FIRST AMENDMENT TO
LOAN DOCUMENTS
THE FIRST AMENDMENT TO LOAN DOCUMENTS (the "First
Amendment") is entered into this 23rd day of September 23, 1997,
by and between INDIANA UNITED BANCORP, an Indiana corporation,
having its principal office at 201 N. Broadway, Greensburg,
Indiana 47240 ("Borrower") and NATIONAL CITY BANK OF INDIANA, a
national banking association f/k/a Merchants National Bank &
Trust Company of Indianapolis, having its principal offices at
101 W. Washington Street, Indianapolis, Indiana 46255 ("Bank");
and
WITNESSETH:
WHEREAS, Borrower and Bank entered into a Loan Agreement,
dated December 31, 1991 (the "Loan Agreement") under which Bank
extended a $14,500,000 secured credit to Borrower which was
refinanced under a $11,200,000 secured term loan evidenced by a
Business Promissory Note, dated January 2, 1992 (the "Prior
Note") and which is secured pursuant to the terms of a Pledge
Agreement, dated December 31, 1991, from Borrower to Bank (the
"Pledge Agreement" and collectively with the Loan Agreement,
Prior Note and all related writings, the "Loan Documents"); and
WHEREAS, Borrower desires that Bank refinance the principal
balance of the Prior Note under a five (5) year secured term
loan; and
WHEREAS, Bank is willing to provide such financing subject
to the terms and conditions of the Loan Documents as modified by
this First Amendment.
NOW, THEREFORE, in consideration of these premises, the
Borrower and Bank hereby agree to amend the Loan Documents as
follows:
1. Unless otherwise defined hereunder shall have the
meanings set forth under the Loan Documents.
2. All references under the Loan Documents to "Merchants"
shall be amended to read "Bank" now meaning National City Bank of
Indiana which is the legal successor in interest to Merchants
National Bank & Trust Company of Indianapolis.
3. The definition of "Union Bank" in Section 1(j) on page
4 of the Loan Agreement shall be deleted in its entirety and the
following substituted therefore:
"(j) "Union Bank" shall mean Union Bank and Trust
Company of Indiana f/k/a Union Bank and Trust Company
of Greensburg."
4. The definition of "Base Rate" in Section 1(a) on page 2
of the Loan Agreement shall be deleted in its entirety and the
following definition of "Prime Rate" substituted therefore, and
all references in the Loan Agreement to "Base Rate" shall be
amended to read "Prime Rate".
"(a) "Prime Rate" shall mean the fluctuating rate of
interest which is publicly announced from time to time
by Bank at its principal place of business as being its
"prime rate" or "base rate" thereafter in effect, with
each change in the Prime Rate automatically,
immediately and without notice changing the fluctuating
interest rate thereafter applicable hereunder, it being
agreed that the Prime Rate is not necessarily the
lowest rate of interest then available from Bank on
fluctuating rate loans."
5. The following two (2) definitions shall be added to
Section 1 of the Loan Agreement on page 4 as new subparagraphs
(n) and (o).
"(n) "LIBOR" shall mean the rate per annum (rounded
upwards, if necessary, to the next higher 1/16 of 1%)
determined by Bank by dividing (a) the rate per annum
determined by Bank to equal the average rate per annum
at which deposits (denominated in United States
dollars) in the applicable amount and with a maturity
similar to the applicable interest period that is
offered to Bank at 11:00 A.M. London time (or as soon
thereafter as practicable) two (2) Eurodollar Banking
Days prior to the first day of the applicable interest
period by banking institutions in any Eurodollar market
selected by Bank by (b) the difference of one (1) less
the Reserve Percentage.
(o) "Reserve Percentage" shall mean the percentage
(expressed as a decimal) which Bank determines to be
the maximum (but in any case less than 1.00) reserve
requirement (including, without limitation, any
emergency, marginal, special, or supplemental reserve
requirement) prescribed for so-called "Eurocurrency
liabilities" (or any other category of liabilities that
includes deposits by reference to which the interest
rate applicable to advances bearing interest based upon
LIBOR is determined) under Regulation D (as amended
from time to time) of the Board of Governors of the
Federal Reserve System or under any successor
regulation which Bank determines to be applicable, with
each change in such maximum reserve requirement
automatically, immediately, and without notice changing
the interest rate thereafter applicable to each advance
bearing interest based upon LIBOR, it being agreed that
LIBOR advances shall be deemed Eurocurrency liabilities
subject to such reserve requirements without the
benefit of any credit for proration, exceptions, or
offsets."
6. Sections 2 and 3 on pages 5-7 of the Loan Agreement
shall be deleted in their entirety together with Exhibits "A" and
"B" to the Loan Agreement, and the following new Section 2 and
Exhibit "A" shall be substituted therefore.
"2. Term Loan. Bank shall, subject to the terms and
conditions of this Agreement, grant a five (5) year
term loan (the "Loan") to Borrower in the principal
amount of Four Million Six Hundred Twenty-Five Thousand
and No/100 Dollars ($4,625,000.00) which shall be used
to refinance the principal balance of the Prior Note.
The Loan shall bear interest at a fluctuating rate per
annum (based upon a 365-day year and actual days
elapsed) equal to one-quarter of one percent (0.25%)
below the Prime Rate. At Borrower's option, all or any
portion of the Loan (in a minimum amount of $500,000
and $100,000 increments thereafter), may bear interest
at a fixed rate per annum (based upon a 365-day year
and actual days elapsed) equal to one and one-half of
one percent (1.5%) above LIBOR, for one (1), two (2),
three (3), six (6) or twelve (12) month interest
periods. The Loan shall be repaid in semi-annual
payments of principal with the first installment,
commencing January 1, 1998, to be in the amount of One
Hundred Twenty-Five Thousand and No/100 Dollars
($125,000.00), and each installment thereafter to be in
the amount of Five Hundred Thousand and No/100 Dollars
($500,000.00), which shall continue to be due and
payable on the first (1st) day of every July and
January thereafter, until five (5) years from the date
of the First Amendment when the total outstanding
balance of any unpaid principal and interest shall be
finally due and payable. Interest shall be due and
payable quarterly commencing October 1, 1997 and
continuing to be due and payable on the first day of
every third (3rd) month thereafter. The Loan shall be
evidenced by a Commercial Note (the "Note") in the form
of Exhibit "A" attached hereto and made a part hereof.
The Note shall replace the Prior Note. The account
records of Bank shall be prima facie evidence of the
transactions between Bank and Borrower for the purposes
of the Loan. All references hereinafter to "Loan"
shall mean the Loan of this Section. Section 3 of this
Loan Agreement, as well as Exhibit "B" are
intentionally deleted."
7. In Section 8, subparagraphs (j) through (r) beginning
on page 30 of the Loan Agreement shall be deleted in their
entirety and the following subparagraphs shall be substituted
therefore.
"(j) Borrower shall maintain at all times its Primary
Capital at a level of no less than seven percent (7%)
of total assets or the minimum level required by
governing regulators, whichever is greater. This
covenant shall be tested quarterly or more often if
requested by Bank.
(k) Regional Savings and Union Bank shall respectively
maintain at all times their capital adequacy
requirements at a level which constitutes a "well
capitalized" status in accordance with the requirements
of governing regulators. This covenant shall be tested
quarterly or more often if requested by Bank.
(l) Borrower shall maintain at all times its ratio of
Underperforming Loans to Total Loans at no greater than
2.0:1. This ratio shall be tested quarterly or more
often if requested by Bank.
(m) Borrower shall maintain at all times a minimum
ratio of Loan Loss Reserves to Total Loans of no less
than 0.9:1. This ratio shall be tested quarterly or
more often if requested by Bank.
Subparagraphs 8(n) through 8(r) are intentionally
deleted."
8. Subsequent to the execution of the Loan Agreement,
Peoples Bank has been merged into Union Bank. Section 4(a) on
page 7 of the Loan Agreement shall be deleted and updated by
substituting the following paragraph:
"(a) One Hundred Seventy-Eight Thousand Seven Hundred
Ninety Three (178,793) shares of the common stock of
Union Bank (the "Union Stock") as evidenced by
Certificate #001, which constitutes 100% of the issued
and outstanding shares of the common stock of Union
Bank pursuant to the Pledge Agreement, dated December
31, 1991."
9. The Pledge Agreement shall also be hereby amended by:
(1) deleting in its entirety subparagraph "(2)" on page 1 of the
Pledge Agreement, which references Certificate #282 evidencing
Sixty-Four Thousand (64,000) shares of Peoples Bank stock and
leave this subparagraph "(2)" intentionally blank; and (2)
deleting in its entirety subparagraph "(1)" on page 1 of the
Pledge Agreement, which references Certificate #10 evidencing One
Hundred Fourteen Thousand Nine Hundred Seventy-Three (114,973)
shares of Union Bank and Trust Company of Greensburg, and
substitute the following paragraph:
"(a) One Hundred Seventy-Eight Thousand and Seven
Hundred Ninety-Three (178,793) shares of common stock
of Union Bank and Trust Company of Indiana which are
evidenced by Certificate #001;
All references to the "Note" under the Pledge Agreement
shall now refer to the Commercial Note, of even date with the
First Amendment, from Borrower to Bank, in the principal amount
of Four Million Six Hundred Twenty-Five Thousand and No/100
Dollars ($4,625,000.00), and all renewals, extensions, amendments
or replacements thereof, and shall be included within the meaning
of "Liabilities" under the Pledge Agreement.
10. All representations and warranties of the Loan
Agreement are hereby effectively rewarranted and all terms and
conditions which are not hereby amended shall continue to be
valid and in full force and effect.
THIS FIRST AMENDMENT is executed and agreed to by the Bank
and the Borrower, as of the date first written above, and shall
amend, become a part of and be attached to the Loan Agreement.
"BORROWER"
INDIANA UNITED BANCORP
By: /s/ Jay B. Fager
Jay B. Fager
Chief Financial Officer
"BANK"
NATIONAL CITY BANK OF INDIANA
f/k/a Merchants National Bank & Trust
Company of Indianapolis
By: /s/ Rafe L. Boldrick
Rafe L. Boldrick
Senior Vice President