EXHIBIT 10.1
EXECUTION VERSION
TRUST AND ASSET MANAGEMENT BUSINESS
ASSET PURCHASE AGREEMENT
BY AND AMONG
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ TRUST COMPANY N.A.,
FIRST INDIANA BANK, N.A.
AND
FIRST INDIANA CORPORATION
Dated as of October 21, 2005
TABLE OF CONTENTS
ARTICLE 1 DEFINITIONS.........................................................1
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ARTICLE 2 PURCHASE AND SALE OF THE BUSINESS...................................9
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2.1 Purchase and Sale................................. 9
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2.2 Assumed Liabilities...............................10
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2.3 Retained Liabilities..............................10
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2.4 Method of Transfer................................11
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ARTICLE 3 PAYMENT 12
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3.1 Purchase Price....................................12
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3.2 Payment of Purchase Price.........................12
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3.3 Revenue Incentive Amounts and Sustained Growth
Incentive Amount..................................13
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ARTICLE 4 THE CLOSING........................................................15
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4.1 Closing Time and Place............................15
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4.2 Deliveries of Seller at Closing...................16
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4.3 Deliveries of the Buyer at Closing................17
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ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF THE SELLER.......................18
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5.1 Organization......................................18
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5.2 Authorization.....................................18
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5.3 Execution and Binding Effect......................18
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5.4 Absence of Conflicts..............................19
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5.5 Litigation........................................19
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5.6 Brokers...........................................19
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5.7 Trust Agreements and Ancillary Agreements.........19
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5.8 Transferred Contracts.............................21
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5.9 Property and Equipment............................21
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5.10 Compliance with Laws..............................22
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5.11 Fee Schedules.....................................22
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5.12 Employees and Employee Benefit Plans; Notices.....22
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5.13 Taxes.............................................23
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5.14 Financial Information.............................24
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5.15 Books and Records.................................24
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5.16 Consents..........................................24
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5.17 Schedules.........................................25
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ARTICLE 6 REPRESENTATIONS AND WARRANTIES OF THE BUYER........................25
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6.1 Organization......................................25
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6.2 Authorization.....................................25
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6.3 Execution and Binding Effect......................25
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6.4 Compliance with Other Instruments.................26
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6.5 Compliance with Laws..............................26
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6.6 Litigation; Claims................................26
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6.7 Brokers...........................................26
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6.8 Consents..........................................26
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6.9 Schedules.........................................27
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6.10 Material Adverse Effect...........................27
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ARTICLE 7 COVENANTS OF THE SELLER............................................27
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7.1 Additional Information............................27
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7.2 Cooperation.......................................27
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7.3 Consents..........................................27
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7.4 Conduct of the Business...........................28
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7.5 Collection of Accounts Receivable.................29
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7.6 Supplement to Schedules...........................30
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ARTICLE 8 COVENANTS OF THE BUYER.............................................30
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8.1 Cooperation.......................................30
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8.2 Consents..........................................31
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8.3 Supplement to Schedules...........................31
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ARTICLE 9 CONDITIONS PRECEDENT TO THE BUYER'S OBLIGATIONS....................31
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9.1 Representations and Warranties True at Closing
Date..............................................31
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9.2 Seller's Performance..............................31
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9.3 Required Consents.................................31
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9.4 No Governmental Orders............................32
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ARTICLE 10 CONDITIONS PRECEDENT TO THE SELLER'S OBLIGATIONS..................32
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10.1 Representations and Warranties True at Closing
Date..............................................32
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10.2 Buyer's Performance...............................32
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10.3 Required Consents.................................32
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10.4 No Governmental Orders............................33
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ARTICLE 11 FURTHER COVENANTS.................................................33
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11.1 Employees and Employee Benefits...................33
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11.2 Proration of Fees and Expenses....................36
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11.3 Noncompete and Nonsolicitation....................37
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11.4 Lease of Premises.................................38
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ARTICLE 12 POST-CLOSING COVENANTS............................................39
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12.1 Further Assurances................................39
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12.2 Conversion Plan...................................39
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12.3 Access to Files...................................40
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ARTICLE 13 INDEMNIFICATION...................................................40
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13.1 Indemnification...................................40
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13.2 Limitations on Claims.............................41
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13.3 Remedies Exclusive................................43
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13.4 Exclusion Relating to Transfer of Agreements......44
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13.5 Mitigation of Damages.............................44
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13.6 Enforcement.......................................45
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13.7 Tax Treatment of Indemnification Payments.........45
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13.8 Arbitration.......................................45
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ARTICLE 14 TERMINATION.......................................................45
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14.1 Termination Events................................45
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14.2 Effect of Termination.............................46
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ARTICLE 15 SURVIVAL OF PROVISIONS............................................46
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ARTICLE 16 GENERAL...........................................................47
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16.1 Communications Plan; Press Releases...............47
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16.2 Entire Agreement..................................47
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16.3 Amendment.........................................47
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16.4 Binding Effect....................................47
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16.5 Notices...........................................48
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16.6 Provisions Separable..............................49
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16.7 Captions..........................................49
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16.8 Expenses..........................................49
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16.9 Time Deadlines....................................49
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16.10 Construction......................................50
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16.11 Number and Gender.................................50
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16.12 Scope of Agreement................................50
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16.13 Governing Law.....................................50
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16.14 Waiver............................................50
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16.15 No Third Party Beneficiary Rights.................50
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16.16 Counterparts......................................51
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Exhibits and Schedules
Exhibit A Instrument of Assumption
Schedule 1.1...............Accounts Receivable
Schedule 1.2...............Furniture and Equipment
Schedule 1.3...............List of Prospects
Schedule 1.4...............New Accounts
Schedule 1.5...............Transferred Contracts
Schedule 5.5...............Litigation
Schedule 5.7(a)............Trust Agreement and Ancillary Agreement Customers
Schedule 5.7(b)............Excluded Trust Agreement and Excluded Ancillary
Agreement Customers
Schedule 5.7(c)............Aggregated Balances and Holdings of Customers
Schedule 5.7(g)............Notices from Customers regarding Discontinuation,
Termination or Modification of Trust Agreements or
Ancillary Agreements
Schedule 5.12(c)...........Employees Having Received Written Warnings from
Seller
Schedule 5.12(d)...........Employee Benefit Plans
Schedule 5.13..............Untimely Tax Filings
Schedule 5.14..............Financial Information
Schedule 5.15..............Inaccurate or Unreconciled Trust Accounting System
Records
Schedule 5.16..............Seller's Required Consents
Schedule 6.8...............Buyer's Required Consents
Schedule 11.1(a)...........Employee Information
Schedule 11.1(e)...........Stock Based Awards Held by Employees
Schedule 11.2(a)...........Fees and Expenses Billed by Seller Prior to Closing
Schedule 11.2(b)...........Fees and Expenses to be Billed by Buyer Following
Closing
Schedule 11.2(c)...........Prepaid Fees and Expenses with Respect to Trust
Agreements
Schedule 11.3..............List of Nonsolicitation Banking Customers
TRUST AND ASSET MANAGEMENT BUSINESS ASSET PURCHASE AGREEMENT
This TRUST AND ASSET MANAGEMENT BUSINESS ASSET PURCHASE AGREEMENT (this
"Agreement") is made as of this 21st day of October, 2005 by and among First
Indiana Bank, N.A., a national banking association with its principal office
located in Indianapolis, Indiana ("First Indiana Bank"), First Indiana
Corporation, an Indiana corporation (the "Parent," and together with First
Indiana Bank, the "Seller"), and ▇▇▇▇▇▇▇▇ & Ilsley Trust Company N.A., a
national banking association with its principal office located in Milwaukee,
Wisconsin (the "Buyer").
Background
The Buyer wishes to purchase from the Seller and the Seller wishes to sell
to the Buyer the trust and asset management business of the Seller, as such
business is described herein.
Terms
NOW THEREFORE, in consideration of and subject to each of the covenants,
representations, warranties, terms and conditions hereinafter set forth,
intending to be legally bound, the Seller and the Buyer hereby agree as follows:
ARTICLE 1
DEFINITIONS
The following terms, as used herein, have the following meanings:
"Account" shall mean any arrangement, however characterized, with respect
to which the Seller acts as trustee, custodian, paying agent, investment
manager, record-keeper or in a similar capacity under a Trust Agreement.
"Account Documentation" shall mean the agreements, books, records and other
data relating to the Business, including all files, reports, income tax
information and other tax deposit records maintained in connection with the
Business, mailing lists, accounting records, documentation or records relating
to the Business or as a result of the provision of services under the Trust
Agreements (except that no records relating to Trust Agreements governing
Accounts which were terminated on or prior to the Closing Date and have no cash
balances or obligations outstanding shall be transferred hereunder, and such
obligations shall remain the obligations of the Seller).
"Accounts Receivable" shall mean all receivables outstanding on the Closing
Date and due to the Seller arising under any Trust Agreement or Ancillary
Agreement, as set forth on Schedule 1.1 hereof.
"Acquired Competing Business" shall have the meaning set forth in Section
11.3(b) hereof.
"Administrative Fee" shall mean any account-level fee, including, but not
limited to, trustee, custodial, paying agent, record-keeping, or asset
management fees, or any other fee charged to any Customer relating to a Trust
Agreement or Ancillary Agreement during the period identified on Schedule
5.7(a).
"Affiliate" shall mean, with respect to any Person, another Person
which, directly or indirectly, owns or controls, is owned or controlled by, or
is under common ownership or common control with such Person.
"Agreement" shall have the meaning set forth in the introductory
paragraph hereof.
"Ancillary Agreements" shall mean, collectively, the agreements (other than
Trust Agreements and Excluded Trust Agreements, certificates or instruments
entered into by or on behalf of the Seller as a trustee, custodian, paying
agent, investment manager, record-keeper or in a similar capacity with any
Person, or under which the Seller, in a trustee, custodial, paying agent,
investment manager or record-keeping capacity, has rights or obligations in
connection with a Trust Agreement that are in effect on the date hereof or are
entered into after the date hereof but on or before the Closing Date.
"Applicable Law" shall mean any law, rule, regulation, policy statement
or regulatory bulletin enacted, promulgated or issued by any government entity,
whether federal, state or local, that are applicable to or binding upon the
Business, the transaction contemplated by this Agreement or the parties hereto.
"Assets Under Management" shall have the meaning set forth in Section 3.1
hereof.
"Assumed Liabilities" shall have the meaning set forth in Section 2.2
hereof.
"Business Day" shall mean any day which is not a Saturday, Sunday or a day
on which banks in either Indiana or Wisconsin are authorized or obligated by law
or executive order to be closed.
"Business" shall mean the trust and asset management business conducted by
the Seller, including, individually and collectively, all assignable right,
title and interest of the Seller in and to the following relating to the trust
and asset management business conducted by the Seller, but excluding all of the
Retained Assets:
(a) all of the Trust Agreements (excluding the Excluded Trust Agreements)
and Ancillary Agreements;
(b) funds, cash, securities and other assets held by the Seller as a
trustee, custodian, and/or investment manager pursuant to the Trust Agreements
and the Ancillary Agreements;
(c) the Accounts Receivable;
(d) the Transferred Contracts;
(e) the Account Documentation;
(f) those items of equipment, furniture, computer hardware and other tangible
personal property that are owned by the Seller and used primarily in
connection with the operation of the Business that Buyer agrees to
purchase, as set forth by separate location in Schedule 1.2 hereto;
(g) a list of prospects, pending proposals and the like, segregated into those
prospects, pending proposals and the like that relate to the Seller's trust
and asset management business ("Trust Prospects"), as set forth in Schedule
1.3 hereto;
(h) all income tax information reporting and other tax records maintained in
connection with the Business; and
(i) all assets owned by Seller and used primarily in the conduct of the
Seller's trust and asset management business and required by the Buyer to
conduct such business following the Closing and that the Buyer elects to
acquire hereunder, if any, other than governmental licenses and the like.
"Buyer Employee Offer Schedule" shall have the meaning set forth in Section
11.1(b) hereof.
"Buyer Indemnified Parties" shall have the meaning set forth in Section
13.1(a) hereof.
"Buyer's Knowledge" shall mean the actual knowledge of any senior officer
employed in the trust and asset management business of the Buyer.
"Buyer's Required Consents" shall have the meaning set forth in Section
6.8 hereof.
"Change of Control" shall mean, with respect to any Person, the occurrence
of any of the following:
(a) the direct or indirect sale, transfer, conveyance or other disposition
(other than by way of merger or consolidation), in one or more series of related
transactions, of all or substantially all of the properties or assets of such
Person to any "person" (as such term is used in Section 13(d) of the Securities
Exchange Act of 1934, as amended);
(b) the adoption of a plan relating to the liquidation or dissolution of such
Person; or
(c) the consummation of any transaction (including, without limitation, any
merger or consolidation) as a result any other Person becomes the
beneficial owner, directly or indirectly, of more than 40% of the voting
stock of such Person.
"Claims" shall have the meaning set forth in Section 5.5 hereof.
"Closing" shall have the meaning set forth in Section 4.1 hereof.
"Closing Date" shall mean the date on which the Closing occurs.
"Code" shall mean the Internal Revenue Code of 1986, as amended, and the
rules and regulations promulgated thereunder.
"Commercially Reasonable Efforts" shall mean diligent efforts by a party to
fulfill a responsibility that are objectively reasonable taking into account all
of the relevant circumstances; provided that the exercise of commercially
reasonable efforts by a party shall not require such party to pay any bonus or
premium or make any financial concession to any Person, except as otherwise
specified herein.
"Competing Business" shall have the meaning set forth in Section 11.3(a)
hereof.
"Conversion Plan" shall have the meaning set forth in Section 12.2 hereof.
"Customers" shall mean, individually and collectively, those Persons
counter to the Seller in the Trust Agreements.
"Damages" shall mean all actions, costs, damages, disbursements,
obligations, penalties, liabilities, Taxes, losses, diminution in value,
charges, expenses, assessments, judgments, settlements or deficiencies of any
nature whatsoever, whether foreseeable or unforeseeable (including, without
limitation, any reasonable legal expenses, and any interest, penalties,
investigation, accounting and other costs and expenses incurred in the
investigation, collection, prosecution and defense of any action, suit,
proceeding or claim and amounts paid in settlement) that may be imposed or
otherwise incurred or suffered by an indemnified party.
"Designated Employees" shall have the meaning set forth in Section 11.1(b)
hereof.
"Employees" shall mean all current employees of the Business.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended, and the rules and regulations promulgated thereunder.
"Excluded Ancillary Agreements" shall mean, collectively, the agreements
(other than Trust Agreements, Ancillary Agreements and Excluded Trust
Agreements), instruments, certificates or other documents entered into by or on
behalf of the Seller as a trustee, custodian, paying agent, investment manager,
record-keeper or in a similar capacity with any Person, or under which the
Seller, in a trustee, custodial, paying agent, investment manager or
record-keeping capacity, has rights or obligations in connection with a Trust
Agreement that are in effect on the date hereof or are entered into after the
date hereof but on or before the Closing Date.
"Excluded Documents" shall mean documents determined by the Seller to be
subject to the attorney-client privilege, which determination shall be
conclusive, and other documents related to the Business that Buyer and Seller
expressly agree in writing do not need to be transferred as a result of the sale
of the Business hereunder.
"Excluded Employees" shall mean those employees working in the Business as
listed on Schedule 11.2(b).
"Excluded Trust Agreements" shall mean:
(a) those Trust Agreements in respect of which the Customer (i) objects in
writing to the designation of the Buyer as successor trustee, custodian, paying
agent, investment manager and/or record-keeper, (ii) names a successor trustee,
custodian, paying agent, investment manager and/or record-keeper other than the
Buyer, and (iii) provides the Seller with information as the Seller may
reasonably request in connection with a Customer's appointment of a successor
trustee, custodian, paying agent, investment manager and/or record-keeper (other
than the Buyer) where such information is provided before the Trust Agreements
and Ancillary Agreements were to be transferred and assigned; and
(b) those Trust Agreements which Buyer determines cannot be sold, assigned,
transferred or conveyed to, and assumed by Buyer under Applicable Law or the
terms of the underlying Trust Agreement or related account documentation,
unless the Customer consents to the transfer of its agreement to Buyer or
agrees to enter into a new agreement with the Buyer appointing the Buyer as a
successor trustee, custodian, paying agent, investment manager and/or
record-keeper, as the case may be.
"Fees" shall mean all revenues currently charged by the Seller and paid by
Customers or any other Person for services provided under the Trust Agreements
or in respect of the Business, including, without limitation, (i) Administrative
Fees (ii) any "12b-1", subtransfer agent, shareholder servicing or other fees
paid by any mutual fund company or other unrelated third party.
"Gross Revenues" shall have the meaning set forth in Section 3.3(a) hereof.
"Indemnified Party" shall have the meaning set forth in Section 13.2(d)
hereof.
"Indemnifying Party" shall have the meaning set forth in Section 13.2(d)
hereof.
"Leased Premises" shall have the meaning set forth in Section 11.4 hereof.
"Material Adverse Effect" shall mean a material adverse effect on the
operations or revenues of the Business as conducted by the Seller prior to the
Closing, taken as a whole.
"Maximum Indemnification Amount" shall have the meaning set forth in
Section 13.2(a) hereof.
"New Account" shall mean any Account relating to a Trust Agreement
established with the Seller between the date of this Agreement and the Closing
Date, as set forth, together with the related Administrative Fees, on Schedule
1.4 hereto, and delivered by the Seller to the Buyer at the Closing.
"Person" shall mean an individual, corporation, partnership, unincorporated
organization, voluntary association, joint stock company, business trust,
limited liability company or government or any agency or political subdivision
thereof or any other entity.
"Purchase Price" shall have the meaning set forth in Section 3.1 hereof.
"Retained Assets" shall mean all of the assets of the Seller that are not
specifically enumerated in the definition of "Business" and are not transferred
to the Buyer as a part of the Business, including, without limitation:
(a) the Excluded Trust Agreements; and
(b) assets owned by the Seller that are not specifically related to the
operations of the Business.
"Retained Liabilities" shall have the meaning set forth in Section 2.3
hereof.
"Revenue Incentive Amount" shall have the meaning set forth in Section
3.3(d) hereof.
"Revenue Incentive Determination Dates" shall have the meaning set forth in
Section 3.3(a) hereof.
"Seller Indemnified Parties" shall have the meaning set forth in Section
13.1(b) hereof.
"Seller's Knowledge" shall mean the knowledge deemed to be possessed by
Seller regarding a matter if (a) any executive or senior management level
employee of the Seller has knowledge of the matter, or (b) such matter has come,
or should reasonably be expected to have come, to the attention of any executive
or senior management level employee of the Seller if such person had conducted a
reasonable due diligence review of the Business's operations and assets and the
Business, including a review of the books, records and operations of the Seller
relating to the Business and reasonable inquiries to appropriate personnel
regarding the same.
"Seller's Required Consents" shall have the meaning set forth in Section
5.16 hereof.
"Sustained Growth Incentive Amount" shall have the meaning set forth in
Section 3.3(e) hereof.
"Tax" or "Taxes" shall mean any net income, alternative or add-on minimum
tax, gross income, gross receipts, sales, use, ad valorem, franchise, capital,
profits, license, withholding, payroll, employment, excise, severance, stamp,
occupation, premium, property, custom duty, transfer, documentary or
other tax, governmental fee or other like assessment or charge of any kind
whatsoever, including any obligation to contribute to the payment of a Tax
determined upon a consolidated, combined or unitary basis with respect to the
Seller, any information reporting or back-up withholding obligation, liability
or penalty, together with any interest or any penalty, addition to tax or
additional amount imposed by any governmental authority responsible for the
imposition of any such tax.
"Three-Year Period" shall have the meaning set forth in Section 11.3(a)
hereof.
"Threshold" shall have the meaning set forth in Section 13.2(a) hereof.
"Transferred Contracts" shall mean those contracts specified on Schedule
1.5 hereto.
"Transferred Employees" shall have the meaning set forth in Section
11.1(d) hereof.
"Trust Agreement" shall mean each agreement, including any investment
management agency agreement, that, as of the Closing Date, designates the Seller
as trustee, custodian, paying agent, or in other similar capacities on behalf of
Customers, as specified on Schedule 5.7(a), Schedule 5.7(b) and Schedule 5.7(c)
hereto.
"Trust Prospects" shall have the meaning set forth in Section (i) of the
definition of "Business" in this Article 1.
ARTICLE 2
PURCHASE AND SALE OF THE BUSINESS
2.1 Purchase and Sale. Subject to the terms, provisions and conditions set
forth herein, the Seller hereby agrees to sell, assign, transfer and convey to
the Buyer, and the Buyer agrees to purchase, acquire and accept from the Seller,
at the Closing, in the manner set forth in Section 2.4 hereof, all right, title
and interest of the Seller in the Business in consideration for the Purchase
Price and the assumption by the Buyer of the Assumed Liabilities. In connection
with such sale, assignment, transfer and conveyance, the Seller undertakes to
sell, assign, transfer and convey to the Buyer all assets owned by the Seller
with respect to each Trust Agreement and Ancillary Agreement and all of the
assets that the Seller is required to hold or otherwise control pursuant to each
such Trust Agreement and Ancillary Agreement.
2.2 Assumed Liabilities. After the Closing Date, the Buyer shall assume
only those liabilities and obligations which relate to the Business as set forth
below (the "Assumed Liabilities"). The Assumed Liabilities shall not include any
Retained Liabilities but shall consist only of the following liabilities and
obligations arising after the Closing Date:
(a) all liabilities and obligations of the Buyer as successor to the
Business with respect to all of the assets transferred to the Buyer hereunder,
including without limitation all liabilities and obligations under the Trust
Agreements and the Ancillary Agreements that are due to be performed in the
period after the Closing Date, arising in the ordinary course of business;
provided however, that Buyer shall not assume or be responsible for any such
liabilities or obligations which arise from breaches thereof or defaults
thereunder by Seller;
(b) the liabilities and obligations of the Buyer relating to the
Transferred Employees to the extent specified in Section 11.1 hereof; and
(c) certain liabilities and obligations in connection with the Leased
Premises as set forth in Section 11.4 hereof.
2.3 Retained Liabilities. Notwithstanding anything to the contrary set
forth in this Agreement, the Buyer shall assume only the Assumed Liabilities.
The Seller shall retain all liabilities not so assumed by the Buyer, which
liabilities shall be hereinafter referred to as the "Retained Liabilities" and
which shall include, without limitation, the following:
(a) all liabilities and obligations of the Seller relating to (i) the
period prior to and including the Closing Date or (ii) incurred in connection
with the Retained Assets including, but not limited to, all escheat obligations;
provided, however, that in the event any asset that is subject to escheatment is
transferred to the Buyer hereunder, the Buyer shall escheat such asset upon the
request of the Seller;
(b) all liabilities and obligations of the Seller for Taxes attributable to
the conduct of the Business for all periods prior to and including the Closing
Date;
(c) all liabilities and obligations of the Seller arising in connection
with its operations unrelated to the Business; and
(d) (i) with respect to Transferred Employees, all liabilities and
obligations of the Seller relating to such Transferred Employees in the period
on or before the Closing Date and those liabilities and obligations in the
period following the Closing Date specified in Section 11.1 hereof, and (ii)
with respect to all other Employees, all liabilities and obligations of the
Seller relating to such other Employees.
2.4 Method of Transfer. The parties intend that the Seller shall, to the
extent not prohibited by Applicable Law, transfer and assign to the Buyer the
Trust Agreements and Ancillary Agreements on the Closing Date in accordance with
the following procedures:
(a) Where the Buyer determines that a particular Trust Agreement, Ancillary
Agreement and Applicable Law does not require the affirmative written consent of
the Customer to the transfer or assignment of the Trust Agreement and any
related Ancillary Agreements, or the Buyer determines that such written consent
is not appropriate, the Seller shall (i) assign to the Buyer all rights, duties
and responsibilities of the Seller relating to the Trust Agreement and related
Ancillary Agreements and the Buyer will be deemed the successor trustee,
custodian, paying agent, investment manager and/or record-keeper, as applicable,
under such Trust Agreement, effective as of the Closing Date, and (ii) promptly
deliver to the Customer a notice of the foregoing, which will, among other
things, notify the Customer that the Trust Agreement and Ancillary Agreements
will be assigned and transferred by the Seller to the Buyer on or after a date
following the mailing of such notice.
(b) Where the Buyer determines that a particular Trust Agreement, Ancillary
Agreement or Applicable Law requires the affirmative written consent of the
Customer to the transfer or assignment of such Trust Agreement and any related
Ancillary Agreements, or the Buyer determines that such written consent is
appropriate, (i) the Buyer and the Seller shall request the Customer's written
consent to the transfer or assignment of the related Trust Agreement and any
related Ancillary Agreements, (ii) the Buyer and the Seller shall promptly
notify the Customer that the Trust Agreement and any related Ancillary
Agreements will, if the Customer consents in writing, be assigned and
transferred by the Seller to the Buyer on or after a date following the mailing
of such notice, and (iii) the Seller shall resign as the trustee, custodian,
paying agent, investment manager and/or record-keeper, as applicable, under such
Trust Agreements and Ancillary Agreements if the Customer has not consented to
the transfer and assignment of such Trust Agreement and any related Ancillary
Agreements. If the Customer objects in writing to the appointment of the Buyer
as successor trustee, custodian, paying agent, investment manager and/or
record-keeper on or before the Closing Date, and is entitled to, and does, in
fact, name a successor trustee, custodian, paying agent, investment manager
and/or record-keeper other than Buyer, then such Trust Agreements shall be
deemed to be Excluded Trust Agreements and Excluded Ancillary Agreements and
shall not be transferred and assigned by the Seller to the Buyer hereunder.
ARTICLE 3
PAYMENT
3.1 Purchase Price. In consideration for the transfer of the Business to
the Buyer, Buyer agrees to assume the Assumed Liabilities and to pay to the
Seller an amount equal to the product of the assets under management in
connection with the Business (the "Assets Under Management") as of the Closing
Date times .0155 (the "Purchase Price"). By way of example, the Buyer and the
Seller agree that if September 30, 2005 had been the Closing Date, the Assets
Under Management would have been equal to Nine Hundred Eighty Million Dollars
($980,000,000) and the Purchase Price would therefore have been Fifteen Million,
One Hundred Ninety Thousand Dollars ($15,190,000). The Purchase Price shall be
paid in the manner set forth in Section 3.2.
3.2 Payment of Purchase Price. On the Closing Date, the Seller shall
deliver to the Buyer a certificate executed by Seller certifying as to the
Assets Under Management as of the Closing Date. The Purchase Price shall be paid
by wire transfer of immediately available federal funds to an account which the
Seller shall designate in writing at least two (2) Business Days prior to the
Closing.
3.3 Revenue Incentive Amounts and Sustained Growth Incentive Amount. (a) In
addition to the Purchase Price, the Buyer shall pay to the Seller the Revenue
Incentive Amounts and the Sustained Growth Incentive Amount (each as defined
below), if any, as set forth in Section 3.3(b)-(e), which shall be based on the
annual gross revenues, determined in a manner consistent with Buyer's accounting
practices, earned or received by the Buyer with respect to the Trust Agreements
acquired hereunder or generated by the Business after the Closing Date
(including all gross revenues of the Buyer and its Affiliates associated with
the Business from all services and products of the Buyer and its Affiliates)
(the "Gross Revenues") in each of the Buyer's fiscal years ended December 31,
2006, December 31, 2007 and December 31, 2008 (each such date a "Revenue
Incentive Determination Date"). The Revenue Incentive Amounts and the Sustained
Growth Incentive Amount, if any, shall be paid in the manner set forth in
Section 3.3(f).
(b) If the quotient of the Gross Revenues for the Buyer's fiscal year ended
December 31, 2006 divided by the Gross Revenues for the Buyer's fiscal year
ended December 31, 2005, as determined in accordance with the Buyer's accounting
practices (the "Base Gross Revenue Amount"), is greater than 1.15 but less than
or equal to 1.2, then the Buyer shall pay to the Seller an amount (the "Year 1
Revenue Incentive Amount") equal to Two Hundred Thousand Dollars ($200,000);
provided, however, that if such quotient is greater than 1.2, then the Year 1
Revenue Incentive Amount shall equal Three Hundred Thousand Dollars ($300,000).
(c) If the quotient of (i) the Gross Revenues for the Buyer's fiscal year
ended December 31, 2007 divided by (ii) the product of the Base Gross Revenue
Amount times 1.15 is greater than 1.15 but less than or equal to 1.2, then the
Buyer shall pay to the Seller an amount (the "Year 2 Revenue Incentive Amount")
equal to Two Hundred Thousand Dollars ($200,000); provided, however, that if
such quotient is greater than 1.2, then the Year 2 Revenue Incentive Amount
shall equal Three Hundred Thousand Dollars ($300,000).
(d) If the quotient of (i) the Gross Revenues for the Buyer's fiscal year
ended December 31, 2008 divided by (ii) the product of the Base Gross Revenue
Amount times 1.3 is greater than 1.15 but less than or equal to 1.2, then the
Buyer shall pay to the Seller an amount (the "Year 3 Revenue Incentive Amount")
equal to Two Hundred Thousand Dollars ($200,000) and, collectively with the Year
1 Revenue Incentive Amount and the Year 2 Revenue Incentive Amount, the "Revenue
Incentive Amounts"); provided, however, that if such quotient is
greater than 1.2, then the Year 3 Revenue Incentive Amount shall equal
Three Hundred Thousand Dollars ($300,000).
(e) If, at the end of the Buyer's three fiscal years ended December 31,
2008, the Seller has been entitled to each of the Year 1 Revenue Incentive
Amount, the Year 2 Revenue Incentive Amount and the Year 3 Revenue Incentive
Amounts, then the Buyer shall pay to the seller an additional amount equal to
Six Hundred Thousand Dollars $600,000 (the "Sustained Growth Incentive Amount");
provided, however, that if at such time the Seller has not been entitled to any
one of the Revenue Incentive Amounts, but the aggregate Gross Revenues for the
Buyer's three fiscal years ended December 31, 2008 are equal to or greater than
the product of the Base Gross Revenues times 1.5209, then the Buyer shall pay to
the seller the Sustained Growth Incentive Amount.
(f) Within ninety (90) days following each Revenue Incentive Determination
Date, the Buyer will deliver to the Seller a certificate, signed by an officer
of the Buyer, certifying as to the Gross Revenues and the determination of the
Revenue Incentive Amount for the respective fiscal year and, following the
December 31, 2008 Revenue Incentive Determination Date, the Sustained Growth
Incentive Amount. The Buyer will grant the Seller reasonable access to all
books, records and other data related to the Business during regular business
hours upon reasonable prior notice for the purpose of verifying the
determination of the Revenue Incentive Amount and, as applicable, the Sustained
Growth Incentive Amount. Subject to the resolution of any disputed amount, the
Revenue Incentive Amount and, as applicable, the Sustained Growth Incentive
Amount, will be paid by the Buyer to the Seller not later than the one hundred
twentieth (120th) day following the applicable Revenue Incentive Determination
Date. The Seller shall, within thirty (30) days after delivery of the
certificate, notify the Buyer in writing of any disagreement with the
calculation of the Gross Revenues (which notice shall specify in detail the
nature of such disagreement), and upon agreement by the Buyer regarding the
Seller's requested adjustment, an appropriate adjustment to the Revenue
Incentive Amount and/or, as applicable, the Sustained Growth Incentive Amount,
shall be made thereto. If the Buyer does not agree to any such adjustment within
five (5) days after receipt of Seller's notice, then the portion of the Revenue
Incentive Amount and/or, as applicable, the Sustained Growth Incentive Amount
(if any) that is not subject to any dispute shall be paid as scheduled, and
the disputed elements shall be submitted to binding resolution by any nationally
recognized independent accounting firm agreed to by the Buyer and the Seller (an
"Independent Accountant"),which shall be expressly charged with determining any
disputed Revenue Incentive Amount or Sustained Growth Incentive Amount in
accordance with the terms of this Agreement. If issues in dispute are submitted
to the Independent Accountant for resolution, (i) each party will furnish to the
Independent Accountant such records and other documents and information relating
to the disputed issues as the Independent Accountant may request and are
available to that party, and will be afforded the opportunity to present to the
Independent Accountant any material relating to the determination and to discuss
the determination with the Independent Accountant; (ii) the determination by the
Independent Accountant, in accordance herewith and as set forth in a notice
delivered to both parties by the Independent Accountant, will be binding and
conclusive on the parties; and (iii) the costs and expenses of such Independent
Accountant shall be borne by the non-prevailing party with respect to such
dispute. Any remaining Revenue Incentive Amount and/or, as applicable, Sustained
Growth Incentive Amount, will be paid by the Buyer to the Seller promptly after
the Independent Accountant's determination. If the Independent Accountant
determines that the Revenue Incentive Amount and/or, as applicable, the
Sustained Growth Incentive Amount paid by the Buyer exceeds the actual Revenue
Incentive Amount and/or, as applicable, the Sustained Growth Incentive Amount
determined by the Independent Accountant, the Seller shall promptly pay Buyer
the amount of any such excess.
ARTICLE 4
THE CLOSING
4.1 Closing Time and Place. The consummation of the transactions
contemplated by this Agreement shall take place at a closing (the "Closing") to
be held beginning at 10:00 AM on January 1, 2006 at the offices of ▇▇▇▇▇▇▇ &
▇▇▇▇, S.C., located at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ or at such
other place and time as the parties may agree. The Closing may be accomplished
by the use of facsimile transmission of documents and instruments, including
signature pages, to be delivered at the Closing, provided that the originals of
such documents and instruments, including original signature pages, shall be
delivered promptly after the Closing.
4.2 Deliveries of Seller at Closing. At the Closing, the Seller will
deliver or cause to be delivered to the Buyer the following:
(a) the amounts payable by the Seller to the Buyer pursuant to Sections
11.2(a), 11.2(c) and 11.2(d) hereof;
(b) a receipt acknowledging receipt by the Seller of the Purchase Price and
the amount payable by the Buyer to the Seller pursuant to Section 11.2(b)
hereof;
(c) a certificate executed by the Seller representing and warranting to the
Buyer that (i) each of the Seller's representations and warranties contained in
Article 5 hereof was true and correct in all material respects as of the date of
this Agreement and is true and correct in all material respects as of the
Closing Date, with the same force and effect as though newly made as of the
Closing Date except where made as of a specific date or otherwise contemplated
by this Agreement and for purposes of such certificate; and (ii) that each of
the obligations of the Seller to be performed on or before the Closing Date
pursuant to the terms hereof shall have been performed in all material respects;
(d) an officer's incumbency certificate of Seller;
(e) a certified copy of the resolutions adopted by the Board of Directors
of Seller approving this Agreement and the transactions contemplated hereby;
(f) any Schedules or updates to any Schedule which are required by the
terms of this Agreement to be delivered by the Seller at the Closing;
(g) all of Seller's Required Consents;
(h) a ▇▇▇▇ of sale and assignments, certificates of title and such other
instruments of conveyance as the Buyer shall require, in form and substance
satisfactory to the Buyer, each duly executed by the Seller, conveying to the
Buyer all right, title and interest in the assets acquired by the Buyer pursuant
to this Agreement; and
(i) all other documents, instruments of assignment and other writings
required to be delivered by the Seller at or prior to the Closing pursuant to
this Agreement.
4.3 Deliveries of the Buyer at Closing. At the Closing, the Buyer will
deliver or cause to be delivered to the Seller the following:
(a) the Purchase Price payable by the Buyer to the Seller as set forth in
Section 3.1(a) hereof;
(b) the amount payable by the Buyer to the Seller pursuant to Section
11.2(b) hereof;
(c) a receipt acknowledging receipt by the Buyer of the amounts payable by
the Seller to the Buyer pursuant to Sections 11.2(a), 11.2(c) and 11.2(d)
hereof;
(d) a certificate executed by the Buyer representing and warranting to the
Seller that (i) each of the Buyer's representations and warranties contained in
Article 6 hereof was true and correct in all respects as of the date of this
Agreement and is true and correct in all material respects as of the Closing
Date, with the same force and effect as though newly made as of the Closing
Date, except where made as of a specific date or otherwise contemplated by this
Agreement and for purposes of such certificate; and (ii) that each of the
obligations of the Buyer to be performed on or before the Closing Date pursuant
to the terms hereof shall have been performed in all material respects;
(e) an officer's incumbency certificate of Buyer;
(f) an instrument of assumption ("Instrument of Assumption") substantially
in the form attached hereto as Exhibit A evidencing the assumption by the Buyer
of the Assumed Liabilities;
(g) any Schedules or updates to any Schedule which are required by the
terms of this Agreement to be delivered by the Buyer at the Closing; and
(h) all other documents, instruments and writings required to be delivered
by Buyer at or prior to the Closing pursuant to this Agreement.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF THE SELLER
5.1 Organization.
(a) First Indiana Bank is a national banking association duly organized,
validly existing and in good standing under the laws of the United States and
has the requisite authority to own and operate its properties and to carry on
the Business as now conducted; and
(b) the Parent is a corporation duly organized, validly existing and in
good standing under the laws of Indiana and has the requisite authority to own
and operate its properties and to carry on the Business as now conducted.
5.2 Authorization. The Seller has the corporate power and authority to
execute and deliver this Agreement and to perform its obligations hereunder, and
all such action has been duly and validly authorized by all necessary corporate
proceedings on the part of the Seller. The execution, delivery and performance
of this Agreement by First Indiana Bank does not require the approval of the
shareholders of the Parent.
5.3 Execution and Binding Effect. This Agreement has been duly authorized,
executed and delivered by Seller and constitutes a valid and legally binding
agreement enforceable against Seller in accordance with its terms, except as the
enforceability of this Agreement may be limited by bankruptcy, insolvency or
other similar laws of general application affecting the enforcement of rights of
creditors generally and the rights of creditors of insured depository
institutions the accounts of which are insured by the Federal Deposit Insurance
Corporation (and their holding companies) or by general principles of equity
limiting the availability of equitable remedies.
5.4 Absence of Conflicts. Neither the execution and delivery of this
Agreement nor consummation of the transactions herein contemplated nor
performance of or compliance with the terms and conditions hereof: (a) will
violate or conflict with the charter or bylaws of First Indiana Bank or the
Parent, or (b) subject to Section 5.16 hereof, will violate, conflict with, give
rise to a right to terminate or create a default under any material agreement to
which the Seller is a party, or any judgement, order, writ, injunction, decree,
directive or award to which the Seller is subject.
5.5 Litigation. As of the date hereof, except as disclosed on Schedule 5.5
hereto, there are no actions, suits or proceedings, claims, charges, audits or
investigations (collectively, "Claims") of any kind pending against, or to the
Seller's Knowledge, threatened against the Seller or before any court,
governmental or regulatory agency, body, commission or any arbitrator which (a)
questions or calls into question the validity of this Agreement or any action
taken or to be taken pursuant hereto or (b) which involves or arises out of any
aspect of the Business or the Seller's practices or procedures (including
without limitation any Claims, pending, threatened or unresolved made by or on
behalf of a Customer or Employee including former, temporary or putative
employees associated with the Business) which would individually or in the
aggregate be deemed to have a Material Adverse Effect or which in any case would
individually or in the aggregate reasonably be expected to have a Material
Adverse Effect or would have a Material Adverse Effect upon the ability of the
Seller to effect the transactions contemplated hereby.
5.6 Brokers. The Seller has not dealt with any broker, finder, commission
agent or other similar person, in connection with the transactions contemplated
by this Agreement, and the Seller is not under any obligation to pay any
broker's fee, finder's fee or commission in connection with such transactions.
5.7 Trust Agreements and Ancillary Agreements.
(a) Schedule 5.7(a) hereto sets forth, as of the date hereof, a complete
and correct list of all Customers for which the Seller provides trustee,
custodial, paying agent, investment manager and/or record-keeping services
pursuant to the Trust Agreements or the related Ancillary Agreements, other than
the Excluded Trust Agreements and Excluded Ancillary Agreements. The
Administrative Fee related to each such Customer for the nine months ended
September 30, 2005 will be included on such list.
(b) Schedule 5.7(b) hereto sets forth, as of the date hereof, a complete
and correct list of all Customers for which the Seller provides trustee,
custodial, paying agent, investment manager and/or record-keeping services
pursuant to the Excluded Trust Agreements or the related Excluded Ancillary
Agreements.
(c) Schedule 5.7(c) hereto sets forth, as of the date hereof, a complete
and correct list of the aggregate related cash balances and aggregate
investments and/or other asset holdings for all Customers for which the Seller
provides trustee, custodial, paying agent, investment manager and/or
record-keeping services pursuant to the Trust Agreements or the related
Ancillary Agreements.
Not later than seven (7) days prior to the Closing Date, Seller shall
deliver to the Buyer revised Schedules 5.7(a), 5.7 (b) and 5.7(c).
(d) Each of the Trust Agreements and Ancillary Agreements entered into by
the Seller were duly executed and delivered by the Seller and each constitutes
valid and legally binding obligations of the Seller, and is enforceable by the
Seller in accordance with its terms, bankruptcy, insolvency or other similar
laws of general application affecting the enforcement of creditors' rights and
rights of insured depository institutions the accounts of which are insured by
the Federal Deposit Insurance Corporation, by general principles of equity
limiting the availability of equitable remedies or by public policy limitations
relating to indemnities and rights of contribution.
(e) The Seller and, to Seller's Knowledge, each Customer, is in compliance
in all material respects with the terms and conditions of the applicable Trust
Agreements and Ancillary Agreements and all Applicable Laws relating thereto,
other than those laws, rules, and regulations of governmental authorities the
penalty for the violation of which, if imposed or asserted, would not result in
the Buyer incurring Damages.
(f) To the Seller's Knowledge, the Seller has not taken any action, or
omitted to take any action, which would cause the Seller to be subject to
disqualification or removal for cause as the trustee, custodian, paying agent,
investment manager and/or record-keeper, as applicable, or other similar
capacity under any Trust Agreement or Ancillary Agreement nor has the Seller
been so disqualified or removed from such capacity.
(g) Except as set forth on Schedule 5.7(g), the Seller has not received
written notice from any Customer or authorized representative of a Customer that
any Trust Agreement or Ancillary Agreement will be discontinued, terminated or
modified in any material respect, nor, to the Seller's Knowledge, has the Seller
been asked to resign or take similar action under any Trust Agreement or
Ancillary Agreement.
5.8 Transferred Contracts. (a) Each of the Transferred Contracts was duly
executed and delivered by and constitutes a valid and legally binding obligation
of the Seller, and is enforceable by the Seller in accordance with its terms,
except as the enforceability thereof may be limited by bankruptcy, insolvency or
other similar laws of general application affecting the enforcement of
creditors' rights and rights of insured depository institutions the accounts of
which are insured by the Federal Deposit Insurance Corporation or by general
principles of equity limiting the availability of equitable remedies.
(b) The Seller and, to Seller's Knowledge, the other party thereto, is in
compliance in all material respects with the terms and conditions of each of the
Transferred Contracts and the Seller's performance of its obligations under the
applicable Transferred Contract does not violate any applicable law or
regulation.
5.9 Property and Equipment. Schedule 1.2 identifies all items of equipment
and tangible personal property to be transferred to the Buyer hereunder by
separate location. Except as set forth on such Schedule, there are no claims,
liens, pledges, mortgages, security interests, encumbrances, charges, options,
defaults, equities or restrictions which singly or in the aggregate would
materially impair the Buyer's use of such equipment and tangible personal
property, taken as a whole.
5.10 Compliance with Laws. (a).The Seller is in material compliance with
all laws, ordinances, rules, regulations and orders applicable to the Business.
(b) The Seller has all material permits, licenses, orders, ratings and
approvals of all federal, state, local or foreign governmental or regulatory
bodies necessary for the Seller to operate the Business, and all of such
permits, licenses, orders, ratings and approvals are in full force and
effect, and, to the Seller's Knowledge, no suspension or cancellation of any
such permit, license, order, rating or approval has occurred, is pending or has
been threatened.
(c) Any notices required to be given by the Seller pursuant to the WARN Act
and COBRA, and any comparable state law, in connection with the transaction
contemplated by this Agreement have been given or will be given by the time
required in such laws in order to comply therewith.
5.11 Fee Schedules.
The Account Documentation included in the Seller's files and records
relating to the pricing for the top 100 Accounts, as measured by gross revenues
for the 2004 calendar year, fairly present in all material respects the Fees
relating to such Trust Agreements and Ancillary Agreements.
5.12 Employees and Employee Benefit Plans; Notices. (a) Schedule 11.1(a)
sets forth a complete list of the Employees as of the date hereof and the
information required by Section 11.1(a) and all such information is true and
correct as of the date hereof. None of the Employees is covered by any union,
collective bargaining or similar agreement in connection with his or her
employment with the Seller.
(b) All Employees are employees "at will" whose employment is terminable
without liability to Seller therefor (other than for benefits under the Seller's
applicable severance policy and other employee benefit plans and programs and
benefits required to be provided under applicable law). The Seller has not
received notification of any impediment to the employment of any Employee based
on the results of fingerprinting or other testing and is not otherwise aware of
any such impediment. All Employees are authorized to work in accordance with the
Immigration and Reform Control Act ("IRCA").
(c) Except as disclosed on Schedule 5.12(c) hereto, no Employee of the
Business has received a written warning from the Seller or has been placed on
"corrective action" by the Seller or is under any internal, or to Seller's
Knowledge, any external, investigation.
(d) Schedule 5.12(d) includes a true and correct list of all material
employee benefit plans as defined in Section 3(3) of ERISA, and all material
deferred compensation, stock based compensation, incentive compensation plans
and nonqualified plans, in each case applicable to the Employees.
(e) Except as set forth in Schedule 11.1(a), there are no contracts, other
agreements or offer letters providing for stay bonuses, sign on bonuses,
commissions, compensation, special monetary or vacation awards, non-compete
provisions or agreements.
5.13 Taxes. Except as set forth on Schedule 5.13 hereto: (a) all filings
for Taxes attributable to the Business for any period prior to and including the
Closing Date have been or will be timely filed, and all such Taxes have been or
will be timely paid and to Seller's Knowledge, there are no proposed Tax
assessments related to the Business;
(b) to the Seller's Knowledge, all tax identification numbers furnished to
the Buyer at Closing have been properly solicited and where tax identification
numbers have not been received in response to such solicitation, the Seller has
properly initiated withholding of applicable taxes such that the Seller's
records with respect to such tax identification numbers and withholding
constitute a complete set of such records necessary for the Business to be in
compliance with all United States information reporting and withholding tax
rules;
(c) to the Seller's Knowledge, all tax certifications (including IRS Forms
W-8, W-9, 1001, 8709 and 4224, as appropriate) concerning withholding taxes for
United States and foreign persons furnished to the Buyer at Closing have been
properly solicited and with respect to those certifications received in response
to such solicitation, have been properly renewed as required, and where such tax
certifications have not been received in response to such solicitation, the
Seller has properly initiated the withholding of applicable taxes such that the
Seller's records with respect to such tax certifications and withholding
constitute a complete set of records required under United States tax rules; and
(d) to the Seller's Knowledge, all prescribed mailings relating to the
application of United States withholding tax rules have been made to United
States and foreign persons, and Seller has acted with due diligence in the
processing, solicitation and reporting of account information.
5.14 Financial Information. The financial information set forth in Schedule
5.14 hereto fairly presents in all material respects the revenues and direct
expenses for the Business during the indicated period and has been prepared by
the Seller from its books and records used in connection with the preparation of
financial statements prepared in accordance with generally accepted accounting
principles.
5.15 Books and Records. (a) To the Seller's Knowledge, with respect to each
Account, the accounting, financial and other books and records kept by the
Seller are in all material respects complete and accurate and have been
maintained in the usual, regular and ordinary course of business and in
accordance with sound business practices with regard to the maintenance of such
books and records; and
(b) except as shown on Schedule 5.15, the assets shown on the Seller's
trust accounting system records for each Account are accurate and are fully
reconciled to the Seller's other recordkeeping systems.
5.16 Consents. Except as set forth on Schedule 5.16 hereto (collectively,
"Seller's Required Consents"), the Seller is not required to obtain any
regulatory consent, approval, order or authorization of, or required to make any
declaration or filing with, any governmental authority or other Person in
connection with the execution and delivery of this Agreement or the consummation
of the transactions contemplated hereby.
5.17 Schedules. Each Schedule required to be delivered by the Seller to the
Buyer under the terms of this Agreement completely and accurately reflects the
information it purports to convey and contains no misstatement of material fact
or omits to state any material fact necessary to make the statements contained
therein not false or misleading.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF THE BUYER
The Buyer hereby represents and warrants to the Seller as follows:
6.1 Organization. The Buyer is a national banking association organized,
validly existing and in good standing under the laws of the United States and
has all requisite corporate power and authority to own and operate its
properties, to carry on its business as now conducted and to enter into this
Agreement and to carry out the terms hereof.
6.2 Authorization. The Buyer has the corporate power and authority to
execute and deliver this Agreement and to perform its obligations hereunder, and
all such action has been duly and validly authorized by all necessary corporate
proceedings on the part of the Buyer. The execution, delivery and performance of
this Agreement by the Buyer does not require the approval of its parent
corporation's shareholders.
6.3 Execution and Binding Effect. This Agreement has been duly authorized,
executed and delivered by Buyer and constitutes a valid and legally binding
agreement enforceable against the Buyer in accordance with its terms, except as
the enforceability of this Agreement may be limited by bankruptcy, insolvency or
other similar laws of general application affecting the enforcement of rights of
creditors generally and the rights of creditors of insured depository
institutions the accounts of which are insured by the Federal Deposit Insurance
Corporation or by general principles of equity limiting the availability of
equitable remedies.
6.4 Compliance with Other Instruments. Neither the execution and delivery
of this Agreement nor consummation of the transactions herein contemplated nor
performance of or compliance with the terms and conditions hereof will violate
or conflict with the articles of incorporation or association or bylaws of the
Buyer, will violate, conflict with or create a default under any material
agreement to which it is a party.
6.5 Compliance with Laws.The Buyer is in compliance with all material rules
and regulations applicable to its trust and asset management business, under
applicable federal or state law.
6.6 Litigation; Claims. There is no action, suit, claim, charge, proceeding
or investigation pending or, to the Buyer's Knowledge, threatened before any
court, governmental or regulatory body, agency, commission, official or any
arbitrator that: (a) if decided adversely to the Buyer, would materially impair
the ability of the Buyer to perform its obligations under this Agreement, the
Trust Agreements or the Ancillary Agreements, as contemplated hereby, or (b)
calls into question Buyer's state or federal regulatory authority to consummate
the transactions contemplated hereby.
6.7 Brokers. The Buyer has dealt with no broker, finder, commission agent
or other similar person in connection with the transactions contemplated by this
Agreement, and the Buyer is under no obligation to pay any broker's fee,
finder's fee or commission in connection with such transactions.
6.8 Consents. Except as set forth on Schedule 6.8 hereto (collectively,
"Buyer's Required Consents"), Buyer is not required to obtain any consent,
approval, order or authorization of, or required to make any declaration or
filing with, any governmental authority or other Person in connection with the
execution and delivery of this Agreement or the consummation of the transactions
contemplated hereby.
6.9 Schedules. Each Schedule required to be delivered by the Buyer to the
Seller under the terms of this Agreement completely and accurately reflects the
information it purports to convey and contains no misstatement of material fact
or omits to state any material fact necessary to make the statements contained
therein not false or misleading.
6.10 Material Adverse Effect. Since January 1, 2005, there has not occurred
any events, individually or in the aggregate, that have had, or with a lapse of
time, the giving of notice or both would result in a material adverse effect on
the operations or revenues of the Buyer, taken as a whole.
ARTICLE 7
COVENANTS OF THE SELLER
7.1 Additional Information. From the date hereof to the Closing and subject
to any confidentiality requirements deemed necessary or desirable by Seller,
Seller shall give Buyer, its representatives and agents reasonable access (to
the extent lawful), upon prior notice, to the premises, books, records and
employees relating to the Business at all reasonable times during normal
business hours, and to furnish to Buyer and its agents and representatives all
financial and operating data and other information with respect to the conduct
of the Business that Buyer may reasonably request; provided, however, that any
such inspection shall be conducted in such manner as to not interfere
unreasonably with the operations of the Seller. Except for Excluded Documents
and subject to any confidentiality requirements deemed reasonably necessary or
desirable by Seller, Buyer shall have the right, at its own expense, to make
copies of such corporate records, reports and other documents related to the
conduct of the Business, as Buyer may reasonably request.
7.2 Cooperation. From and after the date hereof and through the Closing,
Seller shall use its Commercially Reasonable Efforts to consummate the
transactions contemplated hereby and shall cooperate with Buyer in any action
necessary or advisable to facilitate such consummation.
7.3 Consents. The Seller will use Commercially Reasonable Efforts,
including the payment of any fees or charges required by applicable law, to
obtain on or before the Closing Date the Seller's Required Consents.
7.4 Conduct of the Business. Prior to the Closing, except with the prior
consent of the Buyer, which consent shall not be unreasonably withheld, the
Seller will:
(a) conduct its Business in the ordinary course, including complying in all
material respects with all applicable laws, ordinances, rules and regulations
relating to the Business, maintaining the books of account and records of the
Business in accordance with applicable law and past practices, and not
accelerating the provision of services or deferring the incurrence of any
expenses relating thereto;
(b) except for any guaranteed bonus set forth on Schedule 11.1(a) and any
salary increases which have been expressly approved by the Buyer in advance in
writing (provided that the increases set forth on Schedule 11.1(a) are hereby
deemed approved), (i) make no increase in any salary or wages and establish no
increase in any bonus, pension, option, incentive or deferred compensation,
retirement, death, profit sharing, or similar benefits of the Employees of the
Business, other than any such increases (other than in salary or wages) that
apply generally to all of the Seller's employees; (ii) make no promotions; (iii)
not transfer any Employee to another location or business of the Seller; (iv)
not terminate any Employee except for cause and (v) not authorize any voluntary
non-medical, non-family leave or non-military leave that extends beyond the
Closing Date; provided, however, that the extension of leave to an Employee for
a vacation taken in the ordinary course beyond the Closing Date shall not
constitute a violation of this Section 7.4(b).
(c) use Commercially Reasonable Efforts to preserve the Business and
relationships with the Customers and to encourage each Employee who is not a
Transferred Employee to continue employment with the Seller until sixty (60)
days following the Closing Date, with the wages of any such Employee who is not
a Transferred Employee to be paid for such period of time by the Buyer; and
encourage each Designated Employee to accept employment with the Buyer and to
give notice to the Buyer of any Employee who terminates his or her employment
with the Business prior to the Closing Date;
(d) refrain from terminating any Trust Agreement or Ancillary Agreement
(other than by expiration or prepayment in accordance with, or as otherwise
required by, its terms, in the ordinary course of Seller's business or
consistent with Seller's past practice) or amending or modifying any Trust
Agreement or Ancillary Agreement in any way (other than as required by the terms
thereof);
(e) subject to Section 16.1 hereof, permit the Buyer commercially
reasonable access to all of the Employees to conduct interviews and take other
steps reasonably necessary in order for the Buyer to make a determination as to
whether to hire such Employees;
(f) not release or waive any material claim, whether taken individually or
in the aggregate, relating to the Business except to the extent that such
release or waiver may occur in connection with a termination, modification or
amendment permitted pursuant to this Article 7; and
(g) not enter into any contract or commitment to engage in any transaction
relating to the Business not in the ordinary course of its business or not
consistent with its past practice.
7.5 Collection of Accounts Receivable.
The Seller guarantees collection by the Buyer of the full face amount of
the Accounts Receivable set forth in Schedule 1.1 hereof within a one hundred
and eighty (180) day period (the "Accounts Receivable Collection Period")
commencing on the Closing Date and agrees to pay the Buyer, upon expiration of
the Accounts Receivable Collection Period, an amount equal to the Accounts
Receivable that have been not been collected by the Buyer during the Accounts
Receivable Collection Period. The Buyer shall provide a notice to the Seller of
those Accounts Receivable that the Buyer elects to reassign to the Seller
(collectively, the "Reassigned Receivables") and payment pursuant to this
Section 7.5 shall be made within ten (10) days of receipt by the Seller of such
notice. The obligations of the Seller under the above provisions are subject to
the following:
(a) Unless the amount of, or obligation to pay, a specific Account
Receivable is disputed by the debtor named therein or if the account debtor
under any Account Receivable shall, without prior instruction from the Buyer,
direct the application of any payment to a specific outstanding account, all
amounts collected by the Buyer from such debtor shall be applied in
chronological order starting with the oldest receivable or installment, as the
case may be, owing by such debtor.
(b) The Buyer shall deliver to the Seller a statement setting forth the
Reassigned Receivables, including the name of the debtor and the uncollected
balance of each Reassigned Receivable.
(c) Upon payment in full by the Seller of any amounts due for Reassigned
Receivables under this Section 7.5, the Buyer shall provide notification to the
related debtors to remit all future payments, if any, directly to the Seller
and, to the extent the Buyer receives payment from such debtor after the Buyer
provides a notice of the Reassigned Receivables to the Seller but before the
Buyer receives full payment of the amount due with respect to the Reassigned
Receivables, the Buyer shall hold such payment in trust for the benefit of the
Seller until the Buyer is paid in full in accordance with the provisions of this
Section 7.5.
7.6 Supplement to Schedules. Seller shall supplement the Schedules to this
Agreement for which it is responsible to reflect any material change to the
information contained therein or any change to the information set forth in
Schedule 5.13; provided that no such supplement shall cure any misrepresentation
therein.
ARTICLE 8
COVENANTS OF THE BUYER
8.1 Cooperation. From and after the date hereof and through the Closing,
Buyer shall use its Commercially Reasonable Efforts to consummate the
transactions contemplated hereby and shall cooperate with the Seller in any
action reasonably necessary or advisable to facilitate such consummation,
including, without limitation, at the reasonable request of the Seller, making
itself available to customers of the Seller, and providing, as reasonably
requested, copies of financial statements, reports, and other information
reasonably requested by such customers of the Seller.
8.2 Consents. The Buyer will use Commercially Reasonable Efforts, including
the payment of any fees or charges required by applicable law, to obtain the
Buyer's Required Consents on or before the Closing Date.
8.3 Supplement to Schedules. Buyer shall supplement the Schedules to this
Agreement for which it is responsible to reflect any material change to the
information contained therein; provided that no such supplement shall cure any
misrepresentation therein.
ARTICLE 9
CONDITIONS PRECEDENT TO THE BUYER'S OBLIGATIONS
All obligations of the Buyer under this Agreement are subject to the
fulfillment and satisfaction, prior to or at the Closing, of each of the
following conditions (any of which may be waived in writing by the Buyer, in
whole or in part):
9.1 Representations and Warranties True at Closing Date. The
representations and warranties of the Seller contained in this Agreement shall
have been true and correct in all material respects at and as of the date
hereof, and shall be true and correct in all material respects at and as of the
Closing Date, with the same force and effect as though newly made as of that
date except where made as of a specific date or otherwise contemplated by this
Agreement or consented to in writing by the Buyer.
9.2 Seller's Performance. Each of the obligations of the Seller to be
performed on or before the Closing Date pursuant to this Agreement shall have
been performed in all material respects on or before the Closing Date.
9.3 Required Consents. All of Buyer's Required Consents and the Seller's
Required Consents shall have been obtained and shall be in effect on the Closing
Date, all notice periods and waiting periods with respect thereto shall have
expired or terminated and all conditions to be satisfied prior to consummation
of the transactions contemplated hereby shall have been satisfied.
9.4 No Governmental Orders. None of the parties hereto shall be subject to
any order, decree or injunction of a court or agency of competent jurisdiction
that enjoins or prohibits the consummation of the transactions contemplated
hereby.
ARTICLE 10
CONDITIONS PRECEDENT TO THE SELLER'S OBLIGATIONS
All obligations of the Seller under this Agreement are subject to the
fulfillment and satisfaction, prior to or at the Closing, of each of the
following conditions (any of which may be waived in writing by the Seller in
whole or in part):
10.1 Representations and Warranties True at Closing Date. The
representations and warranties of the Buyer contained in this Agreement shall
have been true and correct in all material respects at and as of the date
hereof, and shall be true and correct in all material respects at and as of the
Closing Date, with the same force and effect as though newly made as of that
date, except where made as of a specific date or otherwise contemplated by this
Agreement or consented to in writing by the Seller.
10.2 Buyer's Performance. Each of the obligations of the Buyer to be
performed on or before the Closing Date pursuant to this Agreement shall have
been performed in all material respects on or before the Closing Date.
10.3 Required Consents. Any and all Seller's Required Consents to be
obtained by the Seller and all of the Buyer's Required Consents shall have been
obtained and shall be in effect on the Closing Date, all notice periods and
waiting periods with respect thereto shall have expired or terminated and all
conditions to be satisfied prior to consummation of the transactions
contemplated hereby shall have been satisfied.
10.4 No Governmental Orders. None of the parties hereto shall be subject to
any order, decree or injunction of a court or agency of competent jurisdiction
that enjoins or prohibits the consummation of the transactions contemplated
hereby.
ARTICLE 11
FURTHER COVENANTS
11.1 Employees and Employee Benefits. (a) Schedule 11.1(a) hereto is a
complete and accurate list of the Employees employed in the Business, which list
contains the following information for each such Employee: name, position held,
retention or stay bonus, if any, in accordance with the stay bonus program, if
any, current salary, anticipated salary increase date if prior to December 31,
2005 and specified anticipated amount of such increase, official title, annual
bonus and/or sales commission amounts, if any, annual guaranteed bonus and/or
sales commission targets and/or amounts (if any) and Seller's current intentions
for such bonuses for 2005, annual vacation entitlement and whether such vacation
entitlement is grandfathered, accrued but unused vacation, Fair Labor Standards
Act status, date of hire, current salary grade, schedule of work, year to date
overtime, shift differential, (if any), special work arrangements (with
description), whether Employee is employed based upon an employer sponsored
non-resident visa program, work locations, and social security number and
service date for employee benefit plan purposes.
(b) The Buyer will prepare and deliver to the Seller within thirty (30)
days after the date of this Agreement a Schedule (the "Buyer Employee Offer
Schedule") setting forth the names of all Employees to whom the Buyer intends to
offer employment (collectively, "Designated Employees") and as soon as
practicable thereafter will offer employment to those Employees as described in
Section 11.1 (c)and obtain either acceptances or rejections of such offers of
employment.
(c) Buyer's employment of a Designated Employee is conditioned upon the
Closing taking place and compliance with all customary and appropriate
conditions established by the Buyer, including, but not limited, to Buyer's
interview, background check, reference check, fingerprinting, and drug test, an
offer of employment with the Buyer and a written response to such offer from the
Designated Employee receiving the offer within two (2) weeks after the date of
such offer. Any such offer of employment shall take effect as of the Closing
Date.
(d) All Designated Employees who are employed on the Closing Date, having
accepted an offer of employment with the Buyer, shall be referred to herein as
"Transferred Employees."
(e) Except as set forth in Schedule 11.1(e) hereto, there are no stock
based awards held by Employees outstanding under Seller's stock based plans.
(f) Transferred Employees shall be eligible to participate as of the
effective date of their employment with Buyer in the employee benefit plans and
other fringe benefits of the Buyer on the same basis as such plans and benefits
are offered to similarly situated employees of Buyer. The Buyer will recognize
any prior service of any Transferred Employee with the Seller as if it had been
service with the Buyer for purposes of (i) eligibility for participation and
vesting but not benefit accruals (i.e. no salary credit service) under its cash
balance retirement plan, (ii) eligibility for participation and vesting under
its 401(k) plan, (iii) eligibility to participate in the Buyer's medical, dental
and other welfare plans, but not for purposes of determining eligibility for
post-retirement medical, dental and other similar benefits, (iv) subject to
subsection 11.1(h) below, accruing annual vacation under the appropriate
schedule applicable to Transferred Employees from time to time, and (v)
determining the amount of severance due to any Transferred Employee on the
termination of their employment under the Buyer's then existing severance
program.
(g) The Seller shall remain responsible for all employment and benefit
related liabilities or obligations of whatever nature with respect to all
Transferred Employees arising from or relating to their employment with the
Seller prior to their employment with the Buyer with respect to claims incurred
or based on events, acts, omissions, conduct or course of conduct, to the extent
that such claims were incurred or such events, acts, omissions, conduct or
course of conduct occurred on or before the Closing Date. Buyer shall be
responsible for all employment related liabilities or obligations with respect
to any Transferred Employee, with respect to claims incurred or based on events,
acts, omissions, conduct or course of conduct, to the extent that such claims
were incurred or such events, acts, omissions, conduct or course of conduct
occurred after the Closing Date.
(h) By way of amplification of Section 11.1(f)(iv), the Buyer shall be
responsible for payments and accrued vacation benefit days not taken by or
otherwise not paid to a Transferred Employee prior to the Closing, except that
in no event shall the Buyer be required to compensate or provide vacation days
for any unused vacation attributable to periods prior to January 1, 2005.
(i) The Buyer agrees that any pre-existing condition clause in any of the
Buyer's health insurance plans and policies shall not be applicable to any
Transferred Employee. With respect to any Transferred Employee who elects
coverage under Buyer's long term disability insurance policy immediately
following his or her date of hire, such Transferred Employee shall, if covered
by the Seller's long term disability insurance policy on the day immediately
preceding his or her hire date by Seller, be subject to the transfer provision
of the Buyer's policy. By way of explanation, this means that the Buyer's
insurance carrier (i) will first apply Buyer's pre-existing condition clause,
and (ii) if no benefit is payable because of the application of that clause,
will then apply the pre-existing condition clause under the Seller's long term
disability policy to determine if a benefit would have been payable under that
policy. If under clause (ii) a benefit would have been payable, the Buyer's
insurance policy shall pay a benefit, but such benefit shall be no greater than
that payable under the Seller's long term disability policy. The Buyer shall
cause its health and other welfare benefit plans and policies that provide
medical and dental benefits to credit the Transferred Employees with any
deductible or maximum out-of-pocket payments made by such Transferred Employees
under the Seller's health and other welfare benefit plans and policies that
provide medical and dental benefits so as to reduce the amount of any deductible
or maximum out-of-pocket payments payable by the Transferred Employees under the
Buyer's health and other welfare benefit plans and policies that provide medical
and dental benefits. Seller shall deliver to the Buyer within twenty (20) days
after the Closing on disk such information as is reasonably necessary to permit
the Buyer to make such credits.
11.2 Proration of Fees and Expenses. At least fifteen (15) days prior to
the Closing Date, the Seller shall deliver to the Buyer:
(a) Schedule 11.2(a) listing those fees and expenses billed by the Seller
prior to the Closing Date relating in whole or in part to services to be
rendered under any Trust Agreement or any related Ancillary Agreement following
the Closing and an apportionment of any such fees and expenses between the
periods before and after the Closing. The portion of the fees and expenses which
is allocable to the period following Closing shall be paid by the Seller to the
Buyer in immediately available federal funds by wire transfer at Closing.
(b) Schedule 11.2(b) listing an estimate of all fees and expenses which
relate to services rendered by the Seller under any Trust Agreement or any
related Ancillary Agreement prior to the Closing which will be billed by the
Buyer after the Closing and apportionment of any such fees and expenses between
the periods before and after the Closing. The portion of the fees and expenses
which is allocable to the period prior to Closing shall be paid by the Buyer to
the Seller in immediately available federal funds by wire transfer at Closing.
(c) Schedule 11.2(c) listing all prepaid fees and expenses which relate to
services rendered by the Seller under any Trust Agreement or any related
Ancillary Agreement and the apportionment of any such prepaid fees and expenses
between the periods before and after the Closing. The portion of such prepaid
fees and expenses which is allocable to the period following the Closing shall
be paid by the Seller to the Buyer in immediately available federal funds by
wire transfer at Closing.
(d) In the event that the Seller, on the one hand, or the Buyer, on the
other hand, receives payments following the Closing of amounts that should
properly have been paid to the other party under this Section 11(d), the party
or parties, as is appropriate, receiving such payment shall promptly remit such
amounts to the other party.
11.3 Noncompete and Nonsolicitation. (a) For a period commencing on the
Closing Date and continuing for the three-year period thereafter (the
"Three-Year Period"), subject to Section 11.3(b) hereof, Seller and its
Affiliates shall not engage, directly or indirectly, in any business which is
substantially similar to the Business (a "Competing Business") or compete with
the Buyer with respect to trustee, custodial, paying agent and/or record-keeping
services relating to any of the Trust Agreements or trust agreements which are
of the same type and/or possess substantially similar features as the Trust
Agreements, or compete with the Buyer with respect to investment management
services for any assets for which the Seller currently serves as an investment
manager and which are part of a Trust Agreement, or, except as required by
Applicable Law, disclose or use any confidential information regarding the Trust
Agreements or the Business.
(b) Nothing contained in this Section 11.3 shall prohibit the Seller or its
Affiliates, after the period commencing on the Closing Date and continuing for
the one-year period thereafter, but prior to the end of the Three-Year Period,
from acquiring a Person a portion of which constitutes a Competing Business (an
"Acquired Competing Business"); provided, however, that (i) if, prior to the end
of the Three-Year Period, the Seller or such Affiliates shall desire to divest
itself of such Acquired Competing Business, then the Seller or such Affiliates
shall allow the Buyer the opportunity to bid to acquire such Acquired Competing
Business, and to conduct such due diligence of such Acquired Competing Business
as necessary in connection with such opportunity, before allowing such
opportunity or access to such due diligence to any other Person; and (ii) in the
event that the Seller or its Affiliates does not divest itself of such Acquired
Competing Business, then for a period commencing on the date on which the Seller
or its Affiliate acquires such Acquired Competing Business and lasting until the
end of the Three-Year Period, the Seller and its Affiliates will not directly or
knowingly solicit customers of the Business for services provided by the
Business. Notwithstanding anything contained in the foregoing clause (ii), in
connection with an Acquired Competing Business, the Seller and its respective
Affiliates shall be permitted to (i) engage in advertising, solicitations or
other marketing campaigns, programs or other efforts not primarily directed to
or targeted at the customers of the Business, or (ii) respond to unsolicited
inquiries from such customers.
(c) During the Three-Year Period, the Buyer and its banking Affiliates will
not directly or knowingly solicit those customers of the Seller listed on
Schedule 11.3 hereto or any customers of the Seller or any Affiliate of the
Seller which are referred to the Buyer by the Seller or such Affiliate after the
Closing for banking (including loan and deposit) services. Notwithstanding
anything contained in the foregoing sentence, the Buyer and its respective
Affiliates shall be permitted to (i) engage in advertising, solicitations or
other marketing campaigns, programs or other efforts not primarily directed to
or targeted at those Customers of the Seller listed on Schedule 11.3 hereto, or
(ii) respond to unsolicited inquiries from such customers.
(d) Because of the difficulty of measuring economic losses to the Buyer or
the Seller as a result of a breach of the covenants set forth in Section
11.3(a), Section 11.3(b) and Section 11.3(c) hereof, and because of the
immediate and irreparable damage that could be caused to the Buyer or Seller for
which such party would have no other adequate remedy, each of the Buyer and the
Seller agrees that such covenants may be enforced by the other party in the
event of a breach of either of such covenants by injunctions, restraining
orders, and damages. Each of the Buyer and the Seller agrees that the terms and
conditions of this Section 11.3 are reasonable and necessary for the protection
of the respective interests thereof, and of the confidential information related
thereto and for the prevention of damage or loss to either of the Buyer or the
Seller as a result of actions taken by the other.
(e) Notwithstanding anything in this Section 11.3 to the contrary, the
restrictions set forth in Section 11.3(a), Section 11.3(b) and Section 11.3(c)
hereof shall cease to apply in the event of a Change of Control of the Seller,
the Buyer or the parent of the Buyer.
11.4 Lease of Premises. The Seller and the Buyer shall cooperate and use
Commercially Reasonable Efforts to obtain the consent of the owner of that
portion of the leased premises at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ which is used in connection with Business (the "Leased Premises") to the
assignment or other transfer of the rights under such lease from Seller to
Buyer. The Seller and the Buyer shall each be responsible for one-half (1/2) of
any up-front payment that may be required by such owner to facilitate such
assignment or other transfer, but excluding any payment which constitutes an
advance on rent payments to be paid by the Seller in connection with such
consent; provided, however, that the portion of any such payment for which the
Seller shall be responsible shall not exceed Twenty Thousand Dollars ($20,000).
In the event that the parties are unable to obtain such consent to an assignment
or transfer of the rights under such lease on terms which the Seller, in its
sole discretion, shall deem to be reasonable, the Buyer shall reimburse the
Seller for one half (1/2) of any payments made by the Seller in accordance with
the terms of such lease, and the Buyer shall indemnify the Seller with respect
to any Damages incurred in connection with Buyer's occupation of the Leased
Premises, subject to Section 13 hereof.
ARTICLE 12
POST-CLOSING COVENANTS
12.1 Further Assurances. The Seller shall, from time to time after the
Closing, execute and deliver such further documents, including, without
limitation, instruments of resignation from fiduciary positions, appointment of
the Buyer or its nominee(s) to the same, and assignments of various rights and
assets held by the Seller or its nominees under Trust Agreements and Ancillary
Agreements in accordance with the terms and provisions of such Trust Agreements
and Ancillary Agreements as the Buyer may prepare and reasonably request in
order effectively to sell, transfer and convey the Business to the Buyer.
12.2 Conversion Plan. Promptly following the execution of this Agreement,
the Buyer and the Seller shall agree upon a detailed conversion plan (the
"Conversion Plan") for the conversion of the Seller's data relating to the
Business to the Buyer's processing, reporting and other systems, including,
without limitation, the collection and input of relevant data, development of
new operating procedures and design of forms. The Conversion Plan shall provide
that the Seller shall be responsible for its expenses in connection with the
de-conversion of such data from such systems (other than any termination fees
incurred in connection with the termination of the Seller's service provider
agreement with respect to such systems), and the Buyer shall be responsible for
its expenses in connection with the conversion of such data and any termination
fees incurred by the Seller in connection with the termination of the Seller's
service provider agreement with respect to such systems. The Buyer and the
Seller shall cooperate with each other to implement the Conversion Plan as
promptly as possible. The Seller or its designee shall provide to the Buyer a
magnetic tape containing such Account information as is reasonably requested by
the Buyer to accomplish the Conversion Plan.
12.3 Access to Files. Until the expiration of any applicable statutes of
limitations, or for such longer period as may be required by the Buyer's
customary retention policies but in no case for a period less than that called
for by applicable law, provided that all Employee records and personnel files
shall be retained for five (5) years from the later of the Closing Date and the
pendency of any claims covering such Employees, the Buyer will grant the Seller
and its representatives reasonable access to all books, records and other data
included in the Business during regular business hours upon reasonable prior
notice if such access is required by the Seller in connection with its legal,
tax, regulatory or contractual matters. The Seller shall grant the Buyer similar
access to books and records retained by the Seller relating to the Business. If
physical possession of any Account Documentation is impractical to deliver into
the Buyer's possession at the Closing, the Seller shall, from time to time at
Buyer's reasonable request, promptly furnish to Buyer such Account Documentation
as is in Seller's possession.
ARTICLE 13
INDEMNIFICATION
13.1 Indemnification. (a) The Seller shall indemnify, defend, save and hold
harmless the Buyer and its Affiliates and their respective officers, directors,
employees and agents (collectively, the "Buyer Indemnified Parties") from and
against any and all Damages incurred or sustained by the Buyer Indemnified
Parties to the extent they arise out of:
(i) any inaccuracy of any representation or warranty made by
Seller in this Agreement or any breach by Seller of any of its
covenants, agreements or obligations under this Agreement;
(ii) any Retained Liability; or
(iii) the conduct of the Business on or prior to the Closing
Date, other than in the ordinary course of business and in accordance
with the Seller's past practices.
(b) The Buyer shall indemnify, defend, save and hold harmless the
Seller and its Affiliates and their respective officers, directors,
employees and agents (collectively, the "Seller Indemnified Parties") from
and against any and all Damages incurred or sustained by the Seller
Indemnified Parties to the extent they arise out of:
(i) any inaccuracy of any representation or warranty made by the
Buyer in this Agreement or any breach by the Buyer of any of its
covenants, agreements or obligations under this Agreement;
(ii) any Assumed Liability;
(iii) any Damages with respect to the Leased Premises in
accordance with Section 11.4 hereof; or
(iv) the conduct of the Business after the Closing Date.
13.2 Limitations on Claims. (a) Notwithstanding anything contained in this
Agreement to the contrary: (i) neither party shall be liable for any amounts for
which an indemnified party is otherwise entitled to indemnification in
connection with the breach or inaccuracy of any representation or warranty or
any breach of a covenant contained in Article 7 or 8 hereof until the aggregate
amount for which such indemnified party is entitled to indemnification with
respect to all such claims for indemnification in the aggregate exceed $25,000
(the "Threshold"), at which time such party shall be liable for any such excess,
and (ii) nor shall a party indemnifying another party hereto be required to make
indemnification in connection with the breach or inaccuracy of any
representation or warranty or any breach of a covenant contained in Article 7 or
8 to the extent indemnification payments with respect to all such claims for
indemnification would exceed the Purchase Price (the "Maximum Indemnification
Amount"). The Threshold and Maximum Indemnification Amount shall not apply as to
any claims related to (i) Taxes, (ii) claims brought by third parties (including
Employees as described in Section 11.1(g)), (iii) claims relating to the Leased
Premises pursuant to Section 11.4, (iv) any claims for the out-of-balance
condition of Accounts purchased hereunder which are not in proof and fully
reconciled, and (v) a final, nonappealable judgment of a court of competent
jurisdiction that the Seller or the Buyer has committed (y) fraud or intentional
misrepresentation against the Buyer with respect to the transactions
contemplated under this Agreement, or (z) a willful and intentional breach of
any material provision of this Agreement.
(b) The respective obligations of the parties to indemnify in connection
with the breach or inaccuracy of any representation or warranty or any breach of
a covenant contained in Article 7 or 8 hereof shall expire: two (2) years after
the Closing Date as to claims solely between the parties hereto which are not
brought within such time period; provided, however, that such expiration shall
not apply to claims relating to the Leased Premises pursuant to Section 11.4
hereof; and provided, further, with respect to claims involving Taxes and all
claims brought by third parties (including Employees as described in Section
11.1(g)), the obligation to indemnify shall survive the expiration of any
applicable statute of limitations or the period of time in which such a claim
may be asserted under common law; and provided, further, that the respective
indemnification obligations of the parties hereunder shall not expire with
respect to any claim brought within such specified time periods until the
indemnification obligation, if any, with respect to such claim shall have been
finally determined and paid.
(c) With respect to Damages that result from or arise out of events, acts,
omissions, conduct or course of conduct of a continuous nature occurring both
before and after the Closing Date, the indemnification obligations of the Seller
and the Buyer under this Article 13 shall be allocated based on the relative
fault of the Seller and the Buyer in relation to such Damages.
(d) If any claim shall be made or action brought with respect to a matter
referred to in this Article 13, the party entitled to indemnification (the
"Indemnified Party") shall promptly notify the party liable therefor hereunder
(the "Indemnifying Party"), in writing, setting forth the particulars of such
claim or action, and the Indemnifying Party shall assume the defense thereof,
including the employment of counsel satisfactory to it. No such claim or action
shall be settled by the Indemnifying Party without the Indemnified Party's prior
written consent; provided, however, that the Indemnified Party shall not
unreasonably withhold its consent to any proposed settlement if: (i) such
proposed settlement involves only the payment of money and (ii) the Indemnifying
Party demonstrates to the reasonable satisfaction of the Indemnified Party that
it is able to pay the amount of such settlement and all related expenses. The
Indemnifying Party will not settle any claim, action, suit or proceeding that
would give rise to the Indemnified Party's liability under its indemnity unless
such settlement includes as an unconditional term thereof the giving by the
claimant or plaintiff of a release of the Indemnified Party from all liability
with respect to such claim, action, suit or proceeding, in form and substance
reasonably satisfactory to the Indemnified Party and its counsel. If the
Indemnifying Party shall not have employed counsel reasonably satisfactory to
the Indemnified Party within a reasonable time after such notice of commencement
of any such action, then legal and other expenses, including the reasonable fees
and expenses of counsel, incurred by the Indemnified Party shall be borne by the
Indemnifying Party.
13.3 Remedies Exclusive. The remedies provided in this Article 13 shall be
the exclusive remedies of the parties hereto from and after the Closing in
connection with any claim or action arising out of this Agreement or the
Business. The provisions of this Article 13 shall apply to claims for
indemnification asserted as between the parties hereto as well as to third-party
claims. Nothing herein shall preclude a party hereto from applying to a court
for equitable relief to enforce its rights under this Agreement or be deemed a
limitation or waiver of any claim for fraud or intentional misrepresentation
described in Section 13.2(a)(v) hereof. Notwithstanding the foregoing, however,
if the Buyer in its capacity as trustee, custodian, paying agent, investment
manager, record-keeper or the like under any Trust Agreement or Ancillary
Agreement commences litigation against the Seller for the benefit of any Person
which is a party to, or beneficiary of, any such Trust Agreement or Ancillary
Agreement including any trust created pursuant to any such agreement, the amount
of any recovery for such Person with respect to any such action shall not
constitute Damages, and the Threshold and Maximum Indemnification Amount set
forth herein shall not apply to such recovery nor shall the limitation on time
within which an action is to be brought set forth in Section 13.2(b) hereof
apply except to the extent that the same would be applicable were Section
13.2(b) hereof not contained in this Agreement.
13.4 Exclusion Relating to Transfer of Agreements. A party shall have no
liability to the other party or to any third party arising solely from a
challenge by the other party or third party to the validity of the transfer of
any Trust Agreement or Ancillary Agreement in accordance with the terms of this
Agreement; provided that each party shall be liable for any failure to take any
action specifically required of such party under applicable law to effect such
transfer.
13.5 Mitigation of Damages. (a) An Indemnified Party shall, to the extent
practicable and reasonably within its control and at the expense of the
Indemnifying Party, make Commercially Reasonable Efforts to mitigate any Damages
of which it has adequate notice, provided that the Indemnified Party shall not
be obligated to act in contravention of applicable law or in contravention of
reasonable and customary practices of a prudent person in similar circumstances.
The Indemnifying Party shall have the right, but not the obligation, and shall
be afforded the opportunity by the Indemnified Party to the extent reasonably
possible, to make Commercially Reasonable Efforts to minimize Damages before
such Damages actually are incurred by the Indemnified Party.
(b) Each Indemnified Party shall maintain such insurance coverage with
respect to its trust and asset management business as is customary for an entity
of the size and nature of such Indemnified Party. Each Indemnified Party shall
be obligated in connection with any claim for indemnification under this Article
13 to use all commercially reasonable efforts to obtain any insurance proceeds
available to it with regard to the applicable claims. The amount which the
Indemnifying Party is or may be required to pay to any Indemnified Party
pursuant to this Article 13 shall be reduced (retroactively, if necessary) by
any insurance proceeds or other amounts actually recovered by or on behalf of
the Indemnified Party in reduction of the related Damages. If the Indemnified
Party shall have received the payment required by this Agreement from the
Indemnifying Party in respect of Damages and shall subsequently receive
insurance proceeds or other amounts in respect of such Damages, then such
Indemnified Party shall promptly repay to the Indemnifying Party a sum equal to
the amount of such insurance proceeds or other amounts actually received.
13.6 Enforcement. The obligation to indemnify a party's officers,
directors, employees and agents in accordance with this Article 13 will be
enforced exclusively by such party and nothing herein shall be construed to
grant such officers, directors, employees and agents any individual rights,
remedies, obligations or liabilities with respect to this Agreement. The parties
to this Agreement may amend or modify this Agreement in any respect without the
consent of such officers, directors, employees and agents.
13.7 Tax Treatment of Indemnification Payments. All indemnification
payments made by either party pursuant to this Article 13 shall be treated as
adjustments to the Purchase Price.
13.8 Arbitration. Any controversy or claim arising out of or relating to
this Article 13 or the breach thereof shall be determined and settled by
arbitration in Chicago, Illinois, pursuant to the rules then in effect of the
CPR Institute for Dispute Resolution. The resolution of such arbitration shall
be final and binding on the parties hereto and enforceable in a court of
competent jurisdiction. Any arbitration pursuant to this section shall be
governed by the rules of discovery then in effect in the United States District
Court located in Chicago, Illinois. Each party shall bear the costs and expenses
of all counsel and other advisors, witnesses and employees retained by it and
the costs of the arbitration panel shall be borne by the parties in the
proportions the arbitration panel may direct, or in the absence of direction,
one-half by the Seller and one-half by the Buyer.
ARTICLE 14
TERMINATION
14.1 Termination Events. This Agreement may be terminated at any time prior
to the Closing Date:
(a) by mutual written consent of the Seller and the Buyer;
(b) by the Seller or the Buyer if, upon written notice to the other party:
(i) any governmental entity that must grant a Required Consent has denied
approval of the transaction and such denial has become final and nonappealable,
or (ii) consummation of the transactions contemplated by this Agreement would
violate any statute, or nonappealable final order, decree or judgment of any
court or governmental body having competent jurisdiction;
(c) by the Seller or the Buyer, upon written notice to the other party, if
the transactions contemplated by this Agreement shall not have been consummated
on or before March 31, 2006, unless the failure of the Closing to occur by such
date shall be due to the failure of the party seeking to terminate this
Agreement to perform or observe the covenants and agreements of such party set
forth herein; or
(d) by the Seller or the Buyer (provided that the terminating party is not
then in material breach of any representation, warranty, covenant or other
agreement contained herein), if there shall have been a material breach of any
of the covenants or agreements or any of the representations or warranties set
forth in this Agreement on the part of the other party which breach is not cured
within thirty (30) days after written notice thereof is given to the party
committing such breach, or which breach, by its nature, cannot be cured prior to
the Closing.
14.2 Effect of Termination. In the event of termination of this Agreement
as provided in Section 14.1 hereof, this Agreement shall forthwith become void
and have no effect, and neither the Seller nor the Buyer, nor any of their
respective Affiliates or any of the officers, directors or stockholders of any
of them shall have any liability of any nature whatsoever hereunder, or in
connection with the transactions contemplated hereby, except as set forth in
Article 15 hereof.
ARTICLE 15
SURVIVAL OF PROVISIONS
The representations and warranties set forth herein, or in any certificates
or documents executed in connection herewith, shall survive for the same period
set forth in Section 13.2(b) hereof. The expenses provision of Section 16.8
hereof shall survive any termination hereof. Notwithstanding anything to the
contrary contained in this Agreement, neither the Seller nor the Buyer shall be
relieved or released from any liabilities or damages arising out of its willful
breach of any provision of this Agreement.
ARTICLE 16
GENERAL
16.1 Communications Plan; Press Releases. Upon the execution of this
Agreement, the Seller and the Buyer shall mutually agree upon and establish a
communications plan that shall govern all communications by the parties
including, but not limited to, rating agencies, financial analysts, the press,
customers of the Seller and Employees concerning the subject matter of this
Agreement. Notwithstanding anything to the contrary in this Section 16.1, no
party shall be prohibited, following notification to the other party, from
making any disclosure (including of financial terms) which is required by
Applicable Law.
16.2 Entire Agreement. This Agreement contains the entire agreement between
the parties with respect to the transactions contemplated hereunder and
supersedes all prior arrangements or understanding with respect thereto, whether
oral or written, other than documents referred to herein and the confidentiality
agreement between the Seller and the Buyer dated September 2, 2005, which
confidentiality agreement shall survive the execution of this Agreement. The
Schedules referred to in this Agreement have been separately delivered by the
parties hereto. This Agreement embodies all exhibits attached hereto and all
schedules separately delivered.
16.3 Amendment. Neither this Agreement nor any provision thereof may be
changed, waived, discharged or terminated, except by an instrument in writing
signed by the party against which enforcement of such change, waiver, discharge
or termination is sought.
16.4 Binding Effect. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns;
provided, however, that except as expressly provided herein, this Agreement and
all rights hereunder may not be assigned by any party hereto, other than to an
Affiliate of such party (but the party so assigning shall remain liable for the
acts and omissions of such Affiliate), except by written consent of the other
parties hereto.
16.5 Notices. All notices, documents, information and legal process to be
delivered to or served upon any party hereto shall be deemed to have been duly
given or made if delivered personally, sent by facsimile transmission confirmed
in writing within two (2) Business Days, or sent by registered or certified
mail, postage prepaid, or by recognized overnight courier to the applicable
parties hereto at the address stated below or in accordance with the last
unrevoked written direction from such party to the other parties hereto.
If to the Seller:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Chief Financial Officer
First Indiana Bank, N.A.
▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
With a copy to:
▇▇▇▇▇▇ K. ▇▇▇▇
Legal Counsel
First Indiana Bank, N.A.
▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
If to the Buyer:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
General Counsel
Wealth Management
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ Trust Company N.A.
▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇.
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
With copies to:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Senior Vice President, General Counsel
and Secretary
▇▇▇▇▇▇▇▇ & Ilsley Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇
▇▇▇▇▇▇▇ & ▇▇▇▇, S.C.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
16.6 Provisions Separable. The provisions of this Agreement are independent
of and separable from each other, and no provision shall be affected or rendered
invalid or unenforceable by virtue of the fact that for any reason any other or
others of them may be invalid or unenforceable in whole or in part.
16.7 Captions. The captions herein have been inserted solely for
convenience of reference and in no way define, limit or describe the scope or
substance of any provision of this Agreement.
16.8 Expenses. Except as set forth herein, each of the parties hereto shall
bear its own expenses in connection with the preparation, negotiation,
execution, delivery, and performance of this Agreement including any fees
payable in connection with obtaining any regulatory approval.
16.9 Time Deadlines. If the last day of the time period for the giving of
any notice or the taking of any action acquired under this Agreement falls on a
Saturday, Sunday or legal holiday or a date on which banks in the states of
Indiana and/or Wisconsin are authorized by law to close, the time period for
giving such notice or taking such action shall be extended through the next
Business Day following the original expiration date of such period.
16.10 Construction. The parties acknowledge that each party and its counsel
have 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.
16.11 Number and Gender. As used in this Agreement and the schedules and
exhibits hereto, the masculine shall include the feminine and neuter, the
singular shall include the plural and the plural shall include the singular, as
the context may require.
16.12 Scope of Agreement. This Agreement shall not create any partnership,
joint venture or other similar arrangement between the Buyer and the Seller.
16.13 Governing Law. The execution, interpretation, and performance of this
Agreement shall be governed by the laws of the State of Indiana, without regard
to the laws of any other jurisdiction that would otherwise govern under the
conflict of laws principles thereof.
16.14 Waiver. No delay or omission to exercise any right, power or remedy
accruing to any party upon any breach or default under this Agreement shall
impair any such right, power or remedy of such party, nor shall it be construed
to be a waiver of such breach or default, or an acquiescence therein, or in any
similar breach or default thereafter occurring; nor shall any waiver of any
single breach or default be deemed a waiver of any other breach or default
theretofore or thereafter occurring. Any waiver, permit, consent or approval of
any kind or character of any breach or default under this Agreement, or any
waiver of any provision or condition of this Agreement, must be in writing and
shall be effective only to the extent in such writing specifically set forth.
All rights and remedies, either under this Agreement or by law or otherwise
afforded to a party, shall be cumulative.
16.15 No Third Party Beneficiary Rights. This Agreement is made solely and
specifically between and for the benefit of the parties hereto, and their
respective successors and assigns and, except as otherwise expressly provided in
Article 13 hereof, which shall be enforceable solely by the parties to this
Agreement and their respective successors and assigns for the benefit of any
other such person, no other person shall have any rights, interests or claims
hereunder or be entitled to any benefits under or on account of this Agreement
as a third party beneficiary or otherwise.
16.16 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original as against any
party whose signature appears thereon, and all of which shall together
constitute one and the same instrument.
[Signatures begin on following page]
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be duly executed by an authorized officer as of the date first
above written.
FIRST INDIANA CORPORATION
By:/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: President
FIRST INDIANA BANK, N.A.
By:/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: President
▇▇▇▇▇▇▇▇ & ILSLEY TRUST COMPANY N.A.
By:/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: President and CEO
By:/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President, CFO, Secretary