EXHIBIT 2.1
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (this "Agreement") is made and entered
into as of March 31, 1997, by and between BANK CORPORATION OF GEORGIA ("BCG"), a
corporation organized and existing under the laws of the State of Georgia, with
its principal office located in Macon, Georgia, and CENTURY SOUTH BANKS, INC.
("CSBI"), a corporation organized and existing under the laws of the State of
Georgia, with its principal office located in Gainesville, Georgia.
PREAMBLE
The Boards of Directors of BCG and CSBI are of the opinion that the
transaction described herein is in the best interest of the parties and their
respective shareholders. This Agreement provides for the acquisition of BCG by
CSBI pursuant to the merger of BCG with and into CSBI under the Articles of
Incorporation and Bylaws of CSBI At the effective time of such merger, the
outstanding shares of the capital stock of BCG shall be converted into the right
to receive shares of the common stock of CSBI (except as provided herein). As a
result, shareholders of BCG shall become shareholders of CSBI. The transaction
described in this Agreement is subject to the approvals of the shareholders of
BCG, the Board of Governors of the Federal Reserve System and the Department of
Banking and Finance of the State of Georgia and the satisfaction of certain
other conditions described in this Agreement. It is the intention of the
parties to this Agreement that the Merger (i) for federal income tax purposes
shall qualify as a "reorganization" within the meaning of Section 368(a) of the
Internal Revenue Code, and (ii) for accounting purposes shall qualify for
treatment as a "pooling of interests".
Immediately following the Closing of the merger, First South Bank, National
Association and Ameribank, National Association, both wholly-owned national bank
subsidiaries of BCG (collectively, "BCG Banks") will remain in existence under
their respective Articles of Association and Bylaws as wholly-owned subsidiaries
of CSBI.
Certain terms used in this Agreement are defined in Section 11.1 of this
Agreement.
NOW, THEREFORE, in consideration of the above and the mutual warranties,
representations, covenants and agreements set forth herein, the parties agree as
follows:
ARTICLE I
TRANSACTION AND TERMS OF MERGER
1.1 Merger. Subject to the terms and conditions of this Agreement, at the
Effective Time, BCG shall be merged with and into CSBI in accordance with the
provisions of Section 14-2-1101 of the GBCC and with the effect provided in
Section 14-2-1106 of the GBCC (the "Merger"). CSBI shall be the Surviving
Corporation resulting from the Merger and the separate existence of BCG shall
cease. The Merger shall be consummated pursuant to the terms of this Agreement,
which has been approved and adopted by the respective Boards of Directors of
CSBI and BCG.
1.2 Time and Place of Closing. The Closing will take place at 9:30 a.m. on
the date that the Effective Time occurs (or the immediately preceding day if the
Effective Time is earlier than 9:30 a.m.), or at such other time as the Parties,
acting through their Chief Executive Officers, may mutually agree. The place of
Closing shall be at the offices of Xxxxxxxx Xxxxxxx LLP, Atlanta, Georgia, or
such other place as may be mutually agreed upon by the Parties.
1.3 Effective Time. The Merger contemplated by this Agreement shall become
effective on the date and at the time the Articles of Merger reflecting the
Merger shall become effective with the Secretary of State of the State of
Georgia. Subject to the terms and conditions hereof, unless otherwise mutually
agreed upon in writing by the Chief Executive Officers of each Party, the
Parties shall use their reasonable efforts to cause the Effective Time to occur
on the last business day of the month in which occurs the last to occur of (i)
the effective date (including expiration of any applicable waiting period) of
the last required Consent of any Regulatory Authority having authority over and
approving or exempting the Merger, (ii) the date on which the shareholders of
BCG approve this Agreement to the extent such approval is required by applicable
Law; or (iii) such later date as may be mutually agreed upon in writing by the
Chief Executive Officers of each Party.
ARTICLE 2
TERMS OF MERGER
2.1 Articles of Incorporation. The Articles of Incorporation of CSBI in
effect immediately prior to the
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Effective Time shall be the Articles of Incorporation of the Surviving
Corporation until otherwise amended or repealed.
2.2 Bylaws. The Bylaws of CSBI in effect immediately prior to the
Effective Time shall be the Bylaws of the Surviving Corporation until otherwise
amended or repealed.
2.3 Directors. Upon the Effective Time, CSBI shall have eleven (11)
directors determined as follows:
(a) Immediately before the Effective Time all but five (5) directors
of CSBI will resign as directors of CSBI;
(b) Three (3) of the resulting vacancies on the Board of Directors of
CSBI will be filled by those three (3) nominees designated by the president of
BCG; and
(c) The remaining three (3) vacancies on the Board of Directors of
CSBI shall be selected by majority vote of the eight (8) directors then serving
on the CSBI Board of Directors.
2.4 Officers. The officers of CSBI in office immediately prior to the
Effective Time, shall serve as the officers of CSBI from and after the Effective
Time in accordance with the Bylaws of CSBI except the officers who shall serve
in the offices and capacities as follows:
(a) Xxxxxxx X. Xxxxxxxx, XX, Chairman;
(b) J. Xxxxxxx Xxxx, Vice-Chairman;
(c) Xxxxx X. Xxxxxxxx, Vice-Chairman, Chief Executive Officer; and
(d) Xxxxxx X. Xxxxx, President, Chief Operating Officer and Chief
Financial Officer.
ARTICLE 3
MANNER OF CONVERTING SHARES
3.1 Conversion of Shares. Subject to the provisions of this Article 3, at
the Effective Time, by virtue of the Merger and without any action on the part
of the holders thereof, the shares of the constituent corporations shall be
converted as follows:
(a) Each share of CSBI Common Stock issued and outstanding
immediately prior to the Effective Time shall remain issued and outstanding from
and after the Effective Time; and
(b) Subject to the conditions set forth herein, each share of BCG
Common Stock shall be exchanged for one and thirty-three one hundredths (1 and
33/100) shares of CSBI Common Stock (the "Merger Consideration"); and
(c) Each share of BCG Common Stock (excluding shares held by CSBI or
any of its Subsidiaries or by BCG, in each case other than in a fiduciary
capacity or as a result of debts previously contracted, and excluding shares
held by shareholders who perfect their dissenters' rights of appraisal as
provided in Section 3.4 of this Agreement) issued and outstanding at the
Effective Time shall cease to be outstanding and shall be converted into and
exchanged for the right to receive the Merger Consideration.
3.2 Anti-Dilution Provisions. In the event BCG or CSBI changes the number
of shares of BCG Common Stock or CSBI Common Stock, respectively, issued and
outstanding prior to the Effective Time as a result of a stock split, stock
dividend or similar recapitalization with respect to such stock and the record
date therefor (in the case of a stock dividend) or the effective date therefor
(in the case of a stock split or similar recapitalization) shall be prior to the
Effective Time, the Merger Consideration shall be proportionately adjusted.
3.3 Shares Held by BCG or CSBI. Each of the shares of BCG Common Stock
held by BCG or by any CSBI Companies, in each case other than in a fiduciary
capacity or as a result of debts previously contracted, shall be canceled and
retired at the Effective Time and no consideration shall be issued in exchange
therefor.
3.4 Dissenting Shareholders. Any holder of shares of BCG Common Stock who
perfects his dissenters' rights of appraisal in accordance with and as
contemplated by Sections 14-2-1301, et seq. of the GBCC shall be entitled to
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receive the value of such shares in cash as determined pursuant to such
provision of Law; provided,
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however, that no such payment shall be made to any dissenting shareholder unless
and until such dissenting shareholder has complied with the applicable
provisions of the GBCC and surrendered to BCG the certificate or certificates
representing the shares for which payment is being made. In the event that after
the Effective Time a dissenting shareholder of BCG fails to perfect, or
effectively withdraws or loses, his right to appraisal and of payment for his
shares, BCG shall issue and deliver the consideration to which such holder of
shares of BCG Common Stock is entitled under this Article 3 (without interest)
upon surrender by such holder of the certificate or certificates representing
shares of BCG Common Stock held by him.
3.5 Fractional Shares. Notwithstanding any other provision of this
Agreement, each holder of shares of BCG Common Stock exchanged pursuant to the
Merger, who would otherwise have been entitled to receive a fraction of a share
of CSBI Common Stock (after taking into account all certificates delivered by
such holder) shall receive, in lieu thereof, cash (without interest) in an
amount equal to such fractional part of a share of CSBI Common Stock multiplied
by the market value of one share of CSBI Common Stock at the Effective Time, in
the case of shares exchanged pursuant to the Merger, or the date of exercise, in
the case of options. The market value of one share of CSBI Common Stock at the
Effective Time or the date of exercise, as the case may be, shall be the last
sale price of such common stock on NASDAQ (as reported by The Wall Street
Journal or, if not reported thereby, any other authoritative source) on the last
business day preceding the Effective Time or the date of exercise, as the case
may be. No such holder will be entitled to dividends, voting rights, or any
other rights as a shareholder in respect of any fractional shares.
3.6 Conversion of Stock Options.
(a) At the Effective Time, all rights with respect to BCG Common
Stock pursuant to stock options ("BCG Option") granted by BCG under the BCG Key
Employee Stock Option Plan ("BCG Option Plan"), which are outstanding at the
Effective Time, whether or not exercisable, shall be converted into and become
rights with respect to CSBI Common Stock, and CSBI shall assume each BCG Option,
in accordance with the terms of the BCG Option Plan and stock option agreement
by which it is evidenced. From and after the Effective Time, (i) each BCG Option
assumed by CSBI may be exercised solely for shares of CSBI Common stock, (ii)
the number of shares of CSBI Common Stock subject to such BCG Option shall be
equal to the number of shares of BCG Common Stock subject to such BCG Option
immediately prior to the Effective Time multiplied by 1.33, and (iii) the per
share exercise price under each such BCG Option shall be adjusted by dividing
the per share exercise price under each such BCG Option by 1.33 and rounding
down to the nearest cent.
(b) All restrictions or limitations on transfer with respect to BCG
Common Stock awarded under the BCG Option Plan or any other plan, program, or
arrangement of BCG or BCG Banks, to the extent that such restrictions or
limitations shall not have already lapsed, and except as otherwise expressly
provided in such plan, program or arrangement, shall remain in full force and
effect with respect to shares of CSBI Common Stock into which such restricted
stock is converted pursuant to Section 3.1 of this Agreement.
ARTICLE 4
EXCHANGE OF SHARES
4.1 Exchange Procedures. Promptly after the Effective Time, CSBI shall
cause the exchange agent selected by CSBI (the "Exchange Agent"), to mail to
the former shareholders of BCG appropriate transmittal materials (which shall
specify that delivery shall be effected, and risk of loss and title to the
certificates theretofore representing shares of BCG Common Stock shall pass,
only upon proper delivery of such certificates to the Exchange Agent). After
the Effective Time, each holder of shares of BCG Common Stock (other than shares
to be canceled pursuant to Section 3.3 of this Agreement or as to which
dissenters' rights of appraisal have been perfected as provided in Section 3.4
of this Agreement) issued and outstanding at the Effective Time shall surrender
the certificate or certificates representing such shares to the Exchange Agent
and shall promptly upon surrender thereof receive in exchange therefor the
consideration provided in Section 3.1 of this Agreement, together with all
undelivered dividends or distributions in respect of such shares (without
interest thereon) pursuant to Section 4.2 of this Agreement. To the extent
required by Section 3.5 of this Agreement, each holder of shares of BCG Common
Stock issued and outstanding at the Effective Time also shall receive, upon
surrender of the certificate or certificates representing such shares, cash in
lieu of any fractional share of CSBI Common Stock to which such holder may be
otherwise entitled (without interest). CSBI shall not be obligated to deliver
the consideration to which any former holder of BCG Common Stock is entitled as
a result of the Merger until such holder surrenders his certificate or
certificates representing the shares of BCG Common Stock for exchange as
provided in this Section 4.1. The certificate or certificates of BCG Common
Stock so surrendered shall be duly endorsed as the Exchange Agent may require.
Any other provision of this Agreement notwithstanding, neither CSBI nor the
Exchange Agent shall be liable to a holder of BCG Common Stock for any amounts
paid or property delivered in good faith to a public official pursuant to any
applicable abandoned property Law.
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4.2 Rights of Former Shareholders. At the Effective Time, the stock
transfer books of BCG shall be closed as to holders of BCG Common Stock
immediately prior to the Effective Time and no transfer of BCG Common Stock by
any such holder shall thereafter be made or recognized. Until surrendered for
exchange in accordance with the provisions of Section 4.1 of this Agreement,
each certificate theretofore representing shares of BCG Common Stock (other than
shares to be canceled pursuant to Sections 3.3 and 3.4 of this Agreement) shall
from and after the Effective Time represent for all purposes only the right to
receive the consideration provided in Sections 3.1 and 3.5 of this Agreement in
exchange therefor. To the extent permitted by Law, former shareholders of
record of BCG shall be entitled to vote after the Effective Time at any meeting
of CSBI shareholders the number of whole shares of BCG Common Stock into which
their respective shares of BCG Common Stock are converted, regardless of
whether such holders have exchanged their certificates representing BCG Common
Stock for certificates representing CSBI Common Stock in accordance with the
provisions of this Agreement. Whenever a dividend or other distribution is
declared by CSBI on the CSBI Common Stock, the record date for which is at or
after the Effective Time, the declaration shall include dividends or other
distributions on all shares issuable pursuant to this Agreement, but no dividend
or other distribution payable to the holders of record of CSBI Common Stock as
of any time subsequent to the Effective Time shall be delivered to the holder of
any certificate representing shares of BCG Common Stock issued and outstanding
at the Effective Time until such holder surrenders such certificate for exchange
as provided in Section 4.1 of this Agreement. However, upon surrender of such
BCG Common Stock certificate, both the CSBI Common Stock certificate (together
with all such undelivered dividends or other distributions without interest) and
any undelivered cash payments to be paid for fractional share interests (without
interest) shall be delivered and paid with respect to each share represented by
such certificate.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF BCG
BCG hereby represents and warrants to CSBI as follows:
5.1 Organization, Standing, and Power. BCG is a corporation duly
organized, validly existing, and in good standing under the Laws of the State of
Georgia, and is duly registered as a bank holding company under the BHC Act. BCG
has the corporate power and authority to carry on its business as now conducted
and to own, lease and operate its Assets. BCG is duly qualified or licensed to
transact business as a foreign corporation in good standing in the States of the
United States and foreign jurisdictions where the character of its Assets or the
nature or conduct of its business requires it to be so qualified or licensed,
except for such jurisdictions in which the failure to be so qualified or
licensed is not reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on BCG.
5.2 Authority, No Breach By Agreement.
(a) BCG has the corporate power and authority necessary to execute,
deliver and perform its obligations under this Agreement and to consummate the
transaction contemplated hereby. The execution, delivery and performance of
this Agreement and the consummation of the Merger contemplated herein, have been
duly and validly authorized by all necessary corporate action in respect thereof
on the part of BCG subject to the approval of this Agreement by the holders of a
majority of the outstanding shares of BCG Common Stock. Subject to such
requisite shareholder approval, this Agreement represents a legal, valid, and
binding obligation of BCG, enforceable against BCG in accordance with its terms
(except in all cases as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium, or similar Laws affecting
the enforcement of creditors' rights generally and except that the availability
of the equitable remedy of specific performance or injunctive relief is subject
to the discretion of the court before which any proceeding may be brought).
(b) Neither the execution and delivery of this Agreement by BCG, nor
the consummation by BCG of the transaction contemplated hereby, nor compliance
by BCG with any of the provisions hereof, will (i) conflict with or result in a
breach of any provision of BCG's Articles of Incorporation or Bylaws, or (ii)
constitute or result in a Default under, or require any Consent pursuant to, or
result in the creation of any Lien on any Asset of any BCG Bank under, any
Contract or Permit of any BCG Bank, where such Default or Lien, or any failure
to obtain such Consent, is reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on BCG, or, (iii) subject to receipt of the
requisite approvals referred to in Section 9.1(b) of this Agreement, violate any
Law or Order applicable to any BCG Bank or any of their respective Assets.
(c) No notice to, filing with, or Consent of, any public body or
authority is necessary for the consummation by BCG of the Merger and the other
transactions contemplated in this Agreement other than (i) in connection or
compliance with the provisions of the Securities Laws, applicable state
corporate and securities Laws, (ii) Consents required from Regulatory
Authorities, (iii) notices to or filings with the IRS or the Pension Benefit
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Guaranty Corporation with respect to any employee benefit plans, and (iv)
Consents, filings or notifications which, if not obtained or made, are not
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on BCG.
5.3 Capital Stock.
(a) The authorized capital stock of BCG consists of 3,000,000 shares
of BCG Common Stock. At the close of business on March 31, 1997, there were
2,268,097 shares of BCG Common Stock issued and outstanding and 212,915 shares
of BCG Common Stock were reserved for issuance upon the exercise of outstanding
stock options and purchases under the BCG Option Plan. All of the issued and
outstanding shares of BCG Common Stock are, and all of the shares of CSBI Common
Stock to be issued in exchange for shares of BCG Common Stock upon consummation
of the Merger, when issued in accordance with the terms of this Agreement, will
be, duly and validly issued and outstanding and fully paid and nonassessable
under the GBCC. None of the outstanding shares of BCG Common Stock has been, and
none of the shares of CSBI Common Stock to be issued in exchange for shares of
BCG Common Stock upon consummation of the Merger will be, issued in violation of
any preemptive rights of the current or past shareholders of BCG.
(b) Except as set forth in Section 5.3(a) of this Agreement, or as
provided pursuant to the BCG Option Plan, or the Bank Corporation of Georgia
Employee Stock Ownership Plan ("BCG ESOP") or pursuant to options to purchase
shares of BCG Common Stock outside the BCG Option Plan or as Previously
Disclosed, as of the date of this Agreement, there are no shares of capital
stock or other equity securities of BCG outstanding and no outstanding options,
warrants, scrip, rights to subscribe to, calls, or commitments of any character
whatsoever relating to, or securities or rights convertible into or exchangeable
for, shares of the capital stock of BCG or contracts, commitments,
understandings, or arrangements by which BCG is or may be bound to issue
additional shares of its capital stock or options, warrants, or rights to
purchase or acquire any additional shares of its capital stock.
5.4 Financial Statements. BCG has Previously Disclosed and delivered to
CSBI prior to the execution of this Agreement copies of all BCG Financial
Statements for periods ended prior to the date hereof and will deliver to CSBI
copies of all BCG Financial Statements prepared subsequent to the date hereof.
The BCG Financial Statements (as of the dates thereof and the periods covered
thereby) (i) are or, if dated after the date of this Agreement, will be in
accordance with the books and records of BCG and the BCG Banks, which are or
will be, complete and correct and which have been or will have been, maintained
in accordance with good business practices, and (ii) present or will present,
fairly the consolidated financial position of BCG and the BCG Banks as of the
dates indicated and the consolidated results of operations, changes in
shareholders' equity, and cash flows of BCG and the BCG Banks for the periods
indicated, in accordance with GAAP (subject to exceptions as to consistency
specified therein or as may be indicated in the notes thereto or, in the case of
interim financial statements, to normal recurring year-end adjustments that are
not material).
5.5 Absence of Undisclosed Liabilities. Neither BCG nor either BCG Bank
has any Liabilities that are reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on either BCG or any of the BCG Banks
except Liabilities which are accrued or reserved against in the consolidated
balance sheets of BCG as of December 31, 1996 and March 31, 1997 included in the
BCG Financial Statements or reflected in the notes thereto. Neither BCG nor
either of the BCG Banks has incurred or paid any Liability since March 31, 1997,
except for such Liabilities incurred or paid in the ordinary course of business
consistent with past business practice and which are not reasonably likely to
have, individually or in the aggregate, a Material Adverse Effect on BCG.
5.6 Absence of Certain Changes or Events. Since March 31, 1997, except as
disclosed in SEC Documents filed by BCG prior to the date of this Agreement, (i)
there have been no events, changes or occurrences which have had, or are
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on BCG, and (ii) neither BCG nor either of the BCG Banks has taken any
action, or failed to take any action, prior to the date of this Agreement, which
action or failure, if taken after the date of this Agreement, would represent or
result in a material breach or violation of any of the covenants and agreements
of BCG provided in Article 7 of this Agreement.
5.7 Tax Matters.
(a) All tax returns required to be filed by or on behalf of BCG or
any of the BCG Banks have been timely filed or requests for extensions have been
timely filed, granted, and have not expired for periods ended on or before
December 31, 1996, and on or before the date of the most recent fiscal year end
immediately preceding the Effective Time, except to the extent that all such
failures to file, taken together, are not reasonably likely to have a Material
Adverse Effect on BCG, and all returns filed are complete and accurate to the
Knowledge of BCG. All
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Taxes shown on filed returns have been paid. As of the date of this Agreement,
there is no audit examination, deficiency, or refund Litigation with respect to
any Taxes that is reasonably likely to result in a determination that would
have, individually or in the aggregate, a Material Adverse Effect on BCG, except
as reserved against in the BCG Financial Statements delivered prior to the date
of this Agreement. All Taxes and other Liabilities due with respect to completed
and settled examinations or concluded Litigation have been paid.
(b) Except as Previously Disclosed, neither BCG nor any of the BCG
Banks has executed an extension or waiver of any statute of limitations on the
assessment or collection of any Tax due that is currently in effect, and no
unpaid tax deficiency has been asserted in writing against or with respect to
BCG or any of the BCG Banks, which deficiency is reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on BCG.
(c) Adequate provision for any Taxes due or to become due for BCG or
any of the BCG Banks for the period or periods through and including the date of
the respective BCG Financial Statements has been made and is reflected on such
BCG Financial Statements.
(d) Deferred Taxes of BCG and the BCG Banks have been provided for in
accordance with GAAP. Effective January 1, 1993, BCG adopted Financial
Accounting Standards Board Statement 109, "Accounting for Income Taxes."
(e) BCG and each BCG Bank has performed all due diligence procedures
required under Internal Revenue Code Section 6722 relating to taxpayer
identification numbers, have complied with all other information reporting
requirements of the IRS, and BCG and each BCG Bank has complied with the
withholding requirements under Internal Revenue Code Section 3406, except for
any nonperformance or noncompliance which, individually or in the aggregate, is
not reasonably likely to have a Material Adverse Effect on either BCG or any BCG
Bank
5.8 Compliance with Laws. BCG is duly registered as a bank holding company
under the BHC Act. Each of the BCG Banks has in effect all permits necessary to
own, lease or operate their Assets and to carry on their respective business as
now conducted, except for those Permits the absence of which are not reasonably
likely to have, individually or in the aggregate, a Material Adverse Effect on
BCG or any of the BCG Banks, and there has occurred no Default under any such
Permit, other than Defaults which are not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on BCG. Neither BCG
nor any of the BCG Banks:
(a) is in violation of any Laws, Orders or Permits applicable to its
business or employees conducting its business, except for violations which are
not reasonably likely to have, individually or in the aggregate, a Material
Adverse Effect on BCG; and
(b) except as Previously Disclosed, has received any notification or
communication from any agency or department of federal, state, or local
government or any Regulatory Authority or the staff thereof (i) asserting that
either BCG or any of the BCG Banks are not in compliance with any of the Laws or
Orders which such governmental authority or Regulatory Authority enforces, where
such noncompliance is reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on BCG or any of the BCG Banks, (ii)
threatening to revoke any Permits, the revocation of which is reasonably likely
to have, individually or in the aggregate, a Material Adverse Effect on either
BCG or any BCG Bank, or (iii) requiring either BCG or any of the BCG Banks to
enter into or consent to the issuance of a cease and desist order, formal
agreement, directive, commitment or memorandum of understanding, or to adopt any
board of directors resolution or similar undertaking, which restricts materially
the conduct of its business, or in any manner relates to its capital adequacy,
its credit or reserve policies, its management, or the payment of dividends.
5.9 Legal Proceedings. There is no Litigation instituted or pending, or,
to the Knowledge of BCG, threatened against either BCG or any of the BCG Banks,
or against any Asset, interest, or right of any of them, that is reasonably
likely to have, individually or in the aggregate, a Material Adverse Effect on
either BCG or any of the BCG Banks, nor are there any Orders of any Regulatory
Authorities, other governmental authorities, or arbitrators outstanding against
either BCG or any of the BCG Banks, that are reasonably likely to have,
individually or in the aggregate a Material Adverse Effect on BCG or any of the
BCG Banks.
5.10 Reports. Since January 1, 1991, BCG and each of the BCG Banks has
filed all reports and statements, together with any amendments required to be
made with respect thereto, that it was required to file with (i) the SEC,
including, but not limited to, Forms 10-K, Forms 10-Q, Forms 8-K, and proxy
statements, (ii) other Regulatory Authorities, and (iii) any applicable state
securities or banking authorities (except, in the case of state securities
authorities, failures to file which are not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on either BCG or any
of the BCG Banks). As of their respective dates, each of such reports
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and documents, including the financial statements, exhibits, and schedules
thereto, complied in all material respects with all applicable Laws. As of their
respective dates, each such report and document did not, in all material
respects, contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
made therein, in light of the circumstances under which they were made, not
misleading.
5.11 Statements True and Correct. No statement, certificate, instrument or
other writing furnished or to be furnished by either BCG or any of the BCG Banks
or any Affiliate thereof to CSBI pursuant to this Agreement or any other
document, agreement or instrument referred to herein contains or will contain
any untrue statement of material fact or will omit to state a material fact
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading. None of the information supplied or to be
supplied by either BCG or any of the BCG Banks or any Affiliate thereof for
inclusion in the Registration Statement to be filed by CSBI with the SEC, will,
when the Registration Statement becomes effective, be false or misleading with
respect to any material fact, or omit to state any material fact necessary to
make the statements therein not misleading. None of the information supplied or
to be supplied by either BCG or any of the BCG Banks or any Affiliate thereof
for inclusion in the Proxy Statement to be mailed to BCG shareholders in
connection with the Shareholders' Meeting, and any other documents to be filed
by either BCG or any of the BCG Banks or any Affiliate thereof with the SEC or
any other Regulatory Authority in connection with the transactions contemplated
hereby, will, at the respective time such documents are filed, and with respect
to the Proxy Statement, when first mailed to the shareholders of BCG, be false
or misleading with respect to any material fact, or omit to state any material
fact necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading, or, in the case of the Proxy
Statement or any amendment thereof or supplement thereto, at the time of the
Shareholders' Meeting, be false or misleading with respect to any material fact,
or omit to state any material fact necessary to correct any statement in any
earlier communication with respect to the solicitation of any proxy for the
Shareholders' Meeting. All documents that either BCG or any of the BCG Banks or
any Affiliate thereof is responsible for filing with any Regulatory Authority in
connection with the transactions contemplated hereby will comply as to form in
all material respects with the provisions of applicable Law.
5.12 Accounting, Tax and Regulatory Matters. Neither BCG nor any of the BCG
Banks or any Affiliate thereof has taken any action or has any Knowledge of any
fact or circumstance that is reasonably likely to (i) prevent the Merger from
qualifying for pooling-of-interests accounting treatment or as a reorganization
within the meaning of Section 368(a) of the Internal Revenue Code, or (ii)
materially impede or delay receipt of any Consents of Regulatory Authorities
referred to in Section 9.1(b) of this Agreement. To the Knowledge of BCG, there
exists no fact, circumstance, or reason why the requisite Consents referred to
in Section 9.1(b) of this Agreement cannot be received in a timely manner
without the imposition of any condition or restriction of the type described in
the second sentence of such Section 9.1(b).
5.13 Assets. Except as Previously Disclosed or as disclosed or reserved
against in the BCG Financial Statements, BCG and each BCG Bank have good and
marketable title, free and clear of all Liens, to all of their respective
Assets. All material tangible properties used in the business of BCG and each
BCG Bank are in good condition, reasonable wear and tear excepted, and are
usable in the ordinary course of business consistent with BCG's past practices.
All Assets which are material to BCG's and BCG Banks' businesses held under
leases or subleases by BCG or any of the BCG Banks, are held under valid
Contracts enforceable in accordance with their respective terms (except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, or other Laws affecting the enforcement of
creditors' rights generally and except that the availability of the equitable
remedy of specific performance or injunctive relief is subject to the discretion
of the court before which any proceedings may be brought), and each such
Contract is in full force and effect. The policies of fire, theft, liability,
and other insurance maintained with respect to the Assets or businesses of BCG
and the BCG Banks provide adequate coverage under current industry practices
against loss or Liability, and the fidelity and blanket bonds in effect as to
which BCG or any of the BCG Banks is a named insured are reasonably sufficient.
The Assets of BCG and the BCG Banks include all assets required to operate the
business of BCG and the BCG Banks as presently conducted.
5.14 Environmental Matters.
(a) To the Knowledge of BCG, BCG and BCG Banks' Participation
Facilities, and their respective Loan Properties are, and have been, in
substantial compliance with all Environmental Laws, except for violations which
are not reasonably likely to have, individually or in the aggregate, a Material
Adverse Effect on BCG or any of the BCG Banks.
(b) There is no Litigation pending or, to the Knowledge of BCG,
threatened before any court, governmental agency or authority or other forum in
which either BCG, BCG Banks or any of their respective
7
Participation Facilities have been or, with respect to threatened Litigation,
may be named as a defendant (i) for alleged noncompliance (including by any
predecessor) with any Environmental Law or (ii) relating to the release into the
environment of any Hazardous Material (as defined below) or oil, whether or not
occurring at, on, under or involving a site owned, leased or operated by either
BCG, BCG Banks or any of their respective Participation Facilities, except for
such Litigation pending or threatened that is not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on BCG.
(c) There is no Litigation pending or, to the Knowledge of BCG,
threatened before any court, governmental agency or board or other forum in
which any of their respective Loan Properties (or any BCG Bank in respect of
such Loan Property) has been or, with respect to threatened Litigation, may be
named as a defendant or potentially responsible party (i) for alleged
noncompliance (including by any predecessor) with any Environmental Law or (ii)
relating to the release into the environment of any Hazardous Material or oil,
whether or not occurring at, on, under or involving a Loan Property, except for
such Litigation pending or threatened that is not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on either BCG or any
of the BCG Banks.
(d) To the Knowledge of BCG, there is no reasonable basis for any
Litigation of a type described in subsections (b) or (c), except such as is not
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on either BCG or any of the BCG Banks.
(e) To the Knowledge of BCG, there have been no releases of Hazardous
Material or oil in, on, under or affecting any Participation Facility or Loan
Property, except such as are not reasonably likely to have, individually or in
the aggregate, a Material Adverse Effect on either BCG or any of the BCG Banks.
(f) Notwithstanding the foregoing, with respect to any of the BCG
Banks' Loan Properties, BCG has not conducted any independent investigation and
is making these representations and warranties only with respect to its
Knowledge.
5.15 Employee Benefit Plans.
(a) BCG has Previously Disclosed, and delivered or made available to
CSBI prior to the execution of this Agreement copies in each case of, all
pension, retirement, profit-sharing, deferred compensation, stock option,
employee stock ownership, severance pay, vacation, bonus, or other incentive
plan, all other written employee programs, arrangements, or agreements, all
medical, vision, dental, or other health plans, all life insurance plans, and
all other employee benefit plans or fringe benefit plans, including, without
limitation, "employee benefit plans" as that term is defined in Section 3(3) of
ERISA, currently adopted, maintained by, sponsored in whole or in part by, or
contributed to by BCG or any Affiliate thereof for the benefit of employees,
retirees, dependents, spouses, directors, independent contractors, or other
beneficiaries and under which such persons are eligible to participate
(collectively, the "BCG Benefit Plans"). Any of the BCG Benefit Plans which is
an "employee pension benefit plan," as that term is defined in Section 3(2) of
ERISA, is referred to herein as a "BCG ERISA Plan." Each BCG ERISA Plan which
is also a "defined benefit plan" (as defined in Section 414(j) of the Internal
Revenue Code) is referred to herein as a "BCG Pension Plan". No BCG Pension
Plan is or has been a multi-employer plan within the meaning of Section 3(37) of
ERISA.
(b) All BCG Benefit Plans are in compliance in all material respects
with the applicable terms of ERISA, the Internal Revenue Code, and any other
applicable Laws the breach or violation of which are reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on BCG. Each BCG
ERISA Plan which is intended to be qualified under Section 401(a) of the
Internal Revenue Code has received a favorable determination letter from the
IRS, and BCG is not aware of any circumstances likely to result in revocation of
any such favorable determination letter. BCG has not engaged in a transaction
with respect to any BCG Benefit Plan that, assuming the taxable period of such
transaction expired as of the date hereof, would subject any BCG Companies to a
tax or penalty imposed by either Section 4975 of the Internal Revenue Code or
Section 502(i) or ERISA in amounts which are reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on BCG.
(c) No BCG ERISA Plan which is a defined benefit plan has any
"unfunded current liability," as that term is defined in Section 302(d)(8)(A) of
ERISA, based on actuarial assumptions set forth for such plan's most recent
actuarial valuation, and the fair market value of the assets of any such plan
exceeds the plan's "benefit liabilities," as that term is defined in Section
4001(a)(16) of ERISA, when determined under actuarial factors that would apply
if the plan terminated in accordance with all applicable legal requirements.
Since the date of the most recent actuarial valuation, there has been (i) no
material change in the financial position of any BCG Pension Plan, (ii) no
change in the actuarial assumptions with respect to any BCG Pension Plan, and
(iii) no increase in benefits under any BCG Pension Plan as a result of plan
amendments or changes in applicable Law which is reasonably
8
likely to have, individually or in the aggregate, a Material Adverse Effect on
BCG or materially affect the funding status of any such plan. Neither any BCG
Pension Plan nor any "single-employer plan", within the meaning of Section
4001(a)(15) of ERISA, currently or formerly maintained by BCG, or the single-
employer plan of any entity which is considered one employer with BCG under
Section 4001 of ERISA or Section 414 of the Internal Revenue Code or Section 302
of ERISA (whether or not waived) (an "ERISA Affiliate") has an "accumulated
funding deficiency" within the meaning of Section 412 of the Internal Revenue
Code or Section 302 of ERISA, which is reasonably likely to have a Material
Adverse Effect on BCG. BCG has not provided, and is not required to provide,
security to a BCG Pension Plan or to any single-employer plan of an ERISA
Affiliate pursuant to Section 401(a)(29) of the Internal Revenue Code.
(d) Within the six-year period preceding the Effective Time, no
Liability under Subtitle C or D of Title IV of ERISA has been or is expected to
be incurred by BCG with respect to any ongoing, frozen or terminated single-
employer plan or the single-employer plan of any ERISA Affiliate, which
Liability is reasonably likely to have a Material Adverse Effect on BCG. Except
as Previously Disclosed, BCG has not incurred any withdrawal Liability with
respect to a multi employer plan under Subtitle B of Title IV or ERISA
(regardless of whether based on contributions of an ERISA Affiliate), which
Liability is reasonably likely to have a Material Adverse Effect on BCG. No
notice of a "reportable event", within the meaning of Section 4043 of ERISA for
which the 30-day reporting requirement has not been waived, has been required to
be filed for any BCG Pension Plan or by any ERISA Affiliate within the 12-month
period ending on the date hereof.
(e) Except as Previously Disclosed, BCG has no obligations to provide
health and life benefits under any of the BCG Benefit Plans after termination of
employment, except as required by Section 601 of ERISA and Section 4980 B of the
Internal Revenue Code and BCG retains the right to amend or terminate any such
Plan.
(f) Except as Previously Disclosed, neither the execution and
delivery of this Agreement nor the consummation of the transactions contemplated
hereby will (i) result in any payment (including, without limitation, severance,
unemployment compensation, golden parachute or otherwise) becoming due to any
officer, director or any employee of BCG from BCG under any BCG Benefit Plan or
otherwise, (ii) increase any benefits otherwise payable under any BCG Benefit
Plan, or (iii) result in any acceleration of the time of payment or vesting of
any such benefit.
(g) The actuarial present values of all accrued deferred compensation
entitlements (including, without limitation, entitlements under any executive
compensation, supplemental retirement, or employment agreement) of employees and
former employees of BCG and its respective beneficiaries, other than
entitlements accrued pursuant to funded retirement plans subject to the
provisions of Section 412 of the Internal Revenue Code or Section 302 of ERISA,
have been fully reflected on the BCG Financial Statements to the extent required
by and in accordance with GAAP.
5.16 Material Contracts. Except as Previously Disclosed or otherwise
reflected in the BCG Financial Statements, neither BCG, any of the BCG Banks nor
any of their respective Assets, businesses or operations, is a party to, or is
bound or affected by, or receives benefits under, (i) any employment, severance,
termination, consulting or retirement Contract providing for aggregate payments
to any Person in any calendar year in excess of $100,000, and (ii) any Contract
relating to the borrowing of money by BCG, any of the BCG Banks or the guarantee
by BCG or any of the BCG Banks of any such obligation (other than Contracts
evidencing deposit liabilities, purchases of federal funds, fully-secured
repurchase agreements, trade payables, and Contracts relating to borrowings or
guarantees made in the ordinary course of business) (together with all Contracts
referred to in Sections 5.13 and 5.15(a) of this Agreement, the "BCG
Contracts"). Neither BCG nor any of the BCG Banks is in Default under any BCG
Contract, other than Defaults which are not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on either BCG or any
of the BCG Banks. All of the indebtedness of BCG and the BCG Banks for money
borrowed is prepayable at any time by BCG without penalty or premium.
5.17 State Takeover Laws. BCG has not taken any necessary action which
would require the transaction contemplated by this Agreement to comply with any
applicable state takeover Law.
5.18 Continuity of Stock Ownership.
(a) To the Knowledge of BCG, there is no plan or intention by the
holders of BCG Shares to sell, exchange, or otherwise dispose of a number of
CSBI Shares received in the Merger that would reduce the ownership of CSBI
Shares by the holders of BCG Shares to a number of CSBI Shares having a value,
as of the date of the Merger, of less than fifty percent (50%) of the value of
all the formerly outstanding BCG Shares as of the same date. For purposes of
this representation, CSBI Shares Exchanged for cash pursuant to Section 1.5,
surrendered by dissenters or exchanged for cash in lieu of fractional CSBI
Shares will be treated as outstanding on
9
the date of the Merger. Moreover, BCG Shares and CSBI Shares held by holders of
BCG Shares and otherwise sold, redeemed, or disposed of prior or subsequent to
the Merger will be considered in making this representation;
(b) CSBI will acquire at least ninety percent (90%) of the fair
market value of the net Assets and at least seventy percent (70%) of the fair
market value of the gross assets held by BCG immediately prior to the
transaction. For purposes of this representation, amounts paid by BCG to
dissenters, BCG assets used to pay its Merger expenses, and all redemptions and
distributions (except for regular, normal dividends) made by BCG immediately
preceding the Merger, will be included as assets of BCG held immediately prior
to the Merger; and
(c) The liabilities of BCG to be assumed by CSBI by virtue of the
Merger and the liabilities to which the Assets of BCG are subject were incurred
by BCG in the ordinary course of business.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF CSBI
CSBI hereby represents and warrants to BCG as follows:
6.1 Organization, Standing, and Power. CSBI is a corporation duly
organized, validly existing, and in good standing under the Laws of the State of
Georgia, and is duly registered as a bank holding company under the BHC Act.
CSBI has the corporate power and authority to carry on its business as now
conducted and to own, lease and operate its Assets. CSBI is duly qualified or
licensed to transact business as a foreign corporation in good standing in the
States of the United States and foreign jurisdictions where the character of its
Assets or the nature or conduct of its business requires it to be so qualified
or licensed, except for such jurisdictions in which the failure to be so
qualified or licensed is not reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on CSBI.
6.2 Authority, No Breach By Agreement.
(a) CSBI has the corporate power and authority necessary to execute,
deliver and perform its obligations under this Agreement and to consummate the
transaction contemplated hereby. The execution, delivery and performance of
this Agreement and the consummation of the Merger contemplated herein, have been
duly and validly authorized by all necessary corporate action in respect thereof
on the part of CSBI. This Agreement represents a legal, valid, and binding
obligation of CSBI, enforceable against CSBI in accordance with its terms
(except in all cases as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium, or similar Laws affecting
the enforcement of creditors' rights generally and except that the availability
of the equitable remedy of specific performance or injunctive relief is subject
to the discretion of the court before which any proceeding may be brought).
(b) Neither the execution and delivery of this Agreement by CSBI, nor
the consummation by CSBI of the transaction contemplated hereby, nor compliance
by CSBI with any of the provisions hereof, will (i) conflict with or result in a
breach of any provision of CSBI's Articles of Incorporation or Bylaws, or (ii)
constitute or result in a Default under, or require any Consent pursuant to, or
result in the creation of any Lien on any Asset of any CSBI Companies under, any
Contract or Permit of any CSBI Companies, where such Default or Lien, or any
failure to obtain such Consent, is reasonably likely to have, individually or in
the aggregate, a Material Adverse Effect on CSBI, or, (iii) subject to receipt
of the requisite approvals referred to in Section 9.1(b) of this Agreement,
violate any Law or Order applicable to any CSBI Companies or any of their
respective Assets.
(c) No notice to, filing with, or Consent of, any public body or
authority is necessary for the consummation by CSBI of the Merger and the other
transactions contemplated in this Agreement other than (i) in connection or
compliance with the provisions of the Securities Laws, applicable state
corporate and securities Laws, (ii) Consents required from Regulatory
Authorities, (iii) notices to or filings with the IRS or the Pension Benefit
Guaranty Corporation with respect to any employee benefit plans, and (iv)
Consents, filings or notifications which, if not obtained or made, are not
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on CSBI.
6.3 Capital Stock.
(a) The authorized capital stock of CSBI consists of 15,000,000
shares of CSBI Common Stock. At the close of business on March 31, 1997, there
were 7,761,624 shares of CSBI Common Stock issued and outstanding. As of March
31, 1997, 50,000 shares of CSBI Common Stock were reserved for issuance upon the
exercise of outstanding stock options and purchases under the Century South
Banks, Inc. Incentive Stock Option Plan ("CSBI Option Plan"), 100,000 shares
were reserved pursuant to the Century South Banks, Inc. Dividend
10
Reinvestment Plan ("Dividend Reinvestment Plan"), 100,000 shares were reserved
pursuant to the Century South Banks, Inc. Employee Stock Ownership Plan ("CSBI
ESOP"), and 5,000 shares were reserved pursuant to options granted to certain
executive officers outside the CSBI Option Plan. All of the issued and
outstanding shares of CSBI Common Stock are, and all of the shares of CSBI
Common Stock to be issued in exchange for shares of BCG Common Stock upon
consummation of the Merger, when issued in accordance with the terms of this
Agreement, will be, duly and validly issued and outstanding and fully paid and
nonassessable under the GBCC. None of the outstanding shares of CSBI Common
Stock has been, and none of the shares of CSBI Common Stock to be issued in
exchange for shares of BCG Common Stock upon consummation of the Merger will be,
issued in violation of any preemptive rights of the current or past shareholders
of CSBI.
(b) Except as set forth in Section 6.3(a) of this Agreement, or as
provided pursuant to the CSBI Option Plan, the CSBI Dividend Reinvestment Plan,
or the CSBI ESOP, or pursuant to options to purchase shares of CSBI Common Stock
outside the CSBI Option Plan or as Previously Disclosed, as of the date of this
Agreement, there are no shares of capital stock or other equity securities of
CSBI outstanding and no outstanding options, warrants, scrip, rights to
subscribe to, calls, or commitments of any character whatsoever relating to, or
securities or rights convertible into or exchangeable for, shares of the capital
stock of CSBI or contracts, commitments, understandings, or arrangements by
which CSBI is or may be bound to issue additional shares of its capital stock or
options, warrants, or rights to purchase or acquire any additional shares of its
capital stock.
6.4 Financial Statements. CSBI has Previously Disclosed and delivered to
BCG prior to the execution of this Agreement copies of all CSBI Financial
Statements for periods ended prior to the date hereof and will deliver to BCG
copies of all CSBI Financial Statements prepared subsequent to the date hereof.
The CSBI Financial Statements (as of the dates thereof and the periods covered
thereby) (i) are or, if dated after the date of this Agreement, will be in
accordance with the books and records of the CSBI Companies, which are or will
be, complete and correct and which have been or will have been, maintained in
accordance with good business practices, and (ii) present or will present,
fairly the consolidated financial position of the CSBI Companies as of the dates
indicated and the consolidated results of operations, changes in shareholders'
equity, and cash flows of the CSBI Companies for the periods indicated, in
accordance with GAAP (subject to exceptions as to consistency specified therein
or as may be indicated in the notes thereto or, in the case of interim financial
statements, to normal recurring year-end adjustments that are not material).
6.5 Absence of Undisclosed Liabilities. No CSBI Companies have any
Liabilities that are reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on CSBI, except Liabilities which are
accrued or reserved against in the consolidated balance sheets of CSBI as of
December 31, 1996 and March 31, 1997 included in the CSBI Financial Statements
or reflected in the notes thereto. No CSBI Companies have incurred or paid any
Liability since March 31, 1997, except for such Liabilities incurred or paid in
the ordinary course of business consistent with past business practice and which
are not reasonably likely to have, individually or in the aggregate, a Material
Adverse Effect on CSBI.
6.6 Absence of Certain Changes or Events. Since March 31, 1997, except as
disclosed in SEC Documents filed by CSBI prior to the date of this Agreement,
(i) there have been no events, changes or occurrences which have had, or are
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on CSBI, and (ii) the CSBI Companies have not taken any action, or failed
to take any action, prior to the date of this Agreement, which action or
failure, if taken after the date of this Agreement, would represent or result in
a material breach or violation of any of the covenants and agreements of CSBI
provided in Article 7 of this Agreement.
6.7 Tax Matters.
(a) All Tax returns required to be filed by or on behalf of any of
the CSBI Companies have been timely filed or requests for extensions have been
timely filed, granted, and have not expired for periods ended on or before
December 31, 1996, and on or before the date of the most recent fiscal year end
immediately preceding the Effective Time, except to the extent that all such
failures to file, taken together, are not reasonably likely to have a Material
Adverse Effect on CSBI, and all returns filed are complete and accurate to the
Knowledge of CSBI. All Taxes shown on filed returns have been paid. As of the
date of this Agreement, there is no audit examination, deficiency, or refund
Litigation with respect to any Taxes that is reasonably likely to result in a
determination that would have, individually or in the aggregate, a Material
Adverse Effect on CSBI, except as reserved against in the CSBI Financial
Statements delivered prior to the date of this Agreement. All Taxes and other
Liabilities due with respect to completed and settled examinations or concluded
Litigation have been paid.
(b) Except as Previously Disclosed, none of the CSBI Companies has
executed an extension or waiver of any statute of limitations on the assessment
or collection of any Tax due that is currently in effect, and no unpaid tax
deficiency has been asserted in writing against or with respect to any CSBI
Companies, which deficiency
11
is reasonably likely to have, individually or in the aggregate, a Material
Adverse Effect on CSBI.
(c) Adequate provision for any Taxes due or to become due for any of
the CSBI Companies for the period or periods through and including the date of
the respective CSBI Financial Statements has been made and is reflected on such
CSBI Financial Statements.
(d) Deferred Taxes of the CSBI Companies have been provided for in
accordance with GAAP. Effective January 1, 1993, CSBI adopted Financial
Accounting Standards Board Statement 109, "Accounting for Income Taxes."
(e) The CSBI Companies have performed all due diligence procedures
required under Internal Revenue Code Section 6722 relating to taxpayer
identification numbers, have complied with all other information reporting
requirements of the IRS, and the CSBI Companies have complied with the
withholding requirements under Internal Revenue Code Section 3406, except for
any nonperformance or noncompliance which, individually or in the aggregate, is
not reasonably likely to have a Material Adverse Effect on the CSBI Companies.
6.8 Compliance with Laws. CSBI is duly registered as a bank holding
company under the BHC Act. Each of the CSBI Companies has in effect all permits
necessary to own, lease or operate their Assets and to carry on their business
as now conducted, except for those Permits the absence of which are not
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on CSBI, and there has occurred no Default under any such Permit, other
than Defaults which are not reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on CSBI. None of the CSBI Companies:
(a) is in violation of any Laws, Orders or Permits applicable to its
business or employees conducting its business, except for violations which are
not reasonably likely to have, individually or in the aggregate, a Material
Adverse Effect on CSBI; and
(b) except as Previously Disclosed, has received any notification or
communication from any agency or department of federal, state, or local
government or any Regulatory Authority or the staff thereof (i) asserting that
any of the CSBI Companies are not in compliance with any of the Laws or Orders
which such governmental authority or Regulatory Authority enforces, where such
noncompliance is reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on CSBI, (ii) threatening to revoke any Permits, the
revocation of which is reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on CSBI, or (iii) requiring any CSBI
Companies to enter into or consent to the issuance of a cease and desist order,
formal agreement, directive, commitment or memorandum of understanding, or to
adopt any Board resolution or similar undertaking, which restricts materially
the conduct of its business, or in any manner relates to its capital adequacy,
its credit or reserve policies, its management, or the payment of dividends.
6.9 Legal Proceedings. There is no Litigation instituted or pending, or,
to the Knowledge of CSBI, threatened against any CSBI Companies, or against any
Asset, interest, or right of any of them, that is reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on CSBI, nor are
there any Orders of any Regulatory Authorities, other governmental authorities,
or arbitrators outstanding against any CSBI Companies, that are reasonably
likely to have, individually or in the aggregate a Material Adverse Effect on
CSBI.
6.10 Reports. Since January 1, 1991, each of the CSBI Companies has filed
all reports and statements, together with any amendments required to be made
with respect thereto, that it was required to file with (i) the SEC, including,
but not limited to, Forms 10-K, Forms 10-Q, Forms 8-K, and proxy statements,
(ii) other Regulatory Authorities, and (iii) any applicable state securities or
banking authorities (except, in the case of state securities authorities,
failures to file which are not reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on CSBI). As of their respective dates,
each of such reports and documents, including the financial statements,
exhibits, and schedules thereto, complied in all material respects with all
applicable Laws. As of their respective dates, each such report and document
did not, in all material respects, contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements made therein, in light of the circumstances under which
they were made, not misleading.
6.11 Statements True and Correct. No statement, certificate, instrument or
other writing furnished or to be furnished by any CSBI Companies or any
Affiliate thereof to BCG pursuant to this Agreement or any other document,
agreement or instrument referred to herein contains or will contain any untrue
statement of material fact or will omit to state a material fact necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading. None of the information supplied or to be supplied by any
CSBI Companies or any Affiliate thereof for inclusion in the Registration
Statement to be filed by CSBI with the SEC, will, when the Registration
Statement becomes effective, be false or misleading with respect to any material
fact, or omit to state any material fact necessary to make the statements
therein not misleading. None of the information supplied or to
12
be supplied by any CSBI Companies or any Affiliate thereof for inclusion in the
Proxy Statement to be mailed to BCG shareholders in connection with the
Shareholders' Meeting, and any other documents to be filed by any CSBI Companies
or any Affiliate thereof with the SEC or any other Regulatory Authority in
connection with the transactions contemplated hereby, will, at the respective
time such documents are filed, and with respect to the Proxy Statement, when
first mailed to the shareholders of BCG, be false or misleading with respect to
any material fact, or omit to state any material fact necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading, or, in the case of the Proxy Statement or any amendment thereof
or supplement thereto, at the time of the Shareholders' Meeting, be false or
misleading with respect to any material fact, or omit to state any material fact
necessary to correct any statement in any earlier communication with respect to
the solicitation of any proxy for the Shareholders' Meeting. All documents that
any CSBI Companies or any Affiliate thereof is responsible for filing with any
Regulatory Authority in connection with the transactions contemplated hereby
will comply as to form in all material respects with the provisions of
applicable Law.
6.12 Accounting, Tax and Regulatory Matters. No CSBI Company or any
Affiliate thereof has taken any action or has any Knowledge of any fact or
circumstance that is reasonably likely to (i) prevent the Merger from qualifying
for pooling-of-interests accounting treatment or as a reorganization within the
meaning of Section 368(a) of the Internal Revenue Code, or (ii) materially
impede or delay receipt of any Consents of Regulatory Authorities referred to in
Section 9.1(b) of this Agreement. To the Knowledge of CSBI, there exists no
fact, circumstance, or reason why the requisite Consents referred to in Section
9.1(b) of this Agreement cannot be received in a timely manner without the
imposition of any condition or restriction of the type described in the second
sentence of such Section 9.1(b).
6.13 Assets. Except as Previously Disclosed or as disclosed or reserved
against in the CSBI Financial Statements, CSBI and each CSBI Subsidiary have
good and marketable title, free and clear of all Liens, to all of their
respective Assets. All material tangible properties used in the business of
CSBI and each CSBI Subsidiary are in good condition, reasonable wear and tear
excepted, and are usable in the ordinary course of business consistent with
CSBI's past practices. All Assets which are material to CSBI and CSBI
Subsidiaries= businesses held under leases or subleases by CSBI or any of the
CSBI Subsidiaries, are held under valid Contracts enforceable in accordance with
their respective terms (except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium, or other Laws affecting the
enforcement of creditors' rights generally and except that the availability of
the equitable remedy of specific performance or injunctive relief is subject to
the discretion of the court before which any proceedings may be brought), and
each such Contract is in full force and effect. The policies of fire, theft,
liability, and other insurance maintained with respect to the Assets or
businesses of CSBI and the CSBI Subsidiaries provide adequate coverage under
current industry practices against loss or Liability, and the fidelity and
blanket bonds in effect as to which CSBI or any of the CSBI Subsidiaries is a
named insured are reasonably sufficient. The Assets of CSBI and the CSBI
Subsidiaries include all assets required to operate the business of CSBI and the
CSBI Subsidiaries as presently conducted.
6.14 Environmental Matters.
(a) To the Knowledge of CSBI, CSBI and CSBI Subsidiaries=
Participation Facilities, and their respective Loan Properties are, and have
been, in substantial compliance with all Environmental Laws, except for
violations which are not reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on CSBI or any of the CSBI Subsidiaries.
(b) There is no Litigation pending or, to the Knowledge of CSBI,
threatened before any court, governmental agency or authority or other forum in
which either CSBI, CSBI Subsidiaries or any of their respective Participation
Facilities have been or, with respect to threatened Litigation, may be named as
a defendant (i) for alleged noncompliance (including by any predecessor) with
any Environmental Law or (ii) relating to the release into the environment of
any Hazardous Material (as defined below) or oil, whether or not occurring at,
on, under or involving a site owned, leased or operated by either CSBI, CSBI
Subsidiaries or any of their respective Participation Facilities, except for
such Litigation pending or threatened that is not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on CSBI.
(c) There is no Litigation pending or, to the Knowledge of CSBI,
threatened before any court, governmental agency or board or other forum in
which any of their respective Loan Properties (or any CSBI Subsidiaries in
respect of such Loan Property) has been or, with respect to threatened
Litigation, may be named as a defendant or potentially responsible party (i) for
alleged noncompliance (including by any predecessor) with any Environmental Law
or (ii) relating to the release into the environment of any Hazardous Material
or oil, whether or not occurring at, on, under or involving a Loan Property,
except for such Litigation pending or threatened that is not reasonably likely
to have, individually or in the aggregate, a Material Adverse Effect on either
CSBI or any of the CSBI Subsidiaries.
13
(d) To the Knowledge of CSBI, there is no reasonable basis for any
Litigation of a type described in subsections (b) or (c), except such as is not
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on either CSBI or any of the CSBI Subsidiaries.
(e) To the Knowledge of CSBI, there have been no releases of
Hazardous Material or oil in, on, under or affecting any Participation Facility
or Loan Property, except such as are not reasonably likely to have, individually
or in the aggregate, a Material Adverse Effect on either CSBI or any of the CSBI
Subsidiaries.
(f) Notwithstanding the foregoing, with respect to any of the CSBI
Subsidiaries= Loan Properties, CSBI has not conducted any independent
investigation and is making these representations and warranties only with
respect to its Knowledge.
6.15 Employee Benefit Plans.
(a) CSBI has Previously Disclosed, and delivered or made available to
BCG prior to the execution of this Agreement copies in each case of, all
pension, retirement, profit-sharing, deferred compensation, stock option,
employee stock ownership, severance pay, vacation, bonus, or other incentive
plan, all other written employee programs, arrangements, or agreements, all
medical, vision, dental, or other health plans, all life insurance plans, and
all other employee benefit plans or fringe benefit plans, including, without
limitation, "employee benefit plans" as that term is defined in Section 3(3) of
ERISA, currently adopted, maintained by, sponsored in whole or in part by, or
contributed to by CSBI or any Affiliate thereof for the benefit of employees,
retirees, dependents, spouses, directors, independent contractors, or other
beneficiaries and under which such persons are eligible to participate
(collectively, the "CSBI Benefit Plans"). Any of the CSBI Benefit Plans which
is an "employee pension benefit plan," as that term is defined in Section 3(2)
of ERISA, is referred to herein as a "CSBI ERISA Plan." Each CSBI ERISA Plan
which is also a "defined benefit plan" (as defined in Section 414(j) of the
Internal Revenue Code) is referred to herein as a "CSBI Pension Plan". No CSBI
Pension Plan is or has been a multi-employer plan within the meaning of Section
3(37) of ERISA.
(b) All CSBI Benefit Plans are in compliance in all material respects
with the applicable terms of ERISA, the Internal Revenue Code, and any other
applicable Laws the breach or violation of which are reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on CSBI. Each CSBI
ERISA Plan which is intended to be qualified under Section 401(a) of the
Internal Revenue Code has received a favorable determination letter from the
IRS, and CSBI is not aware of any circumstances likely to result in revocation
of any such favorable determination letter. CSBI has not engaged in a
transaction with respect to any CSBI Benefit Plan that, assuming the taxable
period of such transaction expired as of the date hereof, would subject any CSBI
Companies to a tax or penalty imposed by either Section 4975 of the Internal
Revenue Code or Section 502(i) or ERISA in amounts which are reasonably likely
to have, individually or in the aggregate, a Material Adverse Effect on CSBI.
(c) No CSBI ERISA Plan which is a defined benefit plan has any
"unfunded current liability," as that term is defined in Section 302(d)(8)(A) of
ERISA, based on actuarial assumptions set forth for such plan's most recent
actuarial valuation, and the fair market value of the assets of any such plan
exceeds the plan's "benefit liabilities," as that term is defined in Section
4001(a)(16) of ERISA, when determined under actuarial factors that would apply
if the plan terminated in accordance with all applicable legal requirements.
Since the date of the most recent actuarial valuation, there has been (i) no
material change in the financial position of any CSBI Pension Plan, (ii) no
change in the actuarial assumptions with respect to any CSBI Pension Plan, and
(iii) no increase in benefits under any CSBI Pension Plan as a result of plan
amendments or changes in applicable Law which is reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on CSBI or
materially affect the funding status of any such plan. Neither any CSBI Pension
Plan nor any "single-employer plan", within the meaning of Section 4001(a)(15)
of ERISA, currently or formerly maintained by CSBI, or the single-employer plan
of any entity which is considered one employer with CSBI under Section 4001 of
ERISA or Section 414 of the Internal Revenue Code or Section 302 of ERISA
(whether or not waived) (an "ERISA Affiliate") has an "accumulated funding
deficiency" within the meaning of Section 412 of the Internal Revenue Code or
Section 302 of ERISA, which is reasonably likely to have a Material Adverse
Effect on CSBI. CSBI has not provided, and is not required to provide, security
to a CSBI Pension Plan or to any single-employer plan of an ERISA Affiliate
pursuant to Section 401(a)(29) of the Internal Revenue Code.
(d) Within the six-year period preceding the Effective Time, no
Liability under Subtitle C or D of Title IV of ERISA has been or is expected to
be incurred by CSBI with respect to any ongoing, frozen or terminated single-
employer plan or the single-employer plan of any ERISA Affiliate, which
Liability is reasonably likely to have a Material Adverse Effect on CSBI. Except
as Previously Disclosed, CSBI has not incurred any withdrawal
14
Liability with respect to a multi employer plan under Subtitle B of Title IV or
ERISA (regardless of whether based on contributions of an ERISA Affiliate),
which Liability is reasonably likely to have a Material Adverse Effect on CSBI.
No notice of a "reportable event", within the meaning of Section 4043 of ERISA
for which the 30-day reporting requirement has not been waived, has been
required to be filed for any CSBI Pension Plan or by any ERISA Affiliate within
the 12-month period ending on the date hereof.
(e) Except as Previously Disclosed, CSBI has no obligations to
provide health and life benefits under any of the CSBI Benefit Plans after
termination of employment, except as required by Section 601 of ERISA and
Section 4980 B of the Internal Revenue Code, CSBI retains the right to amend or
terminate any such Plan.
(f) Except as Previously Disclosed, neither the execution and
delivery of this Agreement nor the consummation of the transactions contemplated
hereby will (i) result in any payment (including, without limitation, severance,
unemployment compensation, golden parachute or otherwise) becoming due to any
officer, director or any employee of CSBI from CSBI under any CSBI Benefit Plan
or otherwise, (ii) increase any benefits otherwise payable under any CSBI
Benefit Plan, or (iii) result in any acceleration of the time of payment or
vesting of any such benefit.
(g) The actuarial present values of all accrued deferred compensation
entitlements (including, without limitation, entitlements under any executive
compensation, supplemental retirement, or employment agreement) of employees and
former employees of CSBI and its respective beneficiaries, other than
entitlements accrued pursuant to funded retirement plans subject to the
provisions of Section 412 of the Internal Revenue Code or Section 302 of ERISA,
have been fully reflected on the CSBI Financial Statements to the extent
required by and in accordance with GAAP.
6.16 Material Contracts. Except as Previously Disclosed or otherwise
reflected in the CSBI Financial Statements, neither CSBI, any of the CSBI
Subsidiaries nor any of their respective Assets, businesses or operations, is a
party to, or is bound or affected by, or receives benefits under, (i) any
employment, severance, termination, consulting or retirement Contract providing
for aggregate payments to any Person in any calendar year in excess of $100,000,
and (ii) any Contract relating to the borrowing of money by CSBI, any of the
CSBI Subsidiaries or the guarantee by CSBI or any of the CSBI Subsidiaries of
any such obligation (other than Contracts evidencing deposit liabilities,
purchases of federal funds, fully-secured repurchase agreements, trade payables,
and Contracts relating to borrowings or guarantees made in the ordinary course
of business) (together with all Contracts referred to in Sections 6.13 and
6.15(a) of this Agreement, the "CSBI Contracts"). Neither CSBI nor any of the
CSBI Subsidiaries is in Default under any CSBI Contract, other than Defaults
which are not reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on either CSBI or any of the CSBI Subsidiaries. All of
the indebtedness of CSBI and the CSBI Subsidiaries for money borrowed is
prepayable at any time by CSBI without penalty or premium.
ARTICLE 7
CONDUCT OF BUSICNESS PENDING CONSUMMATION
7.1 Affirmative Covenants of BCG. Unless the prior written consent of CSBI
shall have been obtained, and except as otherwise contemplated herein, BCG
agrees:
(a) to operate its business and cause the BCG Banks to operate their
respective businesses in the usual, regular, and ordinary course;
(b) to preserve intact its business organizations and Assets and
maintain its rights and franchises;
(c) to use its best efforts to cause its representations and
warranties to be correct at all times; and
(d) to take no action which would (i) adversely affect the ability of
any Party to obtain any Consents required for the transactions contemplated
hereby without imposition of a condition or restriction of the type referred to
in the last sentence of Section 9.1(b) of this Agreement or (ii) adversely
affect in any material respect the ability of either Party to perform its
covenants and agreements under this Agreement.
7.2 Negative Covenants of BCG. From the date of this Agreement until the
earlier of the Effective Time or the termination of this Agreement, BCG
covenants and agrees that it and each of the BCG Banks will not do or agree or
commit to do, any of the following without the prior written consent of the
Chief Executive Officer of CSBI, which consent shall not be unreasonably
withheld:
(a) amend the Articles of Incorporation, Articles of Association,
Bylaws or other governing
15
instruments of either BCG or any of the BCG Banks; or
(b) incur any additional debt obligation or other obligation for
borrowed money in excess of an aggregate of $100,000 except in the ordinary
course of the business of BCG and the BCG Banks consistent with past practices
(which shall include creation of deposit liabilities, purchases of federal
funds, and entry into repurchase agreements fully secured by U.S. government or
agency securities), or impose, or suffer the imposition, on any share of stock
of the BCG Banks held by BCG of any Lien or permit any such Lien to exist; or
(c) repurchase, redeem, or otherwise acquire or exchange (other than
exchanges in the ordinary course under current employee benefit plans, dividend
reinvestment plans or voluntary stock purchase plans), directly or indirectly,
any shares, or any securities convertible into any shares, of the capital stock
of BCG, or declare or pay any dividend or make any other distribution in respect
of BCG's capital stock provided that BCG may, in its sole discretion (to the
extent legally and contractually permitted to do so), but shall not be obligated
to, declare and pay a quarterly cash dividend consistent with its past
practices; or
(d) except for this Agreement, or as Previously Disclosed, issue or
sell, pledge, encumber, authorize the issuance of, enter into any Contract to
issue, sell, pledge, encumber, or authorize the issuance of, or otherwise permit
to become outstanding, any additional shares of either BCG or any of the BCG
Banks' common stock, or any stock appreciation rights, or any option, warrant,
conversion, or other right to acquire any such stock other than in the ordinary
course under current employee benefit plans, dividend reinvestment plans or
voluntary stock purchase plans; or
(e) adjust, split, combine or reclassify any capital stock of BCG or
issue or authorize the issuance of any other securities in respect of or in
substitution for shares of either BCG or any of the BCG Banks' common stock or
sell, lease, mortgage or otherwise dispose of or otherwise encumber any Asset
having a book value in excess of $100,000 other than in the ordinary course of
business for reasonable and adequate consideration; or
(f) acquire direct or indirect control over any Person, other than in
connection with (i) foreclosures in the ordinary course of business, or (ii)
acquisitions of control by BCG in its fiduciary capacity; or
(g) grant any increase in compensation or benefits to the employees
or officers of either BCG or any of the BCG Banks (including such discretionary
increases as may be contemplated by existing employment agreements) exceeding
five percent (5%) individually or in the aggregate on an annual basis, except in
accordance with past practice Previously Disclosed or as required by Law; pay
any bonus except in accordance with past practice Previously Disclosed or the
provisions of any applicable program or plan adopted by its Board of Directors
prior to the date of this Agreement; enter into or amend any severance
agreements with officers of BCG; grant any increase in fees or other increases
in compensation or other benefits to directors of either BCG or any of the BCG
Banks except in accordance with past practice Previously Disclosed; or
(h) enter into or amend any employment Contract between BCG and any
Person (unless such amendment is required by Law or this Agreement) that BCG
does not have the unconditional right to terminate without Liability (other than
Liability for services already rendered), at any time on or after the Effective
Time; or
(i) adopt any new employee benefit plan of BCG or make any material
change in or to any existing employee benefit plans of BCG other than any such
change that is required by Law or that, in the opinion of counsel, is necessary
or advisable to maintain the tax qualified status of any such plan; or
(j) make any significant change in any accounting methods or systems
of internal accounting controls, except as may be appropriate to conform to
changes in regulatory accounting requirements or GAAP; or
(k) commence any Litigation other than in accordance with past
practice, settle any Litigation involving any Liability of BCG for money damages
in excess of $100,000 or material restrictions upon the operations of BCG; or
(l) except in the ordinary course of business, modify, amend or
terminate any material Contract or waive, release, compromise or assign any
material rights or claims.
7.3 Affirmative Covenants of CSBI. Unless the prior written consent of BCG
shall have been obtained, and except as otherwise contemplated herein, CSBI
agrees
(a) to operate its business and cause the CSBI Companies to operate
their respective businesses in the usual, regular, and ordinary course;
16
(b) to preserve intact its business organizations and Assets and
maintain its rights and franchises;
(c) to use its best efforts to cause its representations and
warranties to be correct at all times; and
(d) to take no action which would (i) adversely affect the ability of
any Party to obtain any Consents required for the transactions contemplated
hereby without imposition of a condition or restriction of the type referred to
in the last sentence of Section 9.1(b) of this Agreement or (ii) adversely
affect in any material respect the ability of either Party to perform its
covenants and agreements under this Agreement.
7.4 Negative Covenants of CSBI. From the date of this Agreement until the
earlier of the Effective Time or the termination of this Agreement, CSBI
covenants and agrees that it and each of the CSBI Companies will not do or
agree or commit to do, any of the following without the prior written consent of
the Chief Executive Officer of BCG, which consent shall not be unreasonably
withheld:
(a) amend the Articles of Incorporation, Articles of Association,
Bylaws or other governing instruments of either CSBI or any of the CSBI
Companies; or
(b) incur any additional debt obligation or other obligation for
borrowed money in excess of an aggregate of $100,000 except in the ordinary
course of the business of CSBI and the CSBI Companies consistent with past
practices (which shall include creation of deposit liabilities, purchases of
federal funds, and entry into repurchase agreements fully secured by U.S.
government or agency securities), or impose, or suffer the imposition, on any
share of stock of the CSBI Companies held by CSBI of any Lien or permit any such
Lien to exist; or
(c) repurchase, redeem, or otherwise acquire or exchange (other than
exchanges in the ordinary course under current employee benefit plans, dividend
reinvestment plans or voluntary stock purchase plans), directly or indirectly,
any shares, or any securities convertible into any shares, of the capital stock
of CSBI, or declare or pay any dividend or make any other distribution in
respect of CSBI's capital stock provided that CSBI may, in its sole discretion
(to the extent legally and contractually permitted to do so), but shall not be
obligated to, declare and pay a quarterly cash dividend consistent with its past
practices; or
(d) except for this Agreement, or as Previously Disclosed, issue or
sell, pledge, encumber, authorize the issuance of, enter into any Contract to
issue, sell, pledge, encumber, or authorize the issuance of, or otherwise permit
to become outstanding, any additional shares of either CSBI or any of the CSBI
Companies' common stock, or any stock appreciation rights, or any option,
warrant, conversion, or other right to acquire any such stock other than in the
ordinary course under current employee benefit plans, dividend reinvestment
plans or voluntary stock purchase plans; or
(e) adjust, split, combine or reclassify any capital stock of CSBI or
issue or authorize the issuance of any other securities in respect of or in
substitution for shares of either CSBI or any of the CSBI Companies' common
stock or sell, lease, mortgage or otherwise dispose of or otherwise encumber any
Asset having a book value in excess of $100,000 other than in the ordinary
course of business for reasonable and adequate consideration; or
(f) acquire direct or indirect control over any Person, other than in
connection with (i) foreclosures in the ordinary course of business, or (ii)
acquisitions of control by CSBI in its fiduciary capacity; or
(g) grant any increase in compensation or benefits to the employees
or officers of either CSBI or any of the CSBI Companies (including such
discretionary increases as may be contemplated by existing employment
agreements) exceeding five percent (5%) individually or in the aggregate on an
annual basis, except in accordance with past practice Previously Disclosed or as
required by Law; pay any bonus except in accordance with past practice
Previously Disclosed or the provisions of any applicable program or plan adopted
by its Board of Directors prior to the date of this Agreement; enter into or
amend any severance agreements with officers of CSBI; grant any increase in fees
or other increases in compensation or other benefits to directors of either CSBI
or any of the CSBI Companies except in accordance with past practice Previously
Disclosed; or
(h) enter into or amend any employment Contract between CSBI and any
Person (unless such amendment is required by Law or this Agreement) that CSBI
does not have the unconditional right to terminate without Liability (other than
Liability for services already rendered), at any time on or after the Effective
Time; or
(i) adopt any new employee benefit plan of CSBI or make any material
change in or to any existing employee benefit plans of CSBI other than any such
change that is required by Law or that, in the opinion
17
of counsel, is necessary or advisable to maintain the tax qualified status of
any such plan; or
(j) make any significant change in any accounting methods or systems
of internal accounting controls, except as may be appropriate to conform to
changes in regulatory accounting requirements or GAAP; or
(k) commence any Litigation other than in accordance with past
practice, settle any Litigation involving any Liability of CSBI for money
damages in excess of $100,000 or material restrictions upon the operations of
CSBI; or
(l) except in the ordinary course of business, modify, amend or
terminate any material Contract or waive, release, compromise or assign any
material rights or claims.
7.5 Adverse Changes in Condition. Each Party agrees to give written notice
promptly to the other Party upon becoming aware of the occurrence or impending
occurrence of any event or circumstance relating to it or any of its
Subsidiaries which (i) is reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on it or (ii) is reasonably likely to cause
or constitute a material breach of any of its representations, warranties, or
covenants contained herein, and to use its reasonable efforts to prevent or
promptly to remedy the same.
7.6 Reports. Each Party and its Subsidiaries shall file all reports
required to be filed by it with Regulatory Authorities between the date of this
Agreement and the Effective Time and shall deliver to the other Party copies of
all such reports (other than currency transaction reports) promptly after the
same are filed. If financial statements are contained in any such reports filed
with the SEC, such financial statements will fairly present the consolidated
financial position of the entity filing such statements as of the dates
indicated and the consolidated results of operations, changes in shareholders'
equity, and cash flows for the periods then ended in accordance with GAAP
(subject in the case of interim financial statements to normal recurring year-
end adjustments that are not material). As of their respective dates, such
reports filed with the SEC will comply in all material respects with the
Securities Laws and will not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading. Any financial statements contained in any other
reports to another Regulatory Authority shall be prepared in accordance with
Laws applicable to such reports.
ARTICLE 8
ADDITIONAL AGREEMENTS
8.1 Registration Statement, Proxy Statement, Shareholder Approval. As soon
as practicable after execution of this Agreement, CSBI shall file the
Registration Statement with the SEC, and shall use its reasonable efforts to
cause the Registration Statement to become effective under the 1933 Act and take
any action required to be taken under the applicable state blue sky or
securities Laws in connection with the issuance of the shares of CSBI Common
Stock upon consummation of the Merger. BCG shall furnish all information
concerning it and the holders of its capital stock as CSBI may reasonably
request in connection with such action. BCG shall call a Shareholders' Meeting,
to be held as soon as reasonably practicable after the Registration Statement is
declared effective by the SEC, for the purpose of voting upon approval of this
Agreement and such other related matters as it deems appropriate. In connection
with the Shareholders' Meeting, (i) BCG shall assist CSBI in the preparation and
filing of a Proxy Statement (which shall be included in the Registration
Statement) with the SEC and mail it to BCG's shareholders, (ii) the Parties
shall furnish to each other all information concerning them that they may
reasonably request in connection with such Proxy Statement, (iii) the Board of
Directors of BCG shall unanimously recommend (subject to compliance with their
fiduciary duties as advised by counsel to its shareholders the approval of this
Agreement, and (iv) the Board of Directors and officers of BCG shall use their
best efforts to obtain such shareholders' approval (subject to compliance with
their fiduciary duties as advised by counsel).
8.2 Applications. CSBI shall promptly prepare and file, and BCG shall
cooperate in the preparation and, where appropriate, filing of, applications
with all Regulatory Authorities having jurisdiction over the transactions
contemplated by this Agreement seeking the requisite Consents necessary to
consummate the transactions contemplated by this Agreement. CSBI shall permit
BCG to review such applications prior to filing same.
8.3 Filings with State Offices. Upon the terms and subject to the
conditions of this Agreement, CSBI shall execute and file the Articles of Merger
with the Secretary of State of the State of Georgia in connection with the
Closing.
8.4 Agreement as to Efforts to Consummate. Subject to the terms and
conditions of this Agreement, each Party agrees to use its reasonable efforts to
take all actions, and to do all things necessary, proper, or advisable
18
under applicable Laws, as promptly as practicable so as to permit consummation
of the Merger at the earliest possible date and to otherwise enable consummation
of the transactions contemplated hereby and shall cooperate fully with the other
Party hereto to that end (it being understood that any amendments to the
Registration Statement filed by CSBI in connection with the CSBI Common Stock to
be issued in the Merger or a resolicitation of proxies as a consequence of an
acquisition agreement by CSBI or any of its Subsidiaries shall not violate this
covenant), including, without limitation, using its reasonable efforts to lift
or rescind any Order adversely affecting its ability to consummate the
transactions contemplated herein and to cause to be satisfied the conditions
referred to in Article 9 of this Agreement. Each Party shall use its reasonable
efforts to obtain all Consents necessary or desirable for the consummation of
the transactions contemplated by this Agreement.
8.5 Investigation and Confidentiality.
(a) Prior to the Effective Time, each Party will keep the other Party
advised of all material developments relevant to its business and to
consummation of the Merger and shall permit the other Party to make or cause to
be made such investigation of the business and properties of it and its
Subsidiaries and of their respective financial and legal conditions as the other
Party reasonably requests, provided that such investigation shall be reasonably
related to the transaction contemplated hereby and shall not interfere
unnecessarily with normal operations. No investigation by a Party shall affect
the representations and warranties of the other Party.
(b) Each Party shall, and shall cause its advisers and agents to,
maintain the confidentiality of all confidential information furnished to it by
other Party concerning its and its Subsidiaries' businesses, operations, and
financial condition except in furtherance of the transaction contemplated by
this Agreement. If this Agreement is terminated prior to the Effective Time,
each Party shall promptly return all documents and copies thereof, and all work
papers containing confidential information received from the other Party.
(c) Each Party agrees to give the other Party notice as soon as
practicable after any determination by it of any fact or occurrence relating to
the other Party which it has discovered through the course of its investigation
and which represents, or is reasonably likely to represent, either a material
breach of any representation, warranty, covenant or agreement of the other Party
or which has had or is reasonably likely to have a Material Adverse Effect on
the other Party.
8.6 Press Releases. Prior to the Effective Time, BCG and CSBI shall
consult with each other as to the form and substance of any press release or
other public disclosure materially related to this Agreement or any other
transaction contemplated hereby; provided, however, that nothing in this Section
8.6 shall be deemed to prohibit any Party from making any disclosure which its
counsel deems necessary or advisable in order to satisfy such Party's disclosure
obligations imposed by Law.
8.7 Certain Actions. Except with respect to this Agreement and the
transactions contemplated hereby or with the consent of the other Party, neither
Party nor any of its respective Affiliate, nor any investment banker, attorney,
accountant or other representative (collectively "Representatives") retained by
such Party shall directly or indirectly solicit any Acquisition Proposal by any
Person. Except to the extent necessary to comply with the fiduciary duties of a
Party's Board of Directors as advised by counsel, neither Party nor any of its
respective Affiliates or Representatives thereof shall furnish any non-public
information that it is not legally obligated to furnish, negotiate with respect
to, or enter into any Contract with respect to, any Acquisition Proposal, but
either Party may communicate information about such an Acquisition Proposal to
its stockholders if and to the extent that it is required to do so in order to
comply with its legal obligations as advised by counsel. Either Party shall
promptly notify the other verbally and in writing in the event that such Party
receives any inquiry or proposal relating to any such transaction. Each Party
shall (i) immediately cease and cause to be terminated any existing activities,
discussions or negotiations with any Persons conducted heretofore with respect
to any of the foregoing, and (ii) direct and use its reasonable efforts to cause
all of its Representatives not to engage in any of the foregoing.
8.8 Accounting and Tax Treatment. Each of the Parties undertakes and
agrees to use its reasonable efforts to cause the Merger, and to take no action
which would cause the Merger not, to qualify for pooling-of-interests accounting
treatment and treatment as a "reorganization" within the meaning of Section
368(a) of the Internal Revenue Code for federal income tax purposes.
8.9 State Takeover Laws. BCG shall take all necessary steps to exempt the
transactions contemplated by this Agreement from, or if necessary challenge the
validity or applicability of, any applicable state takeover Law.
8.10 Articles of Incorporation Provisions. BCG shall take all necessary
action to ensure that the entering into of this Agreement and the consummation
of the Merger does not and will not result in the grant of any rights to any
Person under the Articles of Incorporation, Bylaws or other governing
instruments of BCG or restrict or impair
19
the ability of CSBI to vote, or otherwise to exercise the rights of a
shareholder with respect to, shares of BCG that may be acquired or controlled by
it.
8.11 Agreement of Affiliates. BCG has Previously Disclosed all Persons
whom it reasonably believes is an "affiliate" of BCG for purposes of Rule 145
under the 1933 Act. BCG shall use its reasonable efforts to cause each such
Person to deliver to CSBI not later than 30 days after the date of this
Agreement, a written agreement, substantially in the form of Exhibit 1,
providing that such Person will not sell, pledge, transfer, or otherwise dispose
of the shares of BCG Common Stock held by such Person except as contemplated by
such agreement or by this Agreement and will not sell, pledge, transfer, or
otherwise dispose of the shares of CSBI Common Stock to be received by such
Person upon consummation of the Merger except in compliance with applicable
provisions of the 1933 Act and the rules and regulations thereunder and until
such time as the financial results covering at least 30 days of combined
operations of CSBI and BCG have been published within the meaning of Section
201.01 of the SEC's Codification of Financial Reporting Policies. If the Merger
will qualify for pooling-of-interests accounting treatment, shares of CSBI
Common Stock issued to such affiliates of BCG in exchange for shares of BCG
Common Stock shall not be transferable until such time as financial results
referred to in this Section 8.11 have been published as set forth in this
Section 8.11, regardless of whether each such affiliate has provided the written
agreement referred to in this Section 8.11 (and CSBI shall be entitled to place
restrictive legends upon certificates for shares of CSBI Common Stock issued to
affiliates of BCG pursuant to this Agreement to enforce the provisions of this
Section 8.11). CSBI shall not be required to maintain the effectiveness of the
Registration Statement under the 1933 Act for the purposes of resale of CSBI
Common Stock by such affiliates.
8.12 Employee Benefits and Contracts. Following the Effective Time, CSBI
shall provide generally to officers and employees of BCG employee benefits under
employee benefit plans on terms and conditions which when taken as a whole are
substantially similar to those currently provided by the CSBI Companies to their
similarly situated officers and employees. For purposes of participation and
vesting under such employee benefit plans, the service of the employees of BCG
prior to the Effective Time shall be treated as service with the CSBI Companies
participating in such employee benefit plans. Except as set forth herein, CSBI
also shall honor in accordance with their terms all employment, severance,
consulting and other compensation Contracts Previously Disclosed to CSBI between
BCG and any current or former director, officer, or employee thereof, and all
provisions for vested benefits or other vested amounts earned or accrued through
the Effective Time under the BCG Benefit Plans. Each Party will exercise its
best efforts to amend any agreement it has with its respective officers and
employees to except the Merger from qualifying under any change of control
provision under such officer's or employee's employment, option or similar
agreement
ARTICLE 9
CONDITIONS PRECEDENT TO OBLIGATIONS TO CONSUMMATE
9.1 Conditions to Obligations of Each Party. The respective obligations
of each Party to perform this Agreement and consummate the Merger are subject to
the satisfaction of the following conditions, unless waived by both Parties
pursuant to Section 11.6 of this Agreement:
(a) Shareholder Approval. The shareholders of BCG shall have
--------------------
approved this Agreement, and the consummation of the Merger as and to the extent
required by Law and by the provisions of any of its governing instruments.
(b) Regulatory Approvals. All Consents of, filings and
--------------------
registrations with, and notifications to, all Regulatory Authorities required
for consummation of the Merger shall have been obtained or made and shall be in
full force and effect and all waiting periods required by Law shall have
expired. No Consent obtained from any Regulatory Authority which is necessary to
consummate the transactions contemplated hereby shall be conditioned or
restricted in a manner (including, without limitation, requirements relating to
the raising of additional capital or the disposition of Assets) which in the
reasonable judgment of the Board of Directors of either Party would so
materially adversely impact the economic or business benefits of the
transactions contemplated by this Agreement so as to render inadvisable the
consummation of the Merger.
(c) Consents and Approvals. Each Party shall have obtained any and
----------------------
all Consents required for consummation of the Merger (other than those referred
to in Section 9.1(b) of this Agreement) or for the preventing of any Default
under any Contract or Permit of such Party which, if not obtained or made, is
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on such Party.
(d) Legal Proceedings. No court or governmental or regulatory
-----------------
authority of competent jurisdiction shall have enacted, issued, promulgated,
enforced or entered any Law or Order (whether temporary, preliminary or
permanent) or taken any other action which prohibits, restricts or makes illegal
consummation of the
20
transactions contemplated by this Agreement.
(e) Registration Statement. The Registration Statement shall be
----------------------
effective under the 1933 Act, no stop orders suspending the effectiveness of the
Registration Statement shall have been issued, no action, suit, proceeding or
investigation by the SEC to suspend the effectiveness thereof shall have been
initiated and be continuing, and all necessary approvals under state securities
Laws or the 1933 Act or 1934 Act relating to the issuance or trading of the
shares of CSBI Common Stock issuable pursuant to the Merger shall have been
received.
(f) Pooling Letters. Each of the Parties shall have received a
---------------
letter, dated as of the Effective Time, in form and substance reasonably
acceptable to such Party, from KPMG Peat Marwick LLP to the effect that the
Merger will qualify for pooling-of-interests accounting treatment.
(g) Tax Matters. BCG and CSBI shall have received a written opinion
-----------
of counsel from Xxxxxxxx Xxxxxxx LLP in form reasonably satisfactory to each of
them (the "Tax Opinion"), to the effect that for federal income tax purposes (i)
the Merger will constitute a reorganization within the meaning of Section 368(a)
of the Internal Revenue Code, (ii) the exchange in the Merger of BCG Common
Stock for CSBI Common Stock will not give rise to gain or loss to the
stockholders of BCG with respect to such exchange (except to the extent of any
cash received), and (iii) neither BCG nor CSBI will recognize gain or loss as a
consequence of the Merger except for income and deferred gain recognized
pursuant to Treasury regulations issued under Section 1502 of the Internal
Revenue Code. In rendering such Tax Opinion, Xxxxxxxx Xxxxxxx LLP shall be
entitled to rely upon representations of officers of BCG and CSBI reasonably
satisfactory in form and substance to such counsel.
9.2 Conditions to Obligations of CSBI. The obligations of CSBI to perform
this Agreement and consummate the Merger and the other transactions contemplated
hereby are subject to the satisfaction of the following conditions, unless
waived by CSBI pursuant to Section 11.6(a) of this Agreement:
(a) Representations and Warranties. The representations and
------------------------------
warranties of BCG set forth or referred to in this Agreement shall be true and
correct in all material respects as of the date of this Agreement and as of the
Effective Time with the same effect as though all such representations and
warranties had been made on and as of the Effective Time (provided that
representations and warranties which are confined to a specified date shall
speak only as of such date), except (i) as expressly contemplated by this
Agreement, or (ii) for representations and warranties the inaccuracies of which
relate to matters that are not reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on BCG.
(b) Performance of Agreements and Covenants. Each and all of the
---------------------------------------
agreements and covenants of BCG to be performed and complied with pursuant to
this Agreement and the other agreements contemplated hereby prior to the
Effective Time shall have been duly performed and complied with in all material
respects.
(c) Certificates. BCG shall have delivered to CSBI (i) a certificate,
------------
dated as of the Effective Time and signed on its behalf by its Chief Executive
Officer and its Chief Financial Officer, to the effect that the conditions of
its obligations set forth in Section 9.2(a) and 9.2(b) of this Agreement have
been satisfied, and (ii) certified copies of resolutions duly adopted by BCG
Board of Directors and shareholders evidencing the taking of all corporate
action necessary to authorize the execution, delivery and performance of this
Agreement, and the consummation of the transactions contemplated hereby, all in
such reasonable detail as CSBI and its counsel shall request.
(d) Opinion of Counsel. CSBI shall have received an opinion of
------------------
Xxxxxxxxxx Xxxxxxxx LLP, counsel to BCG, dated as of the Closing, in form
reasonably satisfactory to CSBI, as to the matters set forth in Exhibit 2
hereto.
(e) Accountant's Letters. CSBI shall have received from Xxxxxx Xxxxxx
--------------------
Xxxxx, LLP letters dated not more than five (5) days prior to (i) the date of
the Proxy Statement and (ii) the Effective Time, with respect to certain
financial information regarding BCG, in form and substance reasonably
satisfactory to CSBI, which letters shall be based upon customary specified
procedures undertaken by such firm.
(f) Affiliates Agreements. CSBI shall have received from each
---------------------
affiliate of BCG the affiliates' letters referred to in Section 8.11 hereof, to
the extent necessary to assure in the reasonable judgment of CSBI that the
transaction contemplated hereby will qualify for pooling-of-interests accounting
treatment.
(g) Due Diligence Investigation. On or before June 30, 1997, CSBI
---------------------------
shall have completed a due diligence investigation in regard to BCG and shall
have resolved to its sole satisfaction any issues which arise in the course of
such investigation.
21
9.3 Conditions to Obligations of BCG. The obligations of BCG to perform
this Agreement and consummate the Merger and the other transactions contemplated
hereby are subject to the satisfaction of the following conditions, unless
waived by BCG pursuant to Section 11.6(b) of this Agreement:
(a) Representations and Warranties. The representations and
------------------------------
warranties of CSBI set forth or referred to in this Agreement shall be true and
correct in all material respects as of the date of this Agreement and as of the
Effective Time with the same effect as though all such representations and
warranties had been made on and as of the Effective Time (provided that
representations and warranties which are confined to a specified date shall
speak only as of such date), except (i) as expressly contemplated by this
Agreement, or (ii) for representations and warranties the inaccuracies of which
relate to matters that are not reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on CSBI.
(b) Performance of Agreements and Covenants. Each and all of the
---------------------------------------
agreements and covenants of CSBI to be performed and complied with pursuant to
this Agreement and the other agreements contemplated hereby prior to the
Effective Time shall have been duly performed and complied with in all material
respects.
(c) Certificates. CSBI shall have delivered to BCG (i) a certificate,
------------
dated as of the Effective Time and signed on its behalf by its Chief Executive
Officer and its Chief Financial Officer, to the effect that the conditions of
its obligations set forth in Section 9.3(a) and 9.3(b) of this Agreement have
been satisfied, and (ii) certified copies of resolutions duly adopted by CSBI
Board of Directors evidencing the taking of all corporate action necessary to
authorize the execution, delivery and performance of this Agreement, and the
consummation of the transaction contemplated hereby, all in such reasonable
detail as BCG and its counsel shall request.
(d) Opinion of Counsel. BCG shall have received an opinion of
------------------
Xxxxxxxx Xxxxxxx LLP, counsel to CSBI, dated as of the Effective Time, in form
reasonably satisfactory to BCG, as to matters set forth in Exhibit 3 hereto.
(e) Due Diligence Investigation. On or before June 30, 1997, BCG
---------------------------
shall have completed a due diligence investigation in regard to CSBI and shall
have resolved to its sole satisfaction any issues which arise in the course of
such investigation.
(f) Accountant's Letters. BCG shall have received from KPMG Peat
--------------------
Marwick letters dated not more than five (5) days prior to (i) the date of the
Proxy Statement and (ii) the Effective Time, with respect to certain financial
information regarding CSBI, in form and substance reasonably satisfactory to
BCG, which letters shall be based upon customary specified procedures undertaken
by such firm.
ARTICLE 10
TERMINATION
10.1 Termination. Notwithstanding any other provision of this Agreement,
and notwithstanding the approval of this Agreement by the shareholders of BCG,
this Agreement may be terminated and the Merger abandoned at any time prior to
the Effective Time:
(a) By mutual consent of the Board of Directors of CSBI and the Board
of Directors of BCG; or
(b) By the Board of Directors of either Party (provided that the
terminating Party is not then in material breach of any representation,
warranty, covenant, or other agreement contained in this Agreement) in the event
of a breach by the other Party of any representation or warranty contained in
this Agreement which cannot be or has not been cured within 30 days after the
giving of written notice to the breaching Party of such breach and which breach
would provide the non-breaching party the ability to refuse to consummate the
Merger under the standard set forth in Section 9.2(a) of this Agreement in the
case of CSBI and Section 9.3(a) of this Agreement in the case of BCG; or
(c) By the Board of Directors of either Party (provided that the
terminating Party is not then in material breach of any representation,
warranty, covenant, or other agreement contained in this Agreement) in the event
(i) any Consent of any Regulatory Authority required for consummation of the
Merger shall have been denied by final nonappealable action of such authority or
if any action taken by such authority is not appealed within the time limit for
appeal, or (ii) the shareholders of BCG fail to vote their approval of this
Agreement and the transaction contemplated hereby as required by the GBCC at the
Shareholders' Meeting where the transaction was presented to such shareholders
for approval and voted upon; or
(d) By the Board of Directors of either Party in the event that the
Merger shall not have been
22
consummated by December 31, 1997, but only if the failure to consummate the
transactions contemplated hereby on or before such date is not caused by any
breach of this Agreement by the Party electing to terminate pursuant to this
Section 10.1(d); or
(e) By the Board of Directors of either Party (provided that the
terminating Party is not then in material breach of any representation,
warranty, covenant, or other agreement contained in this Agreement) in the event
that any of the conditions precedent to the obligations of such Party to
consummate the Merger cannot be satisfied or fulfilled by the date specified in
Section 10.1(d) of this Agreement; or
(f) By CSBI in the event that the Board of Directors of BCG shall
have failed to reaffirm, following a written request by CSBI for such
reaffirmation after BCG shall have received any inquiry or proposal with respect
to an Acquisition Proposal, its approval of the Merger (to the exclusion of any
other Acquisition Proposal), or shall have resolved not to reaffirm the Merger.
10.2 Effect of Termination. In the event of the termination and abandonment
of this Agreement pursuant to Section 10.1 of this Agreement, this Agreement
shall become void and have no effect, except that (i) the provisions of this
Section 10.2 and Article 11 and Section 8.5(b) of this Agreement shall survive
any such termination and abandonment, and (ii) a termination pursuant to
Sections 10.1(b) or 10.1(e) of this Agreement shall not relieve the breaching
Party from Liability for an uncured willful breach of a representation,
warranty, covenant, or agreement giving rise to such termination.
10.3 Non-Survival of Representations and Covenants. The respective
representations, warranties, obligations, covenants, and agreements of the
Parties shall not survive the Effective Time except for this Section 10.3 and
Articles 2, 3, 4, and 11 and Section 8.11 of this Agreement.
ARTICLE 11
MISCELLANEOUS
11.1 Definitions. Except as otherwise provided herein, the capitalized
terms set forth below (in their singular and plural forms as applicable) shall
have the following meanings:
"ACQUISITION PROPOSAL" with respect to a Party shall mean any tender
offer or exchange offer or any proposal for a merger, acquisition of all of
the stock or Assets of, or other business combination involving such Party or
any of its Subsidiaries or the acquisition of a substantial equity interest
in, or a substantial portion of the Assets of, such Party or any of its
Subsidiaries.
"AFFILIATE" of a Person shall mean: (i) any other Person directly, or
indirectly through one or more intermediaries, controlling, controlled by or
under common control with such Person or (ii) any officer, director, partner,
employee, or direct or indirect beneficial owner of any 10% or greater equity
or voting interest of such Person.
"AGREEMENT" shall mean this Agreement and Plan of Merger, including
the Exhibits delivered pursuant hereto and incorporated herein by reference.
"ASSETS" of a Person shall mean all of the assets, properties,
businesses and rights of such Person of every kind, nature, character and
description, whether real, personal or mixed, tangible or intangible, accrued
or contingent, or otherwise relating to or utilized in such Person's
business, directly or indirectly, in whole or in part, whether or not carried
on the books and records of such Person, and whether or not owned in the name
of such Person or any Affiliate of such Person and wherever located.
"BCG BANKS" shall have the meaning set forth on page 1 of this
Agreement.
"BCG BENEFIT PLANS" shall have the meaning set forth in Section 5.15
of this Agreement.
"BCG COMMON STOCK" shall mean the $1.00 par value common stock of BCG.
"BCG FINANCIAL STATEMENTS" shall mean (i) the consolidated balance
sheets (including related notes and schedules, if any) of BCG as of March 31,
1997 and as of December 31, 1996 and 1995, and the related statements of
income, changes in shareholders' equity, and cash flows (including related
notes and schedules, if any) for the three months ended March 31, 1997, and
for each of the four fiscal years ended December 31, 1996, 1995, 1994, 1993,
as filed by BCG in SEC Documents, and (ii) the consolidated balance sheets of
BCG (including related notes and schedules, if any) and related statements of
income, changes in
23
shareholders' equity, and cash flows (including related notes and schedules,
if any) included in SEC Documents filed with respect to periods ended
subsequent to March 31, 1997, with related prior year comparable financial
statements.
"BCG STOCK PLAN" shall mean the existing stock option and other stock-
based compensation plans of BCG.
"BHC ACT" shall mean the federal Bank Holding Company Act of 1956, as
amended.
"CSBI COMMON STOCK" shall mean the $1.00 par value common stock of
CSBI.
"CSBI COMPANIES" shall mean, collectively, CSBI and all CSBI
Subsidiaries.
"CSBI FINANCIAL STATEMENTS" shall mean (i) the consolidated statements
of condition (including related notes and schedules, if any) of CSBI as of
March 31, 1997, and as of December 31, 1996 and 1995, and the related
statements of income, changes in shareholders' equity, and cash flows
(including related notes and schedules, if any) for the three months ended
Mach 31, 1997, and for each of the four years ended December 31, 1996, 1995,
1994, 1993, as filed by CSBI in SEC Documents and (ii) the consolidated
statements of condition of CSBI (including related notes and schedules, if
any) and related statements of income, changes in shareholders' equity, and
cash flows (including related notes and schedules, if any) included in SEC
Documents filed with respect to periods ended subsequent to March 31, 1997.
"CSBI SUBSIDIARIES" shall mean the Subsidiaries of CSBI.
"CLOSING" shall mean the closing of the transaction contemplated
hereby, as described in Section 1.2 of this Agreement.
"CONSENT" shall mean any consent, approval, authorization, clearance,
exemption, waiver, or similar affirmation by any Person pursuant to any
Contract, Law, Order, or Permit.
"CONTRACT" shall mean any written or oral agreement, arrangement,
authorization, commitment, contract, indenture, instrument, lease,
obligation, plan, practice, restriction, understanding or undertaking of any
kind or character, or other document to which any Person is a party or that
is binding on any Person or its capital stock, Assets or business.
"DEFAULT" shall mean (i) any breach or violation of or default under
any Contract, Order or Permit, (ii) any occurrence of any event that with the
passage of time or the giving of notice or both would constitute a breach or
violation of or default under any Contract, Order or Permit, or (iii) any
occurrence of any event that with or without the passage of time or the
giving of notice would give rise to a right to terminate or revoke, change
the current terms of, or renegotiate, or to accelerate, increase, or impose
any Liability under, any Contract, Order or Permit.
"EFFECTIVE TIME" shall mean the date and time at which the Articles of
Merger reflecting the Merger shall become effective with the Secretary of
State of the State of Georgia.
"ENVIRONMENTAL LAWS" shall mean all Laws which are administered,
interpreted or enforced by the United States Environmental Protection Agency
and state and local agencies with jurisdiction over pollution or protection
of the environment.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended.
"ERISA AFFILIATE" shall have the meaning provided in Section 5.15 of
this Agreement.
"ERISA PLAN" shall have the meaning provided in Section 5.15 of this
Agreement.
"EXHIBITS" 1 through 3, inclusive, shall mean the Exhibits so marked,
copies of which are attached to this Agreement. Such Exhibits are hereby
incorporated by reference herein and made a part hereof, and may be referred
to in this Agreement and any other related instrument or document without
being attached hereto.
"GAAP" shall mean generally accepted accounting principles,
consistently applied during the periods involved.
24
"GBCC" shall mean the Georgia Business Corporation Code.
"GEORGIA ARTICLES OF MERGER" shall mean the Articles of Merger to be
executed by CSBI and BCG and filed with the Secretary of State of the State
of Georgia relating to the Merger as contemplated by Section 1.1 of this
Agreement.
"HAZARDOUS MATERIAL" shall mean any pollutant, contaminant, or
hazardous substance within the meaning of the Comprehensive Environment
Response, Compensation, and Liability Act, 42 U.S.C. '' 9601 et seq., or any
similar federal, state or local Law.
"IRS" shall mean the Internal Revenue Service.
"INTERNAL REVENUE CODE" shall mean the Internal Revenue Code of 1986,
as amended, and the rules and regulations promulgated thereunder.
"KNOWLEDGE" as used with respect to a Person shall mean the knowledge
after due inquiry of the Chairman, President, Chief Financial Officer, Chief
Accounting Officer, Chief Credit Officer, any Senior or Executive Vice
President of such Person or with respect to BCG, Xxxxxxx X. Xxxxxxxx, Esquire
and X. Xxxxxxxxx Xxxx, Esquire, and with respect to CSBI, Xxxxxx X. Xxxxxx,
Esquire.
"LAW" shall mean any code, law, ordinance, regulation, reporting or
licensing requirement, rule, or statute applicable to a Person or its Assets,
Liabilities or business, including, without limitation, those promulgated,
interpreted or enforced by any of the Regulatory Authorities.
"LIABILITY" shall mean any direct or indirect, primary or secondary,
liability, indebtedness, obligation, penalty, cost or expense (including,
without limitation, costs of investigation, collection and defense), claim,
deficiency, guaranty or endorsement of or by any Person (other than
endorsements of notes, bills, checks, and drafts presented for collection or
deposit in the ordinary course of business) of any type, whether accrued,
absolute or contingent, liquidated or unliquidated, matured or unmatured, or
otherwise.
"LIEN" shall mean any conditional sale agreement, default of title,
easement, encroachment, encumbrance, hypothecation, infringement, lien,
mortgage, pledge, reservation, restriction, security interest, title
retention or other security arrangement, or any adverse right or interest,
charge, or claim of any nature whatsoever of, on, or with respect to any
property or property interest, other than (i) Liens for current property
Taxes not yet due and payable, (ii) for depository institution Subsidiaries
of a Party, pledges to secure deposits and other Liens incurred in the
ordinary course of the banking business, and (iii) Liens which are not
reasonably likely to have, individually or in the aggregate, a Material
Adverse Effect on a Party.
"LITIGATION" shall mean any action, arbitration, cause of action,
claim, complaint, criminal prosecution, demand letter, governmental or other
examination or investigation, hearing, inquiry, administrative or other
proceeding, or notice (written or oral) by any Person alleging potential
Liability or requesting information relating to or affecting a Party, its
business, its Assets (including, without limitation, Contracts related to
it), or the transactions contemplated by this Agreement, but shall not
include regular, periodic examinations of depository institutions and their
Affiliates by Regulatory Authorities.
"LOAN PROPERTY" shall mean any property owned by the Party in question
or by any of its Subsidiaries or in which such Party or Subsidiary holds a
security interest, and, where required by the context, includes the owner or
operator of such property, but only with respect to such property.
"MATERIAL" for purposes of this Agreement shall be determined in light
of the facts and circumstances of the matter in question; provided that any
specific monetary amount stated in this Agreement shall determine materiality
in that instance.
"MATERIAL ADVERSE EFFECT" on a Party shall mean an event, change or
occurrence which has a material adverse impact on (i) the financial position,
business, or results of operations of such Party and its Subsidiaries, taken
as a whole, or (ii) the ability of such Party to perform its obligations
under this Agreement or to consummate the Merger or the other transactions
contemplated by this Agreement, provided that "material adverse impact" shall
not be deemed to include the impact of (x) changes in banking and similar
Laws of general applicability or interpretations thereof by courts or
governmental authorities and (y) changes in GAAP or regulatory accounting
principles generally applicable to Banks and their holding companies.
25
"MERGER" shall mean the merger of BCG with and into CSBI referred to
in Section 1.1 of this Agreement.
"MERGER CONSIDERATION" shall mean the aggregate consideration to be
received for all of the shares of BCG Common Stock.
"NASD" shall mean the National Association of Securities Dealers, Inc.
"NASDAQ" shall mean the National Association of Securities Dealers
Automated Quotations System.
"1933 ACT" shall mean the Securities Act of 1933, as amended.
"1934 ACT" shall mean the Securities Exchange Act of 1934, as amended.
"ORDER" shall mean any administrative decision or award, decree,
injunction, judgment, order, quasi judicial decision or award, ruling, or
writ of any federal, state, local or foreign or other court, arbitrator,
mediator, tribunal, administrative agency or Regulatory Authority.
"PARTICIPATION FACILITY" shall mean any facility or property in which
the Party in question or any of its Subsidiaries participates in the
management (including any property or facility held in a joint venture) and,
where required by the context, said term means the owner or operator of such
facility or property, but only with respect to such facility or property.
"PARTY" shall mean either BCG or CSBI, and "Parties" shall mean BCG
and CSBI.
"PERMIT" shall mean any federal, state, local, and foreign
governmental approval, authorization, certificate, easement, filing,
franchise, license, notice, permit, or right to which any Person is a party
or that is or may be binding upon or inure to the benefit of any Person or
its capital stock, Assets, Liabilities, or business.
"PERSON" shall mean a natural person or any legal, commercial or
governmental entity, such as, but not limited to, a corporation, general
partnership, joint venture, limited partnership, limited liability company,
trust, business association, group acting in concert, or any person acting in
a representative capacity.
"PREVIOUSLY DISCLOSED" shall mean information delivered in writing
prior to the date of this Agreement in the manner and to the Party or counsel
or both described in Section 11.8 of this Agreement and entitled "Previously
Disclosed Information Delivered Pursuant to the Agreement and Plan of Merger"
describing in reasonable detail the matters contained therein or identifying
the information disclosed, provided that in the case of Subsidiaries acquired
after the date of this Agreement, such information may be so delivered by the
acquiring Party to the other Party prior to the date of such acquisition.
"PROXY STATEMENT" shall mean the proxy statement used by BCG to
solicit the approval of its shareholders of the transactions contemplated by
this Agreement and shall include the prospectus of CSBI relating to shares of
CSBI Common Stock to be issued to the shareholders of BCG.
"REGISTRATION STATEMENT" shall mean the Registration Statement on Form
S-4, or other appropriate form, filed with the SEC by CSBI under the 1933 Act
in connection with the transactions contemplated by this Agreement.
"REGULATORY AUTHORITIES" shall mean, collectively, the Federal Trade
Commission, the United States Department of Justice, the Board of the
Governors of the Federal Reserve System, the Office of the Comptroller of the
Currency, the Federal Deposit Insurance Corporation, all state regulatory
agencies having jurisdiction over the Parties and their respective
Subsidiaries, the NASD, and the SEC.
"SEC" shall mean the United States Securities and Exchange Commission.
"SEC DOCUMENTS" shall mean all reports and registration statements
filed, or required to be filed, by a Party or any of its Subsidiaries with
any Regulatory Authority pursuant to the Securities Laws.
"SECURITIES LAWS" shall mean the 1933 Act, the 1934 Act, the
Investment Company Act of 1940, as amended, the Investment Advisors Act of
1940, as amended, the Trust Indenture Act of 1939, as amended,
26
and the rules and regulations of any Regulatory Authority promulgated
thereunder.
"SHAREHOLDERS' MEETING" shall mean the meeting of the shareholders of
BCG to be held pursuant to Section 8.1 of this Agreement, including any
adjournment or adjournments thereof.
"SUBSIDIARIES" shall mean all those corporations, Banks, associations,
or other entities of which the entity in question owns or controls 5% or more
of the outstanding equity securities either directly or through an unbroken
chain of entities as to each of which 5% or more of the outstanding equity
securities is owned directly or indirectly by its parent; provided, however,
there shall not be included any such entity acquired through foreclosure or
any such entity the equity securities of which are owned or controlled in a
fiduciary capacity.
"SURVIVING CORPORATION" shall mean CSBI as the surviving corporation
resulting from the Merger.
"TAXES" shall mean any federal, state, county, local, foreign and
other taxes, assessments, charges, fares, and impositions, including interest
and penalties thereon or with respect thereto.
11.2 Expenses.
(a) General. Except as otherwise provided in this Section 11.2, each
-------
of the Parties shall bear and pay all direct costs and expenses incurred by it
or on its behalf in connection with the transactions contemplated hereunder,
including filing, registration and application fees, printing fees, and fees and
expenses of its own financial or other consultants, investment bankers,
accountants, and counsel.
(b) Breach by BCG with Subsequent Business Combination. In addition
--------------------------------------------------
to the foregoing, if, after the date of this Agreement and within 12 months
following
(i) any termination of this Agreement
(1) by CSBI pursuant to Sections 10.1(b), 10.1(e) (but only on
the basis of the failure of BCG to satisfy any of the conditions
enumerated in Section 9.2, other than Section 9.2(d) or (e)) or
10.1(f) of this Agreement, or
(2) by either Party pursuant to Section 10.1(c)(ii) (with respect
to approval of the shareholders of BCG), or
(ii) failure to consummate the Merger by reason of any failure of BCG
to satisfy the conditions enumerated in Section 9.1(a) (as such section relates
to approval of the shareholders of BCG), or Section 9.2, other than Section
9.2(d) or (e),
any third-party shall acquire, merge with, combine with, purchase a significant
amount of assets of, or engage in any other business combination with, or
purchase any equity securities involving an acquisition of fifty-one percent
(51%) or more of the voting stock of, BCG, or enter into any binding agreement
to do any of the foregoing (collectively, a "Business Combination"), such third-
party that is a party to the Business Combination shall pay to CSBI, prior to
consummation of the Business Combination the sum of $500,000 in cash which sum
represents compensation for CSBI's loss as the result of the transaction
contemplated by this Agreement not being consummated. In the event such third-
party shall refuse to pay such amounts, the amounts shall be an obligation of
BCG and shall be paid by BCG promptly upon notice to BCG by CSBI.
(c) Breach by CSBI with Subsequent Business Combination. In addition
---------------------------------------------------
to the foregoing, if, after the date of this Agreement and within 12 months
following
(i) any termination of this Agreement by BCG pursuant to Sections
10.1(b), 10.1(e) (but only on the basis of the failure of CSBI to satisfy
any of the conditions enumerated in Section 9.3, other than Section 9.3(d)
or (e)) of this Agreement; or
(ii) failure to consummate the Merger by reason of any failure of CSBI
to satisfy the conditions enumerated in Section 9.3, other than Section 9.3(d)
or (e),
any third-party shall acquire, merge with, combine with, purchase a significant
amount of assets of, or engage in any other business combination with, or
purchase any equity securities involving an acquisition of fifty-one percent
(51%) or more of the voting stock of, CSBI, or enter into any binding agreement
to do any of the foregoing
27
(collectively, a "Business Combination"), such third-party that is a party to
the Business Combination shall pay to BCG, prior to consummation of the Business
Combination the sum of $500,000 in cash which sum represents compensation for
BCG's loss as the result of the transaction contemplated by this Agreement not
being consummated. In the event such third-party shall refuse to pay such
amounts, the amounts shall be an obligation of CSBI and shall be paid by CSBI
promptly upon notice to CSBI by BCG.
(d) Non-Exclusive Remedy for Willful Breach. Nothing contained in
---------------------------------------
this Section 11.2 shall constitute or shall be deemed to constitute liquidated
damages for the willful breach by a Party of the terms of this Agreement or
otherwise limit the rights of the nonbreaching Party.
11.3 Brokers and Finders. Each Party represents and warrants to the other
Party that neither it nor any of its officers, directors, employees, or
Affiliates has employed any broker or finder or incurred any Liability for any
financial advisory fees, investment bankers' fees, brokerage fees, commissions,
or finders' fees in connection with this Agreement or the transactions
contemplated hereby. In the event of a claim by any broker or finder based upon
his or its representing or being retained by or allegedly representing or being
retained by any Party, such Party agrees to indemnify and hold the other Party
harmless of and from any Liability in respect of any such claim.
11.4 Entire Agreement. Except as otherwise expressly provided herein, this
Agreement (including the documents and instruments referred to herein)
constitutes the entire agreement between the Parties with respect to the
transaction contemplated hereunder and supersedes all prior arrangements or
understandings with respect thereto, written or oral. Nothing in this Agreement
expressed or implied, is intended to confer upon any Person, other than the
Parties or their respective successors, any rights, remedies, obligations, or
liabilities under or by reason of this Agreement.
11.5 Amendments. To the extent permitted by Law, this Agreement may be
amended by a subsequent writing signed by each of the Parties upon the approval
of the Boards of Directors of each of the Parties; provided, however, that after
any such approval by the holders of BCG Common Stock, there shall be made no
amendment decreasing the consideration to be received by BCG shareholders
without the further approval of such shareholders.
11.6 Waivers.
(a) Prior to or at the Effective Time, CSBI, acting through its Board
of Directors, Chief Executive Officer or other authorized officer, shall have
the right to waive any Default in the performance of any term of this Agreement
by BCG, to waive or extend the time for the compliance or fulfillment by BCG of
any and all of its obligations under this Agreement, and to waive any or all of
the conditions precedent to the obligations of CSBI under this Agreement, except
any condition which, if not satisfied, would result in the violation of any Law.
No such waiver shall be effective unless in writing signed by a duly authorized
officer of CSBI.
(b) Prior to or at the Effective Time, BCG, acting through its Board
of Directors, Chief Executive Officer or other authorized officer, shall have
the right to waive any Default in the performance of any term of this Agreement
by CSBI, to waive or extend the time for the compliance or fulfillment by CSBI
of any and all of its obligations under this Agreement, and to waive any or all
of the conditions precedent to the obligations of BCG under this Agreement,
except any condition which, if not satisfied, would result in the violation of
any Law. No such waiver shall be effective unless in writing signed by a duly
authorized officer of BCG.
(c) The failure of any Party at any time or times to require
performance of any provision hereof shall in no manner affect the right of such
Party at a later time to enforce the same or any other provision of this
Agreement. No waiver of any condition or of the breach of any term contained in
this Agreement in one or more instances shall be deemed to be or construed as a
further or continuing waiver of such condition or breach or a waiver of any
other condition or of the breach of any other term of this Agreement.
11.7 Assignment. Except as expressly contemplated hereby, neither this
Agreement nor any of the rights, interests or obligations hereunder shall be
assigned by any Party hereto (whether by operation of Law or otherwise) without
the prior written consent of the other Party. 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.
11.8 Notices. All notices or other communications which are required or
permitted hereunder shall be in writing and sufficient if delivered by hand, by
facsimile transmission, by registered or certified mail, postage pre-paid, or by
courier or overnight carrier, to the persons at the addresses set forth below
(or at such other address as may be provided hereunder), and shall be deemed to
have been delivered as of the date so delivered:
28
CSBI: Century South Banks, Inc.
P. O. Box 3366
455 Xxxxx Xxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxxxxxx, Xxxxxxx 00000
404/000-0000 - FAX
Attn: Xxxxx X. Xxxxxxxx, President
Copy to Counsel: Xxxxxx X. Xxxxxx, Esquire
Xxxxxxxx Xxxxxxx LLP
NationsBank Plaza
000 Xxxxxxxxx Xxxxxx, X.X., Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000-0000
404/000-0000 - FAX
BCG: Bank Corporation of Georgia
0000 Xxxxxxx Xxxx
Xxxxx, Xxxxxxx 00000-0000
912/000-0000 - FAX
Attn: Xxxxxx X. Xxxxx, President
Copy to Counsel: Xxxxxxx X. Xxxxxxxx, Esquire
Xxxxxxxxxx Xxxxxxxx LLP
0000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxxxx, Xxxxxxx 00000
404/000-0000 - FAX
11.9 Governing Law. This Agreement shall be governed by and construed in
accordance with the Laws of the State of Georgia, without regard to any
applicable conflicts of Laws.
11.10 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.
11.11 Captions. The captions contained in this Agreement are for reference
purposes only and are not part of this Agreement.
11.12 Enforcement of Agreement. The Parties hereto agree that irreparable
damage would occur in the event that any of the provisions of this Agreement was
not performed in accordance with its specific terms or was otherwise breached.
It is accordingly agreed that the Parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions hereof 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.
11.13 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 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.
11.14 Interpretation of Agreement. The parties hereto acknowledge and agree
that each party has participated in the drafting of this Agreement and that this
document has been reviewed by the respective counsel for the parties hereto and
the normal rule of construction to the effect that any ambiguities are to be
resolved against the drafting party shall not be applied to the interpretation
of this Agreement. No inference in favor, or against, any party shall be drawn
from the fact that one party has drafted any portion hereof.
IN WITNESS WHEREOF, each of the Parties has caused this Agreement to be
executed on its behalf and its corporate seal to be hereunto affixed and
attested by officers thereunto as of the day and year first above written.
29
ATTEST: "CSBI"
CENTURY SOUTH BANKS, INC.
By: /s/ Xxxxx X. Xxxxxxxx
____________________________________ _________________________________
Xxxxx X. Xxxxxxxx, Secretary Xxxxx X. Xxxxxxxx, President
[CORPORATE SEAL]
ATTEST: "BCG"
BANK CORPORATION OF GEORGIA
By: /s/ Xxxxxxx X. Xxxxxxxx, XX
____________________________________ _________________________________
________________________, Secretary Xxxxxxx X. Xxxxxxxx, XX, Chairman
[CORPORATE SEAL] By: /s/ Xxxxxx X. Xxxxx
_________________________________
Xxxxxx X. Xxxxx, President
30
AMENDMENT TO AGREEMENT AND PLAN OF MERGER
This Amendment to Agreement and Plan of Merger, dated as of July 11, 1997
(the "Amendment"), by and among Bank Corporation of Georgia ("BCG"), a
corporation organized and existing under the laws of the State of Georgia and
Century South Banks, Inc. ("CSBI"), a corporation organized and existing under
the laws of the State of Georgia:
WHEREAS, pursuant to the terms of that certain Agreement and Plan of Merger
dated as of March 31, 1997 by and between BCG and CSBI (the "Merger Agreement"),
BCG will merge with and into CSBI and shares of BCG will be converted into the
right to receive shares of common stock of CSBI; and
WHEREAS, the parties wish to amend the Merger Agreement pursuant to the
terms of Section 11.5 thereof.
NOW, THEREFORE, in consideration of the premises and the mutual agreements
hereinafter set forth, the parties agree as follows:
1. The number, one and thirty-three one hundredths (1 and 33/100), used
in the second line of Section 3.1(b) and the ninth and eleventh lines of Section
3.6(a) shall be changed to the number, one and thirty-five one hundredths (1 and
35/100) such that the exchange ratio equals one and thirty-five one hundredths
(1.35) to one.
2. The date reference "June 30, 1997" appearing in the first lines of
Section 9.2(g) and 9.3(e) shall be changed to "July 31, 1997. "
3. Except as amended hereby, the terms, conditions, covenants,
agreements, representations and warranties contained in the Merger Agreement
shall remain unaffected hereby and shall continue in full force and effect.
4. This Amendment may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed by their duly authorized officers as of the date first written
above.
"BCG"
ATTEST: BANK CORPORATION OF GEORGIA
By: /s/ Xxxxxxx X. Xxxxxxxx, XX
---------------------------- ---------------------------------
, Secretary Xxxxxxx X. Xxxxxxxx, XX, Chairman
----------------
[CORPORATE SEAL]
By: /s/ Xxxxxx X. Xxxxx
---------------------------------
Xxxxxx X. Xxxxx, President
"CSBI"
ATTEST: CENTURY SOUTH BANKS, INC.
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------- ----------------------------
Xxxxx X. Xxxxxxxx, Secretary Xxxxx X. Xxxxxxxx, President
[CORPORATE SEAL]
31
SECOND AMENDMENT TO AGREEMENT AND PLAN OF MERGER
This Amendment to Agreement and Plan of Merger, dated as of October 15,
1997 (the "Amendment"), by and between Bank Corporation of Georgia ("BCG"), a
corporation organized and existing under the laws of the State of Georgia, and
Century South Banks, Inc. ("CSBI"), a corporation organized and existing under
the laws of the State of Georgia:
WHEREAS, pursuant to the terms of that certain Agreement and Plan of Merger
dated as of March 31, 1997 by and between BCG and CSBI (the "Merger Agreement"),
as amended by that certain Amendment to Agreement and Plan of Merger by and
between BCG and CSBI dated July 11, 1997, BCG will merge with and into CSBI and
shares of BCG will be converted into the right to receive shares of common stock
of CSBI; and
WHEREAS, the parties wish to amend the Merger Agreement pursuant to the
terms of Section 11.5 thereof.
NOW, THEREFORE, in consideration of the premises and the mutual agreements
hereinafter set forth, the parties agree as follows:
1. The fifth sentence of the first paragraph of the Preamble is hereby
amended by deleting same and inserting in lieu thereof the following:
"The transaction described in this Agreement is subject to the approvals of
the shareholders of BCG, the shareholders of CSBI, the Board of Governors
of the Federal Reserve System and the Department of Banking and Finance of
the State of Georgia and the satisfaction of certain other conditions
described in this Agreement."
2. Section 1.3(ii) is hereby amended by deleting same and inserting in
lieu thereof the following:
"(ii) the date on which the respective shareholders of BCG and CSBI, voting
separately, shall have approved this Agreement to the extent such approval
is required by applicable Law; or"
3. The third sentence of Section 5.11 is hereby amended by deleting same
and inserting in lieu thereof the following:
"None of the information supplied or to be supplied by either BCG or any of
the BCG Banks or any Affiliate thereof for inclusion in the Joint Proxy
Statement to be mailed to BCG shareholders and CSBI shareholders in
connection with the BCG Shareholders' Meeting and the CSBI Shareholders'
Meeting, respectively, and any other documents to be filed by either BCG or
any of the BCG Banks or any Affiliate thereof with the SEC or any other
Regulatory Authority in connection with the transactions contemplated
hereby, will, at the respective time such documents are filed, and with
respect to the Joint Proxy Statement, when first mailed to the shareholders
of BCG and CSBI, be false or misleading with respect to any material fact,
or omit to state any material fact necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading, or, in the case of the Joint Proxy Statement or any amendment
thereof or supplement thereto, at the time of each of the BCG Shareholders'
Meeting and the CSBI Shareholders' Meeting, be false or misleading with
respect to any material fact, or omit to state any material fact necessary
to correct any statement in any earlier communication with respect to the
solicitation of any proxy for either of such shareholders' meetings."
4. The second sentence of Section 6.2(a) is hereby amended by inserting
the following at the end of such sentence:
"subject to the approval of this Agreement by a majority of the votes cast
in person or by proxy by holders of shares of CSBI Common Stock at the
CSBI Shareholders' Meeting."
5. The third sentence of Section 6.2(a) is hereby amended by deleting the
first word of such sentence and inserting in lieu thereof the following:
"Subject to such requisite shareholder approval, this"
32
6. The third sentence of Section 6.11 is hereby amended by deleting same
and inserting in lieu thereof the following:
None of the information supplied or to be supplied by any CSBI Companies or
any Affiliate thereof for inclusion in the Joint Proxy Statement to be
mailed to BCG shareholders and CSBI shareholders in connection with the BCG
Shareholders' Meeting and the CSBI Shareholders' Meeting, respectively, and
any other documents to be filed by any CSBI Companies or any Affiliate
thereof with the SEC or any other Regulatory Authority in connection with
the transactions contemplated hereby, will, at the respective time such
documents are filed, and with respect to the Joint Proxy Statement, when
first mailed to the shareholders of BCG and CSBI, be false or misleading
with respect to any material fact, or omit to state any material fact
necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading, or, in the case of the Joint
Proxy Statement or any amendment thereof or supplement thereto, at the time
of each of the BCG Shareholders' Meeting and the CSBI Shareholders'
Meeting, be false or misleading with respect to any material fact, or omit
to state any material fact necessary to correct any statement in any
earlier communication with respect to the solicitation of any proxy for
either of such shareholders' meetings."
7. The third sentence of Section 8.1 is hereby amended by deleting same
and inserting in lieu thereof the following:
"Each of CSBI and BCG shall take, in accordance with applicable Law,
applicable stock exchange or NASDAQ rules and its respective articles of
incorporation and bylaws, all action necessary to convene, respectively, a
CSBI Shareholders' Meeting to consider and vote upon the issuance of the
shares of CSBI Common Stock to be issued in the Merger pursuant to this
Agreement and any other matters required to be approved by CSBI
shareholders for consummation of the Merger, and a BCG Shareholders'
Meeting to consider and vote upon the approval of this Agreement and any
other matters required to be approved by BCG's shareholders for
consummation of the Merger, respectively, as promptly as practicable after
the Registration Statement is declared effective.
8. The fourth sentence of Section 8.1 is hereby amended by deleting same
and inserting in lieu thereof the following:
"In connection with the CSBI Shareholders' Meeting and the BCG
Shareholders' Meeting, (i) BCG shall assist CSBI in the preparation and
filing of the Joint Proxy Statement (which shall be included in the
Registration Statement) with the SEC and mail it to BCG's shareholders and
CSBI's shareholders, (ii) the Parties shall furnish to each other all
information concerning them that they may reasonably request in connection
with such Joint Proxy Statement, (iii) the Board of Directors of each of
CSBI and BCG shall unanimously recommend (subject in the case of BCG to
compliance with their fiduciary duties as advised by counsel) to their
respective shareholders the approval of this Agreement, and (iv) the Board
of Directors and officers of each of CSBI and BCG shall use their best
efforts to obtain such approval of their respective shareholders (subject
in the case of BCG to compliance with their fiduciary duties as advised by
counsel).
9. Section 9.1(a) is hereby amended by deleting "BCG" and inserting in
lieu thereof the following:
"each of BCG and CSBI"
10. Section 9.3(c) is hereby amended by deleting "CSBI Board of Directors"
and inserting "CSBI's Board of Directors and CSBI's shareholders" in lieu
thereof.
11. Sections 9.2(e) and 9.3(f) are hereby amended by deleting all
references to "Proxy Statement" in such sections and inserting "Joint Proxy
Statement" in lieu thereof.
12. Section 10.1(c) is hereby amended by deleting same and inserting in
lieu thereof the following:
"By the Board of Directors of either Party (provided that the terminating
Party is not then in material breach of any representation, warranty,
covenant, or other agreement contained in this Agreement) in the event (i)
any Consent of any Regulatory Authority required for consummation of the
Merger shall have been denied by final nonappealable action of such
authority or if any action taken by such authority is not appealed within
the time limit for appeal, (ii) the shareholders of BCG fail to vote their
approval of this Agreement and the transaction contemplated hereby as
required by the GBCC at the BCG Shareholders' Meeting where the
transaction was presented to such shareholders for approval and voted
upon, or (iii) the shareholders of CSBI fail to vote their approval of
this Agreement and the transaction contemplated hereby
33
at the CSBI Shareholders' Meeting where the transaction was presented to
such shareholders for approval and voted upon; or"
13. Section 11.1 is hereby amended by deleting " 'PROXY STATEMENT' shall
mean the proxy statement used by BCG to solicit the approval of its shareholders
of the transactions contemplated by this Agreement and shall include the
prospectus of CSBI relating to shares of CSBI Common Stock to be issued to the
shareholders of BCG."
14. Section 11.1 is hereby amended by inserting the following between the
definitions of "Internal Revenue Code" and "Knowledge":
" 'JOINT PROXY STATEMENT' shall mean the joint proxy statement used by BCG
and CSBI to solicit the approval of their respective shareholders of the
transactions contemplated by this Agreement and shall include the
prospectus of CSBI relating to shares of CSBI Common Stock to be issued to
the shareholders of BCG."
15. Section 11.1 is hereby amended by deleting " 'SHAREHOLDER'S MEETING'
shall mean the meeting of the shareholders of BCG to be held pursuant to Section
8.1 of this Agreement, including any adjournment or adjournments thereof."
16. Section 11.1 is hereby amended by inserting the following between the
definitions of "BCG Financial Statements" and "BCG Stock Plan":
" 'BCG SHAREHOLDERS' MEETING' shall mean the meeting of the shareholders of
BCG to be held pursuant to Section 8.1 of this Agreement, including any
adjournment or adjournments thereof."
17. Section 11.1 is hereby amended by inserting the following between the
definitions of "CSBI Financial Statements" and "CSBI Subsidiaries":
" 'CSBI SHAREHOLDERS' MEETING' shall mean the meeting of the shareholders
of CSBI to be held pursuant to Section 8.1 of this Agreement, including any
adjournment or adjournments thereof."
18. Section 11.2(c) is hereby amended by deleting Sections 11.2(c)(i) and
11.2(c)(ii) and inserting in lieu thereof the following:
" (i) any termination of this Agreement
(1) by BCG pursuant to Sections 10.1(b), 10.1(e) (but only on the
basis of the failure of CSBI to satisfy any of the conditions enumerated in
Section 9.3, other than Section 9.3(d) or (e)) of this Agreement, or
(2) by either Party pursuant to Section 10.1(c)(iii) (with
respect to approval of the shareholders of CSBI), or
(ii) failure to consummate the Merger by reason of any failure of CSBI
to satisfy the conditions enumerated in Section 9.1(a) (as such section
relates to approval of the shareholders of CSBI), or Section 9.3, other
than Section 9.3(d) or (e),"
19. Except as amended hereby, the terms, conditions, covenants,
agreements, representations and warranties contained in the Merger Agreement
shall remain unaffected hereby and shall continue in full force and effect.
20. This Amendment may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
34
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed by their duly authorized officers as of the date first written
above.
"BCG"
ATTEST: BANK CORPORATION OF GEORGIA
By: /s/ Xxxxxxx X. Xxxxxxxx, XX
-------------------------------- ---------------------------------------
Xxxxx Xxxxxx, Secretary Xxxxxxx X. Xxxxxxxx, XX, Chairman
[CORPORATE SEAL]
By: /s/ Xxxxxx X. Xxxxx
---------------------------------------
Xxxxxx X. Xxxxx, President
"CSBI"
ATTEST: CENTURY SOUTH BANKS, INC.
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------- --------------------------------------
Xxxxx X. Xxxxxxxx, Secretary Xxxxx X. Xxxxxxxx, President
[CORPORATE SEAL]
35
