EXHIBIT 2.1
-----------
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER
BY AND AMONG
CAPITAL CITY BANK GROUP, INC.,
FIRST ALACHUA BANKING CORPORATION
AND
FIRST NATIONAL BANK OF ALACHUA
Dated as of February 3, 2005
TABLE OF CONTENTS
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ARTICLE 1 TRANSACTIONS AND TERMS OF MERGERS.............................1
1.1 HOLDING COMPANY MERGER..........................................1
1.2 BANK MERGER.....................................................2
1.3 TIME AND PLACE OF CLOSING.......................................2
1.4 EFFECTIVE TIME..................................................2
1.5 ARTICLES OF INCORPORATION.......................................2
1.6 BYLAWS..........................................................2
1.7 DIRECTORS AND OFFICERS..........................................2
ARTICLE 2 MANNER OF CONVERTING SHARES...................................3
2.1 CONVERSION OF SHARES............................................3
2.2 ANTI-DILUTION PROVISIONS........................................4
2.3 SHARES HELD BY FABC SHAREHOLDERS OR CCBG........................4
2.4 DISSENTING SHAREHOLDERS.........................................4
2.5 FRACTIONAL SHARES...............................................4
ARTICLE 3 EXCHANGE OF SHARES............................................4
3.1 EXCHANGE PROCEDURES.............................................4
3.2 RIGHTS OF FORMER FABC SHAREHOLDERS..............................5
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF FABC........................6
4.1 ORGANIZATION, STANDING, AND POWER...............................6
4.2 AUTHORITY OF FABC AND FIRST NATIONAL; NO BREACH BY AGREEMENT....7
4.3 CAPITAL STOCK...................................................8
4.4 INVESTMENTS; SUBSIDIARIES.......................................8
4.5 FINANCIAL STATEMENTS............................................9
4.6 ABSENCE OF UNDISCLOSED LIABILITIES..............................9
4.7 ABSENCE OF CERTAIN CHANGES OR EVENTS............................9
4.8 TAX MATTERS....................................................10
4.9 ALLOWANCE FOR POSSIBLE LOAN LOSSES.............................13
4.10 ASSETS.........................................................13
4.11 INTELLECTUAL PROPERTY..........................................14
4.12 ENVIRONMENTAL MATTERS..........................................15
4.13 COMPLIANCE WITH LAWS...........................................16
4.14 LABOR RELATIONS................................................17
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TABLE OF CONTENTS
(continued)
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4.15 EMPLOYEE BENEFIT PLANS.........................................17
4.16 MATERIAL CONTRACTS.............................................21
4.17 LEGAL PROCEEDINGS..............................................21
4.18 REPORTS........................................................22
4.19 STATEMENTS TRUE AND CORRECT....................................22
4.20 ACCOUNTING, TAX, AND REGULATORY MATTERS........................22
4.21 STATE TAKEOVER LAWS............................................23
4.22 CHARTER PROVISIONS.............................................23
4.23 OPINION OF FINANCIAL ADVISOR...................................23
4.24 BOARD RECOMMENDATION...........................................23
ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF CCBG.......................23
5.1 ORGANIZATION, STANDING, AND POWER..............................23
5.2 AUTHORITY OF CCBG; NO BREACH BY AGREEMENT......................24
5.3 CAPITAL STOCK..................................................24
5.4 CCBG SUBSIDIARIES..............................................25
5.5 SEC FILINGS; FINANCIAL STATEMENTS..............................25
5.6 ABSENCE OF UNDISCLOSED LIABILITIES.............................25
5.7 ABSENCE OF CERTAIN CHANGES OR EVENTS...........................26
5.8 ALLOWANCE FOR POSSIBLE LOAN LOSSES.............................26
5.9 INTELLECTUAL PROPERTY..........................................26
5.10 COMPLIANCE WITH LAWS...........................................27
5.11 LEGAL PROCEEDINGS..............................................27
5.12 REPORTS........................................................28
5.13 STATEMENTS TRUE AND CORRECT....................................28
5.14 ACCOUNTING, TAX AND REGULATORY MATTERS.........................28
ARTICLE 6 CONDUCT OF BUSINESS PENDING CONSUMMATION.....................29
6.1 AFFIRMATIVE COVENANTS OF FABC AND FIRST NATIONAL...............29
6.2 NEGATIVE COVENANTS OF FABC AND FIRST NATIONAL..................29
6.3 COVENANTS OF CCBG..............................................31
6.4 ADVERSE CHANGES IN CONDITION...................................32
6.5 REPORTS........................................................32
6.6 TAXES..........................................................32
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TABLE OF CONTENTS
(continued)
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ARTICLE 7 ADDITIONAL AGREEMENTS........................................34
7.1 REGISTRATION STATEMENT; PROXY STATEMENT; SHAREHOLDER APPROVAL..34
7.2 NASDAQ LISTING.................................................34
7.3 APPLICATIONS...................................................34
7.4 FILINGS WITH STATE OFFICES.....................................35
7.5 AGREEMENT AS TO EFFORTS TO CONSUMMATE..........................35
7.6 INVESTIGATION AND CONFIDENTIALITY..............................35
7.7 PRESS RELEASES.................................................36
7.8 CERTAIN ACTIONS................................................37
7.9 ACCOUNTING AND TAX TREATMENT...................................37
7.10 STATE TAKEOVER LAWS............................................37
7.11 CHARTER PROVISIONS.............................................37
7.12 FABC AND FIRST NATIONAL MEETINGS...............................37
7.13 AGREEMENT OF AFFILIATES........................................38
7.14 EMPLOYEE BENEFITS AND CONTRACTS................................38
7.15 ALACHUA 401(K) PLAN QUALIFICATION..............................39
7.16 INDEMNIFICATION................................................40
7.17 CERTAIN POLICIES OF FABC.......................................41
7.18 DIRECTOR AND VOTING AGREEMENTS.................................41
7.19 PAYMENT OF BONUS...............................................41
7.20 REAL PROPERTY MATTERS..........................................42
7.21 FAIRNESS OPINION...............................................43
7.22 NON-COMPETITION AGREEMENTS.....................................43
7.23 FABC AUDITED FINANCIAL STATEMENTS..............................43
7.24 ALLOWANCE FOR POSSIBLE LOAN LOSSES.............................44
ARTICLE 8 CONDITIONS PRECEDENT TO OBLIGATIONS TO CONSUMMATE............44
8.1 CONDITIONS TO OBLIGATIONS OF EACH PARTY........................44
8.2 CONDITIONS TO OBLIGATIONS OF CCBG..............................45
8.3 CONDITIONS TO OBLIGATIONS OF FABC AND FIRST NATIONAL...........47
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(continued)
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ARTICLE 9 TERMINATION..................................................48
9.1 TERMINATION....................................................48
9.2 EFFECT OF TERMINATION..........................................49
9.3 ALTERNATE TRANSACTION..........................................50
9.4 NON-SURVIVAL OF REPRESENTATIONS AND COVENANTS..................50
ARTICLE 10 MISCELLANEOUS................................................50
10.1 DEFINITIONS....................................................50
10.2 EXPENSES.......................................................61
10.3 BROKERS AND FINDERS............................................61
10.4 ENTIRE AGREEMENT...............................................61
10.5 AMENDMENTS.....................................................61
10.6 WAIVERS........................................................62
10.7 ASSIGNMENT.....................................................62
10.8 NOTICES........................................................62
10.9 GOVERNING LAW..................................................63
10.10 COUNTERPARTS...................................................63
10.11 CAPTIONS; ARTICLES AND SECTIONS................................64
10.12 INTERPRETATIONS................................................64
10.13 ENFORCEMENT OF AGREEMENT.......................................64
10.14 ENFORCEMENT COSTS..............................................64
10.15 SEVERABILITY...................................................64
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AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (this "Agreement") is made and entered
into as of February 3, 2005, by and among CAPITAL CITY BANK GROUP, INC., a
Florida corporation ("CCBG"), FIRST ALACHUA BANKING CORPORATION, a Florida
corporation ("FABC"), and FIRST NATIONAL BANK OF ALACHUA, a national bank
("First National").
PREAMBLE
The respective Boards of Directors of CCBG, FABC, and First National are
of the opinion that the transactions described herein are in the best
interests of the parties to this Agreement and their respective shareowners.
This Agreement provides for the acquisition of FABC by CCBG pursuant to the
merger of (i) FABC with and into CCBG (the "Holding Company Merger") and
(ii) First National with and into a Florida chartered bank subsidiary of
CCBG, Capital City Bank ("CCB") (the "Bank Merger") (collectively, the
"Mergers"). At the effective time of the Holding Company Merger, the
outstanding shares of the capital stock of FABC shall be converted into the
right to receive a combination of shares of the common stock of CCBG and cash
as described in this Agreement. As a result, shareholders of FABC shall
become shareowners of CCBG and CCBG shall conduct the business and operations
of First National. The transactions described in this Agreement are subject
to the approvals of the shareholders of FABC, the Board of Governors of the
Federal Reserve System, the Florida Department of Financial Services, and the
satisfaction of certain other conditions described in this Agreement. It is
the intention of the parties to this Agreement that the Mergers, for federal
income tax purposes, shall qualify as a "reorganization" within the meaning
of Section 368(a)(1)(A) of the Code.
Certain terms used in this Agreement are defined in Section 10.1 of this
Agreement.
NOW, THEREFORE, in consideration of the above and the mutual warranties,
representations, covenants, and agreements set forth herein, the parties,
intending to be legally bound, agree as follows:
ARTICLE 1
TRANSACTIONS AND TERMS OF MERGERS
1.1 HOLDING COMPANY MERGER.
---------------------- Subject to the terms and conditions of
this Agreement, at the Effective Time, FABC shall be merged with and into
CCBG in accordance with the provisions of, and with the effect provided in,
Sections 607.1101, 607.1103, 607.1105, 607.1106 and 607.1107 of the FBCA.
CCBG shall be the Surviving Corporation resulting from the Holding Company
Merger and shall continue to be governed by the Laws of the State of Florida.
The Holding Company Merger shall be consummated pursuant to the terms of this
Agreement, which has been approved and adopted by the respective Boards of
Directors of FABC and CCBG.
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1.2 BANK MERGER.
----------- Subsequent to the consummation of the Holding
Company Merger, First National shall be merged with and into CCB in
accordance with the provisions of and with the effect provided in Section
658.41 of the Florida Statutes on terms and subject to the provisions of the
Bank Plan of Merger ("Bank Plan"), attached hereto as Exhibit 1. FABC shall
vote the shares of First National Capital Stock in favor of the Bank Plan and
the Bank Merger provided therein.
1.3 TIME AND PLACE OF CLOSING.
------------------------- The closing of the transactions
contemplated hereby (the "Closing") will take place at the close of business
on the date that the Effective Time occurs (or the immediately preceding day
if the Effective Time is earlier than 9:00 A.M.), or at such other time as
the Parties, acting through their authorized officers, may mutually agree.
The Closing shall be held at such location as may be mutually agreed upon by
the Parties or may be conducted by mail or facsimile as may be mutually
agreed upon by the Parties.
1.4 EFFECTIVE TIME.
-------------- The Holding Company Merger and other transactions
contemplated by this Agreement shall become effective on the date and at the
time the Articles of Merger reflecting the Holding Company Merger shall
become effective with the Secretary of State of the State of Florida (the
"Effective Time"). Subject to the terms and conditions hereof, unless
otherwise mutually agreed upon in writing by the authorized officers of each
Party, the Parties shall use their reasonable efforts to cause the Effective
Time to occur within 60 days after 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 Mergers, and (ii) the date on which the
shareholders of FABC and CCBG approve this Agreement to the extent such
approval is required by applicable Law. The actual Effective Time within the
60-day period shall be mutually agreed upon by CCBG and FABC.
1.5 ARTICLES OF INCORPORATION.
------------------------- The Articles of Incorporation of CCBG
in effect immediately prior to the Effective Time shall be the Articles of
Incorporation of the Surviving Corporation until duly amended or repealed.
1.6 BYLAWS.
------ The Bylaws of CCBG in effect immediately prior to the
Effective Time shall be the Bylaws of the Surviving Corporation until duly
amended or repealed.
1.7 DIRECTORS AND OFFICERS.
---------------------- The directors of CCBG in office
immediately prior to the Effective Time, together with such persons as may
thereafter be elected, shall serve as the directors of the Surviving
Corporation from and after the Effective Time in accordance with the Bylaws
of the Surviving Corporation. The officers of CCBG in office immediately
prior to the Effective Time, together with such additional persons as may
thereafter be elected, shall serve as the officers of the Surviving
Corporation from and after the Effective Time in accordance with the Bylaws
of the Surviving Corporation.
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ARTICLE 2
MANNER OF CONVERTING SHARES
2.1 CONVERSION OF SHARES.
-------------------- Subject to the provisions of this Article
2, at the Effective Time, by virtue of the Mergers and without any action on
the part of CCBG, CCB, FABC, or First National or the shareholders of the
foregoing, the shares of the constituent corporations shall be converted as
follows:
(a) Each share of capital stock of CCBG issued and outstanding
immediately prior to the Effective Time shall remain issued and outstanding
from and after the Effective Time.
(b) Subject to adjustment as set forth in this Section 2.1, the
aggregate purchase price (the "Purchase Price") to be paid by CCBG for the
FABC Common Stock shall be Fifty-Eight Million U.S. Dollars ($58,000,000).
(c) Each share of FABC Common Stock issued and outstanding
immediately prior to the Effective Time, excluding shares held by any FABC
Entity or any CCBG Entity, 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 statutory dissenters' rights as provided in
Section 2.4, shall cease to be outstanding and, subject to any adjustments as
set forth in this Section 2.1, shall be converted into and exchanged for the
right to receive:
(1) that multiple of a share of CCBG Common Stock equal
to the quotient obtained by dividing (i) one-half of the Adjusted Purchase
Price Per Share by (ii) $40 (the "Share Exchange Ratio"); and
(2) cash equal to one-half of the Adjusted Purchase Price
Per Share.
(d) In the event that the FABC Audited Financial Statements,
pursuant to Section 7.23, indicate total shareholders' equity, as that term
is defined in accordance with GAAP, as of September 30, 2004 to be less than
$24,665,000, the difference obtained by subtracting (a) total shareholders'
equity as determined by the Auditor pursuant to Section 7.23 from (b)
$24,665,000 shall be deemed to be audit adjustments to the FABC Financial
Statements (the "Audit Adjustments").
(e) If, pursuant to Section 2.1(d), the opinion of the Auditor
with respect to the FABC Audited Financial Statements shall be qualified and
the total capital is not readily determinable by the Auditor, then the
parties agree to negotiate appropriate Audit Adjustments; provided, that, if
the parties cannot agree as to the amount of such Audit Adjustments within 30
days of the delivery of the Auditor's audit opinion, CCBG may terminate this
Agreement. In the event that CCBG elects not to terminate this Agreement,
then there shall be no Audit Adjustments.
(f) Each share of capital stock of CCB issued and outstanding
immediately prior to the Effective Time shall remain issued and outstanding
from and after the Effective Time.
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(g) Each share of capital stock of First National issued and
outstanding immediately prior to the Effective Time shall cease to be
outstanding and shall be extinguished from and after the consummation of the
Bank Merger.
2.2 ANTI-DILUTION PROVISIONS.
------------------------ In the event CCBG changes the number of
shares of CCBG Common Stock 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 thereof (in the case of a
stock split or similar recapitalization for which a record date is not
established) shall be prior to the Effective Time, the Share Exchange Ratio
shall be proportionately adjusted.
2.3 SHARES HELD BY FABC SHAREHOLDERS OR CCBG.
---------------------------------------- Each of the shares of
FABC Common Stock held by any FABC Entity or any CCBG Entity, 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.
2.4 DISSENTING SHAREHOLDERS.
----------------------- Any holder of shares of FABC Common
Stock who perfects his or her dissenters' rights in accordance with and as
contemplated by Sections 607.1301-1333 of the FBCA shall be entitled to
receive the value of such shares in cash as determined pursuant to such
provision of Law; provided, 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 FBCA and surrendered to FABC
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 FABC fails to perfect, or effectively withdraws or loses, his
or her right to appraisal and of payment for his or her shares subject to
CCBG's consent in its sole discretion, CCBG shall issue and deliver the
consideration to which such holder of shares of FABC Common Stock is entitled
under this Article 2 (without interest) upon surrender by such holder of the
certificate or certificates representing shares of FABC Common Stock held by
him or her.
2.5 FRACTIONAL SHARES.
----------------- Notwithstanding any other provision of this
Agreement, each holder of shares of FABC Common Stock exchanged pursuant to
the Mergers who would otherwise have been entitled to receive a fraction of a
share of CCBG 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 CCBG
Common Stock multiplied by the Average Closing Price. No such holder will be
entitled to dividends, voting rights, or any other rights as a shareholder in
respect of any fractional shares.
ARTICLE 3
EXCHANGE OF SHARES
3.1 EXCHANGE PROCEDURES.
------------------- Promptly after the Effective Time, CCBG and
FABC shall cause the exchange agent selected by CCBG (the "Exchange Agent")
to mail to each holder of record of a certificate or certificates which
represented shares of FABC Common Stock immediately prior to the Effective
Time (the "Certificates") appropriate transmittal materials and instructions
(which shall specify that delivery shall be effected, and risk of loss and
title to such
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Certificates shall pass, only upon proper delivery of such Certificates to
the Exchange Agent). The Certificate or Certificates of FABC Common Stock so
delivered shall be duly endorsed as the Exchange Agent may require. In the
event of a transfer of ownership of shares of FABC Common Stock represented
by Certificates that are not registered in the transfer records of FABC, the
consideration provided in Section 2.1 may be issued to a transferee if the
Certificates representing such shares are delivered to the Exchange Agent,
accompanied by all documents required to evidence such transfer and by
evidence satisfactory to the Exchange Agent that any applicable stock
transfer taxes have been paid. If any Certificate shall have been lost,
stolen, mislaid or destroyed, upon receipt of (i) an affidavit of that fact
from the holder claiming such Certificate to be lost, mislaid, stolen or
destroyed, (ii) such bond, security or indemnity as CCBG and the Exchange
Agent may reasonably require and (iii) any other documents necessary to
evidence and effect the bona fide exchange thereof, the Exchange Agent shall
issue to such holder the consideration into which the shares represented by
such lost, stolen, mislaid or destroyed Certificate shall have been
converted. The Exchange Agent may establish such other reasonable and
customary rules and procedures in connection with its duties as it may deem
appropriate. After the Effective Time, each holder of shares of FABC Common
Stock (other than shares to be canceled pursuant to Section 2.3 or as to
which statutory dissenters' rights have been perfected as provided in Section
2.4) 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 2.1, together with all undelivered
dividends or distributions in respect of such shares (without interest
thereon) pursuant to Section 3.2. To the extent required by Section 2.5,
each holder of shares of FABC Common Stock issued and outstanding at the
Effective Time also shall receive, upon surrender of the Certificate or
Certificates, cash in lieu of any fractional share of CCBG Common Stock to
which such holder may be otherwise entitled (without interest). CCBG shall
not be obligated to deliver the consideration to which any former holder of
FABC Common Stock is entitled as a result of the Mergers until such holder
surrenders such holder's Certificate or Certificates for exchange as provided
in this Section 3.1. Any other provision of this Agreement notwithstanding,
neither CCBG nor the Exchange Agent shall be liable to a holder of FABC
Common Stock for any amounts paid or property delivered in good faith to a
public official pursuant to any applicable abandoned property, escheat or
similar Law. Adoption of this Agreement by the shareholders of FABC shall
constitute ratification of the appointment of the Exchange Agent.
3.2 RIGHTS OF FORMER FABC SHAREHOLDERS.
---------------------------------- At the Effective Time, the
stock transfer books of FABC shall be closed as to holders of FABC Common
Stock immediately prior to the Effective Time and no transfer of FABC Common
Stock by any such holder shall thereafter be made or recognized. Until
surrendered for exchange in accordance with the provisions of Section 3.1,
each Certificate therefor representing shares of FABC Common Stock (other
than shares to be canceled pursuant to Sections 2.3 and 2.4) shall from and
after the Effective Time represent for all purposes only the right to receive
the consideration provided in Sections 2.1 and 2.5 in exchange therefor,
subject, however, to the Surviving Corporation's obligation to pay any
dividends or make any other distributions with a record date prior to the
Effective Time which have been declared or made by FABC in respect of such
shares of FABC Common Stock in accordance with the terms of this Agreement
and which remain unpaid at the Effective Time. Whenever a dividend or other
distribution is declared by CCBG on the CCBG Common Stock, the record date
for which is at or after the Effective Time, the
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declaration shall include dividends or other distributions on all shares of
CCBG Common Stock issuable pursuant to this Agreement. No dividend or other
distribution payable to the holders of record of CCBG Common Stock as of any
time subsequent to the Effective Time shall be delivered to the holder of any
Certificate until such holder surrenders such Certificate for exchange as
provided in Section 3.1. However, upon surrender of such Certificate, both
the CCBG Common Stock certificate (together with all such undelivered
dividends or other distributions, without interest) and any undelivered
dividends and cash payments payable hereunder (without interest) shall be
delivered and paid with respect to each share represented by such
Certificate.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF FABC
FABC and First National hereby jointly and severally represent and
warrant to CCBG as follows:
4.1 ORGANIZATION, STANDING, AND POWER.
---------------------------------
(a) FABC is a corporation duly organized, validly existing, and
its status is active under the Laws of the State of Florida, and has the
corporate power and authority to carry on its business as now conducted and
to own, lease and operate its Assets. FABC is duly qualified or licensed to
transact business and in good standing in the 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, an FABC Material Adverse Effect. The
minute books and other organizational documents and corporate records for
FABC have been made available to CCBG for its review and, except as disclosed
in Section 4.1 of the FABC Disclosure Memorandum, are true and complete in
all Material respects as in effect as of the date of this Agreement and
accurately reflect in all Material respects all amendments thereto and all
proceedings of the Board of Directors and shareholders
thereof.
(b) First National is a national bank duly organized, validly
existing, and in good standing under the Laws of the United States of
America, and has the corporate power and authority to carry on its business
as now conducted and to own, lease and operate its Assets. First National is
duly qualified or licensed to transact business and in good standing in the
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, an FABC Material
Adverse Effect. The minute books and other organizational documents and
corporate records for First National have been made available to CCBG for its
review and, except as disclosed in Section 4.1 of the FABC Disclosure
Memorandum, are true and complete in all Material respects as in effect as of
the date of this Agreement and accurately reflect in all Material respects
all amendments thereto and all proceedings of the Board of Directors and
shareholders thereof.
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4.2 AUTHORITY OF FABC AND FIRST NATIONAL; NO BREACH BY AGREEMENT.
------------------------------------------------------------
(a) Each of FABC and First National has the corporate power and
authority necessary to execute, deliver, and perform its obligations under
this Agreement and to consummate the transactions contemplated hereby. The
execution, delivery, and performance of this Agreement and the consummation
of the transactions contemplated herein, including the Mergers, have been
duly and validly authorized by all necessary corporate action in respect
thereof on the part of FABC and First National, subject to receipt of the
requisite Consents referred to in Section 8.1(b) and the approval of this
Agreement by the holders of a majority of the outstanding shares of FABC
Common Stock and a majority of the outstanding shares of First National
Common Stock, which are the only shareholder votes required for approval of
this Agreement and consummation of the Mergers by FABC and First National.
Subject to such requisite shareholder approval and due authorization,
execution and delivery by CCBG, this Agreement represents a legal, valid, and
binding obligation of FABC and First National, enforceable against FABC and
First National in accordance with its terms (except in all cases as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, receivership, conservatorship, 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 such
proceeding may be brought).
(b) Neither the execution and delivery of this Agreement by
FABC and First National, nor the consummation by FABC and First National of
the transactions contemplated hereby, nor compliance by FABC and First
National with any of the provisions hereof, will (i) conflict with or result
in a breach of any provision of FABC's Articles of Incorporation or Bylaws or
the certificate or articles of incorporation of any FABC Subsidiary or any
resolution adopted by the board of directors or the shareholders of any FABC
Entity, or (ii) subject to receipt of the requisite Consents referred to in
Section 8.1(b), and except as disclosed in Section 4.2 of the FABC Disclosure
Memorandum, 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 FABC
Entity under, any Contract or Permit of any FABC Entity, where such Default
or Lien, or any failure to obtain such Consent, is reasonably likely to have,
individually or in the aggregate, an FABC Material Adverse Effect, or where
such event would cause a breach hereof or a Default hereunder, or (iii)
subject to receipt of the requisite Consents referred to in Section 8.1(b),
constitute or result in a Default under, or require any Consent pursuant to,
any Law or Order applicable to any FABC Entity or their respective Material
Assets (including any CCBG Entity or any FABC Entity becoming subject to or
liable for the payment of any Tax on any of the Assets owned by any CCBG
Entity or any FABC Entity being reassessed or revalued by any taxing
authority).
(c) Except for the Consents referred to in Section 8.1(b), no
notice to, filing with, or Consent of, any public body or authority is
necessary for the consummation by FABC or First National of the Mergers and
the other transactions contemplated in this Agreement.
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4.3 CAPITAL STOCK.
-------------
(a) The authorized capital stock of FABC consists of
(i) 250,000 shares of FABC Class A Common Stock, of which 4,456 shares are
issued and outstanding as of the date of this Agreement and not more than
4,456 shares will be issued and outstanding at the Effective Time, (ii)
250,000 shares of FABC Class B Common Stock, of which 5,730 shares are issued
and outstanding as of the date of this Agreement and not more than 5,730
shares will be issued and outstanding at the Effective Time, and (iii) no
shares of preferred stock are authorized, issued or outstanding. All of the
issued and outstanding shares of FABC Capital Stock are duly and validly
issued and outstanding and are fully paid and nonassessable under the FBCA.
None of the outstanding shares of FABC Capital Stock has been issued in
violation of any preemptive rights of the current or past shareholders of
FABC.
(b) The authorized capital stock of First National consists of
(i) 80,000 shares of First National Common Stock, of which 80,000 shares are
issued and outstanding as of the date of this Agreement and not more than
80,000 shares will be issued and outstanding at the Effective Time, and (ii)
no shares of preferred stock are authorized, issued or outstanding. All of
the issued and outstanding shares of First National Capital Stock are duly
and validly issued and outstanding and are fully paid and nonassessable
(except for assessment pursuant to 12 U.S.C. Section 55). None of the
outstanding shares of First National Capital Stock has been issued in
violation of any preemptive rights of the current or past shareholders of
First National.
(c) Except as set forth in Sections 4.3(a) and 4.3(b), or as
disclosed in Section 4.3 of the FABC Disclosure Memorandum, there are no
shares of FABC Capital Stock, First National Capital Stock or other equity
securities of FABC or First National outstanding and no outstanding Equity
Rights relating to FABC Capital Stock or First National Capital Stock.
4.4 INVESTMENTS; SUBSIDIARIES.
------------------------- FABC and First National have disclosed
in Section 4.4 of the FABC Disclosure Memorandum all of the FABC Subsidiaries
that are corporations (identifying its jurisdiction of incorporation, each
jurisdiction in which it is qualified and/or licensed to transact business,
and the number of shares owned and percentage ownership interest represented
by such share ownership) and all of the FABC Subsidiaries that are general or
limited partnerships, limited liability companies, trusts or other
non-corporate entities (identifying the Law under which such entity is
organized, each jurisdiction in which it is qualified and/or licensed to
transact business, the type of entity and the amount and nature of the
ownership interest therein). FABC owns all of the issued and outstanding
shares of capital stock (or other equity interests) of each FABC Subsidiary.
No capital stock (or other equity interest) of any FABC Subsidiary is or may
become required to be issued (other than to another FABC Entity) by reason of
any Equity Rights, and there are no Contracts by which any FABC Subsidiary is
bound to issue (other than to another FABC Entity) additional shares of its
capital stock (or other equity interests) or Equity Rights or by which any
FABC Entity is or may be bound to transfer any shares of the capital stock
(or other equity interests) of any FABC Subsidiary (other than to another
FABC Entity). There are no Contracts relating to the rights of any FABC
Entity to vote or to dispose of any shares of the capital stock (or other
equity interests) of any FABC Subsidiary. All of the shares of capital stock
(or other equity interests) of each FABC Subsidiary held by a FABC Entity are
fully paid and (except pursuant to 12 U.S.C. Section 55 in the case of
national banks and comparable, applicable state Law, if any, in the case of
8
state depository institutions) nonassessable under the applicable corporation
Law of the jurisdiction in which such Subsidiary is incorporated or organized
and are owned by the FABC Entity free and clear of any Lien. Except as
disclosed in Section 4.4 of the FABC Disclosure Memorandum, each FABC
Subsidiary is either a bank, a savings association, or a corporation, and
each such Subsidiary is duly organized, validly existing, and (as to
corporations) in good standing or its status is active, as applicable, under
the Laws of the jurisdiction in which it is incorporated or organized, and
has the corporate power and authority necessary for it to own, lease, and
operate its Assets and to carry on its business as now conducted. Each FABC
Subsidiary is duly qualified or licensed to transact business and in good
standing or its status is active, as applicable, in the 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, an FABC Material Adverse Effect. Each FABC
Subsidiary that is a depository institution is an "insured institution" as
defined in the Federal Deposit Insurance Act and applicable regulations
thereunder, and the deposits are insured by the Bank Insurance Fund. The
minute books and other organizational and corporate documents for each FABC
Subsidiary have been made available to CCBG for its review, and, except as
disclosed in Section 4.4 of the FABC Disclosure Memorandum, are true and
complete in all Material respects as in effect as of the date of this
Agreement and accurately reflect in all Material respects all amendments
thereto and all proceedings of the Board of Directors, all committees of the
Board of Directors and shareholders thereof.
4.5 FINANCIAL STATEMENTS.
-------------------- To the Knowledge of FABC and to the
Knowledge of First National, each of the FABC Financial Statements was
prepared in accordance with GAAP applied on a consistent basis throughout the
periods involved (except as may be indicated in the notes to such financial
statements or as disclosed in Section 4.5 of the FABC Disclosure Memorandum),
and fairly presents in all Material respects the financial position of FABC
and First National as of the respective dates and the results of operations
for the periods indicated, except that the interim financial statements were
or are subject to normal and recurring year-end adjustments which were not or
are not expected to be Material in amount or effect.
4.6 ABSENCE OF UNDISCLOSED LIABILITIES.
---------------------------------- No FABC Entity has any
Liabilities that are reasonably likely to have, individually or in the
aggregate, an FABC Material Adverse Effect, except Liabilities which are
accrued or reserved against in the balance sheets of FABC and First National
as of December 31, 2003, included in the FABC Financial Statements delivered
prior to the date of this Agreement or reflected in the notes thereto.
Except as set forth in Section 4.6 of the FABC Disclosure Memorandum, no FABC
Entity has incurred or paid any Liability since December 31, 2003, except for
such Liabilities incurred or paid (i) in the ordinary course of business
consistent with past business practice and which are not reasonably likely to
have, individually or in the aggregate, an FABC Material Adverse Effect or
(ii) in connection with the transactions contemplated by this Agreement.
4.7 ABSENCE OF CERTAIN CHANGES OR EVENTS.
------------------------------------ Since December 31, 2003,
except as disclosed in the FABC Financial Statements delivered prior to the
date of this Agreement or as disclosed in Section 4.7 of the FABC Disclosure
Memorandum, there have been
9
no events, changes, or occurrences which have had, or are reasonably likely
to have, individually or in the aggregate, an FABC Material Adverse Effect.
4.8 TAX MATTERS.
-----------
(a) Filing of Tax Returns. Each FABC Entity has timely filed
with the appropriate taxing authorities all Returns (including, without
limitation, information returns and other Material information) in respect of
Taxes that it is required to file under applicable Law through the date
hereof. All such Returns were, and the information contained therein was,
complete and accurate in all Material respects. Except as specified in
Section 4.8(a) of the FABC Disclosure Memorandum, no FABC Entity has
requested any extension of time within which to file Returns (including,
without limitation, information returns) in respect of any Taxes. FABC and
First National have made available to CCBG copies of such portions of the
federal, state, foreign and local income tax returns of each FABC Entity for
the last four years that relate to such FABC Entity. Except as set forth in
Section 4.8(a) of the FABC Disclosure Memorandum, no FABC Entity has derived
income from or operated a trade or business in any foreign country, state or
locality.
(b) Payment of Taxes. All Taxes in respect of periods
beginning before the date hereof (i) if due and payable, have been timely
paid, (ii) if not yet due and payable, have an adequate reserve established
therefor in accordance with FABC management's estimate of the taxes owed and
in accordance with GAAP as of the Closing Date or (iii) are being contested
in good faith by an FABC Entity pursuant to appropriate proceedings which are
being diligently pursued and an adequate reserve therefor has been
established in accordance with GAAP, as set forth in Section 4.8(b) of the
FABC Disclosure Memorandum. No FABC Entity has any Material Liability for
Taxes in excess of the amounts so paid or reserves so established in
accordance with (b)(i) or (b)(ii) above. Each FABC Entity has, within the
time and manner prescribed by applicable Law, rules and regulations, withheld
and paid over to the proper taxing or other governmental authorities all
Taxes required to be withheld and paid over. Except (i) acts, events or
omissions that are ordinary business activities, (ii) to the extent relating
to income an FABC Entity receives after the Closing, or (iii) as set forth in
Section 4.8(b) of the FABC Disclosure Memorandum, to the Knowledge of FABC,
no acts, events or omissions have occurred on or before the Closing Date that
would result in Material Taxes for which any FABC Entity is or may become
liable that will apply in a period or a portion thereof beginning on or after
the Closing Date.
(c) Audit History. Except as set forth in Section 4.8(c) of
the FABC Disclosure Memorandum, there are no deficiencies for Taxes claimed,
proposed or assessed that have not yet been fully and finally resolved and,
if such resolution required payment of any Taxes, such payment has been made.
Except as set forth in Section 4.8(c) of the FABC Disclosure Memorandum,
there are no pending or, to FABC's Knowledge or to First National's
Knowledge, threatened audits, investigations or claims for or relating to
Taxes, and there are no matters under discussion with any taxing or other
governmental authority with respect to Taxes, in each case, that, in the
reasonable judgment of FABC and First National or their respective tax
advisers, are likely to result in a Material additional amount of Taxes.
Audits of federal, state, foreign and local returns for Taxes of any FABC
Entity by the relevant taxing authorities within the past 5 years have been
completed for each period set forth in Section 4.8(c) of the FABC
10
Disclosure Memorandum. Except as set forth in Section 4.8(c) of the FABC
Disclosure Memorandum, no extension of a statute of limitations relating to
Taxes is in effect with respect to any FABC Entity.
(d) Tax Elections.
-------------
(1) All Material elections with respect to Taxes
affecting any FABC Entity that are effective as of the date hereof are set
forth in Section 4.8(d) of the FABC Disclosure Memorandum.
(2) No FABC Entity: (i) has agreed, or is required, to
make any adjustment under Section 481(a) of the Code that would be applicable
to any taxable period ending after the Closing Date by reason of a change in
accounting method or otherwise; (ii) has made an election or is required, to
treat any Asset of any FABC Entity as owned by another person pursuant to the
provisions of Section 168(f)(8) of the Internal Revenue Code of 1954, as
amended and in effect immediately before enactment of the Tax Reform Act of
1986, (iii) owns tax-exempt bond financed property within the meaning of
Section 168(g) of the Code, or (iv) owns tax-exempt use property within the
meaning of Section 168(h)(1) of the Code.
(e) Asset Liens.
----------- There are no Liens for Taxes (other than for
current Taxes not yet due and payable) on any Assets of any FABC Entity.
(f) Tax Rulings/Binding Agreement.
----------------------------- No FABC Entity has requested
or received any ruling from any taxing authority, or signed any binding
agreement with any taxing authority (including, without limitation, any
advance pricing agreement), that would materially adversely affect the amount
of Taxes after the Closing Date.
(g) Power of Attorney.
----------------- Except as set forth in Section 4.8(g) of
the FABC Disclosure Memorandum, there is no power of attorney currently in
force granted by any FABC Entity relating to Taxes.
(h) Prior Affiliated Groups.
----------------------- Section 4.8(h) of the FABC
Disclosure Memorandum lists all combined consolidated or unitary groups
(other than the consolidated or unitary group of which FABC is the parent) of
which each FABC Entity has been a member and which has filed a combined,
consolidated or unitary return for federal, state, local or foreign tax
purposes.
(i) Tax-Sharing Agreements.
---------------------- Except as set forth in Section
4.8(i) of the FABC Disclosure Memorandum, no FABC Entity is a party to a tax-
sharing agreement or any similar arrangement.
(j) Existing Partnerships and Single Member LLCs.
-------------------------------------------- Except as set
forth in Section 4.8(j) of the FABC Disclosure Memorandum, no FABC Entity (i)
is subject to any joint venture, partnership or other agreement or
arrangement which is treated as a partnership for federal income tax
purposes, or (ii) owns a single member limited liability company which is
treated as a disregarded entity.
11
(k) Parachute Payments.
------------------ Except as set forth in Section 4.8(k)
of the FABC Disclosure Memorandum, no FABC Entity has made or become
obligated to make, or will, as a result of any event connected with the
merger of FABC with CCBG or any other transaction contemplated herein, make
or become obligated to make, any "excess parachute payment" as defined in
Section 280G of the Code.
(l) Balance of Intercompany Items.
----------------------------- Except as set forth in
Section 4.8(l) of the FABC Disclosure Memorandum, all items of income, gain,
deduction or loss from an intercompany transaction will be taken into account
as of the Closing Date under the matching and acceleration rules of Treas.
Reg. Section 1.1502-13.
(m) Debt or Stock of Acquiring Group.
-------------------------------- No FABC Entity owns any
debt obligation of a CCBG Entity or any CCBG Capital Stock.
(n) Compliance with Section 6038A.
----------------------------- Each FABC Entity has
complied with all applicable reporting and record-keeping requirements under
Section 6038A of the Code with respect to certain foreign-owned companies and
transactions with certain related parties.
(o) FIRPTA.
------ No FABC Entity is a "foreign person" as defined in
Section 1445(f)(3) of the Code.
(p) Permanent Establishment.
----------------------- No FABC Entity has, or has had, a
permanent establishment in any foreign country, as defined in any applicable
tax treaty or convention between the United States of America and any such
foreign country.
(q) Security for Tax-Exempt Obligations.
----------------------------------- None of the Assets of
any FABC Entity directly or indirectly secures any debt, the interest on
which is tax-exempt under Section 103(a) of the Code.
(r) U.S. Real Property Holding Corporation.
-------------------------------------- No FABC Entity is,
or has been, a United States real property holding corporation (as defined in
Section 897(c)(2) of the Code) during the applicable period specified in
Section 897(c)(1)(A)(ii) of the Code.
(s) Unpaid Tax.
---------- The unpaid Taxes of each FABC Entity do not
exceed the reserve for Taxes based upon FABC management's estimates of the
Taxes owed (excluding any reserve for deferred Taxes established to reflect
timing differences between book and Tax income) set forth or included in the
most recent FABC Financial Statements as adjusted for the passage of time
through the Closing Date in accordance with the past custom and practice of
FABC.
(t) Tax Ownership.
------------- Each Asset with respect to which an FABC
Entity claims depreciation, amortization or similar expense for Tax purposes
is owned for Tax purposes by such FABC Entity.
(u) Timing Differences.
------------------ No item of income or gain reported by
any FABC Entity for financial accounting purposes in any pre-Closing period
is required to be included in taxable income for a post-Closing period except
to the extent that a reserve has been established
12
on the books and financial statements of FABC to reflect timing differences
between book and Tax income.
4.9 ALLOWANCE FOR POSSIBLE LOAN LOSSES.
---------------------------------- In the opinion of FABC
management and First National management, the allowances for possible loan
and lease credit losses (collectively, the "Allowance") shown on the FABC
Financial Statements immediately prior to the Effective Time will be, as of
the date thereof, adequate (within the meaning of GAAP and applicable
regulatory requirements or guidelines) to provide for all known or reasonably
anticipated losses relating to or inherent in the loan and lease portfolio of
the FABC Entities and other extensions of credit (including letters of
credit) by the FABC Entities as of the dates thereof.
4.10 ASSETS.
------
(a) Except as disclosed in Section 4.10 of the FABC Disclosure
Memorandum or as disclosed or reserved against in the FABC Financial
Statements delivered prior to the date of this Agreement, each FABC Entity
has good, marketable, and insurable title, free and clear of all Liens, to
all of its Assets. All Material tangible properties used in the businesses
of each FABC Entity are in good condition, reasonable wear and tear excepted,
and are usable in the ordinary course of business consistent with such FABC
Entity's past practices.
(b) All Assets which are Material to the business of either
FABC or First National, held under leases or subleases by any FABC Entity,
are held under valid Contracts enforceable by an FABC Entity and to the
Knowledge of FABC or to the Knowledge of First National, as to the
counterparty to such Contracts 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 such proceeding may
be brought), there are no Material Defaults under such Contracts and no
event(s) has occurred, which with the giving of notice or passage of time
would cause such a Material Default to occur, and each such Contract is in
full force and effect. Furthermore, none of the FABC Entities has received
any notice that any FABC Entity is in, or will be in, Material Default under
such Contracts.
(c) Each FABC Entity currently maintains insurance in amounts,
scope, and coverage reasonably adequate to operate its business as presently
conducted. None of the FABC Entities has received notice from any insurance
carrier that (i) any policy of insurance will be canceled or that coverage
thereunder will be reduced or eliminated, or (ii) premium costs with respect
to such policies of insurance will be substantially increased. There are
presently no claims for amounts exceeding in any individual case $10,000, or
in the aggregate $50,000, pending under such policies of insurance and no
notices of claims in excess of such amounts have been given by FABC under
such policies.
(d) The Assets of each FABC Entity include all Assets required
to operate the business of the FABC Entities as presently conducted.
13
(e) Except as disclosed in Section 4.10(e) of the FABC
Disclosure Memorandum, neither FABC nor any FABC Subsidiary holds any
deposits or has made any loans to any individuals or related group of
individuals which (i) in the case of deposits, individually or in the
aggregate exceed $8 million, or (ii) in the case of loans, individually or in
the aggregate exceed $3.5 million.
(f) There are no leases, subleases, licenses, concessions, or
other agreements, written or oral, granting to any party or parties the right
of use or occupancy of any real property owned or leased by any FABC Entity,
including FABC's and First National's banking facilities and all other real
estate or foreclosed properties and any improvements thereon (collectively,
the "Real Property"), except as set forth in Section 4.10(f) of the FABC
Disclosure Memorandum.
(g) Except as set forth in Section 4.10(g) of the FABC
Disclosure Memorandum, there are no outstanding contracts for sale, options
or rights of first refusal to purchase any Real Property or any portion
thereof or interest therein.
(h) There are no parties (other than any FABC Entities) in
possession of any Real Property, other than tenants under any leases
disclosed in Section 4.10(h) of the FABC Disclosure Memorandum who are in
possession of space to which they are entitled.
(i) Each real property owned or leased by any FABC Entities and
which is used in the ordinary course of FABC's or First National's banking
business is supplied with utilities and other services necessary for the
operation of such facilities, including gas, electricity, water, telephone,
sanitary sewer, and storm sewer, all of which services are adequate and are
provided via public roads or via permanent, irrevocable, appurtenant
easements benefiting such property.
(j) Except as set forth in the FABC Disclosure Memorandum, each
real property owned or leased by FABC or First National and which is used in
the ordinary course of FABC's or First National's banking business has direct
vehicular access to a public road, or has access to a public road via
permanent, irrevocable, appurtenant easements benefiting the parcel of real
property.
4.11 INTELLECTUAL PROPERTY.
--------------------- Except as set forth in Section 4.11 of the
FABC Disclosure Memorandum, each FABC Entity owns or has a license to use all
of the Intellectual Property used by such FABC Entity in the course of its
business. Each FABC Entity is the owner of or has a license to any
Intellectual Property sold or licensed to a third party by such FABC Entity
in connection with such FABC Entity's business operations, and such FABC
Entity has the right to convey by sale or license any Intellectual Property
so conveyed. Except as set forth in Section 4.11 of the FABC Disclosure
Memorandum, no FABC Entity is in Default under any of its Intellectual
Property licenses. No proceedings have been instituted, or are pending or to
the Knowledge of FABC threatened, which challenge the rights of any FABC
Entity with respect to Intellectual Property used, sold or licensed by such
FABC Entity in the course of its business, nor has any person claimed or
alleged any rights to such Intellectual Property. To the Knowledge of FABC,
the conduct of the business of any FABC Entity does not infringe any
Intellectual Property of any other person. Except as disclosed in Section
4.11 of the FABC Disclosure Memorandum, no FABC Entity is obligated to pay
any recurring royalties to
14
any Person with respect to any such Intellectual Property. Except as
disclosed in Section 4.11 of the FABC Disclosure Memorandum, every officer,
director, or employee of any FABC Entity is a party to a Contract which
requires such officer, director or employee to assign any interest in any
Intellectual Property to an FABC Entity and to keep confidential any trade
secrets, proprietary data, customer information, or other business
information of any FABC Entity, and to the Knowledge of FABC or to the
Knowledge of First National, no such officer, director or employee is party
to any Contract with any Person other than any FABC Entity which requires
such officer, director or employee to assign any interest in any Intellectual
Property to any Person other than FABC or to keep confidential any trade
secrets, proprietary data, customer information, or other business
information of any Person other than any FABC Entity. Except as disclosed in
Section 4.11 of the FABC Disclosure Memorandum, no officer, director or, to
the Knowledge of FABC or to the Knowledge of First National, any employee of
any FABC Entity is party to any Contract which restricts or prohibits such
officer, director or employee from engaging in activities competitive with
any Person, including any FABC Entity.
4.12 ENVIRONMENTAL MATTERS.
---------------------
(a) Except as disclosed in Section 4.12(a) of the FABC
Disclosure Memorandum, each FABC Entity, its Operating Properties and its
Participation Facilities are and have been in compliance with all
Environmental Laws, except for violations which are not reasonably likely to
have, individually or in the aggregate, an FABC Material Adverse Effect.
(b) Except as disclosed in Section 4.12(b) of the FABC
Disclosure Memorandum, there has not occurred, nor is there presently
occurring, nor is there any basis for the occurrence of, any emission,
release, discharge, spill, or disposal, or any threatened emission, release,
discharge, spill, or disposal, of any Hazardous Material at, in, on, upon,
about, into, beneath, adjacent to, or affecting (or potentially affecting)
any respective current or former properties of any FABC Entity, or that of
any of its Operating Properties or its Participation Facilities, that was
caused by, contributed to, exacerbated by, or otherwise affected or adversely
affected by (or potentially affected or adversely affected by), the acts or
omissions of an FABC Entity or any of its Operating Properties or, to the
Knowledge of FABC, its Participation Facilities, including, but not limited
to, (i) in an amount requiring, or reasonably requiring, a notice,
notification, or report to be made to a governmental agency or authority
pursuant to Environmental Laws or (ii) in violation or noncompliance, or
alleged violation or noncompliance, of Environmental Laws.
(c) Except as disclosed in Section 4.12(c) of the FABC
Disclosure Memorandum, each FABC Entity, its Operating Properties and its
Participation Facilities have not, at any time, generated, manufactured,
processed, distributed, treated, stored, transported, used or handled or
disposed of or arranged for the disposal of Hazardous Material at or upon:
(i) any location other than a site lawfully permitted to receive such
Hazardous Material or (ii) any site which, pursuant to any Environmental
Laws, (x) has been placed on the National Priorities List or on its state
equivalent or analog or on any other list of hazardous waste sites maintained
by a governmental agency or authority, or (y) the United States Environmental
Protection Agency or the relevant state agency or other governmental agency
or authority has notified any FABC Entity or any of its Participation
Facilities or Operating Properties that such governmental agency or authority
has proposed or is proposing to place such site on the National Priorities
List
16
or on its state equivalent or analog or on any other list of hazardous waste
sites maintained by a governmental agency or authority, nor is there any
basis for the above.
(d) Except as disclosed in Section 4.12(d) of the FABC
Disclosure Memorandum, there is no Litigation pending, or to the Knowledge of
FABC and First National, threatened to occur, before any court, governmental
agency or authority, or any other forum, in which any FABC Entity or any of
its Operating Properties or, to the Knowledge of FABC, its Participation
Facilities, has been or, with respect to threatened Litigation, may be named
as a defendant or respondent (i) for violation or noncompliance, or alleged
violation or noncompliance, with any Environmental Laws or (ii) relating to
the emission, release, discharge, spill, or disposal or threatened emission,
release, discharge, spill, or disposal of any Hazardous Material at, in, on,
upon, about, into, beneath, adjacent to, or affecting (or potentially
affecting) the environment, whether or not occurring at, in, on, into, upon,
beneath, about, adjacent to, or affecting (or potentially affecting) a site
owned, leased, or operated by any FABC Entity or any of its Operating
Properties or Participation Facilities.
(e) Except as disclosed in Section 4.12(e) of the FABC
Disclosure Memorandum, there are no non-compliance orders, warning letters,
or notices of violation (collectively, "Notices") pending, nor to the
Knowledge of FABC and First National is there a basis for any Notices, before
any court, governmental agency or authority, or any other forum, in which any
FABC Entity or any of its Operating Properties or, to the Knowledge of FABC,
its Participation Facilities, has been or, with respect to threatened
Notices, may be named as a defendant or respondent (i) for violation or
noncompliance, or alleged violation or noncompliance, with any Environmental
Laws, or (ii) relating to the emission, release, discharge, spill, or
disposal or threatened emission, release, discharge, spill, or disposal of
any Hazardous Material at, in, on, upon, about, into, beneath, adjacent to,
or affecting (or potentially affecting) a site owned, leased, or operated by
any FABC Entity or any of its Operating Properties or Participation
Facilities.
4.13 COMPLIANCE WITH LAWS.
-------------------- FABC is duly registered as a bank holding
company under the BHC Act. Each FABC Entity has in effect all Permits
necessary for it to own, lease, or operate its Material Assets and to carry
on its business as now conducted, except for those Permits the absence of
which are not reasonably likely to have, individually or in the aggregate, an
FABC Material Adverse Effect, 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, an FABC Material Adverse Effect. Except as
disclosed in Section 4.13 of the FABC Disclosure Memorandum, none of the FABC
Entities:
(a) is in Default under or violation of any of the provisions
of its Articles of Incorporation or Bylaws (or other governing instruments);
(b) is in Default under any Laws, Orders, or Permits applicable
to its business or employees conducting its business, except for Defaults
which are not reasonably likely to have, individually or in the aggregate, an
FABC Material Adverse Effect; or
(c) since January 1, 2001, has received any notification or
communication from any agency or department of federal, state, or local
government or any Regulatory
16
Authority or the staff thereof (i) asserting that any FABC Entity is not in
compliance with any of the Laws or Orders which such governmental authority
or Regulatory Authority enforces, (ii) threatening to revoke any Permits, or
(iii) requiring any FABC Entity 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 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.
Copies of all Material reports, correspondence, notices and other
documents relating to any inspection, audit, monitoring or other form of
review or enforcement action by a Regulatory Authority have been made
available to CCBG.
4.14 LABOR RELATIONS.
--------------- No FABC Entity is the subject of any Litigation
asserting that it or any other FABC Entity has committed an unfair labor
practice (within the meaning of the National Labor Relations Act or
comparable state law) or seeking to compel it or any other FABC Entity to
bargain with any labor organization as to wages or conditions of employment,
nor is any FABC Entity party to any collective bargaining agreement, nor is
there any strike or other labor dispute involving any FABC Entity, pending or
threatened, or to the Knowledge of FABC or to the Knowledge of First National
is there any activity involving any FABC Entity's employees seeking to
certify a collective bargaining unit or engaging in any other organization
activity.
4.15 EMPLOYEE BENEFIT PLANS.
----------------------
(a) FABC and First National have listed in Section 4.15 of the
FABC Disclosure Memorandum, and, in addition thereto, have delivered or made
available to CCBG prior to the execution of this Agreement copies (and will
continue to make same available to CCBG after execution and prior to Closing,
where necessary) of any and 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, including any employment agreement
which may itself contain such provisions, all payroll practices, all medical,
vision, dental, or other health plans, all life insurance plans, and all
other employee benefit plans or fringe benefit plans, including "employee
benefit plans" as that term is defined in Section 3(3) of ERISA (generally
referred to as "Benefit Plans"), currently adopted, maintained by,
participated in, sponsored in whole or in part by, or contributed to by FABC
or ERISA Affiliate (as defined below) thereof for the benefit of FABC's or
any ERISA Affiliate's employees, retirees, dependents, spouses, directors,
independent contractors, or any other beneficiaries (collectively
"Participants") under which such Participants are eligible to participate or
receive benefits (collectively, the "FABC Benefit Plans"). The FABC Benefit
Plans documents delivered or made available to CCBG by FABC include true and
complete copies of each plan, together with any amendments thereto, any trust
agreements associated with an FABC Benefit Plan, together with any amendments
thereto, any insurance or annuity contracts with respect to any FABC Benefit
Plan, all corporate resolutions with respect to any FABC Benefit Plan, all
summary plan descriptions with respect to any FABC Benefit Plan together with
any amendments thereto, all Internal Revenue Service ("IRS") Forms 5500 (or
variations thereof) together with any Schedule B and any other attachment
thereto filed with respect to any FABC Benefit Plan (for each of the three
most recent plan years), all certified
17
actuarial statements (for each of the three most recent plan years) with
respect to any FABC Benefit Plan, any auditor's reports (for each of the
three most recent plan years) with respect to any FABC Benefit Plan, all
agreements or Contracts entered into with any third party administrator or
trustee with respect to any FABC Benefit Plan, and all agreements or
contracts with any investment manager, investment advisor or third party
administrator with respect to any FABC Benefit Plan. FABC will further
provide CCBG with a list of each pension consultant, actuary, attorney, and
accountant providing professional services with respect to any FABC Benefit
Plan or the fiduciaries of any FABC Benefit Plan, as well as the location of
all other records and the name of the individual responsible for such records
with respect to any FABC Benefit Plan. Any of the FABC 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 "FABC ERISA Plan." Each FABC ERISA
Plan that is also a "defined benefit plan" (as defined in Section 414(j) of
the Code) is referred to herein as a "FABC Pension Plan." No FABC Pension
Plan is or has been a multiemployer plan within the meaning of Section 3(37)
of ERISA.
(b) Except as otherwise provided for in this Agreement or
disclosed in Section 4.15(b) of the FABC Disclosure Memorandum, FABC, First
National, their agents, the trustees and other fiduciaries of the FABC
Benefit Plans have, at all times, complied in all Material respects in the
aggregate with the applicable provisions of the FABC Benefit Plans, the Code
and ERISA, including, but not limited to, COBRA, HIPAA (as those terms are
defined below) and any applicable, similar state law, and with all agreements
relating to the administration of such FABC Benefit Plans. Except as
otherwise provided for or disclosed elsewhere in this Agreement, each FABC
Benefit Plan has been administered and communicated to the Participants and
beneficiaries in accordance with its provisions, and all required annual
reports, filings, disclosures, or other communications, which have been
required to be made to the Participants and beneficiaries, other employees,
the IRS, the U.S. Department of Labor, or any other applicable governmental
agency, in connection with each FABC Benefit Plan, pursuant to the Code,
ERISA, or other applicable statute or regulation, have been made in a timely
manner and no Liability has been incurred on account of delinquent or
incomplete compliance or failure to comply with such requirements. All
amendments and actions required to bring the FABC ERISA Plans into conformity
in all Material respects with all of the applicable provisions of ERISA and
other applicable Laws have been made or taken. Any bonding required with
respect to any FABC Benefit Plan in accordance with applicable provisions of
ERISA has been obtained and is in full force and effect. Each FABC ERISA
Plan, which is intended to be qualified under Section 401(a) of the Code has
heretofore received a favorable determination letter from the IRS, and
neither FABC nor any ERISA Affiliate is aware of any circumstances likely to
result in revocation of any such favorable determination letter(s); provided,
however, that if such FABC ERISA Plan is in the form of a master plan, a
prototype plan or a volume submitter plan, then the term "determination
letter" includes a favorable opinion or advisory letter issued by the IRS to
the submitter practitioner covering the underlying master plan, prototype
plan or volume submitter plan, provided the requirements of Announcement
2001-77 (or its successors) are satisfied, which permit FABC and First
National to rely on the determination letter issued to the submitter
practitioner of such master plan, a prototype plan or a volume submitter
plan.
(c) Except as disclosed in Section 4.15 of the FABC Disclosure
Memorandum:
18
(1) There are no actions, suits, investigations,
arbitrations, proceedings, or adverse Participant claims pending against any
FABC Benefit Plan, against the Assets of any of the trusts under such plans
or the plan sponsor or the plan administrator, or, to the Knowledge of FABC
and its Affiliates, against any agent or fiduciary of any FABC Benefit Plan
with respect to the operation of such plans (other than routine benefit
claims);
(2) Neither FABC nor any ERISA Affiliate or any
disqualified person (as defined in Section 4975 of the Code) have engaged in
a transaction with respect to any FABC Benefit Plan that, assuming the
taxable period of such transaction expired as of the date hereof, would
subject FABC, First National, their agents, the trustees or the other
fiduciaries of the FABC Benefit Plans to a Tax imposed by either Section 4975
of the Code or any penalty under Section 502(i) of ERISA;
(3) There have been no governmental audits of any FABC
Benefit Plan within the last six (6) years that have resulted in any
penalties, fines, excise taxes, additional benefit accruals, and to the
Knowledge of FABC and its Affiliates, there are no threatened or pending
governmental audits as of the date hereof and as of the date of Closing; and
(4) No FABC Entity will issue any stock, stock options or
amend or terminate any FABC Benefit Plan subsequent to the date of this
Agreement without the written consent of CCBG except as may be necessary to
honor any pre-existing contract or to maintain the qualification of such FABC
Benefit Plan, in which case FABC shall promptly notify CCBG of such issuance,
amendment or termination in writing prior to its implementation.
(d) No FABC Pension Plan has any "unfunded current liability,"
as that term is defined in Section 302(d)(8)(A) of ERISA, based on actuarial
assumptions used for ongoing funding purposes, as set forth for such plan's
most recent actuarial valuation or upon termination of such plan and payment
of accrued benefits using terminal funding annuities to satisfy accrued
benefit obligations. Since the date of the most recent actuarial valuation,
there has been (i) no Material change in the financial position of any FABC
Pension Plan, (ii) no change in the actuarial assumptions with respect to any
FABC Pension Plan, and (iii) no increase in benefits under any FABC ERISA
Plan as a result of plan amendments or changes in applicable Law. Neither
any FABC Pension Plan nor any "single-employer plan," within the meaning of
Section 4001(a)(15) of ERISA, currently or formerly maintained by FABC, or
the single-employer plan of any entity which is considered one employer with
FABC under Section 4001 of ERISA or Section 414 of the 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 Code or Section
302 of ERISA. Neither FABC nor any ERISA Affiliate has any outstanding
Liability under Section 4971 of the Code. FABC has not provided, nor is it
required to provide, security to an FABC Pension Plan or to any single-
employer plan of an ERISA Affiliate pursuant to Section 401(a)(29) of the
Code.
(e) Within the six-year period preceding the Effective Time, no
Liability to the Pension Benefit Guaranty Corporation ("PBGC") under Subtitle
C or D of Title IV of ERISA has been or is expected to be incurred by any
FABC Entity with respect to any ongoing, frozen, or terminated single-
employer plan or the single-employer plan of FABC or an ERISA Affiliate.
Neither FABC nor any ERISA Affiliate has incurred any withdrawal Liability
with respect to a
19
multiemployer plan under Subtitle B of Title IV of ERISA (regardless of
whether based on contributions of an ERISA Affiliate). 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 FABC Pension Plan or by any ERISA Affiliate within the 12-month
period ending on the date hereof. All premiums due the PBGC with respect to
any FABC Pension Plan have been paid.
(f) Except as disclosed in Section 4.15 of the FABC Disclosure
Memorandum, neither FABC nor any ERISA Affiliate has any Liability for
retiree health and life benefits under any of the FABC Benefit Plans and if
there are any such plans, there are no restrictions on the rights of FABC or
on any ERISA Affiliate to amend or terminate any such retiree health or
benefit Plan without incurring any post-termination Liability thereunder
(except for administrative costs and professional fees to terminate same).
(g) Except as provided for in this Agreement or as disclosed in
Section 4.15 of the FABC Disclosure Memorandum, neither the execution and
delivery of this Agreement nor the consummation of the transactions
contemplated hereby will (i) result in any payment (including severance,
unemployment compensation, golden parachute, change of control, or otherwise)
becoming due to any director or any employee of any FABC Entity under any
FABC Benefit Plan or otherwise, (ii) increase any benefits otherwise payable
under any FABC Benefit Plan, or (iii) result in any acceleration of the time
of payment or vesting of any such benefit.
(h) Except as disclosed in Section 4.15 of the FABC Disclosure
Memorandum, the actuarial present values of all accrued deferred compensation
entitlements (including entitlements under any executive compensation,
supplemental retirement, or employment agreement) of employees and former
employees of any FABC Entity and respective beneficiaries, other than
entitlements accrued pursuant to funded retirement plans subject to the
provisions of Sections 401(a) and/or 412 of the Code or Section 302 of ERISA,
have been fully reflected on the FABC Financial Statements to the extent
required by and in accordance with GAAP.
(i) No Liability under any FABC Pension Plan has been funded or
satisfied with the purchase of a contract from an insurance company that is
not rated "A(Excellent)" or better by A.M. Best Company, Inc.
(j) Except as disclosed in Section 4.15 of the FABC Disclosure
Memorandum, no stock or other security issued by any FABC Entity forms or has
formed a part of the Assets of any FABC Benefit Plan.
(k) To the Knowledge of FABC or to the Knowledge of First
National, neither FABC, First National, any FABC Benefit Plan nor any
employee, administrator or agent thereof, is or has been in violation of the
transaction code set rules enacted by HIPAA and codified at 42 U.S.C.
SectionSection 1320d-1 to 1320d-3 or the HIPAA privacy rules under 45 C.F.R.
Part 160 and subparts A and E of Part 164. No penalties have been imposed on
FABC, First National, any FABC Benefit Plan, or any employee, administrator
or agent thereof, under 42 U.S.C. Section 1320d-5 or Section 1320d-6 as
enacted by HIPAA. For purposes of this Agreement, "COBRA" means the
provision of Section 4980B of the Code and the regulations thereunder, and
Part 6 of Subtitle B
20
of Title I of ERISA and any regulations thereunder. "HIPAA" means provisions
of the Code, ERISA, and Social Security Act as enacted by the Health
Insurance Portability and Accountability Act of 1996, and any regulations
thereunder.
4.16 MATERIAL CONTRACTS.
------------------ Except as disclosed in Section 4.16 of the
FABC Disclosure Memorandum or otherwise reflected in the FABC Financial
Statements, none of the FABC Entities, nor any of their 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 $25,000, (ii) any Contract relating to the
borrowing of money by any FABC Entity or the guarantee by any FABC Entity of
any such obligation (other than Contracts evidencing deposit liabilities,
purchases of federal funds, fully-secured repurchase agreements, and Federal
Home Loan Bank advances of depository institution Subsidiaries, trade
payables and Contracts relating to borrowings or guarantees made in the
ordinary course of business), (iii) any Contract which prohibits or restricts
any FABC Entity from engaging in any business activities in any geographic
area, line of business or otherwise in competition with any other Person,
(iv) any Contract between or among FABC Entities, (v) any Contract involving
Intellectual Property (other than Contracts entered into in the ordinary
course with customers and commercial "shrink-wrap" software licenses), (vi)
any Contract relating to the provision of data processing, network
communication, or other technical services to or by any FABC Entity, (vii)
any Contract relating to the purchase or sale of any goods or services (other
than Contracts entered into in the ordinary course of business and involving
payments under any individual Contract of less than $25,000), (viii) any
exchange-traded or over-the-counter swap, forward, future, option, cap,
floor, or collar financial Contract, or any other interest rate or foreign
currency protection Contract not included on its balance sheet which is a
financial derivative Contract, and (ix) any other Contract or amendment
thereto that would be required to be filed with any relevant Regulatory
Authority as of the date of this Agreement (together with all Contracts
referred to in Sections 4.10 and 4.15(e), the "FABC Contracts"). With
respect to each FABC Contract and except as disclosed in Section 4.16 of the
FABC Disclosure Memorandum: (i) the Contract is in full force and effect;
(ii) no FABC Entity is in Default thereunder in any Material respect or would
be in Default thereunder in any Material respect as a result of this
Agreement or the transaction contemplated herein; (iii) no FABC Entity has
repudiated or waived any Material provision of any such Contract; and (iv) no
other party to any such Contract is, to the Knowledge of FABC or to the
Knowledge of First National, in Default in any respect or has repudiated or
waived any Material provision thereunder. Except as disclosed in Section
4.16 of the FABC Disclosure Memorandum, all of the indebtedness of any FABC
Entity for money borrowed is prepayable at any time by such FABC Entity
without penalty or premium and no FABC Entity has any obligation or Liability
to any wholesale mortgage business or to any Affiliate of such Persons to
purchase, fund or extend credit with respect to any loans, extensions of
credit, mortgages, or any participation or other interest therein originated,
brokered or referred by or through such Persons. Except as described in
Section 4.16 of the FABC Disclosure Memorandum, all Contracts to which any
FABC Entity is a party may be terminated by such FABC Entity and its
successors and assigns without penalty, charge, liability or further
obligation.
4.17 LEGAL PROCEEDINGS.
----------------- There is no Litigation instituted or pending,
or, to the Knowledge of FABC or to the Knowledge of First National,
threatened (or unasserted but considered probable of assertion and which if
asserted would have at least a reasonable
21
probability of an unfavorable outcome) against any FABC Entity or any FABC
Benefit Plan, or against any director or employee of any FABC Entity, in
their capacity as such, or against any Asset, interest, or right of any of
them, nor are there any Orders of any Regulatory Authorities, other
governmental authorities, or arbitrators outstanding against any FABC Entity.
Section 4.17 of the FABC Disclosure Memorandum contains a summary of all
Litigation as of the date of this Agreement to which any FABC Entity is a
party and which names any FABC Entity as a defendant or cross-defendant or
for which any FABC Entity has any potential Liability.
4.18 REPORTS.
------- Except as set forth in Section 4.18 of the FABC
Disclosure Memorandum, since January 1, 2001, or the date of organization if
later, each FABC Entity has timely filed all reports and statements, together
with any amendments required to be made with respect thereto, that it was
required to file with Regulatory Authorities. 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 its respective date, each such report and document
did not contain any untrue statement of a Material fact or omit to state a
Material fact required to be stated therein or necessary to make the
statements made therein, in light of the circumstances under which they were
made, not misleading.
4.19 STATEMENTS TRUE AND CORRECT.
--------------------------- No statement, certificate,
instrument, or other writing furnished or to be furnished by any FABC Entity
or any Affiliate thereof to CCBG 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 FABC Entity or any Affiliate
thereof for inclusion in the Registration Statement to be filed by CCBG 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 any FABC Entity or any Affiliate
thereof for inclusion in the Proxy Statement to be mailed to FABC
shareholders in connection with the Shareholders' Meeting, and none of the
information contained in any other documents to be filed by any FABC Entity
or any Affiliate thereof with the SEC or any other Regulatory Authority in
connection with the transactions contemplated hereby, will, at the respective
times such documents are filed, and with respect to the Proxy Statement, when
first mailed to the shareholders of FABC, 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 FABC Entity 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.
4.20 ACCOUNTING, TAX, AND REGULATORY MATTERS.
--------------------------------------- No FABC Entity or any
Affiliate thereof has taken or agreed to take any action or has any Knowledge
of any fact
22
or circumstance that is reasonably likely to (i) prevent the Mergers from
qualifying as a reorganization within the meaning of Section 368(a) of the
Code, or (ii) materially impede or delay receipt of any Consents of
Regulatory Authorities referred to in Section 8.1(b) or result in the
imposition of a condition or restriction of the type referred to in the last
sentence of such Section.
4.21 STATE TAKEOVER LAWS.
------------------- Each FABC Entity has taken all necessary
action to exempt the transactions contemplated by this Agreement from, or if
necessary to challenge the validity or applicability of, any applicable
"moratorium," "fair price," "business combination," "control share," or other
anti-takeover Laws (collectively, "Takeover Laws"), including Sections
607.0901 and 607.0902 of the FBCA.
4.22 CHARTER PROVISIONS.
------------------ Each FABC Entity has taken all action so that
the entering into of this Agreement and the consummation of the Mergers and
the other transactions contemplated by this Agreement do 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 any FABC Entity or
restrict or impair the ability of CCBG or any of its Subsidiaries to vote, or
otherwise to exercise the rights of a shareholder with respect to, shares of
any FABC Entity that may be directly or indirectly acquired or controlled by
them. This Agreement and the transactions contemplated herein will not
trigger any supermajority voting provisions under the Articles of
Incorporation, Bylaws, or other governing instruments of any FABC Entity.
4.23 OPINION OF FINANCIAL ADVISOR.
---------------------------- FABC has received the opinion of
SunTrust Xxxxxxxx Xxxxxxxx, dated the date that the FABC Board of Directors
approved this Agreement, to the effect that the consideration to be received
in the Mergers by the holders of FABC Common Stock is fair, from a financial
point of view, to such holders, a signed copy of which has been delivered to
CCBG.
4.24 BOARD RECOMMENDATION.
-------------------- The Board of Directors of FABC, at a
meeting duly called and held, has by unanimous vote of the directors present
(who constituted all of the directors then in office) (i) determined that
this Agreement and the transactions contemplated hereby, including the
Mergers, taken together, are fair to and in the best interests of the
shareholders and (ii) resolved to recommend that the holders of the shares of
FABC Common Stock approve this Agreement.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF CCBG
CCBG hereby represents and warrants to FABC and First National as follows:
5.1 ORGANIZATION, STANDING, AND POWER.
--------------------------------- CCBG is a corporation duly
organized, validly existing, and in good standing under the Laws of the State
of Florida, and has the corporate power and authority to carry on its
business as now conducted and to own, lease and operate its Material Assets.
CCBG is duly qualified or licensed to transact business in good standing in
the 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
23
failure to be so qualified or licensed is not reasonably likely to have,
individually or in the aggregate, a CCBG Material Adverse Effect.
5.2 AUTHORITY OF CCBG; NO BREACH BY AGREEMENT.
-----------------------------------------
(a) CCBG has the corporate power and authority necessary to
execute, deliver and perform its obligations under this Agreement and to
consummate the transactions contemplated hereby. The execution, delivery and
performance of this Agreement and the consummation of the transactions
contemplated herein, including the Mergers, have been duly and validly
authorized by all necessary corporate action in respect thereof on the part
of CCBG, subject to receipt of the requisite Consents referred to in Section
8.1(b). This Agreement represents a legal, valid, and binding obligation of
CCBG, enforceable against CCBG in accordance with its terms (except in all
cases as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, receivership, conservatorship, 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
CCBG, nor the consummation by CCBG of the transactions contemplated hereby,
nor compliance by CCBG with any of the provisions hereof, will (i) conflict
with or result in a breach of any provision of CCBG's Articles of
Incorporation or Bylaws, or (ii) subject to receipt of the requisite Consents
referred to Section 8.1(b), 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 CCBG Entity under, any Contract or Permit of any CCBG Entity,
where such Default or Lien, or any failure to obtain such Consent, is
reasonably likely to have, individually or in the aggregate, a CCBG Material
Adverse Effect, or, (iii) subject to receipt of the requisite Consents
referred to in Section 8.1(b), constitute or result in a Default under, or
require any Consent pursuant to, any Law or Order applicable to any CCBG
Entity or any of their respective Material Assets (including any CCBG Entity
or any FABC Entity becoming subject to or liable for the payment of any Tax
or any of the Assets owned by any CCBG Entity or any FABC Entity being
reassessed or revalued by any taxing authority).
(c) Other than in connection or compliance with the provisions
of the Securities Laws, applicable state corporate and securities Laws, and
rules of the NASD, and other than Consents required from Regulatory
Authorities, and other than notices to or filings with the IRS or the PBGC
with respect to any employee benefit plans, or under the HSR Act, and other
than Consents, filings, or notifications which, if not obtained or made, are
not reasonably likely to have, individually or in the aggregate, a CCBG
Material Adverse Effect, no notice to, filing with, or Consent of, any public
body or authority is necessary for the consummation by CCBG of the Mergers
and the other transactions contemplated in this Agreement.
5.3 CAPITAL STOCK.
-------------
(a) The authorized capital stock of CCBG consists of (i)
90,000,000 shares of CCBG Common Stock, of which 14,162,048 shares are issued
and outstanding as of the date of this Agreement, and (ii) 3,000,000 shares
of CCBG Preferred Stock, none of which is issued and
24
outstanding. All of the issued and outstanding shares of CCBG Capital Stock
are, and all of the shares of CCBG Common Stock to be issued in exchange for
shares of FABC Common Stock upon consummation of the Mergers, 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 FBCA. None of the
outstanding shares of CCBG Capital Stock has been, and none of the shares of
CCBG Common Stock to be issued in exchange for shares of FABC Common Stock
upon consummation of the Mergers will be, issued in violation of any
preemptive rights of the current or past shareholders of CCBG.
(b) Except as set forth in Section 5.3(a), or as provided
pursuant to the CCBG Stock Plans, or as disclosed in Section 5.3 of the CCBG
Disclosure Memorandum, there are no shares of capital stock or other equity
securities outstanding and no outstanding Equity Rights relating to the CCBG
Capital Stock.
5.4 CCBG SUBSIDIARIES.
----------------- CCBG has disclosed in Section 5.4 of the CCBG
Disclosure Memorandum all of its Significant Subsidiaries as of the date of
this Agreement that are corporations and all of the CCBG Subsidiaries that
are general or limited partnerships or other non-corporate entities. Each
CCBG Subsidiary that is a depository institution is an "insured institution"
as defined in the Federal Deposit Insurance Act and applicable regulations
thereunder.
5.5 SEC FILINGS; FINANCIAL STATEMENTS.
---------------------------------
(a) CCBG has timely filed and made available to FABC all SEC
Documents required to be filed by CCBG since December 31, 2001 (the "CCBG SEC
Reports"). The CCBG SEC Reports (i) at the time filed, complied in all
Material respects with the applicable requirements of the Securities Laws and
other applicable Laws and (ii) did not, at the time they were filed (or, if
amended or superseded by a filing prior to the date of this Agreement, then
on the date of such filing) contain any untrue statement of a Material fact
or omit to state a Material fact required to be stated in such CCBG SEC
Reports or necessary in order to make the statements in such CCBG SEC
Reports, in light of the circumstances under which they were made, not
misleading.
(b) Each of the CCBG Financial Statements (including, in each
case, any related notes) contained in the CCBG SEC Reports, including any
CCBG SEC Reports filed after the date of this Agreement until the Effective
Time, complied as to form in all Material respects with the applicable
published rules and regulations of the SEC with respect thereto, was prepared
in accordance with GAAP applied on a consistent basis throughout the periods
involved (except as may be indicated in the notes to such financial
statements or, in the case of unaudited interim statements, as permitted by
Form 10-Q of the SEC), and fairly presented in all Material respects the
consolidated financial position of CCBG and its Subsidiaries as at the
respective dates and the consolidated results of operations and cash flows
for the periods indicated, except that the unaudited interim financial
statements were or are subject to normal and recurring year-end adjustments
which were not or are not expected to be Material in amount or effect.
5.6 ABSENCE OF UNDISCLOSED LIABILITIES.
---------------------------------- Except as disclosed in the
CCBG Disclosure Memorandum, no CCBG Entity has any Liabilities that are
reasonably likely
25
to have, individually or in the aggregate, a CCBG Material Adverse Effect,
except Liabilities which are accrued or reserved against in the consolidated
balance sheets of CCBG as of December 31, 2003, included in the CCBG
Financial Statements delivered prior to the date of this Agreement or
reflected in the notes thereto. Except as disclosed in the CCBG Disclosure
Memorandum, no CCBG Entity has incurred or paid any Liability since
December 31, 2003, except for such Liabilities incurred or paid (i) 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 CCBG
Material Adverse Effect or (ii) in connection with the transactions
contemplated by this Agreement.
5.7 ABSENCE OF CERTAIN CHANGES OR EVENTS.
------------------------------------ Since December 31, 2003,
except as disclosed in the CCBG Financial Statements delivered prior to the
date of this Agreement or as disclosed in Section 5.7 of the CCBG Disclosure
Memorandum, (i) there have been no events, changes or occurrences which have
had, or are reasonably likely to have, individually or in the aggregate, a
CCBG Material Adverse Effect, and (ii) the CCBG Entities 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 CCBG provided in Article 6.
5.8 ALLOWANCE FOR POSSIBLE LOAN LOSSES.
---------------------------------- In the opinion of management
of CCBG, the Allowance shown on the consolidated balance sheets of CCBG
included in the most recent CCBG Financial Statements dated prior to the date
of this Agreement was, and the Allowance shown on the consolidated balance
sheets of CCBG included in the CCBG Financial Statements as of dates
subsequent to the execution of this Agreement will be, as of the dates
thereof, adequate (within the meaning of GAAP and applicable regulatory
requirements or guidelines) to provide for all known or reasonably
anticipated losses relating to or inherent in the loan and lease portfolios
(including accrued interest receivables) of the CCBG Entities and other
extensions of credit (including letters of credit) by the CCBG Entities as of
the dates thereof.
5.9 INTELLECTUAL PROPERTY.
--------------------- Each CCBG Entity owns or has a license to
use all of the Intellectual Property used by such CCBG Entity in the course
of its business. Each CCBG Entity is the owner of or has a license to any
Intellectual Property sold or licensed to a third party by such CCBG Entity
in connection with such CCBG Entity's business operations, and such CCBG
Entity has the right to convey by sale or license any Intellectual Property
so conveyed. No CCBG Entity is in Default under any of its Intellectual
Property licenses. No proceedings have been instituted, or are pending or to
the Knowledge of CCBG threatened, which challenge the rights of any CCBG
Entity with respect to Intellectual Property used, sold or licensed by such
CCBG Entity in the course of its business, nor has any person claimed or
alleged any rights to such Intellectual Property. The conduct of the
business of the CCBG Entities does not infringe any Intellectual Property of
any other person. Except as disclosed in Section 5.6 of the CCBG Disclosure
Memorandum, no CCBG Entity is obligated to pay any recurring royalties to any
Person with respect to any such Intellectual Property. Except as disclosed
in Section 5.9 of the CCBG Disclosure Memorandum, every officer, director, or
employee of any CCBG Entity is a party to a Contract which requires such
officer, director or employee to assign any interest in any Intellectual
Property to a CCBG Entity and to keep confidential any trade secrets,
proprietary data, customer information, or other business
26
information of a CCBG Entity, and to the Knowledge of CCBG, no such officer,
director or employee is party to any Contract with any Person other than a
CCBG Entity which requires such officer, director or employee to assign any
interest in any Intellectual Property to any Person other than a CCBG Entity
or to keep confidential any trade secrets, proprietary data, customer
information, or other business information of any Person other than a CCBG
Entity. Except as disclosed in Section 5.9 of the CCBG Disclosure
Memorandum, no officer, director or, to the Knowledge of CCBG, any employee
of any CCBG Entity is party to any Contract which restricts or prohibits such
officer, director or employee from engaging in activities competitive with
any Person, including any CCBG Entity.
5.10 COMPLIANCE WITH LAWS.
-------------------- CCBG is duly registered as a financial
holding company under the BHC Act. Each CCBG Entity has in effect all
Permits necessary for it to own, lease or operate its Material Assets and to
carry on its business as now conducted, except for those Permits the absence
of which are not reasonably likely to have, individually or in the aggregate,
a CCBG Material Adverse Effect, 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 CCBG Material Adverse Effect. Except as
disclosed in Section 5.10 of the CCBG Disclosure Memorandum, none of the CCBG
Entities:
(a) is in Default under its Articles of Incorporation or Bylaws
(or other governing instruments); or
(b) is in Default under any Laws, Orders or Permits applicable
to its business or employees conducting its business, except for Defaults
which are not reasonably likely to have, individually or in the aggregate, a
CCBG Material Adverse Effect; or
(c) since January 1, 2001, 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 CCBG Entity is 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 CCBG Material Adverse Effect, (ii) threatening to revoke any
Permits, or (iii) requiring any CCBG Entity 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.
5.11 LEGAL PROCEEDINGS.
----------------- Except as disclosed in Section 5.11 of the
CCBG Disclosure Memorandum, there is no Litigation instituted or pending, or,
to the Knowledge of CCBG, threatened (or unasserted but considered probable
of assertion and which if asserted would have at least a reasonable
probability of an unfavorable outcome) against any CCBG Entity or employee
benefit plan of any CCBG Entity, or against any director or employee of any
CCBG Entity, in their capacity as such, or against any Asset, interest, or
right of any of them, that is reasonably likely to have, individually or in
the aggregate, a CCBG Material Adverse Effect, nor are there any Orders of
any Regulatory Authorities, other governmental authorities, or
27
arbitrators outstanding against any CCBG Entity, that are reasonably likely
to have, individually or in the aggregate, a CCBG Material Adverse Effect.
5.12 REPORTS.
------- Since January 1, 2001, or the date of organization if
later, each CCBG Entity has filed all reports and statements, together with
any amendments required to be made with respect thereto, that it was required
to file with Regulatory 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 CCBG Material Adverse Effect). 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 its respective date, each
such report and document did not contain any untrue statement of a Material
fact or omit to state a Material fact required to be stated therein or
necessary to make the statements made therein, in light of the circumstances
under which they were made, not misleading.
5.13 STATEMENTS TRUE AND CORRECT.
--------------------------- No statement, certificate,
instrument or other writing furnished or to be furnished by any CCBG Entity
or any Affiliate thereof to FABC 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 CCBG Entity or any Affiliate thereof for inclusion in the
Registration Statement to be filed by CCBG 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 any CCBG Entity or any Affiliate thereof for inclusion in
the Proxy Statement to be mailed to the shareholders of FABC in connection
with the Shareholders' Meeting, and none of the information contained in any
other documents to be filed by any CCBG Entity or any Affiliate thereof with
the SEC or any other Regulatory Authority in connection with the transactions
contemplated hereby, will, at the respective times such documents are filed,
and with respect to the Proxy Statement, when first mailed to the
shareholders of FABC, 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 CCBG Entity 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.
5.14 ACCOUNTING, TAX AND REGULATORY MATTERS.
-------------------------------------- No CCBG Entity or any
Affiliate thereof has taken or agreed to take any action or has any Knowledge
of any fact or circumstance that is reasonably likely to (i) prevent the
Mergers from qualifying as a reorganization within the meaning of Section
368(a) of the Code, or (ii) materially impede or delay receipt of any
Consents of Regulatory Authorities referred to in Section 8.1(b) or result in
the imposition of a condition or restriction of the type referred to in the
last sentence of such Section. All Tax Returns required under applicable Law
to be filed by or on behalf of any of the
28
CCBG Entities through the date hereof have been timely filed, and all such
Tax Returns filed are complete and accurate in all Material respects. All
Taxes due and owing by any CCBG Entity (whether or not shown on Tax 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,
except as reserved against in the most recent CCBG Financial Statements
delivered prior to the date of this Agreement and as disclosed in Section
5.14 of the CCBG Disclosure Memorandum. Provision for Taxes due or to become
due for any of the CCBG Entities for the period or periods through and
including the day of the respective CCBG Financial Statements has been made
and is reflected on such CCBG Financial Statements and is sufficient to cover
all such Taxes.
ARTICLE 6
CONDUCT OF BUSINESS PENDING CONSUMMATION
6.1 AFFIRMATIVE COVENANTS OF FABC AND FIRST NATIONAL.
------------------------------------------------ From the date
of this Agreement until the earlier of the Effective Time or the termination
of this Agreement, unless the prior written consent of CCBG shall have been
obtained, and except as otherwise expressly contemplated herein, FABC and
First National shall operate their businesses only in the usual, regular and
ordinary course, and in a manner designed to preserve intact their business
organizations and Assets and maintain their rights and franchises, and shall
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
sentences of Section 8.1(b) or 8.1(c), or (ii) adversely affect the ability
of any Party to perform its covenants and agreements under this Agreement.
6.2 NEGATIVE COVENANTS OF FABC AND FIRST NATIONAL.
--------------------------------------------- From the date of
this Agreement until the earlier of the Effective Time or the termination of
this Agreement, unless the prior written consent of CCBG shall have been
obtained, and except as otherwise expressly contemplated herein, each of FABC
and First National covenants and agrees that it will not do or agree or
commit to do, or permit any of its Subsidiaries to do or agree or commit to
do, any of the following:
(a) amend the Articles of Incorporation, Bylaws or other
governing instruments of any FABC Entity, except as expressly contemplated by
this Agreement; or
(b) incur any additional debt obligation or other obligation
for borrowed money (other than indebtedness of a FABC Entity to another FABC
Entity) in excess of an aggregate of $25,000 (for the FABC Entities on a
consolidated basis) except in the ordinary course of the business of FABC
Subsidiaries consistent with past practices (which shall include, for FABC
Subsidiaries that are depository institutions, 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 Asset of any FABC Entity of any Lien or permit any
such Lien to exist (other than in connection with deposits, repurchase
agreements, bankers acceptances, "treasury tax and loan" accounts established
in the ordinary course of business, the satisfaction of legal requirements in
the exercise of trust powers, and Liens in effect as of the date hereof that
are disclosed in the FABC Disclosure Memorandum); or
29
(c) repurchase, redeem, or otherwise acquire or exchange (other
than exchanges in the ordinary course under FABC Benefit Plans), directly or
indirectly, any shares, or any securities convertible into any shares, of the
capital stock of any FABC Entity, or except as consistent with past practice,
declare or pay any dividend or make any other distribution in respect of FABC
Capital Stock or First National Capital Stock; or
(d) except for this Agreement or as disclosed in Section 6.2(d)
of the FABC Disclosure Memorandum, issue, 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 FABC Common Stock or any other capital stock of any FABC
Entity, or any stock appreciation rights, or any option, warrant, or other
Equity Right; or
(e) adjust, split, combine or reclassify any capital stock of
any FABC Entity or issue or authorize the issuance of any other securities in
respect of or in substitution for shares of FABC Common Stock, or sell,
lease, mortgage or otherwise dispose of or otherwise encumber (x) any shares
of capital stock of any FABC Subsidiary (unless any such shares of stock are
sold or otherwise transferred to another FABC Entity) or (y) any Asset having
a book value in excess of $25,000 other than in the ordinary course of
business for reasonable and adequate consideration; or
(f) except for purchases of U.S. Treasury securities or U.S.
Government agency securities, which in either case have maturities of one
year or less, purchase any securities or make any Material investment, either
by purchase of stock or securities, contributions to capital, Asset
transfers, or purchase of any Assets, in any Person other than a wholly owned
FABC Subsidiary, or otherwise 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 a depository Subsidiary
solely in its fiduciary capacity; or
(g) (1) make any new loans or extensions of credit or renew,
extend or renegotiate any existing loans or extensions of credit (i) with
respect to properties or businesses outside of the current market area for
First National or to borrowers whose principal residence is outside of the
current market area for First National, (ii) that are unsecured in excess of
$100,000, or (iii) that are secured in excess of $300,000; (2) purchase or
sell (except for sales of single family residential first mortgage loans in
the ordinary course of FABC's or First National's business for fair market
value) any whole loans, leases, mortgages or any loan participations or
agented credits or other interest therein, or (3) renew or renegotiate any
loans or credits that are on any watch list and/or are classified or special
mentioned or take any similar actions with respect to collateral held with
respect to debts previously contracted or other real estate owned, except
pursuant to safe and sound banking practices and with prior disclosure to
CCBG; provided, however, that FABC or First National may, without the prior
notice to or written consent of CCBG, renew or extend existing credits on
substantially similar terms and conditions as present at the time such credit
was made or last extended, renewed or modified, for a period not to exceed
one year and at rates not less than market rates for comparable credits and
transactions and without any release of any collateral except as any FABC
Entity is presently obligated under existing written agreements kept as part
of such FABC Entity's official records; or
30
(h) grant any increase in compensation or benefits to the
employees or officers of any FABC Entity, except in accordance with past
practice as disclosed in Section 6.2(h) of the FABC Disclosure Memorandum or
as required by Law; pay any severance or termination pay or any bonus other
than pursuant to plans, written policies or written Contracts in effect on
the date of this Agreement as disclosed in Section 6.2(h) of the FABC
Disclosure Memorandum; enter into or amend any severance agreements with
officers of any FABC Entity; grant any increase in fees or other increases in
compensation or other benefits to directors of any FABC Entity except in
accordance with past practice disclosed in Section 6.2(h) of the FABC
Disclosure Memorandum; or voluntarily accelerate the vesting of any stock
options or other stock-based compensation or employee benefits or other
Equity Rights; or
(i) enter into or amend any employment Contract between any
FABC Entity and any Person (unless such amendment is required by Law) that
such FABC Entity 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
(j) adopt any new FABC Benefit Plan or terminate or withdraw
from, or make any Material change in or to, any existing FABC Benefit Plan
other than any such change that is required by Law or this Agreement or that,
in the opinion of counsel, is necessary or advisable to maintain the tax
qualified status of any such plan, or make any distributions from such FABC
Benefit Plans, except as required by Law, the terms of such plans or
consistent with past practice; or
(k) make any significant change in any Tax or accounting
methods or estimates or systems of internal accounting controls, except as
may be appropriate to conform to changes in Tax Laws or regulatory accounting
requirements or GAAP; or
(l) commence any Litigation other than in accordance with past
practice, settle any Litigation involving any Liability of any FABC Entity
for Material money damages or restrictions upon the operations of any FABC
Entity; or
(m) except in the ordinary course of business and as expressly
permitted in Section 6.2(g), enter into, modify, amend or terminate any
Material Contract calling for payments exceeding $25,000 or waive, release,
compromise or assign any Material rights or claims.
6.3 COVENANTS OF CCBG.
----------------- From the date of this Agreement until the
earlier of the Effective Time or the termination of this Agreement, unless
the prior written consent of FABC shall have been obtained, and except as
otherwise expressly contemplated herein, CCBG covenants and agrees that it
shall (a) continue to conduct its business and the business of its
Subsidiaries in a manner designed in its reasonable judgment, to enhance the
long-term value of the CCBG Capital Stock and the business prospects of the
CCBG Entities and to the extent consistent therewith use all reasonable
efforts to preserve intact the CCBG Entities' core businesses and goodwill
with their respective employees and the communities they serve, and (b) take
no action which would (i) materially 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 sentences of Section 8.1(b) or 8.1(c), or (ii)
31
materially adversely affect the ability of any Party to perform its covenants
and agreements under this Agreement; provided, that the foregoing shall not
prevent any CCBG Entity from acquiring any Assets or other businesses or from
discontinuing or disposing of any of its Assets or business if such action
is, in the judgment of CCBG, desirable in the conduct of the business of CCBG
and its Subsidiaries. CCBG further covenants and agrees that it will not
amend or agree or commit to amend or permit any of its Subsidiaries to amend
or agree or commit to amend, without the prior written consent of FABC, which
consent shall not be unreasonably withheld, the Articles of Incorporation or
Bylaws of CCBG, in each case, in any manner adverse to the holders of FABC
Common Stock as compared to the rights of holders of CCBG Common Stock
generally as of the date of this Agreement.
6.4 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, an FABC Material Adverse Effect or a CCBG Material Adverse
Effect, as applicable, or (ii) would cause or constitute a 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.
6.5 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 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 in all Material respects 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.
6.6 TAXES.
-----
(a) Actions Prior to Closing.
------------------------
(1) Termination of Existing Tax-Sharing Agreements.
---------------------------------------------- All
tax-sharing agreements or similar arrangements involving an FABC Entity or to
which an FABC Entity is a party shall be terminated with respect to such FABC
Entity before the Closing Date, and, after the Closing Date, such FABC Entity
shall not be bound thereby or have any Liability thereunder.
(2) Tax Elections.
------------- No new elections, and no changes in
current elections, with respect to Taxes affecting any FABC Entity shall be
made after the date of this Agreement without the prior written consent of
CCBG, if such election or change would have the effect of increasing the Tax
Liability of any FABC Entity for any period after the Closing Date.
32
(3) Tax Certificates.
---------------- FABC shall provide CCBG, on or
before the Closing Date, with (i) all forms, certificates and/or other
instruments required in connection with the transfer and recording taxes and
charges arising from the transactions contemplated by this Agreement,
together with evidence satisfactory to CCBG that such transfer taxes and
charges have been paid in full by FABC, and (ii) a clearance certificate or
similar documents which may be required by any state taxing authority to
relieve CCBG of any obligation to withhold any portion of payments to FABC
pursuant to this Agreement.
(4) Access to Books and Records.
--------------------------- Between the date of the
Agreement and the Closing Date, FABC and First National shall give CCBG and
its authorized representatives reasonable access to all books, records and
returns of each FABC Entity and have its personnel and accountants available
during normal business hours to respond to reasonable requests of CCBG and
its authorized representatives.
(b) Filing of Tax Returns.
---------------------
(1) FABC shall prepare and timely file all Tax returns
for all periods ending on or before the Closing Date. All such returns shall
be prepared in accordance with past practice (unless a contrary position is
required by Law) as to elections and accounting practices to the extent any
position taken in such returns may affect the Tax Liability of FABC after the
Closing. FABC shall discharge all tax liabilities shown on such returns. In
connection with preparation of such returns, FABC shall prepare books and
working papers (including a closing of the books as of the Closing Date)
which shall clearly demonstrate the income and activities of each FABC Entity
for the period ending on the Closing Date. FABC shall provide a copy of such
returns to CCBG for its review at least 20 days before the filing of such
returns. FABC shall not file any amended return for a period ending on or
before the Closing without CCBG's written consent (which consent shall not be
unreasonably withheld or delayed) if the filing of any such amended return
may affect the Tax Liability of any FABC Entity or for which CCBG is or may
become liable.
(2) CCBG shall prepare and timely file all Tax returns
with respect to FABC other than the Tax returns referred to in Section
6.6(b)(1)above, that are required to be filed after the Closing, and shall
duly and timely pay Taxes due on such Tax returns.
(c) Carryovers and Carrybacks.
------------------------- For purposes of this Section,
Tax or Taxes shall include the amount of Taxes which would have been paid but
for the application of any credit or net operating or capital loss deduction
attributable to periods beginning after the Closing Date or to any Post-
Closing Partial Period.
(d) Allocation Between Partial Periods. Any Taxes for any
period beginning before the Closing Date and ending after the Closing Date (a
"Straddle Period") shall be apportioned between the Pre-Closing Partial
Period and the Post-Closing Partial Period, based, in the case of real and
personal property Taxes, on a per diem basis and, in the case of other Taxes
(including, without limitation, income Taxes and Taxes in lieu of income
Taxes), on the actual activities, taxable income or taxable loss of FABC
during such Pre-Closing Partial Period and such Post-Closing Partial Period,
based on a closing of the books as of the close of business on the Closing
Date. FABC shall not be permitted to carry out any transaction outside the
ordinary
33
course of its trade or business on the Closing Date after the Closing (other
than the transactions expressly permitted by this Agreement). "Pre-Closing
Partial Period" shall mean the portion of the Straddle Period up to and
including the Closing Date, and "Post-Closing Partial Period" shall mean the
portion of the Straddle Period following the Closing Date.
(e) Control of Post-Closing Audits and Other Proceedings.
---------------------------------------------------- FABC
shall cause Xxxxx X. Xxxxx to deliver to CCBG upon the execution of this
Agreement a letter agreement, substantially in the form of Exhibit 2.
ARTICLE 7
ADDITIONAL AGREEMENTS
7.1 REGISTRATION STATEMENT; PROXY STATEMENT; SHARE-HOLDER APPROVAL.
--------------------------------------------------------------
As soon as reasonably practicable after execution of this Agreement, at a
date determined by CCBG in its sole discretion, CCBG shall prepare and file
the Registration Statement with the SEC, and shall use its reasonable best
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
CCBG Common Stock upon consummation of the Mergers. FABC and First National
shall each cooperate in the preparation and filing of the Registration
Statement and shall each furnish all information concerning it and the
holders of its capital stock as CCBG may reasonably request in connection
with such action. FABC 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) CCBG shall prepare and file
with the SEC the Registration Statement which shall contain the Proxy
Statement and FABC shall mail such Proxy Statement to the FABC shareholders,
(ii) FABC shall furnish to CCBG all information concerning FABC that CCBG may
reasonably request in connection with such Proxy Statement, (iii) the Board
of Directors of FABC shall recommend to FABC shareholders the approval of the
matters submitted for approval, and (iv) the Board of Directors and officers
of FABC shall use their reasonable efforts to obtain such shareholders'
approval. CCBG and FABC shall make all necessary filings with respect to the
Mergers under the Securities Laws.
7.2 NASDAQ LISTING.
-------------- CCBG shall use its reasonable best efforts to
list, prior to the Effective Time, on the Nasdaq National Market the shares
of CCBG Common Stock to be issued to the holders of FABC Common Stock
pursuant to the Holding Company Merger, and CCBG shall give all notices and
make all filings with the NASD required in connection with the transactions
contemplated herein.
7.3 APPLICATIONS.
------------ CCBG shall promptly prepare and file, and FABC and
First National 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. The Parties shall deliver to each other copies of all filings,
correspondence and
34
orders to and from all Regulatory Authorities in connection with the
transactions contemplated hereby.
7.4 FILINGS WITH STATE OFFICES.
-------------------------- Upon the terms and subject to the
conditions of this Agreement, CCBG shall execute and file, in connection with
the Closing, the Articles of Merger, or such other required filings to
effectuate the Mergers, with the Secretary of State of the State of Florida.
7.5 AGREEMENT AS TO EFFORTS TO CONSUMMATE.
------------------------------------- Subject to the terms and
conditions of this Agreement, each Party agrees to use, and to cause its
Subsidiaries to use, its reasonable efforts to take, or cause to be taken,
all actions, and to do, or cause to be done, all things necessary, proper, or
advisable under applicable Laws to consummate and make effective, as soon as
reasonably practicable after the date of this Agreement, the transactions
contemplated by this Agreement, including 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 8; provided, that nothing herein shall preclude any
Party from exercising its rights under this Agreement. Each Party shall use,
and shall cause each of its Subsidiaries to use, its reasonable efforts to
obtain all Consents necessary or desirable for the consummation of the
transactions contemplated by this Agreement.
7.6 INVESTIGATION AND CONFIDENTIALITY.
---------------------------------
(a) Prior to the Effective Time, each Party shall keep the
other Party advised of all Material developments relevant to its business and
to consummation of the Mergers.
(b) Prior to the Effective Time, FABC and First National shall
permit and allow CCBG to make or cause to be made, at CCBG's own expense,
such investigation(s) of the business and properties of FABC and its
Subsidiaries, and of their respective financial and legal conditions, as CCBG
reasonably requests, provided that such investigation(s) shall be reasonably
related to the transactions contemplated hereby. In order to perform or to
conduct any such investigation(s) described in this Section 7.6(b), or as
permitted in Section 7.20, FABC and First National shall grant CCBG the right
to gain reasonable access to the businesses and properties of each FABC
Entity. No investigations by a Party shall affect the representations and
warranties of the other Party.
(c) If any investigation(s) of CCBG conducted pursuant to
Section 7.6(b) results in a finding of an event or circumstance that has had
or is reasonably likely to have an FABC Material Adverse Effect (an "Adverse
Finding"), CCBG shall have the right, but not the obligation (unless required
by Section 7.6(f)), to elect to identify and describe in writing to FABC such
Adverse Finding and to request its correction, cure, or other resolution, to
CCBG's complete satisfaction (which CCBG shall in good faith determine in its
sole discretion), within a specific period of time. Any such action taken by
CCBG pursuant to the foregoing sentence (1) shall not waive CCBG's right to
terminate this Agreement and abandon the Mergers without penalty and at any
time before the Closing Date pursuant to Section 9.1(h), provided FABC fails
to cure the Adverse Finding to CCBG's satisfaction in the time granted to
FABC, and (2) shall not, in any way, act as a waiver as to any other right(s)
granted to CCBG pursuant to this Agreement.
35
(d) In addition to the Parties' respective obligations under
the Confidentiality Agreement, which are hereby reaffirmed and incorporated
by reference herein, each Party shall, and shall cause its advisers and
agents to, maintain the confidentiality of all confidential information
furnished to it by the other Party concerning its and its Subsidiaries'
businesses, operations, and financial positions and shall not use such
information for any purpose except in furtherance of the transactions
contemplated by this Agreement. In the event that a Party is required by
applicable Law or valid court process to disclose any such confidential
information, then such Party shall provide the other Party with prompt
written notice of any such requirement so that the other Party may seek a
protective Order or other appropriate remedy and/or waive compliance with
this Section 7.6. If in the absence of a protective Order or other remedy or
the receipt of a waiver by the other Party, a Party is nonetheless, in the
written opinion of counsel, legally compelled to disclose any such
confidential information to any tribunal or else stand liable for contempt or
suffer other censure or penalty, a Party may, without Liability hereunder,
disclose to such tribunal only that portion of the confidential information
which such counsel advises such Party is legally required to be disclosed,
provided that such disclosing Party uses its best efforts to preserve the
confidentiality of such confidential information, including without
limitation, by cooperating with the other Party to obtain an appropriate
protective Order or other reliable assurance that confidential treatment will
be accorded such confidential information by such tribunal. If this
Agreement is terminated prior to the Effective Time, upon written request of
the other Party, each Party shall promptly return or certify the destruction
of all documents and copies thereof, and all work papers containing
confidential information received from the other Party.
(e) FABC shall use its reasonable efforts to exercise its
rights under confidentiality agreements entered into with Persons, if any,
which were considering an Acquisition Proposal with respect to any FABC
Entity to preserve the confidentiality of the information relating to such
FABC Entity provided to such Persons and their Affiliates and
Representatives.
(f) 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
an FABC Material Adverse Effect or a CCBG Material Adverse Effect, as
applicable; provided, that, as applied to any obligations of CCBG, CCBG shall
be governed by the provisions of Section 7.6(c).
(g) Upon request of CCBG, FABC and First National shall request
within 10 days of the date thereof, that all third parties that received
confidential information regarding FABC or any of its Subsidiaries within the
last 12 months in connection with a possible sale or merger transaction
involving FABC or any of its Subsidiaries promptly return such confidential
information to FABC or First National.
7.7 PRESS RELEASES.
-------------- Prior to the Effective Time, FABC, First National
and CCBG 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, that nothing in this
Section 7.7 shall be deemed to prohibit any Party from
36
making any disclosure which its counsel deems necessary or advisable in order
to satisfy such Party's disclosure obligations imposed by Law.
7.8 CERTAIN ACTIONS.
--------------- Except with respect to this Agreement and the
transactions contemplated hereby, no FABC Entity nor any Affiliate thereof
nor any Representatives thereof retained by any FABC Entity shall directly or
indirectly solicit any Acquisition Proposal by any Person. Except to the
extent the Board of Directors of FABC reasonably determines in good faith,
based and relying upon a written opinion from its outside counsel, that the
failure to take such actions would constitute a breach of fiduciary duties of
the members of such Board of Directors to FABC's shareholders under
applicable Law, no FABC Entity or any Affiliate or Representative thereof
shall furnish any non-public information that it is not legally obligated to
furnish, negotiate with respect to, or enter into any discussions or Contract
with respect to, any Acquisition Proposal, but FABC may communicate
information about such an Acquisition Proposal to its shareholders if and to
the extent that it is required to do so in order to comply with its legal
obligations. FABC and First National shall promptly advise CCBG following
the receipt of any Acquisition Proposal and the details thereof, and advise
CCBG of any developments with respect to such Acquisition Proposal promptly
upon the occurrence thereof. FABC and First National 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, (ii) direct and use its reasonable best efforts to cause all of
its Affiliates and Representatives not to engage in any of the foregoing, and
(iii) use its reasonable best efforts to enforce any confidentiality or
similar agreement relating to any such activities, discussions, negotiations
or Acquisition Proposal. FABC and First National will take all actions
necessary or advisable to inform the appropriate individuals or entities
referred to in the first sentence of this Section 7.8 of the obligations
undertaken in this Section 7.8.
7.9 ACCOUNTING AND TAX TREATMENT.
---------------------------- Each of the Parties undertakes and
agrees to use its reasonable efforts to cause the Mergers, and to use its
reasonable efforts to take no action which would cause the Mergers not, to
qualify as a "reorganization" within the meaning of Section 368(a) of the
Code for federal income tax purposes.
7.10 STATE TAKEOVER LAWS.
------------------- Each FABC Entity and its Affiliates shall
take the necessary steps to exempt the transactions contemplated by this
Agreement from, or if necessary to challenge the validity or applicability
of, any applicable Takeover Law, including Sections 607.0901 and 607.0902 of
the FBCA.
7.11 CHARTER PROVISIONS.
------------------ Each FABC Entity shall take all necessary
action to ensure that the entering into of this Agreement and the
consummation of the Mergers and the other transactions contemplated hereby do
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 any FABC
Entity or restrict or impair the ability of CCBG or any of its Subsidiaries
to vote, or otherwise to exercise the rights of a shareholder with respect
to, shares of any FABC Entity that may be directly or indirectly acquired or
controlled by them.
7.12 FABC AND FIRST NATIONAL MEETINGS.
-------------------------------- Each FABC Entity shall give
CCBG prior notice of each meeting or proposed action by any of their
respective Board of Directors and/or committees, including a description of
any matters to be discussed and/or acted
37
upon, and shall within a reasonable period of time after each such meeting
occurs provide CCBG copies of all Minutes of each such meeting, except
portions of the Minutes discussing the transactions contemplated herein that
present conflict of interest and/or confidentiality issues.
7.13 AGREEMENT OF AFFILIATES.
----------------------- FABC has disclosed in Section 7.13 of
the FABC Disclosure Memorandum all Persons whom it reasonably believes is an
"affiliate" of FABC for purposes of Rule 145 under the 1933 Act. FABC shall
cause each such Person to deliver to CCBG upon the execution of this
Agreement a written agreement, substantially in the form of Exhibit 3,
providing that such Person will not sell, pledge, transfer, or otherwise
dispose of the shares of FABC 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 CCBG Common Stock to
be received by such Person upon consummation of the Mergers except in
compliance with applicable provisions of the 1933 Act and the rules and
regulations thereunder. CCBG shall be entitled to place restrictive legends
upon certificates for shares of CCBG Common Stock issued to affiliates of
FABC pursuant to this Agreement to enforce the provisions of this Section
7.13; provided that CCBG removes such legends at the appropriate time. CCBG
shall not be required to maintain the effectiveness of the Registration
Statement under the 1933 Act for the purposes of resale of CCBG Common Stock
by such affiliates.
7.14 EMPLOYEE BENEFITS AND CONTRACTS.
-------------------------------
(a) Following the Effective Time, CCBG shall provide generally
to officers and employees of the FABC Entities employee benefits under
employee benefit and welfare plans (other than stock option or other plans
involving the potential issuance of CCBG Common Stock), on terms and
conditions which when taken as a whole are substantially similar to those
currently provided by the CCBG Entities to their similarly situated officers
and employees. CCBG shall waive any pre-existing condition exclusion under
any employee health plan for which any employees and/or officers and
dependents are covered by FABC plans as of Closing, to the extent that (i)
such pre-existing condition was covered under the corresponding plan
maintained by the FABC Entity and (ii) the individual affected by the pre-
existing condition was covered by the FABC Entity's corresponding plan on the
date which immediately precedes the Effective Time, provided further,
however, that any portion of a pre-existing condition exclusion period
imposed by a CCBG employee health plan shall not be enforced to the extent it
exceeds in duration any corresponding provision in effect under an FABC
Benefit Plan immediately prior to Closing. In addition, CCBG shall credit
employees of any FABC Entity for amounts paid under FABC Benefit Plans for
the applicable plan year that contains the Closing Date for purposes of
applying deductibles, co-payments and out-of-pocket limitations under CCBG
health plans. For purposes of participation and vesting (but not benefit
accrual) under CCBG's employee benefit plans, the service of the employees of
any FABC Entity prior to the Effective Time shall be treated as service with
a CCBG Entity participating in such employee benefit plans. For purposes of
participation and vesting (but not benefit accrual) under CCBG's vacation
policy, the service of the employees of the FABC Entities prior to the
Effective Time shall be treated as service with a CCBG Entity subject to such
policy.
(b) Xxxxx X. Xxxxx shall enter into a three year employment
agreement with CCBG in the form attached hereto as Exhibit 4 (the "Executive
Employment Agreement").
38
(c) Subject to compliance with applicable Laws and the absence
of any Material Adverse Effect upon CCBG or any FABC Benefit Plans or CCBG
Benefit Plans, FABC shall prior to Closing take such actions as are
necessary to terminate each FABC Benefit Plan (other than the Executive
Indexed Salary Continuation Plan, by and between Xxxxx X. Xxxxx and First
National Bank of Alachua, dated June 1, 1995 (the "Executive Indexed Salary
Continuation Plan"), the Endorsement Method Split Dollar Plan Agreement,
dated June 1, 1995, and the First National Bank of Alachua 401(k) Profit
Sharing Plan (the "Alachua 401(k) Plan")) and to distribute all benefits
attributable thereto as soon as administratively feasible.
7.15 ALACHUA 401(K) PLAN QUALIFICATION.
---------------------------------
(a) First National, as the sponsor of the Alachua 401(k) Plan,
and Xxxxx X. Xxxxx, as co-trustee of the Alachua 401(k) Plan, shall take all
actions reasonably necessary prior to the Closing Date to submit a proper
application to the IRS pursuant to the Employee Plans Compliance Resolution
System ("EPCRS Application") as set forth in Revenue Procedure 2003-44 (or
successor guidance) that will contain a reasonable proposal to address the
matters described in Section 4.15 of the FABC Disclosure Memorandum so as to
obtain IRS approval of such corrections thereto. It is understood and agreed
that such corrections may, if necessary, be made after the Closing Date and
that such IRS approval may be obtained after the Closing Date. Xxxxx X. Xxxxx,
as co-trustee of the Alachua 401(k) Plan, shall consult with CCBG and CCBG's
legal counsel prior to taking any such actions, shall obtain CCBG and CCBG's
legal counsel's prior approval in connection with any IRS or PBGC submissions,
communications, filings, or applications, and shall provide CCBG at Closing
with documentation of the actions ultimately implemented.
(b) CCBG, FABC, First National, and Xxxxx X. Xxxxx, as co-
trustee of the Alachua 401(k) Plan, expressly agree that, at all times
subsequent to Closing, all Participants in the Alachua 401(k) Plan shall make
all elective deferrals exclusively to the Capital City Bank Group, Inc.
401(k) Plan. Upon approval by the IRS of the EPCRS Application, CCBG, in its
sole discretion, may elect to (x) freeze the Alachua 401(k) Plan; (y)
terminate the Alachua 401(k) Plan; or (z) merge the Alachua 401(k) Plan with
the Capital City Bank Group, Inc. 401(k) Plan as a successor plan. Prior to
the Closing, First National may continue to pay in the ordinary course the
reasonable fees and expenses relating to the administration of the Alachua
401(k) Plan, subject, however, to the provisions of this Agreement relating
to certain 401(k) Plan Liabilities and any Corrections required pursuant to
the EPCRS Application. After the Closing, CCBG will pay in the ordinary
course all reasonable fees and expenses relating to the administration of the
Alachua 401(k) Plan, subject, however, to the provisions of this Agreement
relating to certain Alachua 401(k) Plan Liabilities and any Corrections
required pursuant to the EPCRS Application. FABC and First National have
described in Section 7.15(b) of the FABC Disclosure Memorandum the fees and
expenses that First National has paid to service providers relating to the
Alachua 401(k) Plan.
(c) CCBG, FABC, First National, and Xxxxx X. Xxxxx, as co-
trustee of the Alachua 401(k) Plan, expressly agree that, at all times
subsequent to the execution of this Agreement, no stock or other security
issued by any FABC Entity or CCBG Entity held in the Alachua 401(k) Plan
shall be withdrawn or transferred by any Participant until CCBG, in its sole
discretion, determines that the terms of the IRS compliance statement
pursuant to the EPCRS Application have been met.
39
(d) With respect to the EPCRS Application, First National, and
subsequent to Closing, CCBG, shall pay all fees and expenses, including all
legal fees of counsel to First National, accounting fees, filing fees, and
application fees, subject to the indemnification provisions in the letter
agreement, which is attached to this Agreement substantially in the form of
Exhibit 2; provided, however, that to the extent the IRS or any other
governmental agency or applicable Law (i) prohibits any FABC Entity or CCBG
Entity from paying such fees and expenses; or (ii) deems such amount to be
penalties, Xxxxx X. Xxxxx, individually, shall pay all fees and expenses,
including all legal fees, accounting fees, filing fees, and application fees.
(e) Xxxxx X. Xxxxx, to the extent Xx. Xxxxx has direct control
over the implementation of corrections set forth in the IRS compliance
statement, and the then sponsor of the Alachua 401(k) Plan shall be
responsible for timely and properly implementing the corrections set forth in
the IRS compliance statement pursuant to the EPCRS Application, subject to
the indemnification provisions in the letter agreement, which is attached to
this Agreement substantially in the form of Exhibit 2.
(f) FABC shall cause Xxxxx X. Xxxxx to deliver to CCBG upon
execution of this Agreement a letter agreement, substantially in the form of
Exhibit 2.
7.16 INDEMNIFICATION.
---------------
(a) With respect to all claims brought during the period of
three (3) years after the Effective Time, CCBG shall indemnify, defend and
hold harmless the present and former directors, officers and employees of
FABC and First National (each, an "Indemnified Party") against all
Liabilities arising out of actions or omissions arising out of the
Indemnified Party's service or services as directors, officers or employees
of FABC and First National or, at FABC's request, of another corporation,
partnership, joint venture, trust or other enterprise occurring at or prior
to the Effective Time (including the transactions contemplated by this
Agreement) to the fullest extent permitted under Florida Law.
Notwithstanding the foregoing, with respect to all losses, Liabilities,
damage, costs, claims, and expenses related to Alachua 401(k) Plan
Liabilities, no CCBG Entity shall indemnify, defend or hold harmless the
present and former trustees of the Alachua 401(k) Plan, including Xxxxx X.
Xxxxx and Xxxxx Xxxxx. Without limiting the foregoing, in any case in which
approval by the Surviving Corporation is required to effectuate any
indemnification, the Surviving Corporation shall direct, at the election of
the Indemnified Party, that the determination of any such approval shall be
made by independent counsel mutually agreed upon between CCBG and the
Indemnified Party.
(b) CCBG shall, to the extent available, (and FABC and First
National shall cooperate prior to the Effective Time in these efforts)
maintain in effect for a period of three years after the Effective Time
directors' and officers' liability insurance with respect to claims arising
from facts or events which occurred up to twelve (12) months prior to the
Effective Time and covering the Indemnified Parties; provided, that CCBG
shall not be obligated to make aggregate premium payments for such three-year
period in respect of such an insurance policy (or coverage replacing such a
policy) which exceed $45,000 for the portion related to FABC's and First
National's directors and officers.
40
(c) Promptly after receipt by an Indemnified Party of notice of
any complaint or the commencement of any action or proceeding with respect to
which indemnification is being sought hereunder, such party will notify the
indemnifying party in writing of such complaint or of the commencement of
such action or proceeding. A failure to notify the indemnifying party will
not relieve the indemnifying party from any Liability it may have hereunder
or otherwise, except to the extent that such failure materially prejudices
the indemnifying party's rights or its ability to defend against such
complaint, action or proceeding. If the indemnifying party so elects or is
requested by such Indemnified Party, it will assume the defense of such
action or proceeding, including the employment of counsel (which may be
counsel to the indemnifying party) reasonably satisfactory to the Indemnified
Party and the payment of the fees and disbursements of such counsel. In the
event, however, that such Indemnified Party reasonably determines in its
judgment that having common counsel would present such counsel with a
conflict of interest or if the indemnifying party fails to assume the defense
of the action or proceeding in a timely manner, then such Indemnified Party
may employ separate counsel to represent or defend it in any such action or
proceeding and the indemnifying party will pay the fees and disbursements of
such counsel; provided, however, that the indemnifying party will not be
required to pay the fees and disbursements of more than one separate counsel
for all indemnified parties in any jurisdiction in any single action or
proceeding. The Indemnified Party will cooperate with the indemnifying party
in the defense of any such action or proceeding. In any action or proceeding
the defense of which is assumed by the indemnifying party, the Indemnified
Party will have the right to participate in such action or proceeding and to
retain its own counsel at such Indemnified Party's own expense. The
indemnifying party shall not be liable for any settlement effected without
its prior written consent. The indemnifying party shall not have any
obligation hereunder to the Indemnified Party when and if a court of
competent jurisdiction shall determine, and such determination shall have
become final, that the indemnification of the Indemnified Party in the manner
contemplated hereby is prohibited by applicable Law.
7.17 CERTAIN POLICIES OF FABC.
------------------------ CCBG, FABC, and First National shall
consult with respect to their respective major policies and practices and
FABC and First National shall make such modification or changes to their
policies and practices, if any, prior to the Effective Time as may be
mutually agreed upon. CCBG, FABC, and First National also shall consult with
respect to the character, amount and timing of restructuring and Merger-
related expense charges to be taken by each of the Parties in connection with
the transactions contemplated by this Agreement and shall take such charges
in accordance with GAAP, prior to the Effective Time, as may be mutually
agreed upon by the Parties. Neither Party's representations, warranties,
covenants or agreements contained in this Agreement shall be deemed to be
inaccurate or breached in any respect as a consequence of any modifications
or charges undertaken solely on account of this Section.
7.18 DIRECTOR AND VOTING AGREEMENTS.
------------------------------ Concurrently with the execution
and delivery of this Agreement, FABC and First National agree to cause each
of their directors to execute and deliver a Director and Voting Agreement in
the form attached hereto as Exhibit 5.
7.19 PAYMENT OF BONUS.
---------------- CCBG agrees that either CCBG or CCB shall pay
to Xxxxx X. Xxxxx on the Closing Date a lump-sum bonus in cash in an amount
equal to the
41
maximum amount payable without triggering an excise tax under Section 4999 of
the Code or a deduction limitation under Section 280G of the Code; provided
that such bonus shall not exceed $1 million.
7.20 REAL PROPERTY MATTERS.
--------------------- At its option and expense, CCBG may cause
to be conducted: (1) a title examination, physical survey, zoning compliance
review, and structural inspection of the Real Property and improvements
thereon that is used by any FABC Entity as a banking office (collectively,
the "Property Examination"); and (2) site inspections, historic reviews,
regulatory analyses, and environmental investigations and assessments of the
Real Property as CCBG shall deem necessary or desirable (collectively, the
"Environmental Survey"). The Environmental Survey may include, but shall not
be limited to: (i) CCBG's right to perform a Phase I Environmental Site
Assessment (pursuant to ASTM Standard E 1527-00 or ASTM Standard E 1527-97)
in connection with any businesses or properties of any FABC Entity, including
any of its Participation Facilities or its Operating Facilities, (ii) CCBG's
right to perform or to conduct any other environmental investigations,
inspections, assessments, site reconnaissance, or site visits, or
environmental sampling, testing, analysis, or monitoring activities, in
connection with any businesses or properties of any FABC Entity, including
its Participation Facilities or its Operating Facilities, and (iii) CCBG's
right to request and to obtain from any FABC Entity any information or
documents, including, but not limited to, environmental reports and
regulatory agency correspondence, in any FABC Entity's possession or control
relating to the matters described in this Section 7.20. In order to perform
or to conduct any such investigation(s) described in this Section 7.20, each
FABC Entity shall grant CCBG the right to gain reasonable access to any
businesses and properties of any FABC Entity, including access to its
Participation Facilities or its Operating Facilities. Should CCBG elect to
complete an Environmental Survey of any Real Property, it shall notify FABC
or First National before commencing the Environmental Survey and shall make
reasonable efforts to coordinate the Environmental Survey with FABC and First
National.
If, in the course of the Property Examination or Environmental Survey,
CCBG determines that a "Material Defect" (as defined below) exists with
respect to the Real Property, CCBG shall have the option, at its sole
discretion, exercisable upon written notice to FABC or First National
("Material Defect Notice") to: (1) direct FABC or First National to cure the
Material Defect to CCBG's reasonable satisfaction; (2) terminate this
Agreement in the event of a Material Defect under Subsection (a) of the
"Material Defect" definition; (3) terminate this Agreement in the event of a
Material Defect under Subsections (b) or (c) of the "Material Defect"
definition if CCBG reasonably believes the cost to cure the Material Defect
will be greater than or equal to $200,000; or (4) waive the Material Defect.
A termination under Section (2) or (3) of this paragraph shall be deemed to
be a termination under Section 9.1(a).
If CCBG elects to direct FABC or First National to cure, then FABC or
First National shall have thirty (30) days from the date of the receipt of
the Material Defect Notice, or such later time, which shall not be later than
the Closing Date, as shall be mutually agreeable to the parties in which to
cure such Material Defect to CCBG's reasonable satisfaction. If FABC or
First National fails to cure a Material Defect to CCBG's reasonable
satisfaction within the period specified above, then CCBG may terminate this
Agreement (with such termination being deemed to be a termination under
Section 9.1(h)).
42
For purposes of this Agreement, a "Material Defect" shall include:
(a) the existence of any Lien (other than the lien of Real
Property Taxes not yet due and payable), encumbrance, zoning restriction,
easement, covenant or other restriction, title imperfection or title
irregularity, or the existence of any facts or conditions that constitute a
Material breach of the representations and warranties contained in Section
4.10 or 4.11, in either such case that CCBG reasonably believes will
materially adversely affect its use of any parcel of the Real Property for
the purpose for which it currently is used or the value or marketability of
any parcel of the Real Property, or as to which CCBG otherwise reasonably
objects;
(b) the existence of any structural defects or conditions of
disrepair in the improvements on the Real Property (including any equipment,
fixtures or other components related thereto) that CCBG reasonably believes
would cost more than $25,000 in the aggregate to repair, remove or correct as
to all such Real Property; or
(c) the existence of facts or circumstances relating to any of
the Real Property reflecting that: (1) there likely has been a discharge,
disposal, release, threatened release, or emission by any Person of any
Hazardous Material on, from, under, at, or relating to the Real Property; or
(2) any action has been taken or not taken, or a condition or event likely
has occurred or exists, with respect to the Real Property which constitutes
or would constitute a violation of any Environmental Laws as to which CCBG
reasonably believes, based on the advice of legal counsel or other
consultants, that an FABC Entity could become responsible or liable, or that
CCBG could become responsible or liable, following the Closing Date, for
assessment, removal, remediation, monetary damages, or civil, criminal or
administrative penalties or other corrective action and in connection with
which the amount of expense or Liability which an FABC Entity could incur, or
for which CCBG could become responsible or liable, following the Closing
Date, could equal or exceed an aggregate of $25,000 or more as to all such
Real Property.
7.21 FAIRNESS OPINION.
---------------- FABC shall obtain from SunTrust Xxxxxxxx
Xxxxxxxx, a letter, dated the date that the FABC Board of Directors approved
this Agreement, to the effect that, in the opinion of such firm, the
consideration to be received by FABC shareholders in connection with the
Mergers is fair, from a financial point of view, to such shareholders, a
signed copy of which shall be promptly delivered to CCBG.
7.22 NON-COMPETITION AGREEMENTS.
-------------------------- Following the execution and delivery
of this Agreement, FABC agrees to use its best efforts to cause individuals
identified by CCBG to execute and deliver a Non-Competition Agreement in the
form attached hereto as Exhibit 6.
7.23 FABC AUDITED FINANCIAL STATEMENTS.
--------------------------------- FABC agrees to engage Xxxxx
Xxxxxx and Company LLC, certified public accountants (the "Auditor"), on or
before the twentieth (20th) day after the date this Agreement is executed, to
audit the FABC Audited Financial Statements and to use its best efforts to
cause the Auditor to certify such audited financial statements on or before
April 15, 2005. FABC and CCBG agree to each pay one-half of the fees for this
audit of the FABC Audited Financial Statements. FABC shall book the Audit
Adjustments to the FABC Financial Statements, and these Audit Adjustments
shall be reflected in the calculation of "net worth" in Section 8.2(f). In
the event that the Audit Adjustments reflect, in
43
whole or in part, accounting procedures or policies of FABC or First National
that are not consistent with GAAP, FABC and First National agree to modify
immediately their accounting procedures and policies to conform with GAAP.
FABC and First National shall prepare the FABC Financial Statements, for
periods as of or ending on a date that occurs subsequent to September 30,
2004, in accordance with such modified accounting procedures and policies.
7.24 ALLOWANCE FOR POSSIBLE LOAN LOSSES.
---------------------------------- The Allowance reflected in
the FABC Financial Statements as of the Effective Time will be adequate
(within the meaning of GAAP and applicable regulatory requirements or
guidelines) to provide for all known or reasonably anticipated losses
relating to or inherent in the loan and lease portfolio of the FABC Entities
and other extensions of credit (including letters of credit) by the FABC
Entities as of the dates thereof.
ARTICLE 8
CONDITIONS PRECEDENT TO OBLIGATIONS TO CONSUMMATE
8.1 CONDITIONS TO OBLIGATIONS OF EACH PARTY.
--------------------------------------- The respective
obligations of each Party to perform this Agreement and consummate the
Mergers and the other transactions contemplated hereby are subject to the
satisfaction of the following conditions, unless waived by both Parties
pursuant to Section 10.6:
(a) Shareholder Approval.
-------------------- The shareholders of FABC shall have
approved this Agreement, and the consummation of the transactions
contemplated hereby, including the Mergers, as and to the extent required by
Law or by the provisions of any governing instruments. The shareholders of
CCBG shall have approved the issuance of shares of CCBG Common Stock pursuant
to the Mergers, as and to the extent required by Law, by the provisions of
any governing instruments, or by the rules of the NASD.
(b) Regulatory Approvals.
-------------------- All Consents of, filings and
registrations with, and notifications to, all Regulatory Authorities required
for consummation of the Mergers 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 requirements relating to the
raising of additional capital or the disposition of Assets) which in the
reasonable judgment of the Board of Directors of CCBG or of FABC would so
materially adversely affect the economic or business benefits of the
transactions contemplated by this Agreement that, had such condition or
requirement been known, such Party would not, in its reasonable judgment,
have entered into this Agreement.
(c) Consents And Approvals.
---------------------- Each Party shall have obtained any
and all Consents required for consummation of the Mergers (other than those
referred to in Section 8.1(b)) 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, an FABC Material
Adverse Effect or a CCBG Material Adverse Effect, as applicable. No Consent
so obtained which is necessary to consummate the transactions contemplated
hereby shall be conditioned or restricted in a manner which in the reasonable
judgment of the Board of Directors
44
of CCBG or of FABC would so materially adversely affect the economic or
business benefits of the transactions contemplated by this Agreement that,
had such condition or requirement been known, such Party would not, in its
reasonable judgment, have entered into this Agreement.
(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 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 CCBG Common Stock issuable pursuant to
the Mergers shall have been received.
(f) Share Listing.
------------- The shares of CCBG Common Stock issuable
pursuant to the Mergers shall have been approved for listing on the Nasdaq
National Market.
(g) Tax Matters.
----------- Each Party shall have received a written
opinion of its counsel, in form reasonably satisfactory to such Party (the
"Tax Opinion"), to the effect that (i) each of the Mergers will constitute a
reorganization within the meaning of Section 368(a) of the Code, (ii) the
exchange in the Holding Company Merger of FABC Common Stock for CCBG Common
Stock will not give rise to gain or loss to the shareholders of FABC with
respect to such exchange (except to the extent of any cash received), and
(iii) neither FABC nor CCBG will recognize gain or loss as a consequence of
the Mergers (except for amounts resulting from any required change in
accounting methods and any income and deferred gain recognized pursuant to
Treasury regulations issued under Section 1502 of the Code). In rendering
such Tax Opinion, such counsel shall be entitled to rely upon representations
of officers of FABC and CCBG reasonably satisfactory in form and substance to
such counsel.
8.2 CONDITIONS TO OBLIGATIONS OF CCBG.
--------------------------------- The obligations of CCBG to
perform this Agreement and consummate the Mergers and the other transactions
contemplated hereby are subject to the satisfaction of the following
conditions, unless waived by CCBG pursuant to Section 10.6(a):
(a) Representations And Warranties.
------------------------------ For purposes of this
Section 8.2(a), the accuracy of the representations and warranties of FABC
and First National set forth in this Agreement shall be assessed 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). There shall
not exist inaccuracies in the representations and warranties of FABC and
First National set forth in this Agreement (including, without limitation,
the representations and warranties set forth in Sections 4.3, 4.20, 4.21, and
4.22) such that the aggregate effect of such inaccuracies has, or is
reasonably likely to have, an FABC Material Adverse Effect; provided that,
for purposes of this sentence only, those representations
45
and warranties which are qualified by references to "Material" or "Material
Adverse Effect" or to the "Knowledge" of any Person shall be deemed not to
include such qualifications.
(b) Performance Of Agreements And Covenants.
--------------------------------------- Each and all of
the agreements and covenants of FABC and First National 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.
(c) Certificates.
------------ FABC and First National shall have delivered
to CCBG (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 set forth in Section 8.1 as relates to FABC or
First National and in Section 8.2(a) and 8.2(b) have been satisfied, and (ii)
certified copies of resolutions duly adopted by FABC's and First National's
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 CCBG and its counsel shall request.
(d) Opinion Of Counsel.
------------------ CCBG shall have received an opinion of
Xxxxx, Xxxxxxxx & Xxxxxxx, LLP, counsel to FABC and First National, dated as
of the Closing, in form reasonably satisfactory to CCBG, as to the matters
set forth in Exhibit 7.
(e) Affiliates' Agreements.
---------------------- CCBG shall have received from each
Affiliate of FABC the Affiliates Letter referred to in Section 7.13.
(f) Net Worth And Capital Requirements.
---------------------------------- Immediately prior to
the Effective Time, FABC shall have a consolidated minimum net worth of at
least $25,375,000. For purposes of calculating "net worth" for this Section
8.2(f), "net worth" shall not be reduced by fees, costs and expenses (a)
incurred or paid by FABC in connection with the execution and performance of
this Agreement up to a maximum amount of $1,100,000 or (b) incurred or paid
at the request of CCBG; provided, however, "net worth" shall be reduced for
adjustments requested by CCBG for purposes of complying with GAAP and
adjustments for purposes of complying with Sections 7.23 or 7.24. For
purposes of this Section 8.2(f), "net worth" shall mean the sum of the
amounts set forth on the balance sheet as stockholders' equity (including the
par or stated value of all outstanding capital stock, additional paid-in
surplus, retained earnings, treasury stock, and unrealized gains or losses on
securities available for sale) determined in accordance with GAAP.
(g) Director and Voting Agreements.
------------------------------ CCBG shall have received
from each director of FABC and First National the Director and Voting
Agreement set forth hereto at Exhibit 5.
(h) Claims Letter.
------------- CCBG shall have received from each director
and officer of FABC and First National the Claims Letter set forth hereto at
Exhibit 8.
(i) Clearance Certificate.
--------------------- FABC and First National shall
provide CCBG with a clearance certificate or similar document(s) which may be
required by any state taxing authority in order to relieve CCBG of any
obligation to withhold any portion of the consideration under this Agreement.
46
(j) Executive Employment Agreement.
------------------------------ CCBG shall have received from
Xxxxx X. Xxxxx an executed Executive Employment Agreement in the form attached
hereto as Exhibit 4.
(k) Letter Agreement.
---------------- CCBG shall have received from Xxxxx X.
Xxxxx an executed letter agreement in the form attached hereto as Exhibit 2.
8.3 CONDITIONS TO OBLIGATIONS OF FABC AND FIRST NATIONAL.
---------------------------------------------------- The
obligations of FABC and First National 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
FABC or First National pursuant to Section 10.6(b):
(a) Representations And Warranties.
------------------------------ For purposes of this
Section 8.3(a), the accuracy of the representations and warranties of CCBG
set forth in this Agreement shall be assessed 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). There shall not exist
inaccuracies in the representations and warranties of CCBG set forth in this
Agreement such that the aggregate effect of such inaccuracies has, or is
reasonably likely to have, a CCBG Material Adverse Effect; provided that, for
purposes of this sentence only, those representations and warranties which
are qualified by references to "Material" or "Material Adverse Effect" or to
the "Knowledge" of any Person shall be deemed not to include such
qualifications.
(b) Performance Of Agreements And Covenants.
--------------------------------------- Each and all of
the agreements and covenants of CCBG 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.
------------ CCBG shall have delivered to FABC and First
National (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 set forth in Section 8.1 as relates to CCBG and in
Section 8.3(a) and 8.3(b) have been satisfied, and (ii) certified copies of
resolutions duly adopted by CCBG's 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
FABC and First National and their counsel shall request.
(d) Opinion Of Counsel.
------------------ FABC and First National shall have
received an opinion of Gunster, Yoakley & Xxxxxxx, P.A., counsel to CCBG,
dated as of the Effective Time, in form reasonably acceptable to FABC, as to
the matters set forth in Exhibit 9.
(e) Agreement relating to Executive Indexed Salary Continuation
Plan. -----------------------------------------------------------
----
CCBG shall have delivered to FABC and First National an agreement as
contemplated in Section VI(B) of the Executive Indexed Salary Continuation
Plan, in form reasonably acceptable to FABC and First National and their
counsel.
47
ARTICLE 9
TERMINATION
9.1 TERMINATION.
----------- Notwithstanding any other provision of this
Agreement, and notwithstanding the approval of this Agreement by the
shareholders of FABC, this Agreement may be terminated and the Mergers
abandoned at any time prior to the Effective Time:
(a) By mutual consent of CCBG and FABC; or
(b) By 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 is reasonably
likely, in the opinion of the non-breaching Party, to have, individually or
in the aggregate, an FABC Material Adverse Effect or a CCBG Material Adverse
Effect, as applicable, on the breaching Party; or
(c) By 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 Material breach by
the other Party of any covenant or agreement 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; or
(d) By 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 Mergers and the other
transactions contemplated hereby shall have been denied by final
nonappealable action of such authority or if any action taken by such
authority is not appealed within the time limit for appeal, or (ii) the
shareholders of FABC fail to vote their approval of the matters relating to
this Agreement and the transactions contemplated hereby at the Shareholders'
Meeting where such matters were presented to such shareholders for approval
and voted upon; or
(e) By either Party in the event that the Mergers shall not
have been consummated by August 31, 2005, which date may be extended by the
mutual consent of the Parties, 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
9.1(e); or
(f) By 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 Mergers cannot be
satisfied or fulfilled by the date specified in Section 9.1(e); or
(g) By CCBG, in the event that the Board of Directors of FABC
or First National shall have failed to reaffirm its approval of the Mergers
and the transactions contemplated by this Agreement (to the exclusion of any
other Acquisition Proposal), or shall
48
have resolved not to reaffirm the Mergers, or shall have affirmed,
recommended or authorized entering into any other Acquisition Proposal or
other transaction involving a merger, share exchange, consolidation or
transfer of substantially all of the Assets of FABC; or
(h) By CCBG, in the event of an Adverse Finding and, if time is
granted by CCBG to cure such Adverse Finding pursuant to Section 7.6(c), such
Adverse Finding is not cured to the satisfaction of CCBG within the time
specified in CCBG's notice of such Adverse Finding; or
(i) By FABC, pursuant to Section 9.3; or
(j) By CCBG, pursuant to Section 2.1(e); or
(k) By FABC, at any time during the two-day period commencing
at the close of trading on the Determination Date, if both (i) the Average
Closing Price is less than or equal to $34, and (ii) the quotient obtained by
dividing the Average Closing Price by 40 is less than the number obtained by
subtracting 0.15 from the quotient obtained by dividing (x) the Index Price
at the close of trading on the Determination Date by (y) the Index Price on
the Starting Date, subject to the following three sentences. If FABC elects
to exercise its termination right pursuant to the immediately preceding
sentence, then it shall give prompt written notice to CCBG; provided that
such notice of election to terminate may be withdrawn at any time within the
aforementioned two-day period. During the three-day period commencing with
its receipt of such notice, CCBG shall have the option of adjusting the Share
Exchange Ratio to a number equal to a quotient (rounded to the nearest one-
ten-thousandth) obtained by dividing (i) the product obtained by multiplying
(x) $34 and (y) the Share Exchange Ratio (as then in effect) by (ii) the
Average Closing Price. If CCBG makes such an election within such three-day
period it shall give prompt written notice to FABC of such election and the
revised Exchange Ratio, whereupon no termination shall have occurred pursuant
to this Section 9.1(k) and this Agreement shall remain in effect in
accordance with its terms (except as the Exchange Ratio shall have been so
modified), and any references in this Agreement to "Exchange Ratio" shall
thereafter be deemed to refer to the Exchange Ratio as adjusted pursuant to
this Section 9.1(k).
If any company belonging to the Index Group or CCBG declares or effects
a stock dividend, reclassification, recapitalization, split-up, combination,
exchange of shares or similar transaction between the Starting Date and the
Determination Date, the prices for the common stock of such company or CCBG
shall be appropriately adjusted for the purposes of applying this Section
9.1(k).
9.2 EFFECT OF TERMINATION.
--------------------- In the event of the termination and
abandonment of this Agreement pursuant to Section 9.1, this Agreement shall
become void and have no effect, except that (i) the provisions of this
Section 9.2 and Article 10 and Sections 7.6(d) and 7.7 shall survive any such
termination and abandonment, and (ii) a termination pursuant to Sections
9.1(b), 9.1(c) or 9.1(f) 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.
49
9.3 ALTERNATE TRANSACTION.
--------------------- Nothing contained in this Agreement shall
be deemed to prohibit any director or officer of FABC from fulfilling his or
her fiduciary duties to FABC shareholders or from taking any action required
by Law. However, in addition to any other payments required by this
Agreement, in the event that this Agreement is terminated as a result of FABC
or the holders of at least a majority of the shares of FABC Common Stock
entering into an agreement with respect to the merger of FABC with a party
other than CCBG or the acquisition of a majority of the outstanding shares
of FABC Common Stock by any party other than CCBG, or is terminated in
anticipation of any such agreement or acquisition, then, in either event,
FABC shall immediately pay CCBG, by wire transfer, $2,320,000 in full
satisfaction of CCBG's losses and damages resulting from such termination.
FABC agrees that $2,320,000 is reasonable under the circumstances, that it
would be impossible to exactly determine CCBG's actual damages as a result of
such a termination and that CCBG's actual damages resulting from the loss of
the transaction are in excess of $2,320,000.
9.4 NON-SURVIVAL OF REPRESENTATIONS AND COVENANTS.
--------------------------------------------- The respective
representations, warranties, obligations, covenants, and agreements of the
Parties shall not survive the Effective Time except this Section 9.4 and
Articles 1, 2, 3, 4, and 10 and Sections 6.6, 7.7, 7.13, 7.14, 7.16, and 9.3;
provided, however, that the representations and warranties contained in ARTICLE
4 shall not survive the Effective Time beyond the third anniversary of the
Closing Date.
ARTICLE 10
MISCELLANEOUS
10.1 DEFINITIONS.
-----------
(a) Except as otherwise provided herein, the capitalized terms
set forth below shall have the following meanings:
"1933 ACT" shall mean the Securities Act of 1933, as amended.
"1934 ACT" shall mean the Securities Exchange Act of 1934, as amended.
"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 the
acquisition of 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.
"ADJUSTED PURCHASE PRICE" shall mean the Purchase Price reduced by the
Audit Adjustments.
"ADJUSTED PURCHASE PRICE PER SHARE" shall mean the quotient obtained by
dividing (i) the Adjusted Purchase Price by (ii) the number of shares of FABC
Common Stock issued outstanding immediately prior to the Effective Time,
excluding shares held by any FABC Entity or any CCBG Entity, in each case
other than in a fiduciary capacity or as a result of debts previously
contracted.
50
"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; (ii) any executive officer, director,
partner, employer, or direct or indirect beneficial owner of any 10% or
greater equity or voting interest of such Person; or (iii) any other Person
for which a Person described in clause (ii) acts in any such capacity.
"AGREEMENT" shall mean this Agreement and Plan of Merger, including the
Exhibits delivered pursuant hereto and incorporated herein by reference.
"ALACHUA 401(K) PLAN LIABILITIES" shall mean all Liabilities relating to
the EPCRS Application, all failures described in Section 4.15 of the FABC
Disclosure Memorandum, and any Liabilities, including, but not limited to,
excise taxes relating to the Alachua 401(k) Plan.
"ARTICLES OF MERGER" shall mean the Articles of Merger to be executed by
CCBG and filed with the Secretary of State of the State of Florida relating
to the Holding Company Merger as contemplated by Section 1.1.
"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.
"AVERAGE CLOSING PRICE" shall mean the average of the daily closing
sales prices of one share of CCBG Common Stock as reported on the Nasdaq
National Market (as reported by The Wall Street Journal or, if not reported
thereby, any other authoritative source selected by CCBG) for the twenty (20)
consecutive full trading days in which such shares are traded on the Nasdaq
National Market ending at the close of trading on the Determination Date.
"BHC ACT" shall mean the federal Bank Holding Company Act of 1956, as
amended.
"CCB" shall mean Capital City Bank, a Florida chartered commercial bank
and a CCBG Subsidiary.
"CCBG" shall mean Capital City Bank Group, Inc., a Florida corporation.
"CCBG CAPITAL STOCK" shall mean, collectively, the CCBG Common Stock,
the CCBG Preferred Stock and any other class or series of capital stock of
CCBG.
"CCBG COMMON STOCK" shall mean the common stock of CCBG, $.01 par value
per share.
"CCBG DISCLOSURE MEMORANDUM" shall mean the written information entitled
"Capital City Bank Group, Inc. Disclosure Memorandum" delivered prior to the
date of this Agreement to FABC describing in reasonable detail the matters
contained therein and, with respect to each disclosure made therein,
specifically referencing each Section of this Agreement
51
under which such disclosure is being made. Information disclosed with
respect to one Section shall not be deemed to be disclosed for purposes of
any other Section not specifically referenced with respect thereto.
"CCBG ENTITIES" shall mean, collectively, CCBG and all CCBG
Subsidiaries.
"CCBG FINANCIAL STATEMENTS" shall mean (i) the consolidated statements
of condition (including related notes and schedules, if any) of CCBG as of
December 31, 2003 and 2002, and the related statements of income, changes in
shareholders' equity, and cash flows (including related notes and schedules,
if any) for each of the three fiscal years ended December 31, 2003, 2002 and
2001, as filed by CCBG in SEC Documents, and (ii) the consolidated statements
of condition and balance sheets of CCBG (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
December 31, 2003.
"CCBG MATERIAL ADVERSE EFFECT" shall mean an event, change or occurrence
which, individually or together with any other event, change or occurrence,
has a material adverse impact on (i) the financial position, business, or
results of operations of CCBG and its Subsidiaries, taken as a whole, or (ii)
the ability of CCBG to perform its obligations under this Agreement or to
consummate the Mergers or the other transactions contemplated by this
Agreement, including without limitation the tax-free reorganization status of
the Mergers; provided that "Material Adverse Effect" shall not be deemed to
include the impact of (a) changes in banking and similar Laws of general
applicability or interpretations thereof by courts or governmental
authorities, (b) changes in generally accepted accounting principles or
regulatory accounting principles generally applicable to banks and their
holding companies, (c) actions and omissions of CCBG (or any of its
Subsidiaries) taken with the prior informed written Consent of FABC in
contemplation of the transactions contemplated hereby, and (d) the direct
effects of compliance with this Agreement on the operating performance of
CCBG, including expenses incurred by CCBG in consummating the transactions
contemplated by this Agreement.
"CCBG PREFERRED STOCK" shall mean the preferred stock of CCBG, $.01 par
value per share.
"CCBG STOCK PLANS" shall mean the existing stock-based plans of CCBG
designated as follows: (i) Associate Incentive Plan, (ii) Associate Stock
Purchase Plan, (iii) Director Stock Purchase Plan and (iv) Dividend
Reinvestment Plan.
"CCBG SUBSIDIARIES" shall mean the Subsidiaries of CCBG, which shall
include the CCBG Subsidiaries described in Section 5.4 and any corporation,
bank, savings association, or other organization acquired as a Subsidiary of
CCBG in the future and held as a Subsidiary by CCBG at the Effective Time.
"CLOSING DATE" shall mean the date on which the Closing occurs.
"CODE" shall mean the Internal Revenue Code of 1986. All citations to
the Code, or the Treasury Regulations promulgated thereunder, shall include
all amendments thereto and any
52
substitute and successor provisions. All section references to the Code (or
Treasury Regulations) shall include all similar provisions under the
applicable state, local or foreign tax law.
"CONFIDENTIALITY AGREEMENT" shall mean that certain Confidentiality
Agreement, dated July 26, 2004, between SunTrust Xxxxxxxx Xxxxxxxx, on behalf
of FABC and CCBG.
"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, default under,
contravention of, or conflict with, any Contract, Law, 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, default under,
contravention of, or conflict with, any Contract, Law, 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 of any Person to exercise any
remedy or obtain any relief under, terminate or revoke, suspend, cancel, or
modify or change the current terms of, or renegotiate, or to accelerate the
maturity or performance of, or to increase or impose any Liability under, any
Contract, Law, Order, or Permit.
"DEPOSIT ACCOUNTS" means the deposit accounts held at FABC, the balances
which are included in the Deposits or would be so included if the Deposit
Account had a positive balance.
"DEPOSITS" means all deposits (as defined in 12 U.S.C. Section 1813(I))
held by FABC as of the Close of Business on the Closing Date.
"DETERMINATION DATE" shall mean the fifth full trading day prior to the
day on which the Effective Time occurs.
"ENVIRONMENTAL LAWS" shall mean any and all Laws (which were formerly
effective, are effective currently, or are effective after the Effective
Time, including any amendments thereto) relating in any way to protection or
regulation of public health, human health, or the environment, including, but
not limited to, ambient air, indoor air, surface water, ground water, other
waters, land surface, subsurface strata, or occupational safety and health,
including, but not limited to, those Laws which are administered,
interpreted, or enforced by the United States Environmental Protection Agency
or state or local governmental agencies or authorities with jurisdiction
over, and including common law in respect of, protection or regulation of
public health, human health, or the environment, also including, but not
limited to, the Comprehensive Environmental Response Compensation and
Liability Act, as amended, 42 U.S.C. Section 9601 et seq. ("CERCLA"), and
the Resource Conservation and Recovery Act, as amended, 42 U.S.C. Section
6901 et seq. ("RCRA"), and their state equivalents or analogs, and
including, but limited to, all other Laws relating to the emission,
discharge, disposal, spill,
53
release, or threatened release of any Hazardous Material, or otherwise
relating to the manufacture, processing, distribution, use, treatment,
storage, disposal, transport, or handling of any Hazardous Material.
"EQUITY RIGHTS" shall mean all arrangements, calls, commitments,
Contracts, options, rights to subscribe to, scrip, understandings, warrants,
or other binding obligations of any character whatsoever relating to, or
securities or rights convertible into or exchangeable for, shares of the
capital stock of a Person or by which a Person is or may be bound to issue
additional shares of its capital stock or other Equity Rights.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended.
"EXHIBITS" 1 through 9, 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.
"FABC" shall mean First Alachua Banking Corporation, a Florida
corporation.
"FABC AUDITED FINANCIAL STATEMENTS" shall mean the consolidated
statement of condition (including related notes and schedules, if any) of
FABC as of September 30, 2004, and the related statements of income, changes
in shareholders' equity, and cash flows (including related notes and
schedules, if any) for the nine-month period ended September 30, 2004 that
shall be audited pursuant to Section 7.23.
"FABC CAPITAL STOCK" shall mean, collectively, the FABC Common Stock and
any other class or series of capital stock of FABC.
"FABC COMMON STOCK" shall mean (i) Class A Common Stock of FABC, $0.10
par value per share and (ii) Class B Common Stock of FABC, $0.10 par value
per share.
"FABC DISCLOSURE MEMORANDUM" shall mean the written information entitled
"First Alachua Banking Corporation Disclosure Memorandum" delivered prior to
the date of this Agreement to CCBG describing in reasonable detail the
matters contained therein and, with respect to each disclosure made therein,
specifically referencing each Section of this Agreement under which such
disclosure is being made. Information disclosed with respect to one Section
shall not be deemed to be disclosed for purposes of any other Section not
specifically referenced with respect thereto.
"FABC ENTITIES" shall mean, collectively, FABC and all FABC
Subsidiaries.
"FABC FINANCIAL STATEMENTS" shall mean (i) for the years ended December
31, 2003, 2002 and 2001, FABC's balance sheets, income statements and
statements of changes in stockholders' equity (including related notes and
schedules, if any), (ii) for the years ended December 31, 2003, 2002 and
2001, the balance sheet, income statement, reconciliation of equity,
reconciliation of reserve for possible loan losses, and Schedule RC-C-loans
and lease financing receivables (including related notes and schedules, if
any), with respect to First
54
National, all on an unaudited basis, and (iii) the balance sheets, income
statements and statements of changes in stockholders' equity (including
related notes and schedules, if any) for FABC on a consolidated basis, and
for First National, for periods ended subsequent to December 31, 2003.
"FABC MATERIAL ADVERSE EFFECT" shall mean an event, change or occurrence
which, individually or together with any other event, change or occurrence,
has a material adverse impact on (i) the financial position, business, or
results of operations of FABC and its Subsidiaries, taken as a whole, or (ii)
the ability of FABC to perform its obligations under this Agreement or to
consummate the Mergers or the other transactions contemplated by this
Agreement, provided that "Material Adverse Effect" shall not be deemed to
include the impact of (a) changes in banking and similar Laws of general
applicability or interpretations thereof by courts or governmental
authorities, (b) changes in generally accepted accounting principles or
regulatory accounting principles generally applicable to banks and their
holding companies, (c) actions and omissions of FABC (or any of its
Subsidiaries) taken with the prior informed written Consent of CCBG in
contemplation of the transactions contemplated hereby, and (d) the direct
effects of compliance with this Agreement on the operating performance of
FABC, including expenses incurred by FABC in consummating the transactions
contemplated by this Agreement.
"FABC STOCK PLANS" shall mean all stock-based plans of FABC.
"FABC SUBSIDIARIES" shall mean the Subsidiaries of FABC, which shall
include the FABC Subsidiaries described in Section 4.4 and any corporation,
bank, savings association, or other organization acquired as a Subsidiary of
FABC in the future and held as a Subsidiary by FABC at the Effective Time.
"FBCA" shall mean the Florida Business Corporation Act, as amended.
"FIRST NATIONAL" shall mean the First National Bank of Alachua, a
national banking association and an FABC Subsidiary.
"FIRST NATIONAL CAPITAL STOCK" shall mean, collectively, the First
National Common Stock and any other class or series of capital stock of First
National.
"FIRST NATIONAL COMMON STOCK" shall mean the common stock of First
National, $5.00 par value per share.
"GAAP" shall mean generally accepted accounting principles as in effect
in the United States of America at the time of the preparation of the subject
financial statement, consistently applied during the periods involved.
"HAZARDOUS MATERIAL" shall mean (i) any hazardous substance, hazardous
material, hazardous waste, regulated substance, or toxic substance, as those
terms have been, are currently, or after the Effective Time are, regulated,
or defined, by any applicable Environmental Laws, and (ii) any other
chemical, pollutant, constituent, contaminant, substance, material, waste,
petroleum, petroleum product, or oil, or similar or related items, that have
been, are currently, or after the Effective Time are, regulated, or defined,
by any applicable Environmental Laws. The term "HAZARDOUS MATERIAL" shall
specifically include (but is not limited to)
55
asbestos or lead-based paint requiring abatement, removal, or encapsulation,
or otherwise regulated, pursuant to the requirements of governmental agencies
or authorities.
"HSR ACT" shall mean Section 7A of the Xxxxxxx Act, as added by Title II
of the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended, and
the rules and regulations promulgated thereunder.
"INDEX GROUP" means the group of the 22 bank holding companies listed
below, the common stock of all of which shall be publicly traded and as to
which there shall not have been, since the Starting Date and before the
Determination Date, an announcement of a proposal for such company to be
acquired or for such company to acquire another company or companies in
transactions with a value exceeding 25% of the acquirer's market
capitalization as of the Starting Date. In the event that the common stock
of any such company ceases to be publicly traded or any such announcement is
made with respect to any such company, such company will be removed from the
Index Group, and the weights (which have been determined based on the number
of outstanding shares of common stock) redistributed proportionately for
purposes of determining the Index Price. The 22 bank holding companies are
as follows:
Bank Holding Company Ticker Weighting
-------------------- ------
Sterling Bancshares, Inc. SBIB 11.31
United Community Banks, Inc. UCBI 9.13
First Charter Corporation FCTR 7.53
Texas Capital Bancshares, Inc. TCBI 6.38
Prosperity Bancshares, Inc. PRSP 5.64
Main Street Banks, Inc. MSBK 5.43
WesBanco, Inc. WSBC 5.24
Alabama National BanCorporation ALAB 4.28
City Holding Company CHCO 4.17
Bank of the Ozarks, Inc. OZRK 4.14
First Financial Bankshares, Inc. FFIN 3.90
Seacoast Banking Corporation of Florida SBCF 3.89
Xxxxxxx First National Corporation SFNC 3.68
Xxxxx Spring Bancorp, Inc. SASR 3.65
First Bancorp FBNC 3.54
Community Trust Bancorp, Inc. CTBI 3.39
GB&T Bancshares, Inc. GBTB 2.89
First Community Bancshares, Inc. FCBC 2.83
Virginia Commerce Bancorp, Inc. VCBI 2.78
Peoples Holding Company PHC 2.27
Union Bankshares Corporation UBSH 2.19
IberiaBank Corporation IBKC 1.73
"INDEX PRICE" on a given date means the weighted average (weighted in
accordance with the factors listed under the definition of "Index Group") of
the closing prices of the companies comprising the Index Group.
56
"INTELLECTUAL PROPERTY" shall mean: (a) all inventions (whether
patentable or un-patentable and whether or not reduced to practice), all
rights to all improvements thereto, and all patents, patent applications, and
patent disclosures, together with all re-issuances, continuations,
continuations-in-part, revisions, extensions, and reexaminations thereof; (b)
all trademarks, service marks, trade dress, logos, trade names, corporate
names and domain names together with all translations, adaptations,
derivations, and combinations thereof and including all goodwill associated
therewith, and all applications, registrations, and renewals in connection
therewith; (c) all copyrightable works (including, but not limited to,
training materials and instruction manuals), all copyrights, and all
applications, registrations, and renewals in connection therewith; (d) all
trade secrets and confidential business information (including ideas, know-
how, formulae, compositions, techniques, technical data, designs, drawings,
specifications, customer and supplier lists, pricing and cost information,
business methods and business and marketing plans and proposals); (e) all
computer software in source or object code (including data and related
documentation); (f) all other proprietary rights relative to any of the
foregoing; (g) all copies and tangible embodiments of the forgoing (in
whatever form or medium); and (h) all licenses to any of the foregoing.
"KNOWLEDGE" as used with respect to a Person (including references to
such Person being aware of a particular matter) shall mean those facts that
are known or should reasonably have been known after due inquiry by the
chairman, president, chief financial officer, chief accounting officer, chief
operating officer, chief credit officer, general counsel, any assistant or
deputy general counsel, or any senior or executive vice president of such
Person and the knowledge of any such persons obtained or which would have
been obtained from a reasonable investigation.
"LAW" shall mean any code, law (including common law), ordinance,
regulation, reporting or licensing requirement, rule, or statute applicable
to a Person or its Assets, Liabilities, or business, including those
promulgated, interpreted or enforced by any Regulatory Authority.
"LIABILITY" shall mean any direct or indirect, primary or secondary,
liability, indebtedness, obligation, penalty, cost or expense (including
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, (iii) Liens which do not materially
impair the use of or title to the Assets subject to such Lien, and which are
disclosed in Section 10.1 of the FABC Disclosure Memorandum or the CCBG
Disclosure Memorandum, as applicable.
57
"LITIGATION" shall mean any action, arbitration, cause of action, claim,
complaint, criminal prosecution, governmental or other examination or
investigation, hearing, administrative or other proceeding, including without
limitation, any actual, pending, or threatened condemnation, relating to or
affecting a Party, its business, its Assets (including 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.
"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.
"NASD" shall mean the National Association of Securities Dealers, Inc.
"NASDAQ NATIONAL MARKET" shall mean the National Market System of the
National Association of Securities Dealers Automated Quotations System.
"OPERATING PROPERTY" shall mean any property owned, leased, managed or
operated by the Party in question or by any of its Subsidiaries and, where
required by the context, includes the owner or operator of such property, but
only with respect to such property.
"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
such Party or Subsidiary holds a security interest (including an interest in
a fiduciary capacity) 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 FABC and First National, collectively, or
CCBG, and "PARTIES" shall mean FABC, First National, and CCBG.
"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 securities, Assets,
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.
"PROXY STATEMENT" shall mean the proxy statement used by FABC to solicit
the approval of its shareholders of the transactions contemplated by this
Agreement, which shall include the prospectus of CCBG relating to the
issuance of the CCBG Common Stock to holders of FABC Common Stock.
58
"REGISTRATION STATEMENT" shall mean the Registration Statement on Form
S-4, or other appropriate form, including any pre-effective or post-effective
amendments or supplements thereto, filed with the SEC by CCBG under the 1933
Act with respect to the shares of CCBG Common Stock to be issued to the
shareholders of FABC in connection with the transactions contemplated by this
Agreement.
"REGULATORY AUTHORITIES" shall mean, collectively, the SEC, the NASD,
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, the
Florida Department of Financial Services and all other federal, state,
county, local or other governmental or regulatory agencies, authorities
(including self- regulatory authorities), instrumentalities, commissions,
boards or bodies having jurisdiction over the Parties and their respective
Subsidiaries.
"REPRESENTATIVE" shall mean any investment banker, financial advisor,
attorney, accountant, consultant, or other representative engaged by a
Person.
"RETURNS" shall mean all returns, declarations, reports, statements and
other documents required to be filed in respect of Taxes, and any claims for
refunds of Taxes, including any amendments or supplements to any of the
foregoing.
"SEC DOCUMENTS" shall mean all forms, proxy statements, registration
statements, reports, schedules, and other documents 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, and the rules and
regulations of any Regulatory Authority promulgated thereunder.
"SHAREHOLDERS' MEETING" shall mean the meeting of the shareholders of
FABC to be held pursuant to Section 7.1, including any adjournment or
adjournments thereof.
"SIGNIFICANT SUBSIDIARY" shall mean any present or future consolidated
Subsidiary of the Party in question, the assets of which constitute ten
percent (10%) or more of the consolidated assets of such Party as reflected
on such Party's consolidated statement of condition prepared in accordance
with GAAP.
"STARTING DATE" shall mean the full trading day, immediately prior to
the day on which the Parties execute this Agreement, on which the common
stock of all of the bank holding companies comprising the Index Group are
traded.
"SUBSIDIARIES" shall mean all those corporations, associations, or other
business entities of which the entity in question either (i) owns or controls
50% or more of the outstanding equity securities either directly or through
an unbroken chain of entities as to each of which 50% or more of the
outstanding equity securities is owned directly or indirectly by its parent
(provided, there shall not be included any such entity the equity securities
of which are owned or controlled in a fiduciary capacity), (ii) in the case
of partnerships, serves as a general partner,
29
(iii) in the case of a limited liability company, serves as a managing
member, or (iv) otherwise has the ability to elect a majority of the
directors, trustees or managing members thereof.
"SURVIVING CORPORATION" shall mean CCBG as the surviving corporation
resulting from the Holding Company Merger.
"TAX" or "TAXES" shall mean all federal, state, local, foreign and other
taxes, assessments or other governmental charges, including, without
limitation, (i) income, estimated income, business, occupation, franchise,
property, sales, use, excise, employment, unemployment, payroll, social
security, ad valorem, transfer, gains, profits, capital stock, license, gross
receipts, stamp, real estate, severance and withholding taxes, and any fee
assessment or other charge in the nature or in lieu of any tax and including
any transferee or secondary liability in respect of any tax (imposed by Law,
agreement or otherwise) and (ii) interest, penalties and additions in
connection therewith, in each case, for which FABC is or may be liable
(including as a result of the application of Treas. Reg. Section 1.1502-6).
(b) The terms set forth below shall have the meanings ascribed
thereto in the referenced sections:
Adverse Finding Section 7.6(c)
Alachua 401(k) Plan Section 7.14(c)
Allowance Section 4.9
Audit Adjustments Section 2.1(d)
Auditor Section 7.23
Bank Merger Preamble
Bank Plan Section 1.2
Certificates Section 3.1
CCBG SEC Reports Section 5.5(a)
CCBG Stock Multiple Section 2.1(c)
Closing Section 1.3
COBRA Section 4.15(k)
Executive Employment Agreement Section 7.14
Effective Time Section 1.4
Environmental Survey Section 7.20
EPCRS Application Section 7.15
ERISA Affiliate Section 4.15(d)
Exchange Agent Section 3.1
Executive Indexed Salary Continuation Plan Section 7.14(c)
FABC Benefit Plans Section 4.15(a)
FABC Contracts Section 4.16
FABC ERISA Plan Section 4.15(a)
FABC Pension Plan Section 4.15(a)
HIPAA Section 4.15(k)
Holding Company Merger Preamble
Indemnified Party Section 7.16
IRS Section 4.15(a)
Purchase Price Section 2.1(b)
60
Material Defect Section 7.20
Material Defect Notice Section 7.20
Mergers Preamble
Notices Section 4.12(d)
Participants Section 4.15(a)
PBGC Section 4.15(e)
Property Examination Section 7.20
Real Property Section 4.10(f)
Share Exchange Ratio Section 2.1(c)
Takeover Laws Section 4.21
Tax Opinion Section 8.1(g)
(c) Any singular term in this Agreement shall be deemed to
include the plural, and any plural term the singular. Whenever the words
"include," "includes" or "including" are used in this Agreement, they shall
be deemed followed by the words "without limitation."
10.2 EXPENSES.
-------- Except as otherwise provided in this Section 10.2, 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, except that CCBG shall bear and
pay the filing fees payable in connection with the Registration Statement and
the Proxy Statement and the printing costs incurred in connection with the
printing of the Registration Statement and the Proxy Statement shall be borne
equally by CCBG and FABC.
10.3 BROKERS AND FINDERS.
------------------- Except for SunTrust Xxxxxxxx Xxxxxxxx as to
FABC and First National and except for XxXxxxxxx, Xxxx & Xxxxxx, Inc. as to
CCBG, each of the Parties represents and warrants 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 FABC or by CCBG,
each of FABC and CCBG, as the case may be, agrees to indemnify and hold the
other Party harmless of and from any Liability in respect of any such claim.
10.4 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
transactions contemplated hereunder and supersedes all prior arrangements or
understandings with respect thereto, written or oral (except, as to Section
7.6(b), for the Confidentiality Agreement). 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, other than as provided in
Sections 7.14 and 7.16.
10.5 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 each of the
61
Parties, whether before or after shareholder approval of this Agreement has
been obtained; provided, that after any such approval by the holders of FABC
Common Stock, there shall be made no amendment that reduces or modifies in
any Material respect the consideration to be received by holders of FABC
Common Stock; and further provided, that the provisions of this Agreement
relating to the manner or basis in which shares of FABC Common Stock will be
exchanged for shares of CCBG Common Stock shall not be amended after the
Shareholders' Meeting in a manner adverse to the holders of CCBG Common Stock
without any requisite approval of the holders of the issued and outstanding
shares of CCBG Common Stock entitled to vote thereon.
10.6 WAIVERS.
-------
(a) Prior to or at the Effective Time, CCBG, 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 FABC, to waive or extend the time for the compliance or
fulfillment by FABC of any and all of its obligations under this Agreement,
and to waive any or all of the conditions precedent to the obligations of
CCBG 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 CCBG.
(b) Prior to or at the Effective Time, FABC, 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 CCBG, to waive or extend the time for the compliance or
fulfillment by CCBG of any and all of its obligations under this Agreement,
and to waive any or all of the conditions precedent to the obligations of
FABC 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 FABC.
(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.
10.7 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.
10.8 NOTICES.
------- All notices, requests, consents and other communications
required or permitted under this Agreement shall be in writing and shall be
(as elected by the person giving such notice) hand delivered by messenger or
courier service, transmitted by fax, or mailed by registered or certified
mail (postage prepaid), return receipt requested, addressed to:
62
FABC: First Alachua Banking Corporation
00000 X.X. 000xx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
X.X. Xxx 000
Xxxxxxx, Xxxxxxx 00000
Facsimile Number: (000) 000-0000
Attention: Xxxxx X. Xxxxx or Xxxxxxxx Xxxxxxxx
First National: First National Bank of Alachua
00000 X.X. 000xx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
X.X. Xxx 000
Xxxxxxx, Xxxxxxx 00000
Facsimile Number: (000) 000-0000
Attention: Xxxxx X. Xxxxx or Xxxxxxxx Xxxxxxxx
Copy to FABC and
First National Counsel: Xxxxx, Xxxxxxxx & Xxxxxxx, LLP
0000 Xxxxxxxxx Xxxxxx, X.X., Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000-0000
Facsimile Number: (000) 000-0000
Attn: Xxxxxx X. Xxxxxxxx, Esq.
CCBG: Capital City Bank Group, Inc.
000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxx 00000
Facsimile Number: (000) 000-0000
Attention: X. Xxxxxxxxx Xxxxx
Copy to Counsel: Gunster, Yoakley & Xxxxxxx, P.A.
000 Xxxx Xxxxxxx Xxxxxxxxx, Xxxxx 0000
Xxxx Xxxxxxxxxx, Xxxxxxx 00000
Facsimile Number: (000) 000-0000
Attention: Xxxxxxx X. Xxxxx, Esq.
or to such other address as any party may designate by notice complying with
the terms of this Section. Each such notice shall be deemed delivered (a) on
the date delivered, if by messenger or courier service; (b) on the date of
the confirmation of receipt, if by fax; and (c) either upon the date of
receipt or refusal of delivery, if mailed.
10.9 GOVERNING LAW.
------------- This Agreement shall be governed by and construed
in accordance with the Laws of the State of Florida, without regard to any
applicable conflicts of Laws.
10.10 COUNTERPARTS.
------------ This Agreement may be executed in two 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.
63
10.11 CAPTIONS; ARTICLES AND SECTIONS.
------------------------------- The captions contained in this
Agreement are for reference purposes only and are not part of this Agreement.
Unless otherwise indicated, all references to particular Articles or Sections
shall mean and refer to the referenced Articles and Sections of this
Agreement.
10.12 INTERPRETATIONS.
--------------- Neither this Agreement nor any uncertainty or
ambiguity herein shall be construed or resolved against any party, whether
under any rule of construction or otherwise. No party to this Agreement
shall be considered the draftsman. The parties acknowledge and agree that
this Agreement has been reviewed, negotiated, and accepted by all parties and
their attorneys and shall be construed and interpreted according to the
ordinary meaning of the words used so as fairly to accomplish the purposes
and intentions of all parties hereto.
10.13 ENFORCEMENT OF AGREEMENT.
------------------------ The Parties hereto agree that
irreparable damage would occur in the event that any of the provisions of
this Agreement were not performed in accordance with its specific terms or
were otherwise breached. It is accordingly agreed that the Parties shall be
entitled to an injunction or injunctions to prevent breaches of 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.
10.14 ENFORCEMENT COSTS.
----------------- If any civil action, arbitration or other
legal proceeding is brought for the enforcement of this Agreement, or because
of an alleged dispute, breach, Default or misrepresentation in connection
with any provision of this Agreement, the successful or prevailing party or
parties shall be entitled to recover reasonable attorneys' fees, court costs,
sales and use taxes and all expenses even if not taxable as court costs
(including, without limitation, all such fees, taxes, costs and expenses
incident to arbitration, appellate, bankruptcy and post-judgment
proceedings), incurred in that proceeding, in addition to any other relief to
which such party or parties may be entitled. Attorneys' fees shall include,
without limitation, paralegal fees, investigative fees, administrative costs,
sales and use taxes and all other charges billed by the attorney to the
prevailing party (including any fees and costs associated with collecting
such amounts).
10.15 SEVERABILITY.
------------ Any term or provision of this Agreement which is
invalid or unenforceable in any jurisdiction shall, as to that jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction. If any provision of
this Agreement is so broad as to be unenforceable, the provision shall be
interpreted to be only so broad as is enforceable.
[SIGNATURES APPEAR ON FOLLOWING PAGE]
64
IN WITNESS WHEREOF, each of the Parties has caused this Agreement to be
executed on its behalf by its duly authorized officers as of the day and year
first above written.
CAPITAL CITY BANK GROUP, INC.
By: /s/ X. Xxxxxxxxx Xxxxx
-----------------------------
X. Xxxxxxxxx Xxxxx
Executive Vice President and Chief
Financial Officer
FIRST ALACHUA BANKING CORPORATION
By: /s/ Xxxxx X. Xxxxx
-----------------------------
Xxxxx X. Xxxxx,
as Chairman, President and
Chief Executive Officer
FIRST NATIONAL BANK OF ALACHUA
By: /s/ Xxxxx X. Xxxxx
-----------------------------
Xxxxx X. Xxxxx,
as Chairman, President and
Chief Executive Officer
65
LIST OF EXHIBITS
Exhibit Number Description
1. Bank Plan of Merger (Section 1.2).
2. Letter Agreement (Sections 6.6(e), 7.15(e), 7.15(f),
and 8.2(k))
3. Form of Affiliate Agreement (Sections 7.13 and 8.2(e)).
4. Executive Employment Agreement (Sections 7.14(b) and
8.2(j))
5. Form of Director and Voting Agreement (Sections 7.18
and 8.2(g)).
6. Form of Non-Competition Agreement (Section 7.22)
7. Matters as to which Xxxxx, Xxxxxxxx & Xxxxxxx, LLP will
opine (Section 8.2(d)).
8. Form of Claims Letter (Section 8.2(h)).
9. Matters as to which Gunster, Yoakley & Xxxxxxx, P.A.
will opine (Section 8.3(d)).
39
TABLE OF CONTENTS
Page
39
FTL 264323.5
39
FTL 264323.7A
Exhibit 1
FTL 265230.9
9-2
FTL 264323.7A
Exhibit 9
9-1
FTL 264323.7A
