AGREEMENT AND PLAN OF MERGER
OF
SOUTHTRUST OF ALABAMA, INC.
AND
FLORIDAFIRST BANCORP, INC.
JOINED IN BY
SOUTHTRUST CORPORATION
TABLE OF CONTENTS
ARTICLE 1
THE MERGER
Section 1.1 Consummation of Merger; Closing Date............................................................2
Section 1.2 Effect of Merger................................................................................2
Section 1.3 Further Assurances..............................................................................3
Section 1.4 Directors and Officers..........................................................................3
ARTICLE 2
CONVERSION OF CONSTITUENTS' CAPITAL SHARES
Section 2.1 Manner of Conversion of FloridaFirst Shares.....................................................3
Section 2.2 FloridaFirst Stock Options and Related Matters..................................................6
Section 2.3 Fractional Shares...............................................................................7
Section 2.4 Effectuating Conversion.........................................................................7
Section 2.5 Laws of Escheat.................................................................................9
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF FLORIDAFIRST
Section 3.1 Corporate Organization..........................................................................9
Section 3.2 Capitalization.................................................................................10
Section 3.3 Financial Statements; Filings..................................................................11
Section 3.4 Loan Portfolio; Reserves.......................................................................12
Section 3.5 Certain Loans and Related Matters..............................................................12
Section 3.6 Authority; No Violation........................................................................13
Section 3.7 Consents and Approvals.........................................................................14
Section 3.8 Broker's Fees..................................................................................14
Section 3.9 Absence of Certain Changes or Events...........................................................14
Section 3.10 Legal Proceedings; Etc.........................................................................14
Section 3.11 Taxes and Tax Returns..........................................................................15
Section 3.12 Employee Benefit Plans.........................................................................16
Section 3.13 Title and Related Matters......................................................................18
Section 3.14 Real Estate....................................................................................19
Section 3.15 Environmental Matters..........................................................................19
Section 3.16 Commitments and Contracts......................................................................21
Section 3.17 Regulatory, Accounting and Tax Matters.........................................................22
Section 3.18 Registration Obligations.......................................................................22
Section 3.19 Antitakeover Provisions........................................................................22
Section 3.20 Insurance......................................................................................22
Section 3.21 Labor..........................................................................................22
Section 3.22 Compliance with Laws...........................................................................23
Section 3.23 Transactions with Management...................................................................24
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Section 3.24 Derivative Contracts...........................................................................24
Section 3.25 Deposits.......................................................................................24
Section 3.26 Accounting Controls; Disclosure Controls.......................................................24
Section 3.27 Proxy Materials................................................................................25
Section 3.28 Deposit Insurance..............................................................................25
Section 3.29 Intellectual Property..........................................................................25
Section 3.30 SEC Filings....................................................................................25
Section 3.31 Untrue Statements and Omissions................................................................25
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF SOUTHTRUST AND ST-SUB
Section 4.1 Organization and Related Matters of SouthTrust.................................................26
Section 4.2 Organization and Related Matters of ST-Sub.....................................................26
Section 4.3 Capitalization.................................................................................27
Section 4.4 Authorization..................................................................................27
Section 4.5 Financial Statements...........................................................................28
Section 4.6 Absence of Certain Changes or Events...........................................................28
Section 4.7 Consents and Approvals.........................................................................29
Section 4.8 Proxy Materials................................................................................29
Section 4.9 Accounting, Tax, Regulatory Matters............................................................29
Section 4.10 No Broker's or Finder's Fees...................................................................29
Section 4.11 Untrue Statements and Omissions................................................................29
Section 4.12 Legal Proceedings, Etc.........................................................................29
Section 4.13 Compliance with Laws...........................................................................30
Section 4.14 SEC Filings....................................................................................30
ARTICLE 5
COVENANTS AND AGREEMENTS
Section 5.1 Conduct of the Business of FloridaFirst and FloridaFirst Subsidiaries..........................31
Section 5.2 Current Information............................................................................33
Section 5.3 Access to Properties; Personnel and Records; Systems Integration...............................34
Section 5.4 Approval of FloridaFirst Shareholders..........................................................35
Section 5.5 No Other Bids..................................................................................35
Section 5.6 Maintenance of Properties; Certain Remediation and Capital Improvements........................36
Section 5.7 Environmental Audits...........................................................................36
Section 5.8 Title Insurance................................................................................36
Section 5.9 Surveys........................................................................................36
Section 5.10 Consents to Assign and Use Leased Premises.....................................................36
Section 5.11 Compliance Matters.............................................................................37
Section 5.12 Conforming Accounting and Reserve Policies.....................................................37
Section 5.13 Bank Merger Agreement..........................................................................37
Section 5.14 Affiliates.....................................................................................37
Section 5.15 Advisory Board.................................................................................37
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Section 5.16 Restricted Stock Awards........................................................................38
Section 5.17 Publicity......................................................................................38
Section 5.18 Certification of Claims........................................................................38
ARTICLE 6
ADDITIONAL COVENANTS AND AGREEMENTS
Section 6.1 Best Efforts; Cooperation......................................................................38
Section 6.2 Regulatory Matters.............................................................................38
Section 6.3 Employment and Employee Benefits Matters.......................................................39
Section 6.4 Indemnification................................................................................42
Section 6.5 Registration Statement.........................................................................43
ARTICLE 7
MUTUAL CONDITIONS TO CLOSING
Section 7.1 Shareholder Approval...........................................................................44
Section 7.2 Regulatory Approvals...........................................................................44
Section 7.3 Litigation.....................................................................................44
Section 7.4 Proxy Statement and Registration Statement.....................................................44
Section 7.5 Tax Opinion....................................................................................44
ARTICLE 8
CONDITIONS TO THE OBLIGATIONS OF SOUTHTRUST AND ST-SUB
Section 8.1 Representations and Warranties.................................................................44
Section 8.2 Performance of Obligations.....................................................................45
Section 8.3 Certificate Representing Satisfaction of Conditions............................................45
Section 8.4 Absence of Adverse Facts.......................................................................45
Section 8.5 Opinion of Counsel.............................................................................45
Section 8.6 Consents Under Agreements......................................................................45
Section 8.7 Consents Relating to Leased Real Property......................................................45
Section 8.8 Material Condition.............................................................................46
Section 8.9 Matters Relating to Employment Agreements......................................................46
Section 8.10 Acknowledgment of Option Payments..............................................................46
Section 8.11 Outstanding Shares of FloridaFirst.............................................................46
Section 8.12 Increase in Borrowing..........................................................................46
ARTICLE 9
CONDITIONS TO OBLIGATIONS OF FLORIDAFIRST
Section 9.1 Representations and Warranties.................................................................47
Section 9.2 Performance of Obligations.....................................................................47
Section 9.3 Certificate Representing Satisfaction of Conditions............................................47
Section 9.4 Absence of Adverse Facts.......................................................................47
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Section 9.5 Consents Under Agreements......................................................................47
Section 9.6 Opinion of Counsel.............................................................................48
Section 9.7 SouthTrust Shares..............................................................................48
ARTICLE 10
TERMINATION, WAIVER AND AMENDMENT
Section 10.1 Termination....................................................................................48
Section 10.2 Effect of Termination; Termination Fee.........................................................49
Section 10.3 Amendments.....................................................................................50
Section 10.4 Waivers........................................................................................50
Section 10.5 Non-Survival of Representations and Warranties.................................................50
ARTICLE 11
MISCELLANEOUS
Section 11.1 Alternative Structure..........................................................................50
Section 11.2 Definitions....................................................................................51
Section 11.3 Entire Agreement...............................................................................52
Section 11.4 Notices........................................................................................52
Section 11.5 Severability...................................................................................53
Section 11.6 Costs and Expenses.............................................................................54
Section 11.7 Captions.......................................................................................54
Section 11.8 Counterparts...................................................................................54
Section 11.9 Persons Bound; No Assignment...................................................................54
Section 11.10 Governing Law; Arbitration.....................................................................54
Section 11.11 Exhibits and Schedules.........................................................................54
Section 11.12 Waiver.........................................................................................54
Section 11.13 Construction of Terms..........................................................................55
Section 11.14 Specific Performance...........................................................................55
iv
AGREEMENT AND PLAN OF MERGER
OF
SOUTHTRUST OF ALABAMA, INC.
WITH
FLORIDAFIRST BANCORP, INC.
______________________
LIST OF SCHEDULES
______________________
Schedule 2.2(a) Stock Options
Schedule 2.2(c) Restricted Stock Awards
Schedule 3.1(e) Ownership Interests
Schedule 3.2 Capitalization - Stock Options
Schedule 3.3(e) Material Obligations
Schedule 3.4 Problems with Loan Portfolio
Schedule 3.5 Certain Loans and Related Matters
Schedule 3.7 Consents Required in Connection with Merger
Schedule 3.8 Broker Engagement Letter
Schedule 3.9 Certain Changes or Events
Schedule 3.10 Legal Proceedings
Schedule 3.11 Problems with Tax Returns, Etc.
Schedule 3.12(a) Employee Benefit Plans
Schedule 3.12(b) Defined Benefit Plans
Schedule 3.12(g) Effect of Merger on Employee Benefits
Schedule 3.12(m) Continuing Obligations Under Employee Benefits Plans
Schedule 3.12(n) Funding of Employee Benefit Plans
Schedule 3.13(a) Title and Related Matters
Schedule 3.13(b) Real Property Leases
Schedule 3.14(a) List of Real Estate
Schedule 3.14(b) List of Real Property Leases
Schedule 3.15 Environmental Matters
Schedule 3.16(a) Certain Commitments and Contracts
Schedule 3.16(b) Defaults Under Material Agreements
Schedule 3.16(c) Effect of Merger on Service Contracts
Schedule 3.16(d) Contract Extensions or Terminations
Schedule 3.20 Insurance Policies
Schedule 3.21(b) Severance
Schedule 3.21(c) Non-Compliance with Labor Laws
Schedule 3.21(d) Legal Proceedings Related to Labor Matters
Schedule 3.22 Compliance with Laws
Schedule 3.23 Transactions with Management
Schedule 3.24 Derivative Contracts
Schedule 5.1(b)(iv) Capital Expenditures
Schedule 5.1(b)(v) Other Real Estate Owned
Schedule 5.1(b)(vi) Salary Adjustments
v
AGREEMENT AND PLAN OF MERGER OF
SOUTHTRUST OF ALABAMA, INC.
WITH
FLORIDAFIRST BANCORP, INC.
__________________________
LIST OF EXHIBITS
__________________________
Exhibit 5.14: Bank Merger Agreement
Exhibit 5.15: Affiliate Letter
Exhibit 8.5: Matters as to which Xxxxxxx Spidi & Xxxxx, PC, Counsel to
FloridaFirst, will opine
Exhibit 9.6: Matters as to which Xxxxxxx Xxxxx Xxxx & White LLP, Counsel to
SouthTrust and ST-Sub, will opine
vi
AGREEMENT AND PLAN OF MERGER
OF
SOUTHTRUST OF ALABAMA, INC.
AND
FLORIDAFIRST BANCORP, INC.
JOINED IN BY
SOUTHTRUST CORPORATION
----------------------
This AGREEMENT AND PLAN OF MERGER, dated as of the 4th day of February,
2004 (this "Agreement"), by and between SouthTrust of Alabama, Inc., an Alabama
corporation ("ST-Sub"), and FloridaFirst Bancorp, Inc., a Florida corporation
("FloridaFirst"), and joined in by SouthTrust Corporation, a Delaware
corporation ("SouthTrust") (collectively, the "Parties").
WITNESSETH THAT:
WHEREAS, the respective Boards of Directors of ST-Sub and FloridaFirst
deem it in the best interests of ST-Sub and of FloridaFirst, respectively, and
of their respective shareholders, that ST-Sub and FloridaFirst merge pursuant to
this Agreement in a transaction that qualifies as a reorganization pursuant to
Section 368 of the Internal Revenue Code of 1986 (as amended, the "Code") (the
"Merger"); provided, however, that the parties have agreed that under certain
circumstances the transaction may be restructured so as to avoid a corporate
level tax on the transaction, and in such event, the parties will enter into an
appropriate amendment to the Agreement to reflect such restructuring;
WHEREAS, the Boards of Directors of ST-Sub and FloridaFirst have
approved this Agreement and have directed that this Agreement be submitted to
their respective shareholders for approval and adoption in accordance with the
laws of the State of Alabama, the State of Florida and the United States;
WHEREAS, SouthTrust, the sole shareholder of ST-Sub, will deliver, or
cause to be delivered, to the shareholders of FloridaFirst the consideration to
be paid pursuant to the Merger in accordance with the terms of this Agreement;
and
WHEREAS, FloridaFirst owns all the issued and outstanding capital stock
of FloridaFirst Bank, a federal savings bank ("FF-Bank"), and ST-Sub owns all of
the issued and outstanding capital stock of SouthTrust Bank, an Alabama state
banking corporation ("ST-Bank"), and it is contemplated that, in connection with
the consummation of this Agreement and pursuant to the
1
terms of a certain Bank Merger Agreement (the "Bank Merger Agreement"), FF-Bank
will be merged with and into ST-Bank (the "Bank Merger");
NOW, THEREFORE, in consideration of the premises and the mutual
covenants, representations, warranties and agreements herein contained, the
parties agree that FloridaFirst will be merged with and into ST-Sub and that the
terms and conditions of the Merger, the mode of carrying the Merger into effect,
including the manner of converting the shares of common stock of FloridaFirst,
par value $0.10 per share, into shares of common stock of SouthTrust, par value
of $2.50 per share, or other consideration shall be as hereinafter set forth.
ARTICLE 1
THE MERGER
Section 1.1 Consummation of Merger; Closing Date.
------------------------------------
(a) Subject to the provisions hereof, FloridaFirst shall be merged with
and into ST-Sub (which has heretofore and shall hereinafter be referred to as
the "Merger") pursuant to the laws of the States of Alabama and Florida, and
ST-Sub shall be the surviving corporation (sometimes hereinafter referred to as
"Surviving Corporation" when reference is made to it after the Effective Time of
the Merger (as defined below)). The Merger shall become effective on the date
and at the time on which Articles of Merger have been duly filed with the
Secretaries of State of Alabama and Florida, unless a later date is specified in
such Articles of Merger (such time is hereinafter referred to as the "Effective
Time of the Merger"). Subject to the terms and conditions hereof, unless
otherwise agreed upon by SouthTrust and FloridaFirst, the Effective Time of the
Merger shall occur on the tenth (10th) business day following the later to occur
of (i) the effective date (including expiration of any applicable waiting
period) of the last required Consent (as defined herein) of any Regulatory
Authority (as defined herein) having authority over the transactions
contemplated under the Merger Agreement or the Bank Merger Agreement and (ii)
the date on which the shareholders of FloridaFirst approve the transactions
contemplated by this Agreement, or such other time as the parties may agree.
(b) The closing of the Merger (the "Closing") shall take place at the
principal offices of FloridaFirst at 10:00 a.m. local time on the day that the
Effective Time of the Merger occurs, or such other date, time and place as the
parties hereto may agree (the "Closing Date"). Subject to the provisions of this
Agreement, at the Closing there shall be delivered to each of the parties hereto
the opinions, certificates and other documents and instruments required to be so
delivered pursuant to this Agreement.
Section 1.2 Effect of Merger. At the Effective Time of the Merger,
----------------
FloridaFirst shall be merged with and into ST-Sub and the separate existence of
FloridaFirst shall cease. The Articles of Incorporation and Bylaws of ST-Sub, as
in effect on the date hereof and as otherwise amended prior to the Effective
Time of the Merger, shall be the Articles of Incorporation and the Bylaws of the
Surviving Corporation until further amended as provided therein and in
accordance with applicable law. The Surviving Corporation shall have all the
rights, privileges, immunities and powers and shall be subject to all the duties
and liabilities of a corporation
2
organized under the laws of the State of Alabama and shall thereupon and
thereafter possess all other privileges, immunities and franchises of a private,
as well as of a public nature, of each of the constituent corporations. All
property (real, personal and mixed) and all debts on whatever account, including
subscriptions to shares, and all choses in action, all and every other interest,
of or belonging to or due to each of the constituent corporations so merged
shall be taken and deemed to be transferred to and vested in the Surviving
Corporation without further act or deed. The title to any real estate, or any
interest therein, vested in any of the constituent corporations shall not revert
or be in any way impaired by reason of the Merger. The Surviving Corporation
shall thenceforth be responsible and liable for all the liabilities and
obligations of each of the constituent corporations so merged and any claim
existing or action or proceeding pending by or against either of the constituent
corporations may be prosecuted as if the Merger had not taken place or the
Surviving Corporation may be substituted in its place. Neither the rights of
creditors nor any liens upon the property of any constituent corporation shall
be impaired by the Merger.
Section 1.3 Further Assurances. From and after the Effective Time of
-------------------
the Merger, as and when requested by the Surviving Corporation, the officers and
directors of FloridaFirst last in office shall execute and deliver or cause to
be executed and delivered in the name of FloridaFirst such deeds and other
instruments and take or cause to be taken such further or other actions as shall
be necessary in order to vest or perfect in or confirm of record or otherwise to
the Surviving Corporation title to and possession of all of the property,
interests, assets, rights, privileges, immunities, powers, franchises and
authority of FloridaFirst.
Section 1.4 Directors and Officers. From and after the Effective Time
----------------------
of the Merger, the directors of the Surviving Corporation and officers of the
Surviving Corporation shall be those persons serving as directors and officers
of ST-Sub immediately prior to the Effective Time of the Merger, and such
additional persons, in each case, as SouthTrust, at or prior to the Effective
Time of the Merger, shall designate in writing.
ARTICLE 2
CONVERSION OF CONSTITUENTS' CAPITAL SHARES
Section 2.1 Manner of Conversion of FloridaFirst Shares. Subject to the
-------------------------------------------
provisions hereof, as of the Effective Time of the Merger and by virtue of the
Merger and without any further action on the part of SouthTrust, ST-Sub,
FloridaFirst or the holder of any shares thereof, the shares of the constituent
corporations shall be converted as follows:
(a) Each share of capital stock of ST-Sub outstanding immediately prior
to the Effective Time of the Merger shall, after the Effective Time of the
Merger, remain outstanding and unchanged and thereafter shall constitute all of
the issued and outstanding shares of capital stock of the Surviving Corporation.
(b) Each share of common stock of FloridaFirst (the "FloridaFirst
Shares") held by FloridaFirst or by SouthTrust (or any of their subsidiaries),
other than in a fiduciary capacity or as a result of debts previously
contracted, shall be canceled and retired and no consideration shall be paid or
delivered in exchange therefor.
3
(c) Except with regard to: (i) FloridaFirst Shares excluded under
Section 2.1(b) above and (ii) FloridaFirst Shares the holder of which has
elected to receive the per share cash consideration provided in Section 2.1(d),
each FloridaFirst Share outstanding immediately prior to the Effective Time of
the Merger shall be converted into the right to receive that number of shares of
common stock of SouthTrust (and the rights associated therewith pursuant to that
certain Amended and Restated Rights Agreement dated as of August 1, 2000 between
SouthTrust and American Stock Transfer & Trust Company (together, the
"SouthTrust Shares")) that is equal to the quotient obtained by dividing (i)
$146,123,851 plus the product of $27.12 and the number of FloridaFirst Shares
issued pursuant to the exercise of FloridaFirst Options (as defined in Section
2.2) (the "Total Consideration") subsequent to the date hereof but prior to the
Effective Time by (ii) the product of the Average Market Price and the total
number of issued and outstanding FloridaFirst Shares (exclusive of any treasury
shares) at the Effective Time of the Merger. (Such number of SouthTrust Shares,
as may be adjusted as provided herein, is hereinafter referred to as the "Per
Share Stock Consideration"). Thereafter, subject to Sections 2.1(d) and 2.3, all
outstanding certificates representing FloridaFirst Shares shall represent solely
the right to receive SouthTrust Shares. Except as may be provided below, the
"Average Market Price" shall be the average of the closing per share trading
prices of SouthTrust Shares (adjusted appropriately for any stock split, stock
dividend, recapitalization, reclassification or similar transaction which is
effected, or for which a record date occurs) on the twenty (20) trading days
preceding the fifth trading day immediately prior to the Closing Date, as
reported in the Wall Street Journal.
In the event of an Acquisition Transaction (as defined in Section 10.2)
with respect to SouthTrust which is publicly announced subsequent to the date of
this Agreement and on or before the Effective Time of the Merger, the "Average
Market Price" shall be the average of the closing per share trading prices of
SouthTrust Shares on the twenty (20) trading days preceding the fifth trading
day immediately prior to the date of this Agreement, as reported in the Wall
Street Journal.
(d) Notwithstanding the provisions of Section 2.1(c) above, each holder
of FloridaFirst Shares shall be provided with an opportunity to elect to receive
cash consideration for a portion or all of such holder's FloridaFirst Shares in
lieu of receiving SouthTrust Shares under Section 2.1(c), in accordance with the
election procedures set forth in this Section 2.1(d).
Holders who elect to receive cash in lieu of exchanging FloridaFirst
Shares for SouthTrust Shares as specified below shall receive $27.12 in cash
(the "Per Share Cash Consideration") for each FloridaFirst Share so converted;
provided, however, that in no event shall the aggregate amount of cash to be
paid to holders of FloridaFirst Shares in exchange for their FloridaFirst Shares
exceed 49% of the Total Consideration.
(i) SouthTrust will use its commercially reasonable efforts to
cause the Exchange Agent to mail an election form in such form as
SouthTrust and FloridaFirst shall mutually agree (the "Election Form") at
least 20 days prior to the date of the FloridaFirst Shareholders' Meeting
or on such other date as SouthTrust and FloridaFirst shall mutually agree
(the "Mailing Date") to each holder of record of FloridaFirst Shares as of
the record date for the FloridaFirst Shareholders' Meeting. Each Election
Form
4
shall permit a holder (or the beneficial owner through appropriate and
customary documentation and instructions) of FloridaFirst Shares to elect
to receive cash with respect to all or a portion of such holder's
FloridaFirst Shares (shares as to which the election is made being referred
to as "Cash Election Shares").
(ii) Any FloridaFirst Shares with respect to which the holder (or
the beneficial owner, as the case may be) shall not have submitted to the
Exchange Agent an effective, properly completed Election Form on or before
5:00 p.m. Eastern Time on the date of the FloridaFirst Shareholders'
Meeting (or such other time and date as SouthTrust and FloridaFirst may
mutually agree) (the "Election Deadline") shall be converted into
SouthTrust Shares as set forth in Section 2.1(c) of this Agreement (such
shares being referred to as "Exchange Shares"). Any Election Form may be
revoked or changed by the person submitting such Election Form at or prior
to the Election Deadline. In the event an Election Form is revoked prior to
the Election Deadline, the FloridaFirst Shares represented by such Election
Form shall become Exchange Shares. Subject to the terms of this Agreement
and of the Election Form, the Exchange Agent shall have reasonable
discretion to determine whether any election, revocation or change has been
properly or timely made and to disregard immaterial defects in the Election
Forms, and any good faith decisions of the Exchange Agent regarding such
matters shall be binding and conclusive. Neither SouthTrust nor the
Exchange Agent shall be under any obligation to notify any person of any
defect in an Election Form.
(iii)Within three business days after the Election Deadline,
unless the Effective Time has not yet occurred, in which case as soon
thereafter as practicable, SouthTrust shall use commercially reasonable
efforts to cause the Exchange Agent to effect the allocation among the
holders of FloridaFirst Shares in accordance with the Election Forms as
follows:
(A) Cash Elections by No More Than 49% of the Total
-------------------------------------------------------
Consideration. If the amount of cash payable to holders
-------------
of FloridaFirst Shares electing to receive cash does
not exceed 49% of the Total Consideration, then all
Cash Election Shares shall be converted into the right
to receive the Per Share Cash Consideration, and all of
the Exchange Shares shall be converted into the right
to receive SouthTrust Shares, pursuant to Section
2.1(c).
(B) Cash Elections More Than 49% of the Total
-------------------------------------------------------
Consideration. If the amount of cash that otherwise
-------------
would be payable to holders of FloridaFirst Shares
electing to receive cash would exceed 49% of the Total
Consideration, then:
(1) the number of Cash Election Shares designated by
each holder of FloridaFirst Shares who properly
submitted a Cash Election Form Shall be automatically
reduced to that number of shares
5
equal to the product of (A) 49% of the Total
Consideration and (B) a fraction, the numerator of
which is the number of such holder's Cash Election
Shares designated in such holder's Election Form,
and the denominator of which is the total number
of Cash Election Shares designated in all Election
Forms;
(2) the Cash Election Shares that remain following
proration under subsection (1) above shall be
converted into the right to receive the Per Share
Cash Consideration;
(3) the FloridaFirst Shares that would have been Cash
Election Shares but for the proration pursuant to
to subsection (1) above shall automatically be
deemed to be Exchange Shares; and
(4) all Exchange Shares shall be converted into the
right to receive SouthTrust Shares, pursuant to
Section 2.1(c).
Section 2.2 FloridaFirst Stock Options and Related Matters.
----------------------------------------------
(a) As of the Effective Time of the Merger, all rights with respect to
FloridaFirst Shares issuable pursuant to the exercise of stock options
("FloridaFirst Options") granted by FloridaFirst under the 1999 and 2002
FloridaFirst Stock Option Plans (the "FloridaFirst Stock Option Plans"), each of
which are listed and described on Schedule 2.2(a) and which are outstanding at
the Effective Time of the Merger, shall be canceled as of the Effective Time of
the Merger and shall be converted into the right to receive in cash, to be paid
by FloridaFirst to the option holder at or immediately prior to the Effective
Time of the Merger, subject to applicable withholding taxes, the difference
between (A) $27.12 and (B) the exercise price of each FloridaFirst Share under
such FloridaFirst Option as listed on Schedule 2.2 (a) hereof, for each
FloridaFirst Share under such FloridaFirst Options.
(b) FloridaFirst shall procure from each holder of FloridaFirst
Options, and shall deliver to SouthTrust at the Closing, an executed
acknowledgment and receipt of the payments specified in Section 2.2(a).
(c) At or immediately prior to the Effective Time, any unvested awards
under the 1999 and 2002 Restricted Stock Plans, which awards are described on
Schedule 2.2(c), shall become earned and non-forfeitable and distributed in the
form of FloridaFirst Shares at or immediately prior to the Effective Time of the
Merger. Such FloridaFirst Shares shall be deemed Exchange Shares and shall
convert at the Effective Time into the right to receive the Per Share Stock
Consideration.
6
Section 2.3 Fractional Shares. Notwithstanding any other provision of
-----------------
this Agreement, each holder of FloridaFirst Shares converted pursuant to the
Merger who would otherwise have been entitled to receive a fraction of a
SouthTrust Share (after taking into account all certificates delivered by such
holder), shall receive, in lieu thereof, cash (without interest) in an amount
equal to such fractional part of such SouthTrust Share, multiplied by the market
value of one SouthTrust Share at the Effective Time of the Merger. The market
value of a SouthTrust Share at the Effective Time of the Merger, as the case may
be, shall be the last sale price of such SouthTrust Shares, as reported by The
Nasdaq Stock Market ("NASDAQ") on the last business day preceding the Effective
Time of the Merger, as the case may be, or, if the SouthTrust Shares hereafter
become listed for trading on any national securities exchange registered under
the Exchange Act, the last sale price of such SouthTrust Shares on the
applicable date as reported on the principal securities exchange on which the
SouthTrust Shares are then listed for trading. No such holder will be entitled
to dividends, voting rights or any other rights as a shareholder in respect of
any fractional share.
Section 2.4 Effectuating Conversion.
-----------------------
(a) American Stock Transfer & Trust Company, or such other third party
institution as SouthTrust and ST-Bank may designate, shall serve as the exchange
agent (the "Exchange Agent"). The Exchange Agent may employ sub-agents in
connection with performing its duties. As of the Effective Time of the Merger,
SouthTrust will deliver or cause to be delivered to the Exchange Agent the
consideration to be paid by SouthTrust for FloridaFirst Shares, along with the
appropriate cash payment in lieu of fractional interests in SouthTrust Shares.
Not later than three business days after the Effective Time of the Merger, the
Exchange Agent shall send or cause to be sent to each former holder of record of
FloridaFirst Shares transmittal materials (the "Letter of Transmittal") for use
in exchanging their certificates formerly representing FloridaFirst Shares for
the consideration provided for in this Agreement. The Letter of Transmittal will
contain instructions with respect to the surrender of certificates representing
FloridaFirst Shares and the receipt of the consideration contemplated by this
Agreement and will require each holder of FloridaFirst Shares to transfer good
and marketable title to such FloridaFirst Shares to SouthTrust, free and clear
of all liens, claims and encumbrances.
(b) At the Effective Time of the Merger, the stock transfer books of
FloridaFirst shall be closed as to holders of FloridaFirst Shares immediately
prior to the Effective Time of the Merger and no transfer of FloridaFirst Shares
by any such holder shall thereafter be made or recognized and each outstanding
certificate formerly representing FloridaFirst Shares shall, without any action
on the part of any holder thereof, no longer represent FloridaFirst Shares. If,
after the Effective Time of the Merger, certificates are properly presented to
the Exchange Agent, such certificates shall be exchanged for the consideration
contemplated by this Agreement into which FloridaFirst Shares represented
thereby were converted in the Merger.
(c) In the event that any holder of record as of the Effective Time of
the Merger of FloridaFirst Shares is unable to deliver the certificate which
represents such holder's FloridaFirst Shares, SouthTrust, in the absence of
actual notice that any FloridaFirst Shares theretofore represented by any such
certificate have been acquired by a bona fide purchaser,
7
may, in its discretion, deliver to such holder the consideration contemplated by
this Agreement and the amount of cash representing fractional SouthTrust Shares
to which such holder is entitled in accordance with the provisions of this
Agreement upon the presentation of all of the following:
(i) An affidavit or other evidence to the reasonable satisfaction of
SouthTrust that any such certificate has been lost, wrongfully taken or
destroyed;
(ii) Such security or indemnity as may be reasonably requested by
SouthTrust to indemnify and hold SouthTrust harmless in respect of such
stock certificate(s); and
(iii) Evidence to the satisfaction of SouthTrust that such holder is
the owner of FloridaFirst Shares theretofore represented by each
certificate claimed by such holder to be lost, wrongfully taken or
destroyed and that such holder is the person who would be entitled to
present each such certificate for exchange pursuant to this Agreement.
(d) In the event that the delivery of the consideration contemplated by
this Agreement and the amount of cash representing fractional SouthTrust Shares
are to be made to a person other than the person in whose name any certificate
representing FloridaFirst Shares surrendered is registered, such certificate so
surrendered shall be properly endorsed (or accompanied by an appropriate
instrument of transfer), with the signature(s) appropriately guaranteed, and
otherwise in proper form for transfer, and the person requesting such delivery
shall pay any transfer or other taxes required by reason of the delivery to a
person other than the registered holder of such certificate surrendered or
establish to the satisfaction of SouthTrust that such tax has been paid or is
not applicable.
(e) No holder of FloridaFirst Shares shall be entitled to receive any
dividends or distributions declared or made with respect to the SouthTrust
Shares with a record date before the Effective Time of the Merger. Neither the
consideration contemplated by this Agreement, any amount of cash representing
fractional SouthTrust Shares nor any dividend or other distribution with respect
to SouthTrust Shares where the record date thereof is on or after the Effective
Time of the Merger shall be paid to the holder of any unsurrendered certificate
or certificates representing FloridaFirst Shares, and SouthTrust shall not be
obligated to deliver any of the consideration contemplated by this Agreement,
any amount of cash representing fractional SouthTrust Shares or any such
dividend or other distribution with respect to SouthTrust Shares until such
holder shall surrender the certificate or certificates representing FloridaFirst
Shares as provided for by the Agreement. Subject to applicable laws, following
surrender of any such certificate or certificates, there shall be paid to the
holder of the certificate or certificates then representing SouthTrust Shares
issued in the Merger, without interest at the time of such surrender, the
consideration contemplated by this Agreement, the amount of any cash
representing fractional SouthTrust Shares and the amount of any dividends or
other distributions with respect to SouthTrust Shares to which such holder is
entitled as a holder of SouthTrust Shares.
8
Section 2.5 Laws of Escheat. (a) If any of the consideration due
---------------
or other payments to be paid or delivered to the holders of FloridaFirst Shares
is not paid or delivered within the time period specified by any applicable laws
concerning abandoned property, escheat or similar laws, and if such failure to
pay or deliver such consideration occurs or arises out of the fact that such
property is not claimed by the proper owner thereof, SouthTrust or the Exchange
Agent shall be entitled to dispose of any such consideration or other payments
in accordance with applicable laws concerning abandoned property, escheat or
similar laws. Any other provision of this Agreement notwithstanding, none of
FloridaFirst, SouthTrust, ST-Sub, the Exchange Agent, or any other Person acting
on their behalf shall be liable to a holder of FloridaFirst Shares for any
amount paid or property delivered in good faith to a public official pursuant to
and in accordance with any applicable abandoned property, escheat or similar
law.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF FLORIDAFIRST
FloridaFirst and FF-Bank hereby jointly and severally represent and warrant to
ST-Sub and SouthTrust as follows as of the date hereof and as of all times up to
and including the Effective Time of the Merger (except as otherwise provided):
Section 3.1 Corporate Organization.
----------------------
(a) FloridaFirst is a corporation duly organized, validly existing and
in good standing under the laws of the State of Florida. FloridaFirst has the
corporate power and authority to own or lease all of its properties and assets
and to carry on its business as such business is now being conducted, and is
duly licensed or qualified to do business in all such places where the nature of
the business conducted by it or the character or location of the properties and
assets owned or leased by it make such qualification necessary, except where the
failure to be so licensed or qualified would not have a Material Adverse Effect
(as defined herein) on the business, assets, operations, financial condition or
results of operations (such business, assets, operations, financial condition or
results of operations hereinafter collectively referred to as the "Condition")
of FloridaFirst on a consolidated basis. FloridaFirst is duly registered as a
unitary savings and loan holding company under the Home Owners' Loan Act of
1933, as amended. True and correct copies of the Articles of Incorporation and
the Bylaws of FloridaFirst, each as amended to the date hereof, have been
delivered to SouthTrust.
(b) FF-Bank is a federal savings bank, duly organized, validly existing
and in good standing under the laws of the United States. FF-Bank has the
corporate power and authority to own or lease all of its properties and assets
and to carry on its business as such business is now being conducted, and
FF-Bank is duly licensed or qualified to do business in each jurisdiction in
which the nature of the business conducted by it or the character or location of
the properties and assets leased by it makes such licensing or qualification
necessary, except where the failure to be so licensed or qualified would not
have a Material Adverse Effect on FF-Bank. True and correct copies of the
Federal Stock Charter and the Bylaws of FF-Bank, each as amended to the date
hereof, have been delivered to SouthTrust. FF-Bank is a member of the Federal
Home Loan Bank of Atlanta and owns the requisite amount of stock therein.
9
(c) The only subsidiary of FloridaFirst is FF-Bank. FF-Bank does not
have any subsidiaries.
(d) Each of FloridaFirst and FF-Bank has in effect all federal, state,
local and foreign governmental, regulatory and other authorizations, permits and
licenses necessary for each of them to own or lease its properties and assets
and to carry on its business as now conducted, the absence of which, either
individually or in the aggregate, would have a Material Adverse Effect on the
Condition of FloridaFirst on a consolidated basis.
(e) Schedule 3.1(e) lists all entities (whether corporations, limited
liability companies, partnerships or similar organizations) of FloridaFirst
(other than FF-Bank) and FF-Bank, including the corresponding percentage
ownership, in which FloridaFirst or FF-Bank, as appropriate, owns, directly or
indirectly, five percent (5%) or more of the ownership interests as of the date
of this Agreement and indicates for each as of such date, its jurisdiction of
organization and the jurisdiction(s) wherein it is qualified to do business. All
of such ownership interests are in compliance with all applicable laws, rules
and regulations relating to direct investment in equity ownership interests.
(f) The minute books of FloridaFirst and FF-Bank contain complete and
accurate records in all material respects of all meetings and other corporate
actions held or taken by their respective shareholders and Boards of Directors
(including all committees thereof).
Section 3.2 Capitalization.
--------------
(a) The authorized capital stock of FloridaFirst consists of 80,000,000
FloridaFirst Shares, of which 5,388,276 FloridaFirst Shares are issued and
outstanding as of the date hereof (170,073 of which are held in the treasury of
FloridaFirst), and 20,000,000 preferred shares, no par value per share
("FloridaFirst Preferred Shares"), of which no FloridaFirst Preferred Shares as
of the date hereof are issued and outstanding. All of the issued and outstanding
FloridaFirst Shares have been duly authorized and validly issued and all such
shares are fully paid and nonassessable. As of the date hereof, there are no
outstanding options, warrants, commitments, or other rights or instruments to
purchase or acquire any shares of capital stock of FloridaFirst, or any
securities or rights convertible into or exchangeable for shares of capital
stock of FloridaFirst, except for options to purchase 534,799 FloridaFirst
Shares (which are described in more detail in Schedule 3.2).
(b) The authorized capital stock of FF-Bank consists of 8,000,000
shares of common stock, par value of $0.10 per share, 100,000 shares of which of
the date hereof are issued and outstanding (none of which is held in the
treasury of FF-Bank) (the "FF-Bank Shares") and 2,000,000 shares of preferred
stock, no par value per share of which no shares are issued and outstanding as
of the date hereof. All of the issued and outstanding FF-Bank Shares have been
duly authorized and validly issued and all such shares are fully paid and
nonassessable. As of the date hereof, there are no outstanding options,
warrants, commitments or other rights or instruments to purchase or acquire any
shares of capital stock of FF-Bank, or any securities or rights convertible into
or exchangeable for shares of capital stock of FF-Bank.
10
(c) All of the issued and outstanding shares of capital stock of
FF-Bank:
(i) are owned by FloridaFirst; and
(ii) are so owned free and clear of all liens and encumbrances
and adverse claims thereto.
Section 3.3 Financial Statements; Filings.
-----------------------------
(a) FloridaFirst has previously delivered to SouthTrust copies of the
financial statements of FloridaFirst as of and for the years ended September 30,
2003, September 30, 2002 and September 30, 2001, and FloridaFirst shall deliver
to SouthTrust, as soon as practicable following the preparation of additional
financial statements for each subsequent calendar quarter (or other reporting
period) or year of FloridaFirst, the additional consolidated financial
statements of FloridaFirst as of and for such subsequent calendar quarter (or
other reporting period) or year (such financial statements, unless otherwise
indicated, being hereinafter referred to collectively as the "Financial
Statements of FloridaFirst").
(b) FloridaFirst has previously delivered to SouthTrust copies of the
Thrift Financial Reports of FF-Bank as of and for each of the calendar quarters
in the years ended September 30, 2003, September 30, 2002 and September 30,
2001, and FF-Bank and FloridaFirst shall deliver to SouthTrust, as soon as
practicable following the preparation of additional Thrift Financial Reports for
each subsequent calendar quarter (or other reporting period), the Thrift
Financial Reports of FF-Bank as of and for such subsequent calendar quarter (or
other reporting period) (such Thrift Financial Reports, unless otherwise
indicated, being hereinafter referred to collectively as the "Financial
Regulatory Reports of FF-Bank").
(c) Each of the Financial Statements of FloridaFirst and each of the
Financial Regulatory Reports of FF-Bank (including the related notes, where
applicable) have been or will be prepared in all material respects in accordance
with generally accepted accounting principles or regulatory accounting
principles, whichever is applicable, which principles have been or will be
consistently applied during the periods involved, except as otherwise noted
therein, and the books and records of FloridaFirst and FF-Bank have been, are
being, and will be maintained in all material respects in accordance with
applicable legal and accounting requirements and reflect only actual
transactions. Each of the Financial Statements of FloridaFirst and each of the
Financial Regulatory Reports of FF-Bank (including the related notes, where
applicable) fairly present or will fairly present the financial position of
FloridaFirst on a consolidated basis, as applicable, and the financial position
of FF-Bank (as the case may be) as of the respective dates thereof and fairly
present or will fairly present the results of operations of FloridaFirst on a
consolidated basis, as applicable, and the results of operations of FF-Bank (as
the case may be) for the respective periods therein set forth.
(d) To the extent not prohibited by law, FloridaFirst has heretofore
delivered or made available, or caused to be delivered or made available, to
SouthTrust all reports and filings made or required to be made by FloridaFirst,
FF-Bank or any of their respective subsidiaries with the Regulatory Authorities,
and will from time to time hereafter furnish, or
11
cause FF-Bank to furnish to SouthTrust, upon filing or furnishing the same to
the Regulatory Authorities, all such reports and filings made after the date
hereof with the Regulatory Authorities. As of the respective dates of such
reports and filings, all such reports and filings did not and shall not contain
any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading.
(e) Except as set forth in Schedule 3.3(e), since September 30, 2003,
none of FloridaFirst, FF-Bank or any of their respective subsidiaries has
incurred any obligation or liability (contingent or otherwise) that has or might
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect on the Condition of FloridaFirst on a consolidated basis, except
obligations and liabilities (i) which are accrued or reserved against in the
Financial Statements of FloridaFirst or the Financial Regulatory Reports of
FF-Bank, or reflected in the notes thereto, or (ii) which were incurred after
September 30, 2003, in the ordinary course of business consistent with past
practices. Since September 30, 2003, neither FloridaFirst nor FF-Bank has
incurred or paid any obligation or liability which would be material to the
Condition of FloridaFirst on a consolidated basis, except as may have been
incurred or paid in the ordinary course of business, consistent with past
practices.
Section 3.4 Loan Portfolio; Reserves. Except as set forth in Schedule
-------------------------
3.4, (i) all evidences of indebtedness in original principal amount in excess of
$100,000 reflected as assets in the Financial Statements of FloridaFirst as of
and for the year ended September 30, 2003 and the Financial Regulatory Reports
of FF-Bank as of and for the quarter ended September 30, 2003 were as of such
dates in all respects the binding obligations of the respective obligors named
therein in accordance with their respective terms, and were not subject to any
defenses, setoffs, or counterclaims, except as may be provided by bankruptcy,
insolvency or similar laws or by general principles of equity; and (ii) the
allowances for possible loan losses shown on the Financial Statements of
FloridaFirst as of and for the year ended September 30, 2003 and the Financial
Regulatory Reports of FF-Bank as of and for the quarter ended September 30, 2003
were, and the allowance for possible loan losses to be shown on the Financial
Statements of FloridaFirst and the Financial Regulatory Reports of FF-Bank as of
any date subsequent to the execution of this Agreement will be, as of such
dates, adequate under and established in accordance with the requirements of
generally accepted accounting principles and applicable regulatory accounting
principles.
Section 3.5 Certain Loans and Related Matters. Except as set forth in
----------------------------------
Schedule 3.5, neither FloridaFirst nor FF-Bank is a party to any written or
oral: (i) loan agreement, note or borrowing arrangement, other than credit card
loans and other loans the unpaid balance of which does not exceed $100,000 per
loan, under the terms of which the obligor is sixty (60) days delinquent in
payment of principal or interest or, to the knowledge of FloridaFirst and
FF-Bank, in default of any other provision as of the date hereof; (ii) loan
agreement, note or borrowing arrangement which has been classified or, in the
exercise of reasonable diligence by FloridaFirst, FF-Bank or any Regulatory
Authority, should have been classified by any bank examiner (whether regulatory
or internal) as "substandard," "doubtful," "loss," "other loans especially
mentioned," "other assets especially mentioned," "special mention," "credit risk
assets,"
12
"classified," "criticized," "watch list," "concerned loans" or any comparable
classifications by such persons; (iii) loan agreement, note or borrowing
arrangement, including any loan guaranty, with any director or executive officer
of FloridaFirst or FF-Bank or any five percent (5%) shareholder of FloridaFirst
or FF-Bank, or any person, corporation or enterprise controlling, controlled by
or under common control with any of the foregoing; or (iv) loan agreement, note
or borrowing arrangement in violation of any law, regulation or rule applicable
to FloridaFirst or FF-Bank including, but not limited to, those promulgated,
interpreted or enforced by any Regulatory Authority and which violation could
have a Material Adverse Effect on the Condition of FloridaFirst on a
consolidated basis.
Section 3.6 Authority; No Violation.
-----------------------
(a) FloridaFirst has full corporate power and authority to execute and
deliver this Agreement and, subject to the approval of the shareholders of
FloridaFirst and to the receipt of the Consents of the Regulatory Authorities,
to consummate the transactions contemplated hereby. The OTS regulatory
prohibition regarding acquiring or offering to acquire more than 10% of the
capital stock of FloridaFirst within the three-year period following conversion
by FloridaFirst from mutual to stock form has expired and does not limit or
restrict the transactions contemplated by this Agreement. The Board of Directors
of FloridaFirst has duly and validly approved this Agreement and the
transactions contemplated hereby, has authorized the execution and delivery of
this Agreement, has directed that this Agreement and the transactions
contemplated hereby be submitted to FloridaFirst's shareholders for approval at
a meeting of such shareholders and, except for the adoption of such Agreement by
its shareholders and the execution and filing of Articles of Merger, no other
corporate proceeding on the part of FloridaFirst is necessary to consummate the
transactions so contemplated. This Agreement, when duly and validly executed by
FloridaFirst and delivered by FloridaFirst (and assuming due authorization,
execution and delivery by SouthTrust and ST-Sub), will constitute a valid and
binding obligation of FloridaFirst, and will be enforceable against FloridaFirst
in accordance with its terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium, receivership or
similar laws affecting the enforcement of creditors' rights generally and except
that the availability of the equitable remedy of specific performance or
injunctive relief is subject to the discretion of the court before which any
proceeding may be brought.
(b) Neither the execution and delivery of this Agreement by
FloridaFirst nor the consummation by FloridaFirst of the transactions
contemplated hereby, nor compliance by FloridaFirst with any of the terms or
provisions hereof, will (i) violate any provision of the Articles of
Incorporation or Bylaws of FloridaFirst, (ii) to FloridaFirst's knowledge and
assuming that the Consents of the Regulatory Authorities and approvals referred
to herein are duly obtained, violate any statute, code, ordinance, rule,
regulation, judgment, order, writ, decree or injunction applicable to
FloridaFirst, FF-Bank or any of their respective properties or assets, or (iii)
violate, conflict with, result in a breach of any provisions of, constitute a
default (or an event which, with notice or lapse of time, or both, would
constitute a default) under, result in the termination of, accelerate the
performance required by or result in the creation of any lien, security
interest, charge or other encumbrance upon any of the respective properties or
assets of
13
FloridaFirst or FF-Bank under, any of the terms, conditions or provisions of any
material note, bond, mortgage, indenture, deed of trust, license, permit, lease,
agreement or other instrument or obligation to which FloridaFirst or FF-Bank is
a party, or by which any of them or any of their respective properties or assets
may be bound or affected.
Section 3.7 Consents and Approvals. Except for (i) the approval of the
----------------------
shareholders of FloridaFirst pursuant to the proxy statement of FloridaFirst
relating to the meeting of the shareholders of FloridaFirst at which the Merger
is to be considered (the "Proxy Statement"); (ii) the Consents of the Regulatory
Authorities; (iii) the filing of Articles of Merger with the States of Alabama
and Florida; and (iv) as set forth in Schedule 3.7, no Consents of any person
are necessary in connection with the execution and delivery by FloridaFirst of
this Agreement, and the consummation of the Merger and the other transactions
contemplated hereby.
Section 3.8 Broker's Fees. Except for Sandler, X'Xxxxx & Partners,
---------------
L.P., whose engagement letter is set forth in Schedule 3.8, neither of
FloridaFirst or FF-Bank, nor any of their respective officers or directors, has
employed any broker or finder or incurred any liability for any broker's fees,
commissions or finder's fees in connection with any of the transactions
contemplated by this Agreement.
Section 3.9 Absence of Certain Changes or Events. Except as set forth
-------------------------------------
in Schedule 3.9, since September 30, 2003, there has not been (a) any
declaration, payment or setting aside of any dividend or distribution (whether
in cash, stock or property) in respect of FloridaFirst Shares or (b) any change
or any event involving a prospective change in the Condition of FloridaFirst on
a consolidated basis, or a combination of any such change(s) and any such
event(s) which has had, or is reasonably likely to have, a Material Adverse
Effect on the Condition of FloridaFirst on a consolidated basis, including,
without limitation any change in the administration or supervisory standing or
rating of FloridaFirst or FF-Bank with any Regulatory Authority, and no fact or
condition exists as of the date hereof which might reasonably be expected to
cause any such event or change in the future.
Section 3.10 Legal Proceedings; Etc. Except as set forth in Schedule
------------------------
3.10, neither of FloridaFirst or FF-Bank is a party to any, and there are no
pending or, to the knowledge of FloridaFirst and each FloridaFirst subsidiary,
threatened, judicial, administrative, arbitral or other proceedings, claims,
actions, causes of action or governmental investigations against FloridaFirst or
FF-Bank challenging the validity of the transactions contemplated by this
Agreement and, to the knowledge of FloridaFirst and FF-Bank as of the date
hereof, there is no proceeding, claim, action or governmental investigation
against FloridaFirst or FF-Bank; no judgment, decree, injunction, rule or order
of any court, governmental department, commission, agency, instrumentality or
arbitrator is outstanding against FloridaFirst or FF-Bank which has had, or is
reasonably likely to have, a Material Adverse Effect on the Condition of
FloridaFirst on a consolidated basis; there is no default by FloridaFirst or
FF-Bank under any material contract or agreement to which FloridaFirst or
FF-Bank is a party which has had or is reasonably likely to have a Material
Adverse Effect on the Condition of FloridaFirst on a consolidated basis.
14
Section 3.11 Taxes and Tax Returns.
---------------------
(a) FloridaFirst has previously delivered or made available to
SouthTrust copies of the federal, state and local income tax returns of
FloridaFirst and, if consolidated returns do not exist for all periods, of
FF-Bank and each of its respective subsidiaries, for the years 2001, 2002 and
2003 and all schedules and exhibits thereto, and, except as disclosed in
Schedule 3.11, such returns have not been examined by the Internal Revenue
Service or any other taxing authority. Except as reflected in Schedule 3.11,
FloridaFirst and FF-Bank have duly filed in correct form all federal, state and
local information returns and tax returns required to be filed on or prior to
the date hereof, and FloridaFirst and FF-Bank have duly paid or made adequate
provisions for the payment of all taxes and other governmental charges which are
owed by FloridaFirst and FF-Bank to any federal, state or local taxing
authorities, whether or not reflected in such returns (including, without
limitation, those owed in respect of the properties, income, business, capital
stock, deposits, franchises, licenses, sales and payrolls of FloridaFirst and
FF-Bank), other than taxes and other charges which (i) are not yet delinquent or
are being contested in good faith or (ii) have not been finally determined. The
amounts set forth as liabilities for taxes on the Financial Statements of
FloridaFirst and the Financial Regulatory Reports of FF-Bank are sufficient, in
the aggregate, for the payment of all unpaid federal, state and local taxes
(including any interest or penalties thereon), whether or not disputed, accrued
or applicable, for the periods then ended, and have been computed in accordance
with generally accepted accounting principles. Neither FloridaFirst nor FF-Bank
is responsible for the taxes of any other person other than FloridaFirst or
FF-Bank, under Treasury Regulation 1.1502-6 or any similar provision of federal,
state or foreign law.
(b) Except as disclosed in Schedule 3.11, neither FloridaFirst nor
FF-Bank has executed an extension or waiver of any statute of limitations on the
assessment or collection of any federal, state or local taxes due that is
currently in effect, and deferred taxes of FloridaFirst or FF-Bank, have been
adequately provided for in the Financial Statements of FloridaFirst.
(c) Except as disclosed in Schedule 3.11, neither FloridaFirst nor
FF-Bank has made any payment, is obligated to make any payment or is a party to
any contract, agreement or other arrangement that could obligate it to make any
payment that would be disallowed as a deduction under Section 280G or 162(m) of
the Code.
(d) There has not been an ownership change, as defined in Section
382(g) of the Code, of FloridaFirst or FF-Bank that occurred during or after any
taxable period in which FloridaFirst or FF-Bank incurred an operating loss that
carries over to any taxable period ending after the fiscal year of FloridaFirst
immediately preceding the date of this Agreement.
(e) (i) Proper and accurate amounts have been withheld by FloridaFirst
and FF-Bank from their employees and others for all prior periods in compliance
in all material respects with the tax withholding provisions of all applicable
federal, state and local laws and regulations, and proper due diligence steps
have been taken in connection with back-up withholding; (ii) federal, state and
local returns have been filed by FloridaFirst and FF-Bank for all periods for
which returns were due with respect to withholding, Social Security and
unemployment taxes or charges due to any federal, state or local taxing
authority; and (iii) the
15
amounts shown on such returns to be due and payable have been paid in full or
adequate provision therefor have been included by either FloridaFirst or FF-Bank
in the Financial Statements of FloridaFirst.
Section 3.12 Employee Benefit Plans.
----------------------
(a) Neither FloridaFirst nor FF-Bank or any of their respective
subsidiaries has or maintains any "employee benefit plan," as defined in Section
3(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), except as described in Schedule 3.12(a) (the "Employee Benefit
Plans"). FloridaFirst and FF-Bank and their respective subsidiaries have, with
respect to each such plan, delivered to SouthTrust true and complete copies of:
(i) all current plan texts and agreements and related trust agreements or
annuity contracts and any amendments thereto; (ii) all current summary plan
descriptions and material employee communications; (iii) the Form 5500 filed in
each of the most recent three plan years (including all schedules thereto and
the opinions of independent accountants); (iv) the most recent actuarial
valuation (if any); (v) the most recent annual and periodic accounting of plan
assets; (vi) if the plan is intended to qualify under Section 401(a) or 403(a)
of the Code, the most recent determination letter received from the Internal
Revenue Service; and (vii) all material communications with any governmental
entity or agency (including, without limitation, the Department of Labor,
Internal Revenue Service and the Pension Benefit Guaranty Corporation ("PBGC")).
(b) Except as described in Schedule 3.12(b), no Employee Benefit Plan
is a defined benefit plan. Neither FloridaFirst nor FF-Bank (or any pension plan
maintained by either of them) has incurred any liability to the PBGC or the
Internal Revenue Service with respect to any pension plan qualified under
Section 401 of the Code, except liabilities to the PBGC pursuant to Section 4007
of ERISA, all which have been fully paid. No reportable event under Section
4043(b) of ERISA (including events waived by PBGC regulation) has occurred with
respect to any such pension plan.
(c) Neither FloridaFirst nor FF-Bank has incurred any material
liability under Section 4201 of ERISA for a complete or partial withdrawal from,
or agreed to participate in, any multi-employer plan as such term is defined in
Section 3(37) of ERISA.
(d) All Employee Benefit Plans comply, in all material respects, with
the applicable provisions of ERISA and the Code that are applicable to them,
including, but not limited to, COBRA, HIPAA and any applicable, similar state
law. Neither FloridaFirst nor FF-Bank has any material liability under any such
plan that is not reflected in the Financial Statements of FloridaFirst or the
Financial Regulatory Reports of FloridaFirst and FF-Bank. Neither FloridaFirst,
FF-Bank, any Employee Benefit Plan nor any employee, administrator or agent
thereof, is or has been in violation of the transaction code set rules under
HIPAA xx.xx. 1172-1174 or the HIPAA privacy rules under 45 CFR Part 160 and
subparts A and E of Part 164. No penalties have been imposed on FloridaFirst,
FF-Bank, any Employee Benefit Plan, or any employee, administrator or agent
thereof, under HIPAA ss. 1176 or ss. 1177.
16
For purposes of this Agreement, "COBRA" means the provision of Section
4980B of the Code and the regulations thereunder, and Part 6 of the Subtitle B
of title I of ERISA and any regulations thereunder, and "HIPAA" means the
provisions of the Code and ERISA as enacted by the Health Insurance Portability
and Accountability Act of 1996.
(e) No prohibited transaction (which shall mean any transaction
prohibited by Section 406 of ERISA and not exempt under Section 408 of ERISA)
has occurred with respect to any Employee Benefit Plan (i) which would result in
the imposition, directly or indirectly, of a material excise tax under Section
4975 of the Code or a material civil penalty under Section 502(i) of ERISA, or
(ii) the correction of which would have a Material Adverse Effect on the
Condition of FloridaFirst on a consolidated basis and no actions have occurred
which could result in the imposition of a penalty under any section or provision
of ERISA.
(f) No Employee Benefit Plan which is a defined benefit pension plan
has any "unfunded current liability," as that term is defined in Section
302(d)(8)(A) of ERISA, and the present fair market value of the assets of any
such plan exceeds the plan's "benefit liabilities," as that term is defined in
Section 4001(a)(16) of ERISA, when determined under actuarial factors that would
apply if the plan terminated in accordance with all applicable legal
requirements.
(g) Except as described in Schedule 3.12(g), neither the execution and
delivery of this Agreement nor the consummation of the transactions contemplated
hereby will (i) result in any material payment (including, without limitation,
severance, unemployment compensation, golden parachute or otherwise) becoming
due to any director or any officer or employee of FloridaFirst or FF-Bank under
any Employee Benefit Plan or otherwise, (ii) materially increase any benefits
otherwise payable under any benefit plan or (iii) result in any acceleration of
the time of payment or vesting of any such benefits to any material extent.
(h) No Employee Benefit Plan is a multiemployer plan as defined in
Section 414(f) of the Code or Section 3(37) or 4001(a)(3) of ERISA. FloridaFirst
and FF-Bank have never been a party to or participant in a multiemployer plan.
(i) There are no actions, liens, suits or claims pending or, to the
knowledge of FloridaFirst, threatened (other than routine claims for benefits)
with respect to any Employee Benefit Plan or against the assets of any Employee
Benefit Plan. No assets of FloridaFirst or FF-Bank are subject to any lien under
Section 302(f) of ERISA or Section 412(n) of the Code.
(j) Each Employee Benefit Plan which is intended to qualify under
Section 401(a) or 403(a) of the Code has received a favorable determination
letter from the Internal Revenue Service to the effect that it so qualifies and
its related trust is exempt from taxation under Section 501(a) of the Code. No
event has occurred or circumstance exists that will or could give rise to a
disqualification or loss of tax-exempt status of any such plan or trust.
(k) No Employee Benefit Plan is a multiple employer plan within the
meaning of Section 413(c) of the Code or Section 4063, 4064 or 4066 of ERISA. No
Employee Benefit Plan is a multiple employer welfare arrangement as defined in
Section 3(40) of ERISA.
17
(l) Each employee pension benefit plan, as defined in Section 3(2) of
ERISA , that is not qualified under Section 401(a) or 403(a) of the Code is
exempt from Part 2, 3 and 4 of Title I of ERISA as an unfunded plan that is
maintained primarily for the purpose of providing deferred compensation for a
select group of management or highly compensated employees, pursuant to Section
201(2), 301(a)(3) and 401(a)(1) of ERISA. No assets of FloridaFirst or FF-Bank
are allocated to or held in a "rabbi trust" or similar funding vehicle.
(m) Except as set forth on Schedule 3.12(m), no Employee Benefit Plan
provides benefits to any current or former employee of FloridaFirst or FF-Bank
beyond retirement or other termination of service (other than coverage mandated
by COBRA, the cost of which is fully paid by the current or former employee or
his or her dependents).
(n) Except as set forth on Schedule 3.12(n), with respect to each
Employee Benefit Plan, there are no funded benefit obligations for which
contributions have not been made or properly accrued and there are no unfunded
benefit obligations that have not been accounted for by reserves or otherwise
shown in the footnotes in accordance with generally accepted accounting
principles to the Financial Statements of FloridaFirst.
Section 3.13 Title and Related Matters.
-------------------------
(a) Except as set forth in Schedule 3.13, each of FloridaFirst, FF-Bank
and their respective subsidiaries has good title, and as to owned real property,
has good and marketable title in fee simple absolute, to all assets and
properties, real or personal, tangible or intangible, reflected as owned by or
leased or subleased by or carried under the name of any of them on the Financial
Statements of FloridaFirst, or the Financial Regulatory Reports of FF-Bank or
acquired subsequent thereto (except to the extent that such assets and
properties have been disposed of for fair value in the ordinary course of
business since September 30, 2003), free and clear of all liens, encumbrances,
mortgages, security interests, restrictions, pledges or claims, except for (i)
those liens, encumbrances, mortgages, security interests, restrictions, pledges
or claims reflected in the Financial Statements of FloridaFirst, and the
Financial Regulatory Reports of FF-Bank or incurred in the ordinary course of
business after September 30, 2003, (ii) statutory liens for amounts not yet
delinquent or which are being contested in good faith, and (iii) liens,
encumbrances, mortgages, security interests, pledges, claims and title
imperfections that are not in the aggregate material to the Condition of
FloridaFirst on a consolidated basis.
(b) All agreements pursuant to which FloridaFirst, FF-Bank or any of
their respective subsidiaries leases, subleases or licenses material real or
material personal properties from others are valid, binding and enforceable in
accordance with their respective terms, and there is not, under any of such
leases or licenses, any existing default or event of default, or any event which
with notice or lapse of time, or both, would constitute a default or force
majeure, or provide the basis for any other claim of excusable delay or
nonperformance, except for defaults which individually or in the aggregate would
not have a Material Adverse Effect on the Condition of FloridaFirst on a
consolidated basis. Except as set forth in Schedule 3.13(b), FloridaFirst and
FF-Bank have all right, title and interest as a lessee under the terms of each
lease or sublease, free and clear of all liens, claims or encumbrances (other
than the rights of the
18
lessor) as of the Effective Time of the Merger, and shall have the right to
transfer each lease or sublease pursuant to this Agreement.
(c) Other than real estate that was acquired by foreclosure or
voluntary deed in lieu of foreclosure (i) all of the buildings, structures and
fixtures owned, leased or subleased by FloridaFirst, FF-Bank and their
respective subsidiaries are in good operating condition and repair, subject only
to ordinary wear and tear and/or minor defects which do not interfere with the
continued use thereof in the conduct of normal operations, and (ii) all of the
material personal properties owned, leased or subleased by FloridaFirst, FF-Bank
and their respective subsidiaries are in good operating condition and repair,
subject only to ordinary wear and tear and/or minor defects which do not
interfere with the continued use thereof in the conduct of normal operations.
Section 3.14 Real Estate.
-----------
(a) Schedule 3.14(a) identifies each parcel of real estate or interest
therein owned, leased or subleased by FloridaFirst, FF-Bank or their respective
subsidiaries or in which FloridaFirst, FF-Bank or their respective subsidiaries
has any ownership or leasehold interest.
(b) Schedule 3.14(b) lists or otherwise describes each and every
written or oral lease or sublease, together with the current name, address and
telephone number of the landlord or sublandlord and the landlord's property
manager (if any), under which FloridaFirst or FF-Bank is the lessee of any real
property and which relates in any manner to the operation of the businesses of
FloridaFirst or FF-Bank.
(c) To the knowledge of FloridaFirst, neither FloridaFirst nor FF-Bank
has violated, or is currently in violation of, any law, regulation or ordinance
relating to the ownership or use of the real estate and real estate interests
described in Schedules 3.14(a) and 3.14(b) including, but not limited to any
law, regulation or ordinance relating to zoning, building, occupancy,
environmental or comparable matter which individually or in the aggregate would
have a Material Adverse Effect on the Condition of FloridaFirst on a
consolidated basis.
(d) As to each parcel of real property owned or used by FloridaFirst,
FF-Bank or any of their respective subsidiaries, neither FloridaFirst nor
FF-Bank has received notice of any pending or, to the knowledge of FloridaFirst
and FF-Bank, threatened condemnation proceedings, litigation proceedings or
mechanic's or materialmen's liens.
Section 3.15 Environmental Matters.
---------------------
(a) Each of FloridaFirst, FF-Bank, the Participation Facilities (as
defined below), and the Loan Properties (as defined below) are, and have been,
in compliance, and there are no present circumstances that would prevent or
interfere with the continuation of such compliance with all applicable federal,
state and local laws, including common law, rules, regulations and ordinances,
and with all applicable decrees, orders and contractual obligations relating to
pollution or the protection of the environment or the discharge of, or exposure
to, Hazardous Materials (as defined below) in the environment or workplace,
except for violations
19
which, individually or in the aggregate, will not have a Material Adverse Effect
on the Condition of FloridaFirst on a consolidated basis.
(b) There is no litigation pending or, to the knowledge of FloridaFirst
or FF-Bank, threatened before any court, governmental agency or board or other
forum in which FloridaFirst, FF-Bank or any Participation Facility has been or,
with respect to threatened litigation, may be, named as defendant (i) for
alleged noncompliance (including by any predecessor), with respect to any
Environmental Law (as defined below) or (ii) relating to the release into the
environment of any Hazardous Material (as defined below) or oil, whether or not
occurring at, on or involving a site owned, leased or operated by FloridaFirst,
FF-Bank or any Participation Facility, except for such litigation pending or
threatened that will not, individually or in the aggregate, have a Material
Adverse Effect on the Condition of FloridaFirst on a consolidated basis.
(c) There is no litigation pending or, to the knowledge of FloridaFirst
or FF-Bank, threatened before any court, governmental agency or board or other
forum in which any Loan Property (or FloridaFirst or FF-Bank in respect of such
Loan Property) has been or, with respect to threatened litigation, may be, named
as a defendant or potentially responsible party (i) for alleged noncompliance
(including by any predecessor) with any Environmental Law or (ii) relating to
the release into the environment of any Hazardous Material or oil, whether or
not occurring at, on or involving a Loan Property, except for such litigation
pending or threatened that will not individually or in the aggregate, have a
Material Adverse Effect on the Condition of FloridaFirst on a consolidated
basis.
(d) To the knowledge of FloridaFirst or FF-Bank there is no reasonable
basis for any litigation of a type described in Section 3.15(b) and Section
3.15(c) of this Agreement, except as will not have, individually or in the
aggregate, a Material Adverse Effect on the Condition of FloridaFirst on a
consolidated basis.
(e) During the period of (i) ownership or operation by FloridaFirst or
FF-Bank of any of their respective current properties, (ii) participation by
FloridaFirst or FF-Bank in the management of any Participation Facility, or
(iii) holding by FloridaFirst or FF-Bank of a security interest in any Loan
Property, there have been no releases of Hazardous Material or oil in, on, under
or affecting such properties, except where such releases have not and will not,
individually or in the aggregate, have a Material Adverse Effect on the
Condition of FloridaFirst on a consolidated basis.
(f) Prior to the period of (i) ownership or operation by FloridaFirst
or FF-Bank of any of their respective current properties, (ii) participation by
FloridaFirst or FF-Bank in the management of any Participation Facility, or
(iii) holding by FloridaFirst or FF-Bank of a security interest in any Loan
Property, to the knowledge of FloridaFirst or FF-Bank, there were no releases of
Hazardous Material or oil in, on, under or affecting any such property,
Participation Facility or Loan Property, except where such releases have not and
will not, individually or in the aggregate, have a Material Adverse Effect on
the Condition of FloridaFirst on a consolidated basis.
20
Section 3.16 Commitments and Contracts.
-------------------------
(a) Except as set forth in Schedule 3.16, none of FloridaFirst, FF-Bank
or their respective subsidiaries is a party or subject to any of the following
(whether written or oral, express or implied):
(i) Any employment contract or understanding (including any
understandings or obligations with respect to severance or
termination pay liabilities or fringe benefits) with any
present or former officer, director, employee, including in
any such person's capacity as a consultant (other than those
which either are terminable at will without any further
amount being payable thereunder or as a result of such
termination by FloridaFirst or FF-Bank);
(ii) Any labor contract or agreement with any labor union;
(iii)Any contract or covenants which limit the ability of
FloridaFirst or FF-Bank to compete in any line of business
or which involve any restriction of the geographical area in
which FloridaFirst or FF-Bank may carry on its businesses
(other than as may be required by law or applicable
regulatory authorities);
(iv) Any lease (other than real estate leases described on
Schedule 3.14(b)) or other agreements or contracts with
annual payments aggregating $50,000 or more; or
(v) Any other contract or agreement which would be required to
be disclosed in reports filed by FloridaFirst with the SEC
or OTS and which has not been so disclosed.
(b) Except as set forth in Schedule 3.16(b), to the knowledge of
FloridaFirst there is not, under any material agreement, lease or contract to
which FloridaFirst or FF-Bank is a party, any existing default or event of
default on the part of FloridaFirst or FF-Bank, or any event which with notice
or lapse of time, or both, would constitute a default or force majeure, or
provide the basis for any other claim of excusable delay or non-performance.
(c) Except as set forth on Schedule 3.16(c), (i) neither the execution
of this Agreement nor the consummation of the transactions contemplated hereby
will result in termination of any material leases, agreements or licenses
(including specifically real property leases and data processing agreements) to
which FloridaFirst or FF-Bank is a party ("Material Agreements"), or
modification or acceleration of any of the terms of such Material Agreements;
and (ii) no Consents are required to be obtained and no notices are required to
be given in order for the Material Agreements to remain effective, without any
modification or acceleration of any of the terms thereof, following the
consummation of the transactions contemplated by this Agreement.
21
(d) Schedule 3.16(d) lists the deadlines for extensions or terminations
of any Material Agreements to which FloridaFirst or FF-Bank is a party.
Section 3.17 Regulatory, Accounting and Tax Matters. Neither of
------------------------------------------
FloridaFirst nor FF-Bank has taken or agreed to take any action or has any
knowledge of any fact or has agreed to any circumstance that would (i)
materially impede or delay receipt of any Consents of any Regulatory Authorities
referred to in this Agreement including, matters relating to the Community
Reinvestment Act and protests thereunder; or (ii) prevent the transactions
contemplated by this Agreement from qualifying as a reorganization within the
meaning of Section 368(a) of the Code.
Section 3.18 Registration Obligations. Neither FloridaFirst nor FF-Bank
------------------------
is under any obligation, contingent or otherwise, which will survive the Merger
to register any of its securities under the Securities Act of 1933, as amended,
or any state securities laws.
Section 3.19 Antitakeover Provisions. FloridaFirst or FF-Bank have
------------------------
taken all actions required to exempt FloridaFirst, this Agreement, the Merger,
the Bank Merger Agreement and the Bank Merger from any provisions of an
antitakeover nature contained in their organizational documents, and the
provisions of any federal or state "antitakeover," "fair price," "moratorium,"
"control share acquisition" or similar laws or regulations, including, without
limitation, any such regulations pertaining to the conversion of FloridaFirst
from mutual to stock form.
Section 3.20 Insurance. FloridaFirst and FF-Bank are presently insured,
---------
and during each of the past three calendar years have been insured, for
reasonable amounts against such risks as companies or institutions engaged in a
similar business and similar size would, in accordance with good business
practice, customarily be insured. To the knowledge of FloridaFirst and FF-Bank,
the policies of fire, theft, liability and other insurance maintained with
respect to the assets or businesses of FloridaFirst and each FloridaFirst
subsidiary provide adequate coverage against loss, and the fidelity bonds in
effect as to which FloridaFirst or FF-Bank is named an insured are sufficient
for their purpose. Such policies of insurance are listed and described in
Schedule 3.20.
Section 3.21 Labor.
-----
(a) No work stoppage involving FloridaFirst or FF-Bank is pending as of
the date hereof or, to the knowledge of FloridaFirst or FF-Bank threatened.
Neither FloridaFirst or FF-Bank is involved in, or, to the knowledge of
FloridaFirst or FF-Bank and their respective subsidiaries, threatened with or
affected by, any proceeding asserting that FloridaFirst or FF-Bank has committed
an unfair labor practice or any labor dispute, arbitration, lawsuit or
administrative proceeding which might reasonably be expected to have a Material
Adverse Effect on FloridaFirst on a consolidated basis. No union represents, or
to the knowledge of FloridaFirst, claims to represent any employees of
FloridaFirst or FF-Bank, and, to the knowledge of FloridaFirst and FF-Bank, no
labor union is attempting to organize employees of FloridaFirst or FF-Bank.
22
(b) FloridaFirst or FF-Bank have made available to SouthTrust a true
and complete list of all employees of FloridaFirst and FF-Bank and their
respective subsidiaries as of the date hereof, together with the employee
position, title, salary and date of hire, and all information with respect to
all benefit plans or policies, bonus arrangements, commissions, severance plans
or policies, compensation arrangements or other benefits provided to such
employees. Except as set forth on Schedule 3.21(b), the consummation of the
transactions contemplated hereby will not cause SouthTrust or ST-Sub to incur or
suffer any liability relating to, or obligation to pay, severance, termination
or other payments to any person or entity. Except as set forth on Schedule
3.16(a) hereto, no employee of FloridaFirst or FF-Bank has any contractual right
to continued employment by FloridaFirst.
(c) Except as set forth on Schedule 3.21(c), FloridaFirst, FF-Bank and
their respective subsidiaries are in compliance in all material respects with
all applicable laws and regulations relating to employment or the workplace,
including, without limitation, provisions relating to wages, hours, collective
bargaining, safety and health, work authorization, equal employment opportunity,
immigration and the withholding of income taxes, unemployment compensation,
workers compensation, employee privacy and right to know and social security
contributions.
(d) Except as set forth on Schedule 3.21(d) hereto, there has not been,
there is not presently pending or existing and, to the knowledge of FloridaFirst
or FF-Bank, there is not threatened any proceeding against or affecting
FloridaFirst, FF-Bank or their respective subsidiaries relating to the alleged
violation of any legal requirement pertaining to labor relations or employment
matters, including any charge or complaint filed by an employee or union with
the National Labor Relations Board, the Equal Employment Opportunity Commission
or any comparable governmental body, organizational activity, or other labor or
employment dispute against or affecting FloridaFirst or FF-Bank.
Section 3.22 Compliance with Laws. Each of FloridaFirst and FF-Bank has
--------------------
conducted its business in accordance with all applicable federal, foreign, state
and local laws, regulations and orders, and each is in compliance with such
laws, regulations and orders, except for such violations or non-compliance,
which when taken together as a whole, will not have a Material Adverse Effect on
the Condition of FloridaFirst on a consolidated basis. Except as disclosed in
Schedule 3.22, none of FloridaFirst or FF-Bank:
(a) is in violation of any laws, orders or permits applicable to its
business or the employees or agents or representatives conducting its business,
except for violations which individually or in the aggregate do not have and
will not have a Material Adverse Effect on the Condition of FloridaFirst on a
consolidated basis; and
(b) has received a notification or communication from any agency or
department of any federal, state or local governmental authority or any
Regulatory Authority or the staff thereof (i) asserting that FloridaFirst or
FF-Bank is not in compliance with any laws or orders which such governmental
authority or Regulatory Authority enforces, where such noncompliance is
reasonably likely to have a Material Adverse Effect on the Condition of
FloridaFirst on a consolidated basis, (ii) threatening to revoke any permit, the
revocation of
23
which is reasonably likely to have a Material Adverse Effect on the Condition of
FloridaFirst on a consolidated basis, (iii) requiring FloridaFirst or FF-Bank to
enter into any cease and desist order, formal agreement, commitment or
memorandum of understanding, or to adopt any resolutions or similar
undertakings, or (iv) directing, restricting or limiting, or purporting to
direct, restrict or limit in any manner, the operations of FloridaFirst or
FF-Bank, including, without limitation, any restrictions on the payment of
dividends, or that in any manner relates to such entity's capital adequacy,
credit policies, management or business (other than general regulatory
restrictions applicable to similarly-situated federal savings banks and their
holding companies generally).
Section 3.23 Transactions with Management. Except for (a) deposits, all
----------------------------
of which are on terms and conditions comparable to those made available to other
customers of FF-Bank at the time such deposits were entered into, (b) the loans
listed on Schedule 3.5, (c) the agreements listed on Schedule 3.16, (d)
obligations under employee benefit plans of FloridaFirst, FF-Bank and their
respective subsidiaries set forth in Schedule 3.12 and (e) the items described
on Schedule 3.23 and any loans or deposit agreements entered into in the
ordinary course with customers of FF-Bank, there are no contracts with or
commitments to present directors, officers or employees involving the
expenditure of more than $1,000 as to any one individual, including, with
respect to any business directly or indirectly controlled by any such person, or
$5,000 for all such contracts for commitments in the aggregate for all such
individuals.
Section 3.24 Derivative Contracts. Neither of FloridaFirst or FF-Bank
---------------------
is a party to or has agreed to enter into an exchange-traded or over-the-counter
swap, forward, future, option, cap, floor or collar financial contract or
agreement, or any other contract or agreement not included in Financial
Statements of FloridaFirst and the Financial Statements of FF-Bank which is a
financial derivative contract (including various combinations thereof)
("Derivative Contracts"), except for those Derivative Contracts set forth in
Schedule 3.24.
Section 3.25 Deposits. None of the deposits of FF-Bank are "brokered"
--------
deposits as such term is defined in the Rules and Regulations of the FDIC or are
subject to any encumbrance, legal restraint or other legal process (other than
garnishments, pledges, set off rights, escrow limitations and similar actions
taken in the ordinary course of business).
Section 3.26 Accounting Controls; Disclosure Controls.
----------------------------------------
(a) FloridaFirst has devised and maintained systems of internal
accounting control sufficient to provide reasonable assurances that: (i) all
material transactions are executed in accordance with general or specific
authorization of the Board of Directors and the duly authorized executive
officers of FloridaFirst; (ii) all material transactions are recorded as
necessary to permit the preparation of financial statements in conformity with
generally accepted accounting principles consistently applied with respect to
institutions such as FloridaFirst or any other criteria applicable to such
financial statements, and to maintain proper accountability for items therein;
(iii) access to the material properties and assets of FloridaFirst is permitted
only in accordance with general or specific authorization of the Board of
Directors and the duly authorized executive officers of FloridaFirst; and (iv)
the recorded accountability for items is compared with the actual levels at
reasonable intervals and appropriate actions taken with respect
24
to any differences.
(b) To the extent required, FloridaFirst has in place "disclosure
controls and procedures" as defined in Rules 13a-15(e) and 15d-15(e) of the
Securities Exchange Act of 1934, as amended, to allow FloridaFirst's management
to make timely decisions regarding required disclosures and to make the
certifications of the Chief Executive Officer and Chief Financial Officer of
FloridaFirst required under the Securities Exchange Act of 1934, as amended.
Section 3.27 Proxy Materials. None of the information relating to
----------------
FloridaFirst or FF-Bank to be included in the Proxy Statement which is to be
mailed to the shareholders of FloridaFirst in connection with the solicitation
of their approval of this Agreement will, at the time such Proxy Statement is
mailed or at the time of the meeting of shareholders to which such Proxy
Statement relates, be false or misleading with respect to any material fact, or
omit to state any material fact necessary in order to make a statement therein
not misleading.
Section 3.28 Deposit Insurance. The deposit accounts of FF-Bank are
------------------
insured by the FDIC in accordance with the provisions of the Federal Deposit
Insurance Act (the "Act"); FF-Bank has paid all regular premiums and special
assessments and filed all reports required under the Act.
Section 3.29 Intellectual Property. Each of FloridaFirst and FF-Bank
----------------------
owns or possesses valid and binding licenses and other rights to use without
additional payment all material patents, copyrights, trade secrets, trade names,
servicemarks, trademarks, computer software and other intellectual property used
in its businesses; neither of FloridaFirst or FF-Bank has received any notice of
conflict with respect thereto that asserts the right of others.
Section 3.30 SEC Filings. FloridaFirst has filed all forms, reports and
-----------
documents required to be filed by FloridaFirst with the SEC since December 31,
2001 (collectively, the FloridaFirst SEC Reports"). The FloridaFirst SEC Reports
(i) at the time they were filed, complied in all material respects with the
applicable requirements of the Securities Act of 1933, as amended, and the
Securities Exchange Act of 1934, as amended, as the case may be, (ii) did not at
the time they were filed (or if amended or superseded by filing prior to the
date of this Agreement, then on the date of such filing) contain any untrue
statement of a material fact or omit to state a material fact required to be
stated in such FloridaFirst's SEC Reports or necessary in order to make
statements in FloridaFirst's SEC Reports, in light of the circumstances under
which they were made, not misleading.
Section 3.31 Untrue Statements and Omissions. No representation or
---------------------------------
warranty contained in Article 3 of this Agreement or in the Schedules contains
any untrue statement of a material fact or omits to state a material fact
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading.
25
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF SOUTHTRUST AND ST-SUB
SouthTrust and ST-Sub hereby jointly and severally represent and warrant to
FloridaFirst as follows as of the date hereof and also on the Effective Time of
the Merger (except as otherwise provided):
Section 4.1 Organization and Related Matters of SouthTrust.
----------------------------------------------
(a) SouthTrust is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware. SouthTrust has the
corporate power and authority to own or lease all of its properties and assets
and to carry on its business as now conducted, or as proposed to be conducted
pursuant to this Agreement, and SouthTrust is licensed or qualified to do
business in each jurisdiction in which the nature of the business conducted by
SouthTrust, or the character or location of the properties and assets owned or
leased by SouthTrust makes such licensing or qualification necessary, except
where the failure to be so licensed or qualified (or steps necessary to cure
such failure) would not have a Material Adverse Effect on the Condition of
SouthTrust on a consolidated basis. SouthTrust is duly registered as a bank
holding company under the Bank Holding Company Act of 1956, as amended. True and
correct copies of the Restated Certificate of Incorporation of SouthTrust and
the Bylaws of SouthTrust, each as amended to the date hereof, have been made
available to FloridaFirst.
(b) SouthTrust has in effect all federal, state, local and foreign
governmental, regulatory and other authorizations, permits and licenses
necessary for it to own or lease its properties and assets and to carry on its
business as now conducted, the absence of which, either individually or in the
aggregate, would have a Material Adverse Effect on the Condition of SouthTrust
on a consolidated basis.
Section 4.2 Organization and Related Matters of ST-Sub.
------------------------------------------
(a) ST-Sub is a corporation duly organized, validly existing and in
good standing under the laws of the State of Alabama. ST-Sub has the corporate
power and authority to own or lease all of its properties and assets and to
carry on its business as now conducted, or as proposed to be conducted pursuant
to this Agreement, and ST-Sub is licensed or qualified to do business in each
jurisdiction which the nature of the business conducted or to be conducted by
ST-Sub, or the character or location or the properties and assets owned or
leased by ST-Sub make such licensing or qualification necessary, except where
the failure to be so licensed or qualified (or steps necessary to cure such
failure) would not have a Material Adverse Effect on the Condition of SouthTrust
on a consolidated basis. True and correct copies of the Certificate or Articles
of Incorporation and Bylaws of ST-Sub, as each may be amended to the date
hereof, have been made available to FloridaFirst.
(b) ST-Sub has in effect all federal, state, local and foreign
governmental, regulatory or other authorizations, permits and licenses necessary
for it to own or lease its
26
properties and assets and to carry on its business as proposed to be conducted,
the absence of which, either individually or in the aggregate, would have a
Material Adverse Effect on the Condition of SouthTrust on a consolidated basis.
Section 4.3 Capitalization. As of December 31, 2003, the authorized
--------------
capital stock of SouthTrust consisted of 1,000,000,000 shares of common stock,
par value $2.50 per share, 356,983,844 shares (which includes the rights
associated with such shares pursuant to that certain Amended and Restated Rights
Agreement dated as of August 1, 2000 between SouthTrust and FloridaFirst Stock
Transfer & Trust Company) of which are issued and outstanding (exclusive of any
such shares held in the treasury of SouthTrust as of the date hereof), and
5,000,000 shares of preferred stock, par value $1.00 per share, none of which is
issued and outstanding as of the date hereof. All issued and outstanding
SouthTrust Shares and all shares to be issued pursuant hereto have been duly
authorized and validly issued, and all such shares are fully paid and
nonassessable.
Section 4.4 Authorization. The execution, delivery, and performance of
-------------
this Agreement, and the consummation of the transactions contemplated hereby and
in any related agreements, have been or, as of the Effective Time of the Merger,
will have been duly authorized by the Boards of Directors of SouthTrust and
ST-Sub, and no other corporate proceedings on the part of SouthTrust or ST-Sub
are or will be necessary to authorize this Agreement and the transactions
contemplated hereby. This Agreement is the valid and binding obligation of
SouthTrust and ST-Sub enforceable against each in accordance with its terms,
except as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the enforcement
of creditors rights generally and except that the availability of the equitable
remedy of specific performance or injunctive relief is subject to the discretion
of the court before which any proceeding may be brought. Neither the execution,
delivery or performance of this Agreement nor the consummation of the
transactions contemplated hereby will (i) violate any provision of the Restated
Certificate of Incorporation or Bylaws of SouthTrust or the Articles or
Certificate of Incorporation or Bylaws of ST-Sub or, (ii) to SouthTrust's
knowledge and assuming that any necessary Consents are duly obtained, (A)
violate, conflict with, result in a breach of any provisions of, constitute a
default (or an event which, with notice or lapse of time, or both, would
constitute a default) under, result in the termination of, accelerate the
performance required by or result in the creation of any lien, security
interest, charge or other encumbrance upon any of the properties or assets of
SouthTrust or ST-Sub under, any of the terms, conditions or provisions of any
note, bond, mortgage, indenture, deed of trust, license, permit, lease,
agreement or other instrument or obligation to which SouthTrust or ST-Sub is a
party, or by which SouthTrust or ST-Sub or any of their respective properties or
assets may be bound or affected, (B) violate any statute, code, ordinance, rule,
regulation, judgment, order, writ, decree or injunction applicable to SouthTrust
or ST-Sub or any of their respective material properties or assets, except for
(X) such conflicts, breaches or defaults as are set forth in Schedule 4.4; and
(Y) with respect to (B) above, such as individually or in the aggregate will not
have a Material Adverse Effect on the Condition of SouthTrust on a consolidated
basis.
27
Section 4.5 Financial Statements.
--------------------
(a) SouthTrust has made available to FloridaFirst copies of the
consolidated financial statements of SouthTrust as of and for the years ended
December 31, 2001 and 2002, and for the period ended March 31, 2003, June 30,
2003 and September 30, 2003, and SouthTrust will make available to FloridaFirst,
as soon as practicable following the preparation of additional consolidated
financial statements for each subsequent calendar quarter or year of SouthTrust,
the consolidated financial statements of SouthTrust as of and for such
subsequent calendar quarter or year (such consolidated financial statements,
unless otherwise indicated, being hereinafter referred to collectively as the
"Financial Statements of SouthTrust").
(b) Each of the Financial Statements of SouthTrust (including the
related notes) have been or will be prepared in all material respects in
accordance with generally accepted accounting principles, which principles have
been or will be consistently applied during the periods involved, except as
otherwise noted therein, and the books and records of SouthTrust have been, are
being, and will be maintained in all material respects in accordance with
applicable legal and accounting requirements and reflect only actual
transactions. Each of the Financial Statements of SouthTrust (including the
related notes) fairly presents or will fairly present the consolidated financial
position of SouthTrust as of the respective dates thereof and fairly presents or
will fairly present the results of operations of SouthTrust for the respective
periods therein set forth.
(c) Since December 31, 2002, SouthTrust has not incurred any obligation
or liability (contingent or otherwise) that has or might reasonably be expected
to have, individually or in the aggregate, a Material Adverse Effect on the
Condition of SouthTrust on a consolidated basis, except obligations and
liabilities (i) which are accrued or reserved against in the Financial
Statements of SouthTrust or reflected in the notes thereto, and (ii) which were
incurred after December 31, 2002 in the ordinary course of business consistent
with past practices. Since December 31, 2002, and except for the matters
described in (i) and (ii) above, SouthTrust has not incurred or paid any
obligation or liability which would be material to the Condition of SouthTrust
on a consolidated basis.
(d) To the extent not prohibited by law, SouthTrust has heretofore
delivered or made available to FloridaFirst all reports and filings made or
required to be made by SouthTrust or any of its subsidiaries with the Regulatory
Authorities, and will from time to time hereafter furnish to FloridaFirst, upon
such filing or furnishing the same to the Regulatory Authorities, all such
reports and filings made after the date hereof with the Regulatory Authorities.
As of the respective dates of such reports and filings, all such reports and
filings did not and shall not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading.
Section 4.6 Absence of Certain Changes or Events. Since December 31,
-------------------------------------
2002, there has not been any Material Adverse Effect in the Condition of
SouthTrust on a consolidated basis, and to the knowledge of SouthTrust, no fact
or condition exists which might reasonably be expected to cause such a Material
Adverse Effect in the future.
28
Section 4.7 Consents and Approvals. Except for (i) the Consents of the
----------------------
Regulatory Authorities; (ii) approval of this Agreement by the shareholders of
FloridaFirst; (iii) filing of Articles of Merger with the States of Alabama and
Florida; and (iv) as disclosed in Schedule 4.7, no consents or approvals by, or
filings or registrations with, any third party or any public body, agency or
authority are necessary in connection with the execution and delivery by
SouthTrust and ST-Sub or, to the knowledge of SouthTrust, by FloridaFirst of
this Agreement, and the consummation of the Merger and the other transactions
contemplated hereby.
Section 4.8 Proxy Materials. None of the information relating solely to
---------------
SouthTrust or any Subsidiary to be included or incorporated by reference in the
Proxy Statement which is to be mailed to the shareholders of FloridaFirst in
connection with the solicitation of their approval of this Agreement will, at
the time such Proxy Statement is mailed or at the time of the meeting of
shareholders of FloridaFirst to which such Proxy Statement relates, be false or
misleading with respect to any material fact, or omit to state any material fact
necessary in order to make a statement therein not false or misleading.
Section 4.9 Accounting, Tax, Regulatory Matters. SouthTrust has not
--------------------------------------
agreed to take any action, has no knowledge of any fact and has not agreed to
any circumstance that would (i) prevent the transactions contemplated hereby,
including the Merger, from qualifying as a reorganization within the meaning of
Section 368 of the Code, or (ii) materially impede or delay receipt of any
Consent from any Regulatory Authority referred to in this Agreement including
matters related to the Community Reinvestment Act and protests thereunder.
Section 4.10 No Broker's or Finder's Fees. Neither SouthTrust nor
------------------------------
ST-Sub or any of their subsidiaries, affiliates or employers has employed any
broker or finder or incurred any liability for any broker's fees, commissions or
finder's fees in connection with this Agreement or the consummation of any of
the transactions contemplated herein.
Section 4.11 Untrue Statements and Omissions. No representation or
---------------------------------
warranty contained in Article 4 of this Agreement or in the Schedules of
SouthTrust or ST-Sub contains any untrue statement of a material fact or omits
to state a material fact necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading.
Section 4.12 Legal Proceedings, Etc. Neither of SouthTrust or ST-Sub is
----------------------
a party to any, and there are no pending or, to the knowledge of SouthTrust and
each SouthTrust subsidiary, threatened, judicial, administrative, arbitral or
other proceedings, claims, actions, causes of action or governmental
investigations against SouthTrust or ST-Sub challenging the validity of the
transactions contemplated by this Agreement and, to the knowledge of SouthTrust
and each SouthTrust subsidiary as of the date hereof, there is no proceeding,
claim, action or governmental investigation against SouthTrust or any SouthTrust
subsidiary; no judgment, decree, injunction, rule or order of any court,
governmental department, commission, agency, instrumentality or arbitrator is
outstanding against SouthTrust or any SouthTrust subsidiary which has had, or is
reasonably likely to have, a Material Adverse Effect on the Condition of
SouthTrust on a consolidated basis; there is no default by SouthTrust or any
SouthTrust subsidiary under any material contract or agreement to which it is a
party; and none of SouthTrust or any SouthTrust subsidiary is a party to any
agreement, order or memorandum in
29
writing by or with any Regulatory Authority restricting the operations of
SouthTrust or any SouthTrust subsidiary and none of SouthTrust or any SouthTrust
subsidiary has been advised by any Regulatory Authority that any such Regulatory
Authority is contemplating issuing or requesting the issuance of any such order
or memorandum in the future.
Section 4.13 Compliance with Laws. Each of SouthTrust, ST-Sub and their
--------------------
respective subsidiaries has conducted its business in accordance with all
applicable federal, foreign, state and local laws, regulations and orders, and
each is in compliance with such laws, regulations and orders, except for such
violations or non-compliance, which when taken together as a whole, will not
have a Material Adverse Effect on the Condition of SouthTrust on a consolidated
basis. None of SouthTrust or any of its subsidiaries:
(a) is in violation of any laws, orders or permits applicable to its
business or the employees or agents or representatives conducting its business,
except for violations which individually or in the aggregate do not have and
will not have a Material Adverse Effect on the Condition of SouthTrust on a
consolidated basis; and
(b) has received a notification or communication from any agency or
department of any federal, state or local governmental authority or any
Regulatory Authority or the staff thereof (i) asserting that SouthTrust or any
SouthTrust subsidiary is not in compliance with any laws or orders which such
governmental authority or Regulatory Authority enforces, where such
noncompliance is reasonably likely to have a Material Adverse Effect on the
Condition of SouthTrust on a consolidated basis, (ii) threatening to revoke any
permit, the revocation of which is reasonably likely to have a Material Adverse
Effect on the Condition of SouthTrust on a consolidated basis, (iii) requiring
SouthTrust or any SouthTrust subsidiary to enter into any cease and desist
order, formal agreement, commitment or memorandum of understanding, or to adopt
any resolutions or similar undertakings, or (iv) directing, restricting or
limiting, or purporting to direct, restrict or limit in any manner, the
operations of SouthTrust or any SouthTrust subsidiary, including, without
limitation, any restrictions on the payment of dividends, or that in any manner
relates to such entity's capital adequacy, credit policies, management or
business.
Section 4.14 SEC Filings. SouthTrust has filed all forms, reports and
-----------
documents required to be filed by it with the SEC since December 31, 2001
(collectively, the "SouthTrust SEC Reports"). The SouthTrust SEC Reports (i) at
the time they were filed, complied in all material respects with the applicable
requirements of the Securities Act of 1933, as amended, and the Securities
Exchange Act of 1934, as amended, as the case may be, (ii) did not at the time
they were filed (or if amended or superseded by filing prior to the date of this
Agreement, then on the date of such filing) contain any untrue statement of a
material fact or omit to state a material fact required to be stated in such
SouthTrust's SEC Reports or necessary in order to make statements in
SouthTrust's SEC Reports, in light of the circumstances under which they were
made, not misleading.
30
ARTICLE 5
COVENANTS AND AGREEMENTS
Section 5.1 Conduct of the Business of FloridaFirst and FloridaFirst
-----------------------------------------------------------
Subsidiaries.
------------
(a) During the period from the date of this Agreement to the Effective
Time of the Merger, FloridaFirst shall, and shall cause FF-Bank and its
respective subsidiaries to, (i) conduct its business in the usual, regular and
ordinary course consistent with past practice and prudent banking principles,
(ii) use its best efforts to maintain and preserve intact its business
organization, employees, goodwill with customers and advantageous business
relationships and retain the services of its officers and key employees, (iii)
preserve for itself and SouthTrust the goodwill of the customers of
FloridaFirst, FF-Bank and their respective subsidiaries and others with whom
business relationships exist, and (iv) except as required by law or regulation,
take no action which would adversely affect or delay the ability of FloridaFirst
or SouthTrust to obtain any Consent from any Regulatory Authority or other
approvals required for the consummation of the transactions contemplated hereby
or to perform its covenants and agreements under this Agreement.
(b) During the period from the date of this Agreement to the Effective
Time of the Merger, except as required by law or regulation, FloridaFirst shall
not, and it shall not permit any FloridaFirst subsidiary, without the prior
written consent of SouthTrust (which consent shall not be unreasonably
withheld), to:
(i) change, delete or add any provision of or to the Articles of
Incorporation or Bylaws of FloridaFirst or FF-Bank;
(ii) except for the issuance of FloridaFirst Shares pursuant to
the terms of the FloridaFirst Options, change the number of
shares of the authorized, issued or outstanding capital
stock of FloridaFirst, including any issuance, purchase,
redemption, split, combination or reclassification thereof,
or issue or grant any option, warrant, call, commitment,
subscription, right or agreement to purchase relating to the
authorized or issued capital stock of FloridaFirst, declare,
set aside or pay any dividend or other distribution with
respect to the outstanding capital stock of FloridaFirst,
except that FloridaFirst shall be permitted to declare and
pay quarterly cash dividends with respect to the outstanding
capital stock of FloridaFirst in per share amounts
equivalent on a per share basis to any quarterly cash
dividends declared by SouthTrust with respect to outstanding
shares of capital stock of SouthTrust, provided that
SouthTrust has confirmed the amount and timing of any such
cash dividends declared by FloridaFirst and provided that
the Parties shall coordinate the record and payment dates of
any such cash dividends declared by FloridaFirst, it being
the intention of the parties that the holders of
FloridaFirst Shares may (to the extent
32
allowed by law and declared) receive one, but not more than
one, dividend for any quarterly period with respect to
FloridaFirst Shares and any shares of SouthTrust Common
Stock any holder of FloridaFirst Shares receives in exchange
therefor in the Merger;
(iii)incur any material liabilities or material obligations
(other than deposit liabilities and short-term borrowings in
the ordinary course of business), whether directly or by way
of guaranty, including any obligation for borrowed money, or
whether evidenced by any note, bond, debenture, or similar
instrument, except in the ordinary course of business
consistent with past practice;
(iv) make any capital expenditures individually in excess of
$25,000, or in the aggregate in excess of $50,000 other than
pursuant to binding commitments existing on September 30,
2003 and disclosed in a Schedule delivered pursuant to
Article 5 of this Agreement or in the annexed Schedule
5.1(b)(iv) and other than expenditures necessary to maintain
existing assets in good repair;
(v) except as disclosed in Schedule 5.1(b)(v) sell, transfer,
convey or otherwise dispose of any real property (including
"other real estate owned") or interest therein having a book
value in excess of or in exchange for consideration in
excess of $25,000;
(vi) pay any bonuses except pursuant to the terms of an
enforceable written employment agreement; enter into any
new, or amend in any respect any existing, employment,
consulting, non-competition or independent contractor
agreement with any person; alter the terms of any existing
incentive bonus or commission plan; adopt any new or amend
in any material respect any existing employee benefit plan,
except as may be required by law; grant any general increase
in compensation to its employees as a class or to its
officers except for non-executive officers in the ordinary
course of business and consistent with past practices and
policies or except in accordance with the terms of an
enforceable written agreement; grant any material increase
in fees or other compensation or in other benefits to any of
its directors; or effect any change in any material respect
in retirement benefits to any class of employees or
officers, except as required by law;
(vii)enter into or extend any agreement, lease or license
relating to real property, personal property, data
processing or bankcard functions relating to FloridaFirst or
FF-Bank that involves an aggregate of $25,000 or more;
33
(viii) acquire twenty percent (20%) or more of the assets or
equity securities of any Person or acquire direct or
indirect control of any person, other than in connection
with (A) any internal reorganization or consolidation
involving existing FloridaFirst subsidiaries which has been
approved in advance in writing by SouthTrust, (B)
foreclosures in the ordinary course of business, (C)
acquisitions of control by FF-Bank or any other FloridaFirst
subsidiary engaged in banking in a fiduciary capacity or (D)
the creation of any new FloridaFirst subsidiary organized to
conduct and continue activities otherwise permitted by this
Agreement;
(ix) increase or decrease the rate of interest paid on time
deposits or on certificates of deposit, except in a manner
and pursuant to policies consistent with FloridaFirst and
FF-Bank's past practices;
(x) take any action that is intended or may reasonably be
expected to result in any of the conditions to the Merger
set forth in Article 7 not being satisfied;
(xi) purchase or otherwise acquire any investment securities for
its own account having an average remaining life to maturity
greater than five years, or any asset-backed security, other
than those issued or guaranteed by the Government National
Mortgage Association, the Federal National Mortgage
Association or Federal Home Loan Mortgage Corporation, or
any Derivative Contract; or
(xii)commence any cause of action or proceeding other than in
accordance with past practice or settle any action, claim,
arbitration, complaint, criminal prosecution, demand letter,
governmental or other examination or investigation, hearing,
inquiry or other proceeding against FloridaFirst, FF-Bank or
any of their respective subsidiaries for material money
damages or restrictions upon any of their operations.
Section 5.2 Current Information. During the period from the date of
--------------------
this Agreement to the Effective Time of the Merger or the time of termination or
abandonment of this Agreement, FloridaFirst will cause one or more of its
designated representatives to confer on a regular and frequent basis with
representatives of SouthTrust and to report the general status of the ongoing
operations of FloridaFirst. FloridaFirst will promptly notify SouthTrust of any
material change in the normal course of business or the operations or the
properties of FloridaFirst or FF-Bank, any governmental complaints,
investigations or hearings (or communications indicating that the same may be
contemplated) affecting FloridaFirst or an FloridaFirst subsidiary, the
institution or the threat of material litigation, claims, threats or causes of
action involving FloridaFirst or FF-Bank, and will keep SouthTrust fully
informed of such events. FloridaFirst will furnish to SouthTrust, promptly after
the preparation and/or receipt by FloridaFirst thereof, copies of its unaudited
monthly and quarterly periodic financial statements and call reports for the
applicable periods then ended, and such financial statements (other than the
unaudited monthly statements)
33
and call reports shall, upon delivery to SouthTrust, be treated, for purposes of
Section 3.3 hereof, as among the Financial Statements of FloridaFirst, the
Financial Statements of FF-Bank and the Financial Regulatory Reports of FF-Bank.
Section 5.3 Access to Properties; Personnel and Records; Systems
---------------------------------------------------------
Integration.
-----------
(a) For so long as this Agreement shall remain in effect, FloridaFirst
and FF-Bank shall permit SouthTrust or its agents upon prior notice full access,
during normal business hours, to the properties of FloridaFirst and FF-Bank, and
shall disclose and make available to SouthTrust and to its internal auditors,
loan review officers, attorneys, accountants and other representatives, all
books, papers and records relating to the assets, stock, properties, operations,
obligations and liabilities of FloridaFirst or FF-Bank, including all books of
account (including the general ledger), tax records, minute books of directors'
(excluding matters relating to the consideration and approval of the Agreement
and the Merger, any "Acquisition Proposal" or "takeover proposal" (as such terms
are defined herein) or the fiduciary duties of the board) and shareholders'
meetings, organizational documents, bylaws, contracts and agreements, filings
with any regulatory agency, examination reports, correspondence with regulatory
or taxing authorities, documents relating to assets, titles, abstracts,
appraisals, consultant's reports, plans affecting employees, securities transfer
records and stockholder lists, and any other assets, business activities or
prospects in which SouthTrust may have a reasonable interest, and FloridaFirst,
FF-Bank and their respective subsidiaries shall use their reasonable best
efforts to provide SouthTrust and its representatives access to the work papers
of FloridaFirst's and FloridaFirst subsidiaries' accountants. For so long as
this Agreement shall remain in effect, FloridaFirst shall permit a SouthTrust
representative to attend FloridaFirst board meetings provided that the board may
convene in executive session without the presence of a SouthTrust
representative. FloridaFirst, FF-Bank and their respective subsidiaries shall
not be required to provide access to or to disclose information where such
access or disclosure would violate or prejudice the rights of any customer,
would contravene any law, rule, regulation, order or judgment, would destroy
attorney-client privilege or would violate any confidentiality agreement;
provided that FloridaFirst and FF-Bank shall cooperate with SouthTrust in
seeking to obtain Consents from appropriate parties under whose rights or
authority access is otherwise restricted. The foregoing rights granted to
SouthTrust shall not, whether or not and regardless of the extent to which the
same are exercised, affect the representations and warranties made in this
Agreement by FloridaFirst, FF-Bank and their respective subsidiaries.
(b) All information furnished by the parties hereto pursuant to this
Agreement shall be treated as the sole property of the party providing such
information until the consummation of the Merger contemplated hereby and, if
such transaction shall not occur, the party receiving the information shall
return to the party which furnished such information, all documents or other
materials containing, reflecting or referring to such information, shall use its
best efforts to keep confidential all such information, and shall not directly
or indirectly use such information for any competitive or other commercial
purposes. The obligation to keep such information confidential shall continue
for two (2) years from the date the proposed transactions are abandoned but
shall not apply to (1) any information which (A) the party receiving the
34
information was already in possession of prior to disclosure thereof by the
party furnishing the information, (B) was then available to the public, or (C)
became available to the public through no fault of the party receiving the
information; or (2) disclosures pursuant to a legal requirement or in accordance
with an order of a court of competent jurisdiction or regulatory agency;
provided, however, the party which is the subject of any such legal requirement
or order shall use its best efforts to give the other party at least ten (10)
business days prior notice thereof. Each party hereto acknowledges and agrees
that a breach of any of their respective obligations under this Section 5.3
would cause the other irreparable harm for which there is no adequate remedy at
law, and that, accordingly, each is entitled to injunctive and other equitable
relief for the enforcement thereof in addition to damages or any other relief
available at law. Notwithstanding the foregoing, nothing in this Agreement shall
prohibit the disclosure of the tax treatment and tax structure, as those terms
are used in Treasury Regulation Section 1.6011-4, of the transactions
contemplated by the Agreement from and after the date of the public announcement
by the Parties of this Agreement and the Merger.
(c) From and after the date hereof, FloridaFirst shall cause FF-Bank
and its directors, officers and employees to, and shall make all reasonable
efforts to cause FF-Bank's data processing service providers to, cooperate and
assist SouthTrust in connection with an electronic and systematic conversion of
all applicable data regarding FF-Bank to ST-Bank's system of electronic data
processing. In furtherance of, and not in limitation of, the foregoing,
FloridaFirst shall cause FF-Bank to make reasonable arrangements during normal
business hours to permit personnel and representatives of ST-Bank to train
FF-Bank employees in ST-Bank's system of electronic data processing.
Section 5.4 Approval of FloridaFirst Shareholders. FloridaFirst will
--------------------------------------
take all steps necessary under applicable laws to call, give notice of, convene
and hold a meeting of its shareholders at such time as may be mutually agreed to
by the parties for the purpose of approving this Agreement and the transactions
contemplated hereby and for such other purposes consistent with the complete
performance of this Agreement as may be necessary or desirable. Subject to its
fiduciary duties, the Board of Directors of FloridaFirst will recommend to its
shareholders the approval of this Agreement and the transactions contemplated
hereby and FloridaFirst will use its best efforts to obtain the necessary
approvals by its shareholders of this Agreement and the transactions
contemplated hereby.
Section 5.5 No Other Bids. Except with respect to this Agreement and
-------------
the transactions contemplated hereby, neither FloridaFirst nor any Affiliate (as
defined below) thereof, nor any investment banker, attorney, accountant or other
representative (collectively, "representative") retained by FloridaFirst,
FF-Bank or any of their respective subsidiaries shall directly or indirectly
initiate, solicit, encourage or otherwise facilitate any inquiries or the making
of any proposal or offer that constitutes, or may reasonably be expected to lead
to, any "takeover proposal" (as defined below) by any other party. Except to the
extent necessary to comply with the fiduciary duties of FloridaFirst's Board of
Directors taking into account the advice of counsel to such Board of Directors,
neither FloridaFirst nor any affiliate or representative thereof shall furnish
any non-public information that it is not legally obligated to furnish or
negotiate or enter into any agreement or contract with respect to any takeover
35
proposal, and shall direct and use its reasonable efforts to cause its
affiliates or representatives not to engage in any of the foregoing, but
FloridaFirst may communicate information about such a takeover proposal to its
shareholders if and to the extent it is required to do so in order to comply
with its legal obligations as advised by counsel. FloridaFirst shall promptly
notify SouthTrust orally and in writing in the event that it receives any
inquiry or proposal relating to any such transaction. FloridaFirst shall
immediately cease and cause to be terminated as of the date of this Agreement
any existing activities, discussions or negotiations with any other parties
conducted heretofore with respect to any of the foregoing. As used in this
Section 5.5, "takeover proposal" shall mean any proposal for a merger or other
business combination involving FloridaFirst, FF-Bank or any of their respective
subsidiaries or for the acquisition of a significant equity interest in
FloridaFirst, FF-Bank or any of their respective subsidiaries or for the
acquisition of a significant portion of the assets or liabilities of
FloridaFirst, FF-Bank or any of their respective subsidiaries.
Section 5.6 Maintenance of Properties; Certain Remediation and Capital
-----------------------------------------------------------
Improvements. FloridaFirst, FF-Bank and their respective subsidiaries will
------------
maintain their respective properties and assets in satisfactory condition and
repair for the purposes for which they are intended, ordinary wear and tear
excepted.
Section 5.7 Environmental Audits. At the election of SouthTrust, which
--------------------
shall be made within 30 days of the date of this Agreement, FloridaFirst will,
at its own expense, with respect to each parcel of real property that
FloridaFirst or FF-Bank owns, leases or subleases, procure and deliver to
SouthTrust, within thirty (30) days after such election by SouthTrust, an
environmental audit, which audit shall be conducted by a firm reasonably
acceptable to SouthTrust.
Section 5.8 Title Insurance. At the election of SouthTrust, which shall
---------------
be made within 30 days of the date of the Agreement, FloridaFirst will, at its
own expense, with respect to each parcel of real property that FloridaFirst or
FF-Bank owns, leases or subleases, procure and deliver to SouthTrust, at least
thirty (30) days prior to the Effective Time of the Merger, a commitment to
issue owner's and leasehold title insurance in such amounts and by such
insurance company reasonably acceptable to SouthTrust.
Section 5.9 Surveys. At the election of SouthTrust, which shall be made
-------
within 30 days of the date of the Agreement, with respect to each parcel of real
property as to which a title insurance policy is to be procured pursuant to
Section 5.8, FloridaFirst, at its own expense, will procure and deliver to
SouthTrust at least thirty (30) days prior to the Effective Time of the Merger,
a survey of such real property, which survey shall be prepared by a licensed
surveyor reasonably acceptable to SouthTrust, disclosing the locations of all
improvements, easements, sidewalks, roadways, utility lines and other matters
customarily shown on such surveys and providing the legal description of the
property in a form suitable for recording and insuring the title thereof (the
"Survey").
Section 5.10 Consents to Assign and Use Leased Premises. With respect
-------------------------------------------
to the leases disclosed in Schedule 3.12(b), FloridaFirst will, or shall cause
FF-Bank and each applicable subsidiary of FloridaFirst and FF-Bank to, use
commercially reasonable effects obtain all
36
Consents necessary or appropriate to transfer and assign all right, title and
interest of FloridaFirst, FF-Bank and their respective subsidiaries to ST-Bank
and to permit the use and operation of the leased premises by ST-Bank.
Section 5.11 Compliance Matters. Prior to the Effective Time of the
--------------------
Merger, FloridaFirst shall take, or cause to be taken, all steps reasonably
requested by SouthTrust to cure any deficiencies in regulatory compliance by
FloridaFirst or FF-Bank; provided, however, neither SouthTrust nor ST Sub shall
have any liability resulting from such deficiencies or attempts to cure them.
Section 5.12 Conforming Accounting and Reserve Policies. At the request
------------------------------------------
of SouthTrust, FloridaFirst shall immediately prior to Closing establish and
take such reserves and accruals as SouthTrust reasonably shall request to
conform FF-Bank's loan, accrual, reserve and other accounting policies to the
policies of ST-Bank, provided however, such requested conforming adjustment
shall not be taken into account as having a Material Adverse Effect on
FloridaFirst.
Section 5.13 Bank Merger Agreement. Prior to the Effective Time of the
---------------------
Merger, the Parties shall have executed and delivered the Bank Merger Agreement
substantially in the form annexed hereto as Exhibit 5.13. FloridaFirst shall
vote by action by written consent or as otherwise required the shares of capital
stock of FF-Bank held by FloridaFirst, and ST-Sub shall vote by action by
written consent or as otherwise required the shares of ST-Bank held by ST-Sub,
in favor of such Bank Merger Agreement and the transactions contemplated
thereby.
Section 5.14 Affiliates. FloridaFirst shall use its best efforts to
----------
cause all persons who are "affiliates" of FloridaFirst for purposes of Rule 145
under the Securities Act of 1933, as amended, to deliver to SouthTrust promptly
following execution of this Agreement a written agreement in a form
substantially similar to Exhibit 5.14 providing that such person will not
dispose of SouthTrust Shares to be received in the Merger, except in compliance
with applicable provisions of the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder, and in any event shall use its
best efforts to cause such affiliates to deliver to SouthTrust such written
agreement prior to the Closing Date.
Section 5.15 Advisory Board. As of the Effective Time of the Merger
---------------
SouthTrust shall offer to each of the members of the Board of Directors of
FloridaFirst a seat on the Advisory Board for the Lakeland, Florida area. For
three years following the Effective Time of the Merger, the Advisory Board
members appointed pursuant to this Section 5.15 who are not employees of
SouthTrust, ST-Bank or an Affiliate or under contract with SouthTrust, ST-Bank
or an Affiliate, and who continue to serve shall receive, as compensation for
service on the Advisory Board, Advisory Board member's fees (annual retainer and
attendance fees) equal in amount each year (prorated for any partial year) to
the annual retainer and schedule of attendance fees for directors of
FloridaFirst in effect on September 1, 2003. Following such three-year period,
Advisory Board Members, if they continue to serve in such capacity, shall
receive fees in accordance with SouthTrust's standard schedule of fees for
service thereon as in effect from time to time. For three years after the
Effective Time of the Merger, no such Advisory Board member shall be prohibited
from serving thereon because he or she shall have attained the maximum age
37
for service thereon (currently age 70). In the event SouthTrust shall establish
a Florida State Advisory Board prior to the date that Nis X. Xxxxxx, III shall
attain his 70th birthday, Nis X. Xxxxxx, III shall be offered a seat on the
Florida State Advisory Board. Membership of any person on any Advisory Board
shall be conditional upon execution of an agreement providing that such person
will not engage in activities competitive with SouthTrust for three years
following the Effective Time of the Merger or, if longer, the period that he or
she is a member of the Advisory Board.
Section 5.16 Restricted Stock Awards. At or immediately prior to the
------------------------
Effective Time of the Merger, the awards of stock referenced at Section 2.2(c)
herein shall be deemed immediately vested and nonforfeitable, shall be
distributed in the form of FloridaFirst Shares, and shall be subject to
conversion as Exchange Shares under Article 2 hereof.
Section 5.17 Publicity. Except as otherwise required by law or the
---------
rules of NASDAQ, so long as this Agreement is in effect, neither ST-Sub nor
FloridaFirst shall, or shall permit any of their respective subsidiaries or
Affiliates to, issue or cause the publication of any press release or other
public announcement with respect to, or otherwise make any public statement
concerning, the transactions contemplated by this Agreement without the consent
of the other party, which consent shall not be unreasonably withheld. In the
event such press release, public statement or public announcement is required by
law, the announcing party will give the other party advance notice of such and
provide a copy of the proposed release, statement or announcement to the other
party.
Section 5.18 Certification of Claims. Immediately prior to the
-------------------------
Effective Time of the Merger, FloridaFirst shall deliver a certificate to
SouthTrust regarding any pending or threatened claim under the directors and
officers' insurance policy or the fidelity bond coverage of FloridaFirst or
FF-Bank.
ARTICLE 6
ADDITIONAL COVENANTS AND AGREEMENTS
Section 6.1 Best Efforts; Cooperation. Subject to the terms and
---------------------------
conditions herein provided, each of the parties hereto agrees to use its best
efforts promptly to take, or cause to be taken, all actions and to do, or cause
to be done, all things necessary, proper or advisable under applicable laws and
regulations, or otherwise, including attempting to obtain all necessary
Consents, to consummate and make effective, as soon as practicable, the
transactions contemplated by this Agreement.
Section 6.2 Regulatory Matters.
------------------
(a) As promptly as practicable but in no event later than 15 business
days following the execution and delivery of this Agreement, SouthTrust and
FloridaFirst shall cause to be prepared and filed all required applications and
filings with the Regulatory Authorities which are necessary or contemplated for
the obtaining of the Consents of the Regulatory Authorities or consummation of
the Merger. Such applications and filings shall be in such form
38
as may be prescribed by the respective government agencies and shall contain
such information as they may require. The parties hereto will cooperate with
each other and use their best efforts to prepare and execute all necessary
documentation, to effect all necessary or contemplated filings and to obtain all
necessary or contemplated permits, consents, approvals, rulings and
authorizations of government agencies and third parties which are necessary or
contemplated to consummate the transactions contemplated by this Agreement,
including, without limitation, those required or contemplated from the
Regulatory Authorities, and the shareholders of FloridaFirst. Each of the
parties shall have the right to review and approve in advance, which approval
shall not be unreasonably withheld, any filing made with, or written material
submitted to, any government agencies in connection with the transactions
contemplated by this Agreement.
(b) Each party hereto will furnish the other party with all information
concerning itself, its Subsidiaries, directors, trustees, officers, shareholders
and depositors, as applicable, and such other matters as may be necessary or
advisable in connection with any statement or application made by or on behalf
of any such party to any governmental body in connection with the transactions,
applications or filings contemplated by this Agreement. Upon request, the
parties hereto will promptly furnish each other with copies of written
communications received by them or their respective Subsidiaries from, or
delivered by any of the foregoing to, any governmental body in respect of the
transactions contemplated hereby.
Section 6.3 Employment and Employee Benefits Matters.
----------------------------------------
(a) The parties acknowledge that nothing in this Agreement shall be
construed as constituting an employment agreement between SouthTrust or any of
its affiliates and any officer or employee of FloridaFirst, FF-Bank or any of
their respective subsidiaries or an obligation on the part of SouthTrust or any
of its affiliates to employ any such officers or employees.
(b) The parties agree that appropriate steps shall be taken to
terminate the FloridaFirst Bank 401(k) Retirement Plan (the "FloridaFirst 401(k)
Plan") as of a date prior to the Effective Time of the Merger or as promptly as
practicable thereafter, SouthTrust shall take appropriate steps to wind up the
FloridaFirst 401(k) Plan and distribute the assets of its trust in accordance
with the terms of the FloridaFirst 401(k) Plan and applicable law, following the
termination of the FloridaFirst 401(k) Plan and receipt of a favorable
determination letter from the Internal Revenue Service relating to such
termination. In addition, the parties agree that appropriate steps shall be
taken to terminate all employee benefit plans of FloridaFirst, FF-Bank or any of
their respective subsidiaries other than the FloridaFirst 401(k) Plan
immediately prior to, at or as soon as administratively feasible following the
Effective Time of the Merger, provided that the conditions of this Subsection
(b) and of paragraphs (i)-(ii) below are then met and provided further that all
employees of FloridaFirst, FF-Bank or any of their respective subsidiaries who
were participating immediately prior to the Merger in employee benefit plans of
FloridaFirst, FF-Bank or any of their respective subsidiaries (other than the
FloridaFirst 401(k) Plan) for which SouthTrust maintains a corresponding plan
shall commence participation in SouthTrust's corresponding plan upon the later
of the Effective Time of the Merger or the date of termination of coverage under
the Employee Benefit Plans of FloridaFirst, FF-Bank or any of
39
their respective subsidiaries without any gap or interruption in coverage
(including any gap affecting any of FloridaFirst employee's dependents), whether
a gap in time of coverage or in waiting or elimination periods. Subject to
Section 6.3(c) hereof and except as otherwise specifically provided below,
SouthTrust agrees that the officers and employees of FloridaFirst, FF-Bank or
any of their respective subsidiaries who SouthTrust or its subsidiaries employ
shall be eligible to participate in SouthTrust's employee benefit plans,
including welfare and fringe benefit plans, sick leave, vacation, holiday pay
and similar payroll practices, on the same basis as and subject to the same
conditions as are applicable to any newly-hired employee of SouthTrust;
provided, however, that:
(i) with respect to each SouthTrust Health Plan, SouthTrust
shall credit each such employee for eligible expenses
incurred by such employee and his or her dependents (if
applicable) under the group medical insurance plan of
FloridaFirst, FF-Bank or any of their respective
subsidiaries during the current calendar year for purposes
of satisfying the deductible provisions under SouthTrust's
plan for such current year, and SouthTrust shall waive all
waiting periods under said plans for pre-existing
conditions; and
(ii) Credit for each such employee's past service with
FloridaFirst, FF-Bank or any of their respective
subsidiaries prior to the Effective Time of the Merger
("Past Service Credit") shall be given by SouthTrust to
employees for purposes of:
(A) determining vacation, severance, sick leave and other
leave benefits and accruals, in accordance with the
established policies of SouthTrust;
(B) establishing eligibility for participation in and
vesting under SouthTrust's welfare and fringe benefit
plans, and for purposes of determining the scheduling
of vacations and other determinations which are made
based on length of service.
(c) From and after the Applicable Date (as hereinafter defined) and
subject to applicable law, SouthTrust shall recognize the service of all
employees of FloridaFirst, FF-Bank or any of their respective subsidiaries for
purposes of determining eligibility to participate in, and vesting in accrued
benefits under the SouthTrust 401(k) Plan, the SouthTrust Employee Stock
Ownership Plan, the SouthTrust Pension Plan (the "ST Pension Plan"), and the
SouthTrust Discount Stock Payroll Purchase Plan (the "ST Discount Stock Plan")
as follows:
(i) for purposes of vesting and eligibility under the
SouthTrust 401(k) Plan, the SouthTrust Employee Stock
Ownership Plan, the ST Pension Plan and the ST Discount
Stock Plan, all Past Service Credit shall be credited
as if such service had been performed for
40
SouthTrust and all service performed for SouthTrust
from and after the Effective Time of the Merger shall
be credited; and
(ii) for purposes of benefit accrual under the ST Pension
Plan, all service performed for SouthTrust from and
after the Applicable Date shall be credited.
The "Applicable Date" with respect to a plan is as specified below:
Plan Applicable Date
---- ---------------
SouthTrust 401(k) Plan Eligible Plan Entry Date as defined
in such plan
SouthTrust Employee Stock Eligible Plan Entry Date as defined
Ownership Plan in such plan
ST Pension Plan January 1, 2005
ST Discount Stock Plan January 1, 2005
(d) Consistent with Section 6.3(b) of this Agreement, the parties agree
that appropriate steps will be taken to terminate the FloridaFirst Employee
Stock Ownership Plan (the "FF-Bank ESOP") as of a date prior to the Effective
Time of the Merger. FF-Bank, as sponsor of the FF-Bank ESOP, agrees that as soon
as administratively feasible following the execution of this Agreement,
independent legal counsel ("FF-Bank ESOP Counsel") for the FF-Bank ESOP Trustees
(the "Trustees") shall be appointed to advise the Trustees with regard to the
exercise, in connection with the proposed Merger, of their power and
responsibility to vote unallocated FloridaFirst Shares held by the trust
associated with the FF-Bank ESOP (the "FF-Bank ESOP Trust") and allocated
FloridaFirst Shares held by the FF-Bank ESOP Trust for which no voting direction
has been received and their powers and responsibilities with respect to Section
2.1(d) of this Agreement. The parties agree that, following the later of the
termination of the FF-Bank ESOP and receipt of a favorable determination letter
from the Internal Revenue Service relating to such termination, the FF-Bank ESOP
Trustees in coordination with SouthTrust shall take appropriate steps as soon as
practicable to wind up the FF-Bank ESOP and distribute the assets of its trust
in accordance with the terms of the FF-Bank ESOP and applicable law. Moreover,
the parties agree that as soon as practicable following the Effective Time of
the Merger, by means of a process conducted in a manner consistent with the
requirements of the Code, ERISA, other applicable law and the terms of the
FF-Bank ESOP, any existing liability of the FF-Bank ESOP collateralized on the
Closing Date with employer stock (currently FloridaFirst Shares) shall be paid
off by the FF-Bank ESOP either through application of any cash proceeds received
from the sale of any unallocated shares pursuant to Section 2.1(d) of this
Agreement or the proceeds from the sale of a sufficient amount of SouthTrust
Shares which, incident to the Merger, have been substituted as the collateral
for such liabilities; the parties
41
further agree subject to the requirements of the Code, ERISA, other applicable
law and the terms of the FF-Bank ESOP, that any residual sale proceeds and any
residual unallocated SouthTrust Shares pledged with respect to the liabilities
paid incident to such sale shall be allocated after payment of permissible
administrative and Trustee expenses (which shall include, but not be limited to,
the expenses associated with FF-Bank ESOP Counsel) as earnings to the account
balances of the participants, alternate payees, or beneficiaries of the FF-Bank
ESOP.
(e) Deferred Compensation Plans.
(i) Upon SouthTrust's prior approval and upon terms and
conditions satisfactory to SouthTrust, FloridaFirst and FF-Bank shall
use their best efforts to terminate the FloridaFirst Bank Directors
Consultation and Retirement Plan (the "Director Plan") and cause all
benefits payable to participants under the Director Plan to be paid to
such participants as of a date no later than the Closing Date.
(ii) Upon prior approval and upon terms and conditions
satisfactory to SouthTrust, FloridaFirst and FF-Bank shall use their
best efforts to terminate the FloridaFirst Bank Supplemental Executive
Retirement Plan for the Benefit of Senior Officers, as of a date no
later than the Closing Date.
Section 6.4 Indemnification.
---------------
(a) For a period of five (5) years after the Effective Time of the
Merger, SouthTrust shall indemnify, defend and hold harmless each person
entitled to indemnification from FloridaFirst (each an "Indemnified Party")
against all liability arising out of actions or omissions occurring at or prior
to the Effective Time of the Merger (including, without limitation, transactions
contemplated by this Agreement) to the same extent and subject to the conditions
set forth in FloridaFirst's and FF-Bank's Articles or Certificate of
Incorporation or Bylaws, in each case as in effect as of the date hereof.
(b) After the Effective Time of the Merger, directors, officers and
employees of FloridaFirst and FF-Bank, except for the indemnification rights
provided for in this Section 6.4 above, shall have indemnification rights having
prospective application only. These prospective indemnification rights shall
consist of such rights to which directors, officers and employees of SouthTrust
and its subsidiaries would be entitled under the Restated Certificate or
Certificate or Articles of Incorporation and Bylaws of SouthTrust or the
particular subsidiary for which they are serving as officers, directors or
employees and under such directors' and officers' liability insurance policy as
SouthTrust may then make available to officers, directors and employees of
SouthTrust and its subsidiaries.
(c) SouthTrust shall use its best efforts (and FloridaFirst shall
cooperate prior to the Effective Time of the Merger) to maintain in effect for a
period of five (5) years after the Effective Time of the Merger FloridaFirst's
existing directors' and officers' liability insurance policy (provided that
SouthTrust may substitute therefor (i) policies of at least the same coverage
and amounts containing terms and conditions which are substantially no less
advantageous or (ii)with the consent of FloridaFirst (given prior to the
Effective Time of the Merger) any other
42
policy with respect to claims arising from facts or events which occurred prior
to the Effective Time of the Merger and covering persons who are currently
covered by such insurance; provided, that SouthTrust shall not be obligated to
make premium payments for such five (5) year period in respect of such policy
(or coverage replacing such policy) which exceed, for the portion related to
FloridaFirst's and FF-Bank's directors and officers, 150% of the annual premium
payments on FloridaFirst's current policy, as in effect as of the date of this
Agreement (the "Maximum Amount"). If the amount of premium that is necessary to
maintain or procure such insurance coverage exceeds the Maximum Amount,
SouthTrust shall use its reasonable efforts to maintain the most advantageous
policies of director's and officer's liability insurance obtainable for a
premium equal to the Maximum Amount.
(d) If SouthTrust or any of its successors or assigns shall consolidate
with or merge into any other person and shall not be continuing or surviving
person of such consolidation or merger, or shall transfer all or substantially
all of its assets to any person, then, and in each case, proper provisions shall
be made so that the successors and assigns of SouthTrust shall assume the
obligations set forth in this Section 6.4.
(e) The provisions of this Section 6.4 are intended to be for the
benefit of, and shall be enforceable by each Indemnified Party, and each
Indemnified Party's heirs and representatives.
Section 6.5 Registration Statement. Within 60 days of the date of this
----------------------
Agreement, SouthTrust shall cause the Registration Statement to be filed and
shall use its best efforts to cause such Registration Statement to be declared
effective under the Securities Act, which Registration Statement, at the time it
becomes effective, and at the Effective Time of the Merger, shall in all
material respects conform to the requirements of the Securities Act and the
general rules and regulations of the SEC promulgated thereunder. The
Registration Statement shall include the form of Proxy Statement for the meeting
of FloridaFirst's shareholders to be held for the purpose of having such
shareholders vote upon the approval of this Agreement. FloridaFirst, FF-Bank and
their respective subsidiaries will furnish to SouthTrust the information
required to be included in the Registration Statement with respect to its
business and affairs before it is filed with the SEC and again before any
amendments are filed and before the Proxy Statement is mailed to FloridaFirst
shareholders. SouthTrust shall take all actions required to qualify or obtain
exemptions from such qualifications for the SouthTrust Shares to be issued in
connection with the transactions contemplated by this Agreement under applicable
state blue sky securities laws, as appropriate.
ARTICLE 7
MUTUAL CONDITIONS TO CLOSING
The obligations of SouthTrust and ST-Sub, on the one hand, and FloridaFirst, on
the other hand, to consummate the transactions provided for herein shall be
subject to the satisfaction of the following conditions, unless waived as
hereinafter provided for:
43
Section 7.1 Shareholder Approval. The Merger shall have been approved
---------------------
by the requisite vote of the shareholders of FloridaFirst.
Section 7.2 Regulatory Approvals. All necessary Consents of the
---------------------
Regulatory Authorities shall have been obtained and all notice and waiting
periods required by law to pass after receipt of such Consents shall have
passed, and all conditions to consummation of the Merger set forth in such
Consents shall have been satisfied.
Section 7.3 Litigation. There shall be no actual or threatened causes
----------
of action, investigations or proceedings (i) challenging the validity or
legality of this Agreement or the consummation of the transactions contemplated
by this Agreement, or (ii) seeking damages in connection with the transactions
contemplated by this Agreement, or (iii) seeking to restrain or invalidate the
transactions contemplated by this Agreement, which, in the case of (i) through
(iii), and in the reasonable judgment of either SouthTrust or FloridaFirst,
based upon advice of counsel, would have a Material Adverse Effect with respect
to the interests of SouthTrust or FloridaFirst, as the case may be.
Section 7.4 Proxy Statement and Registration Statement. The
--------------------------------------------------
Registration Statement shall have been declared effective by the SEC, no stop
order suspending the effectiveness of the Registration Statement shall have been
issued, no action, suit, proceeding or investigation by the SEC to suspend the
effectiveness of the Registration Statement shall have been initiated, and
SouthTrust shall have received all state securities laws, or "blue sky" permits
or other authorizations, or confirmations as to the availability of exemptions
from registration requirements, as may be necessary to issue the SouthTrust
Shares pursuant to the terms of this Agreement.
Section 7.5 Tax Opinion. FloridaFirst and SouthTrust shall have
------------
received an opinion of SouthTrust's legal counsel, in form and substance
satisfactory to FloridaFirst and to SouthTrust, substantially to the effect that
the Merger will constitute a reorganization under Section 368 of the Code and
that the shareholders of FloridaFirst will not recognize any gain or loss to the
extent that such shareholders exchange their FloridaFirst Shares for SouthTrust
Shares. Each of SouthTrust and FloridaFirst shall upon request execute and
deliver to such counsel a certificate or certificates setting forth factual
matters necessary to form the basis for such opinions.
ARTICLE 8
CONDITIONS TO THE OBLIGATIONS OF SOUTHTRUST AND ST-SUB
The obligations of SouthTrust and ST-Sub to consummate the Merger are subject to
the fulfillment of each of the following conditions, unless waived as
hereinafter provided for:
Section 8.1 Representations and Warranties. The representations and
-------------------------------
warranties of FloridaFirst set forth in this Agreement and in any certificate or
document delivered pursuant hereto shall be true and correct in all material
respects as of the date of this Agreement and as of all times up to and
including the Effective Time of the Merger (as though made on and as of the
44
Effective Time of the Merger except to the extent such representations and
warranties are by their express provisions made as of a specified date and
except for changes therein contemplated by this Agreement). For purposes of this
paragraph, such representations and warranties shall be deemed to be true and
correct unless the failure or failures of such representations to be true and
correct, either individually or in the aggregate and without giving effect to
any qualification as to materiality or Material Adverse Effect set forth in such
representations or warranties, will have or is reasonably likely to have a
Material Adverse Effect on the Condition of FloridaFirst on a consolidated basis
or the Condition of the Surviving Corporation.
Section 8.2 Performance of Obligations. FloridaFirst shall have
----------------------------
performed in all material respects all covenants, obligations and agreements
required to be performed by it under this Agreement prior to the Effective Time
of the Merger.
Section 8.3 Certificate Representing Satisfaction of Conditions.
--------------------------------------------------------
FloridaFirst shall have delivered to SouthTrust and ST-Sub a certificate of the
Chief Executive Officer of FloridaFirst dated as of the Closing Date as to the
satisfaction of the matters described in Section 8.1 and Section 8.2 hereof, and
such certificate shall be deemed to constitute additional representations,
warranties, covenants, and agreements of FloridaFirst under Article 3 of this
Agreement.
Section 8.4 Absence of Adverse Facts. No fact, event or condition
-------------------------
exists or has occurred that, in the reasonable judgment of SouthTrust, (a) would
have a Material Adverse Effect on, or which may be foreseen to have a Material
Adverse Effect on, the Condition of FloridaFirst on a consolidated basis or the
consummation of the transactions contemplated by this Agreement, (b) would have
a Material Adverse Effect on the interests of SouthTrust on a consolidated basis
or (c) would render the Merger or the other transactions contemplated by this
Agreement impractical because of any state of war, national emergency, banking
moratorium or general suspension of trading on NASDAQ, the New York Stock
Exchange, Inc. or other national securities exchange.
Section 8.5 Opinion of Counsel. SouthTrust shall have received an
-------------------
opinion of counsel from Xxxxxxx Spidi & Xxxxx, PC or other counsel to
FloridaFirst reasonably acceptable to SouthTrust in substantially the form set
forth in Exhibit 8.5 hereof.
Section 8.6 Consents Under Agreements. FloridaFirst shall have obtained
-------------------------
the consent or approval of each Person (other than the Consents of the
Regulatory Authorities) whose consent or approval shall be required in order to
permit the succession by the Surviving Corporation to any obligation, right or
interest of FloridaFirst under any loan or credit agreement, note, mortgage,
indenture, lease, license, or other agreement or instrument, except those for
which failure to obtain such consents and approvals would not in the opinion of
SouthTrust, individually or in the aggregate, have a Material Adverse Effect on
the Surviving Corporation or upon the consummation of the transactions
contemplated by this Agreement.
Section 8.7 Consents Relating to Leased Real Property. FloridaFirst
-------------------------------------------
shall have delivered evidence that each Consent related to real property leases
described in Section 3.16(c) shall have been obtained by FloridaFirst or
FF-Bank, except those for which failure to obtain
45
such consents and approvals would not in the opinion of SouthTrust, individually
or in the aggregate, have a Material Adverse Effect on the Surviving Corporation
or upon the consummation of the transactions contemplated by this Agreement.
Section 8.8 Material Condition. There shall not be any action taken, or
------------------
any statute, rule, regulation or order enacted, entered, enforced or deemed
applicable to the Merger by any Regulatory Authority which, in connection with
the grant of any Consent by any Regulatory Authority, imposes, in the judgment
of SouthTrust, any material adverse requirement upon SouthTrust or any
SouthTrust Subsidiary, including, without limitation, any requirement that
SouthTrust sell or dispose of any significant amount of the assets of
FloridaFirst, FF-Bank and their respective subsidiaries, or any other SouthTrust
Subsidiary, provided that, except for any such requirement relating to the
above-described sale or disposition of any significant assets of FloridaFirst or
any SouthTrust Subsidiary, no such term or condition imposed by any Regulatory
Authority in connection with the grant of any Consent by any Regulatory
Authority shall be deemed to be a material adverse requirement unless it
materially differs from terms and conditions customarily imposed by any such
entity in connection with the acquisition of banks, savings associations and
bank and savings association holding companies under similar circumstances.
Section 8.9 Matters Relating to Employment Agreements. Each of Xxxxxxx
-----------------------------------------
X. Xxxxxx, Xxxxx X. Xxxxxxx, Xxxxxxx X. Xxxxx and Xxxxxx X. Xxxxxxx shall have
continued in the employment of FloridaFirst until the Effective Time of the
Merger (or shall have failed to do so solely because of his death or disability
qualifying him for disability benefits under FloridaFirst's long-term disability
Plan), and those certain employment agreements between ST-Bank and such
individuals dated the date hereof and effective as of the Effective Time of the
Merger, shall be in full force and effect.
Section 8.10 Acknowledgment of Option Payments. Each FloridaFirst
-----------------------------------
Option shall be canceled and terminated as of Effective Time of the Merger in
exchange for the payments specified in Section 2.2 and each holder of an
FloridaFirst Option outstanding immediately prior to the Effective Time of the
Merger shall have executed and delivered to FloridaFirst an appropriate
acknowledgment and receipt of such payment.
Section 8.11 Outstanding Shares of FloridaFirst. The total number of
------------------------------------
FloridaFirst Shares outstanding as of the Effective Time of the Merger and the
total number of FloridaFirst Shares covered by any option, warrant, commitment,
or other right or instrument to purchase or acquire any FloridaFirst Shares that
are outstanding as of the Effective Time of the Merger, including any securities
or rights convertible into or exchangeable for FloridaFirst Shares, shall not
exceed 5,923,225 shares in the aggregate.
Section 8.12 Increase in Borrowing. As of the date of any Financial
----------------------
Statement of FloridaFirst, any Financial Statement of FF-Bank or any Financial
Regulatory Report of FF-Bank subsequent to the execution of this Agreement,
including the date of the Financial Statements of FloridaFirst, the Financial
Statements of FF-Bank and the Financial Regulatory Report of FF-Bank that
immediately precede the Effective Time of the Merger, there shall not
46
have been an increase in the loan agreements, notes or borrowing arrangements
described in (i) through (iii) of Section 3.5 and in Schedule 3.5 that would
have a Material Adverse Effect.
ARTICLE 9
CONDITIONS TO OBLIGATIONS OF FLORIDAFIRST
The obligation of FloridaFirst to consummate the Merger as contemplated herein
is subject to each of the following conditions, unless waived as hereinafter
provided for:
Section 9.1 Representations and Warranties. The representations and
-------------------------------
warranties of SouthTrust and ST-Sub contained in this Agreement or in any
certificate or document delivered pursuant to the provisions hereof will be true
and correct, in all material respects, as of the Effective Time of the Merger
(as though made on and as of the Effective Time of the Merger), except to the
extent such representations and warranties are by their express provisions made
as of a specified date and except for changes therein contemplated by this
Agreement. For purposes of this paragraph, such representations and warranties
shall be deemed to be true and correct unless the failure or failures of such
representations to be true and correct, either individually or in the aggregate
and without giving effect to any qualification as to materiality or Material
Adverse Effect set forth in such representations or warranties, will have or is
reasonably likely to have a Material Adverse Effect on the Condition of
SouthTrust on a consolidated basis or the Condition of the Surviving
Corporation.
Section 9.2 Performance of Obligations. SouthTrust and ST-Sub shall
----------------------------
have performed in all material respects all covenants, obligations and
agreements required to be performed by them and under this Agreement prior to
the Effective Time of the Merger.
Section 9.3 Certificate Representing Satisfaction of Conditions.
--------------------------------------------------------
SouthTrust and ST-Sub shall have delivered to FloridaFirst a certificate dated
as of the Effective Time of the Merger as to the satisfaction of the matters
described in Section 9.1 and Section 9.2 hereof, and such certificate shall be
deemed to constitute additional representations, warranties, covenants, and
agreements of SouthTrust and ST-Sub under Article 4 of this Agreement.
Section 9.4 Absence of Adverse Facts. No fact, event or condition
-------------------------
exists or has occurred that, in the reasonable judgment of FloridaFirst, (a)
would have a Material Adverse Effect on, or which may be foreseen to have a
Material Adverse Effect on, the Condition of SouthTrust on a consolidated basis
or the consummation of the transactions contemplated by this Agreement, or (b)
would render the Merger or the other transactions contemplated by this Agreement
impractical because of any state of war, national emergency, banking moratorium,
or a general suspension of trading on NASDAQ, the New York Stock Exchange, Inc.
or other national securities exchange.
Section 9.5 Consents Under Agreements. SouthTrust and ST-Sub shall have
-------------------------
obtained the consent or approval of each Person (other than the Consents of
Regulatory Authorities) whose consent or approval shall be required in
connection with the transactions contemplated hereby under any loan or credit
agreement, note, mortgage, indenture, lease, license or other
47
agreement or instrument, except those for which failure to obtain such consents
and approvals would not, in the judgment of FloridaFirst, individually or in the
aggregate, have a Material Adverse Effect upon the consummation of the
transactions contemplated hereby.
Section 9.6 Opinion of Counsel. FloridaFirst shall have received the
------------------
opinion of Xxxxxxx Xxxxx Xxxx & White LLP, counsel to SouthTrust reasonably
acceptable to FloridaFirst, dated the Effective Time of the Merger, to the
effect set forth in Exhibit 9.6 hereof.
Section 9.7 SouthTrust Shares. The SouthTrust Shares to be issued in
------------------
connection herewith shall be duly authorized and validly issued and, fully paid
and nonassessable, issued free of preemptive rights and free and clear of all
liens and encumbrances created by or through SouthTrust and shall have been
approved for listing on NASDAQ.
ARTICLE 10
TERMINATION, WAIVER AND AMENDMENT
Section 10.1 Termination. This Agreement may be terminated at any time
-----------
prior to the Effective Time of the Merger:
(a) by the mutual consent of the Parties in writing if the Boards of
Directors of SouthTrust, ST-Sub and FloridaFirst so determine by a vote of a
majority of the members of each respective full board of directors; or
(b) by the Board of Directors of SouthTrust, ST-Sub, or FloridaFirst if
the Merger shall not have occurred on or prior to July 31, 2004, provided that
the failure to consummate the Merger on or before such date is not caused by any
breach of any of the representations, warranties, covenants or other agreements
contained herein by the party electing to terminate pursuant to this Section
10.1(b), and, provided further that such date shall be extended to October 1,
2004, if the delay is caused by the failure to receive the required Consents of
the Regulatory Authorities;
(c) by the Board of Directors of SouthTrust, ST-Sub or FloridaFirst
(provided that the terminating party is not then in breach of any representation
or warranty contained in this Agreement under the applicable standard set forth
in Section 8.1 of this Agreement in the case of FloridaFirst and Section 9.1 in
the case of SouthTrust or in breach of any covenant or agreement contained in
this Agreement) in the event of an inaccuracy of any representation or warranty
of the other party contained in this Agreement which cannot be or has not been
cured within thirty (30) days after the giving of written notice to the
breaching party of such inaccuracy and which inaccuracy would provide the
terminating party the ability to refuse to consummate the Merger under the
applicable standard set forth in Section 8.1 of this Agreement in the case of
FloridaFirst and Section 9.1 of this Agreement in the case of SouthTrust; or
(d) by the Board of Directors of SouthTrust, ST-Sub or FloridaFirst
(provided that the terminating party is not then in breach of any representation
or warranty contained in this Agreement under the applicable standard set forth
in Section 8.1 of this Agreement in the case of FloridaFirst and Section 9.1 in
the case of SouthTrust or in breach of any covenant or other agreement contained
in this Agreement) in the event of a material breach by the other party of any
covenant or
48
agreement contained in this Agreement which cannot be or has not been cured
within thirty (30) days after the giving of written notice to the breaching
party of such breach; or
(e) by the Board of Directors of SouthTrust, ST-Sub or FloridaFirst in
the event (i) any Consent of any Regulatory Authority required for consummation
of the Merger and the other transactions contemplated hereby shall have been
denied by final nonappealable action of such authority or if any action taken by
such authority is not appealed within the time limit for appeal, or (ii) the
shareholders of FloridaFirst fail to vote their approval of this Agreement and
the Merger and the transactions contemplated hereby as required by applicable
law at FloridaFirst's shareholders' meeting where the transactions were
presented to such shareholders for approval and voted upon; or
(f) by the Board of Directors of SouthTrust, ST-Sub or FloridaFirst
(provided that the terminating party is not then in breach of any representation
or warranty contained in this Agreement under the applicable standard set forth
in Section 8.1 of this Agreement in this case of FloridaFirst and Section 9.1 in
the case of SouthTrust or in breach of any covenant or agreement contained in
this Agreement) in the event that any of the conditions precedent to the
obligations of such party to consummate the Merger (other than as contemplated
by Section 10.1(e) of this Agreement) cannot be satisfied or fulfilled by the
date specified in Section 10.1(b) of this Agreement as the date after which such
party may terminate this Agreement.
Section 10.2 Effect of Termination; Termination Fee.
--------------------------------------
(a) In the event of the termination of this Agreement pursuant to
Section 10.1 of this Agreement, the Agreement shall terminate and have no
effect, except as otherwise provided herein and except that the provisions of
this Section 10.2, Section 10.5 and Article 11 of this Agreement shall survive
any such termination and abandonment.
(b) If, after the date of this Agreement, (i) an Acquisition
Transaction (as defined below) is offered, presented or proposed to FloridaFirst
or its shareholders, (ii) thereafter this Agreement and the Merger are
disapproved by FloridaFirst or by the shareholders of FloridaFirst and (iii)
within one year after termination of this Agreement as a result of disapproval
by FloridaFirst or by the shareholders of FloridaFirst, an Acquisition
Transaction is consummated or a definitive agreement is entered into by
FloridaFirst relating to an Acquisition Transaction (a "Trigger Event"), then
immediately upon the occurrence of a Trigger Event and in lieu of any other
rights and remedies of SouthTrust, FloridaFirst shall pay SouthTrust a cash
amount of $5,100,000 as an agreed-upon termination fee (the "Termination Fee").
For purposes of this Section 10.2, "Acquisition Transaction" shall, with respect
to FloridaFirst, mean any of the following: (a) a merger or consolidation, or
any similar transaction (other than the Merger) of any company with either
FloridaFirst or FF-Bank, (b) a purchase, lease or other acquisition of all or
substantially all the assets of either FloridaFirst or FF-Bank, (c) a purchase
or other acquisition of "beneficial ownership" by any "person" or "group" (as
such terms are defined in Section 13(d)(3) of the Securities Exchange Act)
(including by way of merger, consolidation, share exchange, or otherwise) which
would cause such person or group to become the beneficial owner of securities
representing 35% or more of the voting power of either FloridaFirst or
49
FF-Bank or any significant subsidiary of FloridaFirst, or (d) a tender or
exchange offer to acquire securities representing 35% or more of the voting
power of FloridaFirst.
(c) FloridaFirst and SouthTrust agree that the Termination Fee is fair
and reasonable in the circumstances. If a court of competent jurisdiction shall
nonetheless, by a final, nonappealable judgment, determine that the amount of
any such Termination Fee exceeds the maximum amount permitted by law, then the
amount of such Termination Fee shall be reduced to the maximum amount permitted
by law in the circumstances, as determined by such court of competent
jurisdiction.
Section 10.3 Amendments. To the extent permitted by law, this Agreement
----------
may be amended by a subsequent writing signed by each of SouthTrust, ST-Sub, and
FloridaFirst.
Section 10.4 Waivers. Subject to Section 11.11 hereof, prior to or at
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the Effective Time of the Merger, SouthTrust and ST-Sub, on the one hand, and
FloridaFirst, on the other hand, shall have the right to waive any default in
the performance of any term of this Agreement by the other, to waive or extend
the time for the compliance or fulfillment by the other of any and all of the
other's obligations under this Agreement and to waive any or all of the
conditions to its obligations under this Agreement, except any condition, which,
if not satisfied, would result in the violation of any law or any applicable
governmental regulation.
Section 10.5 Non-Survival of Representations and Warranties. The
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representations, warranties, covenants or agreements in this Agreement or in any
instrument delivered by SouthTrust or ST-Sub, or FloridaFirst shall not survive
the Effective Time of Merger, except that Section 5.3(b), Section 5.17, Section
6.3(b), Section 6.3(c), Section 6.3(d) and Section 6.4 shall survive the
Effective Time of the Merger, and any representation, warranty or agreement in
any agreement, contract, report, opinion, undertaking or other document or
instrument delivered hereunder in whole or in part by any person other than
SouthTrust, ST-Sub, FloridaFirst (or directors and officers thereof in their
capacities as such) shall survive the Effective Time of Merger; provided that no
representation or warranty of SouthTrust, ST-Sub or FloridaFirst contained
herein shall be deemed to be terminated or extinguished so as to deprive
SouthTrust or ST-Sub, on the one hand, and FloridaFirst, on the other hand, of
any defense at law or in equity which any of them otherwise would have to any
claim against them by any person, including, without limitation, any shareholder
or former shareholder of either party. No representation or warranty in this
Agreement shall be affected or deemed waived by reason of the fact that
SouthTrust, ST-Sub or FloridaFirst and/or its representatives knew or should
have known that any such representation or warranty was, is, might be or might
have been inaccurate in any respect.
ARTICLE 11
MISCELLANEOUS
Section 11.1 Alternative Structure. Notwithstanding anything to the
----------------------
contrary contained in this Agreement, prior to the Effective Time of the Merger,
ST-Sub shall be entitled to revise the structure of the Merger and/or the
subsidiary Merger and related transactions in order to (x)
50
substitute a SouthTrust Subsidiary in the place of ST-Sub prior to the Merger,
whereby such other SouthTrust Subsidiary would be the Continuing Corporation
upon consummation of the Merger or (y) provide that a different entity shall be
the surviving corporation in a merger provided that each of the transactions
comprising such revised structure shall (i) fully qualify as, or fully be
treated as part of, one or more tax-free reorganizations within the meaning of
Section 368(a) of the Code, and not change the amount of consideration to be
received by FloridaFirst's shareholders, (ii) be capable of consummation in as
timely a manner as the structure contemplated herein and (iii) not otherwise be
prejudicial to the interests of FloridaFirst's shareholders. This Agreement and
any related documents shall be appropriately amended in order to reflect any
such revised structure.
Section 11.2 Definitions. Except as otherwise provided herein, the
-----------
capitalized terms set forth below (in their singular and plural forms as
applicable) shall have the following meanings:
"Affiliate" of a person shall mean (i) any other person directly or
indirectly through one or more intermediaries controlling, controlled by or
under common control of such person, (ii) any executive officer, director,
partner, employer or direct or indirect beneficial owner of any 10% or greater
equity of voting interest of such person or (iii) any other persons for which a
person described in clause (ii) acts in any such capacity.
"Consent" shall mean a consent, approval or authorization, waiver,
clearance, exemption or similar affirmation by any person pursuant to any lease,
contract, permit, law, regulation or order.
"Environmental Law" means any applicable federal, state or local law,
statute, ordinance, rule, regulation, code, license, permit, authorization,
approval, consent, order, judgment, decree or injunction relating to (i) the
protection, preservation or restoration of the environment (including, without
limitation, air, water vapor, surface water, groundwater, drinking water supply,
surface soil, subsurface soil, plant and animal life or any other natural
resource), and/or (ii) the use, storage, recycling, treatment, generation,
transportation, processing, handling, labeling, production, release or disposal
of any substance presently listed, defined, designated or classified as
hazardous, toxic, radioactive or dangerous, or otherwise regulated, whether by
type or by substance as a component.
"Loan Property" means any property owned by FloridaFirst, FF-Bank or
any of their subsidiaries, or in which FloridaFirst, FF-Bank or any of their
subsidiaries holds a security interest, and, where required by the context,
includes the owner or operator of such property, but only with respect to such
property.
"Hazardous Material" means any pollutant, contaminant, or hazardous
substance within the meaning of the Comprehensive Environmental Response,
Compensation, and Liability Act, 42 U.S.C. ss. 9601 et seq., or any similar
federal, state or local law.
"Participation Facility" means any facility in which FloridaFirst,
FF-Bank or any of their subsidiaries has engaged in Participation in the
Management of such facility, and, where
51
required by the context, includes the owner or operator of such facility, but
only with respect to such facility.
"Participation in the Management" of a facility has the meaning set
forth in 40 X.X.X.xx. 300.1100(c).
"Material Adverse Effect," with respect to any party, shall mean any
event, change or occurrence which, together with any other event, change or
occurrence, has a material adverse impact on (i) the financial position,
business or results of operation, financial performance or prospects of such
party and their respective subsidiaries, taken as a whole, or (ii) the ability
of such party to perform its obligations under this Agreement or to consummate
the Merger and the other transactions contemplated by this Agreement; provided,
however, that "Material Adverse Effect" shall not be deemed to include (i) the
impact of actions or omissions of a party taken with the prior written consent
of the other in contemplation of the transactions contemplated by this
Agreement; (ii) changes in laws and regulations or interpretations thereof that
are generally applicable to the banking or savings institutions industries,
(iii) changes in generally accepted accounting principles, (iv) expenses
incurred in connection with this Agreement and the Merger including payments to
be made pursuant to employment and severance agreements and the termination of
other benefit plans, or (v) changes attributable to or resulting from changes in
general economic conditions generally affecting financial institutions including
changes in interest rates.
"Regulatory Authorities" shall mean, collectively, the Federal Trade
Commission, the United States Department of Justice, the Board of Governors of
the Federal Reserve System (the "FRB"), the Office of Thrift Supervision (the
"OTS"), the Federal Deposit Insurance Corporation (the "FDIC"), and all state
regulatory agencies having jurisdiction over the parties (including the Florida
Department of Financial Services), the National Association of Securities
Dealers, Inc., all national securities exchanges and the Securities and Exchange
Commission (the "SEC").
Section 11.3 Entire Agreement. This Agreement and the documents
-----------------
referred to herein contain the entire agreement among SouthTrust, ST-Sub and
FloridaFirst with respect to the transactions contemplated hereunder and this
Agreement supersedes all prior arrangements or understandings with respect
thereto, whether written or oral. The terms and conditions of this Agreement
shall inure to the benefit of and be binding upon the parties hereto and their
respective successors. Nothing in this Agreement, expressed or implied, is
intended to confer upon any person, firm, corporation or entity, other than the
parties hereto and their respective successors, any rights, remedies,
obligations or liabilities under or by reason of this Agreement.
Section 11.4 Notices. All notices or other communications which are
-------
required or permitted hereunder shall be in writing and sufficient if delivered
personally or sent by first class or registered or certified mail, postage
prepaid, telegram or telex or other facsimile transmission addressed as follows:
If to FloridaFirst:
52
FloridaFirst Bancorp, Inc.
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxx 00000-0000
Attention: Xxxxxxx X. Xxxxxx
Fax: (000) 000-0000
With a copy to:
Xxxxxxx Xxxxx, Esq.
Xxxxxxx Spidi & Xxxxx, PC
0000 Xxx Xxxx Xxxxxx, XX
Xxxxx 000 Xxxx
Xxxxxxxxxx, X.X. 00000
Fax: (000) 000-0000
If to ST-Sub or SouthTrust, then to:
SouthTrust Corporation
000 Xxxxx 00xx Xxxxxx
Xxxxxxxxxx, Xxxxxxx 00000
Attention: Xxxxx X. Xxxxxx
Fax: (000) 000-0000
With a copy to:
Xxxxxxx Xxxxx Rose & White LLP
One Federal Place
0000 Xxxxx Xxxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxx 00000
Attention: Xxxx X. Xxxx, Esq.
Fax: (000) 000-0000
All such notices or other communications shall be deemed to have been delivered
(i) upon receipt when delivery is made by hand, (ii) on the third (3rd) business
day after deposit in the United States mail when delivery is made by first
class, registered or certified mail, and (iii) upon transmission when made by
telegram, telex or other facsimile transmission if evidenced by a sender
transmission completed confirmation.
Section 11.5 Severability. If any term, provision, covenant or
------------
restriction contained in this Agreement is held by a court of competent
jurisdiction or other competent authority to be invalid, void or unenforceable
or against public or regulatory policy, the remainder of the terms, provisions,
covenants and restrictions contained in this Agreement shall remain in full
force and effect and in no way shall be affected, impaired or invalidated, if,
but only if, pursuant to such remaining terms, provisions, covenants and
restrictions the Merger may be consummated in substantially the same manner as
set forth in this Agreement as of the later of the date this Agreement was
executed or last amended.
53
Section 11.6 Costs and Expenses. Expenses incurred by FloridaFirst on
------------------
the one hand and SouthTrust on the other hand, in connection with or related to
the authorization, preparation and execution of this Agreement, the solicitation
of shareholder approval and all other matters related to the closing of the
transactions contemplated hereby, including all fees and expenses of agents,
representatives, counsel and accountants employed by either such party or its
affiliates, shall be borne solely and entirely by the party which has incurred
same.
Section 11.7 Captions. The captions as to contents of particular
--------
articles, sections or paragraphs contained in this Agreement and the table of
contents hereto are inserted only for convenience and are in no way to be
construed as part of this Agreement or as a limitation on the scope of the
particular articles, sections or paragraphs to which they refer.
Section 11.8 Counterparts. This Agreement may be executed in any number
------------
of counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same document with the same force and
effect as though all parties had executed the same document.
Section 11.9 Persons Bound; No Assignment. This Agreement shall be
------------------------------
binding upon and shall inure to the benefit of the parties hereto and their
respective successors, distributees, and assigns, but notwithstanding the
foregoing, this Agreement may not be assigned by any party hereto unless the
prior written consent of the other parties is first obtained (other than by
ST-Sub to another affiliate of SouthTrust).
Section 11.10 Governing Law; Arbitration. This Agreement is made and
---------------------------
shall be governed by and construed in accordance with the laws of the State of
Alabama (without respect to its conflicts of laws principles). ANY AND ALL
CONTROVERSIES AND CLAIMS ARISING OUT OF OR RELATING TO THIS AGREEMENT, OR THE
BREACH THEREOF, SHALL BE SETTLED BY FINAL AND BINDING ARBITRATION IN ACCORDANCE
WITH THE COMMERCIAL ARBITRATION RULES OF THE AMERICAN ARBITRATION ASSOCIATION
THEN IN EFFECT. Any such arbitration proceedings shall be and remain
confidential. The panel of arbitrators for any such arbitration shall consist of
three members of the American Arbitration Association, one of whom shall be
selected by SouthTrust, one of whom shall be selected by FloridaFirst, and the
third who will be selected by the other two. Judgment upon the decision rendered
by the arbitrators may be entered in any court having jurisdiction thereof. The
parties specifically acknowledge that this Agreement evidences a transaction
involving, affecting, affected by, and a part of, interstate commerce and that
this Agreement to arbitrate is governed by and enforceable under 9 U.S.C. xx.xx.
1 et seq. The place of arbitration shall be Birmingham, Alabama.
Section 11.11 Exhibits and Schedules. Each of the exhibits and
------------------------
schedules attached hereto is an integral part of this Agreement and shall be
applicable as if set forth in full at the point in the Agreement where reference
to it is made.
Section 11.12 Waiver. The waiver by any party of the performance of any
------
agreement, covenant, condition or warranty contained herein shall not invalidate
this Agreement, nor shall it be considered a waiver of any other agreement,
covenant, condition or warranty contained in this
54
Agreement. A waiver by any party of the time for performing any act shall not be
deemed a waiver of the time for performing any other act or an act required to
be performed at a later time. The exercise of any remedy provided by law, equity
or otherwise and the provisions in this Agreement for any remedy shall not
exclude any other remedy unless it is expressly excluded. The waiver of any
provision of this Agreement must be signed by the party or parties against whom
enforcement of the waiver is sought. This Agreement and any exhibit, memorandum
or schedule hereto or delivered in connection herewith may be amended only by a
writing signed on behalf of each party hereto.
Section 11.13 Construction of Terms. Whenever used in this Agreement,
---------------------
the singular number shall include the plural and the plural the singular.
Pronouns of one gender shall include all genders. Accounting terms used and not
otherwise defined in this Agreement have the meanings determined by, and all
calculations with respect to accounting or financial matters unless otherwise
provided for herein, shall be computed in accordance with generally accepted
accounting principles, consistently applied. References herein to articles,
sections, paragraphs, subparagraphs or the like shall refer to the corresponding
articles, sections, paragraphs, subparagraphs or the like of this Agreement. The
words "hereof", "herein", and terms of similar import shall refer to this entire
Agreement. Unless the context clearly requires otherwise, the use of the terms
"including", "included", "such as", or terms of similar meaning, shall not be
construed to imply the exclusion of any other particular elements.
Section 11.14 Specific Performance. The Parties hereto agree that
---------------------
irreparable damage would occur in the event that the provisions contained in the
Agreement were not performed in accordance with its specific terms or was
otherwise breached. It is accordingly agreed that the Parties shall be entitled
to seek an injunction or injunctions to prevent breaches of this Agreement and
to enforce specifically the terms and provisions thereof in any court of the
United States or any state having jurisdiction, this being in addition to any
other remedy to which they are entitled at law or in equity.
55
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered, and their respective seals hereunto affixed, by their
officers thereunto duly authorized, and have caused this Agreement to be dated
as of the date and year first above written.
[CORPORATE SEAL]
FLORIDAFIRST BANCORP, INC.
By: /s/Xxxxxxx X. Xxxxxx
-----------------------------------------
Xxxxxxx X. Xxxxxx
ATTEST: Its President and Chief Executive Officer
____________________________
[Name]
Its Secretary
[CORPORATE SEAL]
SOUTHTRUST OF ALABAMA, INC.
By: /s/Xxxxx X. Xxxxxx
-----------------------------------------
Xxxxx X. Xxxxxx
ATTEST:
/s/Xxxx X. Xxxxxxxx
---------------------------
Xxxx X. Xxxxxxxx
Its Secretary
[CORPORATE SEAL]
SOUTHTRUST CORPORATION
By: /s/Xxxxx X. Xxxxxx
-----------------------------------------
Xxxxx X. Xxxxxx
ATTEST:
/s/Xxxx X. Xxxxxxxx
---------------------------
Xxxx X. Xxxxxxxx
Its Secretary
