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EXHIBIT 2.1
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of August 12, 1998 (this
"Agreement"), between BancorpSouth, Inc., a Mississippi corporation
("BancorpSouth") and The First Corporation, an Alabama corporation (the
"Company" and collectively with BancorpSouth, the "Holding Companies").
WHEREAS, BancorpSouth is the sole shareholder of BancorpSouth Bank, a
Mississippi banking corporation ("BancorpSouth Bank");
WHEREAS, the Company is the sole shareholder of The First National Bank
of Opelika, a national banking association ("Opelika" and together with
BancorpSouth Bank, the "Banks");
WHEREAS, BancorpSouth and the Company have determined that it is in the
best interests of their respective companies and their shareholders to
consummate the business combination transactions provided for herein in which
(i) the Company will merge with and into BancorpSouth (the "Holding Company
Merger") and (ii) Opelika will merge with and into BancorpSouth Bank (the "Bank
Merger"), each subject to the terms and conditions set forth herein
(collectively, the "Merger"); and
WHEREAS, the parties desire to make certain representations, warranties
and agreements in connection with the Merger and also to prescribe certain
conditions to the Merger.
NOW THEREFORE, in consideration of the mutual covenants,
representations, warranties and agreements contained herein, the receipt and
sufficiency of which is hereby acknowledged, and intending to be legally bound
hereby, the parties agree as follows:
ARTICLE I
THE MERGER
1.1. The Merger.
(a) Subject to the terms and conditions of this Agreement, in
accordance with the Mississippi Business Corporation Act (the "MBCA") and the
Alabama Business Corporation Act (the "ABCA"), at the Effective Time (as defined
in Section 1.2 hereof), the Company shall merge with and into BancorpSouth.
BancorpSouth shall be the surviving corporation (hereinafter sometimes called
the "Surviving Corporation") in the Holding Company Merger, and shall continue
its corporate existence under the laws of the State of Mississippi. The name of
the Surviving Corporation shall continue to be "BancorpSouth, Inc." Upon
consummation of the Holding Company Merger, the separate corporate existence of
the Company shall terminate.
(b) Subject to the terms and conditions of this Agreement, in
accordance with the Mississippi Banking Act (the "MBA") and the National Bank
Act (the "NBA") at the Effective Time (as defined in Section 1.2 hereof), and
immediately after the Holding Company Merger, Opelika shall merge with and into
BancorpSouth Bank. BancorpSouth Bank shall be the surviving banking corporation
(hereinafter sometimes called the "Surviving Bank") in the Bank Merger, and
shall continue its corporate existence under the laws of the State of
Mississippi. The name of the Surviving Bank shall continue to be "BancorpSouth
Bank." Upon consummation of the Bank Merger, the separate corporate existence of
Opelika shall terminate.
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1.2. Effective Time.
(a) The Holding Company Merger shall become effective as set
forth in the articles of merger (the "Company Articles of Merger") which shall
be filed on the Closing Date (as defined in Section 10.1) with the Secretary of
State of the State of Mississippi (the "Mississippi Secretary") and the
Secretary of State of the State of Alabama (the "Alabama Secretary") with
respect to the Holding Company Merger.
(b) The Bank Merger shall become effective as set forth in the
articles of merger (the "Opelika Articles of Merger," and together with the
Company Articles of Merger, the "Articles of Merger") which shall be filed on
the Closing Date (as defined in Section 10.1) with the Mississippi Department of
Banking and Consumer Finance (the "Mississippi Department") and the Office of
the Comptroller of the Currency of the United States Department of Treasury (the
"OCC") with respect to the Bank Merger but shall occur immediately after the
Holding Company Merger.
(c) The term "Effective Time" shall be the date and time when
the Merger becomes effective, as set forth in the Articles of Merger.
1.3. Effects of the Merger.
(a) At and after the Effective Time, the Holding Company
Merger shall have the effects set forth in Section 79-4-11.06 of the MBCA and
Section 10-2B-11.06 of the ABCA.
(b) At and after the Effective Time, the Bank Merger shall
have the effects set forth in Section 3(e) (12 U.S.C. ss.215a(e)) of the NBA and
Section 81-5-85 of the MBA.
1.4. Conversion of Company Common Stock.
(a) At the Effective Time, subject to Section 2.2(e) hereof,
each share of the common stock, par value $0.05 per share, of the Company (the
"Company Common Stock") issued and outstanding immediately prior to the
Effective Time (other than (i) Company Dissenting Shares (as defined herein),
(ii) shares of Company Common Stock held directly or indirectly by BancorpSouth
or the Company or any of their respective Subsidiaries (as defined below), and
(iii) Trust Account Shares and DPC shares, as such terms are defined in Section
1.4(b) hereof), shall, by virtue of this Agreement and without any action on the
part of the holder thereof, be converted into and exchangeable for that number
of shares of the common stock, par value $2.50 per share, of BancorpSouth
("BancorpSouth Common Stock"), together with the number of BancorpSouth Rights
(as defined in Section 5.2 hereof) associated therewith, equal to the Exchange
Ratio (as defined below).
For purposes of this Agreement:
(i) the "Exchange Ratio" means the quotient, rounded
to the nearest 1/10,000, equal to (x) $174.8178, divided by
(y) the Average Closing Price (as defined below); provided,
however, that the Exchange Ratio as computed shall not be less
than 7.7043 nor greater than 10.4235 (the "Collar Provision")
and the Exchange Ratio shall be fixed at the applicable amount
set forth above if the actual Exchange Ratio is beyond such
amounts.
(ii) the "Average Closing Price" means the average of
the daily last sale prices of BancorpSouth Common Stock as
reported on the New York Stock Exchange ("NYSE") Composite
Transactions tape (as reported in the Wall Street Journal, or,
if not reported therein, in another alternative authoritative
source mutually agreeable to the parties) for the 10
consecutive full trading days in which shares of BancorpSouth
Common Stock are traded on the NYSE ending at the close of
trading on the Determination Date; and
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(iii) the "Determination Date" means the third
business day prior to the Closing Date.
(b) In the event that, without giving effect to the
limitations set forth in the Collar Provision, the computation of the Exchange
Ratio, computed in accordance with the definition above, shall result in a
number greater than 11.8132 then the Company may, at its option and without
penalty, terminate this Agreement by giving prior written notice thereof to
BancorpSouth on the Determination Date, unless, within 24 hours following the
giving of such notice, BancorpSouth agrees with the Company to adjust the
Exchange Ratio to an amount proposed by the Company that is not greater than the
Exchange Ratio as computed in accordance with this paragraph.
(c) In the event that, without giving effect to the
limitations set forth in the Collar Provision, the computation of the Exchange
Ratio, computed in accordance with the definition above, shall result in a
number less than 7.0879, then BancorpSouth may, at its option and without
penalty, terminate this Agreement by giving prior written notice thereof to the
Company on the Determination Date, unless, within 24 hours following the giving
of such notice, the Company agrees with BancorpSouth to adjust the Exchange
Ratio to an amount proposed by BancorpSouth that is not less than the Exchange
Ratio as computed in accordance with this paragraph.
(d) All of the shares of Company Common Stock converted into
BancorpSouth Common Stock pursuant to this Article I shall no longer be
outstanding and shall automatically be canceled and shall cease to exist, and
each certificate (each a "Certificate") previously representing any such shares
of Company Common Stock shall thereafter only represent the right to receive (i)
the number of whole shares of BancorpSouth Common Stock and (ii) the cash in
lieu of fractional shares into which the shares of Company Common Stock
represented by such Certificate have been converted pursuant to this Section 1.4
and Section 2.2(e) hereof. Company Certificates previously representing shares
of Company Common Stock shall be exchanged for certificates representing whole
shares of BancorpSouth Common Stock and cash in lieu of fractional shares issued
in consideration therefor upon the surrender of such Company Certificates in
accordance with Section 2.2 hereof, without any interest thereon. If, between
the date of this Agreement and the Effective Time, the shares of BancorpSouth
Common Stock shall be changed into a different number or class of shares by
reason of any reclassification, recapitalization, split-up, combination,
exchange of shares or readjustment, or a stock dividend thereon shall be
declared with a record date within said period (any such event, a "Adjustment
Event"), the Exchange Ratio shall be adjusted to result in the same aggregate
consideration being delivered to the Company's shareholders as would have been
received had such Adjustment Event not occurred.
(e) At the Effective Time, all shares of Company Common Stock
that are owned directly or indirectly by BancorpSouth or the Company or any of
their respective Subsidiaries (other than shares of Company Common Stock (i)
held directly or indirectly in trust accounts, managed accounts and the like or
otherwise held in a fiduciary capacity for the benefit of third parties (any
such shares, and shares of BancorpSouth Common Stock which are similarly held,
whether held directly or indirectly by BancorpSouth or the Company, as the case
may be, being referred to herein as "Trust Account Shares") and (ii) held by
BancorpSouth or the Company or any of their respective Subsidiaries in respect
of a debt previously contracted (any such shares of Company Common Stock, and
shares of BancorpSouth Common Stock which are similarly held, whether held
directly or indirectly by BancorpSouth or the Company, being referred to herein
as "DPC Shares")) shall be canceled and shall cease to exist and no stock of
BancorpSouth or other consideration shall be delivered in exchange therefor. All
shares of BancorpSouth Common Stock that are owned by the Company or any of its
Subsidiaries (other than Trust Account Shares and DPC Shares) shall become
treasury stock of BancorpSouth.
(f) Notwithstanding anything in this Agreement to the
contrary, shares of Company Common Stock which are outstanding immediately prior
to the Effective Time and with
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respect to which dissenters' rights shall have been properly demanded in
accordance with Article 13 of the ABCA ("Company Dissenting Shares") shall not
be converted into the right to receive, or be exchangeable for, BancorpSouth
Common Stock or cash in lieu of fractional shares but, instead, the holders
thereof shall be entitled to payment of the "fair value" of such Company
Dissenting Shares in accordance with the provisions of Section 13 of the ABCA,
provided, however, that if any holder fails to satisfy the requirements of
Article 13 of the ABCA, such holder or holders (as the case may be) shall not be
entitled to payment for such shares of Company Common Stock under such Article,
and each of such shares shall thereupon be deemed to have been converted into
the right to receive, and to have become exchangeable for, as of the Effective
Time, BancorpSouth Common Stock and/or cash in lieu of fractional shares,
without any interest thereon, as provided in Section 1.4(a) and Article II
hereof.
(g) BancorpSouth may terminate this Agreement if cash payments
in respect of fractional shares or dissenter's rights exceed the amount
permissible for the utilization of pooling of interests accounting treatment.
(h) At the Effective Time, all shares of Opelika common stock,
par value $1.00 per share ("Opelika Common Stock"), shall be canceled and shall
cease to exist and no stock of BancorpSouth, BancorpSouth Bank, or other
consideration shall be delivered in exchange therefor.
1.5. Stock Options.
(a) At the Effective Time, each option granted by the Company
to purchase shares of Company Common Stock (each a "Company Option") which is
outstanding and unexercised immediately prior thereto shall cease to represent a
right to acquire shares of Company Common Stock and shall be replaced by an
option issued under the appropriate stock option plan of BancorpSouth; provided
that new options shall only be issued to cover 3200 of the current 8000 shares
subject to Company Options and the remainder shall terminate prior to the
Effective Time, with new option being issued pro rata from such amount to
holders of Company Options:
(1) the number of shares of BancorpSouth Common Stock
to be subject to the new option shall be equal to the product
of the number of shares of Company Common Stock subject to the
original option and the Exchange Ratio, provided that any
fractional shares of BancorpSouth Common Stock resulting from
such multiplication shall be rounded down to the nearest whole
share; and
(2) the exercise price per share of BancorpSouth
Common Stock under the new option shall be equal to the
exercise price per share of Company Common Stock under the
original option divided by the Exchange Ratio, provided that
such exercise price shall be rounded down to the nearest cent.
The adjustment provided herein with respect to any options
which are incentive stock options" (as defined in Section 422
of the Internal Revenue Code of 1986, as amended (the "Code"))
shall be and is intended to be effected in a manner which is
consistent with Section 424(a) of the Code and, to the extent
it is not so consistent, such Section 424(a) shall override
anything to the contrary contained herein. The duration and
other terms of the new option shall be the same as the
original option except that all references to the Company
shall be deemed to be references to BancorpSouth.
(b) Prior to the Effective Time, BancorpSouth shall reserve
for issuance the number of shares of BancorpSouth Common Stock necessary to
satisfy BancorpSouth's obligations under this Section 1.5.
1.6. BancorpSouth Common Stock. Except for shares of BancorpSouth
Common Stock owned by the Company or any of its Subsidiaries (other than Trust
Account Shares and DPC
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Shares), which shall be converted into treasury stock of BancorpSouth as
contemplated by Section 1.4 hereof, the shares of BancorpSouth Common Stock
issued and outstanding immediately prior to the Effective Time shall be
unaffected by the Merger and such shares shall remain issued and outstanding.
1.7. Articles. At the Effective Time, the Amended and Restated Articles
of Incorporation of BancorpSouth, as in effect at the Effective Time, shall be
the articles of incorporation of the Surviving Corporation. At the Effective
Time, the Amended and Restated Articles of Association of BancorpSouth Bank, as
in effect at the Effective Time, shall be the articles of association of the
Surviving Bank.
1.8. By-Laws. At the Effective Time, the Bylaws of BancorpSouth, as in
effect immediately prior to the Effective Time, shall be the Bylaws of the
Surviving Corporation until thereafter amended in accordance with applicable
law. At the Effective Time, the Bylaws of BancorpSouth Bank, as in effect
immediately prior to the Effective Time, shall be the Bylaws of the Surviving
Bank until thereafter amended in accordance with applicable law.
1.9. Directors and Officers. The directors and officers of BancorpSouth
immediately prior to the Effective Time shall be the directors and officers of
the Surviving Corporation, each to hold office in accordance with the Restated
Articles of Incorporation and Bylaws of the Surviving Corporation until their
respective successors are duly elected or appointed and qualified. The directors
and officers of BancorpSouth Bank immediately prior to the Effective Time shall
be the directors and officers of the Surviving Bank, each to hold office in
accordance with the Restated Articles of Association and Bylaws of the Surviving
Bank until their respective successors are duly elected or appointed and
qualified
1.10. Tax Consequences; Accounting Treatment. It is intended that the
Merger shall (i) constitute a reorganization within the meaning of Section
368(a) of the Code and that this Agreement shall constitute a "plan of
reorganization" for the purposes of Section 368 of the Code, and (ii) be
accounted for as a "pooling of interests" under GAAP (as defined herein).
BancorpSouth may terminate this Agreement if KPMG Peat Marwick LLP shall advise
BancorpSouth and the Company in writing that the Merger does not qualify for
utilization of pooling of interests accounting treatment.
ARTICLE II
EXCHANGE OF SHARES
2.1. BancorpSouth to Make Shares Available. At or prior to the
Effective Time, BancorpSouth shall deposit, or shall cause to be deposited, with
a bank or trust company (the "Exchange Agent") selected by BancorpSouth and
reasonably satisfactory to the Company, for the benefit of the holders of
Certificates, for exchange in accordance with this Article II, certificates
representing the shares of BancorpSouth Common Stock and the cash in lieu of
fractional shares (such cash and certificates for shares of BancorpSouth Common
Stock, together with any dividends or distributions with respect thereto, being
hereinafter referred to as the "Exchange Fund") to be issued pursuant to Section
1.4 and paid pursuant to Section 2.2(a) in exchange for outstanding shares of
Company Common Stock.
2.2. Exchange of Shares.
(a) As soon as practicable after the Effective Time, and in no
event more than three business days thereafter, the Exchange Agent shall mail to
each holder of record of a Certificate or Certificates a form letter of
transmittal (which shall specify that delivery shall be effected, and risk of
loss and title to the Certificates shall pass, only upon delivery of the
certificates
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to the Exchange Agent) and instructions for use in effecting the surrender of
the Certificates in exchange for certificates representing the shares of
BancorpSouth Common Stock and the cash in lieu of fractional shares into which
the shares of Company Common Stock represented by such Certificate or
Certificates shall have been converted pursuant to this Agreement. The Company
shall have the right to review both the letter of transmittal and the
instructions prior to the Effective Time and provide reasonable comments
thereon. Upon surrender of a Certificate for exchange and cancellation to the
Exchange Agent, together with such letter of transmittal, duly executed, the
holder of such Certificate shall be entitled to receive in exchange therefor and
the Exchange Agent shall mail to such holder within three business days of such
surrender to the Exchange Agent (x) a certificate representing that number of
whole shares of BancorpSouth Common Stock to which such holder of Company Common
Stock shall have become entitled pursuant to the provisions of Article I hereof
and (y) a check representing the amount of cash in lieu of fractional shares, if
any, which such holder has the right to receive in respect of the Certificate
surrendered pursuant to the provisions of this Article II, and the Certificate
so surrendered shall forthwith be canceled. No interest will be paid or accrued
on the cash in lieu of fractional shares and unpaid dividends and distributions,
if any, payable to holders of Certificates.
(b) No dividends or other distributions declared after the
Effective Time with respect to BancorpSouth Common Stock and payable to the
holders of record thereof shall be paid to the holder of any unsurrendered
Certificate until the holder thereof shall surrender such Certificate in
accordance with this Article II. After the surrender of a Certificate in
accordance with this Article II, the record holder thereof shall be entitled to
receive any such dividends or other distributions, without any interest thereon,
which theretofore had become payable with respect to shares of BancorpSouth
Common Stock represented by such Certificate.
(c) If any certificate representing shares of BancorpSouth
Common Stock is to be issued in a name other than that in which the Certificate
surrendered in exchange therefor is registered, it shall be a condition of the
issuance thereof that the Certificate so surrendered shall be properly endorsed
(or accompanied by an appropriate instrument of transfer) and otherwise in
proper form for transfer, and that the person requesting such exchange shall pay
to the Exchange Agent in advance any transfer or other taxes required by reason
of the issuance of a certificate representing shares of BancorpSouth Common
Stock in any name other than that of the registered holder of the Certificate
surrendered, or required for any other reason, or shall establish to the
satisfaction of the Exchange Agent that such tax has been paid or is not
payable.
(d) After the Effective Time, there shall be no transfers on
the stock transfer books of the Company of the shares of Company Common Stock
which were issued and outstanding immediately prior to the Effective Time. If,
after the Effective Time, Certificates representing such shares are presented
for transfer to the Exchange Agent, they shall be canceled and exchanged for
certificates representing shares of BancorpSouth Common Stock as provided in
this Article II.
(e) Notwithstanding anything to the contrary contained herein,
no certificates or scrip representing fractional shares of BancorpSouth Common
Stock shall be issued upon the surrender for exchange of Certificates, no
dividend or distribution with respect to BancorpSouth Common Stock shall be
payable on or with respect to any fractional share, and such fractional share
interests shall not entitle the owner thereof to vote or to any other rights of
a shareholder of BancorpSouth. In lieu of the issuance of any such fractional
share, BancorpSouth shall pay to each former stockholder of the Company who
otherwise would be entitled to receive a fractional share of BancorpSouth Common
Stock an amount in cash equal to the product of (x) the Average Closing Price
and (y) the fraction of a share of BancorpSouth Common Stock which such holder
would otherwise be entitled to receive pursuant to Article I hereof.
(f) Any portion of the Exchange Fund that remains unclaimed by
the shareholders of the Company for 12 months after the Effective Time shall be
paid to BancorpSouth.
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Any shareholders of the Company who have not theretofore complied with this
Article II shall thereafter look only to BancorpSouth for payment of their
shares of BancorpSouth Common Stock, cash in lieu of fractional shares and
unpaid dividends and distributions on BancorpSouth Common Stock deliverable in
respect of each share of Company Common Stock such stockholder holds as
determined pursuant to this Agreement, in each case, without any interest
thereon. Notwithstanding the foregoing, none of BancorpSouth, the Company, the
Exchange Agent or any other person shall be liable to any former holder of
shares of Company Common Stock for any amount properly delivered to a public
official pursuant to applicable abandoned property, escheat or similar laws.
(g) In the event any Certificate shall have been lost, stolen
or destroyed, upon the making of an affidavit of that fact by the person
claiming such Certificate to be lost, stolen or destroyed and, if required by
BancorpSouth, the posting by such person of a bond in such amount as
BancorpSouth may direct as indemnity against any claim that may be made against
it with respect to such Certificate, the Exchange Agent will issue in exchange
for such lost, stolen or destroyed Certificate the shares of BancorpSouth Common
Stock and cash in lieu of fractional shares deliverable in respect thereof
pursuant to this Agreement.
ARTICLE III
DISCLOSURE SCHEDULES; STANDARDS
FOR REPRESENTATIONS AND WARRANTIES
3.1 Disclosure Schedules. The parties acknowledge that as of the date
of this Agreement, the Company has not delivered the Company Disclosure Schedule
and BancorpSouth has not delivered the BancorpSouth Disclosure Schedule (and,
with the Company Disclosure Schedule, the "Disclosure Schedules"). Both parties
covenant and agree to deliver their respective Disclosure Schedules no later
than the close of business on August 25, 1998, and that the Disclosure Schedules
are subject to the reasonable review of, and acceptance by, the receiving party.
Notwithstanding anything in this Agreement to the contrary, the mere inclusion
of an item in a Disclosure Schedule as an exception to a representation or
warranty shall not be deemed an admission by a party that such item represents a
material exception or material fact, event or circumstance or that such item has
had or could be reasonably expected to have a Material Adverse Effect (as
defined herein) with respect to either the Company or BancorpSouth,
respectively.
3.2. Standards.
(a) No representation or warranty of the Company contained in
Article IV or of BancorpSouth contained in Article V shall be deemed untrue or
incorrect for any purpose under this Agreement as a consequence of the existence
or absence of any fact, circumstance or event, unless such fact, circumstance or
event, individually or when taken together with all other facts, circumstances
or events inconsistent with such representation or warranty contained in Article
IV, in the case of the Company, or Article V, in the case of BancorpSouth, has
had or could be reasonably expected to have a Material Adverse Effect with
respect to (i) the Company or (ii) BancorpSouth, respectively.
(b) As used in this Agreement, the term "Material Adverse
Effect" means, with respect to BancorpSouth or the Company, as the case may be,
a material adverse effect on (i) the business, results of operations or
financial condition of such party and its Subsidiaries taken as a whole, other
than any such effect attributable to or resulting from (w) any change in banking
or similar laws, rules or regulations of general applicability or
interpretations thereof by courts or governmental authorities, (x) any change in
GAAP or regulatory accounting principles applicable to banks or their holding
companies generally, (y) any action or omission of the Company or BancorpSouth
or any Subsidiary of either of them taken with the express prior written consent
of the other party hereto, or (z) any expenses incurred by such party where such
expenses are contemplated
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by or reasonably incurred in connection with this Agreement or the transactions
contemplated hereby or (ii) the ability of such party and its Subsidiaries to
consummate the transactions contemplated hereby. As used in this Agreement, the
word "Subsidiary" when used with respect to any party means any corporation,
partnership or other organization, whether incorporated or unincorporated, which
is consolidated with such party for financial reporting purposes.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Subject to Article III, the Company hereby represents and warrants to
BancorpSouth as follows:
4.1. Corporate Organization.
(a) The Company is a corporation duly organized, validly
existing and in good standing under the laws of the State of Alabama. The
Company has the corporate power and authority to own or lease all of its
properties and assets and to carry on its business as it is now being conducted,
and 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 owned or leased by it makes such licensing or
qualification necessary. The Company is duly registered as a bank holding
company under the Bank Holding Company Act of 1956, as amended (the "BHC Act").
The Articles of Incorporation and Bylaws of the Company (the "Company Governing
Documents"), copies of which have previously been made available to
BancorpSouth, are true and correct copies of such documents as in effect as of
the date of this Agreement. The Company has no Subsidiaries other than Opelika
and except for Opelika, the Company does not own (other than in a bona fide
fiduciary capacity or in satisfaction of a debt previously contracted)
beneficially, directly or indirectly, any shares of any equity securities or
similar interests of any person, or any interest in a partnership or joint
venture of any kind.
(b) Opelika is a national banking association duly organized,
validly existing and in good standing under the laws of the United States. The
deposit accounts of Opelika are insured by the Federal Deposit Insurance
Corporation (the "FDIC") through the Bank Insurance Fund to the fullest extent
permitted by law, and all premiums and assessments required to be paid in
connection therewith have been paid when due. Opelika has the corporate power
and authority to own or lease all of its properties and assets and to carry on
its business as it is now being conducted and 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 the location of the properties and assets owned or
leased by it makes such licensing or qualification necessary. The Articles of
Association and Bylaws of Opelika, copies of which have previously been made
available to BancorpSouth, are true and correct copies of such documents as in
effect as of the date of this Agreement. Opelika has no Subsidiaries and does
not own (other than in a bona fide fiduciary capacity or in satisfaction of a
debt previously contracted) beneficially, directly or indirectly, any shares of
any equity securities or similar interests of any person, or any interest in a
partnership or joint venture of any kind except shares in any Federal Home Loan
Bank, any Federal Reserve Bank, the Student Loan Marketing Association, and
other investment securities held by Opelika in the ordinary course of business
as reflected on the financial statements of Opelika delivered to BancorpSouth.
(c) The minute books of the Company and Opelika contain true
and correct records of all meetings and other corporate actions held or taken
since July 1, 1993 of their respective shareholders and Boards of Directors
(including committees of their respective Boards of Directors).
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4.2. Capitalization.
(a) The authorized capital stock of the Company consists of
5,000,000 shares of Company Common Stock. As the date hereof, there are 232,321
shares of Company Common Stock outstanding and no shares of Company Common Stock
held by the Company as treasury stock. At On the Closing Date, no more than
236,818 shares of Company Common Stock will be outstanding and no shares of
Company Common Stock held by the Company as treasury stock. There are (i) no
shares of Company Common Stock reserved for issuance upon exercise of
outstanding stock options or otherwise except for (x) shares of Company Common
Stock reserved for issuance pursuant to the incentive stock option plan of the
under which options to acquire 8000 shares of Company Common Stock are
outstanding, and pursuant to the employee stock ownership with 401 (k) plan, and
(y) 47,822 shares of Company Common Stock reserved for issuance upon exercise of
the option (the "Option") to be issued to BancorpSouth pursuant to the Stock
Option Agreement, to be entered into on the date hereof, between BancorpSouth
and Company (the "Stock Option Agreement"). All of the issued and outstanding
shares of Company Common Stock have been duly authorized and validly issued and
are fully paid, nonassessable, and were issued in compliance with and are
currently free of all preemptive rights (including without limitation, those
granted by Section 4.2 of the Restated Articles of Incorporation of the
Company), with no personal liability attaching to the ownership thereof. Except
for options outstanding under the Company Option Plan and the Option, the
Company does not have and is not bound by any outstanding subscriptions,
options, warrants, calls, commitments or agreements of any character calling for
the purchase or issuance of any shares of Company Common Stock or any other
equity security of the Company or any securities representing the right to
purchase or otherwise receive any shares of Company Common Stock or any other
equity security of the Company. The names of the optionees, the date of each
option to purchase Company Common Stock granted, the number of shares subject to
each such option, the expiration date of each such option, and the price at
which each such option may be exercised under the Company Option Plans, if any,
shall be set forth in Section 4.2(a) of the Company Disclosure Schedule.
(b) The Company owns, directly or indirectly, all of the
issued and outstanding shares of the capital stock of Opelika, free and clear of
all liens, charges, encumbrances and security interests whatsoever, and all of
such shares are duly authorized and validly issued and are fully paid,
nonassessable and free of preemptive rights, with no personal liability
attaching to the ownership thereof. Opelika is not bound by any outstanding
subscriptions, options, warrants, calls, commitments or agreements of any
character calling for the purchase or issuance of any shares of capital stock or
any other equity security of Opelika or any securities representing the right to
purchase or otherwise receive any shares of capital stock or any other equity
security of such Subsidiary.
4.3. Authority; No Violation.
(a) The Company has full corporate power and authority to
execute and deliver this Agreement and the Stock Option Agreement and, upon the
receipt of shareholder approval of the Agreement, to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement and the Stock
Option Agreement and the consummation of the transactions contemplated hereby
and thereby have been duly and validly approved by the Board of Directors of the
Company. The Board of Directors of the Company has directed that this Agreement
and the transactions contemplated hereby be submitted to the Company's
shareholders for approval at a meeting of such shareholders and, except for the
adoption of this Agreement by the requisite vote of the Company's shareholders,
no other corporate proceedings on the part of the Company are necessary to
approve this Agreement and the Stock Option Agreement and to consummate the
transactions contemplated hereby and thereby. This Agreement and the Stock
Option Agreement have been duly and validly executed and delivered by the
Company and constitutes a valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms, except as
enforcement may be limited by general principles of equity whether applied in a
court of law or a court of equity and by bankruptcy, insolvency and similar laws
affecting creditors' rights and remedies generally.
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(b) Neither the execution and delivery of this Agreement or
the Stock Option Agreement by the Company, nor the consummation by the Company
of the transactions contemplated hereby or thereby, nor compliance by the
Company with any of the terms or provisions hereof or thereof, will (i) violate
any provision of the Company Governing Documents or the Opelika Governing
Documents, or (ii) assuming that the consents and approvals referred to in
Section 4.4 hereof are duly obtained, (x) violate any statute, code, ordinance,
rule, regulation, judgment, order, writ, decree or injunction applicable to the
Company or any of its Subsidiaries, or any of their respective properties or
assets, or (y) violate, conflict with, result in a breach of any provision
under, 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 or a right
of termination or cancellation under, accelerate the performance required by, or
result in the creation of any lien, pledge, security interest, charge or other
encumbrance upon any of the respective properties or assets of the Company or
any of its Subsidiaries under, any of the terms, conditions or provisions of any
note, bond, mortgage, indenture, deed of trust, license, lease, agreement or
other instrument or obligation to which the Company or any of its Subsidiaries
is a party, or by which they or any of their respective properties or assets may
be bound or affected.
4.4. Consents and Approvals. Except for (a) the filing of applications
and notices, as applicable, with the Board of Governors of the Federal Reserve
System (the "Federal Reserve Board"), the OCC, and with the FDIC, and approval
of such applications and notices, (b) the filing of such applications, filings,
authorizations, orders and approvals as may be required under applicable state
law, (c) the filing with the SEC of a proxy statement in definitive form
relating to the meetings of the Company's shareholders to be held in connection
with this Agreement and the transactions contemplated hereby (the "Proxy
Statement") and the filing and declaration of effectiveness of a post-effective
amendment to the shelf registration statement on Form S-4 (such shelf
registration statement and any post-effective amendment thereto relating to this
transaction, or any other S-4 Registration Statement used in connection with the
Merger, the "S-4") in which the Proxy Statement will be included as a
prospectus, (d) the approval of this Agreement by the requisite vote of the
shareholders of the Company, (e) the filing of the Articles of Merger with the
Mississippi Secretary, the Alabama Secretary, the Mississippi Department and the
OCC, as applicable, and (f) approval for listing of BancorpSouth Common Stock to
be issued in the Merger on the New York Stock Exchange ("NYSE"), no consents or
approvals of or filings or registrations with any court, administrative agency
or commission or other governmental authority or instrumentality (each a
"Governmental Entity") or with any third party are necessary in connection with
(1) the execution and delivery by the Company of this Agreement and the Stock
Option Agreement and (2) the consummation by the Company and Opelika of the
Merger and the other transactions contemplated hereby and thereby.
4.5. Reports. The Company and Opelika have timely filed all reports,
registrations and statements, together with any amendments required to be made
with respect thereto, that they were required to file since December 31, 1996
with (i) the Federal Reserve Board, (ii) the OCC, (iii) the FDIC, (iv) any
Federal Reserve Bank, (v) any state banking commissions or any other state
regulatory authority (each a "State Regulator") and (vi) any other
self-regulatory organization ("SRO") (collectively, the "Regulatory Agencies"),
and have paid all fees and assessments due and payable in connection therewith.
Except for normal examinations conducted by a Regulatory Agency in the regular
course of the business of the Company and its Subsidiaries, no Regulatory Agency
has initiated any proceeding or, to the knowledge of the Company, investigation
into the business or operations of the Company or any of its Subsidiaries since
December 31, 1995. Except as set forth in Section 4.5 of the Company Disclosure
Schedule, there is no unresolved violation, criticism, or exception by any
Regulatory Agency with respect to any report or statement relating to any
examinations of the Company or any of its Subsidiaries.
4.6. Financial Statements. The Company has previously made available to
BancorpSouth copies of (a) the consolidated statements of condition of the
Company and its Subsidiaries as of December 31 for the fiscal years 1996 and
1997, and the related consolidated statements of earnings,
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changes in shareholders' equity and cash flows for the fiscal years 1996 through
1997, inclusive (collectively, the "Company Financial Statements"), in each case
accompanied by the audit report of Brantley, Stephens, and Xxxxxxx, LLP,
independent public accountants with respect to the Company. The December 31,
1997 consolidated statement of condition of the Company (including the related
notes, where applicable) fairly presents the consolidated financial position of
the Company and its Subsidiaries as of the date thereof, and the other financial
statements referred to in this Section 4.6 (including the related notes, where
applicable) fairly present the results of the consolidated operations and
consolidated financial position of the Company and its Subsidiaries for the
respective fiscal periods or as of the respective dates therein set forth; each
of such statements (including the related notes, where applicable) complies with
applicable accounting requirements; and each of such statements (including the
related notes, where applicable) has been prepared in accordance with generally
accepted accounting principles ("GAAP") consistently applied during the periods
involved, except as indicated in the notes thereto. The books and records of the
Company and its Subsidiaries have been, and are being, maintained in accordance
with GAAP and any other applicable legal and accounting requirements.
4.7. Broker's Fees. Except for Xxxx Xxxxxxxxxx & Co. Investment
Banking, neither the Company nor any Subsidiary of the Company 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 or the Stock Option
Agreement.
4.8. Absence of Certain Changes or Events.
(a) Since December 31, 1997, except as set forth in Section
4.8 of the Company Disclosure Schedule, (i) there has been no change or
development or combination of changes or developments which, individually or in
the aggregate, has had a Material Adverse Effect on the Company and (ii) the
Company and its Subsidiaries have carried on their respective businesses in the
ordinary course consistent with their past practices.
(b) Neither the Company nor any of its Subsidiaries has,
except as set forth in Section 4.8 of the Company Disclosure Schedule, (i)
increased the wages, salaries, compensation, pension, or other fringe benefits
or perquisites payable to any executive officer, employee, or director from the
amount thereof in effect as of December 31, 1997 (which amounts have been
previously disclosed to BancorpSouth), granted any severance or termination pay,
entered into any contract to make or grant any severance or termination pay, or
paid any bonus (except for salary and benefit increases and bonus payments made
in the ordinary course of business consistent with past practices), (ii)
suffered any strike, work stoppage, slow-down, or other labor disturbance, (iii)
been a party to a collective bargaining agreement, contract or other agreement
or understanding with a labor union or organization, or (iv) had any union
organizing activities.
4.9. Legal Proceedings.
(a) Neither the Company nor any of its Subsidiaries is a party
to any, and there are no pending or, to the Company's knowledge, threatened,
legal, administrative, arbitral or other proceedings, claims, actions or
governmental or regulatory investigations of any nature against the Company or
any of its Subsidiaries or challenging the validity or propriety of the
transactions contemplated by this Agreement or the Stock Option Agreement, other
than regularly scheduled examinations and similar routine investigations made by
bank regulatory officials in the course of their supervision of the Company and
Opelika.
(b) There is no injunction, order, judgment, decree, or unique
regulatory restriction imposed upon the Company, any of its Subsidiaries or the
assets of the Company or any of its Subsidiaries.
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4.10. Taxes.
(a) Each of the Company and its Subsidiaries has (i) duly and
timely filed (including applicable extensions granted without penalty) all Tax
Returns (as hereinafter defined) required to be filed at or prior to the
Effective Time, and such Tax Returns are true and correct, and (ii) paid in full
or made adequate provision in the Company Financial Statements (in accordance
with GAAP) for all Taxes (as hereinafter defined) shown to be due on such Tax
Returns. Except as set forth in Section 4.10 of the Company Disclosure Schedule,
as of the date hereof neither the Company nor any of its Subsidiaries has
requested any extension of time within which to file any Tax Returns in respect
of any fiscal year which have not since been filed and no request for waivers of
the time to assess any Taxes are pending or outstanding, and as of the date
hereof, with respect to each taxable period of the Company and its Subsidiaries,
the federal and state income Tax Returns of the Company and its Subsidiaries
have been audited by the Internal Revenue Service or appropriate state tax
authorities or the time for assessing and collecting income Tax with respect to
such taxable period has closed and such taxable period is not subject to review.
There are no liens with respect to Taxes upon any of the assets of the Company
or its Subsidiaries. Deferred Taxes of the Company and its Subsidiaries have
been provided for in accordance with GAAP.
(b) For the purposes of this Agreement, "Taxes" shall mean all
taxes, charges, fees, levies, penalties or other assessments imposed by any
United States federal, state, local or foreign taxing authority, including, but
not limited to income, excise, property, sales, transfer, franchise, payroll,
withholding, social security or other taxes, including any interest, penalties
or additions attributable thereto. For purposes of this Agreement, "Tax Return"
shall mean any return, report, information return or other document (including
any related or supporting information) with respect to Taxes.
4.11. Employees.
(a) Section 4.11(a) of the Company Disclosure Schedule sets
forth a true and correct list of each deferred compensation plan, incentive
compensation plan, equity compensation plan, "welfare" plan, fund or program
(within the meaning of section 3(l) of the Employee Retirement Income Security
Act of 1974, as amended ("ERISA")); "pension" plan, fund or program (within the
meaning of section 3(2) of ERISA); each employment, termination or severance
agreement; and each other employee benefit plan, fund, program, agreement or
arrangement, in each case, that is sponsored, maintained or contributed to or
required to be contributed to (the "Plans") by the Company, any of its
Subsidiaries or by any trade or business, whether or not incorporated (an "ERISA
Affiliate"), all of which together with the Company would be deemed a "single
employer" within the meaning of Section 4001 of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA") or Section 414(b), (c), (m) or (o) of
the Code, for the benefit of any employee or former employee of the Company, any
Subsidiary thereof or any ERISA Affiliate.
(b) The Company has heretofore made available to BancorpSouth
with respect to each of the Plans true and correct copies of each of the
following documents if applicable: (i) the Plan document; (ii) the actuarial
report, if any, for such Plan for each of the last two years, (iii) the most
recent determination letter from the Internal Revenue Service for such Plan and
(iv) the most recent summary plan description and related summaries of material
modifications.
(c) Except as set forth in Section 4.11(c) of the Company
Disclosure Schedule, each of the Plans are in compliance with the applicable
provisions of the Code and ERISA; each of the Plans intended to be "qualified"
within the meaning of section 401(a) of the Code has received a favorable
determination letter from the IRS and to the knowledge of the Company, nothing
has occurred which could reasonably be expected to result in the revocation of
such letter; no Plan has an accumulated or waived funding deficiency within the
meaning of section 412 of the Code; neither the Company nor any ERISA Affiliate
has incurred, directly or indirectly, any liability to or on account of
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a Plan pursuant to Title IV of ERISA (other than PBGC premiums); to the
knowledge of the Company no proceedings have been instituted to terminate any
Plan that is subject to Title IV of ERISA; no "reportable event," as such term
is defined in section 4043(c) of ERISA, has occurred with respect to any Plan
(other than a reportable event with respect to which the thirty day notice
period has been waived); no condition exists that presents a material risk to
the Company of incurring a liability to or on account of a Plan pursuant to
Title IV of ERISA; no Plan is a multiemployer plan (within the meaning of
section 4001(a)(3) of ERISA) and no Plan is a multiple employer plan as defined
in Section 413 of the Code; and there are no pending, or to the knowledge of the
Company, threatened or anticipated claims (other than routine claims for
benefits) by, on behalf of or against any of the Plans or any trusts related
thereto.
(d) Except as set forth in Section 4.11(d) of the Company
Disclosure Schedule or as otherwise contemplated by this Agreement or any other
agreements entered into by any party hereto in connection with the execution
hereof, neither the execution and delivery of this Agreement nor the
consummation of the transactions contemplated hereby will (either alone or in
conjunction with any other event) (i) result in any payment (including, without
limitation, severance, unemployment compensation, "excess parachute payment"
within the meaning of Section 280G of the Code, forgiveness of indebtedness or
otherwise) becoming due to any officer, director or employee of the Company or
any of its Subsidiaries under any Plan or otherwise, (ii) increase any benefits
payable under any Plan or (iii) result in any acceleration of the time of
payment or vesting of any such benefits.
4.12. Company Information. The information relating to the Company and
its Subsidiaries which is provided to BancorpSouth by the Company or its
representatives for inclusion in the Proxy Statement and the S-4, or in any
other document filed with any other regulatory agency in connection herewith,
will not contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in light of the
circumstances in which they are made, not misleading. The Proxy Statement
(except for such portions thereof that relate only to BancorpSouth or any of its
Subsidiaries) will comply with the provisions of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), and the rules and regulations thereunder.
4.13. Compliance with Applicable Law. Except as set forth in Section
4.13 of the Company Disclosure Schedule, the Company and each of its
Subsidiaries hold, and have at all times held, all licenses, franchises, permits
and authorizations necessary for the lawful conduct of their respective
businesses under and pursuant to all, and have complied with and are not in
default in any respect under any, applicable law, statute, order, rule,
regulation, published policy and/or guideline of any Governmental Entity
relating to the Company or any of its Subsidiaries, and neither the Company nor
any of its Subsidiaries has received notice, and the Company does not know, of
any violations of any of the above.
4.14. Certain Contracts.
(a) Except as set forth in Section 4.14 of the Company
Disclosure Schedule, neither the Company nor any of its Subsidiaries is a party
to or bound by any contract (whether written or oral) (i) with respect to the
employment of any directors or consultants, (ii) which, upon the consummation of
the transactions contemplated by this Agreement, will (either alone or upon the
occurrence of any additional acts or events) result in any payment or benefits
(whether of severance pay or otherwise) becoming due, or the acceleration or
vesting of any rights to any payment or benefits, from BancorpSouth, the
Company, the Surviving Corporation or any of their respective Subsidiaries to
any director or consultant thereof, (iii) which is a material contract (as
defined in Item 601(b)(10) of Regulation S-K of the Securities and Exchange
Commission (the "SEC")) to be performed after the date of this Agreement, (iv)
which is a consulting agreement (including data processing, software programming
and licensing contracts) not terminable on 90 days or less notice involving the
payment of more than $50,000 per annum, or (v) which materially restricts the
conduct
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of any line of business by the Company or any of its Subsidiaries. Each
contract, arrangement, commitment or understanding of the type described in this
Section 4.14(a) is referred to herein as a "Company Contract". The Company has
previously delivered or made available to BancorpSouth true and correct copies
of each Company Contract.
(b) (i) Each Company Contract described in clause (iii) of
Section 4.14(a) is valid and binding and in full force and effect, (ii) the
Company and each of its Subsidiaries has performed all obligations required to
be performed by it to date under each Company Contract described in clause (iii)
of Section 4.14(a), (iii) no event or condition exists which constitutes or,
after notice or lapse of time or both, would constitute, a default on the part
of the Company or any of its Subsidiaries under any Company Contract described
in clause (iii) of Section 4.14(a), and (iv) no other party to any Company
Contract described in clause (iii) of Section 4.14(a) is, to the knowledge of
the Company, in default in any respect thereunder.
4.15. Agreements with Regulatory Agencies. Neither the Company nor any
of its Subsidiaries is subject to any cease-and-desist or other order issued by,
or is a party to any written agreement, consent agreement or memorandum of
understanding with, or is a party to any commitment letter or similar
undertaking to, or is subject to any order or directive by, or is a recipient of
any extraordinary supervisory letter from, or has adopted any board resolutions
at the request of (each, a "Regulatory Agreement"), any Regulatory Agency or
other Governmental Entity that restricts the conduct of its business or that in
any manner relates to its capital adequacy, its credit policies, its management
or its business, nor has the Company or any of its Subsidiaries been advised by
any Regulatory Agency or other Governmental Entity that it is considering
issuing or requesting any Regulatory Agreement.
4.16. Business Combination Provision; Takeover Laws. The Company has
taken all action required to be taken by it in order to exempt this Agreement
and the Stock Option Agreement and the transactions contemplated hereby and
thereby from, and this Agreement and the Stock Option Agreement and the
transactions contemplated hereby and thereby are exempt from, the requirements
of any "moratorium", "control share", "fair price" or other anti-takeover laws
and regulations (collectively, "Takeover Laws") of the State of Alabama or other
applicable jurisdiction, if any.
4.17. Administration of Fiduciary Accounts. The Company and each of its
Subsidiaries has properly administered all accounts for which it acts as a
fiduciary, including but not limited to accounts for which it serves as a
trustee, agent, custodian, personal representative, guardian, conservator or
investment advisor, in accordance with the terms of the governing documents and
applicable state and federal law and regulation and common law. Neither the
Company nor any of its Subsidiaries nor any of their respective directors,
officers or employees has committed any breach of trust with respect to any such
fiduciary account, and the accountings for each such fiduciary account are true
and correct and accurately reflect the assets of such fiduciary account.
4.18. Environmental Matters.
(a) Except as set forth in Section 4.18 of the Company
Disclosure Schedule, to the knowledge of the Company, each of the Company and
its Subsidiaries and each of the Participation Facilities and the Loan
Properties (each as hereinafter defined), are in compliance with all applicable
federal, state and local laws, including common law, regulations and ordinances,
and with all applicable decrees, orders and contractual obligations relating to
pollution or the discharge of, or exposure to, Hazardous Materials (as
hereinafter defined) in the environment or workplace ("Environmental Laws");
(b) There is no suit, claim, action or proceeding, pending or,
to the knowledge of the Company, threatened, before any Governmental Entity or
other forum in which the Company,
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any of its Subsidiaries, any Participation Facility or any Loan Property, has
been or, with respect to threatened proceedings, may be, named as a defendant
(x) for alleged noncompliance (including by any predecessor) with any
Environmental Laws, or (y) relating to the release, threatened release or
exposure to any Hazardous Material whether or not occurring at or on a site
owned, leased or operated by the Company or any of its Subsidiaries, any
Participation Facility or any Loan Property;
(c) Except as set forth in Section 4.18 of the Company
Disclosure Schedule, to the knowledge of the Company, during the period of (x)
the Company's or any of its Subsidiaries' ownership or operation of any of their
respective current or former properties, (y) the Company's or any of its
Subsidiaries' participation in the management of any Participation Facility, or
(z) the Company's or any of its Subsidiaries' interest in a Loan Property, there
has been no release of Hazardous Materials in, on, under or affecting any such
property. To the knowledge of the Company, prior to the period of (x) the
Company's or any of its Subsidiaries' ownership or operation of any of their
respective current or former properties, (y) the Company's or any of its
Subsidiaries' participation in the management of any Participation Facility, or
(z) the Company's or any of its Subsidiaries' interest in a Loan Property, there
was no release of Hazardous Materials in, on, under or affecting any such
property, Participation Facility or Loan Property; and
(d) The following definitions apply for purposes of this
Section 4.18: (x) "Hazardous Materials" means any chemicals, pollutants,
contaminants, wastes, toxic substances, petroleum or other regulated substances
or materials, (y) "Loan Property" means any property in which the Company or any
of its Subsidiaries holds a security interest, and, where required by the
context, said term means the owner or operator of such property; and (z)
"Participation Facility" means any facility in which the Company or any of its
Subsidiaries participates in the management and, where required by the context,
said term means the owner or operator of such property.
4.19. Approvals. As of the date of this Agreement, the Company knows of
no reason why all regulatory approvals required for the consummation of the
transactions contemplated hereby (including, without limitation, the Merger)
should not be obtained.
4.20. Loan Portfolio.
(a) Except as set forth in Section 4.20 of the Company
Disclosure Schedule, neither the Company nor any of its Subsidiaries is a party
to any written or oral loan agreement, note or borrowing arrangement (including,
without limitation, leases, credit enhancements, commitments, guarantees and
interest-bearing assets) (collectively, "Loans"), other than Loans the unpaid
principal balance of which does not exceed $100,000, under the terms of which
the obligor was, as of June 30, 1998, over 90 days delinquent in payment of
principal or interest or in default of any other provision. Section 4.20 of the
Company Disclosure Schedule sets forth all of the Loans in original principal
amount in excess of $100,000 of the Company or any of its Subsidiaries that as
of June 30, 1998, were classified as "Doubtful" or "Loss", or words of similar
import, together with the principal amount of and accrued and unpaid interest on
each such Loan and the identity of the borrower thereunder.
(b) Each Loan in original principal amount in excess of
$100,000 (i) is evidenced by notes, agreements or other evidences of
indebtedness which are, to the best knowledge of the Company after appropriate
due diligence, true, genuine and what they purport to be, (ii) to the extent
secured, has been secured by valid liens and security interests which have been
perfected and (iii) is the legal, valid and binding obligation of the obligor
named therein, enforceable in accordance with its terms, subject to bankruptcy,
insolvency, fraudulent conveyance and other laws of general applicability
relating to or affecting creditors' rights and to general equity principles.
4.21. Property. Each of the Company and its Subsidiaries has good and
marketable title free and clear of all liens, encumbrances, mortgages, pledges,
charges, defaults or equitable interests
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to all of the properties and assets, real and personal, tangible or intangible,
which are reflected on the consolidated statement of financial condition of the
Company as of December 31, 1997 or acquired after such date, except (i) liens
for taxes not yet due and payable or contested in good faith by appropriate
proceedings, (ii) pledges to secure deposits and other liens incurred in the
ordinary course of business, (iii) such imperfections of title, easements and
encumbrances, if any, as do not interfere with the use of the respective
property as such property is used on the date of this Agreement, (iv) for
dispositions and encumbrances of, or on, such properties or assets in the
ordinary course of business or (v) mechanics', materialmen's, workmen's,
repairmen's, warehousemen's, carrier's and other similar liens and encumbrances
arising in the ordinary course of business. All leases pursuant to which the
Company or any Subsidiary of the Company, as lessee, leases real or personal
property are valid and enforceable in accordance with their respective terms and
neither the Company nor any of its Subsidiaries nor, to the knowledge of the
Company, any other party thereto, is in default thereunder.
4.22. Accounting for the Merger; Reorganization. As of the date of this
Agreement, the Company has no reason to believe that the Merger will fail to
qualify (i) for pooling-of-interests treatment under GAAP or (ii) as a
reorganization under Section 368(a) of the Code.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF BANCORPSOUTH
Subject to Article III, BancorpSouth hereby represents and warrants to
the Company as follows:
5.1. Corporate Organization.
(a) BancorpSouth is a corporation duly organized, validly
existing and in good standing under the laws of the State of Mississippi.
BancorpSouth has the corporate power and authority to own or lease all of its
properties and assets and to carry on its business as it is now being conducted,
and is duly licensed or qualified to do business in each jurisdiction in which
the nature of the business conducted by it, or to be conducted by it pursuant to
consequences of the Merger, or the character or location of the properties and
assets owned or leased by it makes such licensing or qualification necessary
(including the State of Alabama). BancorpSouth is duly registered as a bank
holding company under the BHC Act. The Amended and Restated Articles of
Incorporation and Bylaws of BancorpSouth (the "BancorpSouth Governing
Documents"), copies of which have previously been made available to the Company,
are true and correct copies of such documents as in effect as of the date of
this Agreement.
(b) BancorpSouth Bank is a Mississippi state bank validly
existing and in good standing. The deposit accounts of BancorpSouth Bank are
insured by the FDIC through the Bank Insurance Fund or Savings Association
Insurance Fund to the fullest extent permitted by law, and all premiums and
assessments required in connection therewith have been paid when due. Each of
BancorpSouth's other Subsidiaries is duly organized, validly existing and in
good standing under the laws of the jurisdiction of its incorporation. Each
Subsidiary of BancorpSouth has the corporate power and authority to own or lease
all of its properties and assets and to carry on its business as it is now being
conducted, and 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 owned or leased by it makes such licensing or
qualification necessary. The Articles of Association and Bylaws of BancorpSouth
Bank (the "Bank Governing Documents"), copies of which have previously been made
available to the Company, are true and correct copies of such documents as in
effect as of the date of this Agreement.
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(c) The minute books of BancorpSouth and each of its
Subsidiaries contain true and correct records of all meetings and other
corporate actions held or taken since December 31, 1996 of their respective
shareholders and Boards of Directors (including committees of their respective
Boards of Directors).
5.2. Capitalization.
(a) The authorized capital stock of BancorpSouth consists of
500,000,000 shares of BancorpSouth Common Stock. As of June 18, 1998, there were
44,792,042 shares of BancorpSouth Common Stock issued and outstanding, and as of
December 31, 1997, 105,052 shares of BancorpSouth Common Stock were held in
BancorpSouth's treasury. As of the date of this Agreement, no shares of
BancorpSouth Common Stock were reserved for issuance, except with respect to
employee benefit plans, stock option plans, BancorpSouth's rights plan pursuant
to which shareholders have the right to receive common stock under certain
circumstances (the "BancorpSouth Rights"), that certain Agreement and Plan of
Merger, dated as of May 2, 1998, between BancorpSouth and Merchants Capital
Corporation, and that certain Merger Agreement, dated as of June 19, 1998, among
BancorpSouth, Alabama Bancorp., Inc., Highland Bank, and First Community Bank of
the South, and the transactions contemplated therein. All of the issued and
outstanding shares of BancorpSouth Common Stock have been duly authorized and
validly issued and are fully paid, nonassessable and free of preemptive rights,
with no personal liability attaching to the ownership thereof. Except as
referred to above with respect to reserved shares and for BancorpSouth's
dividend reinvestment plan, BancorpSouth does not have and is not bound by any
outstanding subscriptions, options, warrants, calls, commitments or agreements
of any character calling for the purchase or issuance of any shares of
BancorpSouth Common Stock or any other equity securities of BancorpSouth or any
securities representing the right to purchase or otherwise receive any shares of
BancorpSouth Common Stock. The shares of BancorpSouth Common Stock to be issued
pursuant to the Merger will be duly authorized and validly issued and, at the
Effective Time, all such shares will be fully paid, nonassessable and free of
preemptive rights, with no personal liability attaching to the ownership
thereof.
(b) Schedule 22 to BancorpSouth's Annual Report on Form 10-K
for the year ended December 31, 1997, sets forth a true and correct list of all
of BancorpSouth Subsidiaries as of the date of this Agreement. BancorpSouth
owns, directly or indirectly, all of the issued and outstanding shares of
capital stock of each of the Subsidiaries of BancorpSouth, free and clear of all
liens, charges, encumbrances and security interests whatsoever, and all of such
shares are duly authorized and validly issued and are fully paid, nonassessable
and free of preemptive rights, with no personal liability attaching to the
ownership thereof. As of the date of this Agreement, no Subsidiary of
BancorpSouth has or is bound by any outstanding subscriptions, options,
warrants, calls, commitments or agreements of any character with any party that
is not a direct or indirect Subsidiary of BancorpSouth calling for the purchase
or issuance of any shares of capital stock or any other equity security of such
Subsidiary or any securities representing the right to purchase or otherwise
receive any shares of capital stock or any other equity security of such
Subsidiary.
5.3. Authority; No Violation.
(a) BancorpSouth has full corporate power and authority to
execute and deliver this Agreement and the Stock Option Agreement and to
consummate the transactions contemplated hereby and thereby. Other than the
approval of the Boards of Directors of BancorpSouth and BancorpSouth Bank, which
have not been obtained on the date of execution hereof and upon which receipt
the obligations of BancorpSouth and BancorpSouth Bank are expressly conditioned,
no other corporate proceedings on the part of BancorpSouth are necessary to
approve this Agreement and the Stock Option Agreement and to consummate the
transactions contemplated hereby and thereby. Each of this Agreement and the
Stock Option Agreement has been duly and validly executed and delivered by
BancorpSouth and when approved and authorized as provided above, will constitute
a
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valid and binding obligation of BancorpSouth, enforceable against BancorpSouth
in accordance with its terms, except as enforcement may be limited by general
principles of equity whether applied in a court of law or a court of equity and
by bankruptcy, insolvency and similar laws affecting creditors' rights and
remedies generally.
(b) Neither the execution and delivery of this Agreement or
the Stock Option Agreement by BancorpSouth, nor the consummation by BancorpSouth
of the transactions contemplated hereby or thereby, nor compliance by
BancorpSouth with any of the terms or provisions hereof or thereof, will (i)
violate any provision of the BancorpSouth Governing Documents or the Bank
Governing Documents, or (ii) assuming that the consents and approvals referred
to in Sections 5.3(a) and 5.4 are duly obtained, (x) violate any statute, code,
ordinance, rule, regulation, judgment, order, writ, decree or injunction
applicable to BancorpSouth or any of its Subsidiaries or any of their respective
properties or assets, or (y) violate, conflict with, result in a breach of any
provision of or the loss of any benefit under, 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 or a right of termination or cancellation under,
accelerate the performance required by, or result in the creation of any lien,
pledge, security interest, charge or other encumbrance upon any of the
respective properties or assets of BancorpSouth or any of its Subsidiaries
under, any of the terms, conditions or provisions of any note, bond, mortgage,
indenture, deed of trust, license, lease, agreement or other instrument or
obligation to which BancorpSouth or any of its Subsidiaries is a party, or by
which they or any of their respective properties or assets may be bound or
affected.
5.4. Consents and Approvals. Except for (a) the filing of applications
and notices, as applicable, with the Federal Reserve Board and the FDIC, and
approval of such applications and notices, (b) such applications, filings,
authorizations, orders and approvals as may be required under applicable state
law, (c) the filing with the SEC of the Proxy Statement and the filing and
declaration of effectiveness of the S-4, (d) the filing of the Articles of
Merger with the Mississippi Secretary, the Alabama Secretary, the Mississippi
Department and the OCC, as applicable, (e) such filings and approvals as are
required to be made or obtained under the securities or "Blue Sky" laws of
various states in connection with the issuance of the shares of BancorpSouth
Common Stock pursuant to this Agreement and (f) approval for listing of
BancorpSouth Common Stock to be issued in the Merger on the NYSE, no consents or
approvals of or filings or registrations with any Governmental Entity or with
any third party are necessary in connection with (1) the execution and delivery
by BancorpSouth of this Agreement and (2) the consummation by BancorpSouth of
the Merger and the other transactions contemplated hereby.
5.5. Reports. BancorpSouth and each of its Subsidiaries have timely
filed all reports, registrations and statements, together with any amendments
required to be made with respect thereto, that they were required to file since
December 31, 1996 with any Regulatory Agency, and have paid all fees and
assessments due and payable in connection therewith. Except for matters
disclosed pursuant to Section 5.16 and normal examinations conducted by a
Regulatory Agency in the regular course of the business of BancorpSouth and its
Subsidiaries, no Regulatory Agency has initiated any proceeding or, to the
knowledge of BancorpSouth, investigation into the business or operations of
BancorpSouth or any of its Subsidiaries since December 31, 1996. Except for
matters disclosed pursuant to Section 5.16, there is no unresolved violation,
criticism, or exception by any Regulatory Agency with respect to any report or
statement relating to any examinations of BancorpSouth or any of its
Subsidiaries.
5.6. Financial Statements. BancorpSouth has previously made available
to the Company copies of (i) the consolidated balance sheets of BancorpSouth and
its Subsidiaries as of December 31 for the fiscal years 1996 and 1997 and the
related consolidated statements of income, changes in shareholders' equity and
cash flows for the fiscal years 1996 through 1997, inclusive, as reported in
BancorpSouth's Annual Report on Form 10-K for the fiscal year ended December 31,
1997, filed with the SEC under the Exchange Act, in each case accompanied by the
audit report of KPMG Peat
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Marwick LLP, independent public accountants with respect to BancorpSouth, and
(ii) the unaudited consolidated balance sheet of BancorpSouth and its
Subsidiaries as of March 31, 1998, and the related unaudited consolidated
statements of income, changes in shareholders' equity and cash flows for the
three months ended March 31, 1998, as reported in BancorpSouth's Quarterly
Report on Form 10-Q for the quarter ended March 31, 1998, filed with the SEC
under the Exchange Act (collectively, the "BancorpSouth Financial Statements")
(and will provide to the Company as soon as available the statements referred to
in clause (ii) for the quarter ending June 30, 1998). The December 31, 1997
consolidated balance sheet of BancorpSouth (including the related notes, where
applicable) fairly presents the consolidated financial position of BancorpSouth
and its Subsidiaries as of the date thereof, and the other financial statements
referred to in this Section 5.6 (including the related notes, where applicable)
fairly present and the financial statements to be filed with the SEC after the
date hereof will fairly present (subject, in the case of the unaudited
statements, to recurring audit adjustments normal in nature and amount), the
results of the consolidated operations and changes in shareholders' equity and
consolidated financial position of BancorpSouth and its Subsidiaries for the
respective fiscal periods or as of the respective dates therein set forth; each
of such statements (including the related notes, where applicable) complies, and
the financial statements to be filed with the SEC after the date hereof will
comply, with applicable accounting requirements and with the published rules and
regulations of the SEC with respect thereto; and each of such statements
(including the related notes, where applicable) has been, and the financial
statements to be filed with the SEC after the date hereof will be, prepared in
accordance with GAAP consistently applied during the periods involved, except as
indicated in the notes thereto or, in the case of unaudited statements, as
permitted by Form 10-Q. The books and records of BancorpSouth and its
Subsidiaries have been, and are being, maintained in accordance with GAAP and
any other applicable legal and accounting requirements.
5.7. Broker's Fees. Neither BancorpSouth nor any Subsidiary of
BancorpSouth, 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 or the Stock Option Agreement.
5.8. Absence of Certain Changes or Events. Except as may be disclosed
in any BancorpSouth Report (as defined in Section 5.12) filed with the SEC prior
to the date of this Agreement, since December 31, 1997, there has been no change
or development or combination of changes or developments which, individually or
in the aggregate, has had a Material Adverse Effect on BancorpSouth.
5.9. Legal Proceedings.
(a) Except as set forth in BancorpSouth's Annual Report on
Form 10-K for the year ended December 31, 1997 or as disclosed pursuant to
Section 5.16 hereto, neither BancorpSouth nor any of its Subsidiaries is a party
to any and there are no pending or, to BancorpSouth's knowledge, threatened,
legal, administrative, arbitral or other proceedings, claims, actions or
governmental or regulatory investigations of any nature against BancorpSouth or
any of its Subsidiaries or challenging the validity or propriety of the
transactions contemplated by this Agreement or the Stock Option Agreement.
(b) There is no injunction, order, judgment, decree, or
regulatory restriction imposed upon BancorpSouth, any of its Subsidiaries or the
assets of BancorpSouth or any of its Subsidiaries.
5.10. Taxes. Except as set forth in Section 5.10 of BancorpSouth
Disclosure Schedule, each of BancorpSouth and its Subsidiaries has (i) duly and
timely filed (including applicable extensions granted without penalty) all Tax
Returns required to be filed at or prior to the Effective Time, and such Tax
Returns are true and correct, and (ii) paid in full or made adequate provision
in the
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BancorpSouth Financial Statements (in accordance with GAAP) for all Taxes shown
to be due on such Tax Returns. Except as set forth in Section 5.10 of
BancorpSouth Disclosure Schedule, as of the date hereof, neither BancorpSouth
nor any of its Subsidiaries has requested any extension of time within which to
file any Tax Returns in respect of any fiscal year which have not since been
filed and no request for waivers of the time to assess any Taxes are pending or
outstanding, and as of the date hereof, with respect to each taxable period of
BancorpSouth and its Subsidiaries, the federal and state income Tax Returns of
BancorpSouth and its Subsidiaries have been audited by the Internal Revenue
Service or appropriate state tax authorities or the time for assessing and
collecting income Tax with respect to such taxable period has closed and such
taxable period is not subject to review. There are no liens with respect to
Taxes upon any of the assets of BancorpSouth or its Subsidiaries. Deferred Taxes
of the BancorpSouth and its Subsidiaries have been provided for in accordance
with GAAP.
5.11. Employees.
(a) Section 5.11(a) of BancorpSouth Disclosure Schedule sets
forth a true and correct list of each deferred compensation plan, incentive
compensation plan, equity compensation plan, "welfare" plan, fund or program
(within the meaning of Section 3(1) of the ERISA); "pension" plan, fund or
program (within the meaning of Section 3(2) of ERISA); each employment,
termination or severance agreement; and each other employee benefit plan, fund,
program, agreement or arrangement, in each case, that is sponsored, maintained
or contributed to or required to be contributed to as of the date of this
Agreement (the "BancorpSouth Plans") by BancorpSouth, any of its Subsidiaries or
by any trade or business, whether or not incorporated (a "BancorpSouth ERISA
Affiliate"), all of which together with BancorpSouth would be deemed a "single
employer" within the meaning of Section 4001 of ERISA, for the benefit of any
employee or former employee of BancorpSouth, any Subsidiary or any BancorpSouth
ERISA Affiliate.
(b) Each of BancorpSouth Plans is in compliance with the
applicable provisions of the Code and ERISA; each of BancorpSouth Plans intended
to be "qualified" within the meaning of Section 401(a) of the Code has received
or is in the process of obtaining a favorable determination letter from the IRS
and to the knowledge of BancorpSouth, nothing has occurred which could
reasonably be expected to result in the revocation of such letter; or refusal by
the IRS to issue such a letter, no BancorpSouth Plan has an accumulated or
waived funding deficiency within the meaning of Section 412 of the Code; neither
BancorpSouth nor any BancorpSouth ERISA Affiliate has incurred, directly or
indirectly, any liability to or on account of a BancorpSouth Plan pursuant to
Title IV of ERISA (other than PBGC premiums); to the knowledge of BancorpSouth
no proceedings have been instituted to terminate any BancorpSouth Plan that is
subject to Title IV of ERISA; no "reportable event," as such term is defined in
Section 4043(c) of ERISA, has occurred with respect to any BancorpSouth Plan
(other than a reportable event with respect to which the thirty day notice
period has been waived); no condition exists that presents a material risk to
BancorpSouth of incurring a liability to or on account of a BancorpSouth Plan
pursuant to Title IV of ERISA; no BancorpSouth Plan is a multiemployer plan
(within the meaning of Section 4001(a)(3) of ERISA) and no BancorpSouth Plan is
a multiple employer plan as defined in Section 413 of the Code; and there are no
pending, or, to the knowledge of BancorpSouth, threatened or anticipated claims
(other than routine claims for benefits) by, on behalf of or against any of
BancorpSouth Plans or any trusts related thereto.
5.12. SEC Reports. BancorpSouth has previously made available to the
Company a true and correct copy of each (a) final registration statement,
prospectus, report, schedule and definitive proxy statement filed since December
31, 1996 by BancorpSouth with the SEC pursuant to the Securities Act of 1933
(the "Securities Act") or the Exchange Act (the "BancorpSouth Reports") and (b)
communication mailed by BancorpSouth to its shareholders since December 31,
1996, and no such registration statement, prospectus, report, schedule, proxy
statement or communication contained any untrue statement of a material fact or
omitted to state any material fact required to be stated
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therein or necessary in order to make the statements therein, in light of the
circumstances in which they were made, not misleading, except that information
as of a later date shall be deemed to modify information as of an earlier date.
BancorpSouth has timely filed all BancorpSouth Reports and other documents
required to be filed by it under the Securities Act and the Exchange Act, and,
as of their respective dates, all BancorpSouth Reports complied with the
published rules and regulations of the SEC with respect thereto.
5.13. BancorpSouth Information. The information relating to
BancorpSouth and its Subsidiaries to be contained in the Proxy Statement and the
S-4, or in any other document filed with any other regulatory agency in
connection herewith, will not contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements therein, in light
of the circumstances in which they are made, not misleading. The Proxy Statement
(except for such portions thereof that relate only to the Company or any of its
Subsidiaries) will comply with the provisions of the Exchange Act and the rules
and regulations thereunder. The S-4 will comply with the provisions of the
Securities Act and the rules and regulations thereunder.
5.14. Compliance with Applicable Law. BancorpSouth and each of its
Subsidiaries holds, and has at all times held, all licenses, franchises, permits
and authorizations necessary for the lawful conduct of their respective
businesses under and pursuant to all, and other than matters addressed by
Section 5.16 have complied with and are not in default in any respect under any,
applicable law, statute, order, rule, regulation, policy and/or guideline of any
Governmental Entity relating to BancorpSouth or any of its Subsidiaries and
neither BancorpSouth nor any of its Subsidiaries has received notice, and
BancorpSouth does not know, of any violations of any of the above.
5.15. Ownership of Company Common Stock; Affiliates and Associates. As
of the date hereof, neither BancorpSouth nor any of its affiliates or associates
(as such terms are defined under the Exchange Act) (i) beneficially owns,
directly or indirectly, or (ii) is a party to any agreement, arrangement or
understanding for the purpose of acquiring, holding, voting or disposing of any
shares of capital stock of the Company (other than Trust Account Shares and DPC
Shares).
5.16. Agreements with Regulatory Agencies. Except as disclosed to the
Company orally or in writing, neither BancorpSouth nor any of its Subsidiaries
is subject to any cease-and-desist or other order issued by, or is a party to
any written agreement, consent agreement or memorandum of understanding with, or
is a party to any commitment letter or similar undertaking to, or is subject to
any order or directive by, or is a recipient of any extraordinary supervisory
letter from, or has adopted any board resolutions at the request of (each, a
"BancorpSouth Regulatory Agreement"), any Regulatory Agency or other
Governmental Entity that restricts the conduct of its business or that in any
manner relates to its capital adequacy, its credit policies, its management or
its business, nor has BancorpSouth or any of its Subsidiaries been advised by
any Regulatory Agency or other Governmental Entity that it is considering
issuing or requesting any BancorpSouth Regulatory Agreement.
5.17. Environmental Matters.
(a) Each of BancorpSouth and its Subsidiaries and, to the
knowledge of BancorpSouth, each of the Participation Facilities and the Loan
Properties (each as hereinafter defined), are in compliance with all
Environmental Laws;
(b) There is no suit, claim, action or proceeding, pending or,
to the knowledge of BancorpSouth, threatened, before any Governmental Entity or
other forum in which BancorpSouth, any of its Subsidiaries, any Participation
Facility or any Loan Property, has been or, with respect to threatened
proceedings, may be, named as a defendant (x) for alleged noncompliance
(including by any predecessor) with any Environmental Laws, or (y) relating to
the release, threatened release or
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exposure to any Hazardous Material whether or not occurring at or on a site
owned, leased or operated by BancorpSouth or any of its Subsidiaries, any
Participation Facility or any Loan Property;
(c) To the knowledge of BancorpSouth during the period of (x)
BancorpSouth's or any of its Subsidiaries' ownership or operation of any of
their respective current or former properties, (y) BancorpSouth's or any of its
Subsidiaries' participation in the management of any Participation Facility, or
(z) BancorpSouth's or any of its Subsidiaries' interest in a Loan Property,
there has been no release of Hazardous Materials in, on, under or affecting any
such property. To the knowledge of BancorpSouth, prior to the period of (x)
BancorpSouth's or any of its Subsidiaries' ownership or operation of any of
their respective current or former properties, (y) BancorpSouth's or any of its
Subsidiaries' participation in the management of any Participation Facility, or
(z) BancorpSouth's or any of its Subsidiaries' interest in a Loan Property,
there was no release of Hazardous Materials in, on, under or affecting any such
property, Participation Facility or Loan Property; and
(d) The following definitions apply for purposes of this
Section 5.17: (x) "Loan Property" means any property in which BancorpSouth or
any of its Subsidiaries holds a security interest, and, where required by the
context, said term means the owner or operator of such property; and (y)
"Participation Facility" means any facility in which BancorpSouth or any of its
Subsidiaries participates in the management and, where required by the context,
said term means the owner or operator of such property.
5.18. Approvals. As of the date of this Agreement, BancorpSouth knows
of no reason why all regulatory approvals required for the consummation of the
transactions contemplated hereby (including, without limitation, the Merger)
should not be obtained.
5.19. Loan Portfolio.
(a) Except as set forth in Section 5.19 of BancorpSouth
Disclosure Schedule, neither BancorpSouth nor any of its Subsidiaries is a party
to any written or oral Loan, other than Loans the unpaid principal balance of
which does not exceed $100,000, under the terms of which the obligor was, as of
May 31, 1998, over 90 days delinquent in payment of principal or interest or in
default of any other provision. Section 5.19 of BancorpSouth Disclosure Schedule
sets forth all Loans in original principal amounts in excess of $100,000 of
BancorpSouth or any of its Subsidiaries that were as of May 31, 1998, classified
as "Doubtful" or "Loss", or words of similar import.
(b) Each Loan in original principal amount in excess of
$100,000 (i) is evidenced by notes, agreements or other evidences of
indebtedness which are true, genuine and what they purport to be, (ii) to the
extent secured, has been secured by valid liens and security interests which
have been perfected and (iii) is the legal, valid and binding obligation of the
obligor named therein, enforceable in accordance with its terms, subject to
bankruptcy, insolvency, fraudulent conveyance and other laws of general
applicability relating to or affecting creditors' rights and to general equity
principles.
5.20. Property. Each of BancorpSouth and its Subsidiaries has good and
marketable title free and clear of all liens, encumbrances, mortgages, pledges,
charges, defaults or equitable interests to all of the properties and assets,
real and personal, tangible or intangible, and which are reflected on the
consolidated statement of financial condition of BancorpSouth as of December 31,
1997 or acquired after such date, except (i) liens for taxes not yet due and
payable or contested in good faith by appropriate proceedings, (ii) pledges to
secure deposits and other liens incurred in the ordinary course of business,
(iii) such imperfections of title, easements and encumbrances, if any, as do not
interfere with the use of the respective property as such property is used on
the date of this Agreement, (iv) for dispositions and encumbrances of, or on,
such properties or assets in the ordinary course of business or (v) mechanics',
materialmen's, workmen's, repairmen's, warehousemen's,
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carrier's and other similar liens and encumbrances arising in the ordinary
course of business. All leases pursuant to which BancorpSouth or any Subsidiary
of BancorpSouth, as lessee, leases real or personal property are valid and
enforceable in accordance with their respective terms and neither BancorpSouth
nor any of its Subsidiaries nor, to the knowledge of BancorpSouth, any other
party thereto is in default thereunder.
5.21. Accounting for the Merger; Reorganization. As of the date of this
Agreement, BancorpSouth has no reason to believe that the Merger will fail to
qualify (i) for pooling-of-interests treatment under GAAP or (ii) as a
reorganization under Section 368(a) of the Code.
ARTICLE VI
COVENANTS RELATING TO CONDUCT OF BUSINESS
6.1. Covenants of the Company. During the period from the date of this
Agreement and continuing until the Effective Time, except as expressly
contemplated or permitted by this Agreement and the Stock Option Agreement or
with the prior written consent of BancorpSouth, the Company and its Subsidiaries
shall carry on their respective businesses in the ordinary course consistent
with past practice. Without limiting the generality of the foregoing, and except
as set forth in Section 6.1 of the Company Disclosure Schedule or as otherwise
contemplated by this Agreement and the Stock Option Agreement or as consented to
in writing by BancorpSouth, the Company shall not, and shall not permit any of
its Subsidiaries to:
(a) declare or pay any dividends on, or make other
distributions in respect of any of its capital stock during any period;
provided, however, that the Company may declare and pay a single cash dividend
immediately prior to the Effective Time of $2.25 per share for the Company's
1998 fiscal year.
(b) (i) repurchase, redeem or otherwise acquire (except for
the acquisition of Trust Account Shares and DPC Shares, as such terms are
defined in Section 1.4(b) hereof) any shares of the capital stock of the Company
or any Subsidiary of the Company, or any securities convertible into or
exercisable for any shares of the capital stock of the Company or any Subsidiary
of the Company, (ii) split, combine or reclassify any shares of its capital
stock or issue or authorize or propose the issuance of any other securities in
respect of, in lieu of or in substitution for shares of its capital stock, or
(iii) issue, deliver or sell, or authorize or propose the issuance, delivery or
sale of, any shares of its capital stock or any securities convertible into or
exercisable for, or any rights, warrants or options to acquire, any such shares,
or enter into any agreement with respect to any of the foregoing, except, in the
case of clauses (ii) and (iii), for the issuance of Company Common Stock (x)
upon the exercise or fulfillment of rights or options issued or existing
pursuant to employee benefit plans or in accordance with past practices with
respect to the Company's employee stock ownership and 401(k) plan, programs or
arrangements, all to the extent outstanding and in existence on the date of this
Agreement and in accordance with their present terms or (y) pursuant to the
Stock Option Agreement;
(c) amend its Articles of Incorporation, Bylaws or other
similar governing documents;
(d) authorize or permit any of its officers, directors,
employees or agents to directly or indirectly solicit, initiate, facilitate or
encourage any inquiries relating to, or the making of any proposal which
constitutes, a "takeover proposal" (as defined below), or participate in any
discussions or negotiations, or provide third parties with any nonpublic
information, relating to any such inquiry or proposal or otherwise facilitate
any effort or attempt to make a takeover proposal; provided, however, that the
Company may communicate information about any such takeover proposal to its
shareholders if, in the judgment of the Company's Board of Directors, based upon
the
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written advice of outside counsel addressed to the Company and BancorpSouth,
such communication is required under applicable law, provided further, however,
that the Company may, and may authorize and permit its officers, directors,
employees or agents to, (i) provide or cause to be provided such information,
and (ii) participate in such discussions or negotiations, if in the judgment of
the Company's Board of Directors, based upon the written advice of outside
counsel addressed to the Company and BancorpSouth, the failure to do so would
cause the members of such Board of Directors to breach their fiduciary duties
under applicable laws. The Company will immediately cease and cause to be
terminated any existing activities, discussions or negotiations previously
conducted with any parties other than BancorpSouth with respect to any of the
foregoing. The Company will take all actions necessary or advisable to inform
the appropriate individuals or entities referred to in the first sentence hereof
of the obligations undertaken in this Section 6.1(d). The Company will notify
BancorpSouth immediately if any such inquiries or takeover proposals are
received by, any such information is requested from, or any such negotiations or
discussions are sought to be initiated or continued with, the Company, and the
Company will promptly (within 24 hours) inform BancorpSouth in writing of all of
the relevant details with respect to the foregoing including the material terms
and conditions of such request or takeover proposal and the identity of the
person or group making such request or proposal. The Company will keep
BancorpSouth fully informed of the status and details (including amendments or
proposed amendments) of any such request or takeover proposal. As used in this
Agreement, "takeover proposal" shall mean any tender or exchange offer, proposal
for a merger, consolidation or other business combination involving the Company
or any Subsidiary of the Company or any proposal or offer to acquire in any
manner a substantial equity interest in, or a substantial portion of the assets
of, the Company or any Subsidiary of the Company other than the transactions
contemplated or permitted by this Agreement and the Stock Option Agreement;
(e) make any capital expenditures other than those which are
set forth in Section 6.1 of the Company Disclosure Schedule or (i) are made in
the ordinary course of business or are necessary to maintain existing assets in
good repair and (ii) in any event are in an amount of no more than $100,000 in
the aggregate, or except as necessary to comply with regulatory guidelines or
requirements;
(f) enter into any new line of business or cease to carry on
their respective businesses in the ordinary course of business consistent with
past practices;
(g) acquire or agree to acquire, by merging or consolidating
with, or by purchasing a substantial equity interest in or a substantial portion
of the assets of, or by any other manner, any business or any corporation,
partnership, association or other business organization or division thereof or
otherwise acquire any assets, which would be material, individually or in the
aggregate, to the Company, or which could reasonably be expected to impede or
delay consummation of the Merger, other than in connection with foreclosures,
settlements in lieu of foreclosure or troubled loan or debt restructurings in
the ordinary course of business consistent with past practices;
(h) except as contemplated by Article III hereto, take any
action that is intended or may reasonably be expected to result in any of its
representations and warranties set forth in this Agreement being or becoming
untrue, or in any of the conditions to the Merger set forth in Article VIII not
being satisfied;
(i) change its methods of accounting in effect December 31,
1997, except as required by changes in GAAP or regulatory accounting principles
as concurred to by the Company's independent auditors;
(j) except as set forth in Section 7.7 hereof, as required by
applicable law or as required to maintain qualification pursuant to the Code,
(i) adopt, amend, or terminate any employee benefit plan (including, without
limitation, any Plan) or any agreement, arrangement, plan or policy
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between the Company or any Subsidiary of the Company and one or more of its
current or former directors, officers or (ii) except for normal increases and
the payment of incentive compensation to Opelika officers and to Opelika
mortgage originators and processors, in each case in the ordinary course of
business consistent with past practice or except as required by applicable law,
increase in any manner the compensation or fringe benefits of any director,
officer or employee or pay any benefit not required by any Plan or agreement as
in effect as of the date hereof (including, without limitation, the granting of
stock options, stock appreciation rights, restricted stock, restricted stock
units or performance units or shares).
(k) take or permit to be taken any action which would
disqualify the Merger as a "pooling of interests" for accounting purposes or a
reorganization under Section 368(a) of the Code;
(l) other than activities in the ordinary course of business
consistent with past practice, sell, lease, encumber, assign or otherwise
dispose of, or agree to sell, lease, encumber, assign or otherwise dispose of,
any of its material assets, properties or other rights or agreements, other than
sales of investment securities of Opelika in accordance with prudent
asset/liability management practices;
(m) other than in the ordinary course of business consistent
with past practice (it being acknowledged that such practices have included
borrowings from the Federal Home Loan Bank), incur any indebtedness for borrowed
money or assume, guarantee, endorse or otherwise as an accommodation become
responsible for the obligations of any other individual, corporation or other
entity;
(n) file any application to relocate or terminate the
operations of any banking office of it or any of its Subsidiaries;
(o) create, renew, amend or terminate or give notice of a
proposed renewal, amendment or termination of, any material contract, agreement
or lease for goods, services or office space to which the Company or any of its
Subsidiaries is a party or by which the Company or any of its Subsidiaries or
their respective properties is bound, other than the renewal in the ordinary
course of business of any lease the term of which expires prior to the Closing
Date, or amend or waive the provisions of any confidentiality or standstill
agreement to which the Company or any of its affiliates is a party as of the
date hereof;
(p) take any action or enter into any agreement that could
reasonably be expected to jeopardize or materially delay the receipt of any
Requisite Regulatory Approval (as defined in Section 8.1(c));
(q) enter into any Loans in an original principal amount in
excess of $2,000,000; or
(r) agree or commit to do any of the foregoing.
6.2. Covenants of BancorpSouth. Except as otherwise contemplated by
this Agreement or consented to in writing by the Company, BancorpSouth shall
not, and shall not permit any of its Subsidiaries to:
(a) except as contemplated by Article III hereto, take any
action that is intended or may reasonably be expected to result in any of its
representations and warranties set forth in this Agreement being or becoming
untrue, or in any of the conditions to the Merger set forth in Article VIII not
being satisfied;
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(b) take any action or enter into any agreement that could
reasonably be expected to jeopardize or materially delay the receipt of any
Requisite Regulatory Approval;
(c) change its methods of accounting in effect at December 31,
1997, except in accordance with changes in GAAP or regulatory accounting
principles as concurred to by BancorpSouth's independent auditors;
(d) take or permit to be taken any action which would
disqualify the Merger as a "pooling of interests" for accounting purposes or a
reorganization under Section 368(a) of the Code;
(e) take any action, including entering into any agreement
with any other party, the effect of which would be to require BancorpSouth to
authorize additional shares of BancorpSouth common stock in order to fulfill
both BancorpSouth's obligations to Company pursuant to this Agreement and
obligations to any such other party pursuant to any such agreement;
(f) take any action that would unreasonably interfere with the
operations or the customers of the Company or Opelika,, jeopardize the business
of the Company or Opelika, including the contacting of Opelika customers or,
take any action that would usurp opportunities belonging to the Company or
Opelika; and
(g) agree or commit to do any of the foregoing.
ARTICLE VII
ADDITIONAL AGREEMENTS
7.1. Regulatory Matters.
(a) BancorpSouth and the Company shall promptly prepare and
file with the SEC the Proxy Statement, and BancorpSouth shall promptly prepare
and file with the SEC the S-4, in which the Proxy Statement will be included as
a prospectus. Each of the Company and BancorpSouth shall use its reasonable best
efforts to have the S-4 declared effective under the Securities Act as promptly
as practicable after such filing, and the Company shall thereafter mail the
Proxy Statement to its shareholders. BancorpSouth shall also use its reasonable
best efforts to obtain all necessary state securities law or "Blue Sky" permits
and approvals required to carry out the transactions contemplated by this
Agreement.
(b) The parties hereto shall cooperate with each other and use
their reasonable best efforts to promptly prepare and file all necessary
documentation, to effect all applications, notices, petitions and filings, and
to obtain as promptly as practicable all permits, consents, approvals and
authorizations of all third parties and Governmental Entities which are
necessary or advisable to consummate the transactions contemplated by this
Agreement (including, without limitation, the Merger). The Company and
BancorpSouth shall have the right to review in advance, and to the extent
practicable each will consult the other on, in each case subject to applicable
laws relating to the exchange of information, all the information relating to
the Company or BancorpSouth, as the case may be, and any of their respective
Subsidiaries, which appears in any filing made with, or written materials
submitted to, any third party or any Governmental Entity in connection with the
transactions contemplated by this Agreement. In exercising the foregoing right,
each of the parties hereto shall act reasonably and as promptly as practicable.
The parties hereto agree that they will consult with each other with respect to
the obtaining of all permits, consents, approvals and authorizations of all
third parties and Governmental Entities necessary or advisable to consummate the
transactions contemplated by this Agreement and each party will keep the other
apprised of the status of matters relating to completion of the transactions
contemplated herein.
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(c) BancorpSouth and the Company shall, upon request, furnish
each other with all information concerning themselves, their Subsidiaries,
directors, officers and shareholders and such other matters as may be reasonably
necessary or advisable in connection with the Proxy Statement, the S-4 or any
other statement, filing, notice or application made by or on behalf of
BancorpSouth, the Company or any of their respective Subsidiaries to any
Governmental Entity in connection with the Merger and the other transactions
contemplated by this Agreement.
(d) BancorpSouth and the Company shall promptly furnish each
other with copies of written communications received by BancorpSouth or the
Company, as the case may be, or any of their respective Subsidiaries, Affiliates
or Associates (as such terms are defined in Rule 12b-2 under the Exchange Act as
in effect on the date of this Agreement) from, or delivered by any of the
foregoing to, any Governmental Entity in respect of the transactions
contemplated hereby.
7.2. Access to Information.
(a) Upon reasonable notice and subject to applicable laws
relating to the exchange of information, each party shall, and shall cause each
of its Subsidiaries to, afford to the officers, employees, accountants, counsel
and other representatives (each, a "Representative") of the other party, access
during normal business hours during the period prior to the Effective Time to
all its properties, books, contracts, commitments, records, officers, employees,
accountants, counsel and other representatives and, during such period, it
shall, and shall cause its Subsidiaries to, make available to the other party
all information concerning its business, properties and personnel as the other
party may reasonably request. In addition, the Company and Opelika shall permit
a Representative of BancorpSouth to have access to the premises and observe the
operations of the Company or Opelika, as the case may be, without interfering
with the operations of the Company or Opelika and only during normal business
hours and to attend each meeting of their respective Boards of Directors and
committees thereof (other than during discussions regarding this Agreement, the
Stock Option Agreement, and the transactions contemplated hereby and thereby).
Neither party nor any of its Subsidiaries shall be required to provide access to
or to disclose information where such access or disclosure would violate or
prejudice the rights of its customers or its relationship with such customers,
jeopardize any attorney-client privilege or contravene any law, rule,
regulation, order, judgment, decree, fiduciary duty or binding agreement entered
into prior to the date of this Agreement. Such party shall identify the nature
of the limitation on access and disclosure, and the parties hereto will make
appropriate substitute disclosure arrangements under circumstances in which the
restrictions of the preceding sentence apply.
(b) All information furnished to BancorpSouth pursuant to
Section 7.2(a) shall be subject to, and BancorpSouth shall hold all such
information in confidence in accordance with, the provisions of the
confidentiality agreement dated August 10, 1998 (the "Confidentiality
Agreement"), between BancorpSouth and the Company. The Company shall have the
same obligations to BancorpSouth under the Confidentiality Agreement with
respect to information furnished to the Company pursuant to Section 7.2(a) as if
the Company were the receiving party under such Confidentiality Agreement.
(c) Notwithstanding anything in the Confidentiality Agreement
or any other agreement to the contrary, no provision of the Confidentiality
Agreement or investigation by either of the parties or their respective
representatives shall affect the representations, warranties, covenants or
agreements of the other set forth herein and the parties shall remain
responsible for the same.
7.3. Shareholder Meeting. The Company shall take all steps necessary to
duly call, give notice of, convene and hold a meeting of its shareholders to be
held as soon as is reasonably practicable after the date on which the S-4
becomes effective for the purpose of voting upon the approval and adoption of
this Agreement. The Company will, through its Board of Directors,
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recommend to its shareholders approval of this Agreement and the transactions
contemplated hereby and such other matters as may be submitted to its
shareholders in connection with this Agreement.
7.4. Legal Conditions to Merger. Each of BancorpSouth and the Company
shall, and shall cause its Subsidiaries to, use their reasonable best efforts
(a) to take, or cause to be taken, all actions necessary, proper or advisable to
comply promptly with all legal requirements which may be imposed on such party
or its Subsidiaries with respect to the Merger and, subject to the conditions
set forth in Article VIII hereof, to consummate the transactions contemplated by
this Agreement and (b) to obtain (and to cooperate with the other party to
obtain) any consent, authorization, order or approval of, or any exemption by,
any Governmental Entity and any other third party which is required to be
obtained by the Company or BancorpSouth or any of their respective Subsidiaries
in connection with the Merger and the other transactions contemplated by this
Agreement, and to comply with the terms and conditions of such consent,
authorization, order or approval.
7.5. Affiliates. Each of BancorpSouth and the Company shall use its
reasonable best efforts to cause each director, executive officer and other
person who is an "affiliate" (for purposes of Rule 145 under the Securities Act
and for purposes of qualifying the Merger for "pooling-of-interests" accounting
treatment) of such party to deliver to the other party hereto, as soon as
practicable after the date of this Agreement, a written agreement, in the form
of Exhibit 7.5(a) hereto (in the case of affiliates of BancorpSouth) or Exhibit
7.5(b) hereto (in the case of affiliates of the Company).
7.6. Stock Exchange Listing. BancorpSouth shall make all filings
required of it to cause the shares of BancorpSouth Common Stock to be issued in
the Merger to be approved for listing on the NYSE, subject to official notice of
issuance, as of the Effective Time.
7.7. Employee Benefit Plans; Existing Agreements.
(a) As of the Effective Time, the employees of the Company and
its Subsidiaries (the "Company Employees") shall be eligible to participate in
BancorpSouth's employee benefit plans in which similarly situated employees of
BancorpSouth or BancorpSouth Bank participate, to the same extent as similarly
situated employees of BancorpSouth or BancorpSouth Bank (it being understood
that inclusion of Company Employees in BancorpSouth's employee benefit plans may
occur at different times with respect to different plans).
(b) With respect to each BancorpSouth Plan that is an
"employee benefit plan," as defined in Section 3(3)of ERISA, for purposes of
determining eligibility to participate, vesting, and entitlement to benefits,
including for severance benefits and vacation entitlement (but not for accrual
of pension benefits or 401(k) eligibility), service with the Company (or
predecessor employers to the extent the Company provides past service credit)
shall be treated as service with BancorpSouth; provided; however, that such
service shall not be recognized to the extent that such recognition would result
in a duplication or increase of benefits. Such service also shall apply for
purposes of satisfying any waiting periods, evidence of insurability
requirements, or the application of any preexisting condition limitations. Each
BancorpSouth Plan shall waive pre-existing condition limitations to the same
extent waived under the applicable Company Plan. Company Employees shall be
given credit for amounts paid under a corresponding benefit plan during the same
period for purposes of applying deductibles, copayments and out-of-pocket
maximums as though such amounts had been paid in accordance with the terms and
conditions of BancorpSouth Plan.
(c) As of the Effective Time, BancorpSouth shall assume and
honor and shall cause the appropriate Subsidiaries of BancorpSouth to assume and
to honor in accordance with their terms all employment, severance and other
compensation agreements and arrangements existing prior to the execution of this
Agreement which are between the Company or any of its Subsidiaries and any
director, officer or employee thereof and which have been disclosed in the
Company Disclosure Schedule.
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(d) BancorpSouth and the Company agree to cooperate and take
all reasonable actions to effect the merger of any employee benefit plan that is
intended to be qualified under Section 401(a) of the Code into the appropriate
tax-qualified retirement plan of BancorpSouth after the Merger is completed, so
that such plan merger satisfies the requirements of Section 414(l) of the Code;
provided, however, that BancorpSouth shall not be obligated to effect such a
merger of a plan unless such plan is fully funded under Section 412 of the Code
and Section 302 of ERISA, to the extent applicable, and the merger would not
jeopardize the tax-qualified status of any BancorpSouth Plan.
7.8. Indemnification.
(a) In the event of any threatened or actual claim, action,
suit, proceeding or investigation, whether civil, criminal or administrative,
including, without limitation, any such claim, action, suit, proceeding or
investigation in which any person who is now, or has been at any time prior to
the date of this Agreement, or who becomes prior to the Effective Time, a
director, officer or employee of the Company or any of its Subsidiaries (the
"Indemnified Parties") is, or is threatened to be, made a party based in whole
or in part on, or arising in whole or in part out of, or pertaining to (i) the
fact that he is or was a director, officer or employee of the Company, any of
the Subsidiaries of the Company or any of their respective predecessors or
affiliates or (ii) this Agreement or any of the transactions contemplated
hereby, whether in any case asserted or arising before or after the Effective
Time, the parties hereto agree to cooperate and use their best efforts to defend
against and respond thereto. It is understood and agreed that after the
Effective Time, BancorpSouth shall indemnify and hold harmless, as and to the
extent permitted by law, each Indemnified Party against any losses, claims,
damages, liabilities, costs, expenses (including reasonable attorney's fees and
expenses in advance of the final disposition of any claim, suit, proceeding or
investigation to each Indemnified Party to the fullest extent permitted by law
upon receipt of any undertaking required by applicable law), judgments, fines
and amounts paid in settlement in connection with any such threatened or actual
claim, action, suit, proceeding or investigation, and in the event of any such
threatened or actual claim, action, suit, proceeding or investigation (whether
asserted or arising before or after the Effective Time), the Indemnified Parties
may retain counsel reasonably satisfactory to them after consultation with
BancorpSouth; provided, however, that (1) BancorpSouth shall have the right to
assume the defense thereof and upon such assumption BancorpSouth shall not be
liable to any Indemnified Party for any legal expenses of other counsel or any
other expenses subsequently incurred by any Indemnified Party in connection with
the defense thereof, except that if BancorpSouth elects not to assume such
defense or counsel for the Indemnified Parties reasonably advises that there are
issues which raise conflicts of interest between BancorpSouth and the
Indemnified Parties, the Indemnified Parties may retain counsel reasonably
satisfactory to them after consultation with BancorpSouth, and BancorpSouth
shall pay the reasonable fees and expenses of such counsel for the Indemnified
Parties, (2) BancorpSouth shall in all cases be obligated pursuant to this
paragraph to pay for only one firm of counsel for all Indemnified Parties, (3)
BancorpSouth shall not be liable for any settlement effected without its prior
written consent (which consent shall not be unreasonably withheld) and (4)
BancorpSouth shall have no obligation hereunder to any Indemnified Party when
and if a court of competent jurisdiction shall ultimately determine, and such
determination shall have become final and nonappealable, that indemnification of
such Indemnified Party in the manner contemplated hereby is prohibited by
applicable law. Any Indemnified Party wishing to claim Indemnification under
this Section 7.8, upon learning of any such claim, action, suit, proceeding or
investigation, shall promptly notify BancorpSouth thereof, provided that the
failure to so notify shall not affect the obligations of BancorpSouth under this
Section 7.8 except to the extent such failure to notify materially prejudices
BancorpSouth. BancorpSouth's obligations under this Section 7.8 shall continue
in full force and effect without time limit from and after the Effective Time.
(b) BancorpSouth shall cause the persons serving as officers
and directors of the Company immediately prior to the Effective Time to be
covered for a period of three years from the
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Effective Time by the directors' and officers' liability insurance policy
maintained by the Company (provided that BancorpSouth may substitute therefor
policies of at least the same coverage and amounts containing terms and
conditions which are not less advantageous than such policy) with respect to
acts or omissions occurring prior to the Effective Time which were committed by
such officers and directors in their capacity as such; provided, however, that
in no event shall BancorpSouth be required to expend on an annual basis more
than 125% of the current amount expended by the Company (the "Insurance Amount")
to maintain or procure insurance coverage, and further provided that if
BancorpSouth is unable to maintain or obtain the insurance called for by this
Section 7.8(b), BancorpSouth shall use all reasonable efforts to obtain as much
comparable insurance as is available for the Insurance Amount.
(c) In the event BancorpSouth or any of its successors or
assigns (i) consolidates with or merges into any other person and shall not be
the continuing or surviving corporation or entity of such consolidation or
merger, or (ii) transfers or conveys all or substantially all of its properties
and assets to any person, then, and in each such case, to the extent necessary,
proper provision shall be made so that the successors and assigns of
BancorpSouth assume the obligations set forth in this section.
(d) The provisions of this Section 7.8 are intended to be for
the benefit of, and shall be enforceable by, each Indemnified Party and his or
her heirs and representatives.
7.9. Additional Agreements. In case at any time after the Effective
Time any further action is necessary or desirable to carry out the purposes of
this Agreement or to vest the Surviving Corporation with full title to all
properties, assets, rights, approvals, immunities and franchises of any of the
parties to the Merger, the proper officers and directors of each party to this
Agreement and their respective Subsidiaries shall take all such necessary action
as may be reasonably requested by BancorpSouth.
7.10. [INTENTIONALLY OMITTED].
7.11. Stock Option Agreement. Contemporaneously with the execution and
delivery of this Agreement, the Company and BancorpSouth shall execute and
deliver the Stock Option Agreement.
7.12. Data Processing Conversion. BancorpSouth shall take all steps
necessary and appropriate to cause a smooth, orderly data processing conversion
in connection with the consummation of the Merger and shall initiate appropriate
training of Company and Opelika personnel sufficiently in advance of the
Effective Time to permit Company and Opelika personnel to continue the
operations of the Company and Opelika without undue interruption after the
Merger. Company and Opelika personnel shall cooperate fully with BancorpSouth in
its efforts to provide the training required by this Section 7.12.
7.13 Publication of Combined Results. As soon as practical after the
date that thirty days of combined financial results of the Company and
BancorpSouth are available, BancorpSouth shall publish such results by press
release or the making of an appropriate filing under the Exchange Act.
7.14 BancorpSouth Board Approval. The appropriate officers of
BancorpSouth shall take all action necessary to have the ratification, approval,
and adoption of this Agreement and the transactions contemplated hereby to be
considered by the BancorpSouth Board of Directors at its August 26, 1998 board
meeting.
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ARTICLE VIII
CONDITIONS PRECEDENT
8.1. Conditions to Each Party's Obligation To Effect the Merger. The
respective obligation of each party to effect the Merger shall be subject to the
satisfaction at or prior to the Effective Time of the following conditions:
(a) Shareholder Approvals. This Agreement shall have been
approved and adopted by the requisite vote of the shareholders of the Company
under applicable law.
(b) Listing of Shares. The shares of BancorpSouth Common Stock
which shall be issued to the shareholders of the Company upon consummation of
the Merger shall have been authorized for listing on the NYSE, subject to
official notice of issuance.
(c) Other Approvals. All regulatory approvals required to
consummate the transactions contemplated hereby (including the Merger) shall
have been obtained and shall remain in full force and effect and all statutory
waiting periods in respect thereof shall have expired (all such approvals and
the expiration of all such waiting periods being referred to herein as the
"Requisite Regulatory Approvals").
(d) S-4. The S-4 shall have become effective under the
Securities Act and no stop order suspending the effectiveness of the S-4 shall
have been issued and no proceedings for that purpose shall have been initiated
or threatened by the SEC.
(e) No Injunctions or Restraints; Illegality. No order,
injunction or decree issued by any court or agency of competent jurisdiction or
other legal restraint or prohibition (an "Injunction") preventing the
consummation of the Merger shall be in effect. No statute, rule, regulation,
order, injunction or decree shall have been enacted, entered, promulgated or
enforced by any Governmental Entity which prohibits, restricts or makes illegal
consummation of the Merger.
8.2. Conditions to Obligations of BancorpSouth. The obligation of
BancorpSouth to effect the Merger is also subject to the satisfaction or waiver
by BancorpSouth at or prior to the Effective Time of the following conditions:
(a) Representations and Warranties. (i) Subject to Section
3.2, the representations and warranties of the Company set forth in this
Agreement (other than those set forth in Section 4.2) shall be true and correct
as of the date of this Agreement and (except to the extent such representations
and warranties speak as of an earlier date) as of the Closing Date as though
made on and as of the Closing Date; and (ii) the representations and warranties
of the Company set forth in Section 4.2 of this Agreement shall be true and
correct in all material respects (without giving effect to Section 3.2 of this
Agreement) as of the date of this Agreement and (except to the extent such
representations and warranties speak as of an earlier date) as of the Closing
Date as though made on and as of the Closing Date. BancorpSouth shall have
received a certificate signed on behalf of the Company by the Chief Executive
Officer and the Chief Financial Officer of the Company to the foregoing effect.
(b) Performance of Obligations of the Company. The Company
shall have performed in all material respects all obligations required to be
performed by it under this Agreement at or prior to the Closing Date, and
BancorpSouth shall have received a certificate signed on behalf of the Company
by the Chief Executive Officer and the Chief Financial Officer of the Company to
such effect.
(c) No Pending Governmental Actions. No proceeding initiated
by any Governmental Entity seeking an Injunction shall be pending.
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(d) Federal Tax Opinion. BancorpSouth shall have received an
opinion from Xxxxxx Xxxxxxx Xxxxxx & Xxxxx, PLLC, counsel to BancorpSouth
("BancorpSouth's Counsel"), in form and substance reasonably satisfactory to
BancorpSouth, dated the Effective Time, substantially to the effect that, on the
basis of facts, representations and assumptions set forth in such opinion which
are consistent with the state of facts existing at the Effective Time, the
Merger will be treated as a reorganization within the meaning of Section 368(a)
of the Code and that, accordingly, for federal income tax purposes:
(i) No gain or loss will be recognized by
BancorpSouth or the Company as a result of the Merger;
(ii) No gain or loss will be recognized by the
shareholders of the Company who exchange all of their Company
Common Stock solely for BancorpSouth Common Stock pursuant to
the Merger (except with respect to cash received in lieu of a
fractional share interest in BancorpSouth Common Stock); and
(iii) The aggregate tax basis of BancorpSouth Common
Stock received by shareholders who exchange all of their
Company Common Stock solely for BancorpSouth Common Stock
pursuant to the Merger will be the same as the aggregate tax
basis of the Company Common Stock surrendered in exchange
therefor (reduced by any amount allocable to a fractional
share interest for which cash is received).
In rendering such opinion, BancorpSouth's Counsel may
require and shall be entitled to rely upon representations and
covenants, including those contained in certificates of
officers of BancorpSouth, the Company and others, reasonably
satisfactory in form and substance to such counsel.
(e) Employment Agreement. Xxxxxxx X. Xxxx shall have entered
into a written employment agreement with BancorpSouth containing non-competition
provisions satisfactory to BancorpSouth in its reasonable discretion.
(f) Legal Opinion. BancorpSouth shall have received an opinion
from Jenkens & Xxxxxxxxx, in form and substance reasonably satisfactory to
BancorpSouth, dated the Effective Time, relating to the enforceability of this
Agreement and such other matters as BancorpSouth may reasonably request;
provided, however, that as to matters of Alabama law, Jenkens & Xxxxxxxxx may
rely upon an opinion of Alabama counsel addressed to it or may cause such
opinion to be issued directly to BancorpSouth.
(g) Pooling Treatment. BancorpSouth shall be satisfied that
the Merger may be accounted for using the "pooling of interests" accounting
method.
(h) Board Approval. This Agreement and the transactions
contemplated hereby shall have been ratified, approved, and adopted by the
Boards of Directors of both BancorpSouth and BancorpSouth Bank.
8.3. Conditions to Obligations of the Company. The obligation of the
Company to effect the Merger is also subject to the satisfaction or waiver by
the Company at or prior to the Effective Time of the following conditions:
(a) Representations and Warranties. (i) Subject to Section
3.2, the representations and warranties of BancorpSouth set forth in this
Agreement (other than those set forth in Section 5.2) shall be true and correct
as of the date of this Agreement and (except to the extent such representations
and warranties speak as of an earlier date) as of the Closing Date as
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though made on and as of the Closing Date; and (ii) the representations and
warranties of BancorpSouth set forth in Section 5.2 of this Agreement shall be
true and correct in all material respects (without giving effect to Section 3.2
of this Agreement) as of the date of this Agreement and (except to the extent
such representations and warranties speak as of an earlier date) as of the
Closing Date as though made on and as of the Closing Date. The Company shall
have received a certificate signed on behalf of BancorpSouth by the Chief
Executive Officer and the principal financial officer of BancorpSouth to the
foregoing effect.
(b) Performance of Obligations of BancorpSouth. BancorpSouth
shall have performed in all material respects all obligations required to be
performed by it under this Agreement at or prior to the Closing Date, and the
Company shall have received a certificate signed on behalf of BancorpSouth by
the Chief Executive Officer and the principal financial officer of BancorpSouth
to such effect.
(c) No Pending Governmental Actions. No proceeding initiated
by any Governmental Entity seeking an Injunction shall be pending.
(d) Federal Tax Opinion. The Company shall have received an
opinion from Jenkens & Xxxxxxxxx (the "Company's Counsel"), in form and
substance reasonably satisfactory to the Company, dated the Effective Time,
substantially to the effect that, on the basis of facts, representations and
assumptions set forth in such opinion which are consistent with the state of
facts existing at the Effective Time, the Merger will be treated as a
reorganization within the meaning of Section 368(a) of the Code and that,
accordingly, for federal income tax purposes:
(i) No gain or loss will be recognized by
BancorpSouth or the Company as a result of the Merger;
(ii) No gain or loss will be recognized by the
shareholders of the Company who exchange all of their Company
Common Stock solely for BancorpSouth Common Stock pursuant to
the Merger (except with respect to cash received in lieu of a
fractional share interest in BancorpSouth Common Stock); and
(iii) The aggregate tax basis of BancorpSouth Common
Stock received by shareholders who exchange all of their
Company Common Stock solely for BancorpSouth Common Stock
pursuant to the Merger will be the same as the aggregate tax
basis of the Company Common Stock surrendered in exchange
therefor (reduced by any amount allocable to a fractional
share interest for which cash is received).
In rendering such opinion, the Company's Counsel may require
and shall be entitled to rely upon representations and covenants, including
those contained in certificates of officers of BancorpSouth, the Company and
others, reasonably satisfactory in form and substance to such counsel.
(e) Fairness Opinion. Prior to the mailing of Proxy Statement,
the Company shall have received an opinion from Xxxx Xxxxxxxxxx & Co. to the
effect that as of the date thereof and based upon and subject to the matters set
forth therein, the Merger is fair to the shareholders of the Company from a
financial point of view.
(f) Legal Opinion. The Company shall have received an opinion
from BancorpSouth's Counsel, in form and substance reasonably satisfactory to
the Company, dated the Effective Time, relating to the enforceability of this
Agreement, the validity of the shares of BancorpSouth Common Stock to be issued
in the Merger, and such other matters as the Company may reasonably request;
provided, however, that as to matters of Mississippi law, BancorpSouth's
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Counsel may rely on an opinion of Mississippi counsel addressed to it or may
cause such opinion to be issued directly to the Company.
ARTICLE IX
TERMINATION AND AMENDMENT
9.1. Termination. This Agreement may be terminated at any time prior to
the Effective Time, whether before or after approval of the matters presented in
connection with the Merger by the shareholders of both the Company and
BancorpSouth:
(a) by mutual consent of the Company and BancorpSouth in a
written instrument, if the Board of Directors of each so determines by a vote of
a majority of the members of its entire Board;
(b) By either BancorpSouth or the Company upon written notice
to the other party (i) 60 days after the date on which any request or
application for a Requisite Regulatory Approval shall have been denied or
withdrawn at the request or recommendation of the Governmental Entity which must
grant such Requisite Regulatory Approval, unless within the 60-day period
following such denial or withdrawal a petition for rehearing or an amended
application has been filed with the applicable Governmental Entity, provided,
however, that no party shall have the right to terminate this Agreement pursuant
to this Section 9.1(b)(i) if such denial or request or recommendation for
withdrawal shall be due to the failure of the party seeking to terminate this
Agreement to perform or observe the covenants and agreements of such party set
forth herein or (ii) if any Governmental Entity of competent jurisdiction shall
have issued a final nonappealable order enjoining or otherwise prohibiting the
Merger;
(c) by either BancorpSouth or the Company if the Merger shall
not have been consummated on or before June 30, 1999 unless the failure of the
Closing to occur by such date shall be due to the failure of the party seeking
to terminate this Agreement to perform or observe the covenants and agreements
of such party set forth herein;
(d) by either BancorpSouth or the Company (provided that the
Company may not terminate if it is in material breach of any of its obligations
under Section 7.3) if any approval of the shareholders of the Company required
for the consummation of the Merger shall not have been obtained by reason of the
failure to obtain the required vote at a duly held meeting of such shareholders
or at any adjournment or postponement thereof;
(e) by either BancorpSouth or the Company (provided that the
terminating party is not then in material breach of any representation,
warranty, covenant or other agreement contained herein) if any of the
representations or warranties set forth in this Agreement on the part of the
other party shall be untrue or incorrect in any material respect, which is not
cured within thirty days following written notice to the party making such
representation, or which, by its nature, cannot be cured prior to the Closing;
provided, however, that neither party shall have the right to terminate this
Agreement pursuant to this Section 9.1(e) unless the representation or warranty,
together with all other representations and warranties that are untrue or
incorrect, would entitle the party receiving such representation not to
consummate the transactions contemplated hereby under Section 8.2(a) (in the
case of a representation or warranty by the Company) or Section 8.3(a) (in the
case of a representation or warranty by BancorpSouth);
(f) by either BancorpSouth or the Company (provided that the
terminating party is not then in material breach of any representation,
warranty, covenant or other agreement contained herein) if there shall have been
a material breach of any of the covenants or agreements set forth in this
Agreement on the part of the other party, which breach shall not have been cured
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within thirty days following receipt by the breaching party of written notice of
such breach from the other party hereto, or which breach, by its nature, cannot
be cured prior to the Closing;
(g) by BancorpSouth, (i) if the condition set forth on Section
8.2(h) is not satisfied, (ii) if the Board of Directors of the Company shall
have failed to recommend in the Proxy Statement that the Company's shareholders
approve and adopt this Agreement, or shall have withdrawn, modified or changed
in a manner adverse to BancorpSouth its approval or recommendation of this
Agreement and the transactions contemplated hereby, or (iii) as provided in
Section 1.10 hereof;
9.2. Effect of Termination. In the event of termination of this
Agreement by either BancorpSouth or the Company as provided in Section 9.1, this
Agreement shall forthwith become void and have no effect except (i) Sections
7.2(b), 9.2 and 10.3 shall survive any termination of this Agreement and (ii)
that notwithstanding anything to the contrary contained in this Agreement, no
party shall be relieved or released from any liabilities or damages arising out
of its breach of any provision of this Agreement, it being understood that a
failure to obtain the approvals referred to in Section 8.2(h) shall not
constitute a breach of this Agreement by BancorpSouth or BancorpSouth Bank.
9.3. Amendment. Subject to compliance with applicable law, this
Agreement may be amended by the parties hereto, by action taken or authorized by
their respective Boards of Directors, at any time before or after approval of
the matters presented in connection with the Merger by the shareholders of the
Company; provided, however, that after any approval of the transactions
contemplated by this Agreement by the Company's shareholders, there may not be,
without further approval of such shareholders, any amendment of this Agreement
which reduces the amount or changes the form of the consideration to be
delivered to the Company shareholders hereunder other than as contemplated by
this Agreement. This Agreement may not be amended except by an instrument in
writing signed on behalf of each of the parties hereto.
9.4. Extension; Waiver. At any time prior to the Effective Time, each
of the parties hereto, by action taken or authorized by its Board of Directors,
may, to the extent legally allowed, (a) extend the time for the performance of
any of the obligations or other acts of the other party hereto, (b) waive any
inaccuracies in the representations and warranties of the other party contained
herein or in any document delivered pursuant hereto and (c) waive compliance
with any of the agreements or conditions of the other party contained herein.
Any agreement on the part of a party hereto to any such extension or waiver
shall be valid only if set forth in a written instrument signed on behalf of
such party, but such extension or waiver or failure to insist on strict
compliance with an obligation, covenant, agreement or condition shall not
operate as a waiver of, or estoppel with respect to, any subsequent or other
failure.
ARTICLE X
GENERAL PROVISIONS
10.1. Closing. Subject to the terms and conditions of this Agreement,
the closing of the Merger (the "Closing") will take place at 10:00 a.m. (Central
Standard Time) on the first day which is (a) the last business day of month, (b)
at least two business days after the satisfaction or waiver (subject to
applicable law) of the last to occur of the conditions set forth in Article VIII
hereof (other than those conditions which relate to actions to be taken at the
Closing), and (iii) subject to the satisfaction of 10.1 (b) December 31, 1998
(the "Closing Date"), at Xxxxxx Xxxxxxx Xxxxxx & Xxxxx, PLLC, 000 Xxxxx Xxxxxx,
Xxxxx 0000, Xxxxxxxxx, Xxxxxxxxx 00000, or at such other time, date and place as
is agreed to by the parties hereto.
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10.2. Nonsurvival of Representations, Warranties and Agreements. None
of the representations, warranties, covenants and agreements in this Agreement
or in any instrument delivered pursuant to this Agreement (other than pursuant
to the Stock Option Agreement which shall terminate in accordance with its
terms) shall survive the Effective Time, except for those covenants and
agreements contained herein and therein which by their terms apply in whole or
in part after the Effective Time.
10.3. Expenses. All costs and expenses incurred in connection with this
Agreement and the transactions contemplated hereby shall be paid by the party
incurring such costs and expenses. Without limiting the foregoing, the Company
shall be solely responsible for the compensation, if any, owed to the financial
advisor referred to in Section 4.7 hereof.
10.4. Notices. All notices and other communications hereunder shall be
in writing and shall be deemed given if delivered personally, telecopied (with
confirmation), mailed by registered or certified mail (return receipt requested)
or delivered by an express courier (with confirmation) to the parties at the
following addresses (or at such other address for a party as shall be specified
by like notice):
(a) if to BancorpSouth, to:
BancorpSouth, Inc.
Xxx Xxxxxxxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxxxx
Facsimile: 601/680-2006
with a copy (which shall not constitute notice) to:
Xxxxxx Xxxxxxx Xxxxxx & Xxxxx
A Professional Limited Liability Company
000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxxxx X. Xxxxx, Esq.
Facsimile: 615/244-6804
and
(b) if to the Company, to:
The First Corporation
000 Xxxxx 00xx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxxx X. Xxxx, Xx.
Facsimile: 334/749-5857
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with a copy (which shall not constitute notice) to:
Jenkens & Xxxxxxxxx, A Professional Corporation
Fountain Place
0000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: Xxxxxxx X. Xxxxx, Esq.
Facsimile: 214/855-4300
10.5. Interpretation. When a reference is made in this Agreement to
Sections, Exhibits or Schedules, such reference shall be to a Section of or
Exhibit or Schedule to this Agreement unless otherwise indicated in such
specific provision. The table of contents and headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement. Whenever the words "include",
"includes" or "including" are used in this Agreement, they shall be deemed to be
followed by the words "without limitation". The phrases "the date of this
Agreement", "the date hereof" and terms of similar import, unless the context
otherwise requires, shall be deemed to refer to August 12, 1998.
10.6. Counterparts. This Agreement may be executed in counterparts, all
of which shall be considered one and the same instrument and shall become
effective when counterparts have been signed by each of the parties and
delivered to the other parties, it being understood that all parties need not
sign the same counterpart.
10.7. Entire Agreement. This Agreement (including the documents and the
instruments referred to herein) constitutes the entire agreement and supersedes
all prior agreements and understandings, both written and oral, among the
parties with respect to the subject matter hereof, other than the Stock Option
Agreement.
10.8. Governing Law. This Agreement shall be governed and construed in
accordance with the laws of the State of Mississippi, without regard to its
principles of conflicts of laws.
10.9. Enforcement of Agreement. The parties hereto agree that
irreparable damage would occur in the event that the provisions contained in
7.2(b) of this Agreement were not performed in accordance with its specific
terms or were otherwise breached. It is accordingly agreed that the parties
shall be entitled to an injunction or injunctions to prevent breaches of Section
7.2(b) 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.
10.10. Severability. Any term or provision of this Agreement which is
invalid or unenforceable in any jurisdiction shall, as to that jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction. If any provision of this
Agreement is so broad as to be unenforceable, the provision shall be interpreted
to be only so broad as is enforceable.
10.11. Publicity. Except as otherwise required by law or the rules of
the NYSE, so long as this Agreement is in effect, neither BancorpSouth nor the
Company shall, or shall permit any of its Subsidiaries 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 such consent
shall not be unreasonably withheld.
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10.12. Assignment; Third Party Beneficiaries. Neither this Agreement
nor any of the rights, interests or obligations hereunder shall be assigned by
any of the parties hereto (whether by operation of law or otherwise) without the
prior written consent of the other parties. Subject to the preceding sentence,
this Agreement will be binding upon, inure to the benefit of and be enforceable
by the parties and their respective successors and assigns. Except as otherwise
expressly provided herein, this Agreement (including the documents and
instruments referred to herein) is not intended to confer upon any person other
than the parties hereto any rights or remedies hereunder.
[Next page is signature page.]
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IN WITNESS WHEREOF, BancorpSouth and the Company have caused this
Agreement to be executed by their respective officers thereunto duly authorized
as of the date first above written for themselves and their respective
Subsidiaries.
BANCORPSOUTH, INC.
By: /s/ Xxxxxx X. Xxxxxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: Chairman and Chief Executive Officer
THE FIRST CORPORATION
By: /s/ Xxxxxxx X. Xxxx
------------------------------------
Name: Xxxxxxx X. Xxxx
Title: President
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