EXHIBIT 2.1
AGREEMENT AND PLAN OF MERGER
by and among
METROBANCORP, INC. and METROBANK
and
FIRST INDIANA CORPORATION,
FIC ACQUISITION CORP.
and
FIRST INDIANA BANK, NATIONAL ASSOCIATION
September 4, 2002
TABLE OF CONTENTS
SECTION 1 THE MERGERS.........................................................2
1.01. The Company Merger..........................................2
1.02. The Bank Merger.............................................3
1.03. Reservation of Right to Revise Structure....................3
SECTION 2 CONSIDERATION.......................................................4
2.01. Consideration...............................................4
2.02. Rights as Shareholders; Stock Transfers.....................4
2.03. Distribution of Cash........................................5
SECTION 3 DISSENTING SHAREHOLDERS.............................................5
SECTION 4 REPRESENTATIONS AND WARRANTIES OF MBC...............................6
4.01. Organization and Authority..................................7
4.02. Authorization...............................................7
4.03. Capitalization..............................................8
4.04. Organizational Documents...................................10
4.05. Compliance with Law........................................10
4.06. Litigation and Pending Proceedings.........................11
4.07. Financial Statements and Reports...........................11
4.08. Properties, Contracts, Employees and Other Agreements......12
4.09. Absence of Undisclosed Liabilities.........................13
4.10. Title to Assets............................................14
i
4.11. Employee Benefit Plans.....................................14
4.12. Labor Matters..............................................16
4.13. Environmental Matters......................................17
4.14. Tax Matters................................................17
4.15. Risk Management............................................18
4.16. Books and Records..........................................18
4.17. Loans. ..................................................18
4.18. Shareholder Rights Plan....................................19
4.19. Deposit Insurance..........................................19
4.20. Insurance..................................................19
4.21. Broker's, Finder's or Other Fees...........................19
4.22. Interim Events.............................................19
4.23. Regulatory Filings.........................................20
4.24. Indemnification Agreements.................................20
4.25. Shareholder Approval.......................................20
4.26. CRA Rating.................................................21
4.27. Capital Requirements.......................................21
4.28. Representations and Warranties at the Effective Time.......21
4.29. Nonsurvival of Representations and Warranties..............21
SECTION 5 REPRESENTATIONS AND WARRANTIES OF FIC..............................21
5.01. Organization and Authority.................................22
5.02. Authorization..............................................22
5.03. Organizational Documents...................................23
5.04. Regulatory Filings.........................................23
ii
5.05. Litigation and Pending Proceedings.........................23
5.06. Shareholder Approval.......................................24
5.07. Broker's, Finder's or Other Fees...........................24
5.08. Employee Benefit Plans.....................................24
5.09. CRA Rating.................................................25
5.10. Pro Forma Capital Requirements.............................25
5.11. No Financing Contingencies.................................25
5.12. Representations and Warranties at the Effective Time.......25
5.13. Nonsurvival of Representations and Warranties..............25
SECTION 6 COVENANTS OF MBC AND THE BANK......................................25
6.01. Shareholder Approval.......................................25
6.02. Other Approvals and Actions................................26
6.03. Conduct of Business........................................26
6.04. Preservation of Business...................................29
6.05. Other Negotiations.........................................30
6.06. FIC Break-up Fee...........................................30
6.07. Press Releases.............................................31
6.08. Disclosure Schedule Update.................................31
6.09. Information, Access Thereto, Confidentiality...............31
6.10. Subsequent MBC Financial Statements........................33
6.11. Employee Benefits..........................................33
6.12. Disposition of MBC Thrift Plan.............................33
6.13. Group Health Plan..........................................34
6.14. Long Term Disability Plan..................................34
iii
6.15. Section 125 Plan...........................................34
6.16. MBC Group Life Plan........................................35
6.17. Termination of MBC SERP....................................35
6.18. Termination of MBC Target Benefit Plan.....................35
6.19. Termination of MBC Employee Equity Ownership Plan..........35
6.20. Termination of MBC Directors' Retirement Plan..............36
6.21. MBC Stock Option Plans.....................................36
6.22. Elimination of Gross-Up Obligations........................36
6.23. Employment Agreements......................................36
6.24. Change of Control Payments.................................37
6.25. Xxxxxxx Consulting Agreement...............................37
6.26. Severance Pay..............................................37
6.27. Disposition of Incentive Plan..............................38
6.28. Reports. 38
6.29. Adverse Actions............................................38
SECTION 7 COVENANTS OF FIC AND FIRST INDIANA.................................38
7.01. Approvals..................................................38
7.02. Employee Benefit Plans.....................................39
7.03. Press Releases.............................................40
7.04. Indemnification and D&O Insurance..........................40
7.05. Adverse Actions............................................41
7.06. Regulatory Capital.........................................41
7.07. Sole Shareholder Approval..................................41
iv
SECTION 8 CONDITIONS PRECEDENT TO THE MERGERS................................41
8.01. FIC. ..................................................41
8.02. MBC. ..................................................44
SECTION 9 TERMINATION OF MERGERS.............................................45
9.01. Manner of Termination......................................45
9.02. Effect of Termination......................................46
SECTION 10 CLOSING...........................................................47
10.01. Closing Date and Place.....................................47
10.02. Deliveries.................................................47
SECTION 11 MISCELLANEOUS.....................................................48
11.01. Binding Effect; Assignment.................................48
11.02. Waiver; Amendment..........................................48
11.03. Notices. 48
11.04. Headings...................................................49
11.05. Severability...............................................49
11.06. Counterparts...............................................49
11.07. Governing Law..............................................49
11.08. Entire Agreement...........................................50
11.09. Expenses...................................................50
11.10. Certain References.........................................50
v
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (the "Agreement") is made and entered
into, effective as of the 4th day of September, 2002, by and among MetroBanCorp,
Inc. ("MBC"), First Indiana Corporation ("FIC"), FIC Acquisition Corp. ("Merger
Sub"), MetroBank (the "Bank"), and First Indiana Bank, National Association
("First Indiana").
W I T N E S S E T H:
WHEREAS, MBC is an Indiana corporation registered as a bank holding
company under the federal Bank Holding Company Act of 1956, as amended (the "BHC
Act"), with its principal office located in Indianapolis, Xxxxxxxx County,
Indiana; and
WHEREAS, MBC is the sole owner, directly or indirectly, of all of the
outstanding capital stock of the Bank and MB Realty Corporation ("MB Realty")
(collectively, the "Subsidiaries"); and
WHEREAS, FIC is an Indiana corporation registered as a bank holding
company under the BHC Act which has elected to be a financial holding company
under the BHC Act, with its principal office located in Indianapolis, Xxxxxx
County, Indiana; and
WHEREAS, FIC is the sole owner, directly or indirectly, of all of the
outstanding capital stock of Merger Sub and First Indiana (collectively, the
"FIC Subsidiaries"); and
WHEREAS, MBC and FIC seek to affiliate through a corporate
reorganization whereby MBC will first merge with Merger Sub and will thereby
become a wholly-owned subsidiary of FIC; and MBC will then merge with and into
FIC, with FIC as the surviving entity; and the Bank will merge immediately
thereafter with and into First Indiana and will become a wholly-owned subsidiary
of FIC; and
WHEREAS, the Boards of Directors of the parties hereto have determined
that it is in the best interests of their respective corporations or banks and
the shareholders thereof to consummate the strategic business combinations
provided for herein and have approved this Agreement, authorized its execution
and designated this Agreement a plan of merger.
NOW, THEREFORE, in consideration of the foregoing premises, the
representations, warranties, covenants and agreements herein contained and other
good and valuable consideration, the sufficiency of which is hereby
acknowledged, the parties hereby make this Agreement and prescribe the terms and
conditions of the merger of MBC with the Merger Sub, the merger of MBC with and
into FIC and the Bank with and into First Indiana and the mode of carrying such
mergers into effect as follows:
1
SECTION 1
THE MERGERS
1.01. The Company Merger.
(a) General Description. Upon the terms and subject to the conditions of
this Agreement, at the Effective Time (as defined in Section 1.01(b) hereof),
(i) Merger Sub shall merge with and into MBC, with MBC as the surviving entity
thereby becoming a wholly-owned subsidiary of FIC; and (ii) MBC will then merge
with and into and under the Articles of Incorporation of FIC (such mergers,
collectively, the "Company Merger"). The Company Merger is subject to the Bank
Merger (as defined in Section 1.02 hereof) occurring immediately after the
Company Merger, and if the Bank Merger will not close immediately thereafter,
the Company Merger shall not occur. FIC (sometimes hereinafter referred to as
the "Surviving Corporation") shall survive the Company Merger and shall continue
its corporate existence under the laws of the State of Indiana pursuant to the
provisions of and with the effect provided in the Indiana Business Corporation
Law, as amended ("IBCL").
(b) Effective Time. The Company Merger shall become effective upon the
filing, in the office of the Secretary of State of the State of Indiana, of
Articles of Merger in accordance with Indiana Code Section 23-1-40-5, as
amended, or at such later date and time as may be set forth in such articles
(the "Effective Time"). Subject to the terms of this Agreement, the parties
shall cause the Company Merger to become effective (a) on the date that is the
seventh full NASDAQ trading day (the "Closing Date") to occur after the last of
the conditions set forth in Section 8 (other than conditions relating solely to
the delivery of documents dated as of the Closing Date) shall have been
satisfied or waived in accordance with the terms of this Agreement, or (b) on
such other date as the parties may agree in writing; provided, however, that the
Mergers shall not become effective prior to January 13, 2003.
(c) Name, Officers and Directors. The name of the Surviving Corporation
shall be "First Indiana Corporation." Its principal office shall be located at
000 Xxxxx Xxxxxxxxxxxx Xxxxxx, Xxxxxxxxxxxx, Xxxxxx Xxxxxx, Xxxxxxx. The
officers of FIC serving at the Effective Time shall continue to serve as the
officers of the Surviving Corporation, until such time as their successors shall
have been duly elected and have qualified or until their earlier resignation,
death or removal from office. The directors of the Surviving Corporation
following the Effective Time shall be those individuals serving as directors of
FIC at the Effective Time, who shall continue to serve until such time as their
successors have been duly elected and have qualified or until their earlier
resignation, death, or removal as directors.
(d) Articles of Incorporation and By-Laws. The Articles of Incorporation
and By-Laws of FIC in existence at the Effective Time shall remain the Articles
of Incorporation and By-Laws of the Surviving Corporation following the
Effective Time, until such Articles of Incorporation and By-Laws shall be
further amended in accordance with applicable law.
2
(e) Effect of the Company Merger. At the Effective Time, the title to all
assets, real estate and other property owned by MBC shall vest in the Surviving
Corporation as set forth in Indiana Code Section 23-1-40-6, as amended, without
reversion or impairment. At the Effective Time, all liabilities of MBC shall be
assumed by the Surviving Corporation.
1.02. The Bank Merger.
(a) General Description. Upon the terms and subject to the conditions of
this Agreement, at the Effective Time, the Bank shall merge with and into and
under the Articles of Association of First Indiana (the "Bank Merger" and
together with the Company Merger, the "Mergers"). First Indiana (sometimes
hereinafter referred to as the "Surviving Bank") shall survive the Bank Merger
and shall continue its corporate existence under the federal banking laws
pursuant to the provisions of and with the effect provided in The National Bank
Act, as amended.
(b) Name, Officers and Directors. The name of the Surviving Bank shall be
"First Indiana Bank, National Association." Its principal office shall be
located at 000 Xxxxx Xxxxxxxxxxxx Xxxxxx, Xxxxxxxxxxxx, Xxxxxx Xxxxxx, Xxxxxxx.
The officers of First Indiana at the Effective Time shall continue to serve as
the officers of the Surviving Bank until such time as their successors shall
have been duly elected and have qualified or until their earlier resignation,
death or removal from office. The directors of the Surviving Bank following the
Effective Time shall be those individuals serving as directors of First Indiana
at the Effective Time, who shall continue to serve until such time as their
successors have been duly elected and have qualified or until their earlier
resignation, death, or removal as directors.
(c) Articles of Association and By-Laws. The Articles of Association and
By-Laws of First Indiana in existence at the Effective Time shall remain the
Articles of Association and By-Laws of the Surviving Bank following the
Effective Time, until such Articles of Association and By-Laws shall be further
amended as provided by applicable law.
(d) Effect of the Bank Merger. The effect of the Bank Merger upon
consummation thereof shall be as set forth under The National Bank Act, as
amended.
(e) Integration. At the Effective Time, the parties hereto currently intend
to effectuate, or cause to be effectuated, the Bank Merger. The parties agree to
cooperate and to take all reasonable actions prior to and following the
Effective Time, including executing all requisite documentation, as may be
reasonably necessary to effect the Bank Merger.
1.03. Reservation of Right to Revise Structure. At FIC's election, the
Company Merger may alternatively be structured so that (a) MBC is merged with
and into FIC or any other direct or indirect wholly owned subsidiary of FIC or
(b) any other direct or indirect wholly owned subsidiary of FIC is merged with
and into MBC; provided, however, that no such change shall (x) alter or change
the amount or kind of the Conversion Price or the treatment of the holders of
MBC Common Stock or MBC Stock Options (as defined herein), (y) prevent the
parties from
3
obtaining the opinions of Bose XxXxxxxx & Xxxxx LLP and Xxxxx XxXxxxx LLP
referred to in Sections 10.02(a)(iv) and 10.02(b)(iv), respectively, or (z)
materially impede or delay consummation of the transactions contemplated by this
Agreement. In the event of such an election, the parties agree to execute an
appropriate amendment to this Agreement in order to reflect such election.
SECTION 2
CONSIDERATION
2.01. Consideration.
(a) Subject to the terms and conditions of this Agreement, upon and by
virtue of the Company Merger becoming effective at the Effective Time, each
issued and outstanding share of MBC Common Stock (as defined in Section 4.03(a)
hereof) shall be converted into the right to receive a cash amount equal to
Seventeen and No/100 Dollars ($17.00) (the "Conversion Price"). Each share of
MBC Common Stock that, immediately prior to the Effective Time, is held as
treasury stock of MBC or held directly or indirectly by FIC, other than shares
held in a fiduciary capacity or in satisfaction of a debt previously contracted,
shall by virtue of the Company Merger be canceled and retired and shall cease to
exist, and no exchange or payment shall be made therefor.
(b) Each outstanding and then exercisable option to purchase MBC Common
Stock shall be converted into the right to receive cash in an amount equal to
the excess of the Conversion Price over the option exercise price.
(c) In no event will the total consideration paid by FIC for MBC Common
Stock exceed the product of the Conversion Price times the sum of (i) the number
of shares of such Common Stock issued on the date hereof (2,108,607), plus (ii)
the number of shares of such Common Stock issued after the date hereof upon
exercise of any of the 446,007 vested, in-the-money options outstanding on the
date hereof under MBC's stock option plans (or, in the case of options converted
to rights to receive cash, the amount paid in respect of such rights pursuant to
Section 2.01(b)), plus (iii) to the extent permitted under Section 6.19 and
subject to Section 6.03(a)(xi) below, the number of shares of such Common Stock
issued after the date hereof pursuant to MBC's Employee Equity Ownership Plan.
2.02. Rights as Shareholders; Stock Transfers. At the Effective Time, (a)
holders of MBC Common Stock shall cease to be, and shall have no rights as,
shareholders of MBC, other than the right to receive (1) any dividend or other
distribution with respect to such MBC Common Stock with a record date occurring
prior to the Effective Time and (2) the consideration provided under this
Section 2, and (b) holders of MBC Stock Options shall have no further or
continuing right to receive MBC Common Stock or any form of consideration other
than the consideration provided under this Section 2. After the Effective Time,
there shall be no transfers on the stock transfer books of MBC or the Surviving
Corporation of shares of MBC Common Stock, and no attempted or purported
exercise of MBC Stock Options shall be effective.
4
2.03. Distribution of Cash.
(a) As soon as reasonably practicable but in no event more than ten (10)
calendar days after the Effective Time, FIC shall mail to each record holder of
any certificate or certificates whose shares of MBC Common Stock were converted
into the right to receive the Conversion Price, a letter of transmittal (which
shall specify that delivery shall be effected, and risk of loss and title to the
MBC certificates shall pass, only upon proper delivery of the MBC certificates
to FIC and shall be in such form and have such other provisions as FIC may
reasonably specify) and instructions for use in effecting the surrender of the
MBC certificates in exchange for the Conversion Price.
(b) Following the Effective Time, payment of the Conversion Price, without
interest, shall be made by FIC to each former shareholder of MBC within five (5)
business days following delivery to FIC of the shareholder's certificate(s)
representing its shares of MBC Common Stock accompanied by a properly completed
and executed letter of transmittal, all in form and substance reasonably
satisfactory to FIC.
(c) Following the Effective Time, stock certificates representing shares of
MBC Common Stock held by shareholders of MBC shall be deemed to evidence only
the right to receive the Conversion Price, without interest thereon, pursuant to
Section 2.01 hereof.
(d) FIC shall be entitled to rely upon the stock transfer books of MBC to
establish the persons entitled to receive payment of the Conversion Price
pursuant to this Agreement, which books shall be conclusive with respect to the
ownership of shares of MBC Common Stock.
(e) With respect to any certificate for shares of MBC Common Stock which
has been lost, stolen or destroyed, FIC shall be authorized to pay the
Conversion Price to the registered owner of such certificate upon receipt by FIC
of an affidavit of lost, stolen or destroyed stock certificate together with an
indemnity, both in form and substance reasonably satisfactory to FIC, and upon
compliance by the MBC shareholder with all other reasonable requirements of FIC
in connection with lost, stolen or destroyed stock certificates.
(f) Notwithstanding the foregoing, no party hereto shall be liable to any
former holder of MBC Common Stock for any amount properly delivered to a public
official pursuant to applicable abandoned property, escheat or similar laws.
SECTION 3
DISSENTING SHAREHOLDERS
Notwithstanding the foregoing, if any holders of MBC Common Stock dissent
from the Company Merger and demand dissenters' rights under the IBCL, any issued
and outstanding shares of MBC Common Stock held by such dissenting holders shall
not be converted as described in Section 2 but shall from and after the
Effective Time represent only the right to receive such consideration as may be
determined to be due to such dissenting holders pursuant to the IBCL; provided,
however, that each share of MBC Common Stock outstanding immediately
5
prior to the Effective Time and held by a dissenting holder who shall, after the
Effective Time, withdraw his or her demand for dissenters' rights or lose his or
her right to exercise dissenters' rights shall have only such rights as are
provided under the IBCL.
SECTION 4
REPRESENTATIONS AND WARRANTIES OF MBC
On or prior to the date hereof, MBC has delivered to FIC a schedule
(the "Disclosure Schedule") setting forth, among other things, items the
disclosure of which is necessary or appropriate either in response to an express
disclosure requirement contained in a provision hereof or as an exception to one
or more representations or warranties contained in this Section 4 or to one or
more of its covenants contained in Section 6 or which is otherwise disclosed
pursuant to this Agreement; provided, that the mere inclusion of an item in the
Disclosure Schedule as an exception to a representation or warranty shall not be
deemed an admission by MBC that such item represents a material exception of
fact, event or circumstance or that such item is reasonably likely to result in
a Material Adverse Effect (as defined below) as to MBC.
For the purpose of this Agreement, and in relation to MBC and the
Subsidiaries, a "Material Adverse Effect" means any effect that (i) is material
and adverse to the financial condition, operations, business, assets,
liabilities or prospects of MBC and the Subsidiaries taken as a whole, or (ii)
would materially impair the ability of MBC to perform its obligations under this
Agreement or otherwise materially threaten or materially impede the consummation
of the Mergers and the other transactions contemplated by this Agreement.
Without limiting the foregoing, items, individually or in the aggregate, that
have a negative financial effect of $150,000 or more shall be deemed to have a
Material Adverse Effect. Material Adverse Effect shall not, however, be deemed
to include the impact of (a) changes in banking and similar laws of general
applicability or interpretations thereof by courts or governmental authorities,
(b) changes in accounting principles generally accepted in the United States or
regulatory accounting requirements applicable to banks and their holding
companies generally, (c) actions taken or to be taken by MBC or its Subsidiaries
in accordance with the specific terms of this Agreement or based upon the
written request of FIC pursuant to this Agreement, in each case in accordance
with accounting principles generally accepted in the United States, (d) fees and
expenses associated with the Mergers, including legal, accounting, investment
banking and any expenses relating to litigation that may be filed to contest the
Mergers, (e) acts of terrorism or war, (f) effects of any action taken with the
prior written consent of FIC, and (g) changes in general levels of interest
rates or conditions or circumstances that affect the banking industry,
generally.
No representation or warranty of MBC and the Bank contained in Sections
4.02(b)(iii), (iv) and (v) and 4.02(c), 4.05(a), 4.08(b) and 4.08(d), 4.10(b),
4.17(c), and 4.23 shall be deemed untrue, incomplete or incorrect, and neither
MBC nor the Bank shall be deemed to have breached any such specified
representation or warranty, as a consequence of the existence of any fact, event
or circumstance unless such fact, circumstance or event, individually or taken
together with all other facts, events or circumstances inconsistent with any
representation or warranty contained in this Section 4, has had or is reasonably
likely to have a Material Adverse Effect.
6
Accordingly, MBC and Bank hereby represent and warrant to FIC, as follows:
4.01. Organization and Authority.
(a) MBC is a corporation duly organized, validly existing and in good
standing under the laws of the State of Indiana and is a registered bank holding
company under the BHC Act. MBC has full power and authority (corporate and
otherwise) to own, operate and lease its properties as presently owned, operated
and leased and to conduct its business in the manner and by the means utilized
as of the date hereof. MBC has a class of stock registered pursuant to Section
12, and is subject to the reporting requirements, of the Securities Exchange Act
of 1934, as amended (the "1934 Act"). The Bank and MB Realty are MBC's only
direct or indirect subsidiaries, and except as disclosed in the Disclosure
Schedule MBC owns no voting stock or equity securities of any other corporation,
partnership, association or other entity.
(b) The Bank is an Indiana chartered bank duly organized, validly existing
and in good standing under the laws of the State of Indiana. The Bank is subject
to primary regulatory supervision and examination by the Indiana Department of
Financial Institutions ("DFI"). The Bank has full power and authority (corporate
and otherwise) to own, operate and lease its properties as presently owned,
operated and leased and to conduct its business in the manner and by the means
utilized as of the date hereof. Except for MB Realty and as set forth in the
Disclosure Schedule and except as security for the satisfaction of obligations
to the Bank, the Bank has no subsidiaries and owns no voting stock or equity
securities of any corporation, partnership, association or other entity.
(c) MB Realty is a corporation duly organized, validly existing and in good
standing under the laws of the State of Indiana. MB Realty has full power and
authority (corporate and otherwise) to own, operate and lease its properties as
presently owned, operated and leased and to conduct its business in the manner
and by the means utilized as of the date hereof. Except as set forth in the
Disclosure Schedule, MB Realty has no subsidiaries and owns no voting stock or
equity securities of any corporation, partnership, association or other entity.
4.02. Authorization.
(a) MBC has the requisite corporate power and authority to enter into this
Agreement and to perform its obligations hereunder, subject to the fulfillment
of the conditions precedent set forth in Section 8.02(d) and (e) hereof. As of
the date hereof, MBC is not aware of any reason why the approvals set forth in
Section 8.02(d) will not be received in a timely manner and without the
imposition of a condition, restriction or requirement of the type described in
Section 8.02(d). This Agreement, and its execution and delivery by MBC, has been
duly authorized and approved by the Board of Directors of MBC and, assuming due
execution and delivery by FIC, constitutes a valid and binding obligation of
MBC, subject to the fulfillment of the conditions precedent set forth in Section
8.02 hereof, and is enforceable in accordance with its terms, except to the
extent limited by general principles of equity and public policy and by
bankruptcy, insolvency, fraudulent transfer, reorganization, liquidation,
moratorium, readjustment of debt or other laws of general application relating
to or affecting the enforcement of creditors' rights.
7
(b) Except as set forth in the Disclosure Schedule, neither the execution
of this Agreement nor consummation of the Mergers contemplated hereby: (i)
conflicts with or violates the organizational documents of either MBC or the
Bank; (ii) conflicts with or violates any local, state, federal or foreign law,
statute, ordinance, rule or regulation (provided that the approvals of or
filings with applicable government regulatory agencies or authorities required
for consummation of the Mergers are obtained) or any court or administrative
judgment, order, injunction, writ or decree; (iii) conflicts with, results in a
breach of or constitutes a default under any note, bond, indenture, mortgage,
deed of trust, license, lease, contract, agreement, arrangement, commitment or
other instrument to which MBC or either Subsidiary is a party or by which MBC or
either Subsidiary is subject or bound; (iv) results in the creation of or gives
any person, corporation or entity the right to create any lien, charge, claim,
encumbrance or security interest, or results in the creation of any other rights
or claims of any other party (other than FIC and First Indiana) or any other
adverse interest, upon any right, property or asset of MBC or either Subsidiary;
or (v) terminates or gives any person, corporation or entity the right to
terminate, accelerate, amend, modify or refuse to perform under any note, bond,
indenture, mortgage, agreement, contract, lease, license, arrangement, deed of
trust, commitment or other instrument to which MBC or either Subsidiary is bound
or with respect to which MBC or either Subsidiary is to perform any duties or
obligations or receive any rights or benefits.
(c) Other than in connection or in compliance with the provisions of the
applicable federal and state banking, securities, and corporation statutes, all
as amended, and the rules and regulations promulgated thereunder, no notice to,
filing with, exemption by or consent, authorization or approval of any
governmental agency or body is necessary for consummation of the Mergers by MBC
or any Subsidiary.
(d) MBC has received an oral opinion of Xxxxx Financial, LLC, to the effect
that, as of the date of this Agreement, the Conversion Price to be received in
the Company Merger by the shareholders of MBC is fair to the shareholders of MBC
from a financial point of view.
4.03. Capitalization.
(a) The authorized capital stock of MBC as of the date hereof consists, and
at the Effective Time will consist, of (i) 1,000,000 shares of preferred stock,
no par value, none of which shares are issued or outstanding, and (ii) 3,000,000
shares of common stock, no par value per share, of which 2,056,837 shares are
issued and outstanding, and of which another 51,770 shares, although classified
as treasury shares, are issued to Xxxxxxx Xxxxx Trust Company as trustee of a
trust established by MBC to provide benefits under the MBC SERP. The total of
such issued shares of MBC Common Stock, constituting 2,108,607 shares, have been
duly and validly authorized by all necessary corporate action of MBC, are
validly issued, fully paid and nonassessable and have not been issued in
violation of any pre-emptive rights of any present or former MBC shareholder. An
additional 446,007 shares of MBC Common Stock are subject to issuance upon the
exercise of options (the "Stock Options") granted under the 1994 Stock Option
and Stock Appreciation Rights Plan and the 1994 Directors Stock Option Plan (the
"MBC Stock Option Plans"). MBC has no capital stock authorized, issued or
outstanding other than as described in this Section 4.03(a) and has no intention
or obligation to authorize or issue any other capital stock or any additional
shares of MBC Common Stock except upon the exercise of Stock
8
Options. Any shares issued upon exercise of the Stock Options will be validly
issued, fully paid and nonassessable. The Disclosure Schedule sets forth, for
each Stock Option outstanding under the MBC Stock Option Plans, the name of the
grantee, the date of the grant, the type of grant, the status of the grant as
qualified or non-qualified under Section 422 of the Internal Revenue Code, the
number of shares of MBC Common Stock subject to options that are exercisable as
of the date hereof and the exercise price per share.
(b) The authorized capital stock of the Bank as of the date hereof
consists, and at the Effective Time will consist, of 10,000 shares of common
stock, $10.00 par value per share, all of which shares are issued and
outstanding (such issued and outstanding shares are referred to herein as "Bank
Common Stock"). Such issued and outstanding shares of Bank Common Stock have
been duly and validly authorized by all necessary corporate action of the Bank,
are issued, fully paid and nonassessable, and have not been issued in violation
of any pre-emptive rights of any present or former Bank shareholder. All of the
issued and outstanding shares of Bank Common Stock are owned by MBC free and
clear of all liens, pledges, charges, claims, encumbrances, restrictions,
security interests, options and pre-emptive rights and of all other rights or
claims of any other person, corporation or entity with respect thereto. The Bank
has no capital stock authorized, issued or outstanding other than as described
in this Section 4.03(b) and has no intention or obligation to authorize or issue
any other capital stock or any additional shares of Bank Common Stock.
(c) The authorized capital stock of MB Realty as of the date hereof
consists, and at the Effective Time will consist, of one (1) share of common
stock, no par value per share, all of which shares are issued and outstanding
(such issued and outstanding shares are referred to herein as "MB Realty Common
Stock"). Such issued and outstanding shares of MB Realty Common Stock have been
duly and validly authorized by all necessary corporate action of MB Realty, are
validly issued, fully paid and nonassessable, and have not been issued in
violation of any pre-emptive rights of any present or former MB Realty
shareholder. All of the issued and outstanding shares of MB Realty Common Stock
are owned by the Bank free and clear of all liens, pledges, charges, claims,
encumbrances, restrictions, security interests, options and pre-emptive rights
and of all other rights or claims of any other person, corporation or entity
with respect thereto. MB Realty has no capital stock authorized, issued or
outstanding other than as described in this Section 4.03(c) and has no intention
or obligation to authorize or issue any other capital stock or any additional
shares of MB Realty Common Stock.
(d) Except as set forth in the Disclosure Schedule, there are no options,
warrants, commitments, calls, puts, agreements, understandings, arrangements or
subscription rights relating to any shares of MBC Common Stock, or any
securities convertible into or representing the right to purchase or otherwise
acquire any common stock or debt securities of MBC, by which MBC is or may
become bound. MBC does not have any outstanding contractual or other obligation
to repurchase, redeem or otherwise acquire any of the issued and outstanding
shares of MBC Common Stock. To the knowledge of MBC and the Bank, there are no
voting trusts, voting arrangements, buy-sell agreements or similar arrangements
affecting the capital stock of either of them or of MB Realty. To the knowledge
of MBC and the Bank, upon consummation of the Company Merger and the Bank
Merger, FIC shall own and have the power and right to
9
vote all of the outstanding capital stock of the Bank and First Indiana shall
own and have the power and right to vote all of the outstanding capital stock of
MB Realty.
(e) There are no options, warrants, commitments, calls, puts, agreements,
understandings, arrangements or subscription rights relating to any shares of
common stock of the Subsidiaries, or any securities convertible into or
representing the right to purchase or otherwise acquire any common stock or debt
securities of either Subsidiary, by which either Subsidiary is or may become
bound. The Subsidiaries do not have any outstanding contractual or other
obligation to repurchase, redeem or otherwise acquire any of the issued and
outstanding shares of their respective common stock.
(f) Except as set forth in the Disclosure Schedule, MBC has no knowledge of
any person or entity which beneficially owns 5% or more of its outstanding
shares of MBC Common Stock.
4.04. Organizational Documents. The Articles of Incorporation and the
By-Laws of MBC and the Subsidiaries, as amended, representing true, accurate and
complete copies of such corporate documents in effect as of the date of this
Agreement, have been delivered to FIC.
4.05. Compliance with Law.
(a) Neither MBC nor either Subsidiary has engaged in any activity nor taken
or omitted to take any action which has resulted in the violation of any local,
state, federal or foreign law, statute, regulation, rule, ordinance, order,
restriction or requirement, nor are they in violation of any order, injunction,
judgment, writ or decree of any court or government agency or body. MBC and the
Subsidiaries possess and hold all licenses, franchises, permits, certificates
and other authorizations necessary for the continued conduct of their business
without interference or interruption, and such licenses, franchises, permits,
certificates and authorizations are transferable (to the extent required) to FIC
or First Indiana at the Effective Time without any restrictions or limitations
thereon or the need to obtain any consents of government agencies or other third
parties other than as set forth in this Agreement.
(b) Except as set forth in the Disclosure Schedule, neither MBC nor either
Subsidiary or their respective property is a party to or is subject to any
order, decree, agreement, memorandum of understanding or similar arrangement
with, or a commitment letter or similar submission to, or extraordinary
supervisory letter from, any federal or state governmental agency or authority
charged with the supervision or regulation of financial institutions or issuers
of securities or engaged in the insurance of deposits (including, without
limitation, DFI, the Federal Reserve Board and the Federal Deposit Insurance
Corporation) or the supervision or regulation of MBC or either Subsidiary. There
are no uncured violations, or violations with respect to which refunds or
restitutions may be required, cited in any examination report of MBC or either
Subsidiary as a result of an examination by any regulatory agency or body, or
set forth in any accountant's or auditor's report to MBC or either Subsidiary.
10
4.06. Litigation and Pending Proceedings.
(a) Except as set forth in the Disclosure Schedule and lawsuits involving
collection of delinquent accounts as to which no counterclaims are asserted
against MBC or either Subsidiary, there are no claims, actions, suits,
proceedings, mediations, arbitrations or investigations pending or to the
knowledge of MBC or either Subsidiary threatened in any court or before any
government agency or authority, arbitration panel or otherwise (nor does MBC or
either Subsidiary have any knowledge of a basis for any claim, action, suit,
proceeding, litigation, arbitration or investigation) against, by or affecting
MBC or either Subsidiary or which would prevent the performance of this
Agreement, declare the same unlawful or cause the rescission hereof.
(b) Except as set forth in the Disclosure Schedule, neither MBC nor the
Subsidiaries are: (i) subject to any outstanding judgment, order, writ,
injunction or decree of any court, arbitration panel or governmental agency or
authority; (ii) presently charged with or, to the knowledge of MBC or either
Subsidiary, under governmental investigation with respect to any actual or
alleged violations of any law, statute, rule, regulation or ordinance; or (iii)
the subject of any pending or, to the knowledge of MBC or either Subsidiary,
threatened proceeding by any government regulatory agency or authority having
jurisdiction over its respective business, assets, capital, properties or
operations.
4.07. Financial Statements and Reports.
(a) MBC has delivered to FIC copies of the following financial statements
and reports of MBC and the Subsidiaries including the notes thereto
(collectively, the "MBC Financial Statements"):
(i) Consolidated Balance Sheets and the related Consolidated
Statements of Income and Consolidated Statements of Changes in
Shareholders' Equity of MBC and the Subsidiaries as of and for the years
ended December 31,1999, 2000, 2001, and as of and for the six months ended
June 30, 2002;
(ii) Consolidated Statements of Cash Flows of MBC and the Subsidiaries
for the years ended December 31, 1999, 2000 and 2001, and for the six
months ended June 30, 2002;
(iii) Consolidated Statements of Changes in Financial Position of MBC
and the Subsidiaries for the years ended December 31, 1999, 2000, and 2001,
and for the six months ended June 30, 2002.
(iv) Reports of Condition and Income ("Call Reports") for the Bank as
of close of business on December 31,1998, 1999, 2000 and 2001 and on March
31, 2002 and June 30, 2002; and
11
(v) Financial Statements of MBC on Form FRY-9LP and Form FRY-9C filed
with the Board of Governors of the Federal Reserve System at the close of
business on December 31, 2001 and on March 31, 2002 and June 30, 2002.
(b) The MBC Financial Statements present fairly the consolidated financial
position of MBC as of and at the dates shown and the consolidated results of
operations for the periods covered thereby and to the knowledge of MBC and the
Bank are complete, correct, represent bona fide transactions, and have been
prepared from the books and records of MBC and its subsidiaries. The MBC
Financial Statements described in clauses (i), (ii) and (iii) of Section 4.07(a)
above for completed fiscal years are audited financial statements and have been
prepared in conformance with accounting principles generally accepted in the
United States applied on a consistent basis, except as may otherwise be
indicated in any accountants' notes or reports with respect to such financial
statements.
4.08. Properties, Contracts, Employees and Other Agreements.
(a) Set forth in the Disclosure Schedule are true, accurate and complete
copies of the following:
(i) A brief description and the location of all real property owned by
MBC and each Subsidiary and the principal buildings and structures located
thereon and each lease of real property to which MBC or either Subsidiary
is a party, identifying the parties thereto, the annual rental payable, the
expiration date of the lease and a brief description of the property
covered;
(ii) a list of all agreements, contracts, leases, licenses, lines of
credit, understandings, commitments or obligations of MBC or either
Subsidiary which individually or in the aggregate:
(A) involve payment or receipt by MBC or either Subsidiary (other
than as disbursements of loan proceeds to customers, loan payments by
customers or customer deposits) of more than $30,000 per annum or in
excess of $150,000 for the remaining term of such agreement;
(B) involve payments based on profits of MBC or either
Subsidiary;
(C) relate to the purchase of goods, products, supplies or
services in excess of $50,000;
(D) were not made in the ordinary course of business;
(E) may not be terminated without penalty within one (1) year
from the date of this Agreement;
12
(F) to which MBC or any of its Subsidiaries is a party, on the
one hand, and under which any affiliate, officer, director or employee
of MBC or any of its Subsidiaries, or any person who owns more than
10% of the outstanding MBC Common Stock, on the other hand, is a party
or beneficiary; or
(G) with respect to the employment of, or payment to, any present
or former directors, officers, employees or consultants relating to
their services as such with MBC or any Subsidiary; and
(iii) The name and current annual salary of each director, officer and
employee of MBC or either Subsidiary whose current annual salary is in
excess of $75,000, and the profit sharing, bonus or other form of
compensation (other than salary) paid or payable by MBC or either
Subsidiary to or for the benefit of each such person for the year ended
December 31, 2001, and any employment, severance or deferred compensation
agreement or arrangement with respect to each such person.
(b) Each of the agreements, contracts, commitments, leases, instruments and
documents set forth in the Disclosure Schedule relating to this Section 4.08 is
valid and enforceable in accordance with its terms, except to the extent limited
by general principles of equity and public policy or by bankruptcy, insolvency,
fraudulent transfer, readjustment of debt or other laws of general application
relative to or affecting the enforcement of creditors' rights, and MBC and the
Subsidiaries (to the extent each is a party thereto) are, and, to the knowledge
of MBC and each Subsidiary, all other parties thereto are, in compliance with
the provisions thereof, and neither MBC nor either Subsidiary is in default in
the performance, observance or fulfillment of any obligation, covenant or
provision contained therein.
(c) None of the agreements, contracts, commitments, leases, instruments and
documents set forth in the Disclosure Schedule relating to this Section 4.08
requires the consent of any party to its assignment in connection with the
Mergers contemplated by this Agreement.
(d) Neither MBC nor either Subsidiary is, to the knowledge of MBC or either
Subsidiary, in default under or in breach of, or alleged to be in default under
or in breach of, any loan or credit agreement, conditional sales contract or
other title retention agreement, security agreement, bond, indenture, mortgage,
license, contract, lease, commitment or any other instrument or obligation.
4.09. Absence of Undisclosed Liabilities. Except (i) as provided in the MBC
Financial Statements, Subsequent MBC Financial Statements (as defined in Section
6.10 hereof and only with respect to obligations incurred after the date of this
Agreement) and in the Disclosure Schedule, (ii) for unfunded loan commitments
and obligations on letters of credit to customers of the Bank, and trade
payables incurred in the ordinary course of either Subsidiary's business, and
(iii) for the transactions contemplated by this Agreement, neither MBC nor
either Subsidiary has, nor will have at the Effective Time, any obligation,
agreement, contract, commitment, liability, lease or license which exceeds
$50,000 individually, or any obligation, agreement, contract, commitment,
liability, lease or license made outside of the ordinary course of business, nor
does there exist any circumstances resulting from transactions effected or
events occurring on or prior
13
to the date of this Agreement or from any action omitted to be taken during such
period which could reasonably be expected to result in any such obligation,
agreement, contract, commitment, liability, lease or license.
4.10. Title to Assets.
(a) Except as described in this Section 4.10, MBC or one of the
Subsidiaries, as the case may be, has good and marketable title in fee simple
absolute to all real property (including, without limitation, all real property
used as bank premises and all other real estate owned) which is reflected in the
MBC Financial Statements as of June 30, 2002, good title to all personal
property reflected in the MBC Financial Statements as of June 30, 2002, other
than personal property disposed of in the ordinary course of business since June
30, 2002, good title to or right to use by valid and enforceable lease or
contract all other properties and assets (whether real or personal, tangible or
intangible) which MBC or either Subsidiary purports to own or which MBC or
either Subsidiary uses in its respective business; good title to, or right to
use by terms of a valid and enforceable lease or contract, all other property
used in their respective businesses; and good title to all property and assets
acquired and not disposed of or leased since June 30, 2002. All of such
properties and assets are owned by MBC or the Subsidiaries free and clear of all
land or conditional sales contracts, mortgages, liens, pledges, restrictions,
security interests, charges, claims, rights of third parties or encumbrances of
any nature except: (i) as set forth in the Disclosure Schedule; (ii) as
specifically noted in the MBC Financial Statements; (iii) statutory liens for
taxes not yet delinquent or being contested in good faith by appropriate
proceedings; (iv) pledges or liens required to be granted in connection with the
acceptance of government deposits or granted in connection with repurchase or
reverse repurchase agreements; and (v) easements, encumbrances and liens of
record, imperfections of title and other limitations which are not material in
amount to MBC on a consolidated basis and which do not materially detract from
the value or materially interfere with the present or contemplated use of any of
the properties subject thereto or impair the use thereof for the purposes for
which they are held or used. All real property owned or leased by MBC or a
Subsidiary is in compliance with all applicable zoning and land use laws.
(b) All real property, machinery, equipment, furniture and fixtures owned
or leased by MBC or a Subsidiary is structurally sound, in good operating
condition and has been and is being maintained and repaired in the ordinary
course of business.
4.11. Employee Benefit Plans.
(a) MBC's Disclosure Schedule contains a complete list of all bonus,
vacation, deferred compensation, commission-based compensation, pension,
retirement, profit sharing, thrift, savings, employee stock ownership, stock
bonus, stock purchase, restricted stock, stock appreciation and stock option
plans, all employment or severance contracts, all medical, dental, disability,
severance, health and life insurance plans, all other employee benefit and
fringe benefit plans, contracts or arrangements and any "change of control" or
similar provisions in any plan, contract or arrangement maintained or
contributed to by MBC or any of its Subsidiaries for the benefit of current or
former officers, employees or directors or the beneficiaries or dependents of
any of the foregoing (collectively, "Compensation Plans").
14
(b) With respect to each Compensation Plan, if applicable, MBC has provided
or made available to FIC, at FIC's request, true and complete copies of
existing: (A) Compensation Plan documents and amendments thereto; (B) trust
instruments and insurance contracts; (C) the most recent Form 5500 filed with
the Internal Revenue Service ("IRS"); (D) the most recent actuarial report and
financial statement; (E) the most recent summary plan description; (F) forms
filed with the PBGC (other than for premium payments); (G) the most recent
determination letter issued by the IRS; (H) any Form 5310 or Form 5330 filed
with the IRS; and (I) the most recent nondiscrimination tests performed under
the Employee Retirement Income Security Act of 1974, as amended ("ERISA") and
the Internal Revenue Code of 1986, as amended (the "Code") (including 401(k) and
401(m) tests).
(c) Except as set forth in the Disclosure Schedule: (i) each of the
Compensation Plans has been administered and operated in all material respects
in accordance with the terms thereof and with applicable law, including ERISA,
the Code and the Securities Act of 1933, as amended (the "Securities Act"); (ii)
neither MBC, any of its Subsidiaries nor any other person for whom
indemnification by MBC or any of its Subsidiaries could apply ("Indemnified
Person") has incurred or is likely to incur fiduciary liability under Part 4 of
Title I of ERISA with respect to any Compensation Plan; (iii) each of the
Compensation Plans which is an "employee pension benefit plan" within the
meaning of Section 3(2) of ERISA ("Pension Plan") and which is intended to be
qualified under Section 401(a) of the Code has received a favorable
determination letter from the IRS which reflects all law changes through the
"GUST" round of amendments, or an application for such a letter is pending with
the IRS, and MBC is not aware of any circumstances that would likely result in
the revocation or denial of any such favorable determination letter; (iv) none
of MBC, any of its Subsidiaries or an Indemnified Person has engaged in any
transaction or taken any action with respect to any Compensation Plan that has
subjected, or could, to MBC's knowledge, subject MBC or any of its Subsidiaries
or any Indemnified Person to a tax or penalty imposed by either Section 4975 of
the Code or Section 502 of ERISA; and (v) there is no pending or, to MBC's
knowledge, threatened litigation or governmental audit, examination or
investigation relating to MBC's Compensation Plans.
(d) None of the Compensation Plans is a plan, and none of MBC and its
Subsidiaries ever have maintained or made any contributions to any plan, that is
subject to Part 3 of Title I of ERISA, Title IV of ERISA or Section 412 of the
Code. No Compensation Plan is a "multiemployer plan" within the meaning of
Section 3(37) or 4001(a)(3) of ERISA or a "multiple employer plan" within the
meaning of Section 4064 of ERISA or Section 413(c) of the Code. None of MBC and
its Subsidiaries have any current or potential liability or obligation, whether
direct or indirect, with respect to any multiemployer or multiple employer plan.
(e) Reserved.
(f) Reserved.
(g) Except as set forth in the Disclosure Schedule or as otherwise provided
for in this Agreement, no Compensation Plan provides benefits, including death
or medical benefits, with respect to any employees or former employees of MBC or
any of its Subsidiaries (or their spouses, beneficiaries, or dependents) beyond
the retirement or other termination of service of
15
any such employee other than (A) coverage mandated by Part 6 of Title I of ERISA
or Section 4980B of the Code, (B) retirement or death benefits under any Pension
Plan, (C) disability benefits under any Compensation Plan which is an employee
welfare benefit plan (as defined under Section 3(1) of ERISA) that have been
fully provided for by insurance or otherwise, (D) benefits in the nature of
severance pay under any Compensation Plan, or (E) miscellaneous other
post-employment benefits not exceeding $10,000 in the aggregate. Except as set
forth in the Disclosure Schedule or as otherwise provided for in this Agreement,
MBC and its Subsidiaries may amend or terminate any health plan which provides
post-retirement or termination of employment benefits at any time without
incurring any liability thereunder. Except as set forth in the Disclosure
Schedule, there has been no communication to employees, former employees or
their spouses, beneficiaries or dependents by MBC or any of its Subsidiaries
that promised or guaranteed such employees retiree health or life insurance or
other retiree death benefits on a permanent basis or promised or guaranteed that
any such benefits could not be modified, eliminated or terminated.
(h) Except as set forth in the Disclosure Schedule or as otherwise provided
for in this Agreement, neither the execution and delivery of this Agreement nor
the consummation of the transactions contemplated hereby including, without
limitation, any termination of employment relating thereto and occurring prior
to, at or following the Effective Time, will (A) result in any increase in
compensation or any payment (including, without limitation, severance, golden
parachute or otherwise) becoming due to any current or former director, officer
or employee of MBC or any of its Subsidiaries under any Compensation Plan or
otherwise from MBC or any of its Subsidiaries, (B) increase any benefits
otherwise payable under any Compensation Plan, or (C) result in any acceleration
of the time of payment, funding or vesting of any such benefit; provided,
however, that effects described in (A), (B) or (C), the aggregate compensation
and benefit cost impact of which, actuarially determined as of the Effective
Time, do not exceed $10,000, shall not be deemed to violate the representations
made in this Section 4.11(h).
(i) Except as set forth in the Disclosure Schedule: (i) neither MBC nor any
of its Subsidiaries maintains any compensation plans, programs or arrangements
the payments under which are, or reasonably would be expected to be,
non-deductible as a result of the limitations under Section 162(m) of the Code
and the regulations issued thereunder; and (ii) none of MBC, the Surviving
Corporation or any of their respective subsidiaries will be obligated to make a
payment as a result, directly or indirectly, of the transactions contemplated by
this Agreement that reasonably would be expected to be non-deductible as a
result of the limitations under Section 162(m) of the Code and the regulations
issued thereunder.
4.12. Labor Matters. Neither MBC nor any of its Subsidiaries is a party to
or is bound by any collective bargaining contract or understanding with a labor
union or labor organization, nor is MBC or any of its Subsidiaries the subject
of a proceeding asserting that it or any such Subsidiary has committed an unfair
labor practice (within the meaning of the National Labor Relations Act) or
seeking to compel MBC or any such Subsidiary to bargain with any labor
organization as to wages or conditions of employment, nor is there any strike or
other labor dispute involving it or any of its Subsidiaries pending or, to MBC's
knowledge, threatened, nor is MBC aware of any activity involving it or any of
its Subsidiaries' employees seeking to certify a collective bargaining unit or
engaging in other organizational activity.
16
4.13. Environmental Matters. Except as set forth in the Disclosure
Schedule, (1) to MBC's knowledge, MBC and each of its Subsidiaries has complied
in all material respects at all times with applicable Environmental Laws (as
defined below); (2) to MBC's knowledge, no property (including buildings and any
other structures) currently or formerly owned or operated by MBC or any of its
Subsidiaries has been contaminated with, or has had any release of, any
Hazardous Substance (as defined below); (3) to MBC's knowledge, neither MBC nor
any of its Subsidiaries would reasonably be expected to be ruled to have caused
or contributed to any contamination as the owner or operator under any
Environmental Law of any property in which it has currently or formerly held a
lien; (4) to MBC's knowledge, neither MBC nor any of its Subsidiaries is subject
to liability for any Hazardous Substance disposal or contamination on any other
third-party property; (5) neither MBC nor any of its Subsidiaries has received
any notice, demand letter, claim or request for information alleging any
violation of, or liability under, any Environmental Law; (6) neither MBC nor any
of its Subsidiaries is subject to any order, decree, injunction or other
agreement with any federal or state governmental authority or any third party
relating to any Environmental Law; (7) to MBC's knowledge, there are no
circumstances or conditions involving MBC or any of its Subsidiaries or any
currently or formerly owned or operated property (including the presence of
asbestos, underground storage tanks, lead products, polychlorinated biphenyls or
gas station sites) that could result in any claims, liability or investigations
or result in any restrictions on the ownership, use, or transfer of any property
pursuant to any Environmental Law; and (8) MBC has delivered to FIC copies of
all environmental reports, studies, sampling data, correspondence, filings and
other environmental information in its possession or reasonably available to it
relating to MBC, any of its Subsidiaries, any currently or formerly owned or
operated property or any property in which MBC or any of its Subsidiaries has
held a lien.
As used in this Section 4.13, "Environmental Laws" means any federal, state
or local law, regulation, order, decree, permit, authorization, common law or
agency requirement with force of law relating to: (1) the protection or
restoration of the environment, health or safety (in each case as relating to
the environment) or natural resources; or (2) the handling, use, presence,
disposal, release or threatened release of any Hazardous Substance. As used in
this Section 4.13, "Hazardous Substance" means: (1) any substance in any
concentration that is listed, classified or regulated pursuant to any
Environmental Law; (2) any petroleum product or by-product, asbestos-containing
material, lead-containing paint or plumbing, polychlorinated biphenyls,
radioactive materials or radon; or (3) any other substance which is or may be
the subject of regulatory action by any federal, state or local governmental
authority pursuant to any Environmental Law.
4.14. Tax Matters. (1) All returns, declarations, reports, estimates,
information returns and statements required to be filed on or before the
Effective Time under any federal, state, local or foreign tax laws ("Tax
Returns") with respect to MBC or any of its Subsidiaries, have been or will be
timely filed, or requests for extensions have been timely filed and have not
expired; (2) all Tax Returns that have been filed by MBC and its Subsidiaries
since 1995 are complete and accurate in all respects; (3) all taxes shown to be
due and payable (without regard to whether such taxes have been assessed) on
such Tax Returns (or, with respect to Tax Returns for which an extension has
been timely filed, will be required to be shown as due and payable when such Tax
Returns are filed) have been paid or adequate reserves have been established for
17
the payment of such taxes; (4) no audit or examination or refund litigation with
respect to any Tax Return is pending or, to MBC's knowledge, has been
threatened; (5) all deficiencies asserted or assessments made as a result of any
examination of a Tax Return of MBC or any of its Subsidiaries have been paid in
full; (6) no waivers of statutes of limitation have been given by or requested
with respect to any taxes of MBC or its Subsidiaries; (7) MBC and its
Subsidiaries have never been a member of an affiliated, combined, consolidated
or unitary tax group for purposes of filing any Tax Return (other than a
consolidated group of which MBC was the common parent); (8) no closing
agreements, private letter rulings, technical advice memoranda or similar
agreement or rulings have been entered into or issued by any taxing authority
with respect to MBC or any of its Subsidiaries; (9) no tax is required to be
withheld pursuant to Section 1445 of the Code as a result of the transactions
contemplated by this Agreement; (10) MBC and its Subsidiaries are not bound by
any tax indemnity, tax sharing or tax allocation agreement or arrangement; and
(11) MBC and its Subsidiaries have withheld and paid all taxes that they are
required to withhold from compensation income of their employees.
4.15. Risk Management. Except as set forth in the Disclosure Schedule, MBC
and the Subsidiaries are not parties to any swaps, caps, floors, option
agreements, futures and forward contracts and other similar risk management
arrangements, whether entered into for MBC's own account, or for the account of
one or more of MBC's Subsidiaries or their customers.
4.16. Books and Records. The books and records of MBC and its Subsidiaries
have been fully, properly and accurately maintained in all material respects,
and there are no material inaccuracies or discrepancies of any kind contained or
reflected therein, and they fairly present the financial position of MBC and its
Subsidiaries.
4.17. Loans.
(a) Except as set forth in the Disclosure Schedule, there is no loan by the
Bank in excess of $100,000 that has been classified by the Bank's regulators or
management as "Other Loans Specially Mentioned," "Substandard," "Doubtful" or
"Loss" or that has been identified by accountants or auditors (internal or
external) as having a significant risk of uncollectability. The most recent loan
watch list of Bank, and a list of all loans in excess of $100,000 which Bank,
has determined to be thirty (30) days or more past due with respect to principal
or interest payments or has placed on nonaccrual status, have been provided to
FIC.
18
(b) All loans reflected in the MBC Financial Statements as of June 30, 2002
and which have been made, extended, renewed, restructured, approved, amended or
acquired since June 30, 2002: (i) to the knowledge of MBC and the Bank,
constitute the legal, valid and binding obligation of the obligor and any
guarantor named therein, except to the extent limited by general principles of
equity and public policy or by bankruptcy, insolvency, fraudulent transfer,
reorganization, liquidation, moratorium, readjustment of debt or other laws of
general application relative to or affecting the enforcement of creditors'
rights; (ii) are evidenced by notes, instruments or other evidences of
indebtedness which are true, genuine and what they purport to be; and (iii) are
secured, to the extent that MBC or the Bank has a security interest in
collateral or a mortgage securing such loans, by perfected security interests or
recorded mortgages naming MBC or the Bank as the secured party or mortgagee.
(c) The reserves, the allowance for possible loan and lease losses and the
carrying value for real estate owned which are shown on the MBC Financial
Statements are adequate in all respects under the requirements of generally
accepted accounting principles applied on a consistent basis to provide for
possible losses on items for which reserves were made, on loans and leases
outstanding and real estate owned as of the respective dates.
4.18. Shareholder Rights Plan. Except as otherwise provided in this
Agreement, the Disclosure Schedule and MBC's Articles of Incorporation and
By-Laws, MBC has no shareholder rights plan or any other plan, program or
agreement involving, restricting, prohibiting or discouraging a change in
control or merger of MBC or which may be considered an anti-takeover mechanism.
4.19. Deposit Insurance. The deposits of Bank are insured by the FDIC in
accordance with the Federal Deposit Insurance Act, as amended (the "FDIA"), and
MBC or the Bank respectively, have paid or properly reserved or accrued for all
current premiums and assessments with respect to such deposit insurance.
4.20. Insurance. Set forth in the Disclosure Schedule is a list and brief
description of all policies of insurance (including, without limitation,
bankers' blanket bond, directors' and officers' liability insurance, property
and casualty insurance, group health or hospitalization insurance and insurance
providing benefits for employees) owned or held by MBC or either Subsidiary on
the date hereof or with respect to which MBC or either Subsidiary pays any
premiums. Each such policy is in full force and effect and all premiums due
thereon have been paid when due, and a true, accurate and complete copy thereof
has been made available to FIC prior to the date hereof.
4.21. Broker's, Finder's or Other Fees. Except for reasonable fees of MBC's
attorneys, accountants, employee benefits consultants, investment bankers and
amounts due under MBC's Incentive Plan, all of which shall be paid by MBC prior
to the Effective Time, no agent, broker or other person acting on behalf of MBC
or either Subsidiary or under any authority of MBC or either Subsidiary is or
shall be entitled to any commission, broker's or finder's fee or any other form
of compensation or payment from any of the parties hereto relating to this
Agreement and the Mergers contemplated hereby. No action has been taken by MBC
that would give rise to any valid claim against any party hereto for a brokerage
commission, finder's fee or other like payment with respect to the transactions
contemplated by this Agreement, excluding a fee to be paid by MBC to Xxxxx
Financial, LLC in an amount and on terms set forth in the Disclosure Schedule.
4.22. Interim Events.
(a) Except as set forth in the Disclosure Schedule, between the period from
December 31, 2001 to the date of this Agreement, no event has occurred and no
fact or circumstance shall have come to exist or come to be known which,
directly or indirectly, individually or taken together with all other facts,
circumstances and events, has had, or is reasonably likely to have, a Material
Adverse Effect.
19
(b) Except as set forth in the Disclosure Schedule, between the period from
December 31, 2001 to the date of this Agreement, MBC and the Subsidiaries have
carried on their respective businesses in the ordinary and usual course
consistent with their respective past practices (excluding the incurrence of
fees and expenses of professional advisors related to this Agreement and the
transactions contemplated hereby) and there has not been:
(i) any declaration, setting aside or payment of any dividend or other
distribution (whether in cash, stock or property) with respect to MBC
Common Stock; or
(ii) any split, combination or reclassification of any capital stock
of MBC or either Subsidiary or any issuance or the authorization of any
issuance of any other securities in respect of, or in lieu of or in
substitution for shares of MBC Common Stock, except for issuances of MBC
Common Stock upon the exercise of options awarded prior to the date hereof
in accordance with the terms of the MBC Stock Option Plans.
4.23. Regulatory Filings. MBC and each Subsidiary respectively, have filed
and will continue to file in a timely manner all required filings with the
Securities and Exchange Commission ("SEC"), including, but not limited to, all
reports on Form 8-K, Form 10-K and Form 10-Q and proxy statements, and with all
appropriate federal and state regulatory agencies and authorities as required by
applicable law. All such filings with the SEC and with all other appropriate
federal and state regulatory agencies were and will be true, accurate and
complete as of the dates of the filings and have complied or will comply in all
respects as to form with the applicable requirements and were or will be
prepared in conformity with generally accepted regulatory accounting principles
applied on a consistent basis, and no such filing has contained or will contain
any untrue statement of a material fact or omitted to state a material fact
necessary in order to make the statements, at the time and in light of the
circumstances under which they were made, not false or misleading.
4.24. Indemnification Agreements.
(a) Neither MBC nor either Subsidiary is a party to any indemnification,
indemnity or reimbursement agreement, contract, commitment or understanding to
indemnify any present or former director, officer, employee, shareholder or
agent against liability or hold the same harmless from liability other than as
expressly provided in the Articles of Incorporation or the By-Laws of MBC and
each Subsidiary respectively.
(b) No claims have been made against or filed with MBC or either Subsidiary
nor have, to the knowledge of MBC, any claims been threatened against MBC or
either Subsidiary for indemnification against liability or for reimbursement of
any costs or expenses incurred in connection with any legal or regulatory
proceeding by any present or former director, officer, shareholder, employee or
agent of MBC or either Subsidiary.
4.25. Shareholder Approval. The affirmative vote of the holders of a
majority of the shares of MBC Common Stock (which are issued and outstanding on
the record date relating to the meeting of shareholders) is required for
shareholder approval of this Agreement and the Company Merger.
20
4.26. CRA Rating. Except as set forth in the Disclosure Schedule, the Bank
was rated "Satisfactory" or "Outstanding" following its most recent Community
Reinvestment Act examination by the regulatory agency responsible for its
supervision. The Bank has received no notice of and has no knowledge of any
planned or threatened objection by any community group to the transactions
contemplated hereby.
4.27. Capital Requirements. The Bank is (i) at least "well capitalized", as
defined for purposes of the FDIA, and (ii) in compliance with all capital
requirements, standards and ratios required by each state or federal bank
regulator with jurisdiction over the Bank.
4.28. Representations and Warranties at the Effective Time. All
representations and warranties of MBC and the Bank contained herein or in the
Disclosure Schedules or other documents provided pursuant to this Agreement
shall be true, accurate and complete in all material respects on and as of the
Effective Time as though made or given at such time.
4.29. Nonsurvival of Representations and Warranties. The representations
and warranties of MBC and the Bank contained in this Agreement shall expire at
the earlier of the termination of this Agreement and the Effective Time, and
thereafter MBC, the Bank and all directors, officers and employees of MBC and
the Bank shall have no further liability with respect thereto.
SECTION 5
REPRESENTATIONS AND WARRANTIES OF FIC
On or prior to the date hereof, FIC has delivered to MBC a schedule (the
"FIC Disclosure Schedule") setting forth, among other things, items the
disclosure of which is necessary or appropriate as an exception to one or more
representations or warranties contained in this Section 5 or to one or more of
its covenants contained in Section 7 or which is otherwise disclosed pursuant to
this Agreement; provided, that the mere inclusion of an item in the FIC
Disclosure Schedule as an exception to a representation or warranty shall not be
deemed an admission by FIC that such item represents a material exception of
fact, event or circumstance or that such item is reasonably likely to result in
a Material Adverse Effect on FIC (as defined below). The items set forth in the
in the FIC Disclosure Schedule establish only those items that constitute an
exception to a representation or warranty which constitutes, or is reasonably
likely to result in, a Material Adverse Effect as to FIC.
For the purpose of this Agreement, and in relation to FIC and the FIC
Subsidiaries, a "Material Adverse Effect" means any effect that (i) is material
and adverse to the financial condition, operations, business, assets,
liabilities or prospects of FIC and the FIC Subsidiaries taken as a whole, or
(ii) would materially impair the ability of FIC to perform its obligations under
this Agreement or otherwise materially threaten or materially impede the
consummation of the Mergers and the other transactions contemplated by this
Agreement. Without limiting the foregoing, items, individually or in the
aggregate, that have a negative financial effect of $2,700,000 or more shall be
deemed to have a Material Adverse Effect. Material Adverse Effect shall not be
deemed to include the impact of (a) changes in banking and similar laws of
general
21
applicability or interpretations thereof by courts or governmental authorities,
(b) changes in generally accepted accounting principles or regulatory accounting
requirements applicable to banks and their holding companies generally, (c) any
modifications or changes to valuation policies and practices in connection with
the Mergers or restructuring charges taken in connection with the Mergers, in
each case in accordance with generally accepted accounting principles, (d) fees
and expenses associated with the Mergers, including legal, accounting,
investment banking and any expenses relating to litigation that may be filed to
contest the Mergers and (e) acts of terrorism or war, (f) effects of any action
taken with the prior written consent of FIC, (g) changes in general level of
interest rate or conditions or circumstances that affect the banking industry,
generally.
No representation or warranty of FIC or First Indiana contained in Sections
5.02(b)(iii), (iv) and (v), 5.04 and 5.08(a) shall be deemed untrue, incomplete
or incorrect, and neither FIC nor First Indiana shall be deemed to have breached
any such specified representation or warranty, as a consequence of the existence
of any fact, event or circumstance unless such fact, circumstance or event,
individually or taken together with all other facts, events or circumstances
inconsistent with any representation or warranty contained in this Section 5,
has had or is reasonably likely to have a Material Adverse Effect.
Accordingly, FIC and First Indiana hereby represent and warrant to MBC, as
follows:
5.01. Organization and Authority. FIC is a corporation duly organized and
validly existing under the laws of the State of Indiana, a registered bank
holding company which has elected to be a financial holding company under the
BHC Act, as amended, and has full power and authority (corporate and otherwise)
to own and lease its properties as presently owned and leased and to conduct its
business in the manner and by the means utilized as of the date hereof. Each of
the FIC Subsidiaries has been duly organized and is validly existing in good
standing under the laws of the jurisdiction of its organization, and has full
power and authority to own and lease its properties as presently owned and
leased and to conduct its business in the manner and by the means utilized as of
the date hereof.
5.02. Authorization.
(a) FIC has the requisite corporate power and authority to enter into this
Agreement and to carry out its obligations hereunder, subject to the fulfillment
of the conditions precedent set forth in Section 8.01 (d) and (e) hereof. As of
the date hereof, FIC is not aware of any reason why the approvals set forth in
Section 8.01(d) will not be received in a timely manner and without the
imposition of a condition, restriction or requirement of the type described in
Section 8.01(d). This Agreement and its execution and delivery by FIC have been
duly authorized by its Board of Directors. Assuming due execution and delivery
by MBC, this Agreement constitutes a valid and binding obligation of FIC,
subject to the conditions precedent set forth in Section 8.01 hereof, and is
enforceable in accordance with its terms, except to the extent limited by
general principles of equity and public policy and by bankruptcy, insolvency,
reorganization, liquidation, moratorium, readjustment of debt or other laws of
general application relating to or affecting the enforcement of creditors'
rights.
22
(b) Neither the execution of this Agreement nor consummation of the Mergers
contemplated hereby: (i) conflicts with or violates the organizational documents
of either FIC or First Indiana; (ii) conflicts with or violates in any respect
any local, state, federal or foreign law, statute, ordinance, rule or regulation
(provided that the approvals of or filings with applicable government regulatory
agencies or authorities required for consummation of the Mergers are obtained)
or any court or administrative judgment, order, injunction, writ or decree;
(iii) conflicts with, results in a breach of or constitutes a default under any
note, bond, indenture, mortgage, deed of trust, license, contract, lease,
agreement, arrangement, commitment or other instrument to which FIC or First
Indiana is a party or by which FIC or First Indiana is subject or bound; (iv)
results in the creation of or gives any person, corporation or entity the right
to create any lien, charge, claim, encumbrance or security interest, or results
in the creation of any other rights or claims of any other party (other than MBC
and the Bank) or any other adverse interest, upon any right, property or asset
of FIC or FIC Subsidiary; or (v) terminates or gives any person, corporation or
entity the right to terminate, accelerate, amend, modify or refuse to perform
under any note, bond, indenture, mortgage, agreement, contract, lease, license,
arrangement, deed of trust, commitment or other instrument to which FIC is bound
or with respect to which FIC is to perform any duties or obligations or receive
any rights or benefits.
(c) Other than in connection or in compliance with applicable federal and
state banking, securities and corporation statutes, all as amended, and the
rules and regulations promulgated thereunder, no notice to, filing with,
exemption by or consent, authorization or approval of any governmental agency or
body is necessary for the consummation by FIC and First Indiana of the Mergers
contemplated by this Agreement.
5.03. Organizational Documents. The Articles of Incorporation and By-Laws
of FIC in force as of the date of this Agreement have been delivered to MBC and
represent true, accurate and complete copies of such corporate documents of FIC
in effect as of the date of this Agreement.
5.04. Regulatory Filings. FIC and each of the FIC Subsidiaries have filed
and will continue to file in a timely manner all required filings with the SEC,
including, but not limited to, all reports on Form 8-K, Form 10-K and Form 10-Q
and proxy statements, and with all other federal and state regulatory agencies
as required by applicable law. All such filings by FIC with the SEC and with all
other federal and state regulatory agencies complied or will comply in all
respects as to form with the applicable requirements and were and will be true,
accurate and complete in all respects as of the dates of the filings, and no
such filings contained or will contain any untrue statement of a material fact
or omitted to state a material fact necessary in order to make the statements,
at the time and in the light of the circumstances under which they were made,
not false or misleading.
5.05. Litigation and Pending Proceedings. There are no claims, actions,
suits, proceedings, investigations or arbitrations pending or, to the knowledge
of FIC, threatened in any court or before or by any government agency or
authority, arbitration panel or otherwise (nor, to the knowledge of FIC, is
there any basis for any claim, action, suit, proceeding, litigation,
investigation or arbitration) against, by or affecting FIC or the FIC
Subsidiaries which would
23
prevent the performance of this Agreement, declare the same unlawful or cause
the rescission hereof.
5.06. Shareholder Approval. Approval by FIC's shareholders of the Company
Merger or for any other actions contemplated by this Agreement is not required.
5.07. Broker's, Finder's or Other Fees. Except for reasonable fees of FIC's
attorneys, accountants, employee benefit consultants, and investment bankers, no
agent, broker or other person acting on behalf of FIC or under any authority of
FIC is or shall be entitled to any commission, broker's or finder's fee or any
other form of compensation or payment from any of the parties hereto relating to
this Agreement and the Mergers contemplated hereby. No action has been taken by
FIC or the FIC Subsidiaries that would give rise to any valid claim against any
party hereto for a brokerage commission, finder's fee or other like payment with
respect to the transactions contemplated by this Agreement, excluding a fee to
be paid by FIC to RBC Xxxx Xxxxxxxx Inc.
5.08. Employee Benefit Plans.
(a) Except as set forth in the Disclosure Schedule, with respect to the
employee benefit plans, as defined in Section 3(3) of ERISA, sponsored or
otherwise maintained by FIC or any of the FIC Subsidiaries, whether written or
oral, in which FIC or any of the FIC Subsidiaries participates as a
participating employer; to which FIC or any of the FIC Subsidiaries contributes
and including any such plans which within the preceding six years have been
terminated, merged into another plan of FIC or any of the FIC Subsidiaries,
frozen or discontinued (collectively, "FIC Plans"): (i) all such FIC Plans have
been, in all respects, maintained in compliance with the requirements prescribed
by all applicable statutes, orders and governmental rules or regulations,
including, without limitation, ERISA, the Code, and Treasury and Labor
Regulations promulgated thereunder, (ii) all FIC Plans intended to constitute
tax-qualified plans under Section 401(a) of the Code have complied since their
adoption in all material respects with applicable requirements of the Code and
the Treasury Regulations promulgated thereunder, and have, except with respect
to plan amendments for which the remedial amendment period under Code Section
401(b) has not yet elapsed, received favorable determination letters from the
IRS, and FIC is not aware of any circumstances likely to result in revocation of
any such favorable determination letter; (iii) each FIC Plan subject to ERISA or
intended to be qualified under Section 401(a) of the Code has been and, if
applicable, is being operated in all material respects in accordance with the
applicable provisions of ERISA and the Code and the Department of Treasury
Regulations promulgated thereunder; (iv) except for the FIC common stock held by
its trustee as an asset of the FIC 401k Plan, no FIC Plan (or its related trust)
holds any stock or other securities of FIC or any related or affiliated person
or entity; (v) FIC has not engaged in any transaction that may subject FIC, or
any FIC Plan, to a civil penalty imposed by Section 502 of ERISA; (vi) no
prohibited transaction (as defined in Section 406 of ERISA and as defined in
Section 4975(c) of the Code) has occurred with respect to any FIC Plan; (vi) to
the knowledge of FIC, there are no actions, suits, proceedings or claims pending
(other than routine claims for benefits) or threatened, against FIC, any of the
FIC Subsidiaries, any FIC Plan, any fiduciary of any FIC Plan or the assets of
any FIC Plan.
24
(b) FIC has made available to MBC true, accurate and complete copies of the
following: (i) pension, retirement, profit-sharing, savings, stock purchase,
stock bonus, stock ownership, stock option and stock appreciation right plans
and all amendments thereto and all summary plan descriptions thereof (including
any modifications thereto); (ii) all group insurance and health insurance
contracts, policies or plans; and (iii) all other employee benefit plans
maintained or sponsored by, participated in, or contributed to by FIC or any of
the FIC Subsidiaries for its employees generally.
5.09. CRA Rating. First Indiana was rated "Satisfactory" or "Outstanding"
following its most recent Community Reinvestment Act examination by the
regulatory agency responsible for its supervision. First Indiana has received no
notice of and has no knowledge of any planned or threatened objection by any
community group to the transactions contemplated hereby.
5.10. Pro Forma Capital Requirements. First Indiana is, as of the date of
this Agreement and on a pro forma basis giving effect to the Mergers and any
financing or capital injection will be at the Effective Time, at least "well
capitalized," as defined in federal banking regulations for purposes of the
FDIA.
5.11. No Financing Contingencies. Not later than the Effective Time, FIC
will have available sufficient cash or other liquid assets to fund this
transaction.
5.12. Representations and Warranties at the Effective Time. All
representations and warranties of FIC and First Indiana contained herein or in
the Disclosure Schedules or other documents provided pursuant to this Agreement
shall be true, accurate and complete in all material respects on and as of the
Effective Time as though made or given at such time.
5.13. Nonsurvival of Representations and Warranties. The representations
and warranties of FIC and First Indiana contained in this Agreement shall expire
at the earlier of the termination of this Agreement and the Effective Time and,
thereafter, FIC, First Indiana and all directors, officers and employees of FIC
and First Indiana shall have no further liability with respect thereto.
SECTION 6
COVENANTS OF MBC AND THE BANK
MBC and the Bank covenant and agree with FIC and First Indiana and covenant
and agree to cause their Subsidiaries to act as follows:
6.01. Shareholder Approval.
(a) Subject to Section 6.05 hereof and all applicable securities laws, MBC
shall submit this Agreement to its shareholders for approval and adoption at a
meeting to be called and held in accordance with applicable law and the Articles
of Incorporation and By-Laws of MBC at the earliest possible reasonable date
after satisfaction of the requirement of a letter from KPMG as set forth in
Section 8.01(i). Subject to Section 6.05 hereof, the Board of Directors of
25
MBC shall recommend to MBC's shareholders that such shareholders approve and
adopt this Agreement and the Company Merger contemplated hereby and shall
solicit proxies voting in favor of this Agreement from MBC's shareholders unless
otherwise necessary under applicable fiduciary duties of MBC's Board of
Directors as determined by the Board of Directors of MBC in good faith after
consultation with independent legal counsel.
(b) Subject to Section 6.05(b) hereof, the Bank shall submit this Agreement
to MBC, as its sole shareholder, for approval by unanimous written consent
without a meeting in accordance with applicable law and the Articles of
Incorporation and By-laws of the Bank at a date reasonably in advance of the
Effective Time. The Board of Directors of the Bank shall recommend approval of
this Agreement and the Bank Merger to MBC, as the sole shareholder of the Bank,
and MBC as sole shareholder of the Bank, shall approve this Agreement and the
Bank Merger.
6.02. Other Approvals and Actions.
(a) MBC and the Subsidiaries will proceed expeditiously, cooperate fully
and use their best efforts to assist FIC in procuring upon reasonable terms and
conditions all consents, authorizations, approvals, registrations and
certificates, in completing all filings and applications and in satisfying all
other requirements prescribed by law which are necessary for consummation of the
Mergers on the terms and conditions provided in this Agreement at the earliest
possible reasonable date.
(b) Any materials or information provided by MBC or either Subsidiary to
FIC for use by FIC or First Indiana in any filing with any state or federal
regulatory agency or authority shall not contain any untrue or misleading
statement of material fact and shall not omit to state a material fact necessary
to make the statements contained therein, in light of the circumstances in which
they are made, not false or misleading.
6.03. Conduct of Business.
(a) Except as set forth in the Disclosure Schedule, on and after the date
of this Agreement and until the Effective Time or until this Agreement shall be
terminated as herein provided, neither MBC nor either Subsidiary shall, without
the prior written consent of FIC or First Indiana:
(i) issue additional capital stock or make any changes in its capital
stock accounts (including, without limitation, any stock split, stock
dividend, recapitalization or reclassification, and any capital stock
issued as a matching contribution to the MBC Thrift Plan or the MBC SERP),
except for the issuance of up to (A) 446,007 shares of MBC Common Stock
under the MBC Stock Option Plans and (B) 1,070 shares of MBC Common Stock
under the Equity Plan (as defined herein);
(ii) authorize a class of stock or issue, or authorize the issuance
of, securities other than or in addition to the issued and outstanding
common stock as set forth in Section 4.03 hereof;
26
(iii) distribute or pay any dividends on its shares of common stock,
or make any other distribution to its shareholders except that (A) the
Subsidiaries may pay cash dividends to MBC in the ordinary course of
business for payment of reasonable and necessary business and operating
expenses of MBC and to provide funds for MBC's dividends to its
shareholders in accordance with this Agreement, and (B) MBC may pay to its
shareholders its usual and customary quarterly cash dividend of no greater
than Seven and One Half Cents ($.075) per share for any quarterly period,
provided that no dividend may be paid for the quarterly period in which the
Mergers are consummated unless at least thirty (30) calendar days have
elapsed in such quarter, in which case a prorated dividend shall be payable
for such partial quarter based upon the number of days from the beginning
of the quarter until the Effective Time as compared to the total number of
days in the quarter;
(iv) redeem any of its outstanding shares of common stock;
(v) merge, combine or consolidate or effect a share exchange with or
sell its assets or any of its securities to any other person, corporation
or entity or enter into any other similar transaction not in the ordinary
course of business;
(vi) purchase any assets or securities or assume any liabilities of
another bank holding company, bank, corporation or other entity, except in
the ordinary course of business when necessary to manage their investment
portfolios or in satisfaction of debts previously contracted between the
Bank and its borrowers;
(vii) issue any letter of credit or accept any deposit, except in the
ordinary course of business in accordance with its existing banking
practices;
(viii) except for the acquisition or disposition in the ordinary
course of business of other real estate owned, acquire or dispose of any
real or personal property or fixed asset constituting a capital investment
in excess of $50,000 individually or $125,000 in the aggregate;
(ix) subject any of its properties or assets to a mortgage, lien,
claim, charge, option, restriction, security interest or encumbrance,
except for tax and other liens which arise by operation of law and with
respect to which payment is not past due or is being contested in good
faith by appropriate proceedings and except for pledges or liens: (i)
required to be granted in connection with acceptance by MBC or the Bank of
government deposits; (ii) granted in connection with repurchase or reverse
repurchase agreements; or (iii) otherwise incurred in the ordinary course
of the conduct of its business;
(x) promote to a new position or increase the rate of compensation or
enter into any agreement to promote to a new position or increase the rate
of compensation, of any director, officer or employee of MBC or either
Subsidiary (except for promotions and compensation increases in the
ordinary course of business and in accordance with past practices and
established employment policies of MBC and the Subsidiaries which have been
disclosed to FIC);
27
(xi) except as agreed to herein, execute, create, institute, modify,
amend or terminate (except with respect to any amendments to the MBC
Compensation Plans required by law, rule or regulation) any pension,
retirement, savings, stock purchase, stock bonus, stock ownership, stock
option, stock appreciation or depreciation rights or profit sharing plans,
or any employment, deferred compensation, consulting, bonus or collective
bargaining agreement, or any group insurance or health contract or policy,
or any other incentive, retirement, welfare or employee welfare benefit
plan, agreement or understanding for current or former directors, officers
or employees of MBC or either Subsidiary, or change the level of benefits
or payments under any of the foregoing, or increase or decrease any
severance or termination benefits or any other fringe or employee benefits
other than as required by law or regulatory authorities or the terms of any
of the foregoing;
(xii) except as agreed to herein, modify, amend or institute new
employment policies or practices, or enter into, renew or extend any
employment, indemnity, reimbursement, consulting, compensation or severance
agreements with respect to any present or former directors, officers or
employees of MBC or either Subsidiary;
(xiii) hire or employ any new or additional employees of MBC or either
Subsidiary, except as reasonably necessary for the proper operation of
their respective businesses;
(xiv) elect or appoint any executive officers or directors of MBC or
either Subsidiary who are not presently serving in such capacities;
(xv) except for technical corrections or clarifications amend, modify
or restate MBC's or either Subsidiary's respective organizational documents
(as described in Section 4.04 hereof) from those in effect on the date of
this Agreement and delivered to FIC hereunder;
(xvi) give, dispose of, sell, convey or transfer; assign, hypothecate,
pledge or encumber; or grant a security interest in or option to or right
to acquire any shares of common stock or substantially all of the assets of
MBC or enter into any agreement or commitment relative to the foregoing;
(xvii) fail to continue to make additions to in accordance with the
Bank's past practices and to otherwise maintain in all respects the Bank's
reserve for loan and lease losses, or any other reserve account, in
accordance with safe, sound, and prudent banking practices and in
accordance with accounting principles generally accepted in the United
States and applied on a consistent basis;
(xviii) fail to accrue, pay, discharge and satisfy all debts,
liabilities, obligations and expenses, including, but not limited to, trade
payables, incurred in the regular and ordinary course of business as such
debts, liabilities, obligations and expenses become due;
(xix) except for obligations disclosed within this Agreement or the
Disclosure Schedule, trade payables and similar liabilities and obligations
incurred in the ordinary course of business, and liabilities reflected in
the MBC Financial Statements or the Subsequent MBC
28
Financial Statements, and except for investment banking, legal, accounting
and other fees related to the Mergers, and except as contemplated by
Section 6.03(a)(vii), (A) borrow any money (except for capital purposes
related to the Bank), (B) incur any indebtedness (including, without
limitation, through the issuance of debentures), or (C) incur any liability
or obligation (whether absolute, accrued, contingent or otherwise), in an
aggregate amount exceeding $50,000;
(xx) open, close, move or, in any material respect, expand, diminish,
renovate, alter or change any of its offices or branches;
(xxi) pay or commit to pay any management or consulting or other
similar type of fees other than in the ordinary course of business;
(xxii) make any loan or advance (1) other than in the ordinary course
of business consistent with lending policies as in effect on the date
hereof or (2) in excess of $1,000,000; provided that MBC or any of its
Subsidiaries may make any such loan in the event (A) MBC or any of its
Subsidiaries has delivered to First Indiana or its designated
representative a notice of its intention to make such loan and such
additional information as First Indiana or its designated representative
may reasonably require and (B) First Indiana or its designated
representative shall not have reasonably objected to such loan by giving
notice of such objection, including the reason for such objections, within
three business days following the delivery to First Indiana of the
applicable notice of intention; or
(xxiii) make any student loan or advance or process any student loan
applications other than in the ordinary course of business or in the
aggregate in excess of $1,000,000.
(b) MBC and each Subsidiary shall maintain, or cause to be maintained, in
full force and effect, insurance on their respective assets, properties and
operations, fidelity coverage and directors' and officers' liability insurance
on their directors, officers and employees in such amounts and with regard to
such liabilities and hazards as are currently insured by MBC and each Subsidiary
as of the date of this Agreement.
6.04. Preservation of Business. On and after the date of this Agreement and
until the Effective Time or until this Agreement is terminated as herein
provided, MBC and the Subsidiaries shall: (a) carry on their respective
businesses substantially in the manner as is presently being conducted and in
the ordinary course of business; (b) use their reasonable best efforts to
preserve their business respective organizations intact, keep available the
services of the present officers and employees and preserve their present
relationships with customers and persons having business dealings with them; (c)
maintain all of the properties and assets that each of them owns or utilizes in
good operating condition and repair, reasonable wear and tear excepted, and
maintain insurance upon such properties and assets in amounts and kinds
comparable to that in effect on the date of this Agreement; (d) maintain their
respective books, records and accounts in the usual, regular and ordinary
manner, on a basis consistent with prior years and in compliance with all
material respects with all statutes, laws, rules and regulations applicable to
them and to the conduct of their business; and (e) not knowingly do or fail to
do anything which will cause a breach of, or default in, any contract,
agreement, commitment,
29
obligation, understanding, arrangement, lease or license to which any one of
them is a party or by which any one of them is or may be subject or bound.
6.05. Other Negotiations.
(a) On and after the date of this Agreement and until the Effective Time or
until this Agreement is terminated as herein provided, except with the prior
written approval of FIC, neither MBC nor either Subsidiary shall permit nor
authorize their respective directors, officers, employees, agents or
representatives to, directly or indirectly, initiate, solicit or encourage, or
provide information to, any corporation, association, partnership, person or
other entity or group concerning any merger, consolidation, share exchange,
combination, purchase or sale of substantial assets, sale of shares of common
stock (or securities convertible or exchangeable into or otherwise evidencing,
or any agreement or instrument evidencing the right to acquire, capital stock)
or similar transaction relating to MBC or the Subsidiaries or to which MBC or
the Subsidiaries may become a party (all such transactions are hereinafter
referred to as "Acquisition Transactions").
(b) MBC shall promptly communicate to FIC the terms of any proposal or
offer which MBC or either Subsidiary may receive with respect to an Acquisition
Transaction. MBC or the Subsidiaries may, in response to an unsolicited written
proposal with respect to an Acquisition Transaction from a third party, furnish
information to, and negotiate, explore or otherwise engage in substantive
discussions with such third party, and enter into any such agreement,
arrangement or understandings, in each case, only if MBC's Board of Directors
determines in good faith by majority vote, after consultation with its financial
advisors and outside legal counsel, that failing to take such action would be a
breach of the fiduciary duties of MBC's Board of Directors in connection with
seeking an Acquisition Transaction, and that the Acquisition Transaction is
substantially more favorable to the shareholders of MBC than the terms of the
Company Merger.
(c) This Section 6.05 shall not authorize MBC or either Subsidiary or any
of their directors, officers, employees, agents or representatives, to initiate
any discussions or negotiations with respect to an Acquisition Transaction with
a third party.
6.06. FIC Break-up Fee.
(a) MBC hereby acknowledges and agrees that FIC has committed and will
commit substantial time, effort, resources and expenses, will forgo other
opportunities in pursuing the Mergers and would not enter into this Agreement
unless MBC agreed to the provisions of this Section 6.06. MBC further agrees
that it shall pay in immediately available funds to FIC a break-up fee in the
amount of One Million Five Hundred Thousand Dollars ($1,500,000), plus
out-of-pocket expenses (collectively, the "FIC Break-up Fee"), in the event
that:
(i) The Board of Directors of MBC fails to recommend to shareholders
of MBC that such shareholders should approve this Agreement and the Company
Merger; or
30
(ii) The Board of Directors of MBC withdraws, modifies or conditions
its recommendation to shareholders of MBC to approve this Agreement and the
Company Merger or is silent with respect to the approval of this Agreement
and the Company Merger; or
(iii) The Board of Directors of MBC fails to undertake a solicitation
of proxies in favor of the Mergers from the shareholders of MBC or MBC
fails to approve the Bank Merger as the sole shareholder of the Bank; or
(iv) The Board of Directors of MBC terminates the Agreement and the
Mergers pursuant to Section 9.01(c)(v) hereof.
(b) The FIC Break-up Fee shall be paid to FIC within thirty (30) days of
the occurrence of any of the events specified in Section 6.06(a) hereof. If the
FIC Break-up Fee is not paid as provided, then FIC shall be entitled to recover
interest at the highest prime rate set forth in The Wall Street Journal (Midwest
Edition) under the section entitled "Money Rates" on the unpaid amount of the
FIC Break-up Fee from the time the FIC Break-up Fee is due until paid-in-full,
together with all costs of collection thereof, including reasonable attorneys'
fees and expenses.
(c) MBC and FIC hereby acknowledge and agree that the FIC Break-up Fee
shall compensate FIC for (i) expenses incurred for attorneys, accountants,
financial advisors and consultants of FIC in developing the Mergers, (ii) FIC's
management time and expense in investigating, analyzing, developing and pursuing
the Mergers, and (iii) expenses relating to FIC's due diligence efforts. MBC
further acknowledges and agrees that the amount of the FIC Break-up Fee is fair,
reasonable and not a penalty and that its obligation to pay the Break-up Fee
shall survive any termination of this Agreement by MBC.
6.07. Press Releases. Except as required by law, neither MBC nor either
Subsidiary shall issue any news or press releases or make any other public
announcements or disclosures relating to the Mergers without the prior consent
of FIC, which consent shall not be unreasonably withheld.
6.08. Disclosure Schedule Update. MBC shall promptly supplement, amend and
update, upon the occurrence of any change prior to the Effective Time, and as of
the Effective Time, the Disclosure Schedule with respect to any matters or
events hereafter arising which, if in existence or having occurred as of the
date of this Agreement, would have been required to be set forth or described in
the Disclosure Schedule or this Agreement and including, without limitation, any
fact which, if existing or known as of the date hereof, would have made any of
the representations or warranties of MBC contained herein incorrect, untrue or
misleading. No such supplement, amendment or update shall become part of the
Disclosure Schedule unless FIC shall have first consented in writing with
respect thereto.
6.09. Information, Access Thereto, Confidentiality.
(a) FIC and its respective representatives and agents shall, upon 48 hours'
prior written notice and during normal business hours prior to the Effective
Time, have reasonable
31
access to the properties, facilities, operations, books and records of MBC and
the Subsidiaries. FIC and its respective representatives and agents may, prior
to the Effective Time, make or cause to be made such reasonable investigation of
the operations, books, records and properties of MBC and the Subsidiaries and of
their financial and legal condition as they deem necessary or advisable to
familiarize themselves with such operations, books, records, properties and
other matters; provided, however, that such access or investigation shall not
interfere with the normal business operations of MBC and the Subsidiaries. MBC
and the Subsidiaries will cooperate with FIC and the FIC Subsidiaries in their
efforts to effect a smooth transition of operations following the Effective
Time, including allowing representatives and agents of FIC and the FIC
Subsidiaries to schedule meetings with employees and officers of MBC and the
Subsidiaries prior to the Effective Time for the purpose of training such
employees and officers and enrolling them in the benefit plans of FIC and the
FIC Subsidiaries. In addition, MBC and the Subsidiaries will cooperate with any
environmental consulting firm designated by FIC in connection with the conduct
by such firm of an environmental investigation on all real property owned or
leased by MBC or the Subsidiaries as of the date of this Agreement and any real
property acquired or leased by them after the date of this Agreement. Upon
request, MBC and the Subsidiaries shall furnish FIC, or its respective
representatives or agents, their attorneys' responses to external auditors
requests for information, management letters received from their external
auditors and such financial, loan and operating data and other information
reasonably requested by FIC which has been or is developed by MBC or either
Subsidiary, their auditors, accountants or attorneys (provided with respect to
attorneys, such disclosure would not result in the waiver by MBC or either
Subsidiary of any claim of attorney-client privilege), and will permit FIC and
its respective representatives or agents to discuss such information directly
with any individual or firm performing auditing or accounting functions for MBC
and the Subsidiaries, and such auditors and accountants shall be directed to
furnish copies of any reports or financial information as developed to FIC or
its respective representatives or agents. FIC shall not use any such information
obtained pursuant to this Agreement for any purpose unrelated to the Mergers.
Any confidential information or trade secrets received by FIC or its
representatives or agents in the course of such examination (whether conducted
prior to or after the date of this Agreement) shall be treated confidentially,
and any correspondence, memoranda, records, copies, documents and electronic or
other media of any kind containing such confidential information or trade
secrets or both shall be destroyed by FIC or, at MBC's request, returned to MBC
in the event this Agreement is terminated as provided in Section 9 hereof.
(b) MBC shall not use any information obtained pursuant to this Agreement
or in contemplation of the Mergers, including any information obtained as a
result of their officers and employees participating in training programs or
meetings of FIC or the FIC Subsidiaries, for any purpose unrelated to the
Mergers. Any confidential information or trade secrets received by MBC or its
Subsidiaries or their representatives or agents pursuant to this Agreement or in
contemplation of the Mergers (whether conducted prior to or after the date of
this Agreement) shall be treated confidentially, and any correspondence,
memoranda, records, copies, documents and electronic or other media of any kind
containing such confidential information or trade secrets or both shall be
destroyed by MBC or, at FIC's request, returned to FIC in the event this
Agreement is terminated as provided in Section 9 hereof.
32
(c) This Section 6.09 shall not require any party to disclose any
information to any other party which would be prohibited by law.
6.10. Subsequent MBC Financial Statements. As soon as reasonably available
after the date of this Agreement, MBC shall deliver to FIC the monthly unaudited
consolidated balance sheets and profit and loss statements of MBC prepared for
its internal use, Call Reports of the Bank for each quarterly period completed
prior to the Effective Time, and all other financial reports or statements
submitted to regulatory authorities after the date hereof, to the extent
permitted by law (collectively, the "Subsequent MBC Financial Statements"). The
Subsequent MBC Financial Statements shall be prepared on a basis consistent with
past accounting practices and accounting principles generally accepted in the
United States applied on a consistent basis to the extent applicable and shall
present fairly the financial condition and results of operations as of the dates
and for the periods presented, subject to year end audit adjustments and the
absence of footnotes for interim statements.
6.11. Employee Benefits. Neither the terms of Section 7.02 hereof, nor the
provision of any employee benefits by FIC or any of its subsidiaries to
employees of MBC or either of its Subsidiaries shall: (a) create any employment
contract, agreement or understanding with or employment rights for, or
constitute a commitment or obligation of employment to, any of the officers or
employees of MBC; or (b) prohibit or restrict FIC or the FIC Subsidiaries,
whether before or after the Effective Time, from changing, amending or
terminating any employee benefits provided to its employees from time to time.
6.12. Disposition of MBC Thrift Plan. MBC shall take any action that needs
to be taken prior to the Effective Time to effectuate the disposition of the
MetroBanCorp Employees Thrift and Retirement Plan ("MBC Thrift Plan") sponsored
by MBC as provided in this Section 6.12:
(a) Termination of MBC Thrift Plan. MBC and the Subsidiaries agree to adopt
resolutions to fully vest MBC Thrift Plan participants immediately prior to the
Effective Time and to terminate the MBC Thrift Plan. FIC shall receive from MBC
evidence that the directors of MBC and the Subsidiaries have adopted such
resolutions (the form and substance of which resolutions shall be subject to
review and approval of FIC), as of the day immediately preceding the day that
includes the Effective Time but contingent on the Closing occurring and
contingent on receipt of a favorable determination letter from the IRS as to the
MBC Thrift Plan's status as a qualified plan at its termination. The MBC Thrift
Plan shall be terminated and all benefits thereunder distributed in accordance
with the provisions of its plan documents in effect as of the Effective Time.
From the date of this Agreement through the Effective Time, MBC may continue to
make matching contributions to the MBC Thrift Plan so long as such contributions
are made in cash and are comparable in amount to its past contributions to such
plan.
(b) Participation in Merger Transaction. In connection with the Mergers,
MBC shall take all actions necessary to assist the fiduciaries of the MBC Thrift
Plan in taking the following actions:
33
(i) Follow its written, confidential pass through voting procedure
pursuant to which the participants under the MBC Thrift Plan and their
beneficiaries shall direct the Trustee under the MBC Thrift Plan to vote
the shares of MBC Common Stock allocated to their MBC Thrift Plan accounts
with respect to the Company Merger.
(ii) Provide the MBC Thrift Plan participants and their beneficiaries
with a written notice regarding the existence of and provisions for such
confidential pass through voting procedures, as well as the same written
materials to be provided to the shareholders of MBC in connection with the
Company Merger.
(iii) Obtain a written opinion from a qualified, independent financial
advisor to the Trustee and the Benefits Committee of the MBC Thrift Plan to
the effect that the Conversion Price to be received by the MBC Thrift Plan
in exchange for its shares of MBC Common Stock will constitute "adequate
consideration" as defined in Section 3(18) of ERISA, and that the terms and
conditions of the Company Merger transaction, as they apply to the MBC
Thrift Plan, are fair to the MBC Thrift Plan and its participants from a
financial point of view, with the cost of such opinion to be paid by MBC,
provided such cost shall be reasonable and in no event shall exceed an
amount equal to $5,000.
(iv) Take any and all additional actions relating to the MBC Thrift
Plan necessary to satisfy the requirements of ERISA applicable to the
fiduciaries thereof in connection with the Mergers.
6.13. Group Health Plan. From the date of this Agreement until the
Effective Time, MBC and its Subsidiaries shall continue to fund all expenses of
the MBC Group Health Plan ("MBC Health Plan"), including but not limited to,
benefits, insurance premiums and administrative fees, attributable to claims
incurred on or prior to the Effective Time. If FIC decides that it wants to
terminate the MBC Health Plan at or shortly after the Effective Time and
thereafter to cover continuing employees under its own group health plan, MBC
and its Subsidiaries shall take such action in respect of the MBC Health Plan
prior to the Effective Time as FIC reasonably may request so that it will be
able to effect such termination and transfer of coverage in a prompt and
efficient manner.
6.14. Long Term Disability Plan. From the date of this Agreement until the
Effective Time, MBC and its Subsidiaries shall continue to pay the insurance
premiums necessary to continue the benefits provided under the MBC Long Term
Disability Plan ("MBC LTD Plan").
6.15. Section 125 Plan. From the date of this Agreement through the
Effective Time, MBC and its Subsidiaries shall continue to contribute to the MBC
Section 125 Plan ("MBC Cafeteria Plan") the pre-tax amounts which the MBC
Cafeteria Plan participants elect to defer from compensation in order to pay the
employee portion of the cost of coverage under the MBC Health Plan. If FIC
decides that it wants to terminate the MBC Cafeteria Plan at or shortly after
the Effective Time and thereafter to cover continuing employees under its own
cafeteria plan, MBC and its Subsidiaries shall take such action in respect of
the MBC Cafeteria Plan prior to the Effective Time as FIC reasonably may request
so that it will be able to effect such termination and transfer of coverage in a
prompt and efficient manner.
34
6.16. MBC Group Life Plan. From the date of this Agreement through the
Effective Time, MBC and the Subsidiaries shall continue to pay the insurance
premiums necessary to continue the benefits provided by the MBC Group Term Life
Insurance Plan ("MBC Group Life Plan") through the end of the calendar month
that includes the Effective Time. If FIC decides that it wants to terminate the
MBC Group Life Plan at or shortly after the close of the calendar month that
includes the Effective Time, MBC and its Subsidiaries shall take such action in
respect of the MBC Group Life Plan prior to the Effective Time as FIC reasonably
may request so that it will be able to effect such termination in a prompt and
efficient manner.
6.17. Termination of MBC SERP. The MBC Supplemental Executive Retirement
Plan ("MBC SERP") and all participation agreements in effect thereunder shall be
terminated, effective as of the day immediately preceding the day on which the
Effective Time occurs. No participant under the MBC SERP shall accrue any
benefits thereunder attributable to periods after December 31, 2002. Any
matching contributions required to be made to the MBC SERP after the date hereof
shall be made in cash. The Board of Directors of MBC shall, prior to the SERP
Termination Date, amend such plan to provide for its termination and to provide
that the accumulated benefit obligations in the MBC SERP shall, at the Effective
Time, be distributed to participants in a single sum in cash.
6.18. Termination of MBC Target Benefit Plan. Prior to the Effective Time,
the Board of Directors of MBC shall amend the MBC Target Benefit Plan ("Target
Plan"), conditional upon the consummation of the Mergers, to provide for the
termination of such plan effective as of the Effective Time and for the
forfeiture of any benefits previously accrued thereunder. The consulting
agreement provided for in Section 6.25 below includes a waiver by Xxx X. Xxxxxxx
of his benefits under the Target Plan. Within 30 days after the date hereof, MBC
shall obtain written releases and consents from any other participants of the
Target Plan who have accrued or will accrue benefits thereunder prior to the
Effective Time wherein such participants consent to such forfeiture. In the
cases of Xxxxxxx X. Xxxxxx, Xxxxxxx X. Xxxxxx, and Xxxxxx X. Xxxxxx, such
consents, if required, shall be in consideration of the amounts payable to them
pursuant to Section 6.23 below.
6.19. Termination of MBC Employee Equity Ownership Plan.
(a) Prior to the Effective Time, the Board of Directors of MBC shall amend
the MBC Employee Equity Ownership Plan ("Equity Plan"), conditional upon
consummation of the Mergers, to provide for the termination of such Equity Plan,
effective as of the day preceding the day of the Effective Time, and for the
grant of awards for any period between December 31, 2002 and the Effective Time,
as set forth in (i) and (ii) below:
(i) If the Effective Time occurs on or before February 10, 2003, no
awards or related cash payments will be made under the Equity Plan in
respect of service occurring after December 31, 2002.
(ii) If the Effective Time occurs after February 10, 2003, awards and
related cash payments will be made under the Equity Plan in respect of each
one-half month of service completed after December 31, 2002 and prior to
the Effective Time. Thus, Equity Plan
35
participants who remain full time employees until the Effective Time will
receive, in respect of their service after December 31, 2002 two shares of
MBC Common Stock if the Effective Time occurs after February 10, 2003 and
before February 15, 2003, three shares of MBC Common Stock if the Effective
Time occurs after February 14, 2003 and before February 28, 2003, and four
shares of MBC Common Stock if the Effective Time occurs on February 28,
2003, in each case with a related cash payment.
(b) The benefit of each participant under the Equity Plan shall be
distributed as soon as practicable after the termination of the Equity Plan but
in any case prior to the Effective Time.
6.20. Termination of MBC Directors' Retirement Plan. Prior to the Effective
Time, the Board of Directors of MBC shall amend the MBC Directors' Retirement
Plan ("MBC Directors' Plan"), conditional upon the consummation of the Mergers:
to provide for the termination of the MBC Directors' Plan, effective as of the
day immediately preceding the day on which the Effective Time occurs, and for
the distribution to each participant, as soon as practicable after the Effective
Time, in a single sum in cash, his vested accrued benefit as of the date of such
termination, in the respective amounts for each participant set forth in MBC's
Disclosure Schedule.
6.21. MBC Stock Option Plans. Prior to the Effective Time, the Board of
Directors of MBC shall amend the MBC Option Plans, conditional upon the
consummation of the Mergers, to provide for the following: (a) effective as of
the day immediately preceding the day on which the Effective Time occurs, all
unexercised options and their related stock appreciation rights ("SARs") shall
be surrendered by the optionees for a single sum cash payment from MBC equal to
the difference between the exercise price of each option and related SAR
outstanding on such date and the Conversion Price, treating each option and SAR
as a single unit; and (b) effective as of the Effective Time, all MBC Option
Plans shall be terminated. MBC shall take all actions necessary to amend all
option agreements executed under the MBC Option Plans to provide for the
disposition of options and their related SARs as specified in the preceding
sentence.
6.22. Elimination of Gross-Up Obligations. To the extent any of MBC and its
Subsidiaries are obligated, under the terms of any agreement, plan or
arrangement (whether or not identified in the Disclosure Schedule), to reimburse
any individual for, or to pay on behalf of any individual, any excise tax
imposed on such individual pursuant to Section 4999 of the Internal Revenue
Code, or any federal, state or local income taxes payable by such individual in
respect of payments by any of MBC and its Subsidiaries to such individual, MBC
shall eliminate such obligation prior to the Effective Time or, if it cannot do
so unilaterally, obtain from such individual, within 30 days from the date
hereof, a written release thereof (which release may be conditional upon the
consummation of the Mergers).
6.23. Employment Agreements.
(a) Within thirty (30) days after the date of this Agreement, MBC shall
have obtained signed agreements and releases (in a form previously approved by
FIC) from Xxxxxxx X. Xxxxxx, Xxxxxxx X. Xxxxxx, and Xxxxxx X. Xxxxxx, officers
of MBC, in which such officers have agreed, contingent upon consummation of the
Mergers, each to terminate his employment agreement as
36
of the Effective Time, each to waive his rights to any payments under said
employment agreement (including payments under sections 4(c)(ii) and 4(e)
thereof) and any payments under MBC's Target Plan; and each to accept in lieu of
such payments a lump sum cash severance payment, payable at the Effective Time,
equal to an amount, calculated and set forth in MBC's Disclosure Schedule.
(b) In addition to the lump sum cash severance amounts payable to them
under Section 6.23(a), but subject to Sections 6.12, 6.17 and 6.22 above,
Xxxxxxx X. Xxxxxx, Xxxxxxx X. Xxxxxx, and Xxxxxx X. Xxxxxx shall be entitled to
receive the nonforfeitable accrued benefits payable to them under the MBC Thrift
Plan and the MBC SERP in respect of their service prior to the Effective Time.
6.24. Change of Control Payments. In consideration of their services to
MetroBank prior to the Effective Date, change of control payments shall be made
on the Effective Date to those specified officers of MetroBank who do not
currently have employment agreements with MetroBank in the respective amounts
for each such officer set forth in MBC's Disclosure Schedule. Such payments
shall be conditional upon the recipient officer's continued employment by
MetroBank until the Effective Time but shall not be conditional on the recipient
officer's termination of employment as of or following the Effective Time.
6.25. Xxxxxxx Consulting Agreement.
(a) Contemporaneous with the execution of this Agreement, Xxx X. Xxxxxxx
and First Indiana shall have executed the Consulting Agreement attached hereto
as Exhibit A, wherein Xx. Xxxxxxx agrees, contingent upon consummation of the
Bank Merger, to terminate his employment agreement as of the Effective Time, to
waive his rights to further payments and benefits under said employment
agreement (including payments under sections 4(c)(ii) and 4(e) thereof), as well
as any payments under MBC's Incentive Plan and MBC's Target Plan, and to accept
in lieu of all such payments and benefits, in respect of his services prior to
the Effective Time, (i) a lump sum cash amount, as calculated and set forth in
MBC's Disclosure Schedule, and payable at the Effective Time, relating to the
benefit to which he would be entitled under MBC's Target Plan had it been
continued in effect and had he terminated service voluntarily on December 31,
2002 otherwise than in connection with a change of control, plus (ii) a lump sum
cash severance payment, payable at the Effective Time, in the amount calculated
and set forth in MBC's Disclosure Schedule.
(b) In addition to the lump sum amounts payable to him under Section
6.25(a), but subject to Sections 6.12, 6.17 and 6.22 above, Xxx X. Xxxxxxx shall
be entitled to receive the nonforfeitable accrued benefits payable to him under
the MBC Thrift Plan and the MBC SERP in respect of his service prior to the
Effective Time.
6.26. Severance Pay. MBC and its Subsidiaries may adopt a severance pay
plan (in a form previously approved by FIC) for those of their employees, other
than Xxx X. Xxxxxxx, Xxxxxxx X. Xxxxxx, Xxxxxxx X. Xxxxxx, or Xxxxxx X. Xxxxxx,
who remain employed by them until the last business day prior to the day that
includes the Effective Time, pursuant to which any such employee whose
employment First Indiana does not offer to continue after the Effective
37
Time or whose employment is terminated by First Indiana without cause within one
year after the Effective Time shall be entitled to a lump sum severance payment
equal to the product of (i) one week's base pay times (ii) the number of such
employee's full years of service with MBC and its Subsidiaries completed prior
to the Effective Time.
6.27. Disposition of Incentive Plan. The amount that otherwise would be
distributable under MBC's Incentive Plan by reason of the Mergers shall be
reduced by eliminating the seventy-five percent (75%) portion thereof that
otherwise would be distributable to Xxx X. Xxxxxxx. The amount otherwise
distributable under MBC's Incentive Plan and the amount of the reduction
provided for in this section have been computed and are set forth in MBC's
Disclosure Schedule. No portion of the remaining amount distributable under
MBC's Incentive Plan shall be allocated to Xxx X. Xxxxxxx. Any portion of such
remaining amount allocated to Xxxxxxx X. Xxxxxx, Xxxxxxx X. Xxxxxx, or Xxxxxx X.
Xxxxxx shall be limited to the amounts calculated and set forth for each in
MBC's Disclosure Schedule.
6.28. Reports. Promptly upon its becoming available, MBC shall furnish to
FIC one (1) copy of each financial statement, report, notice, or proxy statement
sent by MBC to its shareholders generally and of each regular or periodic
report, registration statement or prospectus filed by MBC with the SEC or any
successor agency, and of any order issued by any Governmental Authority in any
proceeding to which MBC is a party. For purposes of this provision,
"Governmental Authority" shall mean any government (or any political subdivision
or jurisdiction thereof), court, bureau, agency or other governmental entity
having or asserting jurisdiction over MBC, the Subsidiaries of the respective
business, operations or properties of MBC or any of the Subsidiaries.
6.29. Adverse Actions. MBC shall not knowingly take any action or inaction
that is intended or is reasonably likely to result in (i) any of its
representations and warranties set forth in this Agreement being or becoming
untrue, subject to the standard set out in the third paragraph of Section 4, in
any respect at any time at or prior to the Effective Time, (ii) any of the
conditions to the Mergers set forth in Section 8 not being satisfied, (iii) a
material violation of any provision of this Agreement or (iv) a delay in the
consummation of the Mergers except, in each case, as may be required by
applicable law or regulation.
SECTION 7
COVENANTS OF FIC AND FIRST INDIANA
FIC and First Indiana covenant and agree with MBC and the Bank, as follows:
7.01. Approvals. FIC shall have primary responsibility for the preparation,
filing and costs of all bank holding company and bank regulatory applications
required for consummation of the Mergers. FIC shall file all bank holding
company and bank regulatory applications as soon as practicable after the
execution of this Agreement. FIC shall provide to MBC's legal counsel a
reasonable opportunity to review such applications prior to their filing and
shall provide to MBC's legal counsel copies of all applications filed and copies
of all material written communications with all state and federal bank
regulatory agencies relating to such applications.
38
FIC shall proceed expeditiously, cooperate fully and use its best efforts to
procure, upon terms and conditions reasonably acceptable to FIC, all consents,
authorizations, approvals, registrations and certificates, to complete all
filings and applications and to satisfy all other requirements prescribed by law
which are necessary for consummation of the Mergers on the terms and conditions
provided in this Agreement at the earliest possible reasonable date.
7.02. Employee Benefit Plans.
(a) As of, or as soon as administratively possible following the Effective
Time, FIC and the FIC Subsidiaries will make available to the employees of MBC
and its Subsidiaries who continue as employees of FIC or any of the FIC
Subsidiaries after the Effective Time, subject to Sections 7.02(b) through
7.02(d) hereof, substantially the same employee benefits on substantially the
same terms and conditions as FIC and the FIC Subsidiaries offer to other
similarly situated officers and employees. Until such time as such employees of
MBC and its Subsidiaries become covered by the FIC welfare benefit plans, they
shall remain covered by the corresponding MBC welfare benefit plans, which FIC
and the FIC Subsidiaries shall assume and maintain as successor employers.
Except as otherwise provided in Sections 6.11 through 6.27, and subject to any
modifications required to be made pursuant to Section 8.01(h), FIC will honor
(i) all employee benefit obligations of MBC and its Subsidiaries that as of the
Effective Time are accrued and nonforfeitable (including, without limitation,
any benefits payable under the MBC Health Plan on claims that are pending or
made after the Effective Time in respect of covered expenses incurred prior to
the Effective Time and any benefits payable under the MBC LTD Plan in respect of
covered MBC employees who become disabled after the date of this Agreement and
prior to the Effective Time) and (ii) all employment or severance agreements of
MBC and its Subsidiaries that are identified and described in the Disclosure
Schedule or provided for in this Agreement.
(b) Subject to the provisions of subsection (c) hereof, years of service
(as defined in the applicable FIC plan) of an officer or employee of MBC or any
of its Subsidiaries prior to the Effective Time shall be credited, effective as
of the date on which such officer or employee becomes covered by a particular
FIC plan or benefit, under Section 7.02(a) hereof: (i) for purposes of
eligibility under FIC's employee welfare benefit plans and other fringe benefit
programs; (ii) for purposes of eligibility and vesting, but not for purposes of
benefit accrual or contributions, under the FIC Defined Benefit Pension Plan
("FIC Pension Plan"), the FIC 401(k) Plan, and the FIC Stock Purchase Plan.
Those officers and employees of MBC and its Subsidiaries who otherwise meet the
eligibility requirements of the FIC Pension Plan, FIC 401(k) Plan, and FIC Stock
Purchase Plan, based on their age and years of service to any of MBC and its
Subsidiaries, shall become participants thereunder at the Effective Time. Those
officers or employees who do not meet the eligibility requirements of the FIC
Pension Plan, FIC 401(k) Plan or Stock Purchase Plan at such times shall become
participants thereunder on the first plan entry date under the FIC Pension Plan,
FIC 401(k) Plan or Stock Purchase Plan, as the case may be, which coincides with
or next follows the date on which such eligibility requirements are satisfied.
(c) In accordance with the provisions of the Health Insurance Portability
and Accountability Act ("HIPAA") and the terms of the FIC group health plan,
officers and
39
employees of any of MBC and its Subsidiaries who become participants in the FIC
group health plan will be given "creditable coverage" credit for their coverage
under the MBC Group Health Plan under the FIC group health plan's pre-existing
condition limitation provisions. In addition, if a condition was not a
"pre-existing condition" for a participant in the MBC Group Health Plan, it
shall not be considered to be a pre-existing condition under the FIC group
health plan.
(d) Neither the terms of this Section 7.02 nor the provision of any
employee benefits by FIC or any of the FIC Subsidiaries to employees of MBC or
any of its Subsidiaries shall: (i) create any employment contract, agreement or
understanding with or employment rights for, or constitute a commitment or
obligation of employment to, any of the officers or employees of MBC or the
either Subsidiary; or (ii) prohibit or restrict FIC or the FIC Subsidiaries,
whether before or after the Effective Time, from changing, amending or
terminating any employee benefits provided to its employees from time to time.
(e) FIC shall assure that the members of the MBC Benefits Committee and the
directors and officers of MBC shall continue to have fiduciary insurance
coverage for a period of three (3) years following the Effective Time for their
activities in respect to MBC's Compensation Plans prior to the Mergers.
(f) FIC and First Indiana shall assume the obligations of MBC and its
Subsidiaries under the severance pay plan adopted by MBC and its Subsidiaries
pursuant to Section 4.26 above.
(g) For purposes of this Section 7.02, employees of MBC and its
Subsidiaries whose employment is terminated by FIC and the FIC Subsidiaries
within one week after the day that includes the Effective Time shall not be
considered employees of MBC and its Subsidiaries who continue as employees of
FIC or any of the FIC Subsidiaries after the Effective Time. Such employees
shall be entitled to receive the same benefits under the Compensation Plans of
MBC and its Subsidiaries as employees of MBC and its Subsidiaries whose
employment is terminated as of the Effective Time but shall not be eligible to
commence participation in any of the employee benefit plans of FIC and the FIC
Subsidiaries.
7.03. Press Releases. Except as required by law, FIC shall not issue any
news or press releases or make any other public announcements or disclosures
relating primarily to MBC with respect to the Mergers without the prior consent
of MBC, which consent shall not be unreasonably withheld.
7.04. Indemnification and D&O Insurance.
(a) For six years after the Effective Time, FIC shall indemnify, defend and
hold harmless the present and former officers and directors of MBC and its
Subsidiaries against all losses, expenses (including attorneys' fees), claims,
damages or liabilities arising out of their actions or omissions in such
capacities occurring on or prior to the Effective Time (including, without
limitation, the transactions contemplated by this Agreement) to the full extent
then permitted under applicable federal and state law and by MBC's Articles of
Incorporation as in
40
effect on the date hereof, including provisions relating to advances of expenses
incurred in the defense of any action or suit.
(b) FIC shall use its best efforts to maintain in effect for not less than
three (3) years from the Effective Time at premiums not greater than 125% of the
premiums currently paid by MBC the policies of directors' and officers'
liability insurance most recently maintained by MBC which covers and insures
such directors and officers for past actions or omissions; provided, however,
that FIC may substitute therefor policies with reputable and financially sound
carriers for substantially similar coverage containing terms and conditions
which are no less advantageous for so long as such substitution does not result
in gaps or lapses in coverage with respect to claims arising from or relating to
matters occurring prior to the Effective Time.
7.05. Adverse Actions. FIC shall not knowingly take any action or inaction
that is intended or is reasonably likely to result in (i) any of its
representations and warranties set forth in this Agreement being or becoming
untrue, subject to the standard set out in the third paragraph to Section 5, in
any respect at any time at or prior to the Effective Time, (ii) any of the
conditions to the Mergers set forth in Section 8 not being satisfied, (iii) a
material violation of any provision of this Agreement or (iv) a delay in the
consummation of the Mergers except, in each case, as may be required by
applicable law or regulation.
7.06. Regulatory CapitalSubject to Sections 7.01 and 8.01(d), FIC shall
obtain financing for the Mergers in a manner necessary to achieve regulatory
capital levels and ratios on a proforma basis as reasonably may be required by
the Board of Governors of the Federal Reserve System or the Office of the
Comptroller of the Currency.
7.07. Sole Shareholder Approval. FIC as the sole shareholder of Merger Sub
shall approve and adopt this Agreement as required by applicable law and the
Articles of Incorporation of Merger Sub. FIC as the sole shareholder of First
Indiana shall approve and adopt this Agreement as required by applicable law and
the Articles of Association of First Indiana.
SECTION 8
CONDITIONS PRECEDENT TO THE MERGERS
8.01. FIC. The obligation of FIC, First Indiana and Merger Sub to
consummate the Mergers is subject to the satisfaction and fulfillment of each of
the following conditions on or prior to the Effective Time, unless waived in
writing by FIC:
(a) Representations and Warranties at Effective Time. Each of the
representations and warranties of MBC with respect to itself and the
Subsidiaries contained in this Agreement shall, subject to the standard set out
in the second paragraph of Section 4, be true and correct at and as of the
Effective Time as though such representations and warranties had been made or
given on and as of the Effective Time.
41
(b) Covenants. Each of the covenants and agreements of MBC with respect to
itself and the Subsidiaries shall have been fulfilled or complied with from the
date of this Agreement through and as of the Effective Time.
(c) Deliveries at Closing. FIC shall have received from MBC at the Closing
(as hereinafter defined) the items and documents, in form and content reasonably
satisfactory to FIC, set forth in Section 10.02(b) hereof.
(d) Regulatory Approvals. All regulatory approvals required to consummate
the transactions contemplated hereby shall have been obtained and shall remain
in full force and effect and all statutory waiting periods in respect thereof
shall have expired and no such approvals shall contain any conditions,
restrictions or requirements which the board of directors of FIC reasonably
determines in good faith would (i) following the Effective Time, have a Material
Adverse Effect on FIC or (ii) reduce the benefits of the transactions
contemplated hereby to such a degree that FIC would not have entered into this
Agreement had such conditions, restrictions or requirements been known at the
date hereof.
(e) Shareholder Approval. The shareholders of MBC shall have approved and
adopted this Agreement as required by applicable law and its Articles of
Incorporation, and shareholders owning no more than ten percent (10%) of the
outstanding shares of MBC shall have exercised a right to dissent from the
Company Merger. MBC as the sole shareholder of the Bank shall have approved and
adopted this Agreement as required by applicable law and the Bank's Articles of
Incorporation.
(f) Officers' Certificate. MBC shall have delivered to FIC a certificate
signed by its chief executive officer and chief financial officer, dated as of
the Effective Time, certifying: (i) to the effect set out in Section 8.01(a),
that the representations and warranties of MBC and the Bank contained in Section
4 hereof shall be true, accurate and correct at and as of the Effective Time;
(ii) that all the covenants of MBC and the Bank have been complied with from the
date of this Agreement through and as of the Effective Time; and (iii) that MBC
and the Bank have satisfied and fully complied with all conditions necessary to
make this Agreement effective as to MBC and the Bank.
(g) Closing Book Value. The Closing Book Value (as defined below) of MCB at
the end of the month prior to the Effective Time of the Company Merger
(excluding any reduction which might occur as a result of payments made by MCB
to Xxxxx Financial, LLC pursuant to the terms of the agreement attached to
Section 4.21 of the Disclosure Schedule and any reduction which might occur as a
result of reasonable expenses or restructuring charges relating to the Mergers)
shall not be less than $15,342,000. As used in the preceding sentence, the term
"Closing Book Value" shall mean the amount of the shareholders' equity of MCB as
of the end of the month immediately preceding the Effective Time of the Company
Merger, determined in accordance with accounting principles generally accepted
in the United States, less the amount of any increase in the shareholders'
equity of MCB resulting from or attributable to the sale of securities held on
and sold after the date of this Agreement or any transactions or accounting
adjustments not in the ordinary course of business effected or completed after
the date of this Agreement. Notwithstanding anything to the contrary in the
foregoing, if the condition in this
42
Section 8.01(g) is not met, FIC and First Indiana shall still be obligated to
proceed with the Mergers (assuming all other conditions precedent to such
obligation are satisfied), if MBC agrees to a reduction in the Conversion Price
which reduces the aggregate consideration paid by FIC for the MBC Common Stock
by the amount by which the Closing Book Value falls below $15,342,000.
(h) Aggregate Benefit Amounts. MBC shall have calculated the amounts paid
or payable to officers, directors and employees under Section 6.20 relating to
the MBC Directors' Plan, Section 6.23(a) relating to certain employment
agreements, Section 6.24 relating to change of control payments, Section 6.25(a)
relating to the compensation of Xxx X. Xxxxxxx in respect of his services prior
to the Effective Time, and Section 6.27 relating to the MBC Incentive Plan, and
the affected officers, directors and employees shall have agreed in writing to
accept such amounts in full payment of the amounts due them under such
agreements, plans and arrangements; and the aggregate of all amounts so paid or
payable, including portions thereof previously accrued as an expense, shall not
exceed $1,752,398.
(i) 280G Opinion. FIC shall have received a written opinion from KPMG
reasonably satisfactory to FIC, based on MBC's data respecting payments made by
MBC and its Subsidiaries before or during the calendar month as of which this
Agreement is dated and MBC's estimates of payments to be made by MBC and its
Subsidiaries after such calendar month and prior to the Effective Time, to the
effect that any amounts that are paid by MBC and its Subsidiaries before the
Effective Time, or required under MBC's Compensation Plans or this Agreement to
be paid at or after the Effective Time, to persons who are disqualified
individuals in respect of MBC and its Subsidiaries, and that otherwise should be
allowable as deductions for federal income tax purposes, should not be
disallowed as deductions for such purposes by reason of Section 280G of the
Code. The foregoing requirement of such KPMG letter shall be deemed to have been
satisfied unless, prior to the date of the mailing of the proxy statement to the
shareholders of MBC (which shall not occur until at least 50 days after the date
of this Agreement), FIC notifies MBC in writing that KPMG has failed or refused
so to opine and identifies in such writing each payment or portion thereof as to
which KPMG fails or refuses so to opine. In that event, MBC and its Subsidiaries
shall have the opportunity to reduce or restructure the subject payments (with
the consent of the affected disqualified individuals, if necessary) so as to
satisfy the requirement for the issuance of such written opinion of KPMG.
Notwithstanding the foregoing, the satisfaction of the conditions in this
Section 8.01(i) is subject to the accuracy (in all respects material to such
KPMG opinion) of such data and estimates provided by MBC.
(j) FDIC Matter. The Bank shall have either (i) completely settled all
issues relating to the unresolved credit transaction item raised by the FDIC in
its Compliance Examination and identified in the Disclosure Schedules for
Section 4.05(b) by the payment of an amount which, in the aggregate with all
other items, would not have a Material Adverse Effect on MBC or (ii) have
received from the FDIC or other appropriate regulatory agency having
jurisdiction over this matter a letter in form and substance satisfactory to FIC
respecting the disposition of this matter.
43
8.02. MBC. The obligation of MBC and the Bank to consummate the Mergers is
subject to the satisfaction and fulfillment of each of the following conditions
on or prior to the Effective Time, unless waived in writing by MBC:
(a) Representations and Warranties at Effective Time. Each of the
representations and warranties of FIC contained in this Agreement shall, subject
to the standards set out in the second paragraph of Section 5, be true and
correct on and as of the Effective Time as though the representations and
warranties had been made or given at and as of the Effective Time.
(b) Covenants. Each of the covenants and agreements of FIC shall have been
fulfilled or complied with from the date of this Agreement through and as of the
Effective Time.
(c) Deliveries at Closing. MBC shall have received from FIC at the Closing
the items and documents, in form and content reasonably satisfactory to MBC,
listed in Section 11.02(a) hereof.
(d) Regulatory Approvals. All regulatory approvals required to consummate
the transactions contemplated hereby shall have been obtained and shall remain
in full force and effect and all statutory waiting periods in respect thereof
shall have expired and no such approvals shall contain any conditions,
restrictions or requirements which the board of directors of MBC reasonably
determines in good faith would reduce the benefits of the transactions
contemplated hereby to such a degree that MBC would not have entered into this
Agreement had such conditions, restrictions or requirements been known at the
date hereof.
(e) Shareholder Approval. The shareholders of MBC shall have approved and
adopted this Agreement as required by applicable law and its Articles of
Incorporation. MBC as the sole shareholder of the Bank shall have approved and
adopted this Agreement as required by applicable law and the Bank's Articles of
Incorporation.
(f) Officers' Certificate. FIC shall have delivered to MBC a certificate
signed by its chief executive officer and chief financial officer, dated as of
the Effective Time, certifying that: (i) to the effect set out in Section
8.02(a), the representations and warranties of FIC contained in Section 5 hereof
shall be true, accurate and correct at and as of the Effective Time; (ii) that
all the covenants of FIC and First Indiana have been complied with from the date
of this Agreement through and as of the Effective Time; and (iii) FIC has
satisfied and fully complied with all conditions necessary to make this
Agreement effective as to it.
(g) Fairness Opinion to Shareholders. MBC's investment banker shall have
issued (as of a date not later than the mailing date of the proxy statement
relating to the Company Merger to be mailed to the shareholders of MBC) its
fairness opinion stating that the consideration to be received by MBC
shareholders relating to the Company Merger is fair to the shareholders of MBC
from a financial point of view.
44
SECTION 9
TERMINATION OF MERGERS
9.01. Manner of Termination. This Agreement and the Mergers may be
terminated at any time prior to the Effective Time by written notice delivered
by FIC to MBC, or by MBC to FIC as follows:
(a) By FIC or MBC, if:
(i) the Mergers contemplated by this Agreement have not been
consummated by February 28, 2003; provided, however, that a party hereto in
willful breach of or willful default hereunder shall have no right to
terminate this Agreement pursuant to this Section 9.01(a)(i); or
(ii) the respective Boards of Directors of FIC and MBC mutually agree
to terminate this Agreement.
(b) By FIC, if:
(i) at any time prior to the Effective Time, FIC's Board of Directors
so determines, in the event of either
(A) a breach by MBC of any representation or warranty contained
herein, which breach cannot be or has not been cured within thirty
(30) days after the giving of written notice to MBC of such breach; or
(B) a breach by MBC of any of the covenants or agreements
contained herein, which breach cannot be or has not been cured within
thirty (30) days after the giving of written notice to MBC of such
breach; or
(ii) it shall reasonably determine that the Mergers contemplated by
this Agreement have become impracticable by reason of commencement or
threat of any claim, litigation or proceeding against FIC, First Indiana,
MBC or the Bank, or any director or officer of any of such entities
relating to this Agreement or the Mergers; or
(iii) there has been a material adverse change in the business,
assets, capitalization, financial condition or results of operations of MBC
and the Subsidiaries taken as a whole, as of the Effective Time, as
compared to that in existence as of the date of this Agreement, other than
any change resulting primarily by reason of changes in banking laws or
regulations (or interpretations thereof), changes in banking laws of
general applicability or interpretations thereof by courts or governmental
authorities, changes in accounting principles generally accepted in the
United States or regulatory accounting requirements applicable to banks and
their holding companies generally, any modifications or changes to
valuation policies and practices in connection with the Mergers or
restructuring charges taken in connection with the Mergers, in each case in
accordance with accounting principles generally accepted in the United
States, effects of any action taken with the prior written consent of FIC
and changes in
45
the general level of interest rates or conditions or circumstances that
affect the banking industry generally; or
(iv) MBC fulfills the requirements of Section 6.01 hereof but the
shareholders of MBC do not approve and adopt the Company Merger and this
Agreement.
(c) By MBC, if:
(i) at any time prior to the Effective Time, MBC's Board of Directors
so determines, in the event of either
(A) a breach by FIC of any representation or warranty contained
herein, which breach cannot be or has not been cured within thirty
(30) days after the giving of written notice to FIC of such breach; or
(B) a breach by FIC of any of the covenants or agreements
contained herein, which breach cannot be or has not been cured within
thirty (30) days after the giving of written notice to FIC of such
breach; or
(ii) there has been a material adverse change in the financial
condition, results of operations, business, assets or capitalization of FIC
on a consolidated basis as of the Effective Time, as compared to that in
existence as of the date of this Agreement, other than any change resulting
primarily by reason of changes in banking laws or regulations (or
interpretations thereof), changes in banking and similar laws of general
applicability or interpretations thereof by courts or governmental
authorities, changes in accounting principles generally accepted in the
United States or regulatory accounting requirements applicable to banks and
their holding companies generally, any modifications or changes to
valuation policies and practices in connection with the Mergers or
restructuring charges taken in connection with the Mergers, in each case in
accordance with accounting principles generally accepted in the United
States, effects of any action taken with the prior written consent of MBC
and changes in the general level of interest rates or conditions or
circumstances that affect the banking industry generally; or
(iii) it shall reasonably determine that the Mergers contemplated by
this Agreement have become impracticable by reason of commencement or
threat of any material claim, litigation or proceeding against FIC or First
Indiana (A) relating to this Agreement or the Mergers or (B) which is
likely to have a Material Adverse Effect on FIC; or
(iv) MBC fulfills the requirements of Section 6.01 hereof but the
shareholders of MBC do not approve and adopt the Company Merger and this
Agreement; or
(v) after the fulfillment of the requirements of Section 6.05(b)
hereof, the Board of Directors enters into an agreement, arrangement or
understanding with a third party with respect to an Acquisition
Transaction.
9.02. Effect of Termination. Upon termination by written notice, this
Agreement shall be of no further force or effect, and there shall be no further
obligations or restrictions on future activities on the part of FIC or MBC and
their respective directors, officers, employees, agents
46
and shareholders, except as provided in compliance with: (i) the confidentiality
provisions of this Agreement set forth in Section 6.09 hereof and the
Confidentiality Agreement dated February 20, 2002 by and between FIC and MBC
(the "Confidentiality Agreement"); (ii) the payment of expenses set forth in
Section 11.09 hereof; and (iii) the payment of the FIC Break-up Fee as provided
by Section 6.06 hereof; provided, however, that termination will not in any way
release a breaching party from liability for any willful breach of this
Agreement giving rise to such termination. The obligation to pay the FIC
Break-up Fee in accordance with Section 6.06 hereof will survive any termination
of this Agreement.
SECTION 10
CLOSING
10.01. Closing Date and Place. So long as all conditions precedent set
forth in Section 8 hereof have been satisfied and fulfilled, the closing of the
Mergers ("Closing") shall take place on the Effective Time in Indianapolis,
Indiana at a place designated by FIC.
10.02. Deliveries.
(a) At the Closing, FIC shall deliver to MBC the following:
(i) the officers' certificate contemplated by Section 8.02(f) hereof;
(ii) copies of all approvals by government regulatory agencies
necessary to consummate the Mergers;
(iii) copies of (A) the resolutions of the Board of Directors of FIC
certified by the Secretary of FIC, relative to the approval of this
Agreement and the Company Merger and (B) the resolutions of the Board of
Directors and sole shareholder of First Indiana, certified by its Secretary
relative to the approval of this Agreement and the Bank Merger;
(iv) an opinion of its counsel dated as of the Effective Time and
substantially in form set forth in Exhibit B attached hereto; and
(v) such other documents as MBC or its legal counsel may reasonably
request.
(b) At the Closing, MBC shall deliver to FIC the following:
(i) the officers' certificate contemplated by Section 8.01(f) hereof;
(ii) a list of MBC's shareholders as of the Effective Time certified
by the President and Secretary of MBC;
(iii) copies of (A) the resolutions adopted by the Board of Directors
of MBC certified by the Secretary of MBC, relative to the approval of this
Agreement and the Company Merger and (B) the resolutions of the Board of
Directors and sole shareholder of the Bank, certified by its Secretary
relative to the approval of this Agreement and the Bank Merger;
47
(iv) an opinion of its counsel dated as of the Effective Time and
substantially in form set forth in Exhibit C attached hereto; and
(v) such other documents as FIC or its legal counsel may reasonably
request.
SECTION 11
MISCELLANEOUS
11.01. Binding Effect; Assignment. This Agreement and the recitals hereof
shall be binding upon and inure to the benefit of the respective parties hereto
and their respective heirs, legatees, representatives, successors and assigns;
provided, however, that this Agreement may not be assigned by any party hereto
without the prior written consent of the other parties hereto, except that no
consent shall be required if this Agreement is assigned to any successor to or a
subsidiary of FIC following the Effective Time, whether by operation of law or
otherwise. The representations, warranties, covenants and agreements contained
in this Agreement are for the sole benefit of the parties hereto and their
successors and assigns, and they shall not be construed as conferring any rights
on any other persons except as specifically set forth in Section 7.04 hereof .
11.02. Waiver; Amendment.
(a) The parties may by an instrument in writing extend the time for the
performance of or otherwise amend any of the covenants, conditions or agreements
set forth in this Agreement, except that the consideration to be received by the
MBC shareholders shall not be decreased by such an amendment following the
adoption and approval of the Company Merger and this Agreement by the MBC
shareholders (other than a reduction in the Conversion Price pursuant to Section
8.01(g)). Either of the holding company parties by an instrument in writing (i)
may waive any inaccuracies in the representations or warranties of the other
holding company party or its subsidiaries contained in this Agreement or in any
document delivered pursuant hereto; (ii) waive the performance by the other
holding company party or its subsidiaries of any of the covenants or agreements
to be performed by it or them under this Agreement; or (iii) waive the
satisfaction or fulfillment of any condition, the satisfaction or fulfillment of
which is a condition to the obligation of the holding company party so waiving
to consummate the Mergers. The waiver by any party hereto of a breach of or
noncompliance with any provision of this Agreement shall not operate or be
construed as a continuing waiver or a waiver of any other or subsequent breach
or noncompliance hereunder.
(b) This Agreement may be amended, modified or supplemented only by a
written agreement executed by the parties hereto.
11.03. Notices. All notices and other communications hereunder shall be in
writing and shall be sufficiently given if made by hand delivery, by fax, by
overnight courier, or by registered or certified mail (postage prepaid and
return receipt requested) to the parties at the following addresses (or at such
other address for a party as shall be specified by it by like notice):
48
If to MBC or the Bank: with a copy to (which shall not
constitute notice):
MetroBanCorp Xxxxx XxXxxxx LLP
00000 X. Xxxxxxxx Xxxxxx Xxx Xxxxxxx Xxxxxx, Xxxxx 0000
Xxxxx 000 Xxxxxxxxxxxx, Xxxxxxx 00000-0000
Xxxxxxxxxxxx, Xxxxxxx 00000 ATTN: Xxxxxxx X. Xxxxxxxxx, Esq.
ATTN: Xxx X. Xxxxxxx Telephone: (000) 000-0000
Telephone: (000) 000-0000 Fax: (000) 000-0000
Fax: (000) 000-0000
If to FIC, First Indiana or Merger with a copy to (which shall not
Sub: constitute notice):
First Indiana Corporation Bose XxXxxxxx & Xxxxx LLP
First Indiana Plaza 000 X. Xxxxxxxxxxxx Xx., #0000
000 X. Xxxxxxxxxxxx Xxxxxx Xxxxxxxxxxxx, XX 00000
Xxxxxxxxxxxx, Xxxxxxx 00000 ATTN: Xxxxx X. Xxxxxxx
ATTN: Xxxx X. Xxxxxx, Xx. Telephone: (000) 000-0000
Telephone: (000) 000-0000 Fax: (000) 000-0000
Fax: (000) 000-0000
All such notices and other communications shall be deemed to have been duly
given as follows: when delivered by hand, if personally delivered; when
received, if delivered by registered or certified mail (postage prepaid and
return receipt requested); when receipt acknowledged, if faxed; and the next
business day after timely delivery to a recognized overnight courier service, if
delivered by overnight courier.
11.04. Headings. The headings in this Agreement have been inserted solely
for ease of reference and should not be considered in the interpretation or
construction of this Agreement.
11.05. Severability. In case any one or more of the provisions contained
herein shall, for any reason, be held to be invalid, illegal or unenforceable in
any respect, such invalidity, illegality or unenforceability shall not affect
any other provision of this Agreement, but this Agreement shall be construed as
if such invalid, illegal or unenforceable provision or provisions (or portion
thereof) had never been contained herein.
11.06. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but such counterparts shall
together constitute one and the same instrument.
11.07. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Indiana and applicable federal laws,
without regard to principles of conflicts of law. The parties hereto hereby
agree that all claims, actions, suits and proceedings between the parties hereto
relating to this Agreement shall be filed, tried and litigated only in the
Circuit or Superior Courts of Xxxxxxxx and Xxxxxx Counties, Indiana or the
00
Xxxxxx Xxxxxx Xxxxxxxx Xxxxx for the Southern District of Indiana. In connection
with the foregoing, the parties hereto consent to the jurisdiction and venue of
such courts and expressly waive any claims or defenses of lack of personal
jurisdiction of or proper venue by such courts.
11.08. Entire Agreement. This Agreement when executed and delivered
supersedes, terminates and renders of no further force or effect all other prior
or contemporaneous understandings, commitments, representations, negotiations or
agreements, whether oral or written, among the parties hereto relating to the
Mergers or matters contemplated herein and constitutes the entire agreement
between the parties hereto, except for the Confidentiality Agreement, which
shall continue in full force and effect following the date hereof. The parties
hereto agree that each party and its counsel reviewed and revised this Agreement
and that the normal rule of construction to the effect that any ambiguities are
to be resolved against the drafting party shall not be employed in the
interpretation of this Agreement or any amendments or exhibits hereto.
11.09. Expenses. FIC and First Indiana shall pay their expenses incidental
to the Mergers contemplated hereby. MBC and the Bank shall pay their expenses
incidental to the Mergers contemplated hereby.
11.10. Certain References. Whenever in this Agreement a singular word is
used, it also shall include the plural wherever required by the context and
vice-versa. Except expressly stated otherwise, all references in this Agreement
to periods of days shall be construed to refer to calendar, not business, days.
The term "business day" shall mean any day except Saturday and Sunday when the
Bank and First Indiana are open for the transaction of business.
50
IN WITNESS WHEREOF, MBC, the Bank, FIC, Merger Sub and First Indiana have
made and entered into this Agreement as of the day and year first above written
and have caused this Agreement to be executed, attested in counterparts and
delivered by their duly authorized officers.
METROBANCORP
By: /s/ Xxx X. Xxxxxxx
---------------------
Xxx X. Xxxxxxx
ATTEST: President and Chief Executive Officer
By: /s/ Xxxxxxx X. Xxxxxx "MBC"
-----------------------------------
Xxxxxxx X. Xxxxxx, Secretary
METROBANK
By: /s/ Xxx X. Xxxxxxx
------------------------------
Xxx X. Xxxxxxx
ATTEST: President and Chief Executive Officer
By: /s/ Xxxxxxx X. Xxxxxx "Bank"
-----------------------------------
Xxxxxxx X. Xxxxxx, Secretary
FIRST INDIANA CORPORATION
By: /s/ Xxxxx XxXxxxxx
------------------------------
ATTEST: Xxxxx XxXxxxxx
By: /s/ Xxxx X. Xxxxxx, Xx. "FIC"
----------------------------------
FIC ACQUISITION CORP.
By: /s/ Xxxxx XxXxxxxx
------------------------------
ATTEST: Xxxxx XxXxxxxx
By: /s/ Xxxx X. Xxxxxx, Xx. "Merger Sub"
----------------------------------
51
FIRST INDIANA BANK, NATIONAL
ASSOCIATION
By: /s/ Xxxx X. Xxxxxx, Xx.
-----------------------------
ATTEST: Xxxx X. Xxxxxx, Xx.
By: /s/ Xxxxx XxXxxxxx "First Indiana"
-----------------------------------
52
VOTING AGREEMENT
Each of the undersigned directors of MBC hereby (a) agrees in his capacity
as a director to recommend to MBC's shareholders the approval of this Agreement
and the Merger, except as otherwise provided in Sections 6.01 and 6.05 of this
Agreement, and (b) agrees in his individual capacity to vote his shares of MBC
common stock that are registered in his personal name (and agrees to use his
best efforts to cause all additional shares of MBC Common Stock owned jointly
with any other person or by his spouse or over which he has voting influence or
control to be voted) in favor of this Agreement and the Company Merger. In
addition, each of the undersigned directors hereby agrees not to make any
transfers of shares of MBC with the purpose of avoiding his agreements set forth
in the preceding sentence.
Dated this 4th day of September, 2002.
/s/ Xxxxx X. Xxxxxxx
----------------------------------
Xxxxx X. Xxxxxxx
/s/ Xxx X. Xxxxxxx
----------------------------------
Xxx X. Xxxxxxx
/s/ Xxxxx X. Xxxxx
----------------------------------
Xxxxx X. Xxxxx
/s/ Xxxxx X. Xxxxxx
----------------------------------
Xxxxx X. Xxxxxx
/s/ Xxxxxx X. Xxxxx, Xx.
----------------------------------
Xxxxxx X. Xxxxx, Xx.
/s/ Xxxxx X. Xxxxxxxxxx
----------------------------------
Xxxxx X. Xxxxxxxxxx
/s/ X.X. Xxxxxxxxxx
----------------------------------
X.X. Xxxxxxxxxx
/s/ Xxxxxx X. Xxxxxxx
----------------------------------
Xxxxxx X. Xxxxxxx
/s/ Xxxxxx X. Xxxxxx
----------------------------------
Xxxxxx X. Xxxxxx
53
SCHEDULE OF EXHIBITS
Exhibit A - Consulting Agreement
Exhibit B Legal opinion of Bose XxXxxxxx & Xxxxx LLP
Exhibit C - Legal opinion of Xxxxx XxXxxxx LLP
54
