EXHIBIT 10.7
ACQUISITION AGREEMENT
This Acquisition Agreement (the "Acquisition Agreement") is made and
entered into as of the 15th day of August, 1996, by and between SMOKY MOUNTAIN
BANCORP, INC. ("Smoky Mountain"), a corporation chartered and existing under the
laws of the State of Tennessee which is registered as a bank holding company and
has its principal office at 000 Xxxxxxx, Xxxxxxxxxx, Xxxxxxxxx 00000, and
BANKFIRST ("BankFirst), a banking corporation chartered and existing under the
laws of the State of Tennessee which has its principal place of business at 000
Xxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxx 00000. First National Bank of Gatlinburg
("FNBG"), is a national banking institution whose principal office is at 000
Xxxxxxx, Xxxxxxxxxx, Xxxxxxxxx 00000, and is a wholly owned subsidiary of Smoky
Mountain.
RECITALS:
A. The Boards of Directors of Smoky Mountain and BankFirst have agreed
that Smoky Mountain will acquire from the BankFirst shareholders by Plan of
Share Exchange all of the issued and outstanding shares of BankFirst Common
Stock and BankFirst Preferred Stock and Smoky Mountain is willing to do so under
the terms and subject to the conditions hereinafter set forth in this Agreement
and the Plan of Share Exchange (the "Acquisition").
B. BankFirst and Smoky Mountain wish to consummate the transactions
contemplated by this Acquisition Agreement in a timely and effective manner.
C. The Board of Directors of First National of Gatlinburg joins in this
agreement for the purpose of giving its approval to the transaction set forth in
this agreement.
NOW, THEREFORE, in consideration of the foregoing and the representations,
warranties, covenants and agreements of the Parties set forth in this
Acquisition Agreement and for other good and valuable considerations, the
receipt and sufficiency of which are hereby acknowledged, the Parties agree as
follows:
ARTICLE I
DEFINITIONS
1.1 Definitions. As used in this Acquisition Agreement, the following
terms have the definitions indicated:
"Acquisition" shall have the meaning assigned to such term in Recital A of
this Acquisition Agreement.
ACQUISITION AGREEMENT - Page 1
"Acquisition Agreement" means this Agreement, and all Exhibits and
Schedules annexed to and incorporated by specific reference as a part of this
Acquisition Agreement.
"Audited Financial Statements of BankFirst" shall have the meaning
assigned to such term in Section 5.6 of this Acquisition Agreement.
"BHCA" shall mean the Bank Holding Company Act of 1956, as amended.
"BankFirst" shall mean BankFirst, a Tennessee banking corporation
headquartered at 000 Xxxxxx Xxxxxx, Xxxxxxxxx, Xxxx Xxxxxx, Xxxxxxxxx 00000.
"BankFirst Common Stock" shall mean the Five Dollar ($5.00) par value
common stock of which 10,000,000 are authorized and 1,154,152 shares are issued
and outstanding.
"BankFirst Preferred Stock" shall mean the Five Dollar ($5.00) par value
non- cumulative convertible preferred stock of which 500,000 shares are
authorized and 225,559 shares are issued and outstanding.
"BankFirst Employee Plan" shall mean BankFirst's 401-K Profit Sharing Plan
adopted on July 1, 1993, as amended on July 1, 1994.
"BankFirst Record Holders" means the holders of record of all of the
issued and outstanding BankFirst Common Stock and BankFirst Preferred Stock
immediately prior to the Effective Time.
"BankFirst Stock Options" shall mean options previously issued by
BankFirst entitling the holder to purchase BankFirst Common Stock as more
particularly described in Section 2.6.
"Closing" shall have the meaning assigned to such term in Section 2.3 of
this Acquisition Agreement.
"Closing Date" shall have the meaning assigned to such term in Section 2.3
of this Acquisition Agreement.
"Consideration" shall mean the value to be received by the BankFirst
Record Holders in exchange for their BankFirst Common and BankFirst Preferred
Stock, such value to be determined as provided in Section 3.1 of this Agreement.
"Effective Time" shall have the meaning assigned in Section 2.4 of this
Agreement, but shall not be later than December 31, 1996; provided, however, the
effective date may be extended if governmental approvals have not been obtained.
ACQUISITION AGREEMENT - Page 2
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended.
"Exchange" shall mean the exchange of stock as contemplated in this
Agreement and the Plan of Share Exchange.
"Exchange Agent" shall mean Smoky Mountain.
"Exchange Rate Price" shall mean the sum of $43.50 for each share of Smoky
Mountain Common Stock.
"FDIC" means the Federal Deposit Insurance Corporation.
"Federal Reserve" shall mean the Board of Governors of the Federal Reserve
System and shall include the Federal Reserve Bank of Atlanta acting under
delegated authority.
"GAAP" shall mean generally accepted accounting principles, consistently
applied.
"Governmental Approvals" shall have the meaning assigned to such term in
Section 4.4 of this Acquisition Agreement.
"Internal Revenue Code" shall mean the Internal Revenue Code of 1986, as
amended.
"Parties" shall mean Smoky Mountain and BankFirst collectively; each
individually may sometimes be referred to as a "Party."
"Pension Plan" shall mean any employee pension benefit plan as such term
is defined in Section 3(2) of ERISA which is maintained by the referenced Party.
"Person" shall mean any natural person, fiduciary, corporation,
partnership, joint venture, business trust or any other entity of any kind.
"Plan of Exchange" shall mean the Plan of Share Exchange of Smoky Mountain
Bancorp, Inc. and BankFirst dated as of the date of this Acquisition Agreement
and is attached hereto as Exhibit "1".
"Proxy Statement" shall mean the proxy statement to be used by BankFirst
and/or Smoky Mountain to solicit the approval of its shareholders of this
Acquisition Agreement.
ACQUISITION AGREEMENT - Page 3
"Records" means all available records, original instruments and other
documentation, pertaining to BankFirst, BankFirst's assets, BankFirst's
liabilities, the BankFirst Common Stock, the BankFirst Preferred Stock, the
deposits and the Loans, and all other business and financial records which are
necessary or customary for use in the conduct of BankFirst's business by
BankFirst on and after the Effective Time as it was conducted prior to the
Closing Date.
"Regulatory Approval" shall mean the same as Governmental Approval.
"Regulatory Authorities" shall mean, collectively, the Federal Reserve,
the FDIC, the TDFI, or any other state or federal governmental or
quasi-governmental entity which has, or may hereafter have, jurisdiction over
any of the transactions described in this Acquisition Agreement.
"Shareholders Meeting" shall mean the meeting of the shareholders of Smoky
Mountain and BankFirst to be held pursuant to Section 6.2 and Section 7.1 of
this Acquisition Agreement, including any adjournment or adjournments thereof.
"Smoky Mountain" shall mean Smoky Mountain Bancorp, Inc., a bank holding
corporation with its principal office located at 000 Xxxxxxx, Xxxxxxxxxx,
Xxxxxxxxx 00000.
"Smoky Mountain Common Stock" shall mean the authorized voting common
stock of Smoky Mountain, $2.50 par value, and Smoky Mountain has issued and
outstanding 395,518 shares of the voting common stock.
"Smoky Mountain Preferred Stock" shall mean the authorized Five Dollar
($5.00) par value preferred stock of Smoky Mountain, none of which has been
designated either by par or dividend rates by the Board of Directors. The
preferred shares shall be authorized by the Board of Directors of Smoky Mountain
and shall have the equivalent par and dividend rate as the issued and
outstanding BankFirst Preferred Stock.
"Subsidiary" or "Subsidiaries" shall mean all of 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, that there shall not be included any such entity acquired
through foreclosure or in satisfaction of a debt previously contracted in good
faith, any such entity that owns or operates an automatic teller machine
interchange network, any such entity that is a joint venture of the parent or of
a Subsidiary of the parent, or any such entity the equity securities of which
are owned or controlled in a fiduciary capacity or through a small business
investment corporation.
"TDFI" shall mean the Tennessee Department of Financial Institutions.
ACQUISITION AGREEMENT - Page 4
"Tennessee Code" means the Tennessee Code Annotated, as amended.
"Tennessee Commissioner" shall mean the Commissioner of Financial
Institutions of the State of Tennessee.
ARTICLE 2
TERMS OF ACQUISITION
2.1 The Acquisition or Exchange. Subject to the terms of this Agreement
and the Plan of Share Exchange, Smoky Mountain will acquire by exchange all of
the BankFirst Common Stock and the BankFirst Preferred Stock for Smoky Mountain
Common Stock and Smoky Mountain Preferred Stock. As a result of the exchange of
the stock, BankFirst will become a wholly owned subsidiary of Smoky Mountain.
The members of the Board of Directors of Smoky Mountain and BankFirst have
agreed to, and shall, subject to their fiduciary duties, recommend to the Smoky
Mountain and BankFirst shareholders that they approve the Acquisition Agreement,
including the Plan of Share Exchange attached as Exhibit "1". The Plan of Share
Exchange and Article 3 below establish the method of determining the shares of
stock that will be exchanged, the number of shares that will be exchanged, and
the method of, and procedure for, delivering the shares of Smoky Mountain Common
Stock and Preferred Stock to the BankFirst Record Holders in exchange for their
BankFirst Common Stock and Preferred Stock.
2.2 Rights of Dissenting BankFirst Shareholders. The rights of the
BankFirst Record Holders who vote against the Acquisition Agreement are set
forth in Section 45-2-1309 of the Tennessee Code and Section 3.8 of the Plan of
Share Exchange.
2.3 Time and Place of Closing. The Closing shall take place at 10:00 a.m.
Eastern Time on the Business Day next preceding the date on which the regulatory
approval is obtained, or at such other time as the Parties, acting through their
presidents may mutually agree (the "Closing Date"). The place of Closing shall
be at the principal offices of BankFirst, 000 Xxxxxx Xxxxxx, Xxxxxxxxx,
Xxxxxxxxx. The Closing shall be held no later than December 31, 1996. In the
event regulatory approval has been applied for, but not received, the closing
may be extended until regulatory approval is obtained.
2.4 The Effective Time of the Exchange. The Exchange shall become
effective on the date and at the time the Articles of Exchange are filed with,
and accepted by the Tennessee Commissioner in accordance with Section 45-2-1306
of the Tennessee Code, or at such later date and/or time as may be specified in
the Articles of Exchange so filed and accepted. Unless the Parties shall
otherwise agree in writing, the date and time so specified in the Articles of
Exchange shall be at the close of business on the last day of the month in which
all Governmental Approvals shall have been obtained, all required waiting
periods shall have expired and all conditions to closing shall have been met or
lawfully waived by the party(ies) entitled to the benefits thereof; provided,
however, that in the event that all Governmental Approvals required for the
lawful
ACQUISITION AGREEMENT - Page 5
consummation of the transactions contemplated herein and all other conditions
precedent to closing (including any waiting periods prescribed by law or by any
Governmental Authority) shall not have been satisfied or waived prior to the
15th day of the month, BankFirst may, at its discretion, delay the Effective
Time of the exchange to a date no later than the last day of the following
month.
2.5 Results of Exchange Becoming Effective. The consummation of the
exchange at the Effective Time shall have the results set forth in the Plan of
Share Exchange and ss. 00-00-000 of Tennessee Code Annotated.
2.6 BankFirst Stock Options. Smoky Mountain has been informed by BankFirst
that BankFirst has issued certain stock options and instituted incentive stock
option plans, copies of which are attached to Schedule 2.6. The stock option
agreements, the incentive stock option plans and the number of shares are
described in detail in Schedule 2.6. Smoky Mountain will, subject to regulatory
approval, either assume all of BankFirst's obligations with respect to all of
such options or purchase the options. If regulatory approval cannot be obtained
to assume the options, Smoky Mountain and BankFirst agree to either:
(a) Allow the option holders the right to exercise the options and
make a market for the shares based on the Exchange Rate Price; or
(b) Purchase the option holders' rights based on the difference
between the exercise price set forth in the stock options and the Exchange Rate
Price.
ARTICLE 3
THE CONSIDERATION FOR THE EXCHANGE
3.1 The Consideration to be Received by the BankFirst Record Holders. The
amount of consideration to be received by the BankFirst Record Holders in
exchange for their BankFirst Common Stock and BankFirst Preferred Stock
incidental to the Plan of Share Exchange becoming effective, the methods of
payment of the consideration in shares of Smoky Mountain and the procedures for
effecting the exchange shall be as provided in the Plan of Share Exchange. The
consideration is based on .494 shares of Smoky Mountain Common Stock for each
issued and outstanding share of BankFirst Common Stock, and a one for one
exchange of Smoky Mountain Preferred Stock for the issued and outstanding
BankFirst Preferred Stock. The Board of Directors of Smoky Mountain will
authorize the same number of Preferred Stock shares at an equivalent par and
dividend rate as BankFirst, and will issue the Smoky Mountain Preferred Stock
shares on a one for one exchange for the issued and outstanding BankFirst
Preferred Stock.
ACQUISITION AGREEMENT - Page 6
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF SMOKY MOUNTAIN
As of the date hereof and as of the closing date, Smoky Mountain
represents and warrants to BankFirst as follows:
4.1 Organization and Corporate Authority. Smoky Mountain is a bank holding
corporation duly organized, validly existing and in good standing under the laws
of the State of Tennessee, and (i) has, in all material respects, all requisite
corporate power and authority to own, operate and lease its material properties
and carry on its business as it is currently being conducted; (ii) is in good
standing and is duly qualified to do business in each jurisdiction where the
character of its properties owned or held under lease or the nature of its
business makes such qualification necessary; and (iii) has in effect all
federal, state, and local governmental authorizations, permits and licenses
necessary for it to own or lease its properties and assets and to carry on its
business as it is currently being conducted. The corporate Charter and Bylaws of
Smoky Mountain, as amended to date, will be in full force and effect as of the
closing date. True copies of the Restated Charter and Bylaws of Smoky Mountain
are annexed as Schedule 4.1.
4.2 Authorization, Execution and Delivery; Acquisition Agreement Not in
Breach.
(a) Smoky Mountain has all requisite corporate power and authority
to execute and deliver this Acquisition Agreement and the Plan of Share Exchange
and to consummate the transactions contemplated hereby and thereby. This
Agreement, and all other agreements contemplated to be executed in connection
herewith by Smoky Mountain, have been (or upon execution will have been) duly
executed and delivered by Smoky Mountain, have been (or upon execution will have
been) duly authorized by the Smoky Mountain Board of Directors, and the matter
has been submitted to the specially called meeting of the Smoky Mountain
Shareholders to be held on September 20, 1996, and thereafter, no other
corporate proceedings on the part of Smoky Mountain are (or will be) necessary
to authorize such execution and delivery, and constitute (or upon execution will
constitute) legal, valid and enforceable obligations of Smoky Mountain, subject,
as to enforceability, to applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the enforcement of creditors' rights
generally, and to the application of equitable principles and judicial
discretion. A certified copy of the resolutions of the Board of Directors of
Smoky Mountain and the Shareholders authorizing the execution and performance of
this Agreement will be annexed as Schedule 4.2.
(b) The execution and delivery of this Acquisition Agreement, the
consummation of the transactions contemplated hereby and the fulfillment of the
terms hereof will not result in a breach of any of the terms or provisions of,
or constitute a default under (or an event which, with the passage of time or
the giving of notice or both, would constitute a default under), or conflict
with, or permit the acceleration of any obligation under, any mortgage, lease,
covenant,
ACQUISITION AGREEMENT - Page 7
agreement, indenture or other instrument to which Smoky Mountain is a party or
by which it or its property or any of its assets is bound; the Restated Charter
or Bylaws of Smoky Mountain; or any judgment, decree, order or award of any
court, governmental body or arbitrator by which Smoky Mountain is bound; or any
permit, concession, grant, franchise, license, law, statute, ordinance, rule or
regulation applicable to Smoky Mountain or its properties; or result in the
creation of any lien, claim, security interest, encumbrance, charge, restriction
or right of any third party of any kind whatsoever upon the property or assets
of Smoky Mountain, except that the Government Approvals shall be required in
order for Smoky Mountain to consummate this Agreement and the Plan of Share
Exchange.
4.3 No Legal Bar. Smoky Mountain is not a party to, subject to or bound by
any agreement, judgment, order, writ, prohibition, injunction or decree of any
court or other governmental body of competent jurisdiction which would prevent
the execution of this Acquisition Agreement by Smoky Mountain, its delivery to
BankFirst or the consummation of the transactions contemplated hereby, and no
action or proceeding is pending against Smoky Mountain in which the validity of
this Acquisition Agreement, any of the transactions contemplated hereby or any
action which has been taken by any of the parties in connection herewith or in
connection with any of the transactions contemplated hereby is at issue.
4.4 Government Approvals. No consent, approval, order or authorization of,
or registration, declaration or filing with, any federal, state or local
governmental authority is required to be made or obtained by Smoky Mountain in
connection with the execution and delivery of this Acquisition Agreement and the
Plan of Share Exchange or the consummation of the transactions contemplated
hereby by Smoky Mountain , except for: (a) the prior approval of the Board of
Governors of the Federal Reserve System (the "Federal Reserve") of the
Acquisition Agreement under the Bank Holding Company Act of 1956, as amended;
(b) the prior approval of the FDIC to the Acquisition Agreement; and (c) the
prior approval of the Tennessee Department of Financial Institutions (TDFI)
under Section 45-2-1314 et seq of the Tennessee Code and the regulations
promulgated by the TDFI thereunder (collectively, the "Government Approvals").
4.5 Capitalization. The authorized capital stock of Smoky Mountain
consists of 3,000,000 shares of voting Common Stock of par value of Two Dollars
and Fifty Cents ($2.50) per share ("Smoky Mountain Common Stock"); 1,000,000
shares of non-voting Common Stock of par value of Two Dollars and Fifty Cents
($2.50) per share ("Non-Voting Common Stock"), and 1,000,000 shares of preferred
stock of par value of Five Dollars ($5.00) per share ("Smoky Mountain Preferred
Stock"). As of the date of this Agreement, 395,518 shares of Smoky Mountain
Common Stock are issued and outstanding. In addition, Smoky Mountain is holding
91,117 shares of Smoky Mountain Common Stock as treasury stock. All of the
outstanding Smoky Mountain Common Stock is validly issued, fully paid, and
non-assessable, and has not been issued in violation of any preemptive rights of
any Smoky Mountain Shareholder.
ACQUISITION AGREEMENT - Page 8
4.6 Smoky Mountain Financial Statements. Smoky Mountain has delivered and,
to the extent reference is made to financial statements not yet available or
capable of development, will deliver to BankFirst true and complete copies of:
(i) Smoky Mountain's audited Consolidated Financial Statements for the calendar
years ended December 31, 1995 and 1994; and (ii) Smoky Mountain's unaudited
consolidated financial statements for each of the calendar quarters in calendar
year 1996 and thereafter, ending prior to the Closing Date. Such financial
statements and the notes thereto present fairly, or will present fairly when
issued, in all material respects, the consolidated financial position of Smoky
Mountain at the respective dates thereof and the consolidated results of
operations and consolidated cash flow of Smoky Mountain for the periods
indicated, and in each case in conformity with GAAP consistently applied and
maintained. Certain of the above Financial Statements identified therein are
annexed to Schedule 4.6 hereto.
4.7 Disclosure. The information concerning, and the representations or
warranties made by Smoky Mountain as set forth in this Agreement, or in any
document, statement, certificate or other writing furnished or to be furnished
by Smoky Mountain to BankFirst pursuant hereto, do not and will not contain any
untrue statement of a material fact or omit and will not omit to state a
material fact required to be stated herein or therein which is necessary to make
the statements and facts contained herein or therein, in light of the
circumstances under which they were or are made, not false or misleading. Copies
of all documents heretofore or hereafter delivered or made available to
BankFirst by Smoky Mountain pursuant hereto were or will be complete and
accurate copies of such documents.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF BANKFIRST
Both as of the date hereof and as of the Effective Time, BankFirst
represents and warrants to Smoky Mountain as follows:
5.1 Organization and Qualification of BankFirst. BankFirst is a
state-chartered banking corporation duly organized, validly existing and in good
standing under the laws of the State of Tennessee and (a) has all requisite
corporate power and authority to own, operate and lease its material properties
and to carry on its material business as it is currently being conducted; (b) is
in good standing and is duly qualified to do business in each jurisdiction where
the character of its material properties owned or held under lease or the nature
of its material business makes such qualification necessary; and (c) its deposit
accounts are insured by the FDIC to the fullest extent permitted under
applicable law. BankFirst is not a member of the Federal Reserve System. The
BankFirst subsidiary, Eastern Life Insurance Company, is duly chartered, validly
existing and in good standing under the laws of the state of its incorporation
and (a) has all requisite corporate power and authority to own, operate and
lease its material properties and to carry on its material business as it is
currently being conducted and (b) is in good standing and is duly qualified to
do business in each jurisdiction where the character of its material properties
owned or held under
ACQUISITION AGREEMENT - Page 9
lease or the nature of its material business makes such qualification necessary.
BankFirst and its subsidiary have in effect all material federal, state and
local governmental authorization, permits and licenses necessary for them to own
or lease their respective material properties and assets and to carry on their
material business as it is currently being conducted. BankFirst engages only in
activities (and holds properties only of the types) permitted by the Tennessee
Code for Tennessee state-chartered banks.
5.2 Authorization, Execution and Delivery; Acquisition Agreement Not in
Breach.
(a) BankFirst has all requisite power and authority to execute and
deliver this Agreement and the Plan of Share Exchange and to consummate the
transactions contemplated hereby and thereby. The execution and delivery of this
Agreement and the Plan of Share Exchange and the consummation of the proposed
transaction have been duly authorized by a majority of the entire Board of
Directors of BankFirst and, except for the approval of the BankFirst
Shareholders, no other corporate proceedings on the part of BankFirst are
necessary to authorize the execution and delivery of this Agreement and the Plan
of Share Exchange and the consummation of the Acquisition contemplated hereby
and thereby. This Acquisition Agreement and the Plan of Share Exchange and all
other agreements and instruments herein contemplated to be executed by BankFirst
have been (or upon execution will have been) duly executed and delivered by
BankFirst and constitute (or upon execution will constitute) legal, valid and
enforceable obligations of BankFirst, subject, as to enforceability, to
applicable bankruptcy, insolvency, receivership, conservatorship,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and to the application of equitable principles and
judicial discretion. A certified copy of the resolutions of the Board of
Directors of BankFirst and the Shareholders authorizing the execution and
performance of this Agreement will be annexed as Schedule 5.2.
(b) The execution and delivery of this Agreement and the Plan of
Share Exchange, the consummation of the transaction contemplated hereby and
thereby, and the fulfillment of the terms hereof and thereof will not result in
a violation or breach of any of the material terms or provisions of, or
constitute a default under (or an event which, with the passage of time or the
giving of notice, or both, would constitute a default under), or conflict with,
or permit the acceleration of, any obligation under any mortgage, lease,
covenant, agreement, indenture or other instrument to which BankFirst or the
BankFirst Subsidiary is a party or by which BankFirst or the BankFirst
Subsidiary is bound; the Charter or Bylaws of BankFirst; or any judgment,
decree, order, regulatory letter of understanding or award of any court,
governmental body, authority or arbitrator by which BankFirst or the BankFirst
Subsidiary is bound; or any material permit, concession, grant, franchise,
license, law, statute, ordinance, rule or regulation applicable to BankFirst or
the BankFirst Subsidiary or the properties of any of them; or result in the
creation of any material lien, claim, security interest, encumbrance, charge,
restriction or right of any third party of any kind whatsoever upon the
properties or assets of BankFirst or the BankFirst Subsidiary.
ACQUISITION AGREEMENT - Page 10
5.3 No Legal Bar. BankFirst is not a party to, or subject to, or bound by,
any agreement or judgment, order, letter of understanding, writ, prohibition,
injunction or decree of any court or other governmental authority or body which
would prevent the execution of this Agreement and the Plan of Share Exchange by
BankFirst, the delivery thereof to Smoky Mountain or the consummation of the
transaction contemplated hereby and thereby, and no action or proceeding is
pending against BankFirst in which the validity of this Agreement, the
transaction contemplated hereby or any action which has been taken by any of the
parties in connection herewith or in connection with the transaction
contemplated hereby is at issue. 5.4 Government and Other Approvals. Except for
the Government Approvals described in Section 4.4, no consent, approval, order
or authorization of, or registration, declaration or filing with, any federal,
state or local governmental authority is required to be made or obtained by
BankFirst in connection with the execution and delivery of this Agreement or the
consummation of the transactions contemplated by this Agreement nor is any
consent or approval required from any landlord, licensor or other
non-governmental party which has granted rights to BankFirst in order to avoid
forfeiture or impairment of such rights.
5.5 Charter Documents. Included in Schedule 5.5 are true and correct
copies of the Charter and Bylaws of BankFirst. The Charter and Bylaws of
BankFirst, as amended to date, are in full force and effect.
5.6 BankFirst Financial Statements. Accompanying Schedule 5.6 are true
copies of the audited consolidated balance sheets of BankFirst as of December
31, 1995, 1994 and 1993, and the related consolidated statements of income and
stockholders' equity and cash flows of BankFirst for the years ended December
31, 1995, 1994 and 1993 (the "Audited Financial Statements of BankFirst") and
the comparative interim (or annual) financial statements for any subsequent
quarter (or year) ending after December 31, 1995 and prior to the Closing Date.
Such financial statements (i) were (or will be) prepared from the books and
records of BankFirst; (ii) were (or will be) prepared in accordance with
generally accepted accounting principles consistently applied; (iii) accurately
present (or will present) BankFirst's consolidated financial condition and the
consolidated results of its operations as at the relevant dates thereof and for
the periods covered thereby; (iv) do contain or reflect (or will contain and
reflect) all necessary adjustments and accruals for an accurate presentation of
BankFirst's consolidated financial condition and the consolidated results of
BankFirst's operations for the periods covered by such Financial Statements; and
(v) do contain and reflect (or will contain and reflect) adequate provisions for
loan losses, for ORE reserves and for all reasonably anticipated liabilities for
all taxes, federal, state, or local, with respect to the periods then ended.
5.7 Records and Documents. The records of BankFirst are and will be
sufficient to enable BankFirst to continue conducting its business as a
Tennessee-chartered state bank under similar standards as BankFirst has
heretofore conducted such business.
ACQUISITION AGREEMENT - Page 11
5.8 Capitalization of BankFirst. The authorized capital stock of BankFirst
consists of Ten Million (10,000,000) shares of common stock having a par value
of $5.00 per share (the "BankFirst Common Stock") and Five Hundred Thousand
(500,000) shares of noncumulative convertible preferred stock (""BankFirst
Preferred Stock"). As of the date of this Agreement, 1,154,152 shares of
BankFirst Common Stock are issued and outstanding and no BankFirst Common Stock
is held by BankFirst as treasury stock. All of the outstanding BankFirst Common
Stock is validly issued, fully paid and nonassessable and has not been issued in
violation of any preemptive rights of any BankFirst shareholder. As of the date
of this Agreement, 225,559 shares of BankFirst Preferred Stock shares are issued
and outstanding and no BankFirst Preferred Stock is held by BankFirst as
treasury stock.
5.9 Disclosure. The information concerning, and representations and
warranties made by, BankFirst set forth in this Agreement, or in the Schedules
of Exceptions of BankFirst hereto, or in any document, statement, certificate or
other writing furnished or to be furnished by BankFirst to Smoky Mountain
pursuant hereto, does not and will not contain any untrue statement of a
material fact or omit and will not omit to state a material fact required to be
stated herein or therein necessary to make the statements and facts contained
herein or therein, in light of the circumstances in which they were or are made,
not false or misleading. Copies of all documents heretofore or hereafter
delivered or made available to Smoky Mountain by BankFirst pursuant hereto were
or will be complete and accurate copies of such documents.
5.10 Material Contracts. Except as reflected in the BankFirst Financial
Statements, or as described in Schedule 5.14 hereto, neither BankFirst nor the
BankFirst Subsidiary, nor any of their respective assets, businesses, or
operations, is as of the date of this Agreement a party to, or is bound or
affected by, or receives benefits under any contract or agreement or amendment
thereto that in each case would be required to be filed as an exhibit to an
Annual Report on Form F-2 filed by BankFirst as of the date of this Agreement
that has not been filed as an exhibit to BankFirst's Form F-2 filed for the
fiscal year ended December 31, 1995.
ARTICLE 6
COVENANTS OF SMOKY MOUNTAIN
6.1 Regulatory Approvals. Within a reasonable time after execution of this
Agreement, Smoky Mountain shall file any and all applications with the
appropriate Regulatory Authorities in order to obtain the Government Approvals
and shall take such other actions as may be reasonably required to consummate
the transactions contemplated in this Agreement and the Plan of Share Exchange
with reasonable promptness. BankFirst shall pay all fees and expenses arising in
connection with such applications for Regulatory Approval. Smoky Mountain agrees
to provide the appropriate Regulatory Authorities with the information required
by such authorities in connection with Smoky Mountain's applications for
Regulatory Approval and Smoky Mountain agrees to use its best efforts to obtain
such Regulatory Approvals, and any other approvals and consents as may be
required for the Closing, as promptly as practicable.
ACQUISITION AGREEMENT - Page 12
6.2 Proxy Statement. Smoky Mountain Shareholder Approval. Smoky Mountain
shall call a meeting of shareholders for September 20, 1996 for the purpose of
(i) approving this agreement and the Plan of Share Exchange; and (ii) such other
related matters as it deems appropriate. In connection with the shareholder's
meeting; (i) Smoky Mountain shall prepare a proxy statement and shall mail or
cause to be mailed such Proxy Statement to its shareholders; (ii) the Board of
Directors shall recommend (subject to compliance with their legal and fiduciary
duty) to Smoky Mountain shareholders the approval of this Agreement and the Plan
of Share Exchange.
ARTICLE 7
COVENANTS OF BANKFIRST
7.1 Proxy Statement; BankFirst Shareholder Approval. BankFirst shall call
the Shareholders Meeting to be held as soon as reasonably practicable after the
date of this Agreement and shall use its best efforts to ensure that such
meeting is held not later than October 10, 1996, for the purpose of (i)
approving this Agreement and the Plan of Share Exchange, and (ii) such other
related matters as it deems appropriate. In connection with the Shareholders
Meeting, (i) BankFirst shall prepare a Proxy Statement, shall mail or cause to
be mailed such Proxy Statement to its shareholders; and (ii) the Board of
Directors of BankFirst shall recommend (subject to compliance with their legal
and fiduciary duty as advised by counsel) to BankFirst shareholders the approval
of this Agreement and the Plan of Share Exchange.
7.2 Conduct of Business - Affirmative Covenants. Unless the prior written
consent of Smoky Mountain shall have been obtained and, except as otherwise
contemplated herein:
(a) BankFirst shall, and shall cause the BankFirst Subsidiary to:
(i) Operate its business only in the usual, regular, and
ordinary course;
(ii) Preserve intact its business organizations and assets and
to maintain its rights and franchises;
(iii) Take no action, unless otherwise required by law, rules
or regulation, that would (a) adversely affect the ability of any of them or
Smoky Mountain to obtain any necessary approvals of Regulatory Authorities
required to consummate the transactions contemplated by this Agreement, or (b)
adversely affect the ability of such party to perform its covenants and
agreements under this Agreement;
ACQUISITION AGREEMENT - Page 13
(iv) Except as they may terminate in accordance with their
terms, keep in full force and effect, and not default in any of their
obligations under, all material contracts;
(v) Keep in full force and effect insurance coverage with
responsible insurance carriers which is reasonably adequate in coverage and
amount for companies the size of BankFirst or the BankFirst Subsidiary and for
the businesses and properties owned by each and in which each is engaged, to the
extent that such insurance is reasonably available;
(vi) Use its best efforts to retain its present customer base
and to facilitate the retention of such customers by BankFirst and its branches
after the closing;
(vii) To maintain, renew, keep in full force and effect, and
preserve its business organization and material rights and franchises, permits
and licenses, and to use its best efforts to maintain positive relations with
its present employees so that such employees will continue to perform
effectively and will be available to BankFirst or Smoky Mountain and BankFirst's
Subsidiaries or Smoky Mountain's Subsidiaries at and after the closing, and to
use its best efforts to maintain its existing, or substantially equivalent,
credit arrangements with banks and other financial institutions and to assure
the continuance of its customer relationships;
(b) BankFirst agrees to use its best efforts to assist Smoky
Mountain in obtaining the Government Approvals necessary to complete the
transactions contemplated hereby, and BankFirst shall provide to Smoky Mountain
or to the appropriate governmental authorities all information reasonably
required to be submitted in connection with obtaining such approvals.
(c) BankFirst, at its own cost and expense, shall use its best
efforts to secure all necessary consents and all consents and releases, if any,
required of BankFirst or third parties and shall comply with all applicable
laws, regulations and rulings in connection with this Agreement and the
consummation of the transactions contemplated hereby.
(d) At all times to and including, and as of, the Closing, BankFirst
shall inform Smoky Mountain in writing of any and all facts necessary to amend
or supplement the representations and warranties made herein and the schedules
attached hereto as necessary so that the information contained herein and
therein will accurately reflect the current status of BankFirst.
ARTICLE 8
CONDITIONS TO CLOSING
8.1 Conditions to the Obligations of BankFirst. Unless waived in writing
by BankFirst, the obligation of BankFirst to consummate the transaction
contemplated by this Agreement is subject to the satisfaction at or prior to the
Closing Date of the following conditions:
ACQUISITION AGREEMENT - Page 14
(a) Performance. Each of the material acts and undertakings of Smoky
Mountain to be performed at or before the Closing Date pursuant to this
Acquisition Agreement shall have been duly performed.
(b) Representations and Warranties. The representations and
warranties of Smoky Mountain contained in Article 4 of this Acquisition
Agreement shall be true and complete, in all material respects, on and as of the
exchange with the same effect as though made on and as of the exchange.
(c) Documents. In addition to the other deliveries of Smoky Mountain
described elsewhere in this Acquisition Agreement, BankFirst shall have received
the following documents and instruments:
(i) a certificate from the Secretary or Assistant Secretary of Smoky
Mountain dated as of the Closing Date certifying that:
(A) Smoky Mountain's Board of Directors has duly adopted
resolutions (copies of which shall be attached to such certificate)
approving the substantive terms of this Acquisition Agreement
(including the Plan of Share Exchange) and authorizing the
consummation of the transactions contemplated by this Acquisition
Agreement and that such resolutions have not been amended or
modified and remain in full force and effect;
(B) Smoky Mountain's Shareholders have duly adopted
resolutions (copies of which shall be attached to such certificate)
approving the substantive terms of this Acquisition Agreement
(including the Plan of Share Exchange) and authorizing the
consummation of the transactions contemplated by this Acquisition
Agreement and that such resolutions have not been amended or
modified and remain in full force and effect;
(C) each person executing this Acquisition Agreement on behalf
of Smoky Mountain is an officer of Smoky Mountain holding the office
or offices specified therein and that the signature of each person
set forth on such certificate is his genuine signature;
(D) the charter documents of Smoky Mountain attached to such
certificate remain in full force and effect;
(E) Smoky Mountain is in good standing under its Tennessee
corporate charter; and
ACQUISITION AGREEMENT - Page 15
(F) Smoky Mountain is in good standing with all Regulatory
Authorities having jurisdiction over it and has received no
notification that this transaction would result in a cease and
desist order or an impairment of the financial ability of Smoky
Mountain to perform its obligations under this Acquisition
Agreement.
(ii) a certificate signed by a duly authorized officer of Smoky
Mountain stating that the conditions set forth in Section 8.1(a), Section
8.1(b), and Section 8.1(c) of this Acquisition Agreement have been fulfilled.
(d) Consideration. BankFirst shall have received a certificate
executed by an authorized officer of the Exchange Agent to the effect that the
Exchange Agent has received and holds in its possession certificates evidencing
and representing that number of shares of Smoky Mountain Common Stock and Smoky
Mountain Preferred Stock, and/or collected funds sufficient to meet the
obligations to the BankFirst Record Holders to deliver the Consideration under
this Acquisition Agreement and the Plan of Share Exchange.
(e) No Material Adverse Change. No material adverse change in the
material business, property, assets, liabilities (whether absolute, contingent
or otherwise), prospects, operations, liquidity, income or condition (financial
or otherwise) of Smoky Mountain taken as a whole, shall have occurred since the
date of this Acquisition Agreement. In the event of such an adverse change with
respect to Smoky Mountain, BankFirst may elect either (i) to close the
contemplated transaction in accordance with the terms of this Acquisition
Agreement or (ii) to terminate this Acquisition Agreement without penalty.
8.2 Conditions to the Obligations of Smoky Mountain. Unless waived in
writing by Smoky Mountain, the obligation of Smoky Mountain to consummate the
transactions contemplated by this Acquisition Agreement is subject to the
satisfaction at or prior to the Closing Date of the following conditions:
(a) Performance. Each of the material acts and undertakings of
BankFirst to be performed at or before the Closing Date pursuant to this
Acquisition Agreement shall have been duly performed;
(b) Representations and Warranties. The representations and
warranties of BankFirst contained in Article 5 of this Acquisition Agreement
shall be true and correct, in all material respects, on and as of the Closing
Date with the same effect as though made on and as of the Closing Date;
(c) No Material Adverse Change. No material adverse change in the
material business, property, assets (including loan portfolios), liabilities
(whether absolute, contingent or otherwise), prospects, operations, liquidity,
income, or condition (financial or otherwise) of BankFirst taken as a whole
shall have occurred since the date of this Acquisition
ACQUISITION AGREEMENT - Page 16
Agreement. In the event of such a material adverse change with respect to
BankFirst, Smoky Mountain may elect either (i) to close the contemplated
transaction in accordance with the terms of this Acquisition Agreement or (ii)
to terminate this Acquisition Agreement without penalty;
8.3 Conditions to Obligations of All Parties. The obligation of each Party
to effect the transactions contemplated hereby shall be subject to the
fulfillment, at or prior to the Closing, of the following conditions:
(a) No Pending or Threatened Claims. That no claim, action, suit,
investigation or other proceeding shall be pending or threatened before any
court or governmental agency which presents a substantial risk of the restraint
or prohibition of the transactions contemplated by this Acquisition Agreement or
the obtaining of material damages or other relief in connection therewith; and
(b) Governmental Approvals Obtained. The parties hereto shall have
received all applicable Governmental Approvals for the consummation of the
transactions contemplated herein and all waiting periods incidental to such
approvals or notices given shall have expired.
ARTICLE 9
TERMINATION
9.1 Termination. This Acquisition Agreement and the Plan of Share Exchange
may be terminated at any time prior to the Closing, as follows:
(a) By mutual consent in writing of the Parties;
(b) By Smoky Mountain, should BankFirst or the BankFirst Subsidiary
fail to conduct its business pursuant to its Covenants made in Article 7;
(c) By either Smoky Mountain or BankFirst, upon written notice to
the other party, upon denial of any Governmental Approval necessary for the
consummation of the Acquisition (or should such approval be conditioned upon a
substantial deviation from the transaction contemplated); provided, however,
that either party may, upon written notice to the other, extend the term of this
Acquisition Agreement for only one sixty (60) day period to prosecute diligently
and overturn such denial, provided that such denial has been appealed within ten
(10) business days of the receipt thereof;
ACQUISITION AGREEMENT - Page 17
(d) By Smoky Mountain if the conditions set forth in Sections 8.2 or
8.3 are not satisfied in all material respects as of the Closing Date, or by
BankFirst if the conditions set forth in Section 8.1 or 8.3 are not satisfied in
all material respects as of the Closing Date, and such failure has not been
waived prior to the Closing;
(e) By Smoky Mountain or BankFirst in the event that there shall
have been a material breach of any obligation of the other party hereunder and
such breach shall not have been remedied within thirty (30) days after receipt
by the breaching party of written notice from the other party specifying the
nature of such breach and requesting that it be remedied;
(f) By BankFirst in the event that there shall have been, in the
good faith opinion of BankFirst's Board of Directors, a material adverse change
in the business, property, assets, liabilities (whether absolute, contingent,
accrued, contingent or otherwise), prospects, operations, liquidity, income,
condition (financial or otherwise) or net worth of Smoky Mountain taken as a
whole or upon the occurrence of any event or circumstances which may have the
effect of limiting or restricting Smoky Mountain's ability to deliver the
consideration either by issuing to the BankFirst Record Holders the Smoky
Mountain Common Stock and the Smoky Mountain Preferred Stock.
9.2 Effect of Termination. In the event that this Acquisition Agreement
should be terminated pursuant to Section 9.1 hereof, all further obligations of
the parties under this Acquisition Agreement shall terminate without further
liability of any party to another; provided, however, that a termination under
Section 9.1 hereof shall not relieve any party of any liability for a breach of
this Acquisition Agreement or for any misstatement or misrepresentation made
hereunder prior to such termination, or be deemed to constitute a waiver of any
available remedy for any such breach, misstatement or misrepresentation.
ARTICLE 10
GENERAL PROVISIONS
10.1 Notices. Any notice, request, demand and other communication which
either party hereto may desire or may be required hereunder to give shall be in
writing and shall be deemed to be duly given if delivered personally or mailed
by certified or registered mail (postage prepaid, return receipt requested), air
courier or facsimile transmission, addressed or transmitted to such other party
as follows:
ACQUISITION AGREEMENT - Page 18
If to BankFirst:
Xxxx X. Xxxxxx
President and Chief Executive Officer
BankFirst
000 Xxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
If to Smoky Mountain:
Xxxxx X. Xxxxxxx
Chairman
Smoky Mountain Bancorp, Inc.
000 Xxxxxxx
Xxxxxxxxxx, XX 00000
With an additional copy to:
Xxxxx X. Xxxxxxx
000 Xxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
If to First National Bank of Gatlinburg:
Xxxxxxx Xxxx Xxxx, Xx.
Chairman
First National Bank of Gatlinburg
000 Xxxxxxx
Xxxxxxxxxx, XX 00000
or to such other address as any party hereto may hereafter designate to the
other parties in writing. Notice shall be deemed to have been given on the date
reflected in the proof or evidence of delivery, or if none, on the date actually
received.
10.2 Assignability and Parties in Interest. This Acquisition Agreement
shall not be assignable by any of the Parties hereto.
10.3 Governing Law. This Acquisition Agreement shall be governed by, and
construed and enforced in accordance with, the laws of the State of Tennessee.
ACQUISITION AGREEMENT - Page 19
10.4 Counterparts. This Acquisition Agreement may be executed
simultaneously in one or more counterparts, each of which shall be deemed an
original, but all of which shall constitute but one and the same instrument.
10.5 Best Efforts. BankFirst and Smoky Mountain each agree to use its best
efforts to complete the transactions contemplated by this Acquisition Agreement.
10.6 Publicity. The parties agree that press releases and other public
announcements to be made by any of them with respect to the transactions
contemplated hereby shall be subject to mutual agreement.
10.7 Entire Agreement. This Acquisition Agreement, together with the Plan
of Share Exchange which is Exhibit "1" hereto, the Schedules, Exhibits and
certificates required to be delivered hereunder and any amendments or addenda
hereafter executed and delivered in accordance with Section 10.9 hereof
constitute the entire agreement of the parties hereto pertaining to the
transaction contemplated hereby and supersede all prior written and oral (and
all contemporaneous oral) agreements and understandings of the parties hereto
concerning the subject matter hereof. The schedules, Exhibit "1", the exhibits
and certificates attached hereto or furnished pursuant to this Acquisition
Agreement are hereby incorporated as integral parts of this Acquisition
Agreement. Except as provided herein, by specific language and not by mere
implication, this Acquisition Agreement is not intended to confer upon any other
person not a party to this Acquisition Agreement any rights or remedies
hereunder.
10.8 Severability. If any portion or provision of this Acquisition
Agreement should be determined by a court of competent jurisdiction to be
invalid, illegal or unenforceable in any jurisdiction, such portion or provision
shall be ineffective as to that jurisdiction to the extent of such invalidity,
illegality or unenforceability, without affecting in any way the validity or
enforceability of the remaining portions or provisions hereof in such
jurisdiction or rendering that or any other portions or provisions of this
Acquisition Agreement invalid, illegal or unenforceable in any other
jurisdiction.
10.9 Modifications, Amendments and Waivers. At any time prior to the
Closing or termination of this Acquisition Agreement, the parties may, solely by
written agreement executed by their duly authorized officers:
(a) Extend the time for the performance of any of the obligations or
other acts of the other party hereto;
(b) Waive any inaccuracies in the representations and warranties
made by the other party contained in this Acquisition Agreement or in the
schedules or exhibits hereto or any other document delivered pursuant to this
Acquisition Agreement;
ACQUISITION AGREEMENT - Page 20
(c) Waive compliance with any of the covenants or agreements of the
other party contained in this Acquisition Agreement; and
(d) Amend or add to any provision of this Acquisition Agreement or
the Plan of Share Exchange; provided, however, that no provision of this
Acquisition Agreement may be amended or added to except by an agreement in
writing signed by the parties hereto or their respective successors in interest
and expressly stating that it is an amendment to this Acquisition Agreement.
10.10 Interpretation. The headings contained in this Acquisition Agreement
are for reference purposes only and shall not affect in any way the meaning or
interpretation of this Acquisition Agreement.
10.11 Payment of Expenses. Except as set forth herein, BankFirst shall pay
the fees and expenses (including, without limitation, legal fees and expenses)
incurred by Smoky Mountain and BankFirst in connection with the transactions
contemplated hereunder.
10.12 Survival of Representations and Warranties. All representations and
warranties made by the parties hereto or in any instrument or document furnished
in connection herewith, shall survive the Closing and any investigation at any
time made by or on behalf of the parties hereto and shall expire at the
Effective Time of the exchange except as to any matter which is based upon
willful fraud with respect to which the representations and warranties set forth
in this Acquisition Agreement shall expire only upon expiration of the
applicable statutes of limitation. Nothing in this Section 10.12 shall limit
BankFirst's or Smoky Mountain's rights or remedies for misrepresentations,
breaches of this Acquisition Agreement or any other improper action or inaction
by the other party hereto prior to the its termination.
10.13 No Waiver. No failure, delay or omission of or by any party in
exercising any right, power or remedy upon any breach or default of any other
party shall impair any such rights, powers or remedies of the party not in
breach or default, nor shall it be construed to be a waiver of any such right,
power or remedy, or an acquiescence in any similar breach or default; nor shall
any waiver of any single breach or default be deemed a waiver of any other
breach or default theretofore or thereafter occurring. Any waiver, permit,
consent or approval of any kind or character on the part of any party of any
provisions of this Acquisition Agreement must be in writing and must be executed
by the parties to this Acquisition Agreement and shall be effective only to the
extent specifically set forth in such writing.
IN WITNESS WHEREOF, each of the parties hereto has duly executed and
delivered this Acquisition Agreement or has caused this Acquisition Agreement to
be executed and delivered in its name and on its behalf by its representative
thereunto duly authorized, all as of the date first written above.
ACQUISITION AGREEMENT - Page 21
BANKFIRST
By: /s/ Xxxx X. Xxxxxx
----------------------------------------
Xxxx X. Xxxxxx
Its: President and Chief Executive Officer
ATTEST:
/s/ Xxxxxx X. Xxxxxx
------------------------------
Secretary
SMOKY MOUNTAIN BANCORP, INC.
By: /s/ Xxxx X. Xxxxxx
----------------------------------------
Xxxx X. Xxxxxx
Its: President and Chief Executive Officer
ATTEST:
/s/ Xxxxxx X. Xxxxxx
------------------------------
Secretary
ACQUISITION AGREEMENT - Page 22
