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EXHIBIT 10(F)
AMENDED AND RESTATED
AGREEMENT AND PLAN OF MERGER
BY AND BETWEEN
THE COLONIAL BANCGROUP, INC.,
AND
SOUTHERN BANKING CORPORATION
DATED AS OF
FEBRUARY 15, 1996
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TABLE OF CONTENTS
CAPTION PAGE
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ARTICLE 1 -- NAME
1.1 Name . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE 2 -- MERGER -- TERMS AND CONDITIONS
2.1 Applicable Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2.2 Corporate Existence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2.3 Articles of Incorporation and Bylaws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.4 Resulting Corporation's Officers and Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.5 Shareholder Approval . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.6 Further Acts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.7 Effective Date and Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
ARTICLE 3 -- CONVERSION OF SOUTHERN STOCK
3.1 Conversion of Southern Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
3.2 Surrender of Southern Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
3.3 Fractional Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
3.4 Adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
3.5 BancGroup Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.6 Dissenting Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
ARTICLE 4 -- REPRESENTATIONS, WARRANTIES AND COVENANTS OF BANCGROUP
4.1 Organization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
4.2 Capital Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
4.3 Financial Statements; Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
4.4 No Conflict with Other Instrument . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
4.5 Absence of Material Adverse Change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
4.6 Approval of Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
4.7 Tax Treatment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
4.8 Title and Related Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
4.9 Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
4.10 Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
4.11 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
4.12 Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
4.13 Registration Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
4.14 SEC Filings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
4.15 Form S-4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
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4.16 Brokers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
4.17 Government Authorization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
4.18 Absence of Regulatory Communications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
4.19 Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
ARTICLE 5 -- REPRESENTATIONS, WARRANTIES AND COVENANTS OF SOUTHERN
5.1 Organization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
5.2 Capital Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
5.3 Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
5.4 Financial Statements; Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
5.5 Absence of Certain Changes or Events . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
5.6 Title and Related Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
5.7 Commitments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
5.8 Charter and Bylaws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
5.9 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
5.10 Material Contract Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
5.11 No Conflict with Other Instrument . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
5.12 Governmental Authorization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
5.13 Absence of Regulatory Communications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
5.14 Absence of Material Adverse Change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
5.15 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
5.16 Pension and Employee Benefit Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
5.17 Buy-Sell Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
5.18 Brokers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
5.19 Approval of Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
5.20 Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
5.21 Registration Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
5.22 Loans; Adequacy of Allowance for Loan Losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
5.23 Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
5.24 Transfer of Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
5.25 Collective Bargaining . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
5.26 Labor Disputes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
5.27 Derivative Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
ARTICLE 6 -- ADDITIONAL COVENANTS
6.1 Additional Covenants of BancGroup . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
6.2 Additional Covenants of Southern . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
ARTICLE 7 -- MUTUAL COVENANTS AND AGREEMENTS
7.1 Best Efforts; Cooperation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
7.2 Press Release . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
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7.3 Mutual Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
7.4 Access to Properties and Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
ARTICLE 8 -- CONDITIONS TO OBLIGATIONS OF ALL PARTIES
8.1 Approval by Shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
8.2 Regulatory Authority Approval . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
8.3 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
8.4 Registration Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
8.5 Tax Opinion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
8.6 Market Value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
ARTICLE 9 -- CONDITIONS TO OBLIGATIONS OF SOUTHERN
9.1 Representations, Warranties and Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
9.2 Adverse Changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
9.3 Closing Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
9.4 Opinion of Counsel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
9.5 Comfort Letter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
9.6 Fairness Opinion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
9.7 NYSE Listing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
9.8 Other Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
ARTICLE 10 -- CONDITIONS TO OBLIGATIONS OF BANCGROUP
10.1 Representations, Warranties and Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
10.2 Adverse Changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
10.3 Closing Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
10.4 Opinion of Counsel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
10.5 Controlling Shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
10.6 Other Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
10.7 Dissenters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
10.8 Pooling of Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
10.9 Material Events . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
ARTICLE 11 -- TERMINATION OF REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
ARTICLE 12 -- NOTICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
ARTICLE 13 -- AMENDMENT OR TERMINATION
13.1 Amendment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
13.2 Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
13.3 Damages . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
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ARTICLE 14 -- DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
ARTICLE 15 -- MISCELLANEOUS
15.1 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
15.2 Benefit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
15.3 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
15.4 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
15.5 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
15.6 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
15.7 Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
15.8 Return of Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
15.9 Equitable Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
15.10 Attorneys' Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
15.11 No Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
15.12 Remedies Cumulative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
15.13 Entire Contract . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
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AMENDED AND RESTATED
AGREEMENT AND PLAN OF MERGER
THIS AMENDED AND RESTATED AGREEMENT AND PLAN OF MERGER is made and
entered into as of this the 15th day of February 1996, by and between SOUTHERN
BANKING CORPORATION ("Southern"), a Florida corporation, and THE COLONIAL
BANCGROUP, INC. ("BancGroup"), a Delaware corporation. This Agreement replaces
and supersedes in its entirety the Agreement and Plan of Merger dated as of
January 25, 1996 by and between BancGroup and Southern (the "original
agreement"), except that whenever a section of this Agreement refers to a
Schedule or Exhibit, the Schedule or Exhibit provided with the original
agreement in response to the comparable section of the original agreement shall
be deemed to have also been provided pursuant to this Agreement.
WITNESSETH
WHEREAS, Southern operates as a bank holding company for its wholly
owned subsidiary, Southern Bank of Central Florida (the "Bank"), with its
principal office in Orlando, Florida; and
WHEREAS, BancGroup is a bank holding company with subsidiary banks in
Alabama, Georgia and Tennessee; and
WHEREAS, Southern wishes to merge with BancGroup; and
WHEREAS, it is the intention of BancGroup and Southern that such
merger shall qualify for federal income tax purposes as a "reorganization"
within the meaning of section 368(a) of the Code, as defined herein;
NOW, THEREFORE, in consideration of the mutual covenants contained
herein, the Parties hereto agree as follows:
ARTICLE 1
NAME
1.1 NAME. The name of the corporation resulting from the Merger
shall be "The Colonial BancGroup, Inc."
ARTICLE 2
MERGER -- TERMS AND CONDITIONS
2.1 APPLICABLE LAW. On the Effective Date, Southern shall be
merged with and into BancGroup (herein referred to as the "Resulting
Corporation" whenever reference is made to it as of the time of merger or
thereafter). The Merger shall be undertaken pursuant to the provisions of and
with the effect provided in the DGCL and the FBCA. The offices and facilities
of Southern and of BancGroup shall become the offices and facilities of the
Resulting Corporation.
2.2 CORPORATE EXISTENCE. On the Effective Date, the corporate
existence of Southern and of BancGroup shall, as provided in the DGCL and the
FBCA, be merged into and continued in the Resulting Corporation, and the
Resulting Corporation shall be deemed to be the same corporation as Southern
and BancGroup. All rights, franchises and interests
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of Southern and BancGroup, respectively, in and to every type of property
(real, personal and mixed) and choses in action shall be transferred to and
vested in the Resulting Corporation by virtue of the Merger without any deed or
other transfer. The Resulting Corporation on the Effective Date, and without
any order or other action on the part of any court or otherwise, shall hold and
enjoy all rights of property, franchises and interests, including appointments,
designations and nominations and all other rights and interests as trustee,
executor, administrator, transfer agent and registrar of stocks and bonds,
guardian of estates, assignee, and receiver and in every other fiduciary
capacity and in every agency, and capacity, in the same manner and to the same
extent as such rights, franchises and interests were held or enjoyed by
Southern and BancGroup, respectively, on the Effective Date.
2.3 ARTICLES OF INCORPORATION AND BYLAWS. On the Effective Date,
the certificate of incorporation and bylaws of the Resulting Corporation shall
be the restated certificate of incorporation and bylaws of BancGroup as they
exist immediately before the Effective Date.
2.4 RESULTING CORPORATION'S OFFICERS AND BOARD. The board of
directors and the officers of the Resulting Corporation on the Effective Date
shall consist of those persons serving in such capacities of BancGroup as of
the Effective Date.
2.5 SHAREHOLDER APPROVAL. This Agreement shall be submitted to
the shareholders of Southern at the Stockholders Meeting to be held as promptly
as practicable consistent with the satisfaction of the conditions set forth in
this Agreement. Upon approval by the requisite vote of the shareholders of
Southern as required by applicable Law, this Agreement shall become effective
as soon as practicable thereafter in the manner provided in section 2.7 hereof.
2.6 FURTHER ACTS. If, at any time after the Effective Date, the
Resulting Corporation shall consider or be advised that any further assignments
or assurances in law or any other acts are necessary or desirable (i) to vest,
perfect, confirm or record, in the Resulting Corporation, title to and
possession of any property or right of Southern or BancGroup, acquired as a
result of the Merger, or (ii) otherwise to carry out the purposes of this
Agreement, Southern or BancGroup and its officers and directors shall execute
and deliver all such proper deeds, assignments and assurances in law and do all
acts necessary or proper to vest, perfect or confirm title to, and possession
of, such property or rights in the Resulting Corporation and otherwise to carry
out the purposes of this Agreement; and the proper officers and directors of
the Resulting Corporation are fully authorized in the name of Southern or
BancGroup, or otherwise, to take any and all such action.
2.7 EFFECTIVE DATE AND CLOSING. Subject to the terms of all
requirements of Law and the conditions specified in this Agreement, the Merger
shall become effective on the date specified in the Certificate of Merger to be
issued by the Secretary of State of the State of Delaware (such time being
herein called the "Effective Date"). The Closing shall take place at the
offices of BancGroup, in Montgomery, Alabama, at 11:00 a.m. on the date that
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the Effective Date occurs or at such other place and time that the Parties may
mutually agree.
ARTICLE 3
CONVERSION OF SOUTHERN STOCK
3.1 CONVERSION OF SOUTHERN STOCK. (a) On the Effective Date, and
subject to sections 3.3 and 3.6, each share of common stock of Southern
outstanding and held by Southern's shareholders (the "Southern Stock"), shall
be converted into .3919 of a share of BancGroup Common Stock (i.e., the
"Exchange Ratio"). Shares of Southern common stock that may be issued pursuant
to the exercise of options under Southern's stock option plans (the "Southern
Options") shall be converted as provided in section 3.1(b).
(b)(i) Southern shall cancel and exchange all Southern Options
outstanding at the Effective Date as to which, at least five days prior to the
Effective Date, the holders thereof have consented in writing to the
cancellation and conversion thereof. In exchange therefor, Southern shall
distribute shares of BancGroup common stock as determined below. BancGroup
shall issue such shares of BancGroup common stock to Southern for delivery to
the holders of Southern Options on the Effective Date. Notwithstanding the
foregoing, Southern Options granted pursuant to the 1989 Employee Incentive
Stock Option Plan (the "ISOs") may not be exchanged for shares of BancGroup
common stock pursuant to this section but shall be converted into BancGroup
options pursuant to section 3.1(b)(ii). The number of shares of BancGroup
Common Stock to be issued in exchange for the cancellation of the Southern
Options, excluding the ISOs, is set forth in the following table:
BancGroup Shares
Number of Shares Subject Exercise Price Conversion To Be Issued for
To Southern Options Per Share Rate Southern Options
------------------------------------------------------------------------------------------------------------------------
204,000 $2.92 .2965 60,486
584,000 $3.04 .2926 170,878
230,000 $4.50 .2448 56,304
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1,018,000 287,668
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No fractions of shares of BancGroup Common Stock shall be issued and fractions
shall be exchanged for cash in accordance with section 3.3 hereof. As of the
date hereof, the number of shares of common stock of Southern outstanding and
held of record is 3,362,000 and the number of shares subject to Southern
Options, including the ISOs, is 1,112,000. Assuming no Southern Options are
exercised prior to the Effective Date, and all Southern Options other than the
ISOs are converted in accordance with this section 3.1(b)(i), the number of
shares of BancGroup Common Stock to be issued in the Merger shall be 1,605,235.
Schedule 3.1(b) hereto sets forth the names of all persons holding Southern
Options, the number of shares of Southern common stock subject to such options
and the exercise price per share for such options.
(b)(ii) On the Effective Date, BancGroup shall assume all Southern
Options outstanding as to which the holders thereof have not consented to the
cancellation and
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conversion thereof as provided by section 3.1(b)(i) and each such option shall
represent the right to acquire BancGroup Common Stock on substantially the same
terms applicable to the Southern Options except as specified below in this
section. The number of shares of BancGroup Common Stock to be issued pursuant
to such options shall equal the number of shares of Southern common stock
subject to such Southern Options multiplied by .3919. The exercise price for
the acquisition of BancGroup Common Stock shall be the exercise price for each
share of Southern common stock subject to such options divided by .3919.
Assuming that none of the holders of the Southern Options consent to the
cancellation and conversion thereof as provided by Section 3.1(b)(i), then the
Southern Options would be converted into BancGroup Options with the following
terms:
Number of Number of
Shares of Shares of
Southern BancGroup
CommonStock Common Stock
Currently to be Subject
Subject to Current to New Adjusted
Southern Exercise BancGroup Exercise Expiration
Options Price Options Price Date
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268,000 $2.92 105,029 $ 7.45 March 14, 1999
584,000 $3.04 228,870 $ 7.76 April 21, 2003
30,000 $3.38 11,757 $ 8.62 March 14, 1999
230,000 $4.50 90,137 $11.48 October 5, 2004
---------------------------------------------------------------------------------------------------------------------
1,112,000 435,793
Notwithstanding the foregoing, no fractions of shares of BancGroup Common Stock
shall be issued upon exercise of such options and any fraction of a share of
BancGroup Common Stock that would otherwise be issued upon the exercise of such
options shall be converted into cash upon the exercise of such option in an
amount equal to the product of such fraction and the difference between the
market value of one share of BancGroup Common Stock at the time of exercise of
such option and the per share exercise price of such option. The market value
of one share of BancGroup Common Stock at the time of exercise of such options
shall be the closing sales price of BancGroup Common Stock on the NYSE on the
last trading day preceding the date of exercise. As soon as practicable after
the Effective Date, BancGroup shall file at its expense a registration
statement with the SEC on Form S-8 or other appropriate form with respect to
the shares of BancGroup Common Stock to be issued pursuant to such options and
shall use its reasonable best efforts to maintain the effectiveness of such
registration statement for so long as such options remain outstanding. Such
shares shall also be registered or qualified for sale under the securities laws
of any state in which registration or qualification is necessary.
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3.2 SURRENDER OF SOUTHERN STOCK. After the Effective Date, each
holder of an outstanding certificate or certificates which prior thereto
represented shares of Southern Stock who is entitled to receive BancGroup
Common Stock shall be entitled, upon surrender to BancGroup of their
certificate or certificates representing shares of Southern Stock, to receive
in exchange therefor a certificate or certificates representing the number of
whole shares of BancGroup Common Stock into and for which the shares of
Southern Stock so surrendered shall have been converted, such certificates to
be of such denominations and registered in such names as such holder may
reasonably request. Until so surrendered and exchanged, each such outstanding
certificate which, prior to the Effective Date, represented shares of Southern
Stock and which is to be converted into BancGroup Common Stock shall for all
purposes evidence ownership of the BancGroup Common Stock into and for which
such shares shall have been so converted, except that no dividends or other
distributions with respect to such BancGroup Common Stock shall be made until
the certificates previously representing shares of Southern Stock shall have
been properly tendered.
3.3 FRACTIONAL SHARES. No fractional shares of BancGroup Common
Stock shall be issued, and each holder of shares of Southern Stock having a
fractional interest arising upon the conversion of such shares into shares of
BancGroup Common Stock shall, at the time of surrender of the certificates
previously representing Southern Stock, be paid by BancGroup an amount in cash
equal to the market value of such fractional share. For this purpose, "market
value" shall mean the average of the closing prices of BancGroup Common Stock
on each of the 20 trading days ending on the trading day immediately prior to
the Effective Date as reported by the NYSE.
3.4 ADJUSTMENTS. In the event that prior to the Effective Date
BancGroup Common Stock shall be changed into a different number of shares or a
different class of shares by reason of any recapitalization or
reclassification, stock dividend, combination, stock split, or reverse stock
split of the Common Stock, an appropriate and proportionate adjustment shall be
made in the number of shares of BancGroup Common Stock into which the Southern
Stock and Southern Options shall be converted, and the market values stated in
section 8.6 hereof shall be appropriately adjusted.
3.5 BANCGROUP STOCK. The shares of Common Stock of BancGroup
issued and outstanding immediately before the Effective Date shall continue to
be issued and outstanding shares of the Resulting Corporation.
3.6 DISSENTING RIGHTS. Any shareholder of Southern who shall not
have voted in favor of this Agreement and who has complied with the applicable
procedures set forth in the FBCA, relating to rights of dissenting
shareholders, shall be entitled to receive payment for the fair value of his
Southern Stock. If after the Effective Date a dissenting shareholder of
Southern fails to perfect, or effectively withdraws or loses, his right to
appraisal and payment for his shares of Southern Stock, BancGroup shall issue
and deliver the consideration to which such holder of shares of Southern Stock
is entitled under Section 3.1 (without interest) upon surrender of such holder
of the certificate or certificates representing shares of Southern Stock held
by him.
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ARTICLE 4
REPRESENTATIONS, WARRANTIES AND COVENANTS OF BANCGROUP
BancGroup represents, warrants and covenants to and with Southern as follows:
4.1 ORGANIZATION. BancGroup is a corporation duly organized,
validly existing and in good standing under the Laws of the State of Delaware.
BancGroup has the necessary corporate powers to carry on its business as
presently conducted and is qualified to do business in every jurisdiction in
which the character and location of the Assets owned by it or the nature of the
business transacted by it requires qualification or in which the failure to
qualify could, individually or in the aggregate, have a Material Adverse Effect
on the condition (financial or other), earnings, business, affairs, Assets,
properties, prospects or results of operations of BancGroup or of BancGroup and
its Subsidiaries taken as a whole.
4.2 CAPITAL STOCK.
(a) The authorized capital stock of BancGroup consists of
(A) 44,000,000 shares of Common Stock, $2.50 par value per share, of which as
of September 30, 1995, 12,267,143 shares were validly issued and outstanding,
fully paid and nonassessable and are not subject to preemptive rights, and (B)
1,000,000 shares of Preference Stock, $2.50 par value per share, none of which
are issued and outstanding. The shares of Common Stock to be issued upon the
Merger are duly authorized and, when so issued, will be validly issued and
outstanding, fully paid and nonassessable, will have been registered under the
1933 Act, and will have been registered or qualified under the securities laws
of all jurisdictions in which such registration or qualification is required,
based upon information provided by Southern.
(b) The authorized capital stock of each Subsidiary of
BancGroup is validly issued and outstanding, fully paid and nonassessable, and
each Subsidiary is wholly owned, directly or indirectly, by BancGroup.
4.3 FINANCIAL STATEMENTS; TAXES. (a) BancGroup has delivered to
Southern copies of the following financial statements of BancGroup.
(i) Consolidated balance sheets as of December
31, 1993, and December 31, 1994, and for the nine months ending September 30,
1995;
(ii) Consolidated statements of operations for
each of the three years ended December 31, 1992, 1993 and 1994, and for the
nine months ending September 30, 1995;
(iii) Consolidated statements of cash flows for each
of the three years ended December 31, 1992, 1993 and 1994, and for the nine
months ending September 30, 1995; and
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(iv) Consolidated statements of changes in
shareholders' equity for the three years ended December 31, 1992, 1993 and
1994, and for the nine months ending September 30, 1995.
All such financial statements are in all material respects in accordance with
the books and records of BancGroup and have been prepared in accordance with
generally accepted accounting principles applied on a consistent basis
throughout the periods indicated, all as more particularly set forth in the
notes to such statements. Each of the consolidated balance sheets presents
fairly as of its date the consolidated financial condition of BancGroup and its
Subsidiaries. Except as and to the extent reflected or reserved against in
such balance sheets (including the notes thereto), BancGroup did not have, as
of the dates of such balance sheets, any material Liabilities or obligations
(absolute or contingent) of a nature customarily reflected in a balance sheet
or the notes thereto, other than Liabilities (including reserves) in the amount
set forth in such balance sheets and the notes thereto. The statements of
consolidated income, shareholders' equity and changes in consolidated financial
position present fairly the results of operations and changes in financial
position of BancGroup and its Subsidiaries for the periods indicated. The
foregoing representations, insofar as they relate to the unaudited interim
financial statements of BancGroup for the nine months ended September 30, 1995,
are subject in all cases to normal recurring year-end adjustments and the
omission of footnote disclosure.
(b) All Tax returns required to be filed by or on behalf
of BancGroup have been timely filed (or requests for extensions therefor have
been timely filed and granted and have not expired), and all returns filed are
complete and accurate in all material respects. All Taxes shown on said
returns to be due and all additional assessments received have been paid. The
amounts recorded for Taxes on the balance sheets provided under section 4.3(a)
are, to the Knowledge of BancGroup, sufficient in all material respects for the
payment of all unpaid federal, state, county, local, foreign or other Taxes
(including any interest or penalties) of BancGroup accrued for or applicable to
the period ended on the dates thereof, and all years and periods prior thereto
and for which BancGroup may at said dates have been liable in its own right or
as transferee of the Assets of, or as successor to, any other corporation or
other party. No audit, examination or investigation is presently being
conducted or, to the Knowledge of BancGroup, threatened by any taxing authority
which is likely to result in a material Tax Liability, no material unpaid Tax
deficiencies or additional liabilities of any sort have been proposed by any
governmental representative and no agreements for extension of time for the
assessment of any material amount of Tax have been entered into by or on behalf
of BancGroup. BancGroup has withheld from its employees (and timely paid to
the appropriate governmental entity) proper and accurate amounts for all
periods in material compliance with all Tax withholding provisions of
applicable federal, state, foreign and local Laws (including without
limitation, income, social security and employment Tax withholding for all
types of compensation).
4.4 NO CONFLICT WITH OTHER INSTRUMENT. The consummation of the
transactions contemplated by this Agreement will not result in a breach of or
constitute a Default (without regard to the giving of notice or the passage of
time) under any material indenture, mortgage, deed of trust or other material
agreement or instrument to which BancGroup or
13
any of its Subsidiaries is a party or by which they or their Assets may be
bound; will not conflict with any provision of the restated certificate of
incorporation or bylaws of BancGroup or the articles of incorporation or bylaws
of any of its Subsidiaries; and will not violate any provision of any Law,
regulation, judgment or decree binding on them or any of their Assets.
4.5 ABSENCE OF MATERIAL ADVERSE CHANGE. Since the date of the
most recent balance sheet provided under section 4.3(a)(i) above, there have
been no events, changes or occurrences which have had or are reasonably likely
to have, individually or in the aggregate, a Material Adverse Effect on
BancGroup.
4.6 APPROVAL OF AGREEMENTS. The board of directors of BancGroup
has, or will have prior to the Effective Date, approved this Agreement and the
transactions contemplated by it and have, or will have prior to the Effective
Date, authorized the execution and delivery by BancGroup of this Agreement.
This Agreement constitutes the legal, valid and binding obligation of
BancGroup, enforceable against it in accordance with its terms. Approval of
this Agreement by the stockholders of BancGroup is not required by applicable
law. Subject to the matters referred to in section 8.2, BancGroup has full
power, authority and legal right to enter into this Agreement and to consummate
the transactions contemplated by this Agreement. BancGroup has no Knowledge of
any fact or circumstance under which the appropriate regulatory approvals
required by section 8.2 will not be granted without the imposition of material
conditions or material delays.
4.7 TAX TREATMENT. BancGroup has no present plan to sell or
otherwise dispose of any of the Assets of Southern, or to liquidate any
Subsidiaries, subsequent to the Merger, and BancGroup intends to continue the
historic business of Southern.
4.8 TITLE AND RELATED MATTERS. BancGroup has good and marketable
title to all the properties, interests in properties and Assets, real and
personal, reflected in the most recent balance sheet referred to in section
4.3(a), or acquired after the date of such balance sheet (except properties,
interests and Assets sold or otherwise disposed of since such date, in the
ordinary course of business), free and clear of all mortgages, Liens, pledges,
charges or encumbrances except (i) mortgages and other encumbrances referred to
in the notes of such balance sheet, (ii) liens for current Taxes not yet due
and payable and (iii) such imperfections of title and easements as do not
materially detract from or interfere with the present use of the properties
subject thereto or affected thereby, or otherwise materially impair present
business operations at such properties. To the Knowledge of BancGroup, the
material structures and equipment of BancGroup comply in all material respects
with the requirements of all applicable Laws.
4.9 SUBSIDIARIES. Each Subsidiary of BancGroup has been duly
incorporated and is validly existing as a corporation in good standing under
the Laws of the jurisdiction of its incorporation and each Subsidiary has been
duly qualified as a foreign corporation to transact business and is in good
standing under the Laws of each other jurisdiction in which it owns or leases
properties, or conducts any business so as to require such qualification and in
which the failure to be duly qualified could have a Material Adverse Effect
upon
14
BancGroup and its Subsidiaries considered as one enterprise; each of the
banking Subsidiaries of BancGroup has its deposits fully insured by the Federal
Deposit Insurance Corporation to the extent provided by the Federal Deposit
Insurance Act; and the businesses of the non-bank Subsidiaries of BancGroup are
permitted to subsidiaries of registered bank holding companies.
4.10 CONTRACTS. Neither BancGroup nor any of its Subsidiaries is
in violation of its respective certificate of incorporation or by-laws or in
default in the performance or observance of any material obligation, agreement,
covenant or condition contained in any Contract, indenture, mortgage, loan
agreement, note, lease or other instrument to which it is a party or by which
it or its property may be bound.
4.11 LITIGATION. Except as disclosed in or reserved for in
BancGroup's financial statements, there is no Litigation before or by any court
or Agency, domestic or foreign, now pending, or, to the Knowledge of BancGroup,
threatened against or affecting BancGroup or any of its Subsidiaries (nor is
BancGroup aware of any facts which could give rise to any such Litigation)
which is required to be disclosed in the Registration Statement (other than as
disclosed therein), or which is likely to have any Material Adverse Effect or
prospective Material Adverse Effect in the condition, financial or otherwise,
or in the general affairs, management, stockholders' equity or results of
operations of BancGroup and its Subsidiaries considered as one enterprise, or
which is likely to materially and adversely affect the properties or Assets
thereof or which is likely to materially affect or delay the consummation of
the transactions contemplated by this Agreement; all pending legal or
governmental proceedings to which BancGroup or any Subsidiary is a party or of
which any of their properties is the subject which are not described in the
Registration Statement, including ordinary routine litigation incidental to the
business, are, considered in the aggregate, not material; and neither BancGroup
nor any of its Subsidiaries have any contingent obligations which could be
considered material to BancGroup and its Subsidiaries considered as one
enterprise which are not disclosed in the Registration Statement as it may be
amended or supplemented.
4.12 COMPLIANCE. BancGroup and its Subsidiaries, in the conduct of
their businesses, are to the Knowledge of BancGroup, in material compliance
with all material federal, state or local Laws applicable to their or the
conduct of their businesses.
4.13 REGISTRATION STATEMENT. At the time the Registration
Statement becomes effective and at the time of the Stockholders' Meeting, the
Registration Statement, including the Proxy Statement which shall constitute a
part thereof, will comply in all material respects with the requirements of the
1933 Act and the rules and regulations thereunder, will not contain an untrue
statement of a material fact or omit to state a material fact necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading; provided, however, that the
representations and warranties in this subsection shall not apply to statements
in or omissions from the Proxy Statement made in reliance upon and in
conformity with information furnished in writing to BancGroup by Southern or
any of its representatives expressly for use in the Proxy
15
Statement or information included in the Proxy Statement regarding the business
of Southern, its operations, Assets and capital.
4.14 SEC FILINGS. (a) BancGroup has heretofore delivered to
Southern copies of BancGroup's: (i) Annual Report on Form 10-K for the fiscal
year ended December 31, 1994; (ii) 1994 Annual Report to Shareholders; (iii)
Quarterly Reports on Form 10-Q for the fiscal quarters ended March 31, 1995,
June 30, 1995 and September 30, 1995; and (iv) all other reports, registration
statements and other documents filed by BancGroup with the SEC since December
31, 1994. Since December 31, 1994, BancGroup has timely filed all reports and
registration statements and the documents required to be filed with the SEC
under the rules and regulations of the SEC and all such reports and
registration statements or other documents have complied in all material
respects, as of their respective filing dates and effective dates, as the case
may be, with all the applicable requirements of the 1933 Act and the 1934 Act.
As of the respective filing and effective dates, none of such reports or
registration statements or other documents contained any untrue statement of a
material fact or omitted 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.
(b) The documents incorporated by reference into the Registration
Statement, at the time they were filed with the SEC, complied in all material
respects with the requirements of the 1934 Act and Regulations thereunder and
when read together and with the other information in the Registration Statement
will not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading at the time the Registration Statement becomes effective
or at the time of the Stockholders Meeting.
4.15 FORM S-4. The conditions for use of a registration statement
on SEC Form S-4 set forth in the General Instructions on Form S-4 have been or
will be satisfied with respect to BancGroup and the Registration Statement.
4.16 BROKERS. All negotiations relative to this Agreement and the
transactions contemplated by this Agreement have been carried on by BancGroup
directly with Southern and without the intervention of any other person, either
as a result of any act of BancGroup or otherwise in such manner as to give
rights to any valid claim against BancGroup for finders fee, brokerage
commissions or other like payment.
4.17 GOVERNMENT AUTHORIZATION. BancGroup and its Subsidiaries have
all Permits that, to the Knowledge of BancGroup and its Subsidiaries, are or
will be legally required to enable BancGroup or any of its Subsidiaries to
conduct their businesses in all material respects as now conducted by each of
them.
4.18 ABSENCE OF REGULATORY COMMUNICATIONS. Neither BancGroup nor
any of its Subsidiaries is subject to, or has received during the past three
(3) years, any written communication directed specifically to it from any
Agency to which it is subject or pursuant to which such Agency has imposed or
has indicated it may impose any material restrictions
16
on the operations of it or the business conducted by it or in which such Agency
has raised a material question concerning the condition, financial or
otherwise, of such company.
4.19 DISCLOSURE. No representation or warranty, or any statement
or certificate furnished or to be furnished to Southern by BancGroup, contains
or will contain any untrue statement of a material fact, or omits or will omit
to state a material fact necessary to make the statements contained in this
Agreement or in any such statement or certificate not misleading.
ARTICLE 5
REPRESENTATIONS, WARRANTIES AND COVENANTS OF SOUTHERN
Southern represents, warrants and covenants to and with BancGroup, as
follows:
5.1 ORGANIZATION. Southern is a Florida corporation, and the Bank
is a Florida banking corporation and not a member of the Federal Reserve
System. Each Southern Company is duly organized, validly existing and in good
standing under the respective Laws of its jurisdiction of incorporation and has
all requisite power and authority to carry on its business as it is now being
conducted and is qualified to do business in every jurisdiction in which the
character and location of the Assets owned by it or the nature of the business
transacted by it requires qualification or in which the failure to qualify
could, individually, or in the aggregate, have a Material Adverse Effect on the
condition (financial or other) earnings, business, affairs, Assets, properties,
prospects or results of operations of Southern or of Southern and its
Subsidiaries taken as a whole.
5.2 CAPITAL STOCK. (i) As of September 30, 1995, the authorized
capital stock of Southern consists of 10,000,000 shares of common stock, $1.00
par value per share, 3,362,000 shares of which are issued and outstanding. All
of such shares which are outstanding are validly issued, fully paid and
nonassessable and not subject to preemptive rights. Southern has 1,112,000
shares of its common stock subject to exercise pursuant to stock options under
its stock option plans. Except for the foregoing, Southern does not have any
other arrangements or commitments obligating it to issue shares of its capital
stock or any securities convertible into or having the right to purchase shares
of its capital stock.
5.3 SUBSIDIARIES. Southern has no direct Subsidiaries other than
the Bank, and there are no operating subsidiaries of the Bank. Southern owns
all of the issued and outstanding capital stock of the Bank free and clear of
any liens, claims or encumbrances of any kind. All of the issued and
outstanding shares of capital stock of the Subsidiaries have been validly
issued and are fully paid and non-assessable. As of September 30, 1995, there
were 1,000,000 shares of the common stock, par value $4.00 per share,
authorized of the Bank, 527,778 of which are issued and outstanding and wholly
owned by Southern.
5.4 FINANCIAL STATEMENTS; TAXES (a) Southern has delivered to
BancGroup copies of the following financial statements of Southern:
17
(i) Consolidated statements of financial
condition as of December 31, 1993 and 1994, and for the nine months ending
September 30, 1995;
(ii) Consolidated statements of income for each of
the three years ended December 31, 1992, 1993 and 1994, and for the nine months
ending September 30, 1995;
(iii) Consolidated statements of stockholders'
equity for each of the three years ended December 31, 1992, 1993, and 1994,
and for the nine months ending September 30, 1995; and
(iv) Consolidated statements of cash flows for the
three years ended December 31, 1992, 1993 and 1994, and for the nine months
ending September 30, 1995.
All of the foregoing financial statements are in all material respects
in accordance with the books and records of Southern and have been prepared in
accordance with generally accepted accounting principles applied on a
consistent basis throughout the periods indicated, except for changes required
by GAAP, all as more particularly set forth in the notes to such statements.
Each of such balance sheets presents fairly as of its date the financial
condition of Southern. Except as and to the extent reflected or reserved
against in such balance sheets (including the notes thereto), Southern did not
have, as of the date of such balance sheets, any material Liabilities or
obligations (absolute or contingent) of a nature customarily reflected in a
balance sheet or the notes thereto, other than Liabilities (including reserves)
in the amount set forth in such balance sheets and the notes thereto. The
statements of income, stockholders' equity and cash flows present fairly the
results of operation, changes in shareholders equity and cash flows of Southern
for the periods indicated. The foregoing representations, insofar as they
relate to the unaudited interim financial statements of Southern for the nine
months ended September 30, 1995, are subject in all cases to normal recurring
year-end adjustments and the omission of footnote disclosure.
(b) Except as set forth on Schedule 5.4(b), all Tax
returns required to be filed by or on behalf of Southern have been timely filed
(or requests for extensions therefor have been timely filed and granted and
have not expired), and all returns filed are complete and accurate in all
material respects. All Taxes shown on said returns to be due and all
additional assessments received have been paid. The amounts recorded for Taxes
on the balance sheets provided under section 5.4(a) are, to the Knowledge of
Southern, sufficient in all material respects for the payment of all unpaid
federal, state, county, local, foreign and other Taxes (including any interest
or penalties) of Southern accrued for or applicable to the period ended on the
dates thereof, and all years and periods prior thereto and for which Southern
may at said dates have been liable in its own right or as a transferee of the
Assets of, or as successor to, any other corporation or other party. No audit,
examination or investigation is presently being conducted or, to the Knowledge
of Southern, threatened by any taxing authority which is likely to result in a
material Tax Liability, no material unpaid Tax deficiencies or additional
liability of any sort have been proposed by any governmental representative and
no agreements for extension of time for the assessment of any material amount
of Tax have been entered into by or on behalf of Southern.
18
Southern has not executed an extension or waiver of any statute of limitations
on the assessment or collection of any Tax due that is currently in effect.
(c) Each Southern Company has withheld from its employees
(and timely paid to the appropriate governmental entity) proper and accurate
amounts for all periods in material compliance with all Tax withholding
provisions of applicable federal, state, foreign and local Laws (including
without limitation, income, social security and employment Tax withholding for
all types of compensation). Each Southern Company is in compliance with, and
its records contain all information and documents (including properly completed
IRS Forms W-9) necessary to comply with, all applicable information reporting
and Tax withholding requirements under federal, state and local Tax Laws, and
such records identify with specificity all accounts subject to backup
withholding under section 3406 of the Code.
5.5 ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as set forth on
Schedule 5.5, since the date of the most recent balance sheet provided under
section 5.4(a)(i) above, no Southern Company has
(a) issued, delivered or agreed to issue or deliver any
stock, bonds or other corporate securities (whether authorized and unissued or
held in the treasury) except shares of common stock issued upon the exercise of
Southern Options and shares issued as director's qualifying shares;
(b) borrowed or agreed to borrow any funds or incurred,
or become subject to, any Liability (absolute or contingent) except borrowings,
obligations and Liabilities incurred in the ordinary course of business and
consistent with past practice;
(c) paid any material obligation or Liability (absolute
or contingent) other than current Liabilities reflected in or shown on the most
recent balance sheet referred to in section 5.4(a)(i) and current Liabilities
incurred since that date in the ordinary course of business and consistent with
past practice;
(d) declared or made, or agreed to declare or make, any
payment of dividends or distributions of any Assets of any kind whatsoever to
shareholders, or purchased or redeemed, or agreed to purchase or redeem, any of
its outstanding securities;
(e) except in the ordinary course of business, sold or
transferred, or agreed to sell or transfer, any of its Assets, or canceled, or
agreed to cancel, any debts or claims;
(f) except in the ordinary course of business, entered or
agreed to enter into any agreement or arrangement granting any preferential
rights to purchase any of its Assets, or requiring the consent of any party to
the transfer and assignment of any of its Assets;
(g) suffered any Losses or waived any rights of value
which in either event in the aggregate are material considering its business as
a whole;
19
(h) except in the ordinary course of business, made or
permitted any amendment or termination of any Contract, agreement or license to
which it is a party if such amendment or termination is material considering
its business as a whole;
(i) except in accordance with normal and usual practice,
made any accrual or arrangement for or payment of bonuses or special
compensation of any kind or any severance or termination pay to any present or
former officer or employee;
(j) except in accordance with normal and usual practice,
increased the rate of compensation payable to or to become payable to any of
its officers or employees or made any material increase in any profit sharing,
bonus, deferred compensation, savings, insurance, pension, retirement or other
employee benefit plan, payment or arrangement made to, for or with any of its
officers or employees;
(k) received notice or had Knowledge or reason to believe
that any of its substantial customers has terminated or intends to terminate
its relationship, which termination would have a Material Adverse Effect on its
financial condition, results of operations, business, Assets or properties;
(l) failed to operate its business in the ordinary course
so as to preserve its business intact and to preserve the goodwill of its
customers and others with whom it has business relations;
(m) entered into any other material transaction other
than in the ordinary course of business; or
(n) agreed in writing, or otherwise, to take any action
described in clauses (a) through (m) above.
Between the date hereof and the Effective Date, no Southern Company,
without the express written approval of BancGroup, will do any of the things
listed in clauses (a) through (n) of this section 5.5 except as permitted
therein or as contemplated in this Agreement, and no Southern Company will
enter into or amend any material Contract without the express written consent
of BancGroup. Southern may request the consent of BancGroup to any of the
foregoing actions by furnishing BancGroup with a written request which
describes the action proposed to be taken by Southern. Such consent shall not
be unreasonably withheld. BancGroup shall have a period of 10 days from the
date on which it receives such request within which to notify Southern of
either its consent or refusal to consent, to the proposed action. BancGroup's
failure to respond to any such request within such 10 days period shall be
deemed to constitute a consent to the action proposed in Southern's request.
5.6 TITLE AND RELATED MATTERS.
(a) Title. Southern has good and marketable title to all
the properties, interest in properties and Assets, real and personal, reflected
in the most recent balance
20
sheet referred to in section 5.4(a)(i), or acquired after the date of such
balance sheet (except properties, interests and Assets sold or otherwise
disposed of since such date, in the ordinary course of business), free and
clear of all mortgages, Liens, pledges, charges or encumbrances except (i)
mortgages and other encumbrances referred to in the notes to such balance
sheet, (ii) Liens for current Taxes not yet due and payable and (iii) such
imperfections of title and easements as do not materially detract from or
interfere with the present use of the properties subject thereto or affected
thereby, or otherwise materially impair present business operations at such
properties. To the Knowledge of Southern, the material structures and
equipment of each Southern Company comply in all material respects with the
requirements of all applicable Laws.
(b) Leases. Schedule 5.6(b) sets forth a list and
description of all real and personal property owned or leased by any Southern
Company, either as lessor or lessee.
(c) Personal Property. Schedule 5.6(c) sets forth a
depreciation schedule of each Southern Company's fixed Assets as of December
31, 1994.
(d) Computer Hardware and Software. Schedule 5.6(d)
contains a description of all agreements relating to data processing computer
software and hardware now being used in the business operations of any Southern
Company. Southern is not aware of any defects, irregularities or problems with
any of its computer hardware or software which renders such hardware or
software unable to satisfactorily perform the tasks and functions to be
performed by them in the business of any Southern Company.
5.7 COMMITMENTS. Except as set forth in Schedule 5.7, no Southern
Company is a party to any oral or written (i) Contracts for the employment of
any officer or employee which is not terminable on 30 days' (or less) notice,
(ii) profit sharing, bonus, deferred compensation, savings, stock option,
severance pay, pension or retirement plan, agreement or arrangement, (iii) loan
agreement, indenture or similar agreement relating to the borrowing of money by
such party, (iv) guaranty of any obligation for the borrowing of money or
otherwise, excluding endorsements made for collection, and guaranties made in
the ordinary course of business, (v) consulting or other similar material
Contracts, (vi) collective bargaining agreement, (vii) agreement with any
present or former officer, director or shareholder of such party, or (viii)
other Contract, agreement or other commitment which is material to the
business, operations, property, prospects or Assets or to the condition,
financial or otherwise, of any Southern Company. Complete and accurate copies
of all Contracts, plans and other items so listed have been made or will be
made available to BancGroup for inspection.
5.8 CHARTER AND BYLAWS. Schedule 5.8 contains true and correct
copies of the articles of incorporation and bylaws of each Southern Company,
including all amendments thereto, as currently in effect. There will be no
changes in such articles of incorporation or bylaws prior to the Effective
Date, without the prior written consent of BancGroup.
5.9 LITIGATION. There is no Litigation (whether or not
purportedly on behalf of Southern) pending or, to the Knowledge of Southern,
threatened against or affecting any
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Southern Company (nor is Southern aware of any facts which are likely to give
rise to any such Litigation) at law or in equity, or before or by any
governmental department, commission, board, bureau, agency or instrumentality,
domestic or foreign, or before any arbitrator of any kind, which involves the
possibility of any judgment or Liability not fully covered by insurance in
excess of a reasonable deductible amount or which may have a Material Adverse
Effect on the business operations, properties or Assets or in the condition,
financial or otherwise, of any Southern Company, and no Southern Company is in
Default with respect to any judgment, order, writ, injunction, decree, award,
rule or regulation of any court, arbitrator or governmental department,
commission, board, bureau, agency or instrumentality, which Default would have
a Material Adverse Effect on the business operations, properties or Assets or
in the condition, financial or otherwise, of such party. To the Knowledge of
Southern, each Southern Company has complied in all material respects with all
material applicable Laws and Regulations including those imposing Taxes, or any
applicable jurisdiction and of all states, municipalities, other political
subdivisions and Agencies, in respect of the ownership of its properties and
the conduct of its business, which, if not complied with, would have a Material
Adverse Effect in the business operations, properties or Assets or in the
condition, financial or otherwise, of any such Southern Company.
5.10 MATERIAL CONTRACT DEFAULTS. Except as disclosed on Schedule
5.10, no Southern Company is in Default in any material respect under the terms
of any material Contract, agreement, lease or other commitment which is or may
be, material to the business, operations, properties or Assets, or the
condition, financial or otherwise, of such company and, to the Knowledge of
Southern, there is no event which, with notice or lapse of time, or both, may
be or become an event of Default under any such material Contract, agreement,
lease or other commitment in respect of which adequate steps have not been
taken to prevent such a Default from occurring.
5.11 NO CONFLICT WITH OTHER INSTRUMENT. The consummation of the
transactions contemplated by this Agreement will not result in the breach of
any term or provision of or constitute a Default under any Contract, indenture,
mortgage, deed of trust or other material agreement or instrument to which any
Southern Company is a party and will not conflict with any provision of the
charter or bylaws of any Southern Company.
5.12 GOVERNMENTAL AUTHORIZATION. Each Southern Company has all
Permits that, to the Knowledge of Southern, are or will be legally required to
enable any Southern Company to conduct its business in all material respects as
now conducted by each Southern Company.
5.13 ABSENCE OF REGULATORY COMMUNICATIONS. Except as provided in
Schedule 5.13, no Southern Company is subject to, nor has any Southern Company
received during the past three years, any written communication directed
specifically to it from any Agency to which it is subject or pursuant to which
such Agency has imposed or has indicated it may impose any material
restrictions on the operations of it or the business conducted by it or in
which such Agency has raised any material question concerning the condition,
financial or otherwise, of such company.
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5.14 ABSENCE OF MATERIAL ADVERSE CHANGE. To the Knowledge of
Southern, since the date of the most recent balance sheet provided under
section 5.4(a)(i), there have been no events, changes or occurrences which
have had, or are reasonably likely to have, individually or in the aggregate,
a Material Adverse Effect on any Southern Company.
5.15 INSURANCE. Each Southern Company has in effect insurance
coverage and bonds with reputable insurers which, in respect to amounts, types
and risks insured, management of Southern reasonably believes to be adequate
for the type of business conducted by such company. No Southern Company is
liable for any material retroactive premium adjustment. All insurance policies
and bonds are valid, enforceable and in full force and effect, and no Southern
Company has received any notice of any material premium increase or
cancellation with respect to any of its insurance policies or bonds. Within
the last three years, no Southern Company has been refused any insurance
coverage which it has sought or applied for, and it has no reason to believe
that existing insurance coverage cannot be renewed as and when the same shall
expire, upon terms and conditions as favorable as those presently in effect,
other than possible increases in premiums that do not result from any
extraordinary loss experience. All policies of insurance presently held or
policies containing substantially equivalent coverage will be outstanding and
in full force with respect to each Southern Company at all times from the date
hereof to the Effective Date.
5.16 PENSION AND EMPLOYEE BENEFIT PLANS.
(a) To the Knowledge of Southern, all employee benefit
plans of each Southern Company have been established in compliance with, and
such plans have been operated in material compliance with, all applicable Laws.
Except as set forth in Section 5.16, no Southern Company sponsors or otherwise
maintains a "pension plan" within the meaning of section 3(2) of ERISA or any
other retirement plan other than the Southern 401(k) plan that is intended to
qualify under section 401 of the Code, nor do any unfunded Liabilities exist
with respect to any employee benefit plan, past or present. To the Knowledge
of Southern, no employee benefit plan, any trust created thereunder or any
trustee or administrator thereof has engaged in a "prohibited transaction," as
defined in section 4975 of the Code, which may have a Material Adverse Effect
on the condition, financial or otherwise, of any Southern Company.
(b) To the Knowledge of Southern, no amounts payable to
any employee of any Southern Company will fail to be deductible for federal
income tax purposes by virtue of Section 280G of the Code and regulations
thereunder.
5.17 BUY-SELL AGREEMENT. To the Knowledge of Southern, there are
no agreements among any of its shareholders granting to any person or persons a
right of first refusal in respect of the sale, transfer, or other disposition
of shares of outstanding securities by any shareholder of Southern, any similar
agreement or any voting agreement or voting trust in respect of any such
shares.
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5.18 BROKERS. Except for services provided for Southern by The
Xxxxxx Xxxxxx Company, all negotiations relative to this Agreement and the
transactions contemplated by this Agreement have been carried on by Southern
directly with BancGroup and without the intervention of any other person,
either as a result of any act of Southern, or otherwise, in such manner as to
give rise to any valid claim against Southern for a finder's fee, brokerage
commission or other like payment.
5.19 APPROVAL OF AGREEMENTS. The board of directors of Southern
has approved this Agreement and the transactions contemplated by this Agreement
and has authorized the execution and delivery by Southern of this Agreement.
Subject to the matters referred to in section 8.2, Southern has full power,
authority and legal right to enter into this Agreement, and, upon appropriate
vote of the shareholders of Southern in accordance with this Agreement,
Southern shall have full power, authority and legal right to consummate the
transactions contemplated by this Agreement.
5.20 DISCLOSURE. No representation or warranty, nor any statement
or certificate furnished or to be furnished to BancGroup by Southern, contains
or will contain any untrue statement of a material fact, or omits or will omit
to state a material fact necessary to make the statements contained in this
Agreement or in any such statement or certificate not misleading.
5.21 REGISTRATION STATEMENT. At the time the Registration
Statement becomes effective and at the time of the Stockholders Meeting, the
Registration Statement, including the Proxy Statement which shall constitute
part thereof, will not contain an untrue statement of a material fact or omit
to state a material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading;
provided, however, that the representations and warranties in this section
shall only apply to statements in or omissions from the Proxy Statement
relating to descriptions of the business of Southern, its Assets, properties,
operations, and capital stock or to information furnished in writing by
Southern or its representatives expressly for inclusion in the Proxy Statement.
5.22 LOANS; ADEQUACY OF ALLOWANCE FOR LOAN LOSSES. All reserves
for loan losses shown on the most recent financial statements furnished by
Southern have been calculated in accordance with prudent and customary banking
practices and are adequate to reflect the risk inherent in the loans of
Southern. Southern has no Knowledge of any fact which is likely to require a
future material increase in the provision for loan losses or a material
decrease in the loan loss reserve reflected in such financial statements. Each
loan reflected as an Asset on the financial statements of Southern is the
legal, valid and binding obligation of the obligor of each loan, enforceable in
accordance with its terms subject to the effect of bankruptcy, insolvency,
reorganization, moratorium, or other similar laws relating to creditors' rights
generally and to general equitable principles. Southern does not have in its
portfolio any loan exceeding its legal lending limit, and except as disclosed
on Schedule 5.22, Southern has no known significant delinquent, substandard,
doubtful, loss, nonperforming or problem loans.
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5.23 ENVIRONMENTAL MATTERS. Except as provided in Schedule 5.23,
to the Knowledge of Southern, each Southern Company is in material compliance
with all Laws and other governmental requirements relating to the generation,
management, handling, transportation, treatment, disposal, storage, delivery,
discharge, release or emission of any waste, pollution, or toxic, hazardous or
other substance (the "Environmental Laws"), and Southern has no Knowledge that
any Southern Company has not complied with all regulations and requirements
promulgated by the Occupational Safety and Health Administration that are
applicable to any Southern Company. To the Knowledge of Southern, there is no
Litigation pending or threatened with respect to any violation or alleged
violation of the Environmental Laws. To the Knowledge of Southern, with
respect to Assets of or owned by any Southern Company, including any Loan
Property, (i) there has been no spillage, leakage, contamination or release of
any substances for which the appropriate remedial action has not been
completed; (ii) no owned or leased property is contaminated with or contains
any hazardous substance or waste; and (iii) there are no underground storage
tanks on any premises owned or leased by any Southern Company. Southern has no
Knowledge of any facts which might suggest that any Southern Company has
engaged in any management practice with respect to any of its past or existing
borrowers which could reasonably be expected to subject any Southern Company to
any Liability, either directly or indirectly, under the principles of law as
set forth in United States v. Fleet Factors Corp., 901 F.2d 1550 (11th Cir.
1990) or any similar principles. Moreover, to the Knowledge of Southern, no
Southern Company has extended credit, either on a secured or unsecured basis,
to any person or other entity engaged in any activities which would require or
requires such person or entity to obtain any Permits which are required under
any Environmental Law which has not been obtained.
5.24 TRANSFER OF SHARES. Southern has no Knowledge of any plan or
intention on the part of Southern's shareholders to sell or otherwise dispose
of any of the BancGroup Common Stock to be received by them in the Merger that
would reduce such shareholders' ownership to a number of shares having, in the
aggregate, a fair market value of less than fifty (50%) percent of the total
fair market value of Southern common stock outstanding immediately before the
Merger.
5.25 COLLECTIVE BARGAINING. There are no labor contracts,
collective bargaining agreements, letters of undertakings or other
arrangements, formal or informal, between any Southern Company and any union or
labor organization covering any of any Southern Company's employees and none of
said employees are represented by any union or labor organization.
5.26 LABOR DISPUTES. To the Knowledge of Southern, each Southern
Company is in material compliance with all federal and state laws respecting
employment and employment practices, terms and conditions of employment, wages
and hours. No Southern Company is or has been engaged in any unfair labor
practice, and, to the Knowledge of Southern, no unfair labor practice complaint
against any Southern Company is pending before the National Labor Relations
Board. Relations between management of each Southern Company and the employees
are amicable and there have not been, nor to the
25
Knowledge of Southern, are there presently, any attempts to organize employees,
nor to the Knowledge of Southern, are there plans for any such attempts.
5.27 DERIVATIVE CONTRACTS. No Southern Company is a party to or
has agreed to enter into a swap, forward, future, option, cap, floor or collar
financial contract, or any other interest rate or foreign currency protection
contract or derivative security not included in Southern's financial statements
delivered under section 5.4 hereof which is a financial derivative contract
(including various combinations thereof).
ARTICLE 6
ADDITIONAL COVENANTS
6.1 ADDITIONAL COVENANTS OF BANCGROUP. BancGroup covenants to and
with Southern as follows:
(a) Registration Statement and Other Filings. BancGroup
shall prepare and file with the SEC the Registration Statement on Form S-4 (or
such other form as may be appropriate) and all amendments and supplements
thereto, in form reasonably satisfactory to Southern and its counsel, with
respect to the Common Stock to be issued pursuant to this Agreement. BancGroup
shall use reasonable good faith efforts to prepare all necessary filings with
any Agencies which may be necessary for approval to consummate the transactions
contemplated by this Agreement.
(b) Blue Sky Permits. BancGroup shall use its best
efforts to obtain, prior to the effective date of the Registration Statement,
all necessary state securities Law or "blue sky" Permits and approvals required
to carry out the transactions contemplated by this Agreement.
(c) Financial Statements. BancGroup shall furnish to
Southern:
(i) As soon as practicable and in any event
within forty-five (45) days after the end of each quarterly period (other than
the last quarterly period) in each fiscal year, consolidated statements of
operations of BancGroup for such period and for the period beginning at the
commencement of the fiscal year and ending at the end of such quarterly period,
and a consolidated statement of financial condition of BancGroup as of the end
of such quarterly period, setting forth in each case in comparative form
figures for the corresponding periods ending in the preceding fiscal year,
subject to changes resulting from year-end adjustments;
(ii) Promptly upon receipt thereof, copies of all
audit reports submitted to BancGroup by independent auditors in connection with
each annual, interim or special audit of the books of BancGroup made by such
accountants;
(iii) As soon as practicable, copies of all such
financial statements and reports as it shall send to its stockholders and of
such regular and periodic reports as BancGroup may file with the SEC or any
other Agency; and
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(iv) With reasonable promptness, such additional
financial data as Southern may reasonably request.
(d) No Control of Southern by BancGroup. Notwithstanding
any other provision hereof, until the Effective Date, the authority to
establish and implement the business policies of Southern shall continue to
reside solely in Southern's officers and board of directors.
(e) Listing. Prior to the Effective Date, BancGroup
shall use its reasonable efforts to list the shares of BancGroup Common Stock
to be issued in the Merger on the NYSE or other quotations system on which such
shares are primarily traded.
(f) Employee Benefit Matters. On the Effective Date, all
employees of any Southern Company shall, at BancGroup's option, either became
employees of the Resulting Corporation or its Subsidiaries or be entitled to
severance benefits in accordance with Colonial Bank's severance policy as of
the date of this Agreement. All employees of any Southern Company who become
employees of the Resulting Corporation or its Subsidiaries on the Effective
Date shall be entitled, to the extent permitted by applicable Law, to
participate in all benefit plans of Colonial Bank to the same extent as
Colonial Bank employees. Employees of any Southern Company who become
employees of the Resulting Corporation or its Subsidiaries shall be allowed to
participate as of the Effective Date in the medical and dental benefits plan of
Colonial Bank as new employees of Colonial Bank, and the time of employment of
such employees who are employed at least 30 hours per week with any Southern
Company shall be counted as employment under such dental and medical plans of
Colonial Bank for purposes of calculating any 30 day waiting period and
pre-existing condition limitations. To the extent permitted by applicable Law,
the period of service with the appropriate Southern Company of all employees
who become employees of the Resulting Corporation or its Subsidiaries on the
Effective Date shall be recognized only for vesting and eligibility purposes
under Colonial Bank's benefit plans. In addition, if the Effective Date falls
within an annual period of coverage under any group health plan or group dental
plan of the Resulting Corporation and its Subsidiaries, each such Southern
Company employee shall be given credit for covered expenses paid by that
employee under comparable employee benefit plans of the Southern Company during
the applicable coverage period through the Effective Date towards satisfaction
of any annual deductible limitation and out-of-pocket maximum that may apply
under that group health plan or group dental plan of the Resulting Corporation
and its Subsidiaries.
(g) Indemnification; Directors and Officers Insurance
(i) From and after the Effective Date, BancGroup shall
indemnify and advance costs and expenses (including reasonable attorneys fees,
disbursements and expenses) and hold harmless each present and former director
and/or officer of Southern or its Subsidiaries determined as of the Effective
Date (the "Indemnified Parties"), against any costs or expenses (including
reasonable attorneys' fees), judgments, fines, losses, claims, damages,
settlements or liabilities (collectively, "Costs") incurred in connection with
any claim, action, suit, proceeding or investigation, whether civil, criminal,
administrative or investigative (each a "Claim"), arising out of or pertaining
to matters existing or occurring at or prior to the Effective Date, whether
asserted or claimed prior to, at or after the
27
Effective Date to the fullest extent that Southern would have been required
under Florida law and its Articles of Incorporation or Bylaws in effect on the
date hereof, to indemnify such person (and also advance expenses as incurred to
the fullest extent permitted under applicable law).
(ii) Any Indemnified Party wishing to claim indemnification
under Section 6.1 (i) shall notify BancGroup within forty-five (45) days of the
Indemnified Party's receipt of a notice of any Claim, but the failure to so
notify shall not relieve BancGroup of any liability it may have to such
Indemnified Party if such failure does not materially prejudice the
Indemnifying Party. In the event of any claim (whether arising before or after
the Effective Date), (i) BancGroup shall have the right to assume the defense
thereof, and BancGroup shall not be liable to such Indemnified Parties for any
legal expenses of other counsel or any other expenses subsequently incurred by
such Indemnified Parties in connection with the defense thereof, except that if
BancGroup elects not to assume such defense, or counsel for the indemnified
Parties advises that there are issues which raise conflicts of interest between
BancGroup and the Indemnified Parties, the Indemnified Parties may retain
counsel satisfactory to them, and BancGroup shall pay the reasonable fees and
expenses of such counsel for the Indemnified Parties promptly after statements
therefore are received; provided, however, that BancGroup shall be obligated
pursuant to this paragraph (ii) to pay for only one firm of counsel for all
Indemnified Parties in any jurisdiction unless the use of one counsel for such
Indemnified Parties will present such counsel with a conflict of interest, (ii)
the Indemnified Parties will cooperate in the defense of any such matter, and
(iii) and BancGroup shall not be liable for any settlement effected without its
prior written consent which shall not be unreasonably withheld. If such
indemnity with any respect to any Indemnified Party is unenforceable against
BancGroup, then BancGroup and the Indemnified Party shall contribute to the
amount payable in such proportion as is appropriate to reflect relative faults
and benefits.
(iii) For a period of four (4) years after the Effective
Date, BancGroup shall cause to be maintained in effect the current policies
with directors and officers liability insurance maintained by Southern
(provided that BancGroup may substitute therefore policies of at least the same
coverage and amounts containing terms and conditions which are no less
advantageous to such directors and officers and provided that the deductible
amount on BancGroup's policies may be higher than that for existing Southern
policies) with respect to claims arising from facts or events which occurred
before the Effective Date, provided that such policies may be maintained at a
cost that is comparable to the cost of such policies as of the date of this
Agreement.
(iv) If BancGroup or any of its successors and assigns, (i)
shall consolidate with or merge into any other corporation or entity and shall
not be the continuing or surviving corporation or entity of such consolidation
or merger, or (ii) shall transfer all or substantially all of its property and
assets to any individual, corporation or other entity, then, in each such case,
proper provision shall be made so that the successors and assigns of BancGroup
and its Subsidiaries shall assume the obligations set forth in this section.
(v) The provisions of this Section 6.1(g) are intended to be
for the benefit of, and shall be enforceable by each Indemnified Party, and
each Indemnified Party's heirs and representatives.
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6.2 ADDITIONAL COVENANTS OF SOUTHERN. Southern covenants to and
with BancGroup as follows:
(a) Operations. Southern will conduct its business
and the business of each Southern Company in a proper and prudent manner and
will use its best efforts to maintain its relationships with its depositors,
customers and employees. No Southern Company will engage in any material
transaction outside the ordinary course of business or make any material change
in its accounting policies or methods of operation, nor will Southern permit
the occurrence of any change or event which would render any of the
representations and warranties in Article 5 hereof untrue in any material
respect at and as of the Effective Date with the same effect as though such
representations and warranties had been made at and as of such Effective Date.
Southern may request the consent of BancGroup to any of the foregoing actions
by furnishing BancGroup with a written request which describes the action
proposed to be taken by Southern. Such consent shall not be unreasonably
withheld. BancGroup shall have a period of 10 days from the date on which it
receives such request within which to notify Southern of either its consent or
refusal to consent, to the proposed action. BancGroup's failure to respond to
any such request within such 10 day period shall be deemed to constitute a
consent to the action proposed in Southern's request.
(b) Stockholders Meeting; Best Efforts. Southern will
cause the Stockholders Meeting to be held for the purpose of approving the
Merger as soon as practicable after the effective date of the Registration
Statement, and will use its best efforts to bring about the transactions
contemplated by this Agreement, including stockholder approval of this
Agreement, as soon as practicable unless this Agreement is terminated as
provided herein.
(c) Prohibited Negotiations. Until the termination of
this Agreement, neither Southern nor any of Southern's directors or officers
(or any person representing any of the foregoing) shall solicit or encourage
inquiries or proposals with respect to, furnish any information relating to or
participate in any negotiations or discussions concerning, any acquisition or
purchase of all or of a substantial portion of the Assets of, or of a
substantial equity interest in, Southern or any business combination involving
Southern or any Southern Company other than as contemplated by this Agreement.
Southern will notify BancGroup immediately if any such inquiries or proposals
are received by Southern, if any such information is requested from Southern,
or if any such negotiations or discussions are sought to be initiated with
Southern, and Southern shall instruct Southern's officers, directors, agents or
affiliates or their subsidiaries to refrain from doing any of the above;
provided, however, that nothing contained herein shall be deemed to prohibit
any officer or director of Southern from fulfilling his fiduciary duty or from
taking any action that is required by Law.
(d) Director Recommendation. The members of the Board of
Directors of Southern agree to support publicly the Merger, provided, however,
that nothing contained herein shall be deemed to prohibit any officer or
director of Southern from fulfilling his fiduciary duty or from taking any
action that is required by Law.
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(e) Shareholder Voting. Southern shall on the date of
execution of this Agreement obtain an agreement from certain of its
shareholders substantially in the form set forth in Exhibit A.
(f) Financial Statements. Southern shall furnish to
BancGroup:
(i) As soon as practicable and in any event within 30 days
after the end of each quarterly period (other than the last quarterly period)
in each fiscal year, consolidated statements of operations of Southern for such
period and for the period beginning at the commencement of the fiscal year and
ending at the end of such quarterly period, and a consolidated statement of
financial condition of Southern as of the end of such quarterly period, setting
forth in each case in comparative form figures for the corresponding periods
ending in the preceding fiscal year, subject to changes resulting from year-end
adjustments;
(ii) Promptly upon receipt thereof, copies of all audit
reports submitted to Southern by independent auditors in connection with each
annual, interim or special audit of the books of Southern made by such
accountants;
(iii) As soon a practicable, copies of all such financial
statements and reports as it shall send to its stockholders and of such regular
and periodic reports as Southern may file with the SEC or any other Agency; and
(iv) With reasonable promptness, such additional financial
data as the BancGroup may reasonably request.
ARTICLE 7
MUTUAL COVENANTS AND AGREEMENTS
7.1 BEST EFFORTS; COOPERATION. Subject to the terms and
conditions herein provided, BancGroup and Southern each agrees to use its best
efforts promptly to take, or cause to be taken, all actions and do, or cause to
be done, all things necessary, proper or advisable under applicable Laws or
otherwise, including, without limitation, promptly making required deliveries
of stockholder lists and stock transfer reports and attempting to obtain all
necessary Consents and waivers and regulatory approvals, to consummate and make
effective, as soon as practicable, the transactions contemplated by this
Agreement. The officers of each Party to this Agreement shall fully cooperate
with officers and employees, accountants, counsel and other representatives of
the other Parties not only in fulfilling the duties hereunder of the Party of
which they are officers but also in assisting, directly or through direction of
employees and other persons under their supervision or control, such as stock
transfer agents for the Party, the other Parties requiring information which is
reasonably available from such Party.
7.2 PRESS RELEASE. Each Party hereto agrees that, unless approved
by the other Parties in advance, such Party will not make any public
announcement, issue any press release or other publicity or confirm any
statements by any person not a party to this Agreement concerning the
transactions contemplated hereby. Notwithstanding the foregoing, each Party
hereto reserves the right to make any disclosure if such Party, in its
reasonable discretion, deems such disclosure required by Law. In that event,
such Party
30
shall provide to the other Party the text of such disclosure sufficiently in
advance to enable the other Party to have a reasonable opportunity to comment
thereon.
7.3 MUTUAL DISCLOSURE. Each Party hereto agrees to promptly
furnish to each other Party hereto its public disclosures and filings not
precluded from disclosure by Law including but not limited to call reports,
Form 8-K, Form 10-Q and Form 10-K filings, Y-2 applications, reports on Form
Y-6, quarterly or special reports to shareholders, Tax returns, Form S-8
registration statements and similar documents.
7.4 ACCESS TO PROPERTIES AND RECORDS. Each Party hereto shall
afford the officers and authorized representatives of each of the other Parties
full access to the Assets, books and records of such Party in order that such
other Parties may have full opportunity to make such investigation as they
shall desire of the affairs of such Party and shall furnish to such Parties
such additional financial and operating data and other information as to its
businesses and Assets as shall be from time to time reasonably requested.
ARTICLE 8
CONDITIONS TO OBLIGATIONS OF ALL PARTIES
The obligations of BancGroup and Southern to cause the transactions
contemplated by this Agreement to be consummated shall be subject to the
satisfaction, in the sole discretion of the Party relying upon such conditions,
on or before the Effective Date of all the following conditions, except as such
Parties may waive such conditions in writing:
8.1 APPROVAL BY SHAREHOLDERS. At the Stockholders Meeting, this
Agreement and the matters contemplated by this Agreement shall have been duly
approved by the vote of the holders of not less than the requisite number of
the issued and outstanding voting securities of Southern as is required by
applicable Law and Southern's articles of incorporation and by-laws.
8.2 REGULATORY AUTHORITY APPROVAL. Orders, Consents and
approvals, in form and substance reasonably satisfactory to BancGroup and
Southern shall have been entered by the Board of Governors of the Federal
Reserve System and other appropriate bank regulatory Agencies (i) granting the
authority necessary for the consummation of the transactions contemplated by
this Agreement and (ii) satisfying all other requirements prescribed by Law.
8.3 LITIGATION. There shall be no pending or threatened
Litigation in any court or any pending or threatened proceeding by any
governmental commission, board or Agency, with a view to seeking or in which it
is sought to restrain or prohibit consummation of the transactions contemplated
by this Agreement or in which it is sought to obtain divestiture, rescission or
damages in connection with the transactions contemplated by this Agreement and
no investigation by any Agency shall be pending or threatened which might
result in any such suit, action or other proceeding.
8.4 REGISTRATION STATEMENT. The Registration Statement shall be
effective under the 1933 Act and no stop order suspending the effectiveness of
the Registration Statement
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shall be in effect; no proceedings for such purpose, or under the proxy rules
of the SEC or any bank regulatory authority pursuant to the 1934 Act, as
amended, and with respect to the transactions contemplated hereby, shall be
pending before or threatened by the SEC or any bank regulatory authority; and
all approvals or authorizations for the offer of BancGroup Common Stock shall
have been received or obtained pursuant to any applicable state securities
Laws, and no stop order or proceeding with respect to the transactions
contemplated hereby shall be pending or threatened under any such state Law.
8.5 TAX OPINION. An opinion of Miller, Hamilton, Xxxxxx & Xxxx,
L.L.C., counsel to BancGroup, shall have been received by Southern and
BancGroup in form and substance reasonably satisfactory to Southern and
BancGroup to the effect that (i) the Merger will constitute a "reorganization"
within the meaning of section 368 of the Code; (ii) no gain or loss will be
recognized by Southern or BancGroup; (iii) no gain or loss will be recognized
to the stockholders of Southern who receive shares of BancGroup Common Stock;
(iv) the basis of the BancGroup Common Stock received in the Merger will be
equal to the basis of the shares of Southern common stock exchanged in the
Merger; (v) the holding period of the BancGroup Common Stock will include the
holding period of the shares of Southern common stock exchanged therefor if
such shares of Southern common stock were capital assets in the hands of the
exchanging Southern stockholder; and (vi) cash received by a Southern
stockholder in lieu of a fractional share interest of BancGroup Common Stock
will be treated as having been received as a distribution in full payment in
exchange for the fractional share interest of BancGroup Common Stock which he
would otherwise be entitled to receive and will qualify as capital gain or loss
(assuming Southern common stock was a capital asset in his hands as of the
Effective Date).
8.6 MARKET VALUE. The average of the closing prices as reported
by the NYSE of BancGroup Common Stock for the period of 20 consecutive trading
days ending on the trading day immediately preceding the Effective Date shall
not be less than $24.625 or greater than $36.625.
ARTICLE 9
CONDITIONS TO OBLIGATIONS OF SOUTHERN
The obligations of Southern to cause the transactions contemplated by
this Agreement to be consummated shall be subject to the satisfaction on or
before the Effective Date of all the following conditions except as Southern
may waive such conditions in writing:
9.1 REPRESENTATIONS, WARRANTIES AND COVENANTS. Notwithstanding
any investigation made by or on behalf of Southern, all representations and
warranties of BancGroup contained in this Agreement shall be true in all
material respects on and as of the Effective Date as if such representations
and warranties were made on and as of such Effective Date, and BancGroup shall
have performed in all material respects all agreements and covenants required
by this Agreement to be performed by it on or prior to the Effective Date.
9.2 ADVERSE CHANGES. There shall have been no changes after the
date of the most recent balance sheet provided under section 4.3(a)(i) hereof
in the results of
32
operations (as compared with the corresponding period of the prior fiscal
year), Assets, Liabilities, financial condition or affairs of BancGroup which
in their total effect constitute a Material Adverse Effect, nor shall there
have been any material changes in the Laws governing the business of BancGroup
or which would impair the rights of Southern or its stockholders pursuant to
this Agreement.
9.3 CLOSING CERTIFICATE. In addition to any other deliveries
required to be delivered hereunder, Southern shall have received a certificate
from the President or a Vice President and from the Secretary or Assistant
Secretary of BancGroup dated as of the Closing certifying that:
(a) the Board of Directors of BancGroup has duly adopted
resolutions (copies of which shall be attached to such certificate) approving
the substantive terms of this Agreement and authorizing the consummation of the
transactions contemplated by this Agreement and such resolutions have not been
amended or modified and remain in full force and effect;
(b) each person executing this Agreement on behalf of
BancGroup is an officer of BancGroup holding the office or offices specified
therein and the signature of each person set forth on such certificate is his
or her genuine signature;
(c) the certificate of incorporation and bylaws of
BancGroup referenced in section 4.4 hereof remain in full force and effect;
(d) such persons have no knowledge of a basis for any
material claim, in any court or before any Agency or arbitration and or
otherwise against, by or affecting BancGroup or the business, prospects,
condition (financial or otherwise), or Assets of BancGroup or which would
prevent the performance of this Agreement or the transactions contemplated by
this Agreement or declare the same unlawful or cause the recision thereof;
(e) to such persons' knowledge, the Proxy Statement
delivered to Southern's stockholders, or any amendments or revisions thereto so
delivered, as of the date thereof, did not contain or incorporate by reference,
any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein, not
misleading in light of the circumstances under which they were made (it being
understood that such persons need not express a statement as to information
concerning or provided by Southern for inclusion in such Proxy Statement); and
(f) the conditions set forth in this Article 9 insofar as
they relate to BancGroup have been satisfied.
9.4 OPINION OF COUNSEL. Southern shall have received an opinion
of Miller, Hamilton, Xxxxxx & Xxxx, L.L.C., counsel to BancGroup, dated as of
the Closing, in form reasonably satisfactory to Southern, as to matters set
forth in Exhibit B hereto.
9.5 COMFORT LETTER. Southern shall have received from Coopers &
Xxxxxxx, L.L.P., comfort letters dated the date of the mailing of the Proxy
Statement and the
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Effective Date, covering matters customary in transactions such as the Merger,
and in form and substance reasonably satisfactory to Southern.
9.6 FAIRNESS OPINION. Southern shall have received prior to the
mailing of the Proxy Statement from The Xxxxxx Xxxxxx Company a letter setting
forth its opinion that the consideration to be received by the shareholders of
Southern under the terms of this Agreement is fair to them from a financial
point of view.
9.7 NYSE LISTING. The shares of BancGroup Common Stock to be
issued under this Agreement shall have been approved for listing on the NYSE.
9.8 OTHER MATTERS. There shall have been furnished to such
counsel for Southern certified copies of such corporate records of BancGroup
and copies of such other documents as such counsel may reasonably have
requested for such purpose.
ARTICLE 10
CONDITIONS TO OBLIGATIONS OF BANCGROUP
The obligations of BancGroup to cause the transactions contemplated by
this Agreement to be consummated shall be subject to the satisfaction by
Southern on or before the Effective Date of the following conditions except as
BancGroup may waive such conditions in writing:
10.1 REPRESENTATIONS, WARRANTIES AND COVENANTS. Notwithstanding
any investigation made by or on behalf of BancGroup, all representations and
warranties of Southern contained in this Agreement shall be true in all
material respects on and as of the Effective Date as if such representations
and warranties were made on and as of the Effective Date, and Southern shall
have performed in all material respects all agreements and covenants required
by this Agreement to be performed by it on or prior to the Effective Date.
10.2 ADVERSE CHANGES. There shall have been no changes after the
date of the most recent balance sheet provided under section 5.4(a)(i) hereof
in the results of operations (as compared with the corresponding period of the
prior fiscal year), Assets, Liabilities, financial condition, or affairs of
Southern which constitute a Material Adverse Effect, nor shall there have been
any material changes in the Laws governing the business of Southern which would
impair BancGroup's rights pursuant to this Agreement.
10.3 CLOSING CERTIFICATE. In addition to any other deliveries
required to be delivered hereunder, BancGroup shall have received a certificate
from the President or Vice President and from the Secretary or Assistant
Secretary of Southern dated as of the Closing certifying that:
(a) the Board of Directors of Southern has duly adopted
resolutions (copies of which shall be attached to such certificate) approving
the substantive terms of this
34
Agreement and authorizing the consummation of the transactions contemplated by
this Agreement and such resolutions have not been amended or modified and
remain in full force and effect;
(b) the shareholders of Southern have duly adopted
resolutions (copies of which shall be attached to such certificate) approving
the substantive terms of the Merger and the transactions contemplated thereby
and such resolutions have not been amended or modified and remain in full force
and effect;
(c) each person executing this Agreement on behalf of
Southern is an officer of Southern holding the office or offices specified
therein and the signature of each person set forth on such certificate is his
or her genuine signature;
(d) the charter documents of Southern and the Bank
referenced in section 5.8 hereof were in full force and effect and have not
been amended or modified since the date hereof;
(e) to such persons' knowledge, the Proxy Statement
delivered to Southern's stockholders, or any amendments or revisions thereto so
delivered, as of the date thereof, did not contain or incorporate by reference
any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein, not
misleading in light of the circumstances under which they were made (it being
understood that such persons need only express a statement as to information
concerning or provided by Southern for inclusion in such Proxy Statement); and
(f) the conditions set forth in this Article 10 insofar
as they relate to Southern have been satisfied.
10.4 OPINION OF COUNSEL. BancGroup shall have received an opinion
of Xxxxxx & Xxxxx, counsel to Southern, dated as of the Closing, in form
reasonably satisfactory to BancGroup, as to matters set forth in Exhibit C
hereto.
10.5 CONTROLLING SHAREHOLDERS. Each shareholder of Southern
who may be an "affiliate" of Southern, within the meaning of Rule 145 of the
general rules and regulations under the 1933 Act shall have executed and
delivered an agreement satisfactory to BancGroup to the effect that such person
shall not make a "distribution" (within the meaning of Rule 145) of the Common
Stock which he receives upon the Effective Date and that such Common Stock will
be held subject to all applicable provisions of the 1933 Act and the rules and
regulations of the SEC thereunder. The agreement will also provide that no
affiliate of Southern will sell or otherwise reduce such affiliate's risk
relative to any shares of BancGroup Common Stock received in the Merger until
financial results concerning at least 30 days of post-Merger combined
operations have been published. Southern recognizes and acknowledges that
Common Stock issued to such persons may bear a legend evidencing the agreement
described above.
10.6 OTHER MATTERS. There shall have been furnished to counsel for
BancGroup certified copies of such corporate records of Southern and copies of
such other documents as such counsel may reasonably have requested for such
purpose.
35
10.7 DISSENTERS. The number of shares as to which shareholders of
Southern have exercised dissenters rights of appraisal under section 3.6 does
not exceed 10% of the outstanding shares of common stock of Southern.
10.8 POOLING OF INTERESTS. BancGroup shall have received the
written opinion of Coopers & Xxxxxxx, L.L.P., that the Merger will qualify for
the pooling of interests method of accounting under generally accepted
accounting principles.
10.9 MATERIAL EVENTS. There shall have been no determination by
the board of directors of BancGroup that the transactions contemplated by this
Agreement have become impractical because of any state of war or declaration of
a banking moratorium in the United States.
ARTICLE 11
TERMINATION OF REPRESENTATIONS AND WARRANTIES
All representations and warranties provided in Articles 4 and 5 of
this Agreement or in any closing certificate pursuant to Articles 9 and 10
shall terminate and be extinguished at and shall not survive the Effective
Date. All covenants, agreements and undertakings required by this Agreement to
be performed by any Party hereto following the Effective Date shall survive
such Effective Date and be binding upon such Party. If the Merger is not
consummated, all representations, warranties, obligations, covenants, or
agreements hereunder or in any certificate delivered hereunder relating to the
transaction which is not consummated shall be deemed to be terminated or
extinguished except that Section 7.2, Article 11, Article 15 and any applicable
definitions of Article 14, shall survive. Items disclosed in the Exhibits and
Schedules attached hereto are incorporated into this Agreement and form a part
of the representations, warranties, covenants or agreements to which they
relate. Information provided in such Exhibits and Schedules is provided only
in response to the specific section of this Agreement which calls for such
information.
ARTICLE 12
NOTICES
All notices, requests, demands and other communications under this
Agreement shall be in writing and shall be deemed to have been duly given at
the time given or mailed, first class postage prepaid:
(a) If to Southern to Xxxxxxx X. Xxxxxxxx, Xx. President
and CEO, Southern Banking Corporation, 000 Xxxx Xxxx Xxxxxx, Xxxxxxx, Xxxxxxx
00000, facsimile (000) 000-0000, with copies to Xxx Xxxxx, Esq., Xxxxxx &
Xxxxx, Suite 1000, 00 Xxxxx Xxxxxx Xxxxxx, Xxxxxxx, Xxxxxxx 00000, facsimile
(000) 000-0000, or as may otherwise be specified by Southern in writing to
BancGroup.
(b) If to BancGroup, to X. Xxxxx Oakley, IV, Xxx Xxxxxxxx
Xxxxxx, Xxxxx 000, Xxxxxxxxxx, Xxxxxxx, 00000, facsimile (000) 000-0000, with a
copy to Xxxxxxx X. Xxxxxx, Miller, Hamilton, Xxxxxx & Xxxx, Xxx Xxxxxxxx
Xxxxxx, Xxxxx 000, Xxxxxxxxxx, Xxxxxxx 00000, facsimile (000) 000-0000, or as
may otherwise be specified in writing by BancGroup to Southern.
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ARTICLE 13
AMENDMENT OR TERMINATION
13.1 AMENDMENT. This Agreement may be amended by the mutual
consent of BancGroup and Southern before or after approval of the transactions
contemplated herein by the shareholders of Southern.
13.2 TERMINATION. This Agreement may be terminated at any time
prior to or on the Effective Date whether before or after action thereon by the
shareholders of Southern, as follows:
(a) by the mutual consent of the respective boards of
directors of Southern and BancGroup;
(b) by the board of directors of either Party (provided
that the terminating Party is not then in material breach of any
representation, warranty, covenant, or other agreement contained in this
Agreement) in the event of a breach by the other Party of any representation or
warranty contained in this Agreement which cannot be or has not been cured
within thirty (30) days after the giving of written notice to the breaching
Party of such breach and which breach would provide the non-breaching Party the
ability to refuse to consummate the Merger under the standard set forth in
section 10.1 of this Agreement in the case of BancGroup and section 9.1 of this
Agreement in the case of Southern;
(c) by the board of directors of either Party (provided
that the terminating Party is not then in material breach of any
representation, warranty, covenant, or other agreement contained in this
Agreement) in the event 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 thirty (30) days after the giving of written notice to the breaching
Party of such breach, or if any of the conditions to the obligations of such
Party contained in this Agreement shall not have been satisfied in full;
(d) by the board of directors of either BancGroup or
Southern if all transactions contemplated by this Agreement shall not have been
consummated on or prior to September 30, 1996, if the failure to consummate the
transactions provided for in this Agreement on or before such date is not
caused by any breach of this Agreement by the Party electing to terminate
pursuant to this section 13.2(d); or
(e) by the board of directors of either BancGroup or
Southern if the average of the closing prices of the BancGroup Common Stock
reported by the NYSE for the 20 consecutive trading days ending on the trading
day immediately proceeding the Effective Date shall be less than $24.625 or
greater than $36.625.
13.3 DAMAGES. In the event of termination pursuant to section
13.2, Southern and BancGroup shall not be liable for damages for any breach of
warranty or representation contained in this Agreement made in good faith, and,
in that case, the expenses incurred shall be borne as set forth in section 15.1
hereof.
ARTICLE 14
37
DEFINITIONS
(a) The following terms, which are capitalized in this
Agreement, shall have the meanings set forth below for the purpose of this
Agreement:
Agencies Shall mean, collectively, the Federal Trade
Commission, the United States Department of
Justice, the Board of the Governors of the
Federal Reserve System, the Federal Deposit
Insurance Corporation, the Office of Thrift
Supervision, all state regulatory agencies
having jurisdiction over the Parties and their
respective Subsidiaries, HUD, the VA, the FHA,
the GNMA, the FNMA, the FHLMC, the NYSE, and
the SEC.
Agreement Shall mean this Amended and Restated Agreement and
Plan of Merger and the Exhibits and Schedules
delivered pursuant hereto and incorporated herein
by reference.
Assets Of a Person shall mean all of the assets,
properties, businesses and rights of such
Person of every kind, nature, character and
description, whether real, personal or mixed,
tangible or intangible, accrued or contingent,
or otherwise relating to or utilized in such
Person's business, directly or indirectly, in
whole or in part, whether or not carried on the
books and records of such Person, and whether
or not owned in the name of such Person or any
Affiliate of such Person and wherever located.
BancGroup The Colonial BancGroup, Inc., a Delaware
corporation with its principal offices in
Montgomery, Alabama.
Bank Southern Bank of Central Florida, a Florida banking corporation.
Closing The closing of the transactions contemplated hereby as described in section
2.7 of this Agreement.
Code The Internal Revenue Code of 1986, as amended.
Common Stock BancGroup's Common Stock authorized and defined in the restated certificate of
incorporation of BancGroup, as amended.
Consent Any consent, approval, authorization, clearance, exemption, waiver, or similar
affirmation by any Person pursuant to any Contract, Law, Order, or Permit.
38
Contract Any written or oral agreement, arrangement, authorization, commitment,
contract, indenture, instrument, lease, obligation, plan, practice,
restriction, understanding or undertaking of any kind or character, or other
document to which any Person is a party or that is binding on any Person or
its capital stock, Assets or business.
Default Shall mean (i) any breach or violation of or default under any Contract, Order
or Permit, (ii) any occurrence of any event that with the passage of time or
the giving of notice or both would constitute a breach or violation of or
default under any Contract, Order or Permit, or (iii) any occurrence of any
event that with or without the passage of time or the giving of notice would
give rise to a right to terminate or revoke, change the current terms of, or
renegotiate, or to accelerate, increase, or impose any Liability under, any
Contract, Order or Permit.
DGCL The Delaware General Corporation Law.
Effective Date Means the date and time at which the Merger becomes effective as defined in
section 2.7 hereof.
Environmental Laws Means the laws, regulations and governmental requirements referred to in
section 5.23 hereof.
ERISA The Employee Retirement Income Security Act of 1974, as amended.
Exchange Ratio The ratio of the number of shares of BancGroup Common Stock to be issued for
one share of Southern Stock, as defined in section 3.1(a).
Exhibits A through C, 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.
FBCA The Florida Business Corporation Act
Knowledge Means the actual knowledge of the Chairman, President, Chief Financial
Officer, Chief Accounting Officer, Chief Credit Officer, General Counsel or
any Senior or Executive Vice President of BancGroup, in the case of
39
knowledge of BancGroup, or of Southern and the Bank, in the case of knowledge
of Southern.
Law Any code, 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 Agency.
Liability Any direct or indirect, primary or secondary, liability, indebtedness,
obligation, penalty, cost or expense (including costs of investigation,
collection and defense), 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 Any conditional sale agreement, default of title, easement, encroachment,
encumbrance, hypothecation, infringement, lien, mortgage, pledge, reservation,
restriction, security interest, title retention or other security arrangement,
or any adverse right or interest, charge, or claim of any nature whatsoever
of, on, or with respect to any property or property interest, other than
(i) Liens for current property Taxes not yet due and payable, (ii) for
depository institution Subsidiaries of a Party, pledges to secure deposits and
other Liens incurred in the ordinary course of the banking business, and
(iii) Liens in the form of easements and restrictive covenants on real
property which do not materially adversely affect the use of such property by
the current owner thereof.
Litigation Any action, arbitration, complaint, criminal prosecution, governmental or
other examination or investigation, hearing, inquiry, administrative or other
proceeding relating to or affecting a Party, its business, its Assets
(including Contracts related to it), or the transactions contemplated by this
Agreement.
Loan Property Any property owned by the Party in question or by any of its Subsidiaries or
in which such Party or Subsidiary holds a security interest, and, where
required by the
40
context, includes the owner or operator of such property, but only with
respect to such property.
Loss Any and all direct or indirect payments, obligations, recoveries,
deficiencies, fines, penalties, interest, assessments, losses, diminution in
the value of Assets, damages, punitive, exemplary or consequential damages
(including, but not limited to, lost income and profits and interruptions of
business), liabilities, costs, expenses (including without limitation,
reasonable attorneys' fees and expenses, and consultant's fees and other costs
of defense or investigation), and interest on any amount payable to a third
party as a result of the foregoing.
material For purposes of this Agreement shall be determined in light of the facts and
circumstances of the matter in question; provided that any specific monetary
amount stated in this Agreement shall determine materiality in that instance.
Material Adverse Effect On a Party shall mean an event, change or occurrence which has a material
adverse impact on (i) the financial position, business, or results of
operations of such Party and its Subsidiaries, taken as a whole, or (ii) the
ability of such Party to perform its obligations under this Agreement or to
consummate the Merger or the other transactions contemplated by this Agreement
provided that "material adverse impact" shall not be deemed to include the
impact of (x) changes in banking and similar laws of general applicability or
interpretations thereof by courts or governmental authorities, (y) changes in
generally accepted accounting principles or regulatory accounting principles
generally applicable to banks and their holding companies, and (z) the Merger
and compliance with the provisions of this Agreement on the operating
performance of the Parties.
Merger The merger of Southern with BancGroup as contemplated in this Agreement.
NYSE The New York Stock Exchange.
Order 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
41
court, arbitrator, mediator, tribunal, administrative agency or Agency.
Party Shall mean Southern or BancGroup, and "Parties" shall mean both Southern and
BancGroup.
Permit 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 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 The proxy statement used by Southern to solicit the approval of its
stockholders of the transactions contemplated by this Agreement, which shall
include the prospectus of BancGroup relating to the issuance of the BancGroup
Common Stock to the shareholders of Southern.
Registration Statement The registration statement on Form S-4, or such other appropriate form, to be
filed with the SEC by BancGroup, and which has been agreed to by Southern, to
register the shares of BancGroup Common Stock offered to stockholders of the
Bank pursuant to this Agreement, including the Proxy Statement.
Resulting Corporation BancGroup, as the surviving corporation resulting from the Merger.
SEC United States Securities and Exchange Commission.
Southern Southern Banking Corporation, a Florida corporation.
Southern Company Shall mean Southern the Bank, any Subsidiary of Southern or the Bank, or any
person or entity acquired as a Subsidiary of Southern or the Bank in the
future and owned by Southern at the Effective Date.
42
Southern Options Options respecting the issuance of Southern common stock pursuant to
Southern's stock option plans.
Southern Stock Shares of Common stock, par value $1.00 per share, of Southern.
Stockholders Meeting The special meeting of stockholders of Southern called to approve the
transactions contemplated by this Agreement.
Subsidiaries Shall mean all those corporations, banks, associations, or other entities of
which the entity in question owns or controls 5% or more of the outstanding
equity securities either directly or through an unbroken chain of entities as
to each of which 5% or more of the outstanding equity securities is owned
directly or indirectly by its parent; provided, however, there shall not be
included any such entity acquired through foreclosure or any such entity the
equity securities of which are owned or controlled in a fiduciary capacity.
Tax or Taxes Means any federal, state, county, local, foreign, and other taxes,
assessments, charges, fares, and impositions, including interest and penalties
thereon or with respect thereto.
1933 Act The Securities Act of 1933, as amended.
1934 Act The Securities Exchange Act of 1934, as amended.
ARTICLE 15
MISCELLANEOUS
15.1 EXPENSES. Each Party hereto shall bear its own legal,
auditing, trustee, investment banking, regulatory and other expenses in
connection with this Agreement and the transactions contemplated hereby.
15.2 BENEFIT. This Agreement shall inure to the benefit of and be
binding upon Southern and BancGroup, and their respective successors. This
Agreement shall not be assignable by any Party without the prior written
consent of the other Party.
15.3 GOVERNING LAW. This Agreement shall be governed by, and
construed in accordance with the Laws of the State of Alabama without regard to
any conflict of Laws.
43
15.4 COUNTERPARTS. This Agreement may be executed in counterparts,
each of which shall be deemed to constitute an original. Each such counterpart
shall become effective when one counterpart has been signed by each Party
thereto.
15.5 HEADINGS. The headings of the various articles and sections
of this Agreement are for convenience of reference only and shall not be deemed
a part of this Agreement or considered in construing the provisions thereof.
15.6 SEVERABILITY. Any term or provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining terms and provisions thereof or affecting the
validity or enforceability of such provision in any other jurisdiction, and if
any term or provision of this Agreement is held by any court of competent
jurisdiction to be void, voidable, invalid or unenforceable in any given
circumstance or situation, then all other terms and provisions, being
severable, shall remain in full force and effect in such circumstance or
situation and the said term or provision shall remain valid and in effect in
any other circumstances or situation.
15.7 CONSTRUCTION. Use of the masculine pronoun herein shall be
deemed to refer to the feminine and neuter genders and the use of singular
references shall be deemed to include the plural and vice versa, as
appropriate. No inference in favor of or against any Party shall be drawn from
the fact that such Party or such Party's counsel has drafted any portion of
this Agreement.
15.8 RETURN OF INFORMATION. In the event of termination of this
Agreement prior to the Effective Date, each Party shall return to the other,
without retaining copies thereof, all confidential or non-public documents,
work papers and other materials obtained from the other Party in connection
with the transactions contemplated in this Agreement and shall keep such
information confidential, not disclose such information to any other person or
entity, and not use such information in connection with its business.
15.9 EQUITABLE REMEDIES. The parties hereto agree that, in the
event of a breach of this Agreement by either Party, the other Party may be
without an adequate remedy at law owing to the unique nature of the contemplated
transactions. In recognition thereof, in addition to (and not in lieu of) any
remedies at law that may be available to the non-breaching Party, the
non-breaching Party shall be entitled to obtain equitable relief, including the
remedies of specific performance and injunction, in the event of a breach of
this Agreement by the other Party, and no attempt on the part of the
non-breaching Party to obtain such equitable relief shall be deemed to
constitute an election of remedies by the non-breaching Party that would
preclude the non-breaching Party from obtaining any remedies at law to which it
would otherwise be entitled.
15.10 ATTORNEYS' FEES. If any Party hereto shall bring an action at
law or in equity to enforce its rights under this Agreement (including an
action based upon a misrepresentation or the breach of any warranty, covenant,
agreement or obligation contained herein), the prevailing Party in such action
shall be entitled to recover from the
44
other Party its costs and expenses incurred in connection with such action
(including fees, disbursements and expenses of attorneys and costs of
investigation).
15.11 NO WAIVER. No failure, delay or omission of or by any Party
in exercising any right, power or remedy upon any breach or Default of any
other Party shall impair any such rights, powers or remedies of the Party not
in breach or Default, nor shall it be construed to be a wavier of any such
right, power or remedy, or an acquiescence in any similar breach or Default;
nor shall any waiver of any single breach or Default be deemed a waiver of any
other breach or default theretofore or thereafter occurring. Any waiver,
permit, consent or approval of any kind or character on the part of any Party
of any provisions of this Agreement must be in writing and be executed by the
Parties to this Agreement and shall be effective only to the extent
specifically set forth in such writing.
15.12 REMEDIES CUMULATIVE. All remedies provided in this Agreement,
by law or otherwise, shall be cumulative and not alternative.
15.13 ENTIRE CONTRACT. This Agreement and the documents and
instruments referred to herein constitute the entire contract between the
parties to this Agreement and supersede all other understandings with respect
to the subject matter of this Agreement.
IN WITNESS WHEREOF, Financial and BancGroup have caused this Agreement
to be signed by their respective duly authorized officers as of the date first
above written.
ATTEST: SOUTHERN BANKING CORPORATION
BY: Xxxxxxx X. Xxxxxxxx BY: J. Xxxxxx Xxxxxxx
--------------------------- --------------------------
ITS: President & CEO ITS: Chairman
--------------------------- --------------------------
(CORPORATE SEAL)
ATTEST: THE COLONIAL BANCGROUP, INC.
BY: Xxxxxx Xxxxxxx BY: X. Xxxxx Oakley
--------------------------- --------------------------
ITS: Assistant Secretary ITS: Chief Financial Officer
--------------------------- --------------------------
(CORPORATE SEAL)
