Exhibit 10.0


 


FORBEARANCE AGREEMENT


 


THIS FORBEARANCE AGREEMENT (“Agreement”) is being entered into as of July 24,
2008, by and between PEOPLES COMMUNITY BANCORP, INC., a Maryland corporation (“Borrower”),
and INTEGRA BANK, N.A., a national banking association (“Bank”).


 


RECITALS


 


A.                                   Bank and Borrower
entered into a Revolving Credit Loan Agreement dated December 8, 2006, as
amended by the Amendment to Revolving Credit Loan Agreement dated December 5,
2007, (collectively, the “Loan Agreement”).


 


B.                                     The loan made to
Borrower pursuant to the terms of the Loan Agreement is evidenced by an Amended
and Restated Revolving Credit Note dated December 8, 2006, in the original
principal amount of Seventeen Million Five Hundred Thousand Dollars
($17,500,000), as amended by the Amendment to Revolving Credit Note dated as of
December 5, 2007 (collectively, the “Note”).


 


C.                                     Borrower failed to
pay the principal amount of the loan within ten (10) business days of the maturity date of June 30,
2008 and, accordingly, an “Event of Default” as defined in the Loan Agreement
exists and is continuing.


 


D.                                    The Note is secured
by the Stock Pledge Agreement dated as of December 8, 2006 (the “Pledge
Agreement”), pursuant to which Borrower has pledged 100% of the outstanding
common stock (the “Pledged Stock”) of its
banking subsidiary, Peoples Community Bank, a federal savings bank (“PCB”).


 


E.                                      Borrower has
developed a structured plan which contemplates the participation of certain
parties whose identities have been disclosed to Bank (the “Third Parties”) and
involves a series of transactions (collectively, the “Transaction”) which, when
implemented, will result in the repayment in full of the Indebtedness.


 


NOW,
THEREFORE, in consideration of the Recitals, the mutual covenants and agreements
contained herein and the acts to be performed hereunder, and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:


 


AGREEMENT


 


1.                                  Definitions. Unless otherwise specifically defined herein, capitalized
terms shall have the respective meanings ascribed to them in the Recitals or
the Loan Documents.


 


(a)                                  “Acceptable
Transaction Agreement” means a definitive agreement between Borrower and the
Third Parties with respect to the Transaction which (1) will provide for
either payment in full of the Indebtedness or a purchase of the Note for the full
amount of the Indebtedness at the earlier of the closing of the Transaction or
the end


 

















 


of the Forbearance Period and (2) has other terms and conditions
which Bank consents to (such consent not to be unreasonably withheld).


 


(b)                                 “Collection
Action” has the meaning set forth in Section 5 of this Agreement.


 


(c)                                  “Forbearance
Period” means: (1) the period that commences on the date of this Agreement
and ends thirty (30) days from the date hereof; provided, however, Bank may, in
its sole discretion, extend such initial 30-day period for an additional
fifteen (15) days; and (2) if prior to the end of the period contemplated
in clause (1), Borrower and the Third Parties enter into an Acceptable
Transaction Agreement, the Forbearance Period shall be extended and shall end
on the earliest of (i) the closing date under the Acceptable Transaction
Agreement, (ii) the occurrence of a Termination Event (as such term is
defined in Section 7 of this Agreement) or (iii) December 31,
2008. Upon the expiration of the Forbearance Period, Bank may initiate its
remedies under the Loan Documents.


 


(d)                                 “Forbearance
Rate” means the annual interest rate for a “Prime Rate Based Loan” as defined
in the Note plus three percent (3%).


 


(e)                                  “Indebtedness”
has the meaning set forth in Section 3 of this Agreement.


 


(f)                                    “Loan
Documents” means, collectively, the Loan Agreement, the Note, the Pledge
Agreement and any other agreements, documents or instruments evidencing,
governing or securing the Indebtedness, as hereinafter defined.


 


(g)                                 “Termination
Event” has the meaning set forth in Section 7 of this Agreement.


 


2.                                       Recitals. The Recitals are incorporated herein and made a part hereof.
Borrower acknowledges, represents and warrants that the Recitals are true and
correct.


 


3.                                       Acknowledgment of Existing Indebtedness. Borrower acknowledges that the Note
matured on June 30, 2008, and that Bank is entitled to exercise all of its
rights, powers and remedies provided for in the Loan Documents following
maturity. Borrower further acknowledges that as of June 30, 2008, Borrower
is indebted to Bank in the principal amount of $17,500,000.00. The foregoing
amount, together with interest accruing at the Forbearance Rate commencing July 1,
2008 until payment in full and all other obligations owed by Borrower to Bank
under the Loan Documents, this Agreement, or otherwise, are collectively
referred to herein as the “Indebtedness.”


 


4.                                       Reaffirmation of Loan Documents-No Defenses. Borrower reaffirms all of its
obligations under the Loan Documents. The Loan Documents are valid, binding and
enforceable in accordance with their respective terms against Borrower, and
remain in full force and effect. Borrower acknowledges that it has no defenses,
set-offs, claims, counterclaims or causes of action of any kind or nature with
respect to any of the Loan Documents or the Indebtedness represented thereby.
The lien and security interest of Bank with respect to the Pledged Stock is
valid and in full force and effect, and is prior to any other liens and
security interests granted to


 


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or obtained by third parties on such asset. Bank is entitled under the
terms of the Loan Documents to exercise all voting and consensual rights and
powers of the Pledged Shares and to receive and retain all dividends on the
Pledged Shares without advance notice to Borrower or any other party of any
such action. The Loan Documents remain in full force and effect and nothing
contained herein shall be deemed to be a waiver by Bank of any provision
contained in the Loan Documents. This Agreement does not supersede the Loan
Documents; however, in the event of any conflict between this Agreement and the
Loan Documents, this Agreement shall control. Borrower acknowledges that the
Indebtedness is not impaired or cancelled by this Agreement and Borrower
remains obligated to pay the Indebtedness in full.


 


5.                                       Agreement to Forbear-Extent of Forbearance. Subject to complete and timely
compliance with the terms of this Agreement by Borrower, Bank agrees to (a) forbear
and refrain during the Forbearance Period from initiating or prosecuting any
action in any court to collect the Indebtedness, including without limitation
any action seeking the establishment of a receivership, trust, or similar
arrangement with respect to Borrower, business, or any portion of its assets,
petitioning as a creditor for the establishment of any case under the Bankruptcy
Code against Borrower or for any determination that Borrower is insolvent,
seeking prejudgment attachment of any of Borrower’s assets, or similar action,
or from exercising any non-judicial means of collecting the Indebtedness,
including without limitation any remedy available to Bank under the Uniform
Commercial Code as enacted in the applicable jurisdiction (referred to herein
as a “Collection Action”); and (b) refrain from exercising its vested
rights to vote and receive dividends on the Pledged Stock. “Collection Action”
does not include, and the forbearance provided in this Section 5 does not
extend to, any action which Bank may take to preserve, perfect, protect or
otherwise act with respect to the lien and security interest held by Bank with
respect to the Pledged Stock or from enforcing the provisions of this
Agreement.


 


6.                                       Borrower Covenants. To induce Bank to enter into this
Agreement, Borrower agrees to the following covenants:


 


(a)                                  Borrower
agrees to pay Bank interest at the Forbearance Rate on the Indebtedness
commencing July 1, 2008, payable as follows: (1) Borrower shall pay
Bank interest at the annual rate for a “Prime Rate Based Loan” on the
Indebtedness as defined in the Note monthly in arrears commencing August 1,
2008; and (2) Borrower shall pay the unpaid portion of all accrued
interest at the earlier of the closing of the Transaction or the end of the
Forbearance Period.


 


(b)                                 Borrower
shall pay Bank a forbearance fee equal to $175,000.00, which fee shall be fully
earned and nonrefundable upon execution of this Agreement and shall be payable
no later than the earlier of the termination of the Forbearance Period or the
closing of the Transaction.


 


(c)                                  Borrower
shall pay within five (5) days of receipt of an invoice from Bank upon
demand Bank’s reasonable attorney’s fees incurred by Bank in the negotiation
and preparation of this Agreement.


 


(d)                                 At
Bank’s request, Borrower shall execute and deliver or cause to be delivered to
Bank and/or file with the appropriate offices, such documents, instruments, agreements, financing statements, amendments
and/or other things deemed necessary by


 


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Bank, in its sole discretion, to implement the substance and intent of
this Agreement, the Loan Documents, and the other documents executed in
connection herewith or therewith.


 


(e)                                  Borrower
shall provide Bank and its advisors with reasonable access to all financial
books, records and files (whether such information is stored on any computer or
disk) to, among other things, verify the results of operations, loans and the
loan loss reserves. Reasonable fees and expenses incurred by Bank in connection
with the foregoing shall be paid or reimbursed by Borrower.


 


(f)                                    Borrower
shall continue to provide Bank all information required to be reported to Bank
under the Loan Documents and, in addition, on the 15th day of each month (each such day, a “Reporting
Date”), Borrower shall provide to Bank:


 


(1)                                  projected
cash flows of Borrower and PCB for the following month;


 


(2)                                  a
report on the status of and any developments concerning the Transaction; and


 


(3)                                  a
report on Borrower’s progress with respect to generating cash sufficient to
repay the Indebtedness in full before or concurrently with consummation of the
Transaction.


 


(g)                                 Neither
Borrower nor PCB shall become an obligor or guarantor with respect to any
indebtedness owed to any person other than the Bank. Further, neither Borrower
nor PCB shall pledge any of its respective assets to any person other than Bank
or allow, voluntarily or involuntarily, any liens or security interests to
attach to any of its respective assets other than liens and security interests
in favor of Bank.


 


(h)                                 Borrower
shall promptly notify Bank of the commencement of any litigation, including the
commencement of an involuntary case under Chapters 7 or 11 of the United States
Bankruptcy Code, as amended, 11 U.S.C. 101 et seq. (the “Bankruptcy Code”)
against Borrower.


 


7.                                       Termination
Events. As used in this Agreement, the term “Termination Event” shall mean
the earliest of any of the following events to occur:


 


(a)                                  Borrower
fails to pay the Indebtedness, including interest, as provided herein or
Borrower or PCB default in the payment of any other debt or obligation which
exceeds $100,000.


 


(b)                                 Borrower
fails to perform any covenants, obligations, or agreements contained in this
Agreement and the Loan Documents which failure would affect the timely
repayment of the Indebtedness in full or Borrower or PCB fails to perform any
covenant, obligation or agreement with respect to any other debt or obligation
which exceeds $100,000.


 


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(c)                                  The
Acceptable Transaction Agreement is modified in any material respect which
would affect the timely repayment of the Indebtedness in full or is terminated.


 


(d)                                 Borrower
becomes the subject of a voluntary or involuntary case under the Bankruptcy
Code or shall become the subject of an order for relief under the Bankruptcy
Code.


 


(e)                                  Any
representation or warranty of Borrower contained in this Agreement is or
becomes untrue or inaccurate in any material respect.


 


(f)                                    A
receiver is appointed with respect to any of the assets or properties of
Borrower, including the Pledged Stock.


 


(g)                                 A
creditor of Borrower takes any action to enforce by repossession, foreclosure,
or other legal proceeding, any lien or security interest against any asset of
Borrower, including the Pledged Stock, or to collect any indebtedness secured
by any of the collateral.


 


(h)                                 A
sale, transfer, conveyance or other disposition of the Pledged Stock is
attempted or purported to have been made without the prior written consent of
Bank.


 


(i)                                     An
action, litigation or proceeding is brought against Borrower in any court or
before or by any agency or regulatory body which could materially and adversely
affect the financial condition of Borrower, or which results in a final,
non-appealable judgment against Borrower not covered by insurance in an amount
in excess of $50,000.


 


(j)                                     Any
term or provision of this Agreement or any of the Loan Documents is disputed
by, on behalf of, or in the right or name of, Borrower or any material term or
provision of this Agreement or any of the Loan Documents is found or declared
to be invalid, avoidable, or unenforceable by any court of competent
jurisdiction.


 


(k)                                  A
material adverse change occurs in the financial condition or credit-worthiness
of Borrower or with respect to the Pledged Stock, with such determination to be
made by Bank in its sole and absolute discretion, including, but not limited
to, any change or potential change that occurs or which could occur in Borrower’s
financial condition or assets as a result of any action taken by, or on behalf
of, any creditor or group of creditors of Borrower.


 


(1)                                  The
Transaction is not submitted to a vote of the shareholders of Borrower on or
before November 15, 2008 or is not approved by the shareholders of
Borrower or applicable regulatory agencies on or before December 10, 2008.


 


(m)                               The
Third Parties announce that they do not intend to complete the Transaction or
withdraw any regulatory application relating thereto.


 


(n)                                 Either
Borrower or PCB fails to perform their obligations under the Cease and Desist
Orders issued by the Office of Thrift Supervision dated April 2, 2008, or
the Office of Thrift Supervision or any
other banking regulatory authority initiates any


 


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additional enforcement actions against Borrower or PCB which failure or
additional enforcement action would affect the timely repayment of the
Indebtedness in full.


 


8.                                       Further
Agreements/No Course of Dealing Established/ No Further Obligation To Extend
Credit. Borrower hereby acknowledges and agrees that:


 


(a)                                  Except
as herein provided, this Agreement does not constitute, and no agreement,
compromise or settlement of any kind has been reached between Bank and Borrower
regarding a reinstatement, restructuring or modification of the Indebtedness or
any portion thereof or of any of the Loan Documents, and no such agreement
shall exist or be deemed to exist unless and until all parties thereto execute
and deliver complete documentation setting forth the terms of any such
reinstatement, restructuring or modification;


 


(b)                                 Bank
is not obligated to reach any further agreement concerning the reinstatement,
restructure or modification of the Indebtedness or any of the Loan Documents;


 


(c)                                  Neither
this Agreement, nor any action taken or forbearance by Bank pursuant to this
Agreement, shall impair, prejudice, or in any other manner affect the rights of
Bank in and to any of the collateral (including, without limitation, any
proceeds thereof) or establish or be deemed to establish any precedent or
course of dealing with respect to any of the Indebtedness or collateral;


 


(d)                                 Neither
this Agreement, nor any action taken or forbearance pursuant to this Agreement,
shall constitute or be deemed to be a waiver by Bank of any default under the
Loan Documents or any rights or
remedies of Bank has with respect thereto and Bank has reserved and continues
to expressly reserve and shall retain all rights, claims, remedies, actions and
causes of action in connection with and with respect to the Indebtedness, the
Loan Documents, and the Pledged Stock, or arising out of any action or failure
to act by Borrower either before or after execution of this Agreement;


 


(e)                                  BORROWER
HEREBY ACKNOWLEDGES AND AGREES THAT BANK HAS MADE NO COMMITMENT, EXPRESS OR
IMPLIED, TO MAKE ANY LOANS TO EXTEND FURTHER CREDIT TO BORROWER AND HAS NO
OBLIGATION TO ENTER INTO ANY FURTHER AGREEMENTS, INCLUDING ANY AGREEMENTS TO
EXTEND THE TERM OF THE FORBEARANCE PERIOD;


 


(f)                                    The
execution, delivery and performance of this Agreement by Borrower has been duly
authorized by all necessary corporate action; and


 


(g)                                 The
execution and delivery of this Agreement by Bank and its performance under or
pursuant to this Agreement contemplated hereby, does not and shall not create,
result in, or provide Borrower with any defense, setoff, claim, counterclaim,
or cause of action of any nature whatsoever with respect to the Indebtedness or
any of the Loan Documents, or, except for the express obligation to forbear
evidenced by this Agreement, impair, prejudice, waive, extinguish, or in any


 


6

















 


other manner affect, directly or indirectly, the rights of Bank under
any of the Loan Documents or with respect to the Pledged Stock.


 


9.                                       Release of
Bank. For value received, the receipt and sufficiency of which are hereby
acknowledged, Borrower, for itself and its respective directors, officers,
shareholders, parents, subsidiaries or affiliates, employees, agents,
attorneys, representatives, successors, assigns, heirs, and personal
representatives, hereby release and forever discharge Bank, and its respective
directors, officers, shareholders, parents, subsidiaries, affiliates,
employees, agents, attorneys, representatives, successors and assigns, of and
from any and all actions, claims, causes of action, suits, proceedings,
demands, damages, costs, expenses and liabilities of any kind or nature
whatsoever, whether known or unknown, against any and all of them arising from,
relating to or involving in any way, directly or indirectly, any act,
statement, omission or conduct by the released parties relating to any
transaction or event occurring prior to the date of this Agreement. The
foregoing release shall not be construed as or deemed an acknowledgment or
admission on the part of Bank or any other released party of any liability to
Borrower or its related parties or as precedent on which any such liability may
be assessed.


 


10.                                 Notices. Any
notices to be given pursuant to this Agreement shall be deemed adequate when
transmitted by U.S. mail or telephone facsimile to:


 


	
   Borrower at:

  	
   

  	
  Bank at:

  
	
   

  	
   

  	
   

  
	
   Peoples Community Bancorp, Inc. 

  	
   

  	
  Integra Bank, N.A.

  
	
   6100 West Chester Road

  	
   

  	
  21 S.E. Third Street

  
	
   P.O. Box 1130

  	
   

  	
  P.O. Box 868

  
	
   West Chester, OH 45071-1130 

  	
   

  	
  Evansville, IN 47705-0868

  
	
   Attention: Jerry D. Williams

  	
   

  	
  Attention: Martin M. Zorn

  
	
   

  	
   

  	
   

  
	
   With a copy to:

  	
   

  	
  With a copy to:

  
	
   

  	
   

  	
   

  
	
   Peoples Community Bancorp, Inc. 

  	
   

  	
  Baker & Daniels LLP

  
	
   6100 West Chester Road

  	
   

  	
  600 East 96th Street, Suite 600

  
	
   P.O. Box 1130

  	
   

  	
  Indianapolis, IN 46240

  
	
   West Chester, OH 45071-1130 

  	
   

  	
  Attention: David C. Worrell

  
	
   Attention: Fred L. Darlington

  	
   

  	
   

  



 


11.                                      Costs and
Expenses. Borrower shall reimburse Bank upon demand for all out of pocket
costs and expenses of the Bank (including reasonable attorney fees and legal
expenses) incurred by Bank enforcing the terms of this Agreement.


 


12.                                      Survival/No
Third Party Beneficiaries.                             All
of the acknowledgments, representations, warranties, covenants and agreements
of Borrower shall survive and continue in full force and effect notwithstanding
the expiration of the Forbearance Period or the occurrence of a Termination
Event. The covenants, terms, provisions and agreements in this Agreement shall
be binding upon, and inure to the benefit of, the parties hereto and their
respective estates, successors, and assigns. There are no third party
beneficiaries of or to this Agreement.


 


13.                                      Bank’s Right
to Partially Enforce Agreements. No delay on the part of Bank in the exercise of any right or remedy hereunder
or under any of the Loan Documents shall operate


 


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as a waiver. No single or partial exercise by Bank of any right or
remedy hereunder or under any of the Loan Documents shall preclude any other
right or remedy. No waiver or indulgence by Bank of any default remedy
hereunder or under any of the Loan Documents shall be effective unless in
writing and signed by Bank, nor shall a waiver of any default on one occasion
be construed as a waiver of that default on any future occasion.


 


14.                                 Choice of Law. Notwithstanding
the choice of law provisions in the Loan Documents, this Agreement shall be
governed by and construed in accordance with the internal laws of the State of
Indiana, without reference to any choice or conflict of laws provisions
thereof.


 


15.                                 Counterparts.
This Agreement may be executed in any number of counterparts and by different
parties hereto in separate counterparts, each of which when so executed and
delivered shall be deemed an original, and all of which taken together shall
constitute one and the same instrument.


 


16.                               CONSENT TO JURISDICTION. BORROWER HEREBY AGREES THAT
ALL ACTIONS OR PROCEEDINGS INITIATED BY OR AGAINST BORROWER AND ARISING
DIRECTLY OR INDIRECTLY OUT OF THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS
SHALL BE LITIGATED IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN
DISTRICT OF INDIANA, EVANSVILLE DIVISION. Borrower hereby expressly
submits and consents in advance to such jurisdiction in any action or
proceeding commenced by Bank in any of such courts, and hereby waive personal
service of the summons and complaint, or other process or papers issued
therein, and agree that service of such summons and complaint or other process
or papers may be made by registered or certified
mail addressed to such parties at the address to which notices are to be sent
pursuant to this Agreement. BORROWER WAIVES ANY CLAIM THAT EITHER COURT IS AN
INCONVENIENT FORUM OR AN IMPROPER FORUM BASED ON LACK OF VENUE. The
exclusive choice of forum for Borrower set forth in this section shall not be
deemed to preclude Bank’s enforcement of any judgment obtained in any other forum
or any action by Bank to enforce the same in any other appropriate
jurisdiction, and Borrower hereby waives the right, if any, to collaterally
attack any such judgment or action.


 


17.                                 Waiver
Of Jury Trial. Bank and Borrower acknowledge and agree that any controversy which may arise under this
Agreement or the other Loan Documents or with respect to the
transactions contemplated herein and therein would be based upon difficult and complex issues. THEREFORE, THE PARTIES AGREE
THAT ANY COURT PROCEEDING ARISING OUT OF ANY SUCH CONTROVERSY WILL BE TRIED IN
A COURT OF COMPETENT JURISDICTION BY A JUDGE SITTING WITHOUT A JURY.


 


18.                                 Supremacy. If
any provision in this Agreement shall conflict with any term or condition set
forth in the Loan Documents, the provision of this Agreement shall supersede
and control the matter.


 


19.                                 Severability.
If any provision of this Agreement shall be invalid, illegal or otherwise
unenforceable, such provision shall be severable from the remainder of this
Agreement, and the validity, legality and enforceability of the remaining
provisions shall not be adversely affected or impaired thereby and shall remain in full force and effect.


 


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20.                                 Miscellaneous.
Each party hereto acknowledges that such party has read this Agreement,
understands it, and agrees to be bound by its terms. The parties further
acknowledge they have each had the opportunity to consult legal counsel. The
parties further acknowledge this Agreement is the complete and final agreement
between them, that it includes all understandings between them, and that it
supersedes any other conflicting contracts or agreements between them relating
to the subject of the Agreement. This Agreement may not be modified or amended
except in writing signed by the parties. Borrower acknowledges that the
relationship between Borrower and Bank is strictly that of “debtor/creditor”,
and that this Agreement shall not be construed as creating a partnership, joint
venture or co-venture between them. Borrower acknowledges and agrees that Bank
is not a fiduciary with respect to them, or the shareholders or creditors of
Borrower.


 


[Signature page follows]


 


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IN
WITNESS WHEREOF, the parties have executed this Agreement as of the date
written above.


 


	
  PEOPLES
  COMMUNITY BANCORP, INC.

  	
  INTEGRA
  BANK, N.A.

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/
  Jerry D. Williams

  	
   

  	
  By:

  	
  /s/
  Raymond D. Beck, EVP

  
	
   

  	
  Jerry
  D. Williams, President

  	
   

  	
   

  	
  Raymond
  D. Beck, EVP