherwise, of any amount payable on any of the Liabilities; an Event of
Default as defined in the Loan Agreement; any representation or warranty of
the Trust contained herein or given pursuant hereto being untrue in any
material respect; or the Trust's failure to perform any covenant or
agreement contained herein.
(b) Upon the occurrence of an Event of Default, (i) the Company may
exercise from time to time any rights and remedies available to it under
the Uniform Commercial Code as in effect from time to time in Indiana or
otherwise available to it, including, but not limited to, sale, assignment,
or other disposal of the Pledged Shares in exchange for cash or credit, and
(ii) the Company may, without demand or notice of any kind, but subject to
Section 7, appropriate and apply toward the payment of such of the
Liabilities, and in such order of application, as the Company may from time
to time elect, any balances, credits, deposits, accounts or moneys of the
Trust. If any notification of intended disposition of any of the Collateral
is required by law, such notification, if mailed, shall be deemed
reasonably and properly given if mailed at least five (5) days before such
disposition, postage prepaid, addressed to the Trust, either at the address
of the Trust shown below, or at any other address of the Trust appearing on
the records of the Company. Any proceeds of any disposition of Collateral
shall be applied as provided in Section 7 hereof. All rights and remedies
of the Company expressed hereunder are in addition to all other rights and
remedies possessed by it, including those under any other agreement or
instrument relating to any of the Liabilities or security therefor. No
delay on the part of the Company in the exercise of any right or remedy
shall operate as a waiver thereof, and no single or partial exercise by the
Company of any right or remedy shall preclude other or further exercise
thereof or the exercise of any other right or remedy. No action of the
Company permitted hereunder shall impair or affect the rights of the
Company in and to the Collateral.
(c) The Trust agrees that in any sale of any of the Collateral
whenever an Event of Default hereunder shall have occurred and be
continuing, the Company is hereby authorized to comply with any limitation
or restriction in connection with such sale as it may be advised by counsel
is necessary in order to avoid any violation of law (including, without
limitation, compliance with such procedures as may restrict the number of
prospective bidders and purchasers, require that such prospective bidders
and purchasers have certain qualification, and restrict such prospective
bidders and purchasers to persons who will represent and agree that they
are purchasing for their own account for investment and not with a view to
the distribution or resale of such Collateral), or in order to obtain any
required approval of the sale or of the purchaser by any governmental
regulatory authority or official, and the Trust further agrees that such
compliance shall not result in such sale being considered or deemed not to
have been made in a commercially reasonable manner, nor shall the Company
be liable nor accountable to the Trust for any discount allowed by the
reason of the fact that such Collateral is sold in compliance with any such
limitation or restriction.
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(d) Notwithstanding anything to the contrary herein or in the Trust
Note or the Loan Agreement contained or implied, if an Event of Default
occurs with respect to the Trust Loan by the Trust, the value of Trust
assets transferred in satisfaction thereof shall not exceed the amount of
such default. In addition, such a transfer of such Trust assets shall only
occur upon, and to the extent of the failure of, the Trust to meet the
payment schedule of the Trust Loan provided in Article II of the Loan
Agreement.
Section 7. Application of Proceeds of Sale or Cash Held as Collateral. The
proceeds of sale of Collateral sold pursuant to the terms of Section 6 hereof
and/or after an Event of Default, the cash held as Collateral hereunder, shall
be applied by the Company, to the extent permitted by applicable law, as
follows:
First: to payment of the costs and expenses of such sale,
including the out-of-pocket costs and expenses of the Company and the
reasonable fees and out-of-pocket costs and expenses of counsel
employed in connection therewith, and to the payment of all advances
made by the Company for the account of the Trust hereunder and the
payment of all costs and expenses incurred by the Company in
connection with the administration and enforcement of this Agreement,
to the extent that such advances, costs and expenses shall not have
been reimbursed to the Company;
Second: to the payment in full of the Liabilities; and
Third: the balance, if any, of such proceeds shall be paid to the
Trust, its successors and assigns, or as a court of competent
jurisdiction may direct.
Section 8. Authority of Company. The Company shall have and be entitled to
exercise all such powers hereunder as are specifically delegated to the Company
by the terms hereof, together with such powers as are incidental thereto. The
Company may execute any of its duties hereunder by or through agents or
employees and shall be entitled to retain counsel and to act in reliance upon
the advice of such counsel concerning all matters pertaining to its duties
hereunder. Neither the Company, nor any director, officer or employee of the
Company, shall be liable for any action taken or omitted to be taken by it or
them hereunder or in connection herewith, except for its or their own gross
negligence or willful misconduct. The Trust hereby agrees, to the extent
permitted by applicable law, to reimburse the Company, on demand, for all costs
and expenses incurred by the Company in connection with the enforcement of this
Agreement (including costs and expenses incurred by any agent employed by the
Company).
Section 9. Termination. This Agreement shall terminate when all the
Liabilities have been fully paid and performed, at which time the Company shall
reassign and redeliver (or cause to be reassigned and redelivered) to the Trust,
or to such person or persons as the Trust shall designate, against receipt, such
of the Collateral (if any) as shall not have been theretofore released, sold or
otherwise applied by the Company pursuant to the terms hereof and shall still be
held by it hereunder, together with any appropriate instruments of reassignment
and release. Any such reassignment shall be without recourse upon, or
representation or warranty by, the Company.
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Section 10. Required Release of Collateral. Notwithstanding any provision
of this Agreement or the Loan Agreement to the contrary, the Company from time
to time will release from the pledge and security interest under the Loan
Agreement, such Collateral as must be allocated to participants under the Plan
pursuant to Section 8.7(h) of the Plan and otherwise under the Code, the Exempt
Loan Rules or other applicable law.
Section 11. Limited Recourse. Notwithstanding anything to the contrary
herein or in the Trust Note, the Loan Agreement or any other instrument,
agreement or document contained or implied, the Liabilities shall be enforceable
to the extent permitted under applicable law, including, without limitation, the
Exempt Loan Rules, only against the Trust to the extent of the Collateral not
theretofore released from the pledge and security interest under this Agreement
as provided herein and contributions (other than contributions of employer
securities) made to the Trust in accordance with the Plan to enable the Trust to
pay and satisfy the Liabilities and from earnings attributable to the Shares and
the investment of such contributions (collectively, the "`Trust Loan
Collateral"). No recourse shall be had to or against the Trust or the assets
thereof (other than the Trust Loan Collateral) for any deficiency judgment
against the Trust for the purpose of obtaining payment or other satisfaction of
the Liabilities. Without limiting the foregoing, the Trustee of the Trust shall
have no personal liability for any of the Liabilities, other than as required by
or arising under applicable law.
Section 12. Notices. All communications and notices hereunder shall be in
writing and, if mailed, shall be deemed to be given when sent by registered or
certified mail, postage prepaid, return receipt requested, or by telecopier,
duly confirmed, and addressed to such party at the address indicated below or to
such other address as such party may designate in writing pursuant to this
Section 12.
THIRD CENTURY BANCORP
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Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, President
HOMEFEDERAL BANK
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Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Section 13. Binding Agreement Assignment. This Agreement, and the terms,
covenants and conditions hereof, shall be binding upon and inure to the benefit
of the parties hereto, and their respective successors and assigns, except the
Trust shall not be permitted to assign this Agreement or any interest herein or
in the Collateral, or any part thereof, or otherwise grant any option with
respect to the Collateral, or any part thereof and the Company shall not assign
any interest herein or in the Collateral unless such assignment is expressly
made subject to the terms of the Loan Documents.
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Section 14. Miscellaneous Provisions. Neither this Agreement nor any
provision hereof may be amended, modified, waived, discharged or terminated nor
may any of the Collateral be released or the pledge or the security interest
created hereby extended, except by an instrument in writing duly signed by or on
behalf of the Company hereunder. The section headings used herein are for
convenience of reference only and shall not define or limit the provisions of
this Agreement. This Agreement may be executed in any number of counterparts and
by the different parties on separate counterparts and each such counterpart
shall be deemed to be an original, but all such counterparts shall together
constitute but one and the same Agreement.
Section 15. Governing Law; Interpretation. This Agreement has been made and
delivered at Franklin, Indiana, and, except to the extent preempted by ERISA,
shall be governed by the internal laws of the State of Indiana, without regard
to principles of conflict of laws. Wherever possible each provision of this
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement shall be prohibited by or
invalid under such law, such provision shall be ineffective to the extent of
such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Agreement.
Section 16. Filing as a Financing Statement. At the option of the Company,
this Agreement, or a carbon, photographic or other reproduction of this
Agreement or of any Uniform Commercial Code financing statement covering the
Collateral or any portion thereof shall be sufficient as a Uniform Commercial
Code financing statement and may be filed as such.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective representatives thereunto duly authorized as
of the date first above written.
TRUST UNDER THE THIRD CENTURY
BANCORP EMPLOYEE STOCK OWNERSHIP
PLAN AND TRUST AGREEMENT
By: HomeFederal Bank, Trustee
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Printed: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Its: Vice President & Senior Trust Officer
THIRD CENTURY BANCORP
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Printed: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Its: President and Chief Executive Officer
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