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EXHIBIT 99.1
AGREEMENT AND PLAN OF MERGER
BY AND BETWEEN
FIRST BANKING COMPANY OF SOUTHEAST GEORGIA
AND
XXXXX BANCORP, INC.
Dated as of November 30, 1998
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TABLE OF CONTENTS
LIST OF EXHIBITS.............................................................V
AGREEMENT AND PLAN OF MERGER.................................................1
ARTICLE 1. TRANSACTIONS AND TERMS OF THE MERGER.......................1
1.1 MERGER..............................................................1
1.2 TIME AND PLACE OF CLOSING...........................................1
1.3 EFFECTIVE TIME......................................................2
ARTICLE 2. TERMS OF MERGER............................................2
2.1 ARTICLES OF INCORPORATION...........................................2
2.2 BYLAWS..............................................................2
2.3 DIRECTORS AND OFFICERS..............................................2
ARTICLE 3. MANNER OF CONVERTING SHARES................................3
3.1 CONVERSION OF SHARES................................................3
3.2 ANTI-DILUTION PROVISIONS............................................3
3.3 SHARES HELD BY XXXXX OR FIRST BANKING...............................3
3.4 DISSENTING SHAREHOLDERS.............................................3
3.5 FRACTIONAL SHARES...................................................4
ARTICLE 4. EXCHANGE OF SHARES.........................................4
4.1 EXCHANGE PROCEDURES.................................................4
4.2 RIGHTS OF FORMER SHAREHOLDERS OF XXXXX..............................5
ARTICLE 5. REPRESENTATIONS AND WARRANTIES OF XXXXX....................5
5.1 ORGANIZATION, STANDING, AND POWER...................................6
5.2 AUTHORITY OF XXXXX; NO BREACH BY AGREEMENT..........................6
5.3 CAPITAL STOCK.......................................................7
5.4 XXXXX SUBSIDIARIES..................................................7
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5.5 SEC FILINGS; FINANCIAL STATEMENTS...................................8
5.6 ABSENCE OF UNDISCLOSED LIABILITIES..................................8
5.7 ABSENCE OF CERTAIN CHANGES OR EVENTS................................9
5.8 TAX MATTERS.........................................................9
5.9 ALLOWANCE FOR POSSIBLE LOAN LOSSES.................................10
5.10 ASSETS..........................................................10
5.11 INTELLECTUAL PROPERTY...........................................11
5.12 ENVIRONMENTAL MATTERS...........................................11
5.13 COMPLIANCE WITH LAWS............................................12
5.14 LABOR RELATIONS.................................................13
5.15 EMPLOYEE BENEFIT PLANS..........................................13
5.16 MATERIAL CONTRACTS..............................................15
5.17 LEGAL PROCEEDINGS...............................................16
5.18 REPORTS.........................................................16
5.19 STATEMENTS TRUE AND CORRECT.....................................16
5.20 ACCOUNTING, TAX AND REGULATORY MATTERS..........................17
5.21 CHARTER PROVISIONS..............................................17
5.22 BOARD RECOMMENDATION...........................................17
5.23 Y-2K............................................................17
ARTICLE 6. REPRESENTATIONS AND WARRANTIES OF FIRST BANKING...........17
6.1 ORGANIZATION, STANDING, AND POWER..................................17
6.2 AUTHORITY OF FIRST BANKING; NO BREACH BY AGREEMENT.................18
6.3 CAPITAL STOCK......................................................19
6.4 FIRST BANKING SUBSIDIARIES.........................................19
6.5 SEC FILINGS, FINANCIAL STATEMENTS..................................20
6.6 ABSENCE OF UNDISCLOSED LIABILITIES.................................20
6.7 ABSENCE OF CERTAIN CHANGES OR EVENTS...............................21
6.8 TAX MATTERS........................................................21
6.9 ALLOWANCE FOR POSSIBLE LOAN LOSSES.................................22
6.10 ASSETS..........................................................22
6.11 INTELLECTUAL PROPERTY...........................................23
6.12 ENVIRONMENTAL MATTERS...........................................24
6.13 COMPLIANCE WITH LAWS............................................24
6.14 LABOR RELATIONS.................................................25
6.15 EMPLOYEE BENEFIT PLANS..........................................25
6.16 MATERIAL CONTRACTS..............................................27
6.17 LEGAL PROCEEDINGS...............................................28
6.18 REPORTS.........................................................28
6.19 STATEMENTS TRUE AND CORRECT.....................................28
6.20 ACCOUNTING, TAX AND REGULATORY MATTERS..........................29
6.21 CHARTER PROVISIONS..............................................29
6.22 BOARD RECOMMENDATION...........................................29
6.23 Y2K.............................................................29
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ARTICLE 7. CONDUCT OF BUSINESS PENDING CONSUMMATION..................29
7.1 AFFIRMATIVE COVENANTS OF XXXXX.....................................29
7.2 NEGATIVE COVENANTS OF XXXXX........................................30
7.3 AFFIRMATIVE COVENANTS OF FIRST BANKING.............................32
7.4 NEGATIVE COVENANTS OF FIRST BANKING................................32
7.5 ADVERSE CHANGES IN CONDITION.......................................32
7.6 REPORTS............................................................32
ARTICLE 8. ADDITIONAL AGREEMENTS.....................................32
8.1 REGISTRATION STATEMENT.............................................32
8.2 NASDAQ LISTING.....................................................33
8.3 SHAREHOLDER APPROVAL...............................................33
8.4 APPLICATIONS.......................................................33
8.5 FILINGS WITH STATE OFFICES.........................................33
8.6 AGREEMENT AS TO EFFORTS TO CONSUMMATE..............................33
8.7 INVESTIGATION AND CONFIDENTIALITY..................................34
8.8 PRESS RELEASES.....................................................34
8.9 CERTAIN ACTIONS....................................................35
8.10 ACCOUNTING AND TAX TREATMENT....................................35
8.11 CHARTER PROVISIONS..............................................35
8.12 AGREEMENTS OF AFFILIATES........................................35
8.13 EMPLOYEE BENEFITS AND CONTRACTS.................................36
8.14 INDEMNIFICATION.................................................36
ARTICLE 9. CONDITIONS PRECEDENT TO OBLIGATIONS TO CONSUMMATE.........37
9.1 CONDITIONS TO OBLIGATIONS OF EACH PARTY............................37
9.2 CONDITIONS TO OBLIGATIONS OF FIRST BANKING.........................39
9.3 CONDITIONS TO OBLIGATIONS OF XXXXX.................................40
ARTICLE 10. TERMINATION...............................................41
10.1 TERMINATION.....................................................41
10.2 EFFECT OF TERMINATION...........................................42
10.3 NON-SURVIVAL OF REPRESENTATIONS AND COVENANTS...................42
ARTICLE 11. MISCELLANEOUS.............................................42
11.1 DEFINITIONS.....................................................42
11.2 EXPENSES........................................................49
11.3 BROKERS AND FINDERS.............................................50
11.4 ENTIRE AGREEMENT................................................50
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11.5 AMENDMENTS......................................................50
11.6 WAIVERS.........................................................51
11.7 ASSIGNMENT......................................................51
11.8 NOTICES.........................................................51
11.9 GOVERNING LAW...................................................52
11.10 COUNTERPARTS....................................................52
11.11 CAPTIONS, ARTICLES AND SECTIONS.................................52
11.12 INTERPRETATIONS.................................................52
11.13 ENFORCEMENT OF AGREEMENT........................................52
11.14 SEVERABILITY....................................................53
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LIST OF EXHIBITS
EXHIBIT
NUMBER DESCRIPTION
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1. Form of Agreement of Affiliates of Xxxxx Bancorp, Inc.
(ss. 8.12, ss. 9.2(f)).
2. Form of Claims Letter (ss. 9.2(g)).
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AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (the "Agreement") is made and entered
into as of November 30, 1998, by and between FIRST BANKING COMPANY OF SOUTHEAST
GEORGIA ("FIRST BANKING"), a Georgia corporation located in Statesboro, Georgia,
and XXXXX BANCORP, INC.("XXXXX"), a Georgia corporation located in Jesup,
Georgia.
PREAMBLE
The respective Boards of Directors of XXXXX and FIRST BANKING are of
the opinion that the transactions described herein are in the best interests of
the Parties to this Agreement and their respective shareholders. This Agreement
provides for the acquisition of XXXXX by FIRST BANKING, pursuant to the merger
of XXXXX with and into FIRST BANKING. At the effective time of such merger, the
outstanding shares of the capital stock of XXXXX shall be converted into the
right to receive shares of the common stock of FIRST BANKING (except as provided
herein). As a result, shareholders of XXXXX shall become shareholders of FIRST
BANKING, and FIRST BANKING shall conduct the business and operations of XXXXX.
The transactions described in this Agreement are subject to (a) approval of the
shareholders of XXXXX, (b) approval of the Georgia Department of Banking and
Finance, (c) approval of the Board of Governors of the Federal Reserve, and (d)
satisfaction of certain other conditions described in this Agreement. It is the
intention of the Parties to this Agreement that the merger, for federal income
tax purposes, shall qualify as a "reorganization" within the meaning of Section
368(a) of the Internal Revenue Code, and, for accounting purposes, shall qualify
for treatment as a pooling of interests.
Certain terms used in this Agreement are defined in Section 11.1
hereof.
NOW, THEREFORE, in consideration of the above and the mutual
warranties, representations, covenants, and agreements set forth herein, the
Parties agree as follows:
ARTICLE 1.
TRANSACTIONS AND TERMS OF THE MERGER
1.1 MERGER. Subject to the terms and conditions of this Agreement, at the
Effective Time, XXXXX will merge with and into FIRST BANKING in accordance with
the provisions of Section 14-2-1101 of the GBCC and with the effect provided in
Section 14-2-1106 of the GBCC (the "Merger"). FIRST BANKING shall be the
Surviving Corporation resulting from the Merger and shall continue to be
governed by the Laws of the State of Georgia. The Merger shall be consummated
pursuant to the terms of this Agreement, which has been approved and adopted by
the respective Boards of Directors of XXXXX and FIRST BANKING, as set forth
herein.
1.2 TIME AND PLACE OF CLOSING. The closing of the transactions contemplated
hereby (the "Closing") will take place at 9:00 A.M. on the date that the
Effective Time occurs (or the immediately preceding day if the Effective Time is
earlier than 9:00 A.M.), or at such other time
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as the Parties, acting through their authorized officers, may mutually agree.
The Closing shall be held at such location as may be mutually agreed upon by the
Parties.
1.3 EFFECTIVE TIME. The Merger and other transactions contemplated by this
Agreement shall become effective on the date and at the time the Certificate of
Merger reflecting the Merger shall become effective with the Secretary of State
of the State of Georgia (the "Effective Time"). Subject to the terms and
conditions hereof, unless otherwise mutually agreed upon in writing by the
authorized officers of each Party, the Parties shall use their reasonable
efforts to cause the Effective Time to occur on the fifth business day following
the last to occur of (i) the effective date (including expiration of any
applicable waiting period) of the last required Consent of any Regulatory
Authority having authority over and approving or exempting the Merger, and (ii)
the earliest date on which the shareholders of XXXXX have approved this
Agreement to the extent such approval is required by applicable Law; provided,
however, that the date of the Effective Time shall not extend past the
termination date set forth in ss. 10.1(e) hereof.
ARTICLE 2.
TERMS OF MERGER
2.1 ARTICLES OF INCORPORATION. The Articles of Incorporation of FIRST
BANKING in effect immediately prior to the Effective Time shall be the Articles
of Incorporation of the Surviving Corporation until duly amended or repealed.
2.2 BYLAWS. The Bylaws of FIRST BANKING in effect immediately prior to the
Effective Time shall be the Bylaws of the Surviving Corporation until duly
amended or repealed.
2.3 DIRECTORS AND OFFICERS.
(a) The directors of the Surviving Corporation shall be (i) the
directors of FIRST BANKING immediately prior to the Effective Time and (ii) J.
Xxxxxx Xxxxx, together with such additional persons as may thereafter be
elected. Such persons shall serve as the directors of the Surviving Corporation
from and after the Effective Time in accordance with the Bylaws of the Surviving
Corporation.
(b) The executive officers of the Surviving Corporation shall be (i)
the executive officers of the Surviving Corporation immediately prior to the
Effective Time and (ii) such additional persons as may thereafter be elected.
Such persons shall serve as the executive officers of the Surviving Corporation
from and after the Effective Time in accordance with the Bylaws of the Surviving
Corporation.
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ARTICLE 3.
MANNER OF CONVERTING SHARES
3.1 CONVERSION OF SHARES. Subject to the provisions of this Article 3, at
the Effective Time, by virtue of the Merger and without any action on the part
of XXXXX, or the shareholders of the foregoing, the shares of XXXXX shall be
converted as follows:
(a) Each share of capital stock of FIRST BANKING issued and outstanding
immediately prior to the Effective Time shall remain issued and outstanding from
and after the Effective Time.
(b) Each share of XXXXX Common Stock (excluding shares held by any
XXXXX Entity or any FIRST BANKING Entity, in each case other than in a fiduciary
capacity or as a result of debts previously contracted, and excluding shares
held by shareholders who perfect their statutory dissenters' rights as provided
in Section 3.4) issued and outstanding immediately prior to the Effective Time
shall cease to be outstanding and shall be converted into and exchanged for the
right to receive 1.57024 shares of FIRST BANKING Common Stock (the "Exchange
Ratio").
(c) Each warrant to acquire shares of XXXXX Common Stock not exercised
prior to the Effective Time shall be forfeited.
3.2 ANTI-DILUTION PROVISIONS. In the event FIRST BANKING changes the number
of shares of FIRST BANKING Common Stock issued and outstanding prior to the
Effective Time as a result of a stock split, stock dividend, or similar
recapitalization with respect to such stock and the record date therefor (in the
case of a stock dividend) or the effective date thereof (in the case of a stock
split or similar recapitalization for which a record date is not established)
and prior to the Effective Time, the Exchange Ratio shall be proportionately
adjusted.
3.3 SHARES HELD BY XXXXX OR FIRST BANKING. Each of the shares of XXXXX
Common Stock held by any XXXXX Entity or by any FIRST BANKING Entity, in each
case other than in a fiduciary capacity or as a result of debts previously
contracted, shall be canceled and retired at the Effective Time and no
consideration shall be issued in exchange therefor.
3.4 DISSENTING SHAREHOLDERS. Any holder of shares of XXXXX Common Stock who
perfects his dissenters' rights in accordance with and as contemplated by
Article 13, Part 2 of Title 14 of the GBCC, shall be entitled to receive the
value of such shares in cash as determined pursuant to such provision of law;
provided, that no such payment shall be made to any dissenting shareholder
unless and until such dissenting shareholder has complied with the applicable
provisions of the GBCC and surrendered to FIRST BANKING the certificates or
certificates representing the shares for which payment is being made. In the
event that after the Effective Time, a dissenting shareholder of XXXXX fails to
perfect, or effectively withdraws or loses, his right to appraisal of and
payment for his shares, FIRST BANKING shall issue and deliver the consideration
to which such holder of shares of XXXXX Common Stock is entitled under this
Article 3 (without interest) upon surrender by such holder of the certificate or
certificates representing shares of XXXXX Common Stock held by him. If and to
the extent
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required by applicable Law, XXXXX will establish (or cause to be established) an
escrow account with an amount sufficient to satisfy the maximum aggregate
payment that may be required to be paid to dissenting shareholders. Upon
satisfaction of all claims of dissenting shareholders, the remaining escrowed
amount, reduced by payment of the fees and expenses of the escrow agent, will be
returned to FIRST BANKING.
3.5 FRACTIONAL SHARES. Notwithstanding any other provision of this
Agreement, each holder of shares of XXXXX Common Stock exchanged pursuant to the
Merger who would otherwise have been entitled to receive a fraction of a share
of FIRST BANKING Common Stock (after taking into account all certificates
delivered by such holder) shall receive, in lieu thereof, cash (without
interest) in an amount equal to such fractional part of a share of FIRST BANKING
Common Stock multiplied by the market value of one share of FIRST BANKING Common
Stock at the Effective Time. The market value of one share of FIRST BANKING
Common Stock at the Effective Time shall be the last sale price of such common
stock on the Nasdaq National Market (as reported by The Wall Street Journal or,
if not reported thereby, any other authoritative source selected by FIRST
BANKING) on the last trading day preceding the Effective Time. No such holder
will be entitled to dividends, voting rights, or any other rights as a
shareholder in respect of any fractional shares.
ARTICLE 4.
EXCHANGE OF SHARES
4.1 EXCHANGE PROCEDURES. Promptly after the Effective Time, FIRST BANKING
shall cause the exchange agent selected by FIRST BANKING (the "Exchange Agent")
to mail to each holder of record of a certificate or certificates which
represented shares of XXXXX Common Stock immediately prior to the Effective Time
(the "Certificates") appropriate transmittal materials and instructions (which
shall specify that delivery shall be effected, and risk of loss and title to
such Certificates shall pass, only upon proper delivery of such Certificates to
the Exchange Agent). The Certificate or Certificates of XXXXX Common Stock so
delivered shall be duly endorsed as the Exchange Agent may require. In the event
of a transfer of ownership of shares of XXXXX Common Stock represented by
Certificates that are not registered in the transfer records of XXXXX, the
consideration provided in Section 3.1 may be issued to a transferee if the
Certificates representing such shares are delivered to the Exchange Agent,
accompanied by all documents required to evidence such transfer and by evidence
satisfactory to the Exchange Agent that any applicable stock transfer taxes have
been paid. If any Certificate shall have been lost, stolen, mislaid or
destroyed, upon receipt of (i) an affidavit of that fact from the holder
claiming such Certificate to be lost, mislaid, stolen or destroyed, (ii) such
bond, security or indemnity as FIRST BANKING and the Exchange Agent may
reasonably require, and (iii) any other documents necessary to evidence and
effect the bona fide exchange thereof, the Exchange Agent shall issue to such
holder the consideration into which the shares represented by such lost, stolen,
mislaid or destroyed Certificate shall have been converted. The Exchange Agent
may establish such other reasonable and customary rules and procedures in
connection with its duties as it may deem appropriate. After the Effective Time,
each holder of shares of XXXXX Common Stock (other than shares to be canceled
pursuant to Section 3.3 or as to which statutory dissenters' rights have been
perfected as provided in Section 3.4) issued and outstanding at the Effective
Time shall surrender the Certificate or Certificates representing such shares to
the Exchange Agent and shall promptly upon surrender thereof
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receive in exchange therefor the consideration provided in Section 3.1, together
with all undelivered dividends or distributions in respect of such shares
(without interest thereon) pursuant to Section 4.2. FIRST BANKING shall not be
obligated to deliver the consideration to which any former holder of XXXXX
Common Stock is entitled as a result of the Merger until such holder surrenders
such holder's Certificate or Certificates for exchange as provided in this
Section 4.1. Any other provision of this Agreement notwithstanding, neither
FIRST BANKING nor the Exchange Agent shall be liable to a holder of XXXXX Common
Stock for any amounts paid or property delivered in good faith to a public
official pursuant to any applicable abandoned property, escheat or similar Law.
Approval of this Agreement by the shareholders of XXXXX shall constitute
ratification of the appointment of the Exchange Agent.
4.2 RIGHTS OF FORMER SHAREHOLDERS OF XXXXX. At the Effective Time, the
stock transfer books of XXXXX shall be closed as to holders of XXXXX Common
Stock immediately prior to the Effective Time and no transfer of XXXXX Common
Stock by any such holder shall thereafter be made or recognized. Until
surrendered for exchange in accordance with the provisions of Section 4.1, each
Certificate theretofore representing shares of XXXXX Common Stock (other than
shares to be canceled pursuant to Sections 3.3 and 3.4) shall from and after the
Effective Time represent for all purposes only the right to receive the
consideration provided in Section 3.1 in exchange therefor, subject, however, to
FIRST BANKING's obligation to pay any dividends or make any other distributions
with a record date prior to the Effective Time which have been declared or made
by XXXXX in respect of such shares of XXXXX Common Stock in accordance with the
terms of this Agreement and which remain unpaid at the Effective Time. To the
extent permitted by Law, former shareholders of record of XXXXX shall be
entitled to vote after the Effective Time at any meeting of FIRST BANKING
shareholders the number of whole shares of FIRST BANKING Common Stock into which
their respective shares of XXXXX Common Stock are converted, regardless of
whether such holders have exchanged their Certificates for certificates
representing FIRST BANKING Common Stock in accordance with the provisions of
this Agreement. Whenever a dividend or other distribution is declared by FIRST
BANKING on the FIRST BANKING Common Stock, the record date for which is at or
after the Effective Time, the declaration shall include dividends or other
distributions on all shares of FIRST BANKING Common Stock issuable pursuant to
this Agreement, but no dividend or other distribution payable to the holders of
record of FIRST BANKING Common Stock as of any time subsequent to the Effective
Time shall be delivered to the holder of any Certificate until such holder
surrenders such Certificate for exchange as provided in Section 4.1. However,
upon surrender of such Certificate, both the FIRST BANKING Common Stock
certificate (together with all such undelivered dividends or other distributions
without interest) and any undelivered dividends and cash payments payable
hereunder (without interest) shall be delivered and paid with respect to each
share represented by such Certificate. No interest shall be payable with respect
to any cash to be paid under Section 3.1 of this Agreement except to the extent
required in connection with the exercise of dissenters' rights.
ARTICLE 5.
REPRESENTATIONS AND WARRANTIES OF XXXXX
XXXXX hereby represents and warrants to FIRST BANKING as follows:
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5.1 ORGANIZATION, STANDING, AND POWER. XXXXX is a corporation duly
organized, validly existing, and in good standing under the Laws of the State of
Georgia, and has the corporate power and authority to carry on its business as
now conducted and to own, lease and operate its material Assets. XXXXX is duly
qualified or licensed to transact business as a foreign corporation in good
standing in the United States and foreign jurisdictions where the character of
its Assets or the nature or conduct of its business requires it to be so
qualified or licensed, except for such jurisdictions in which the failure to be
so qualified or licensed is not reasonably likely to have, individually or in
the aggregate, a XXXXX Material Adverse Effect. The minute book and other
organizational documents for XXXXX have been made available to FIRST BANKING for
its review and, except as disclosed in Section 5.1 of the XXXXX Disclosure
Memorandum, are true and complete in all material respects as in effect as of
the date of this Agreement and accurately reflect in all material respects all
amendments thereto and all proceedings of the Board of Directors and
shareholders thereof.
5.2 AUTHORITY OF XXXXX; NO BREACH BY AGREEMENT.
(a) XXXXX has the corporate power and authority necessary to
execute, deliver, and perform its obligations under this Agreement and to
consummate the transactions contemplated hereby. The execution, delivery, and
performance of this Agreement and the consummation of the transactions
contemplated herein, including the Merger, have been duly and validly authorized
by all necessary corporate action in respect thereof on the part of XXXXX,
subject to the approval of this Agreement by the holders of a majority of the
outstanding voting stock of XXXXX, which is the only shareholder vote required
for approval of this Agreement, and consummation of the Merger by XXXXX. Subject
to such requisite shareholder approval, this Agreement represents a legal,
valid, and binding obligation of XXXXX, enforceable against XXXXX in accordance
with its terms (except in all cases as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, receivership,
conservatorship, moratorium, or similar Laws affecting the enforcement of
creditors' rights generally and except that the availability of the equitable
remedy of specific performance or injunctive relief is subject to the discretion
of the court before which any proceeding may be brought).
(b) Neither the execution and delivery of this Agreement by
XXXXX, nor the consummation by XXXXX of the transactions contemplated hereby,
nor compliance by XXXXX with any of the provisions hereof, will (i) conflict
with or result in a breach of any provision of WAYNE's Articles of Incorporation
or Bylaws, or the Charter, Articles of Incorporation, or Bylaws of any XXXXX
Subsidiary or any resolution adopted by the board of directors or the
shareholders of any XXXXX Entity, or (ii) except as disclosed in Section 5.2 of
the XXXXX Disclosure Memorandum, constitute or result in a Default under, or
require any Consent pursuant to, or result in the creation of any Lien on any
Asset of any XXXXX Entity under, any Contract or Permit of any XXXXX Entity,
where such Default or Lien, or any failure to obtain such Consent, is reasonably
likely to have, individually or in the aggregate, a XXXXX Material Adverse
Effect, or (iii) subject to receipt of the requisite Consents referred to in
Section 9.1(b), constitute or result in a Default under or require any Consent
pursuant to any Law or Order applicable to any XXXXX Entity or any of their
respective material Assets (including any FIRST BANKING Entity or any XXXXX
Entity becoming subject to or liable for the payment of any Tax or any of the
Assets owned by any FIRST BANKING Entity or any XXXXX Entity being reassessed or
revalued by any Taxing authority).
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(c) Other than in connection or compliance with the provisions
of applicable federal banking laws, and other than Consents required from
Regulatory Authorities, and other than notices to or filings with the Internal
Revenue Service or the Pension Benefit Guaranty Corporation with respect to any
employee benefit plans, or under the HSR Act, and other than Consents, filings,
or notifications which, if not obtained or made, are not reasonably likely to
have, individually or in the aggregate, a XXXXX Material Adverse Effect, no
notice to, filing with, or Consent of, any public body or authority is necessary
for the consummation by XXXXX of the Merger and the other transactions
contemplated in this Agreement.
5.3 CAPITAL STOCK.
(a) As of the date of this Agreement, the authorized capital
stock of XXXXX consists of Ten Million (10,000,000) shares of XXXXX Common
Stock, of which Five Hundred Fifty Eight Thousand Six Hundred Forty-Eight
(558,648) shares are issued and outstanding, assuming all warrants to acquire
XXXXX Common Stock have been exercised. All of the issued and outstanding shares
of capital stock of XXXXX are duly and validly issued and outstanding and are
fully paid and nonassessable under the GBCC. None of the outstanding shares of
capital stock of XXXXX has been issued in violation of any preemptive rights of
the current or past shareholders of XXXXX. XXXXX has reserved Fifty-Two Thousand
Six Hundred Fifty (52,650) shares of XXXXX Common Stock for issuance upon the
exercise of certain authorized Warrants as described in Section 5.3(a) of the
XXXXX Disclosure Memorandum.
(b) Except as set forth in Section 5.3(a), or as disclosed in
Section 5.3(b) of the XXXXX Disclosure Memorandum, there are no shares of
capital stock or other equity securities of XXXXX outstanding and no outstanding
Equity Rights relating to the capital stock of XXXXX.
5.4 XXXXX SUBSIDIARIES. XXXXX has disclosed in Section 5.4 of the
XXXXX Disclosure Memorandum all of the XXXXX Subsidiaries that are corporations
(identifying its jurisdiction of incorporation, each jurisdiction in which the
character of its Assets or the nature or conduct of its business requires it to
be qualified and/or licensed to transact business, and the number of shares
owned and percentage ownership interest represented by such share ownership) and
all of the XXXXX Subsidiaries that are general or limited partnerships, limited
liability companies, or other non-corporate entities (identifying the Law under
which such entity is organized, each jurisdiction in which the character of its
Assets or the nature or conduct of its business requires it to be qualified
and/or licensed to transact business, and the amount and nature of the ownership
interest therein). Except as disclosed in Section 5.4 of the XXXXX Disclosure
Memorandum, XXXXX or one of its wholly-owned Subsidiaries owns all of the issued
and outstanding shares of capital stock (or other equity interests) of each
XXXXX Subsidiary. No capital stock (or other equity interest) of any XXXXX
Subsidiary is or may become required to be issued (other than to another XXXXX
Entity) by reason of any Equity Rights, and there are no Contracts by which any
XXXXX Subsidiary is bound to issue (other than to another XXXXX Entity)
additional shares of its capital stock (or other equity interests) or Equity
Rights or by which any XXXXX Entity is or may be bound to transfer any shares of
the capital stock (or other equity interests) of any XXXXX Subsidiary (other
than to another XXXXX Entity). There are no Contracts relating to the rights of
any XXXXX Entity to vote or
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to dispose of any shares of the capital stock (or other equity interests) of any
XXXXX Subsidiary. All of the shares of capital stock (or other equity interests)
of each XXXXX Subsidiary held by a XXXXX Entity are fully paid and (except
pursuant to 12 U.S.C. Section 55 in the case of national banks and comparable,
applicable State Law, if any, in the case of State depository institutions)
nonassessable and are owned by the XXXXX Entity free and clear of any Lien.
Except as disclosed in Section 5.4 of the XXXXX Disclosure Memorandum, each
XXXXX Subsidiary is either a bank, savings association or a corporation, and is
duly organized, validly existing, and in good standing under the Laws of the
jurisdiction in which it is incorporated or organized, and has the corporate
power and authority necessary for it to own, lease, and operate its Assets and
to carry on its business as now conducted. Each XXXXX Subsidiary is duly
qualified or licensed to transact business as a foreign corporation in good
standing in the States of the United States and foreign jurisdictions where the
character of its Assets or the nature or conduct of its business requires it to
be so qualified or licensed, except for such jurisdictions in which the failure
to be so qualified or licensed is not reasonably likely to have, individually or
in the aggregate, a XXXXX Material Adverse Effect. Each XXXXX Subsidiary that is
a depository institution is an "insured institution" as defined in the Federal
Deposit Insurance Act and applicable regulations thereunder. The minute book and
other organizational documents for each XXXXX Subsidiary have been made
available to FIRST BANKING for its review, and, except as disclosed in Section
5.4 of the XXXXX Disclosure Memorandum, are true and complete in all material
respects as in effect as of the date of this Agreement and accurately reflect in
all material respects all amendments thereto and all proceedings of the Board of
Directors and shareholders thereof.
5.5 SEC FILINGS; FINANCIAL STATEMENTS.
(a) XXXXX has timely filed and made available to FIRST BANKING
all SEC Documents required to be filed by XXXXX since December 31, 1995 (the
"XXXXX SEC Reports"). The XXXXX SEC Reports (i)at the time filed complied in all
material respects with the applicable requirements of the Securities Laws and
other applicable Laws and (ii) did not, at the time they were filed (or, if
amended or superseded by a filing prior to the date of this Agreement, then on
the date of such filing) contain any untrue statement of a material fact or omit
to state a material fact required to be stated in such XXXXX SEC Reports or
necessary in order to make the statements in such XXXXX SEC Reports, in light of
the circumstances under which they were made, not misleading.
(b) Each of the XXXXX Financial Statements (including, in each
case, any related notes) was prepared in accordance with GAAP applied on a
consistent basis throughout the periods involved (except as may be indicated in
the notes to such financial statements), and fairly presented in all material
respects the consolidated financial position of XXXXX and its Subsidiaries as at
the respective dates and the consolidated results of operations and cash flows
for the periods indicated, except that the unaudited interim financial
statements were or are subject to normal and recurring year-end adjustments
which were not or are not expected to be material in amount or effect.
5.6 ABSENCE OF UNDISCLOSED LIABILITIES. No XXXXX Entity has any
Liabilities that are reasonably likely to have, individually or in the
aggregate, a XXXXX Material Adverse Effect, except Liabilities which are accrued
or reserved against in the consolidated balance sheets of XXXXX as of December
31, 1997 or September 30, 1998, included in the XXXXX Financial
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Statements or reflected in the notes thereto. No XXXXX Entity has incurred or
paid any Liability since September 30, 1998, except for such Liabilities
incurred or paid (i) in the ordinary course of business consistent with past
business practice and which are not reasonably likely to have, individually or
in the aggregate, a XXXXX Material Adverse Effect or (ii) in connection with the
transactions contemplated by this Agreement.
5.7 ABSENCE OF CERTAIN CHANGES OR EVENTS. Since December 31, 1997,
except as disclosed in the XXXXX Financial Statements delivered prior to the
date of this Agreement or as disclosed in Section 5.7 of the XXXXX Disclosure
Memorandum, (i) there have been no events, changes, or occurrences which have
had, or are reasonably likely to have, individually or in the aggregate, a
XXXXX Material Adverse Effect, and (ii) XXXXX Entities have not taken any
action, or failed to take any action, prior to the date of this Agreement,
which action or failure, if taken after the date of this Agreement, would
represent or result in a material breach or violation of any of the covenants
and agreements of XXXXX provided in Article 7.
5.8 TAX MATTERS.
(a) All Tax Returns required to be filed by or on behalf of
any XXXXX Entities have been timely filed or requests for extensions have been
timely filed, granted, and, to the Knowledge of XXXXX, have not expired for such
periods, except to the extent that all such failures to file, taken together,
are not reasonably likely to have a XXXXX Material Adverse Effect, and all Tax
Returns filed are complete and accurate in all material respects. All Taxes
shown on filed Tax Returns have been paid. There is no audit examination,
deficiency, or refund Litigation with respect to any Taxes that is reasonably
likely to result in a determination that would have, individually or in the
aggregate, a XXXXX Material Adverse Effect, except as reserved against in the
XXXXX Financial Statements delivered prior to the date of this Agreement or as
disclosed in Section 5.8 of the XXXXX Disclosure Memorandum. All Taxes and other
Liabilities due with respect to completed and settled examinations or concluded
Litigation have been paid. There are no Liens with respect to Taxes upon any of
the Assets of XXXXX Entities, except for any such Liens which are not reasonably
likely to have a XXXXX Material Adverse Effect or with respect to which the
Taxes are not yet due and payable.
(b) None of the XXXXX Entities has executed an extension or
waiver of any statute of limitations on the assessment or collection of any Tax
due (excluding such statutes that relate to years currently under examination by
the Internal Revenue Service or other applicable taxing authorities) that is
currently in effect.
(c) The provision for any Taxes due or to become due for any
of the XXXXX Entities for the period or periods through and including the date
of the respective XXXXX Financial Statements that has been made and is reflected
on such XXXXX Financial Statements is sufficient to cover all such Taxes.
(d) Deferred Taxes of XXXXX Entities have been provided for in
accordance with GAAP.
(e) Except as disclosed in Section 5.8 of the XXXXX Disclosure
Memorandum, none of the XXXXX Entities is a party to any Tax allocation or
sharing agreement and none of XXXXX Entities has been a member of an affiliated
group filing a
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consolidated federal income Tax Return (other than a group the common parent of
which was XXXXX) or has any Liability for Taxes of any Person (other than XXXXX
and its Subsidiaries) under Treasury Regulation Section 1.1502-6 (or any similar
provision of state, local or foreign Law) as a transferee or successor or by
Contract or otherwise.
(f) Each of the XXXXX Entities 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 Internal Revenue Code, except for such instances of
noncompliance and such omissions as are not reasonably likely to have,
individually or in the aggregate, a XXXXX Material Adverse Effect.
(g) Except as disclosed in Section 5.8 of the XXXXX Disclosure
Memorandum, none of the XXXXX Entities has made any payments, is obligated to
make any payments, or is a party to any Contract that could obligate it to make
any payments that would be disallowed as a deduction under Sections 28OG or
162(m) of the Internal Revenue Code.
(h) Exclusive of the Merger, there has not been an ownership
change, as defined in Internal Revenue Code Section 382(g), of XXXXX Entities
that occurred during or after any Taxable Period in which XXXXX Entities
incurred a net operating loss that carries over to any Taxable Period ending
after December 31, 1997.
(i) No XXXXX Entity has or has had in any foreign country a
permanent establishment, as defined in any applicable tax treaty or convention
between the United States and such foreign country.
(j) All material elections with respect to Taxes affecting
XXXXX Entities have been or will be timely made.
5.9 ALLOWANCE FOR POSSIBLE LOAN LOSSES. The allowance for possible
loan or credit losses (the "Allowance") shown on the consolidated balance sheets
of XXXXX included in the most recent XXXXX Financial Statements dated prior to
the date of this Agreement was, and the Allowance shown on the consolidated
balance sheets of XXXXX included in the XXXXX Financial Statements as of dates
subsequent to the execution of this Agreement will be, as of the dates thereof,
adequate (within the meaning of GAAP and applicable regulatory requirements or
guidelines) to provide for all known or reasonably anticipated losses relating
to or inherent in the loan and lease portfolios (including accrued interest
receivables) of XXXXX Entities and other extensions of credit (including letters
of credit and commitments to make loans or extend credit) by XXXXX Entities as
of the dates thereof, except where the failure of such Allowance to be so
adequate is not reasonably likely to have a XXXXX Material Adverse Effect.
5.10 ASSETS.
(a) Except as disclosed in Section 5.10 of the XXXXX
Disclosure Memorandum or as disclosed or reserved against in the XXXXX Financial
Statements delivered prior to the date of this Agreement, XXXXX Entities have
good and marketable title, free and clear of all Liens, to all of their
respective Assets, except for any such Liens or other defects of
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title which are not reasonably likely to have a XXXXX Material Adverse Effect.
All tangible properties used in the businesses of the XXXXX Entities are usable
in the ordinary course of business consistent with WAYNE's past practices.
(b) All Assets which are material to WAYNE's business on a
consolidated basis, held under leases or subleases by any of the XXXXX Entities,
are held under valid Contracts enforceable against XXXXX in accordance with
their respective terms (except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium, or other Laws affecting the
enforcement of creditors' rights generally and except that the availability of
the equitable remedy of specific performance or injunctive relief is subject to
the discretion of the court before which any proceedings may be brought), and,
assuming the enforceability of such Contract against the third party thereto,
each such Contract is in full force and effect.
(c) XXXXX Entities currently maintain the insurance policies
described in Section 5.10(c) of the XXXXX Disclosure Memorandum. None of the
XXXXX Entities has received written notice from any insurance carrier that (i)
any policy of insurance will be canceled or that coverage thereunder will be
reduced or eliminated, or (ii) premium costs with respect to such policies of
insurance will be substantially increased. There are presently no claims for
amounts exceeding in any individual case $25,000 pending under such policies of
insurance and no written notices of claims in excess of such amounts have been
given by any XXXXX Entity under such policies.
(d) The Assets of the XXXXX Entities include all material
Assets required to operate the business of the XXXXX Entities as presently
conducted.
5.11 INTELLECTUAL PROPERTY. Each XXXXX Entity owns or has a license
to use all of the Intellectual Property used by such XXXXX Entity in the
ordinary course of its business. Each XXXXX Entity is the owner of or has a
license to any Intellectual Property sold or licensed to a third party by such
XXXXX Entity in connection with such XXXXX Entity's business operations, and
such XXXXX Entity has the right to convey by sale or license any Intellectual
Property so conveyed. No XXXXX Entity is in material Default under any of its
Intellectual Property licenses. No proceedings have been instituted, or are
pending or, to the Knowledge of XXXXX, threatened, which challenge the rights of
any XXXXX Entity with respect to Intellectual Property used, sold or licensed by
such XXXXX Entity in the course of its business, nor has any person claimed or
alleged any rights to such Intellectual Property. To the Knowledge of XXXXX, the
conduct of the business of the XXXXX Entities does not infringe any Intellectual
Property of any other person. Except as disclosed in Section 5.11 of the XXXXX
Disclosure Memorandum, no XXXXX Entity is obligated to pay any recurring
royalties to any Person with respect to any such Intellectual Property.
5.12 ENVIRONMENTAL MATTERS.
(a) Except as disclosed in Section 5.12 of the XXXXX
Disclosure Memorandum, to the Knowledge of XXXXX, each XXXXX Entity, its
Participation Facilities, and its Operating Properties are, and have been, in
compliance with all Environmental Laws, except for violations which are not
reasonably likely to have, individually or in the aggregate, a XXXXX Material
Adverse Effect.
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(b) There is no Litigation pending or, to the Knowledge of
XXXXX, threatened, before any court, governmental agency, or authority or other
forum in which any XXXXX Entity or any of its Operating Properties or
Participation Facilities (or XXXXX in respect of such Operating Property or
Participation Facility) has been or, with respect to threatened Litigation, may
be named as a defendant (i) for alleged noncompliance (including by any
predecessor) with any Environmental Law or (ii) relating to the emission,
migration, release, discharge, spillage, or disposal into the environment of any
Hazardous Material, whether or not occurring at, on, under, adjacent to, or
affecting (or potentially affecting) a site owned, leased, or operated by any
XXXXX Entity or any of its Operating Properties or Participation Facilities or
any neighboring property, except for such Litigation pending or threatened that
is not reasonably likely to have, individually or in the aggregate, a XXXXX
Material Adverse Effect, nor, to the Knowledge of XXXXX, is there any reasonable
basis for any Litigation of a type described in this sentence, except such as is
not reasonably likely to have, individually or in the aggregate, a XXXXX
Material Adverse Effect.
(c) Except as disclosed in Section 5.12 of the XXXXX
Disclosure Memorandum, during the period of (i) any XXXXX Entity's ownership or
operation of any of their respective current Assets, or (ii) any XXXXX Entity's
participation in the management of any Participation Facility or any Operating
Property, to the Knowledge of XXXXX, there have been no emissions, migrations,
releases, discharges, spillages, or disposals of Hazardous Material in, on, at,
under, adjacent to, or affecting (or potentially affecting) such properties or
any neighboring properties, except such as are not reasonably likely to have,
individually or in the aggregate, a XXXXX Material Adverse Effect. Except as
disclosed in Section 5.12 of the XXXXX Disclosure Memorandum, prior to the
period of (i) any XXXXX Entity's ownership or operation of any of their
respective current properties, (ii) any XXXXX Entity's participation in the
management of any Participation Facility or any Operating Property, to the
Knowledge of XXXXX, there were no releases, discharges, spillages, or disposals
of Hazardous Material in, on, under, or affecting any such property,
Participation Facility or Operating Property, except such as are not reasonably
likely to have, individually or in the aggregate, a XXXXX Material Adverse
Effect.
5.13 COMPLIANCE WITH LAWS. Each XXXXX Entity has in effect all
Permits necessary for it to own, lease, or operate its material Assets and to
carry on its business as now conducted, except for those Permits the absence of
which are not reasonably likely to have, individually or in the aggregate, a
XXXXX Material Adverse Effect, and, to the Knowledge of XXXXX, there has
occurred no Default under any such Permit, other than Defaults which are not
reasonably likely to have, individually or in the aggregate, a XXXXX Material
Adverse Effect. Except as disclosed in Section 5.13 of the XXXXX Disclosure
Memorandum, none of the XXXXX Entities:
(a) is in Default under any of the provisions of its Articles
of Incorporation or Bylaws (or other governing instruments);
(b) is in Default under any Laws, Orders, or Permits
applicable to its business or employees conducting its business, except for
Defaults which are not reasonably likely to have, individually or in the
aggregate, a XXXXX Material Adverse Effect; or
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(c) since January 1, 1995, or as of the date of organization,
if later, has received any written notification or written communication from
any agency or department of federal, state, or local government or any
Regulatory Authority or the staff thereof (i) asserting that any XXXXX Entity is
not in compliance with any of the Laws or Orders which such governmental
authority or Regulatory Authority enforces, where such noncompliance is
reasonably likely to have, individually or in the aggregate, a XXXXX Material
Adverse Effect, (ii) threatening to revoke any Permits, the revocation of which
is reasonably likely to have, individually or in the aggregate, a XXXXX Material
Adverse Effect, or (iii) requiring any XXXXX Entity to enter into or consent to
the issuance of a cease and desist order, formal agreement, directive,
commitment, or memorandum of understanding, or to adopt any Board resolution or
similar undertaking, which restricts materially the conduct of its business or
in any material manner relates to its capital adequacy, its credit or reserve
policies, its management, or the payment of dividends. Copies of all material
reports, correspondence, notices and other documents relating to any inspection,
audit, monitoring or other form of review or enforcement action by a Regulatory
Authority have been made available to FIRST BANKING.
5.14 LABOR RELATIONS. No XXXXX Entity is the subject of any
Litigation asserting that it or any other XXXXX Entity has committed an unfair
labor practice (within the meaning of the National Labor Relations Act or
comparable state law) or seeking to compel it or any other XXXXX Entity to
bargain with any labor organization as to wages or conditions of employment, nor
is any XXXXX Entity party to any collective bargaining agreement, nor is there
any strike or other labor dispute involving any XXXXX Entity, pending or
threatened, or to the Knowledge of XXXXX, is there any activity involving any
XXXXX Entity's employees seeking to certify a collective bargaining unit or
engaging in any other organization activity.
5.15 EMPLOYEE BENEFIT PLANS.
(a) XXXXX has disclosed in Section 5.15 of the XXXXX
Disclosure Memorandum, and has delivered or made available to FIRST BANKING
prior to the execution of this Agreement copies in each case of, all pension,
retirement, profit-sharing, deferred compensation, stock option, employee stock
ownership, severance pay, vacation, bonus, or other incentive plan, all other
written employee programs, arrangements, or agreements, all medical, vision,
dental, or other health plans, all life insurance plans, and all other employee
benefit plans or fringe benefit plans, including "employee benefit plans" as
that term is defined in Section 3(3) of ERISA, currently adopted, maintained by,
sponsored in whole or in part by, or contributed to by any XXXXX Entity or ERISA
Affiliate (as defined in subparagraph (c) below) thereof for the benefit of
employees, retirees, dependents, spouses, directors, independent contractors, or
other beneficiaries and under which employees, retirees, dependents, spouses,
directors, independent contractors, or other beneficiaries are eligible to
participate (collectively, "XXXXX Benefit Plans"). Each XXXXX Benefit Plan which
is an "employee pension benefit plan," as that term is defined in Section 3(2)
of ERISA, is referred to herein as an "XXXXX ERISA Plan." Each XXXXX ERISA Plan
which is also a "defined benefit plan" (as defined in Section 4140 of the
Internal Revenue Code) is referred to herein as an "XXXXX Pension Plan." No
XXXXX Pension Plan is or has been a multiemployer plan within the meaning of
Section 3(37) of ERISA.
(b) All XXXXX Benefit Plans are in compliance with the
applicable terms of ERISA, the Internal Revenue Code, and any other applicable
Laws the breach or violation of which are reasonably likely to have,
individually or in the aggregate, a XXXXX Material
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Adverse Effect. Each XXXXX ERISA Plan which is intended to be qualified under
Section 401(a) of the Internal Revenue Code has received a favorable
determination letter from the Internal Revenue Service, and XXXXX has no
Knowledge of any circumstances likely to result in revocation of any such
favorable determination letter. To the Knowledge of XXXXX, no XXXXX Entity has
engaged in a transaction with respect to any XXXXX Benefit Plan that, assuming
the taxable period of such transaction expired as of the date hereof, would
subject any XXXXX Entity to a Tax imposed by either Section 4975 of the Internal
Revenue Code or Section 502(i) of ERISA in amounts which are reasonably likely
to have, individually or in the aggregate, a XXXXX Material Adverse Effect.
(c) No XXXXX Pension Plan has any "unfunded current
liability," as that term is defined in Section 302(d)(8)(A) of ERISA, based on
actuarial assumptions set forth for such plan's most recent actuarial valuation.
Since the date of the most recent actuarial valuation, there has been (i) no
material change in the financial position of any XXXXX Pension Plan, (ii) no
change in the actuarial assumptions with respect to any XXXXX Pension Plan, and
(iii) no increase in benefits under any XXXXX Pension Plan as a result of plan
amendments or changes in applicable Law which is reasonably likely to have,
individually or in the aggregate, a XXXXX Material Adverse Effect or materially
adversely affect the funding status of any such plan. Neither any XXXXX Pension
Plan nor any "single employer plan," within the meaning of Section 4001(a)(15)
of ERISA, currently or formerly maintained by any XXXXX Entity, or the
single-employer plan of any entity which is considered one employer with XXXXX
under Section 4001 of ERISA or Section 414 of the Internal Revenue Code or
Section 302 of ERISA (whether or not waived) (an "ERISA Affiliate") has an
"accumulated funding deficiency" within the meaning of Section 412 of the
Internal Revenue Code or Section 302 of ERISA, which is reasonably likely to
have a XXXXX Material Adverse Effect. No XXXXX Entity has provided, or is
required to provide, security to a XXXXX Pension Plan or to any single-employer
plan of an ERISA Affiliate pursuant to Section 401(a)(29) of the Internal
Revenue Code.
(d) Within the six-year period preceding the Effective Time,
no Liability under Subtitle C or D of Title IV of ERISA has been or is expected
to be incurred by any XXXXX Entity with respect to any ongoing, frozen, or
terminated single-employer plan or the single-employer plan of any ERISA
Affiliate, which Liability is reasonably likely to have a XXXXX Material Adverse
Effect. No XXXXX Entity has incurred any withdrawal Liability with respect to a
multiemployer plan under Subtitle B of Title IV of ERISA (regardless of whether
based on contributions of an ERISA Affiliate), which Liability is reasonably
likely to have a XXXXX Material Adverse Effect. No notice of a "reportable
event," within the meaning of Section 4043 of ERISA for which the 30- day
reporting requirement has not been waived, has been required to be filed for any
XXXXX Pension Plan or by any ERISA Affiliate within the 12-month period ending
on the date hereof.
(e) Except as disclosed in Section 5.15 of the XXXXX
Disclosure Memorandum, no XXXXX Entity has any Liability for retiree health and
life benefits under any of the XXXXX Benefit Plans and there are no restrictions
on the rights of such XXXXX Entity to amend or terminate any such retiree health
or benefit Plan without incurring any Liability thereunder, which Liability is
reasonably likely to have a XXXXX Material Adverse Effect.
(f) Except as disclosed in Section 5.15 of the XXXXX
Disclosure Memorandum, neither the execution and delivery of this Agreement nor
the consummation of the
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transactions contemplated hereby will (i) result in any payment (including
severance, unemployment compensation, golden parachute, or otherwise) becoming
due to any director or any employee of any XXXXX Entity from any XXXXX Entity
under any XXXXX Benefit Plan or otherwise, (ii) increase any benefits otherwise
payable under any XXXXX Benefit Plan, or (iii) result in any acceleration of the
time of payment or vesting of any such benefit, where such payment, increase, or
acceleration is reasonably likely to have, individually or in the aggregate, a
XXXXX Material Adverse Effect.
(g) The actuarial present values of all accrued deferred
compensation entitlements (including entitlements under any executive
compensation, supplemental retirement, or employment agreement) of employees and
former employees of any XXXXX Entity and their respective beneficiaries, other
than entitlements accrued pursuant to funded retirement plans subject to the
provisions of Section 412 of the Internal Revenue Code or Section 302 of ERISA,
have been fully reflected on the XXXXX Financial Statements to the extent
required by and in accordance with GAAP.
5.16 MATERIAL CONTRACTS. Except as disclosed in Section 5.16 of the XXXXX
Disclosure Memorandum or otherwise reflected in the XXXXX Financial Statements,
none of the XXXXX Entities, nor any of their respective Assets, businesses, or
operations, is a party to, or is bound or affected by, or receives benefits
under, (i) any employment, severance, termination, consulting, or retirement
Contract providing for aggregate payments to any Person in any calendar year in
excess of $50,000, (ii) any Contract relating to the borrowing of money by any
XXXXX Entity or the guarantee by any XXXXX Entity of any such obligation (other
than Contracts evidencing deposit liabilities, purchases of federal funds,
fully-secured repurchase agreements, Federal Home Loan Bank advances and trade
payables and Contracts relating to borrowings or guarantees made in the ordinary
course of business), (iii) any Contract which prohibits or restricts any XXXXX
Entity from engaging in any business activities in any geographic area, line of
business or otherwise in competition with any other Person, (iv) any Contract
between or among the XXXXX Entities or any Contract between any Xxxxx Entity and
any Affiliate of Xxxxx, (v) any Contract relating to the provision of data
processing, network communication, or other technical services to or by any
XXXXX Entity, (vi) any exchange traded or over-the-counter swap, forward,
future, option, cap, floor, or collar financial Contract, or any other interest
rate or foreign currency protection Contract not included on its balance sheet
which is a financial derivative Contract, and (vii) any other Contract or
amendment thereto that would be required to be filed as an exhibit to a Form
10-K filed by XXXXX with the SEC as of the date of this Agreement that has not
been filed as an exhibit to WAYNE's Form 10-K filed for the fiscal year ended
December 31, 1997 or in an SEC Document and identified to XXXXX (together with
all Contracts referred to in Sections 5.10 and 5.15(a), the "XXXXX Contracts").
With respect to each XXXXX Contract and except as disclosed in Section 5.16 of
the XXXXX Disclosure Memorandum: (i) assuming the enforceability of such
Contract against the third party thereto, each such Contract is in full force
and effect; (ii) no XXXXX Entity is in Default thereunder, other than Defaults
which are not reasonably likely to have, individually or in the aggregate, a
XXXXX Material Adverse Effect; (iii) no XXXXX Entity has repudiated or waived
any material provision of any such Contract; and (iv) no other party to any such
Contract is, to the Knowledge of XXXXX, in Default in any respect, other than
Defaults which are not reasonably likely to have, individually or in the
aggregate, a XXXXX Material Adverse Effect, or has repudiated or waived any
material provision thereunder. Except as disclosed in Section 5.16 of the XXXXX
Disclosure Memorandum, no officer, director or employee of any XXXXX
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Entity is party to any Contract which restricts or prohibits such officer,
director or employee from engaging in activities competitive with any Person,
including any XXXXX Entity. All of the indebtedness of any XXXXX Entity for
money borrowed is prepayable at any time by such XXXXX Entity without penalty or
premium.
5.17 LEGAL PROCEEDINGS. There is no Litigation instituted or pending or, to
the Knowledge of XXXXX, threatened (or unasserted but considered probable of
assertion and which if asserted would have at least a reasonable probability of
an unfavorable outcome) against any XXXXX Entity, or against any director,
employee or employee benefit plan (acting in such capacity) of any XXXXX Entity,
or against any Asset, interest, or right of any of them, that is reasonably
likely to have, individually or in the aggregate, a XXXXX Material Adverse
Effect, nor are there any Orders of any Regulatory Authorities, other
governmental authorities, or arbitrators outstanding against any XXXXX Entity,
that are reasonably likely to have, individually or in the aggregate, a XXXXX
Material Adverse Effect. Section 5.17 of the XXXXX Disclosure Memorandum
contains a summary of all Litigation as of the date of this Agreement to which
any XXXXX Entity is a party and which names a XXXXX Entity as a defendant or
cross-defendant or for which, to the Knowledge of XXXXX, any XXXXX Entity has
any potential Liability.
5.18 REPORTS. Since January 1, 1995, each XXXXX Entity has timely filed all
reports and statements, together with any amendments required to be made with
respect thereto, that it was required to file with Regulatory Authorities,
except for such filings which the failure to so file is not reasonably likely to
have, individually or in the aggregate, a XXXXX Material Adverse Effect. As of
their respective dates, each of such reports and documents, including the
financial statements, exhibits, and schedules thereto, complied in all material
respects with all applicable Laws. As of its respective date, each such report
and document did not, in all material respects, contain any untrue statement of
a material fact or omit to state a material fact required to be stated therein
or necessary to make the statements made therein, in light of the circumstances
under which they were made, not misleading. Since January 1, 1995, no Xxxxx
Entity has filed any Suspicious Activity Report or any claim under any fidelity,
blanket bond, general liability, errors and omissions, directors and officers or
other insurance policies that pertain to the operation of its business or the
ownership of its assets.
5.19 STATEMENTS TRUE AND CORRECT. No statement, certificate, instrument, or
other writing furnished or to be furnished by any XXXXX Entity to FIRST BANKING
pursuant to this Agreement or any other document, agreement, or instrument
referred to herein contains or will contain any untrue statement of material
fact or will omit to state a material fact necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading. None of the information supplied or to be supplied by any XXXXX
Entity for inclusion in the registration statement to be filed by FIRST BANKING
with the SEC in accordance with Section 8.1 will, when such registration
statement becomes effective, be false or misleading with respect to any material
fact, or omit to state any material fact necessary to make the statements
therein not misleading. All documents that any XXXXX Entity is responsible for
filing with any Regulatory Authority in connection with the transactions
contemplated hereby will comply as to form in all material respects with the
provisions of applicable Law. No documents to be filed by a XXXXX Entity with
any Regulatory Authority in connection with the transactions contemplated
hereby, will, at the respective time such documents are filed, be false or
misleading with respect to any material fact, or omit to state any material fact
necessary to
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make the statements therein, in light of the circumstances under which they were
made, not misleading.
5.20 ACCOUNTING, TAX AND REGULATORY MATTERS. No XXXXX Entity has taken or
agreed to take any action or has any Knowledge of any fact or circumstance that
is reasonably likely to (i) prevent the Merger from qualifying for pooling of
interest accounting treatment and as a reorganization within the meaning of
Section 368(a) of the Internal Revenue Code, or (ii) materially impede or delay
receipt of any Consents of Regulatory Authorities referred to in Section 9.1(b)
or result in the imposition of a condition or restriction of the type referred
to in the last sentence of such Section.
5.21 CHARTER PROVISIONS. Each XXXXX Entity has taken all action so that the
entering into of this Agreement and the consummation of the Merger and the other
transactions contemplated by this Agreement do not and will not result in the
grant of any rights to any Person under the Charter, Articles of Incorporation,
Bylaws or other governing instruments of any XXXXX Entity or restrict or impair
the ability of FIRST BANKING or any of its Subsidiaries to vote, or otherwise to
exercise the rights of a shareholder with respect to, shares of any XXXXX Entity
that may be directly or indirectly acquired or controlled by them.
5.22 BOARD RECOMMENDATION. The Board of Directors of XXXXX, at a meeting
duly called and held, has by unanimous vote of those directors present (who
constituted all of the directors then in office) (i) determined that this
Agreement and the transactions contemplated hereby are fair to and in the best
interests of the shareholders and (ii) resolved to recommend that the holders of
the shares of XXXXX Common Stock approve this Agreement.
5.23 Y-2K. XXXXX has formed a committee to review policies and directives
issued by Regulatory Authorities with respect to preparedness for year 2000 data
processing and other operations, and intends to implement such committee's
recommendations for ensuring compliance with such policies and directives.
ARTICLE 6.
REPRESENTATIONS AND WARRANTIES OF FIRST BANKING
FIRST BANKING hereby represents and warrants to XXXXX as follows:
6.1 ORGANIZATION, STANDING, AND POWER. FIRST BANKING is a corporation duly
organized, validly existing, and in good standing under the Laws of the State of
Georgia, and has the corporate power and authority to carry on its business as
now conducted and to own, lease and operate its material Assets. FIRST BANKING
is duly qualified or licensed to transact business as a foreign corporation in
good standing in the States of the United States and foreign jurisdictions where
the character of its Assets or the nature or conduct of its business requires it
to be so qualified or licensed, except for such jurisdictions in which the
failure to be so qualified or licensed is not reasonably likely to have,
individually or in the aggregate, a FIRST BANKING Material Adverse Effect. The
minute book and other organizational documents for FIRST BANKING have been made
available to XXXXX for its review and, except as disclosed in Section 6.1 of the
FIRST BANKING Disclosure Memorandum, are true and complete in all material
respects as in effect as of the date of this Agreement and accurately reflect in
all
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material respects all amendments thereto and all proceedings of the Board of
Directors and shareholders thereof.
6.2 AUTHORITY OF FIRST BANKING; NO BREACH BY AGREEMENT.
(a) FIRST BANKING has the corporate power and authority
necessary to execute, deliver and perform its obligations under this Agreement
and to consummate the transactions contemplated hereby. The execution, delivery
and performance of this Agreement and the consummation of the transactions
contemplated herein, including the Merger, have been duly and validly authorized
by all necessary corporate action in respect thereof on the part of FIRST
BANKING. This Agreement represents a legal, valid, and binding obligation of
FIRST BANKING, enforceable against FIRST BANKING in accordance with its terms
(except in all cases as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, receivership, conservatorship,
moratorium, or similar Laws affecting the enforcement of creditors' rights
generally and except that the availability of the equitable remedy of specific
performance or injunctive relief is subject to the discretion of the court
before which any proceeding may be brought).
(b) Neither the execution and delivery of this Agreement by
FIRST BANKING, nor the consummation by FIRST BANKING of the transactions
contemplated hereby, nor compliance by FIRST BANKING with any of the provisions
hereof, will (i) conflict with or result in a breach of any provision of FIRST
BANKING's Articles of Incorporation or Bylaws, or the Charter, or Articles of
Incorporation or Bylaws of any FIRST BANKING Entity, or any resolution adopted
by the Board of Directors or the shareholders of any FIRST BANKING Entity, or
(ii) constitute or result in a Default under, or require any Consent pursuant
to, or result in the creation of any Lien on any Asset of any FIRST BANKING
Entity under, any Contract or Permit of any FIRST BANKING Entity, where such
Default or Lien, or any failure to obtain such Consent, is reasonably likely to
have, individually or in the aggregate, a FIRST BANKING Material Adverse Effect,
or (iii) subject to receipt of the requisite Consents referred to in Section 9.1
(b), constitute or result in a Default under, or require any Consent pursuant
to, any Law or Order applicable to any FIRST BANKING Entity or any of their
respective material Assets (including any FIRST BANKING Entity becoming subject
to or liable for the payment of any Tax or any of the Assets owned by any FIRST
BANKING Entity being reassessed or revalued by any Taxing authority).
(c) Other than in connection or compliance with the provisions
of the Securities Laws, applicable state corporate and securities Laws, and
rules of the NASD, and other than Consents required from Regulatory Authorities,
and other than notices to or filings with the Internal Revenue Service or the
Pension Benefit Guaranty Corporation with respect to any employee benefit plans,
or under the HSR Act, and other than Consents, filings, or notifications which,
if not obtained or made, are not reasonably likely to have, individually or in
the aggregate, a FIRST BANKING Material Adverse Effect, no notice to, filing
with, or Consent of, any public body or authority is necessary for the
consummation by FIRST BANKING of the Merger and the other transactions
contemplated in this Agreement.
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6.3 CAPITAL STOCK.
(a) The authorized capital stock of FIRST BANKING consists of
10,000,000 shares of FIRST BANKING Common Stock, of which 4,702,607 shares are
issued and outstanding as of the date of this Agreement. All of the issued and
outstanding shares of FIRST BANKING Capital Stock are, and all of the shares of
FIRST BANKING Common Stock to be issued in exchange for shares of XXXXX Common
Stock upon consummation of the Merger, when issued in accordance with the terms
of this Agreement, will be, duly and validly issued and outstanding and fully
paid and nonassessable under the GBCC. None of the outstanding shares of FIRST
BANKING Capital Stock has been, and none of the shares of FIRST BANKING Common
Stock to be issued in exchange for shares of XXXXX Common Stock upon
consummation of the Merger will be, issued in violation of any preemptive rights
of the current or past shareholders of FIRST BANKING.
(b) Except as set forth in Section 6.3(a), or as disclosed in
Section 6.3 of the FIRST BANKING Disclosure Memorandum, there are no shares of
capital stock or other equity securities of FIRST BANKING outstanding and no
outstanding Equity Rights relating to the capital stock of FIRST BANKING.
6.4 FIRST BANKING SUBSIDIARIES. FIRST BANKING has disclosed in
Section 6.4 of the FIRST BANKING Disclosure Memorandum all of the FIRST BANKING
Subsidiaries that are corporations (identifying its jurisdiction of
incorporation, each jurisdiction in which the character of its Assets or the
nature or conduct of its business requires it to be qualified and/or licensed to
transact business, and the number of shares owned and percentage ownership
interest represented by such share ownership) and all of the FIRST BANKING
Subsidiaries that are general or limited partnerships, limited liability
companies, or other non-corporate entities (identifying the Law under which such
entity is organized, each jurisdiction in which the character of its Assets or
the nature or conduct of its business requires it to be qualified and/or
licensed to transact business, and the amount and nature of the ownership
interest therein). Except as disclosed in Section 6.4 of the FIRST BANKING
Disclosure Memorandum, FIRST BANKING or one of its wholly-owned Subsidiaries
owns all of the issued and outstanding shares of capital stock (or other equity
interests) of each FIRST BANKING Subsidiary. No capital stock (or other equity
interest) of any FIRST BANKING Subsidiary are or may become required to be
issued (other than to another FIRST BANKING Entity) by reason of any Equity
Rights, and there are no Contracts by which any FIRST BANKING Subsidiary is
bound to issue (other than to another FIRST BANKING Entity) additional shares of
its capital stock (or other equity interests) or Equity Rights or by which any
FIRST BANKING Entity is or may be bound to transfer any shares of the capital
stock (or other equity interests) of any FIRST BANKING Subsidiary (other than to
another FIRST BANKING Entity). There are no Contracts relating to the rights of
any FIRST BANKING Entity to vote or to dispose of any shares of the capital
stock (or other equity interests) of any FIRST BANKING Subsidiary. All of the
shares of capital stock (or other equity interests) of each FIRST BANKING
Subsidiary held by a FIRST BANKING Entity are fully paid and nonassessable under
the applicable corporation Law of the jurisdiction in which such Subsidiary is
incorporated or organized and are owned by the FIRST BANKING Entity free and
clear of any Lien. Each FIRST BANKING Subsidiary is either a bank, savings
association or a corporation, and is duly organized, validly existing, and (as
to corporations) in good standing under the Laws of the jurisdiction in which it
is incorporated or organized, and has the corporate power and authority
necessary for it to own, lease and operate its Assets and to
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carry on its business as now conducted. Each FIRST BANKING Subsidiary is duly
qualified or licensed to transact business as a foreign corporation in good
standing in the States of the United States and foreign jurisdictions where the
character of its Assets or the nature or conduct of its business requires it to
be so qualified or licensed, except for such jurisdictions in which the failure
to be so quaified or licensed is not reasonably likely to have, individually or
in the aggregate, a FIRST BANKING Material Adverse Effect. Each FIRST BANKING
Subsidiary that is a depository institution is an "insured institution" as
defined in the Federal Deposit Insurance Act and applicable regulations
thereunder. The minute book and other organizational documents for each FIRST
BANKING Subsidiary have been made available to XXXXX for its review, and, except
as disclosed in Section 6.4 of the FIRST BANKING Disclosure Memorandum, are true
and complete in all material respects as in effect as of the date of this
Agreement and accurately reflect in all material respects all amendments thereto
and all proceedings of the Board of Directors and shareholders thereof.
6.5 SEC FILINGS, FINANCIAL STATEMENTS.
(a) FIRST BANKING has timely filed and made available to XXXXX
all SEC Documents required to be filed by FIRST BANKING since December 31, 1995
(the "FIRST BANKING SEC Reports"). The FIRST BANKING SEC Reports (i) at the time
filed complied in all material respects with the applicable requirements of the
Securities Laws and other applicable Laws and (ii) did not, at the time they
were filed (or, if amended or superseded by a filing prior to the date of this
Agreement, then on the date of such filing) contain any untrue statement of a
material fact or omit to state a material fact required to be stated in such
FIRST BANKING SEC Reports or necessary in order to make the statements in such
FIRST BANKING SEC Reports, in light of the circumstances under which they were
made, not misleading. No FIRST BANKING Subsidiary is required to file any SEC
Documents.
(b) Each of the FIRST BANKING Financial Statements (including,
in each case, any related notes) contained in the FIRST BANKING SEC Reports,
including any FIRST BANKING SEC Reports filed after the date of this Agreement
until the Effective Time, complied as to form in all material respects with the
applicable published rules and regulations of the SEC with respect thereto, was
prepared in accordance with GAAP applied on a consistent basis throughout the
periods involved (except as may be indicated in the notes to such financial
statements or, in the case of unaudited interim statements, as permitted by Form
10-Q of the SEC), and fairly presented in all material respects the consolidated
financial position of FIRST BANKING and its Subsidiaries as at the respective
dates and the consolidated results of operations and cash flows for the periods
indicated, except that the unaudited interim financial statements were or are
subject to normal and recurring year-end adjustments which were not or are not
expected to be material in amount or effect.
6.6 ABSENCE OF UNDISCLOSED LIABILITIES. No FIRST BANKING Entity
has any Liabilities that are reasonably likely to have, individually or in the
aggregate, a FIRST BANKING Material Adverse Effect, except Liabilities which are
accrued or reserved against in the consolidated balance sheets of FIRST BANKING
as of December 31, 1997 and September 30, 1998, included in the FIRST BANKING
Financial Statements delivered prior to the date of this Agreement or reflected
in the notes thereto. No FIRST BANKING Entity has incurred or paid any Liability
since September 30, 1998, except for such Liabilities incurred or paid (i) in
the ordinary course of business consistent with past business practice and which
are not reasonably
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likely to have, individually or in the aggregate, a FIRST BANKING Material
Adverse Effect or (ii) in connection with the transactions contemplated by this
Agreement.
6.7 ABSENCE OF CERTAIN CHANGES OR EVENTS. Since December 31, 1997,
except as disclosed in the FIRST BANKING Financial Statements delivered prior to
the date of this Agreement or as disclosed in Section 6.7 of the FIRST BANKING
Disclosure Memorandum, (i) there have been no events, changes or occurrences
which have had, or are reasonably likely to have, individually or in the
aggregate, a FIRST BANKING Material Adverse Effect, and (ii) the FIRST BANKING
Entities have not taken any action, or failed to take any action, prior to the
date of this Agreement, which action or failure, if taken after the date of this
Agreement, would represent or result in a material breach or violation of any of
the covenants and agreements of FIRST BANKING provided in Article 7.
6.8 TAX MATTERS.
(a) All Tax Returns required to be filed by or on behalf of
any of the FIRST BANKING Entities have been timely filed or requests for
extensions have been timely filed, granted, and have not expired for periods
ended on or before December 31, 1997, and on or before the date of the most
recent fiscal year end immediately preceding the Effective Time, except to the
extent that all such failures to file, taken together, are not reasonably likely
to have a FIRST BANKING Material Adverse Effect, and all Tax Returns filed are
complete and accurate in all material respects. All Taxes shown on filed Tax
Returns have been paid. There is no audit examination, deficiency, or refund
Litigation with respect to any Taxes that is reasonably likely to result in a
determination that would have, individually or in the aggregate, a FIRST BANKING
Material Adverse Effect, except as reserved against in the FIRST BANKING
Financial Statements delivered prior to the date of this Agreement or as
disclosed in Section 6.8 of the FIRST BANKING Disclosure Memorandum. All Taxes
and other Liabilities due with respect to completed and settled examinations or
concluded Litigation have been paid. There are no Liens with respect to Taxes
upon any of the Assets of the FIRST BANKING Entities, except for any such Liens
which are not reasonably likely to have a FIRST BANKING Material Adverse Effect
or with respect to which the Taxes are not vet due and payable.
(b) None of the FIRST BANKING Entities has executed an
extension or waiver of any statute of limitations on the assessment or
collection of any Tax due (excluding such statutes that relate to veers
currently under examination by the Internal Revenue Service or other applicable
taxing authorities) that is currently in effect.
(c) The provision for any Taxes due or to become due for any
of the FIRST BANKING Entities for the period or periods through and including
the date of the respective FIRST BANKING Financial Statements that has been made
and is reflected on such FIRST BANKING Financial Statements is sufficient to
cover all such Taxes.
(d) Deferred Taxes of the FIRST BANKING Entities have been
provided for in accordance with GAAP.
(e) None of the FIRST BANKING Entities is a party to any Tax
allocation or sharing agreement and none of the FIRST BANKING Entities has been
a member of an affiliated group filing a consolidated federal income Tax Return
(other than a group the common
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parent of which was FIRST BANKING) or has any Liability for Taxes of any Person
(other than FIRST BANKING and its Subsidiaries) under Treasury Regulation
Section 1.1502-6 (or any similar provision of state, local or foreign, Law) as a
transferee or successor or by Contract or otherwise.
(f) Each of the FIRST BANKING Entities 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 Internal Revenue Code, except for such
instances of noncompliance and such omissions as are not reasonably likely to
have, individually or in the aggregate, a FIRST BANKING Material Adverse Effect.
(g) Except as disclosed in Section 6.8 of the FIRST BANKING
Disclosure Memorandum, none of the FIRST BANKING Entities has made any payments,
is obligated to make any payments, or is a party to any Contract that could
obligate it to make any payments that would be disallowed as a deduction under
Sections 28OG or 162(m) of the Internal Revenue Code.
(h) There has not been an ownership change, as defined in
Internal Revenue Code Section 382(g), of the FIRST BANKING Entities that
occurred during or after any Taxable Period in which the FIRST BANKING Entities
incurred a net operating loss that carries over to any Taxable Period ending
after December 31, 1997.
(i) No FIRST BANKING Entity has or has had in any foreign
country a permanent establishment, as defined in any applicable tax treaty or
convention between the United States and such foreign country.
(j) All material elections with respect to Taxes affecting the
FIRST BANKING Entities have been or will be timely made.
6.9 ALLOWANCE FOR POSSIBLE LOAN LOSSES. The Allowance shown on the
consolidated balance sheets of FIRST BANKING included in the most recent FIRST
BANKING Financial Statements dated prior to the date of this Agreement was, and
the Allowance shown on the consolidated balance sheets of FIRST BANKING included
in the FIRST BANKING Financial Statements as of dates subsequent to the
execution of this Agreement will be, as of the dates thereof, adequate (within
the meaning of GAAP and applicable regulatory requirements or guidelines) to
provide for all known or reasonably anticipated losses relating to or inherent
in the loan and lease portfolios (including accrued interest receivables) of the
FIRST BANKING Entities and other extensions of credit (including letters of
credit and commitments to make loans or extend credit) by the FIRST BANKING
Entities as of the dates thereof, except where the failure of such Allowance to
be so adequate is not reasonably likely to have a FIRST BANKING Material Adverse
Effect.
6.10 ASSETS.
(a) Except as disclosed in Section 6.10 of the FIRST BANKING
Disclosure Memorandum or as disclosed or reserved against in the FIRST BANKING
Financial Statements
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delivered prior to the date of this Agreement, the FIRST BANKING Entities have
good and marketable title, free and clear of all Liens, to all of their
respective Assets, except for any such Liens or other defects of title which are
not reasonably likely to have a FIRST BANKING Material Adverse Effect. All
tangible properties used in the businesses of the FIRST BANKING Entities are in
good condition, reasonable wear and tear excepted, and are usable in the
ordinary course of business consistent with FIRST BANKING's past practices.
(b) All Assets which are material to FIRST BANKING's business
on a consolidated basis, held under leases or subleases by any of the FIRST
BANKING Entities, are held under valid Contracts enforceable in accordance with
their respective terms (except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium, or other Laws affecting the
enforcement of creditors' rights generally and except that the availability of
the equitable remedy of specific performance or injunctive relief is subject to
the discretion of the court before which any proceedings may be brought), and
each such Contract is in full force and effect.
(c) The FIRST BANKING Entities currently maintain insurance
similar in amounts, scope and coverage to that maintained by other peer banking
organizations. None of the FIRST BANKING Entities has received notice from any
insurance carrier that (i) any policy of insurance will be cancelled or that
coverage thereunder will be reduced or eliminated, or (ii) premium costs with
respect to such policies of insurance will be substantially increased. There are
presently no claims for amounts exceeding in any individual case $25,000 pending
under such policies of insurance and no notices of claims in excess of such
amounts have been given by any FIRST BANKING Entity under such policies.
(d) The Assets of the FIRST BANKING Entities include all
Assets required to operate the business of the FIRST BANKING Entities as
presently conducted.
6.11 INTELLECTUAL PROPERTY. Each FIRST BANKING Entity owns or has a
license to use all of the Intellectual Property used by such FIRST BANKING
Entity in the course of its business. Each FIRST BANKING Entity is the owner of
or has a license to any Intellectual Property sold or licensed to a third party
by such FIRST BANKING Entity in connection with such FIRST BANKING Entity's
business operations, and such FIRST BANKING Entity has the right to convey by
sale or license any Intellectual Property so conveyed. No FIRST BANKING Entity
is in Default under any of its Intellectual Property licenses. No proceedings
have been instituted, or are pending or to the Knowledge of FIRST BANKING
threatened, which challenge the rights of any FIRST BANKING Entity with respect
to Intellectual Property used, sold or licensed by such FIRST BANKING Entity in
the course of its business, nor has any person claimed or alleged any rights to
such Intellectual Property. The conduct of the business of the FIRST BANKING
Entities does not infringe any Intellectual Property of any other person. Except
as disclosed in Section 6.11 of the FIRST BANKING Disclosure Memorandum, no
FIRST BANKING Entity is obligated to pay any recurring royalties to any Person
with respect to any such Intellectual Property. Except as disclosed in Section
6.11 of the FIRST BANKING Disclosure Memorandum, no officer, director or
employee of any FIRST BANKING Entity is party to any Contract which restricts or
prohibits such officer, director or employee from engaging in activities
competitive with any Person, including any FIRST BANKING Entity.
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6.12 ENVIRONMENTAL MATTERS.
(a) To the Knowledge of FIRST BANKING, each FIRST BANKING
Entity, its Participation Facilities, and its Operating Properties are, and have
been, in compliance with all Environmental Laws, except for violations which are
not reasonably likely to have, individually or in the aggregate, a FIRST BANKING
Material Adverse Effect.
(b) There is no Litigation pending or, to the Knowledge of
FIRST BANKING, threatened before any court, governmental agency, or authority or
other forum in which any FIRST BANKING Entity or any of its Operating Properties
or Participation Facilities (or FIRST BANKING in respect of such Operating
Property or Participation Facility) has been or, with respect to threatened
Litigation, may be named as a defendant (i) for alleged noncompliance (including
by any predecessor) with any Environmental Law or (ii) relating to the emission,
migration, release, discharge, spillage, or disposal into the environment of any
Hazardous Material, whether or not occurring at, on, under, adjacent to, or
affecting (or potentially affecting) a site owned, leased, or operated by any
FIRST BANKING Entity or any of its Operating Properties or Participation
Facilities or any neighboring property, except for such Litigation pending or
threatened that is not reasonably likely to have, individually or in the
aggregate, a FIRST BANKING Material Adverse Effect, nor is there any reasonable
basis for any Litigation of a type described in this sentence, except such as is
not reasonably likely to have, individually or in the aggregate, a FIRST BANKING
Material Adverse Effect.
(c) During the period of (i) any FIRST BANKING Entity's
ownership or operation of any of their respective current properties, (ii) any
FIRST BANKING Entity's participation in the management of any Participation
Facility or any Operating Property, there have been no emissions, migrations,
releases, discharges, spillages, or disposals of Hazardous Material in, on, at,
under, adjacent to, or affecting (or potentially affecting) such properties or
any neighboring properties, except such as are not reasonably likely to have,
individually or in the aggregate, a FIRST BANKING Material Adverse Effect. Prior
to the period of (i) any FIRST BANKING Entity's ownership or operation of any of
their respective current properties, (ii) any FIRST BANKING Entity's
participation in the management of any Participation Facility or any Operating
Property, to the Knowledge of FIRST BANKING, there were no releases, discharges,
spillages, or disposals of Hazardous Material in, on, under, or affecting any
such property, Participation Facility or Operating Property, except such as are
not reasonably likely to have, individually or in the aggregate, a FIRST BANKING
Material Adverse Effect.
6.13 COMPLIANCE WITH LAWS. Each FIRST BANKING Entity has in effect
all Permits necessary for it to own, lease or operate its material Assets and to
carry on its business as now conducted, except for those Permits the absence of
which are not reasonably likely to have, individually or in the aggregate, a
FIRST BANKING Material Adverse Effect, and there has occurred no Default under
any such Permit, other than Defaults which are not reasonably likely to have,
individually or in the aggregate, a FIRST BANKING Material Adverse Effect.
Except as disclosed in Section 6.13 of the FIRST BANKING Disclosure Memorandum,
none of the FIRST BANKING Entities:
(a) is in Default under any of the provisions of its Articles
of Incorporation or Bylaws (or other governing instruments); or
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(b) is in Default under any Laws, Orders or Permits applicable
to its business or employees conducting its business, except for Defaults which
are not reasonably likely to, have, individually or in the aggregate, a FIRST
BANKING Material Adverse Effect; or
(c) since January 1, 1995, has received any notification or
communication from any agency or department of federal, state, or local
government or any Regulatory Authority or the staff thereof (i) asserting that
any FIRST BANKING Entity is not in compliance with any of the Laws or Orders
which such governmental authority or Regulatory Authority enforces, where such
noncompliance is reasonably likely to have, individually or in the aggregate, a
FIRST BANKING Material Adverse Effect, (ii) threatening to revoke any Permits,
the revocation of which is reasonably likely to have, individually or in the
aggregate, a FIRST BANKING Material Adverse Effect, or (iii) requiring any FIRST
BANKING Entity to enter into or consent to the issuance of a cease and desist
order, formal agreement, directive, commitment or memorandum of understanding,
or to adopt any Board resolution or similar undertaking, which restricts
materially the conduct of its business, or in any manner relates to its capital
adequacy, its credit or reserve policies, its management, or the payment of
dividends. Copies of all material reports, correspondence, notices and other
documents relating to any inspection, audit, monitoring or other form of review
or enforcement action by a Regulatory Authority have been made available to
XXXXX.
6.14 LABOR RELATIONS. No FIRST BANKING Entity is the subject of any
Litigation asserting that it or any other FIRST BANKING Entity has committed an
unfair labor practice (within the meaning of the National Labor Relations Act or
comparable state law) or seeking to compel it or any other FIRST BANKING Entity
to bargain with any labor organization as to wages or conditions of employment,
nor is any FIRST BANKING Entity party to any collective bargaining agreement,
nor is there any strike or other labor dispute involving any FIRST BANKING
Entity, pending or threatened, or to the Knowledge of FIRST BANKING, is there
any activity involving any FIRST BANKING Entity's employees seeking to certify a
collective bargaining unit or engaging in any other organization activity.
6.15 EMPLOYEE BENEFIT PLANS.
(a) FIRST BANKING has disclosed in Section 6.15 of the FIRST
BANKING Disclosure Memorandum and has delivered or made available to XXXXX prior
to the execution of this Agreement copies in each case of all pension,
retirement, profit-sharing, deferred compensation, stock option, employee stock
ownership, severance pay, vacation, bonus, or other incentive plan, all other
written employee programs, arrangements, or agreements, all medical, vision,
dental, or other health plans, all life insurance plans, and all other employee
benefit plans or fringe benefit plans, including "employee benefit plans" as
that term is defined in Section 3(3) of ERISA, currently adopted, maintained by,
sponsored in whole or in part by, or contributed to by any FIRST BANKING Entity
or ERISA Affiliate thereof for the benefit of employees, retirees, dependents,
spouses, directors, independent contractors, or other beneficiaries and under
which employees, retirees, dependents, spouses, directors, independent
contractors, or other beneficiaries are eligible to participate (collectively,
the "FIRST BANKING Benefit Plans"). Each FIRST BANKING Benefit Plan which is an
"employee pension benefit plan," as that term is defined in Section 3(2) of
ERISA, is referred to herein as a "FIRST BANKING ERISA Plan." Each FIRST BANKING
ERISA Plan which is also a "defined benefit plan" (as defined in Section 4140)
of the Internal Revenue Code) is referred to herein as a "FIRST BANKING
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Pension Plan." No FIRST BANKING Pension Plan is or has been a multiemployer plan
within the meaning of Section 3(37) of ERISA.
(b) All FIRST BANKING Benefit Plans are in compliance with the
applicable terms of ERISA, the Internal Revenue Code, and any other applicable
Laws the breach or violation of which are reasonably likely to have,
individually or in the aggregate, a FIRST BANKING Material Adverse Effect. Each
FIRST BANKING ERISA Plan which is intended to be qualified under Section 401(a)
of the Internal Revenue Code has received a favorable determination letter from
the Internal Revenue Service, and FIRST BANKING is not aware of any
circumstances likely to result in revocation of any such favorable determination
letter. To the Knowledge of First Banking, no FIRST BANKING Entity has engaged
in a transaction with respect to any FIRST BANKING Benefit Plan that, assuming
the taxable period of such transaction expired as of the date hereof, would
subject any FIRST BANKING Entity to a Tax imposed by either Section 4975 of the
Internal Revenue Code or Section 502(i) of ERISA in amounts which are reasonably
likely to have, individually or in the aggregate, a FIRST BANKING Material
Adverse Effect.
(c) No FIRST BANKING Pension Plan has any "unfunded current
liability," as that term is defined in Section 302(d)(8)(A) of ERISA, based on
actuarial assumptions set forth for such plan's most recent actuarial valuation.
Since the date of the most recent actuarial valuation, there has been (i) no
material change in the financial position of a FIRST BANKING Pension Plan, (ii)
no change in the actuarial assumptions with respect to any FIRST BANKING Pension
Plan, and (iii) no increase in benefits under any FIRST BANKING Pension Plan as
a result of plan amendments or changes in applicable Law which is reasonably
likely to have, individually or in the aggregate, a FIRST BANKING Material
Adverse Effect or materially adversely affect the funding status of any such
plan. Neither any FIRST BANKING Pension Plan nor any "single-employer plan,"
within the meaning of Section 4001(a)(15) of ERISA, currently or formerly
maintained by any FIRST BANKING Entity, or the single-employer plan of any ERISA
Affiliate has an "accumulated funding deficiency" within the meaning of Section
412 of the Internal Revenue Code or Section 302 of ERISA, which is reasonably
likely to have a FIRST BANKING Material Adverse Effect. No FIRST BANKING Entity
has provided, or is required to provide, security to a FIRST BANKING Pension
Plan or to any single-employer plan of an ERISA Affiliate pursuant to Section 40
1 (a)(29) of the Internal Revenue Code.
(d) Within the six-year period preceding the Effective Time,
no Liability under Subtitle C or D of Title IV of ERISA has been or is expected
to be incurred by any FIRST BANKING Entity with respect to any ongoing, frozen
or terminated single-employer plan or the single-employer plan of any ERISA
Affiliate, which Liability is reasonably likely to have a FIRST BANKING Material
Adverse Effect. No FIRST BANKING Entity has incurred any withdrawal Liability
with respect to a multiemployer plan under Subtitle B of Title IV of ERISA
(regardless of whether based on contributions of an ERISA Affiliate), which
Liability is reasonably likely to have a FIRST BANKING Material Adverse Effect.
No notice of a "reportable event," within the meaning of Section 4043 of ERISA
for which the 30-day reporting requirement has not been waived, has been
required to be filed for any FIRST BANKING Pension Plan or by any ERISA
Affiliate within the 12-month period ending on the date hereof.
(e) Except as disclosed in Section 6.15 of the FIRST BANKING
Disclosure Memorandum, no FIRST BANKING Entity has any Liability for retiree
health and life benefits
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under any of the FIRST BANKING Benefit Plans and there are no restrictions on
the rights of such FIRST BANKING Entity to amend or terminate any such retiree
health or benefit Plan without incurring any Liability thereunder, which
Liability is reasonably likely to have a FIRST BANKING Material Adverse Effect.
(f) Except as disclosed in Section 6.15 of the FIRST BANKING
Disclosure Memorandum, neither the execution and delivery of this Agreement nor
the consummation of the transactions contemplated hereby will (i) result in any
payment (including severance, unemployment compensation, golden parachute, or
otherwise) becoming due to any director or any employee of any FIRST BANKING
Entity from any FIRST BANKING Entity under any FIRST BANKING Benefit Plan or
otherwise, (ii) increase any benefits otherwise payable under any FIRST BANKING
Benefit Plan, or (iii) result in any acceleration of the time of payment or
vesting of any such benefit, where such payment, increase, or acceleration is
reasonably likely to have, individually or in the aggregate, a FIRST BANKING
Material Adverse Effect.
(g) The actuarial present values of all accrued deferred
compensation entitlements (including entitlements under any executive
compensation, supplemental retirement, or employment agreement) of employees and
former employees of any FIRST BANKING Entity and their respective beneficiaries,
other than entitlements accrued pursuant to funded retirement plans subject to
the provisions of Section 412 of the Internal Revenue Code or Section 302 of
ERISA, have been fully reflected on the FIRST BANKING Financial Statements to
the extent required by and in accordance with GAAP.
6.16 MATERIAL CONTRACTS. Except as disclosed in Section 6.16 of the
FIRST BANKING Disclosure Memorandum or otherwise reflected in the FIRST BANKING
Financial Statements, none of the FIRST BANKING Entities, nor any of their
respective Assets, businesses, or operations, is a party to, or is bound or
affected by, or receives benefits under, (i) any employment, severance,
termination, consulting or retirement Contract providing for aggregate payments
to any Person in any calendar year in excess of $50,000, (ii) any Contract
relating to the borrowing of money by any FIRST BANKING Entity or the guarantee
by any FIRST BANKING Entity of any such obligation (other than Contracts
evidencing deposit liabilities, purchases of federal funds, fully-secured
repurchase agreements, and Federal Home Loan Bank advances of depository
institution Subsidiaries, trade payables and Contracts relating to borrowings or
guarantees made in the ordinary course of business), (iii) any Contract which
prohibits or restricts any FIRST BANKING Entity from engaging in any business
activities in any geographic area, line of business or otherwise in competition
with any other Person, (iv) any Contract between or among FIRST BANKING
Entities, (v) any Contract relating to the provision of data processing, network
communication, or other technical services to or by any FIRST BANKING Entity,
(vi) any exchange-traded or over-the-counter swap, forward, future, option, cap,
floor, or collar financial Contract, or any other interest rate or foreign
currency protection Contract not included on its balance sheet which is a
financial derivative Contract, or (vii) any other Contract or amendment thereto
that would be required to be filed as an exhibit to a Form 10-K filed by FIRST
BANKING with the SEC as of the date of this Agreement that has not been filed as
an exhibit to FIRST BANKING's Form 10-K filed for the fiscal year ended December
31, 1997, or in an SEC Document and identified to FIRST BANKING (together with
all Contracts referred to in Sections 6.10 and 6.15(a), the "FIRST BANKING
Contracts"). With respect to each FIRST BANKING Contract and except as disclosed
in Section 6.16 of the FIRST BANKING Disclosure Memorandum: (i) the Contract is
in full force and effect; (ii) no FIRST
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BANKING Entity is in Default thereunder, other than Defaults which are not
reasonably likely to have, individually or in the aggregate, a FIRST BANKING
Material Adverse Effect; (iii) no FIRST BANKING Entity has repudiated or waived
any material provision of any such Contract; and (iv) no other party to any such
Contract is, to the Knowledge of FIRST BANKING, in Default in any respect, other
than Defaults which are not reasonably likely to have, individually or in the
aggregate, a FIRST BANKING Material Adverse Effect, or has repudiated or waived
any material provision thereunder. All of the indebtedness of any FIRST BANKING
Entity for money borrowed is prepayable at any time by such FIRST BANKING Entity
without penalty or premium.
6.17 LEGAL PROCEEDINGS. There is no Litigation instituted or pending or, to
the Knowledge of FIRST BANKING, threatened (or unasserted but considered
probable of assertion and which if asserted would have at least a reasonable
probability of an unfavorable outcome) against any FIRST BANKING Entity, or
against any director, employee or employee benefit plan of any FIRST BANKING
Entity, or against any Asset, interest, or right of any of them, that is
reasonably likely to have, individually or in the aggregate, a FIRST BANKING
Material Adverse Effect, nor are there any Orders of any Regulatory Authorities,
other governmental authorities, or arbitrators outstanding against any FIRST
BANKING Entity, that are reasonably likely to have, individually or in the
aggregate, a FIRST BANKING Material Adverse Effect. Section 6.17 of the FIRST
BANKING Disclosure Memorandum contains a summary of all Litigation as of the
date of this Agreement to which any FIRST BANKING Entity is a party and which
names a FIRST BANKING Entity as a defendant or cross-defendant or for which any
FIRST BANKING Entity has any potential Liability.
6.18 REPORTS. Since January 1, 1995, each FIRST BANKING Entity has timely
filed all reports and statements, together with any amendments required to be
made with respect thereto, that it was required to file with Regulatory
Authorities (except, in the case of state securities authorities, failures to
file which are not reasonably likely to have, individually or in the aggregate,
a FIRST BANKING Material Adverse Effect). As of their respective dates, each of
such reports and documents, including the financial statements, exhibits, and
schedules thereto, complied in all material respects with all applicable Laws.
As of its respective date, each such report and document did not, in all
material respects, contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements made therein, in light of the circumstances under which they were
made, not misleading. Since January 1, 1995, no FIRST BANKING Entity has not
filed any Suspicious Activity Report or any claim under any fidelity, blanket
bond, general liability, errors and omissions, directors and officers or other
insurance policies that pertain to the operations of its business or the
ownership of its assets.
6.19 STATEMENTS TRUE AND CORRECT. No statement, certificate, instrument or
other writing furnished or to be furnished by any FIRST BANKING Entity to XXXXX
pursuant to this Agreement or any other document, agreement or instrument
referred to herein contains or will contain any untrue statement of material
fact or will omit to state a material fact necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading. None of the information supplied or to be supplied by any FIRST
BANKING Entity for inclusion in the Registration Statement to be filed by FIRST
BANKING with the SEC, will, when such Registration Statement becomes effective,
be false or misleading with respect to any material fact, or omit to state any
material fact necessary to make the statements therein not
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misleading. None of the documents to be filed by any FIRST BANKING Entity with
the SEC or any other Regulatory Authority in connection with the transactions
contemplated hereby, will, at the respective time such documents are filed, be
false or misleading with respect to any material fact, or omit to state any
material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. All documents that any
FIRST BANKING Entity thereof is responsible for filing with any Regulatory
Authority in connection with the transactions contemplated hereby will comply as
to form in all material respects with the provisions of applicable Law.
6.20 ACCOUNTING, TAX AND REGULATORY MATTERS. No FIRST BANKING Entity has
taken or agreed to take any action or has any knowledge of any fact or
circumstance that is reasonably likely to (i) prevent the Merger from qualifying
for pooling of interests accounting treatment and as a reorganization within the
meaning of Section 368(a) of the Internal Revenue Code, or (ii) materially
impede or delay receipt of any Consents of Regulatory Authorities referred to in
Section 9.l(b) or result in the imposition of a condition or restriction of the
type referred to in the last sentence of such Section.
6.21 CHARTER PROVISIONS. Each FIRST BANKING Entity has taken all action so
that the entering into of this Agreement and the consummation of the Merger and
the other transactions contemplated by this Agreement do not and will not result
in the grant of any rights to any Person under the Charter, Articles of
Incorporation, Bylaws or other governing instruments of any FIRST BANKING Entity
or restrict or impair the ability of FIRST BANKING or any of its Subsidiaries to
vote, or otherwise to exercise the rights of a shareholder with respect to,
shares of any FIRST BANKING Entity that may be directly or indirectly acquired
or controlled by them.
6.22 BOARD RECOMMENDATION. The Board of Directors of FIRST BANKING, at a
meeting duly called and held, has by unanimous vote of those directors present
(who constituted all of the directors then in office) determined that this
Agreement and the transactions contemplated hereby, including the Merger, taken
together, are fair to and in the best interests of the FIRST BANKING
shareholders.
6.23 Y2K. Each FIRST BANKING Entity is in compliance with all policies and
directives issued by Regulatory Authorities with respect to preparedness for
year 2000 data processing and other operations. Section 6.23 of the FIRST
BANKING Disclosure Memorandum sets forth a summary of the steps taken by FIRST
BANKING to ensure such compliance.
ARTICLE 7.
CONDUCT OF BUSINESS PENDING CONSUMMATION
7.1 AFFIRMATIVE COVENANTS OF XXXXX. From the date of this Agreement until
the earlier of the Effective Time or the termination of this Agreement, unless
the prior written consent of FIRST BANKING shall have been obtained, and except
as otherwise expressly contemplated herein, XXXXX shall, and shall cause each of
its Subsidiaries to (a) operate its business only in the usual, regular, and
ordinary course, (b) preserve intact its business organization and Assets and
maintain its rights and franchises, and (c) take no action which would (i)
materially adversely affect the ability of any Party to obtain any Consents
required for
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the transactions contemplated hereby without imposition of a condition or
restriction of the type referred to in the last sentences of Section 9.1(b) or
9.1(c), or (ii) materially adversely affect the ability of any Party to perform
its covenants and agreements under this Agreement.
7.2 NEGATIVE COVENANTS OF XXXXX. From the date of this Agreement
until the earlier of the Effective Time or the termination of this Agreement,
unless the prior written consent of FIRST BANKING shall have been obtained, and
except as otherwise expressly contemplated herein, XXXXX covenants and agrees
that it will not do or agree or commit to do, or permit any of its Subsidiaries
to do or agree or commit to do, any of the following:
(a) amend the Articles of Incorporation, Bylaws or other
governing instruments of any XXXXX entity, or
(b) incur any additional debt obligation or other obligation
for borrowed money (other than indebtedness of a XXXXX Entity to another XXXXX
Entity) in excess of an aggregate of $100,000 (for XXXXX Entities on a
consolidated basis) except in the ordinary course of the business of the XXXXX
Subsidiaries consistent with past practices (which shall include, for the XXXXX
Subsidiaries that are depository institutions, creation of deposit liabilities,
purchases of federal funds, advances from the Federal Reserve Bank or Federal
Home Loan Bank, and entry into repurchase agreements fully secured by U.S.
government or agency securities), or impose, or suffer the imposition, on any
Asset of any XXXXX Entity of any Lien or permit any such Lien to exist (other
than in connection with deposits, repurchase agreements, bankers acceptances,
"treasury tax and loan" accounts established in the ordinary course of business,
the satisfaction of legal requirements in the exercise of trust powers, and
Liens in effect as of the date hereof that are disclosed in Section 7.2(b) of
the XXXXX Disclosure Memorandum); or
(c) repurchase, redeem, or otherwise acquire or exchange
(other than exchanges in the ordinary course under employee benefit plans),
directly or indirectly, any shares, or any securities convertible into any
shares, of the capital stock of any XXXXX Entity, or, except as set forth in
Section 7.2(c) of the XXXXX Disclosure Memorandum, declare or pay any dividend
or make any other distribution in respect of WAYNE's capital stock; or
(d) except for this Agreement, or pursuant to the exercise of
warrants outstanding as of the date hereof and pursuant to the terms thereof in
existence on the date hereof, or as disclosed in Section 7.2(d) of the XXXXX
Disclosure Memorandum, issue, sell, pledge, encumber, authorize the issuance of,
enter into any Contract to issue, sell, pledge, encumber, or authorize the
issuance of, or otherwise permit to become outstanding, any additional shares of
XXXXX Common Stock or any other capital stock of any XXXXX Entity, or any stock
appreciation rights, or any option, warrant, or other Equity Right; or
(e) adjust, split, combine or reclassify any capital stock of
any XXXXX Entity or issue or authorize the issuance of any other securities in
respect of or in substitution for shares of XXXXX Common Stock, or sell, lease,
mortgage or otherwise dispose of or otherwise encumber any Asset having a book
value in excess of $100,000 other than in the ordinary course of business for
reasonable and adequate consideration or any shares of capital stock of any
XXXXX Subsidiary (unless any such shares of stock are sold or otherwise
transferred to another XXXXX Entity); or
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(f) except for loans made in the ordinary course of its
business, make any material investment, either by purchase of stock or
securities, contributions to capital, Asset transfers, or purchase of any
Assets, in any Person other than a wholly owned XXXXX Subsidiary, or otherwise
acquire direct or indirect control over any Person, other than in connection
with (i) foreclosures in the ordinary course of business, (ii) acquisitions of
control by a depository institution Subsidiary in its fiduciary capacity, or
(iii) the creation of new wholly owned Subsidiaries organized to conduct or
continue activities otherwise permitted by this Agreement; or
(g) grant any increase in compensation or benefits to the
employees or officers of any XXXXX Entity, except in accordance with past
practice specifically disclosed in Section 7.2(g) of the XXXXX Disclosure
Memorandum or as required by Law; pay any severance or termination pay or any
bonus other than pursuant to written policies or written Contracts in effect on
the date of this Agreement and disclosed in Section 7.2(g) of the XXXXX
Disclosure Memorandum; and enter into or amend any severance agreements with
officers of any XXXXX Entity; grant any material increase in fees or other
increases in compensation or other benefits to directors of any XXXXX Entity
except in accordance with past practice disclosed in Section 7.2(g) of the XXXXX
Disclosure Memorandum; or voluntarily accelerate the vesting of any stock
options or other stock-based compensation or employee benefits or other Equity
Rights; or
(h) enter into or amend any employment Contract between any
XXXXX Entity and any Person having a salary thereunder in excess of $50,000 per
year (unless such amendment is required by Law) that the XXXXX Entity does not
have the unconditional right to terminate without Liability (other than
Liability for services already rendered), at any time on or after the Effective
Time; or
(i) adopt any new employee benefit plan of any XXXXX Entity or
terminate or withdraw from, or make any material change in or to, any existing
employee benefit plans of any XXXXX Entity other than any such change that is
required by Law or that, in the opinion of counsel, is necessary or advisable to
maintain the tax qualified status of any such plan, or make any distributions
from such employee benefit plans, except as required by Law, the terms of such
plans or consistent with past practice; or
(j) make any significant change in any Tax or accounting
methods or systems of internal accounting controls, except as may be appropriate
to conform to changes in Tax Laws or regulatory accounting requirements or GAAP;
or
(k) commence any Litigation other than in accordance with past
practice or except as set forth in Section 7.2(k) of the XXXXX Disclosure
Memorandum, settle any Litigation involving any Liability of any XXXXX Entity
for material money damages or restrictions upon the operations of any XXXXX
Entity; or
(l) except in the ordinary course of business, enter into,
modify, amend or terminate any material Contract (including any loan Contract
with an unpaid balance exceeding $50,000) or waive, release, compromise or
assign any material rights or claims.
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7.3 AFFIRMATIVE COVENANTS OF FIRST BANKING. From the date of this Agreement
until the earlier of the Effective Time or the termination of this Agreement,
unless the prior written consent of XXXXX shall have been obtained, and except
as otherwise expressly contemplated herein, FIRST BANKING shall and shall cause
each of its Subsidiaries to (a) operate its business only in the usual, regular,
and ordinary course, (b) preserve intact its business organization and Assets
and maintain its rights and franchises, and (c) take no action which would (i)
materially adversely affect the ability of any Party to obtain any Consents
required for the transactions contemplated hereby without imposition of a
condition or restriction of the type referred to in the last sentences of
Section 9.1(b) or 9.1(c), or (ii) materially adversely affect the ability of any
Party to perform its covenants and agreements under this Agreement.
7.4 NEGATIVE COVENANTS OF FIRST BANKING. From the date of this Agreement
until the earlier of the Effective Time or the termination of this Agreement,
unless the prior written consent of XXXXX shall have been obtained, and except
as otherwise expressly contemplated herein, FIRST BANKING covenants and agrees
that it will not amend the Articles of Incorporation or Bylaws of FIRST BANKING
in any manner adverse to the holders of XXXXX Common Stock, or take any action
which will materially adversely impact the ability of FIRST BANKING Entities to
consummate the transactions contemplated by this Agreement.
7.5 ADVERSE CHANGES IN CONDITION. Each of FIRST BANKING and XXXXX agrees to
give written notice promptly to the other upon becoming aware of the occurrence
or impending occurrence of any event or circumstance relating to it or any of
its Subsidiaries which (i) is reasonably likely to have, individually or in the
aggregate, a XXXXX Material Adverse Effect or a FIRST BANKING Material Adverse
Effect, as applicable, or (ii) would cause or constitute a material breach of
any of its representations, warranties, or covenants contained herein, and to
use its reasonable efforts to prevent or promptly to remedy the same.
7.6 REPORTS. Each of FIRST BANKING and XXXXX and their Subsidiaries shall
file all reports required to be filed by it with Regulatory Authorities between
the date of this Agreement and the Effective Time and shall deliver to the other
copies of all such reports promptly after the same are filed. If financial
statements are contained in any such reports filed with the SEC, such financial
statements will fairly present the consolidated financial position of the entity
filing such statements as of the dates indicated and the consolidated results of
operations, changes in shareholders' equity, and cash flows for the periods then
ended in accordance with GAAP (subject in the case of interim financial
statements to normal recurring year-end adjustments that are not material). As
of their respective dates, such reports filed with the SEC will comply in all
material respects with the Securities Laws and will not contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading. Any financial
statements contained in any other reports to another Regulatory Authority shall
be prepared in accordance with Laws applicable to such reports.
ARTICLE 8.
ADDITIONAL AGREEMENTS
8.1 REGISTRATION STATEMENT. As soon as practicable after execution of this
Agreement, FIRST BANKING shall prepare and file the Registration Statement with
the SEC,
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and shall use its reasonable efforts to cause the Registration Statement to
become effective under the 1933 Act and take any action required to be taken
under the applicable state Blue Sky or Securities Laws in connection with the
issuance of the shares of FIRST BANKING Common Stock upon consummation of the
Merger. XXXXX shall cooperate in the preparation and filing of the Registration
Statement and shall furnish all information concerning it and the holders of its
capital stock as FIRST BANKING may reasonably request in connection with such
action. FIRST BANKING and XXXXX shall make all necessary filings with respect to
the Merger under the Securities Laws.
8.2 NASDAQ LISTING. FIRST BANKING shall use its reasonable efforts to list,
prior to the Effective Time, on the Nasdaq National Market the shares of FIRST
BANKING Common Stock to be issued to the holders of XXXXX Common Stock pursuant
to the Merger, and FIRST BANKING shall give all notices and make all filings
with the NASD required in connection with the transactions contemplated herein.
8.3 SHAREHOLDER APPROVAL. XXXXX shall call a Shareholders' Meeting, to be
held as soon as reasonably practicable after the Registration Statement is
declared effective by the SEC, for the purpose of voting upon approval of this
Agreement and such other related matters as it deems appropriate. In connection
with the Shareholders' Meeting, the Board of Directors of XXXXX shall recommend
to its shareholders, subject to the conditions in such authorization and
recommendation by the Board of Directors, the approval of the matters submitted
for approval (subject to the Board of Directors of XXXXX, after having consulted
with and considered the advice of outside counsel, reasonably determining in
good faith that the making of such recommendation, or the failure to withdraw or
modify its recommendation, would constitute a breach of fiduciary duties of the
members of such Board of Directors to WAYNE's shareholders, under applicable
law), and the Board of Directors and officers of XXXXX shall use their
reasonable efforts to obtain such shareholders' approval (subject to the Board
of Directors of XXXXX, after having consulted with and considered the advice of
outside counsel, reasonably determining in good faith that the taking of such
actions would constitute a breach of fiduciary duties of the members of such
Board of Directors to the XXXXX shareholders, under applicable law).
8.4 APPLICATIONS. FIRST BANKING shall promptly prepare and file, and XXXXX
shall cooperate in the preparation and, where appropriate, filing of,
applications with all Regulatory Authorities having jurisdiction over the
transactions contemplated by this Agreement, including without limitation, the
Board of Governors of the Federal Reserve System and the Georgia Department of
Banking and Finance, seeking the requisite Consents necessary to consummate the
transactions contemplated by this Agreement. The Parties shall deliver to each
other copies of all filings, correspondence and orders to and from all
Regulatory Authorities in connection with the transactions contemplated hereby.
8.5 FILINGS WITH STATE OFFICES. Upon the terms and subject to the
conditions of this Agreement, FIRST BANKING shall cause to be filed the
Certificate of Merger with the Secretary of State of the State of Georgia.
8.6 AGREEMENT AS TO EFFORTS TO CONSUMMATE. Subject to the terms and
conditions of this Agreement, each Party agrees to use, and to cause its
Subsidiaries to use, its reasonable efforts to take, or cause to be taken, all
actions, and to do, or cause to be done, all things
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necessary, proper, or advisable under applicable Laws to consummate and make
effective, as soon as reasonably practicable after the date of this Agreement,
the transactions contemplated by this Agreement, including using its reasonable
efforts to lift or rescind any Order adversely affecting its ability to
consummate the transactions contemplated herein and to cause to be satisfied the
conditions referred to in Article 9; provided, that nothing herein shall
preclude either Party from exercising its rights under this Agreement. Each
Party shall use, and shall cause each of its Subsidiaries to use, its reasonable
efforts to obtain all Consents necessary or desirable for the consummation of
the transactions contemplated by this Agreement. The parties agree to use
reasonable efforts to cause the Effective Date to occur prior to any record date
set by FIRST BANKING for the payment of any dividends in 1999 (such record date
or dates in 1999 shall be referred to hereafter as the "1999 FIRST BANKING
Record Date"). FIRST BANKING agrees that, if the Effective Date does not occur
prior to the 1999 FIRST BANKING Record Date, XXXXX will declare and pay a
special dividend to its shareholders as set forth in Section 7.2(c) of the XXXXX
Disclosure Memorandum.
8.7 INVESTIGATION AND CONFIDENTIALITY.
(a) Prior to the Effective Time, each Party shall keep the
other Party advised of all material developments relevant to its business and to
consummation of the Merger and shall permit the other Party to make or cause to
be made such investigation of the business and properties of it and its
Subsidiaries and of their respective financial and legal conditions as the Party
reasonably requests, provided that such investigation shall be reasonably
related to the transactions contemplated hereby, and shall not interfere
unnecessarily with normal operations. No investigation by a Party shall affect
the representations and warranties of any other Party.
(b) Each Party shall, and shall cause its advisers and agents
to, maintain the confidentiality of all confidential information furnished to it
by the other Party concerning its and its Subsidiaries' businesses, operations,
and financial positions and shall not use such information for any purpose
except in furtherance of the transactions contemplated by this Agreement. If
this Agreement is terminated prior to the Effective Time, each Party shall
promptly return or certify the destruction of all documents and copies thereof,
and all work papers containing confidential information received from the other
Party.
(c) Each Party shall use its reasonable efforts to exercise
its rights under confidentiality agreements entered into with Persons which were
considering an Acquisition Proposal with respect to such Party to preserve the
confidentiality of the information relating to such Party and its Subsidiaries
provided to such Persons and their Affiliates and Representatives.
(d) Each Party agrees to give the other Party notice as soon
as practicable after any determination by it of any fact or occurrence relating
to the other Party which it has discovered through the course of its
investigation and which represents, or is reasonably likely to represent, either
a material breach of any representation, warranty, covenant or agreement of the
other Party or which has had or is reasonably likely to have a XXXXX Material
Adverse Effect or a FIRST BANKING Material Adverse Effect, as applicable.
8.8 PRESS RELEASES. Prior to the Effective Time, XXXXX and FIRST
BANKING shall consult with each other as to the form and substance of any press
release or other public disclosure materially related to this Agreement or any
other transaction contemplated hereby;
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provided, that nothing in this Section 8.8 shall be deemed to prohibit any Party
from making any disclosure which its counsel deems necessary or advisable in
order to satisfy such Party's disclosure obligations imposed by Law.
8.9 CERTAIN ACTIONS. Except with respect to this Agreement and the
transactions contemplated hereby, no XXXXX Entity nor any Representatives
thereof retained by any XXXXX Entity shall directly or indirectly solicit any
Acquisition Proposal by any Person. Except to the extent the Board of Directors
of XXXXX, after having consulted with and considered the advice of outside
counsel, reasonably determines in good faith that the failure to take such
actions would constitute a breach of fiduciary duties of the members of such
Board of Directors to WAYNE's shareholders, under applicable Law, no XXXXX
Entity or Representative thereof shall furnish any non-public information that
it is not legally obligated to furnish, negotiate with respect to, or enter into
any Contract with respect to, any Acquisition Proposal, but XXXXX may
communicate information about such an Acquisition Proposal to its shareholders
if and to the extent that it is required to do so in order to comply with its
legal obligations. XXXXX shall promptly advise FIRST BANKING following the
receipt of any Acquisition Proposal and the details thereof, and advise FIRST
BANKING of any developments with respect to such Acquisition Proposal promptly
upon the occurrence thereof. XXXXX shall (i) immediately cease and cause to be
terminated any existing activities, discussions or negotiations with any Persons
conducted heretofore with respect to any of the foregoing, and (ii) direct and
use its reasonable efforts to cause its Representatives not to engage in any of
the foregoing.
8.10 ACCOUNTING AND TAX TREATMENT. Each of the Parties undertakes and
agrees to use its reasonable efforts to cause the Merger to, and to take no
action which would cause the Merger not to, qualify for pooling of interests
accounting treatment and as a "reorganization" within the meaning of Section
368(a) of the Internal Revenue Code for federal income tax purposes.
8.11 CHARTER PROVISIONS. Each Party shall take, and shall cause its
Subsidiaries to take, all necessary action to ensure that the entering into of
this Agreement and the consummation of the Merger and the other transactions
contemplated hereby do not and will not result in the grant of any rights to any
Person under the charter, articles of incorporation, bylaws or other governing
instruments of such Party or any of its Subsidiaries or restrict or impair the
ability of FIRST BANKING or any of its Subsidiaries to vote, or otherwise to
exercise the rights of a shareholder with respect to, shares of any XXXXX Entity
that may be directly or indirectly acquired by them.
8.12 AGREEMENTS OF AFFILIATES. XXXXX has disclosed in Section 8.12 of the
XXXXX Disclosure Memorandum each Person whom it reasonably believes is an
"affiliate" of XXXXX for purposes of Rule 145 under the 1933 Act. XXXXX shall
use its reasonable efforts to cause each such Person to deliver to FIRST BANKING
not later than 30 days after the date of this Agreement a written agreement,
substantially in the form of Exhibit 1, providing that such Person will not
sell, pledge, transfer, or otherwise dispose of the shares of the XXXXX Common
Stock held by such Person except as contemplated by such agreement or by this
Agreement and will not sell, pledge, transfer, or otherwise dispose of the
shares of FIRST BANKING Common Stock to be received by such Person upon
consummation of the Merger except in compliance with applicable provisions of
the 1933 Act and the rules and regulations thereunder and until
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such time as financial results covering at least 30 days of combined operations
of FIRST BANKING and XXXXX have been published within the meaning of Section
201.01 of the SEC's Codification of Financial Reporting Policies, except that
transfers may be made in compliance with Staff Accounting Bulletin No. 76 issued
by the SEC. Except for transfers made in compliance with Staff Accounting
Bulletin No. 76, shares of FIRST BANKING Common Stock issued to such affiliates
of XXXXX shall not be transferable until such time as financial results covering
at least 30 days of combined operations of FIRST BANKING and XXXXX have been
published within the meaning of Section 201.01 of the SEC's Codification of
Financial Reporting Policies, regardless of whether each such affiliate has
provided the written agreement referred to in this Section 8.12. FIRST BANKING
shall be entitled to place restrictive legends upon certificates for shares of
FIRST BANKING Common Stock issued to affiliates of XXXXX pursuant to this
Agreement to enforce the provisions of this Section 8.12. FIRST BANKING shall
not be required to maintain the effectiveness of the Registration Statement
under the 1933 Act for the purposes of resale of FIRST BANKING Common Stock by
such affiliates.
8.13 EMPLOYEE BENEFITS AND CONTRACTS. Following the Effective Time, FIRST
BANKING shall either (i) continue to provide to officers and employees of the
XXXXX Entities employee benefits under WAYNE's existing employee benefit and
welfare plans or, (ii) if FIRST BANKING shall determine to provide to officers
and employees of the XXXXX Entities employee benefits under other employee
benefit plans and welfare plans, provide generally to officers and employees of
the XXXXX Entities employee benefits under employee benefit and welfare plans,
on terms and conditions which when taken as a whole are substantially similar to
those currently provided by the FIRST BANKING Entities to their similarly
situated officers and employees. For purposes of participation and vesting (but
not accrual of benefits) under FIRST BANKING's employee benefit plans, (i)
service under any qualified defined benefit plan of XXXXX shall be treated as
service under FIRST BANKING's defined benefit plan, if any, (ii) service under
any qualified defined contribution plans of XXXXX shall be treated as service
under FIRST BANKING's qualified defined contribution plans, and (iii) service
under any other employee benefit plans of XXXXX shall be treated as service
under any similar employee benefit plans maintained by FIRST BANKING. With
respect to officers and employees of the XXXXX Entities who, at or after the
Effective Time, become employees of a FIRST BANKING Entity and who, immediately
prior to the Effective Time, are participants in one or more employee welfare
benefit plans maintained by the XXXXX Entities, FIRST BANKING shall cause each
comparable employee welfare benefit plan which is substituted for a XXXXX
welfare benefit plan to waive any evidence of insurability or similar provision,
to provide credit for such participation prior to such substitution with regard
to the application of any pre-existing condition limitation, and to provide
credit towards satisfaction of any deductible or out-of-pocket provisions for
expenses incurred by such participants during the period prior to such
substitution, if any, that overlaps with the then current plan year for each
such substituted employee welfare benefit plans. FIRST BANKING also shall cause
the Surviving Bank and its Subsidiaries to honor in accordance with their terms
all employment, severance, consulting and other compensation Contracts disclosed
in Section 8.13 of the XXXXX Disclosure Memorandum to FIRST BANKING between any
XXXXX Entity and any current or former director, officer, or employee thereof,
and all provisions for vested benefits or other vested amounts earned or accrued
through the Effective Time under the XXXXX Benefit Plans.
8.14 INDEMNIFICATION.
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(a) Subject to the conditions set forth in paragraph (b)
below, for a period of six years after the Effective Time, FIRST BANKING shall
indemnify, defend and hold harmless each person entitled to indemnification from
a XXXXX Entity (each, an "Indemnified Party") against all Liabilities arising
out of actions or omissions occurring at or prior to the Effective Time
(including the transactions contemplated by this Agreement) to the fullest
extent permitted under Georgia Law and by WAYNE's Articles of Incorporation and
Bylaws as in effect on the date hereof, including provisions relating to
advances of expenses incurred in the defense of any Litigation. Without limiting
the foregoing, in any case in which approval by FIRST BANKING is required to
effectuate any indemnification, FIRST BANKING shall direct, at the election of
the Indemnified Party, that the determination of any such approval shall be made
by independent counsel mutually agreed upon between FIRST BANKING and the
Indemnified Party.
(b) Any Indemnified Party wishing to claim indemnification
under paragraph (a) of this Section 8.14, upon learning of any such Liability or
Litigation, shall promptly notify FIRST BANKING thereof. In the event of any
such Liability or Litigation (whether arising before or after the Effective
Time), (i) FIRST BANKING shall have the right to assume the defense thereof
(provided FIRST BANKING acknowledges responsibility for such indemnification)
and FIRST BANKING 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 FIRST
BANKING elects not to assume such defense or counsel for the Indemnified Parties
advises that there are substantive issues which raise conflicts of interest
between FIRST BANKING and the Indemnified Parties, the Indemnified Parties may
retain counsel satisfactory to them, and FIRST BANKING shall pay all reasonable
fees and expenses of such counsel for the Indemnified Parties promptly as
statements therefor are received; provided, that FIRST BANKING shall be
obligated pursuant to this paragraph (b) to pay for only one firm of counsel for
all Indemnified Parties in any jurisdiction, (ii) the Indemnified Parties will
cooperate in the defense of any such Litigation, and (iii) FIRST BANKING shall
not be liable for any settlement effected without its prior written consent; and
provided further that FIRST BANKING shall not have any obligation hereunder to
any Indemnified Party when and if a court of competent jurisdiction shall
determine, and such determination shall have become final, that the
indemnification of such Indemnified Party in the manner contemplated hereby is
prohibited by applicable Law.
ARTICLE 9.
CONDITIONS PRECEDENT TO OBLIGATIONS TO CONSUMMATE
9.1 CONDITIONS TO OBLIGATIONS OF EACH PARTY. The respective
obligations of each Party to perform this Agreement and consummate
the Merger and the other transactions contemplated hereby are subject to the
satisfaction of the following conditions, unless waived by both Parties pursuant
to Section 11.6:
(a) SHAREHOLDER APPROVAL. The shareholders of XXXXX shall have
approved this Agreement, and the consummation of the transactions contemplated
hereby, including the Merger, as and to the extent required by Law or by the
provisions of any governing instruments. The shareholders of FIRST BANKING shall
have approved the issuance of shares
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of FIRST BANKING Common Stock pursuant to the Merger, as and to the extent
required by Law, by the provisions of any governing instruments, or by the rules
of the NASD.
(b) REGULATORY APPROVALS. All Consents of, filings and
registrations with, and notifications to, all Regulatory Authorities required
for consummation of the Merger shall have been obtained or made and shall be in
full force and effect and all waiting periods required by Law shall have
expired. No Consent obtained from any Regulatory Authority which is necessary to
consummate the transactions contemplated hereby shall be conditioned or
restricted in a manner (including requirements relating to the raising of
additional capital or the disposition of Assets) which in the reasonable
judgment of the Board of Directors of any Party would so materially adversely
impact the economic or business benefits of the transactions contemplated by
this Agreement that, had such condition or requirement been known, such Party
would not, in its reasonable judgment, have entered into this Agreement.
(c) CONSENTS AND APPROVALS. Each Party shall have obtained any
and all Consents required for consummation of the Merger (other than those
referred to in Section 9.1 (b)) or for the preventing of any Default under any
Contract or Permit of such Party which, if not obtained or made, is reasonably
likely to have, individually or in the aggregate, a XXXXX Material Adverse
Effect or a FIRST BANKING Material Adverse Effect, as applicable. No Consent so
obtained which is necessary to consummate the transactions contemplated hereby
shall be conditioned or restricted in a manner which in the reasonable judgment
of the Board of Directors of any Party would so materially adversely impact the
economic or business benefits of the transactions contemplated by this Agreement
that, had such condition or requirement been known, such Party would not, in its
reasonable judgment, have entered into this Agreement.
(d) LEGAL PROCEEDINGS. No court or governmental or regulatory
authority of competent jurisdiction shall have enacted, issued, promulgated,
enforced or entered any Law or Order (whether temporary, preliminary or
permanent) or taken any other action which prohibits, restricts or makes illegal
consummation of the transactions contemplated by this Agreement.
(e) REGISTRATION STATEMENT. The Registration Statement shall
be effective under the 1933 Act, and no stop orders suspending the effectiveness
of the Registration Statement shall have been issued, no action, suit,
proceeding or investigation by the SEC to suspend the effectiveness thereof
shall have been initiated and be continuing, and all necessary approvals under
state securities laws or the 1933 Act or 1934 Act relating to the issuance or
trading of the shares of FIRST BANKING Common Stock issuable pursuant to the
Merger shall have been received.
(f) NASDAQ LISTING. The shares of FIRST BANKING Common Stock
issuable pursuant to the Merger shall have been approved for listing on the
Nasdaq National Market.
(g) TAX MATTERS. Each Party shall have received a written
opinion of counsel from Powell, Goldstein, Xxxxxx & Xxxxxx LLP, in form
reasonably satisfactory to such Parties (the "Tax Opinion"), to the effect that
(i) the Merger will constitute a reorganization within the meaning of Section
368(a) of the Internal Revenue Code, (ii) the exchange in the Merger of XXXXX
Common Stock for FIRST BANKING Common Stock will not give rise to gain or loss
to the shareholders of XXXXX with respect to such exchange (except to the extent
of any cash
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received), and (iii) neither XXXXX nor FIRST BANKING will recognize gain or loss
as a consequence of the Merger (except for amounts resulting from any required
change in accounting methods and any income and deferred gain recognized
pursuant to Treasury regulations issued under Section 1502 of the Internal
Revenue Code). In rendering such Tax Opinion, such counsel shall be entitled to
rely upon representations of officers of XXXXX and FIRST BANKING reasonably
satisfactory in form and substance to such counsel.
(h) XXXXXX EMPLOYEE AGREEMENT. Xxxxxxx X. Xxxxxx shall have
negotiated a mutually satisfactory employment relationship with FIRST BANKING,
as the Surviving Corporation.
9.2 CONDITIONS TO OBLIGATIONS OF FIRST BANKING. The obligations of
FIRST BANKING to perform this Agreement and consummate the Merger and the other
transactions contemplated hereby are subject to the satisfaction of the
following conditions, unless waived by FIRST BANKING pursuant to Section
11.6(a):
(a) REPRESENTATIONS AND WARRANTIES. For purposes of this
Section 9.2(a), the accuracy of the representations and warranties of XXXXX set
forth in this Agreement shall be assessed as of the date of this Agreement and
as of the Effective Time with the same effect as though all such representations
and warranties had been made on and as of the Effective Time (provided that
representations and warranties which are confined to a specified date shall
speak only as of such date). The representations and warranties set forth in
Section 5.3 shall be true and correct (except for inaccuracies which are de
minimus in amount). The representations and warranties set forth in Sections
5.20 and 5.21 shall be true and correct in all material respects. There shall
not exist inaccuracies in the representations and warranties of XXXXX set forth
in this Agreement (including the representations and warranties set forth in
Sections 5.3, 5.20 and 5.21) such that the aggregate effect of such inaccuracies
has, or is reasonably likely to have, a XXXXX Material Adverse Effect; provided
that, for purposes of this sentence only, those representations and warranties
which are qualified by references to "material" or "Material Adverse Effect" or
to the "Knowledge" of any Person shall be deemed not to include such
qualifications.
(b) PERFORMANCE OF AGREEMENTS AND COVENANTS. Each and all of
the agreements and covenants of XXXXX to be performed and complied with pursuant
to this Agreement and the other agreements contemplated hereby prior to the
Effective Time shall have been duly performed and complied with in all material
respects.
(c) CERTIFICATES. XXXXX shall have delivered to FIRST BANKING
(i) a certificate, dated as of the Effective Time and signed on its behalf by
its chief executive officer and its secretary, to the effect that to the best of
their Knowledge the conditions set forth in Section 9.1 as relates to XXXXX and
in Section 9.2(a) and 9.2(b) have been satisfied; provided, however, that the
representations, warranties and covenants to which such certificate relates
shall not been deemed to have survived the Closing, and (ii) certified copies of
resolutions duly adopted by WAYNE's Board of Directors and shareholders
evidencing the taking of all corporate action necessary to authorize the
execution, delivery and performance of this Agreement, and the consummation of
the transactions contemplated hereby, all in such reasonable detail as FIRST
BANKING and its counsel shall request.
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(d) OPINION OF COUNSEL. FIRST BANKING shall have received an
opinion of Xxxxxx Xxxxxxx Xxxxx & Scarborough, L.L.P., counsel to XXXXX, dated
as of the Closing Date, in form reasonably satisfactory to FIRST BANKING.
(e) POOLING LETTERS. FIRST BANKING shall have received an
opinion of Deloitte & Touche, dated as of the date of filing of the Registration
Statement with the SEC and as of the Closing Date, addressed to FIRST BANKING
and in form and substance reasonably acceptable to FIRST BANKING, to the effect
that the Merger, for accounting purposes, shall qualify for treatment as a
pooling of interests.
(f) AFFILIATES AGREEMENTS. FIRST BANKING shall have received,
within thirty (30) days of the execution of this Agreement, from each affiliate
of XXXXX the affiliates letter referred to in Section 8.12 and Exhibit 1.
(g) CLAIMS LETTERS. Each of the directors and officers of
XXXXX shall have executed and delivered to FIRST BANKING letters in
substantially the form of Exhibit 2.
9.3 CONDITIONS TO OBLIGATIONS OF XXXXX. The obligations of XXXXX
to perform this Agreement and consummate the Merger and the other transactions
contemplated hereby are subject to the satisfaction of the following conditions,
unless waived by XXXXX pursuant to Section 11.6(b):
(a) REPRESENTATIONS AND WARRANTIES. For purposes of this
Section 9.3(a), the accuracy of the representations and warranties of FIRST
BANKING set forth in this Agreement shall be assessed as of the date of this
Agreement and as of the Effective Time with the same effect as though all such
representations and warranties had been made on and as of the Effective Time
(provided that representations and warranties which are confined to a specified
date shall speak only as of such date). The representations and warranties set
forth in Section 6.3 shall be true and correct (except for inaccuracies which
are de minimus in amount). The representations and warranties of FIRST BANKING
set forth in Section 6.20 and 6.21 shall be true and correct in all material
respects. There shall not exist inaccuracies in the representations and
warranties of FIRST BANKING set forth in this Agreement (including the
representations and warranties set forth in Sections 6.3, 6.20 and 6.21) such
that the aggregate effect of such inaccuracies has, or is reasonably likely to
have, a FIRST BANKING Material Adverse Effect; provided that, for purposes of
this sentence only, those representations and warranties which are qualified by
references to "material" or "Material Adverse Effect" or to the "Knowledge" of
any Person shall be deemed not to include such qualifications.
(b) PERFORMANCE OF AGREEMENTS AND COVENANTS. Each and all of
the agreements and covenants of FIRST BANKING to be performed and complied with
pursuant to this Agreement and the other agreements contemplated hereby prior to
the Effective Time shall have been duly performed and complied with in all
material respects.
(c) CERTIFICATES. FIRST BANKING shall have delivered to XXXXX
(i) a certificate, dated as of the Closing Date and signed on its behalf by its
chief executive officer and its chief financial officer, to the effect that to
the best of their knowledge the conditions set forth in Section 9.1 as relates
to FIRST BANKING and in Section 9.3(a) and 9.3(b) have been satisfied, provided,
however, that the representations, warranties and covenants to which such
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certificate relates shall not been deemed to have survived the Closing, and (ii)
certified copies of resolutions duty adopted by FIRST BANKING's Board of
Directors and shareholders evidencing the taking of all corporate action
necessary to authorize the execution, delivery and performance of this
Agreement, and the consummation of the transactions contemplated hereby, all in
such reasonable detail as XXXXX and its counsel shall request.
(d) OPINION OF COUNSEL. XXXXX shall have received an opinion
of Powell, Goldstein, Xxxxxx & Xxxxxx LLP, counsel to FIRST BANKING, dated as of
the Closing Date, in form reasonably acceptable to XXXXX.
(e) FAIRNESS OPINION. XXXXX shall have received an opinion
from Xxxxxxx & Company that the Merger is fair from a financial point of view to
the XXXXX shareholders (the "Fairness Opinion"). Such Fairness Opinion shall be
received by XXXXX within 14 days of the date of this Agreement.
ARTICLE 10.
TERMINATION
10.1 TERMINATION. Notwithstanding any other provision of this Agreement,
and notwithstanding the approval of this Agreement by the shareholders of XXXXX,
this Agreement may be terminated and the Merger abandoned at any time prior to
the Effective Time:
(a) By mutual consent of FIRST BANKING and XXXXX; or
(b) By either Party (provided that the terminating Party is
not then in material breach of any representation, warranty, covenant, or other
agreement contained in this Agreement) in the event of a material breach by the
other Party of any representation or warranty contained in this Agreement which
cannot be or has not been cured within 30 days after the giving of written
notice to the breaching Party of such breach and which breach is reasonably
likely, in the opinion of the non-breaching Party, to have, individually or in
the aggregate, a XXXXX Material Adverse Effect or a FIRST BANKING Material
Adverse Effect, as applicable, on the breaching Party; or
(c) By either Party (provided that the terminating Party is
not then in material breach of any representation, warranty, covenant, or other
agreement contained in this Agreement) in the event of a material breach by the
other Party of any covenant or agreement contained in this Agreement which
cannot be or has not been cured within 30 days after the giving of written
notice to the breaching Party of such breach; or
(d) By either Party (provided that the terminating Party is
not then in material breach of any representation, warranty, covenant, or other
agreement contained in this Agreement) in the event (i) any Consent of any
Regulatory Authority required for consummation of the Merger and the other
transactions contemplated hereby shall have been denied by final non-appealable
action of such authority or if any action taken by such authority is not
appealed within the time limit for appeal, or (ii) the shareholders of XXXXX
fail to vote their approval of the matters relating to this Agreement and the
transactions contemplated hereby at the
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Shareholders' Meeting where such matters were presented to such shareholders for
approval and voted upon; or
(e) By either Party in the event that the Merger shall not
have been consummated by April 30, 1999, if the failure to consummate the
transactions contemplated hereby on or before such date is not caused by any
breach of this Agreement by the Party electing to terminate pursuant to this
Section 10.1(e).
10.2 EFFECT OF TERMINATION. In the event of the termination and
abandonment of this Agreement pursuant to Section 10.1, this Agreement shall
become void and have no effect, except that (i) the provisions of this Section
10.2 and Article 11 and Section 8.7(b) shall survive any such termination and
abandonment, and (ii) a termination pursuant to Sections 10.1(b), 10.1(c) or
10.1(e) shall not relieve the breaching Party from Liability for an uncured
willful breach of a representation, warranty, covenant, or agreement giving rise
to such termination.
10.3 NON-SURVIVAL OF REPRESENTATIONS AND COVENANTS. The respective
representations, warranties, obligations, covenants, and agreements of the
Parties shall not survive the Effective Time except this Section 10.3 and
Articles 1, 2, 3, 4 and 11 and Section 8.10.
ARTICLE 11.
MISCELLANEOUS
11.1 DEFINITIONS.
(a) Except as otherwise provided herein, the capitalized terms
set forth below shall have the following meanings:
"1933 ACT" shall mean the Securities Act of 1933, as amended.
"1934 ACT" shall mean the Securities Exchange Act of 1934, as
amended.
"ACQUISITION PROPOSAL" with respect to a Party shall mean any
tender offer or exchange offer or any proposal for a merger, acquisition of all
of the stock or assets of, or other business combination involving the
acquisition of such Party or any of its Subsidiaries or the acquisition of a
substantial equity interest in, or a substantial portion of the assets of, such
Party or any of its Subsidiaries.
"AFFILIATE" of a Person shall mean: (i) any other Person
directly, or indirectly through one or more intermediaries, controlling,
controlled by or under common control with such Person; (ii) any officer,
director, partner, employer, or direct or indirect beneficial owner of any 10%
or greater equity or voting interest of such Person; or (iii) any other Person
for which a Person described in clause (ii) acts in any such capacity.
"AGREEMENT" shall mean this Agreement and Plan of Merger,
including the Exhibits, the FIRST BANKING Disclosure Memorandum and the XXXXX
Disclosure Memorandum delivered pursuant hereto and incorporated herein by
reference.
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"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, or any Affiliate of such Person and wherever
located.
"CERTIFICATE OF MERGER" shall mean the Certificate of Merger
to be executed by FIRST BANKING and XXXXX and filed with the Secretary of State
of the State of Georgia relating to the Merger as contemplated by Section 1.1.
"CLOSING DATE" shall mean the date on which the Closing
occurs.
"CONSENT" shall mean any consent, approval, authorization,
clearance, exemption, waiver, or similar affirmation by any Person pursuant to
any Contract, Law, Order, or Permit.
"CONTRACT" shall mean any written or oral agreement (provided
such oral agreement is, in any one year period, in excess of $5,000
individually, or $25,000 in the aggregate), arrangement, authorization,
commitment, contract, indenture, instrument, lease, obligation, plan, practice,
restriction, understanding, or undertaking of any kind or character, or other
document to which any Person is a party or that is binding on any Person or its
capital stock, Assets or business.
"DEFAULT" shall mean (i) any breach or violation of, default
under, contravention of, or conflict with, any Contract, Law, Order, or Permit,
after failing to cure any such breach, violation, default, contravention or
conflict within any applicable grace or cure period (ii) any occurrence of any
event that with the passage of time or the giving of notice or both would
constitute a breach or violation of, default under, contravention of, or
conflict with, any Contract, Law, Order, or Permit, or (iii) any occurrence of
any event that with or without the passage of time or the giving of notice would
give rise to a right of any Person to exercise any remedy or obtain any relief
under, terminate or revoke, suspend, cancel, or modify or change the current
terms of, or renegotiate, or to accelerate the maturity or performance of, or to
increase or impose any Liability under, any Contract, Law, Order, or Permit.
"ENVIRONMENTAL LAWS" shall mean all Laws relating to pollution
or protection of human health or the environment (including ambient air, surface
water, ground water, land surface, or subsurface strata) and which are
administered, interpreted, or enforced by the United States Environmental
Protection Agency and other federal, state and local agencies with jurisdiction
over, and including common law in respect of, pollution or protection of the
environment, including the Comprehensive Environmental Response Compensation and
Liability Act, as amended, 42 U.S.C. 9601 et seq. ("CERCLA"), the Resource
Conservation and Recovery Act, as amended, 42 U.S.C. 6901 et seq. ("RCRA"), and
other Laws relating to emissions, migrations, discharges, releases, or
threatened releases of any Hazardous Material, or otherwise relating to the
manufacture, processing, distribution use, treatment, storage, disposal,
generation, recycling, transport, or handling of any Hazardous Material.
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"EQUITY RIGHTS" shall mean all arrangements, calls,
commitments, Contracts, options, rights to subscribe to, scrip, understandings,
warrants, or other binding obligations of any character whatsoever relating to,
or securities or rights convertible into or exchangeable for, shares of the
capital stock of a Person or by which a Person is or may be bound to issue
additional shares of its capital stock or other Equity Rights.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended.
"EXHIBITS 1 THROUGH 4," 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.
"FIRST BANKING CAPITAL STOCK" shall mean, collectively, the
FIRST BANKING Common Stock and any other class or series of capital stock of
FIRST BANKING.
"FIRST BANKING COMMON STOCK" shall mean the $1.00 par value
common stock of FIRST BANKING.
"FIRST BANKING DISCLOSURE MEMORANDUM" shall mean the written
information entitled "First Banking Company of Southeast Georgia Disclosure
Memorandum" delivered prior to execution of this Agreement to XXXXX describing
in reasonable detail the matters contained therein and, with respect to each
disclosure made therein, specifically referencing each Section of this Agreement
under which such disclosure is being made. Information disclosed with respect to
one Section shall not be deemed to be disclosed for purposes of any other
Section not specifically referenced with respect thereto, unless it is clear
from the disclosure of such information that it applies to other Sections.
"FIRST BANKING ENTITIES" shall mean, collectively, FIRST
BANKING and all FIRST BANKING Subsidiaries.
"FIRST BANKING FINANCIAL STATEMENTS" shall mean (i) the
consolidated balance sheets (including related notes and schedules, if any) of
FIRST BANKING as of September 30, 1998 and as of December 31, 1997 and 1996, and
the related statements of income, changes in shareholders' equity, and cash
flows (including related notes and schedules, if any) for the three months ended
September 30, 1998, and for each of the three fiscal years ended December 31,
1997, 1996 and 1995, as filed by FIRST BANKING in SEC Documents, and (ii) the
consolidated balance sheets of FIRST BANKING (including related notes and
schedules, if any) and related statements of income, changes in shareholders'
equity, and cash flows (including related notes and schedules, if any) included
in SEC Documents filed with respect to periods ended subsequent to September 30,
1998.
"FIRST BANKING MATERIAL ADVERSE EFFECT" shall mean an event,
change or occurrence which, individually or together with any other event,
change or occurrence, has a material adverse impact on (i) the financial
position, business, or results of operations of FIRST BANKING and its
Subsidiaries, taken as a whole, or (ii) the ability of FIRST BANKING Entities to
perform their obligations under this Agreement or to consummate the Merger or
the other
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transactions contemplated by this Agreement, provided that "Material Adverse
Effect" shall not be deemed to include the impact of (a) changes in banking and
similar Laws of general applicability or interpretations thereof by courts or
governmental authorities, (b) changes in generally accepted accounting
principles or regulatory accounting principles generally applicable to savings
associations, banks, and their holding companies, and (c) actions and omissions
of FIRST BANKING (or any of its Subsidiaries) taken with the prior informed
written Consent of XXXXX in contemplation of the transactions contemplated
hereby.
"FIRST BANKING SUBSIDIARIES" shall mean the Subsidiaries of
FIRST BANKING, which shall include the FIRST BANKING Subsidiaries described in
Section 6.4 and any corporation, bank, savings association, or other
organization acquired as a Subsidiary of FIRST BANKING in the future and held as
a Subsidiary by FIRST BANKING at the Effective Time.
"GAAP" shall mean generally accepted accounting principles,
consistently applied during the periods involved.
"GBCC" shall mean the Georgia Business Corporation Code.
"HAZARDOUS MATERIAL" shall mean (i) any hazardous substance,
hazardous constituent, hazardous waste, solid waste, special waste, regulated
substance, or toxic substance (as those terms are listed, defined or regulated
by any applicable Environmental Laws) and (ii) any chemicals, pollutants,
contaminants, petroleum, petroleum products, or oil (and specifically shall
include asbestos requiring abatement. removal, or encapsulation pursuant to the
requirements of governmental authorities and any polychlorinated biphenyls).
"HSR ACT" shall mean Section 7A of the Xxxxxxx Act, as added
by Title II of the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as
amended, and the rules and regulations promulgated thereunder.
"INTELLECTUAL PROPERTY" shall mean copyrights, patents,
trademarks, service marks, service names, trade names, applications therefor,
and licenses, computer software (including any source or object codes therefor
or documentation relating thereto), trade secrets, franchises, inventions, and
other intellectual property rights.
"INTERNAL REVENUE CODE" shall mean the Internal Revenue Code
of 1986, as amended, and the rules and regulations promulgated thereunder.
"KNOWLEDGE" as used with respect to a FIRST BANKING Entity
(including references to being aware of a particular matter) shall mean those
facts that are known or should reasonably have been known after due inquiry by
the chairman, president, chief financial officer, chief accounting officer,
chief operating officer, chief credit officer, general counsel, any assistant or
deputy general counsel, or any senior, executive or other vice president of such
FIRST BANKING Entity. "Knowledge" as used with respect to a XXXXX Entity
(including references to being aware of a particular matter) shall mean those
facts that are actually known (with no obligation of inquiry) by the president
and chief executive officer of such XXXXX Entity.
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"LAW" shall mean any code, law (including common law),
ordinance, regulation, decision, judicial interpretation, reporting or licensing
requirement, rule, or statute applicable to a Person or its Assets, Liabilities,
or business, including those promulgated, interpreted or enforced by any
Regulatory Authority.
"LIABILITY" shall mean any direct or indirect, primary or
secondary, liability, indebtedness, obligation, penalty, cost or expense
(including costs of investigation, collection and defense), claim, deficiency,
guaranty or endorsement of or by any Person (other than endorsements of notes,
bills, checks, and drafts presented for collection or deposit in the ordinary
course of business) of any type, whether accrued, absolute or contingent,
liquidated or unliquidated, matured or unmatured, or otherwise.
"LIEN" shall mean any conditional sale agreement, default of
title, easement, encroachment, encumbrance, hypothecation, infringement, lien,
mortgage, pledge, reservation, restriction, security interest, title retention
or other security arrangement, or any adverse right or interest, charge, or
claim of any nature whatsoever of, on, or with respect to any property or
property interest, other than (i) Liens for current property Taxes not yet due
and payable, (ii) for depository institution Subsidiaries of a Party, pledges to
secure deposits and other Liens incurred in the ordinary course of the banking
business, and (iii) Liens which do not materially impair the use of or title to
the Assets subject to such Lien.
"LITIGATION" shall mean any action, arbitration, cause of
action. claim, complaint investigation hearing, criminal prosecution,
governmental or other examination or other 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. but shall
not include regular. periodic examinations of depository institutions and their
Affiliates by Regulatory Authorities.
"NASD" shall mean the National Association of Securities
Dealers, Inc.
"NASDAQ NATIONAL MARKET" shall mean the National Market System
of the National Association of Securities Dealers Automated Quotations System.
"OPERATING PROPERTY" shall mean any property owned, leased, or
operated by the Party in question or by any of its Subsidiaries and, where
required by the context, includes the owner or operator of such property, but
only with respect to such property.
"ORDER" shall mean any administrative decision or award,
decree, injunction, judgment, order, quasi-judicial decision or award, ruling,
or writ of any federal, state, local or foreign or other court, arbitrator,
mediator, tribunal, administrative agency, or Regulatory Authority.
"PARTICIPATION FACILITY" shall mean any facility or property
in which the Party in question or any of its Subsidiaries participates in the
management and, where required by the context, said term means the owner or
operator of such facility or property, but only with respect to such facility or
property.
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"PARTY" shall mean either XXXXX or FIRST BANKING, and
"Parties" shall mean XXXXX and FIRST BANKING.
"PERMIT" shall mean any federal, state, local, and foreign
governmental approval, authorization, certificate, easement, filing, franchise,
license, notice, permit, or right to which any Person is a party or that is or
may be binding upon or inure to the benefit of any Person or its securities,
Assets, or business.
"PERSON" shall mean a natural person or any legal, commercial
or governmental entity, such as, but not limited to, a corporation, general
partnership, joint venture, limited partnership, limited liability company,
trust, business association, group acting in concert, or any person acting in a
representative capacity.
"REGISTRATION STATEMENT" shall mean the Registration Statement
on Form S- 4, or other appropriate form, including any pre-effective or
post-effective amendments or supplements thereto, filed with the SEC by FIRST
BANKING under the 1933 Act with respect to the shares of FIRST BANKING Common
Stock to be issued to the shareholders of XXXXX in connection with the
transactions contemplated by this Agreement.
"REGULATORY AUTHORITIES" shall mean, collectively, the SEC,
the NASD, the Federal Trade Commission, the United States Department of Justice,
the Board of the Governors of the Federal Reserve System, the Federal Deposit
Insurance Corporation, the Georgia Department of Banking and Finance, and all
other federal, state, county, local or other governmental or regulatory
agencies, authorities (including self-regulatory authorities),
instrumentalities, commissions, boards or bodies having jurisdiction over the
Parties and their respective Subsidiaries.
"REPRESENTATIVE" shall mean any investment banker, financial
advisor, attorney, accountant, consultant, or other representative engaged by a
Person.
"SEC DOCUMENTS" shall mean all forms, proxy statements,
registration statements, reports, schedules, and other documents filed, or
required to be filed, by a Party or any of its Subsidiaries with any Regulatory
Authority pursuant to the Securities Laws.
"SECURITIES LAWS" shall mean the 1933 Act, the 1934 Act, the
Investment Company Act of 1940, as amended, the Investment Advisors Act of 1940,
as amended, the Trust Indenture Act of 1939, as amended, and the rules and
regulations of any Regulatory Authority promulgated thereunder.
"SHAREHOLDERS MEETING" shall mean the meeting of the
shareholders of XXXXX to be held pursuant to Section 8.3, including any
adjournment or adjournments thereof.
"SUBSIDIARIES" shall mean all those corporations,
associations, or other business entities of which the entity in question either
(i) owns or controls 50% or more of the outstanding equity securities either
directly or through an unbroken chain of entities as to each of which 50% or
more of the outstanding equity securities is owned directly or indirectly by its
parent (provided, there shall not be included any such entity the equity
securities of which are owned or controlled in a fiduciary capacity), (ii) in
the case of partnerships, serves as a general partner, (iii) in the case
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of a limited liability company, serves as a managing member, or (iv) otherwise
has the ability to elect a majority of the directors, trustees or managing
members thereof.
"SURVIVING CORPORATION" shall mean FIRST BANKING as the
surviving corporation resulting from the Merger.
"TAX RETURN" shall mean any report, return, information
return, or other information required to be supplied to a taxing authority in
connection with Taxes, including any return of an affiliated or combined or
unitary group that includes a Party or its Subsidiaries.
"TAX" or TAXES" shall mean any federal, state, county, local,
or foreign taxes, charges, fees, levies, imposts, duties, or other assessments,
including income, gross receipts, excise, employment, sales, use, transfer,
license, payroll, franchise, severance, stamp, occupation, windfall profits,
environmental, federal highway use, commercial rent, customs duties, capital
stock, paid-up capital, profits, withholding, Social Security, single business
and unemployment, disability, real property, personal property, registration, ad
valorem, value added, alternative or add-on minimum, estimated, or other tax or
governmental fee of any kind whatsoever, imposed or required to be withheld by
the United States or any state, county, local or foreign government or
subdivision or agency thereof, including any interest, penalties, and additions
imposed thereon or with respect thereto.
"XXXXX COMMON STOCK" shall mean the $1.00 par value common
stock of XXXXX.
"XXXXX DISCLOSURE MEMORANDUM" shall mean the written
information entitled "XXXXX Disclosure Memorandum" delivered prior to execution
of this Agreement to FIRST BANKING describing in reasonable detail the matters
contained therein and, with respect to each disclosure made therein,
specifically referencing each Section of this Agreement under which such
disclosure is being made. Information disclosed with respect to one Section
shall not be deemed to be disclosed for purposes of any other Section not
specifically referenced with respect thereto, unless it is clear from the
disclosure of such information that it applies to other Sections.
"XXXXX ENTITIES" shall mean, collectively, XXXXX and all XXXXX
Subsidiaries.
"XXXXX FINANCIAL STATEMENTS" shall mean (i) the consolidated
balance sheets (including related notes and schedules, if any) of XXXXX as of
September 30, 1998, and as of December 31, 1997 and the related statements of
income, changes in shareholders' equity, and cash flows (including related notes
and schedules, if any) for the three months ended September 30, 1998, and for
the Fiscal year ended December 31, 1997, and (ii) the consolidated balance
sheets of XXXXX (including related notes and schedules, if any) and related
statements of income, changes in shareholders' equity, and cash flows (including
related notes and schedules, if any) with respect to periods ended subsequent to
September 30, 1998.
"XXXXX MATERIAL ADVERSE EFFECT" shall mean an event, change or
occurrence which, individually or together with any other event, change or
occurrence, has a material adverse impact on (i) the financial position,
business, or results of operations of XXXXX and its
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Subsidiaries, taken as a whole, or (ii) the ability of XXXXX to perform its
obligations under this Agreement or to consummate the Merger or the other
transactions contemplated by this Agreement, provided that an "XXXXX Material
Adverse Effect" shall not be deemed to include the impact of (a) changes in
banking and similar Laws of general applicability or interpretations thereof by
courts or governmental authorities, (b) changes in generally accepted accounting
principles or regulatory accounting principles generally applicable to banks and
their holding companies, and (c) actions and omissions of XXXXX (or any of its
Subsidiaries) taken with the prior informed written Consent of FIRST BANKING in
contemplation of the transactions contemplated hereby.
"XXXXX SUBSIDIARIES" shall mean the Subsidiaries of XXXXX,
which shall include the XXXXX Subsidiaries described in Section 5.4 and any
corporation, bank, savings association, or other organization acquired as a
Subsidiary of XXXXX in the future and held as a Subsidiary by XXXXX at the
Effective Time.
(b) The terms set forth below shall have the meanings ascribed
thereto in the referenced sections:
Allowance Section 5.9
Certificates Section 4.1
Closing Section 1.2
Effective Time Section 1.3
ERISA Affiliate Section 5.15(c)
Exchange Agent Section 4.1
Exchange Ratio Section 3.1(b)
FIRST BANKING Benefit Plans Section 6.15(a)
FIRST BANKING ERISA Plan Section 6.15(a)
FIRST BANKING Pension Plan Section 6.15(a)
FIRST BANKING SEC Reports Section 6.5(a)
Indemnified Party Section 8.14(a)
Merger Section 1.1
Tax Opinion Section 9.1(g)
XXXXX Benefit Plans Section 5.15(a)
XXXXX Contracts Section 5.16
XXXXX ERISA Plan Section 5.15(a)
XXXXX Pension Plan Section 5.15(a)
XXXXX SEC Reports Section 5.5 (a)
(c) Any singular term in this Agreement shall be deemed to
include the plural, and any plural term the singular. Whenever the words
"include," "includes" or "including" are used in this Agreement, they shall be
deemed followed by the words "without limitation."
11.2 EXPENSES.
(a) Except as otherwise provided in this Section 11.2, each
Party shall bear and pay all direct costs and expenses incurred by it or on its
behalf in connection with the transactions contemplated hereunder, including
filing, registration and application fees, printing
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fees, and fees and expenses of its own financial or other consultants,
investment bankers, accountants, and counsel.
(b) If this Agreement is terminated by FIRST BANKING (i)
pursuant to Sections 10.1(b), (c) or (d)(ii), or (ii) due to the failure of the
condition in Section 9.2(e) solely because of the exercise of dissenters' rights
by any director of XXXXX or any member of any such director's immediate family,
XXXXX shall pay to FIRST BANKING an amount equal to the lesser of $100,000 or
FIRST BANKING's actual out-of-pocket expenses incurred in connection with the
transactions contemplated by this Agreement.
(c) If this Agreement is terminated by XXXXX pursuant to
Sections 10.1(b) or (c), FIRST BANKING shall pay to XXXXX an amount equal to the
lesser of $100,000 or WAYNE's actual out-of-pocket expenses incurred in
connection with the transactions contemplated by this Agreement.
(d) Nothing contained in this Section 11.2 shall constitute or
shall be deemed to constitute liquidated damages for the willful breach by a
Party of the terms of this Agreement or otherwise limit the rights of the
nonbreaching Party.
11.3 BROKERS AND FINDERS. Except as set forth in Section 11.3 of
the XXXXX Disclosure Memorandum with respect to Xxxxxxx & Company, each of the
Parties represents and warrants that neither it nor any of its officers,
directors, employees, or Affiliates has employed any broker or finder or
incurred any Liability for any financial advisory fees, investment bankers'
fees, brokerage fees, commissions, or finders' fees in connection with this
Agreement or the transactions contemplated hereby. In the event of a claim by
any broker or finder based upon his or its representing or being retained by or
allegedly representing or being retained by XXXXX or by FIRST BANKING, each of
XXXXX and FIRST BANKING, as the case may be, agrees to indemnify and hold the
other Party harmless of and from any Liability in respect of any such claim.
11.4 ENTIRE AGREEMENT. Except as otherwise expressly provided
herein, this Agreement (including the documents and instruments referred to
herein) constitutes the entire agreement between the Parties with respect to the
transactions contemplated hereunder and supersedes all prior arrangements or
understandings with respect thereto, written or oral. Nothing in this Agreement,
expressed or implied, is intended to confer upon any Person, other than the
Parties or their respective successors, any rights, remedies, obligations, or
liabilities under or by reason of this Agreement.
11.5 AMENDMENTS. To the extent permitted by Law, this Agreement may
be amended by a subsequent writing signed by each of the Parties upon the
approval of each of the Parties, whether before or after shareholder approval of
this Agreement has been obtained; provided, that after any such approval by the
holders of XXXXX Common Stock, there shall be made no amendment that, pursuant
to the GBCC, requires further approval by such shareholders without the further
approval of such shareholders; and further provided, that after any such
approval by the holders of FIRST BANKING Common Stock, the provisions of this
Agreement relating to the manner or basis in which shares of XXXXX Common Stock
will be exchanged for shares of FIRST BANKING Common Stock shall not be amended
after the Shareholders' Meeting in a manner adverse to the holders of FIRST
BANKING Common Stock without any requisite
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approval of the holders of the issued and outstanding shares of FIRST BANKING
Common Stock entitled to vote thereon.
11.6 WAIVERS.
(a) Prior to or at the Effective Time, FIRST BANKING, acting
through its Board of Directors, chief executive officer or other authorized
officer, shall have the right to waive any Default in the performance of any
term of this Agreement by XXXXX, to waive or extend the time for the compliance
or fulfillment by XXXXX of any and all of its obligations under this Agreement,
and to waive any or all of the conditions precedent to the obligations of FIRST
BANKING under this Agreement, except any condition which, if not satisfied,
would result in the violation of any Law. No such waiver shall be effective
unless in writing signed by a duly authorized officer of FIRST BANKING.
(b) Prior to or at the Effective Time, XXXXX, acting through
its Board of Directors, chief executive officer or other authorized officer,
shall have the right to waive any Default in the performance of any term of this
Agreement by FIRST BANKING, to waive or extend the time for the compliance or
fulfillment by FIRST BANKING, of any and all of its obligations under this
Agreement, and to waive any or all of the conditions precedent to the
obligations of XXXXX under this Agreement, except any condition which, if not
satisfied, would result in the violation of any Law. No such waiver shall be
effective unless in writing signed by a duly authorized officer of XXXXX.
(c) The failure of any Party at any time or times to require
performance of any provision hereof shall in no manner affect the right of such
Party at a later time to enforce the same or any other provision of this
Agreement. No waiver of any condition or of the breach of any term contained in
this Agreement in one or more instances shall be deemed to be or construed as a
further or continuing waiver of such condition or breach or a waiver of any
other condition or of the breach of any other term of this Agreement.
11.7 ASSIGNMENT. Except as expressly contemplated hereby, neither
this Agreement nor any of the rights, interests or obligations hereunder shall
be assigned by any Party hereto (whether by operation of Law or otherwise)
without the prior written consent of the other Party. Subject to the preceding
sentence, this Agreement will be binding upon, inure to the benefit of and be
enforceable by the Parties and their respective successors and assigns.
11.8 NOTICES. All notices or other communications which are
required or permitted hereunder shall be in writing and sufficient if delivered
by hand, by facsimile transmission, by registered or certified mail, postage
pre-paid, or by courier or overnight carrier, to the persons at the addresses
set forth below (or at such other address as may be provided hereunder), and
shall be deemed to have been delivered as of the date so delivered:
XXXXX: Xxxxx Bancorp, Inc.
000 X. Xxxxx Xxxxxx
Xxxxx, Xxxxxxx 00000
Attention: J. Xxxxxx Xxxxx
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Copy to Counsel: Xxxxxx Xxxxxxx Xxxxx & Scarborough, L.L.P.
First Union Plaza, Suite 1400
000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxxxx, XX 00000
Telecopy Number: (000) 000-0000
Attention: Xxxx X. Xxxxxxx, Esq.
FIRST BANKING: First Banking Company of Southeast Georgia
X.X. Xxx 000
00 Xxxxx Xxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxx 00000
Attention: Xxxxx Xxx Xxxxxx
Copy to Counsel: Powell, Goldstein, Xxxxxx & Xxxxxx LLP
Sixteenth Floor
000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxxxx, XX 00000
Telecopy Number: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxx XX, Esq.
11.9 GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the Laws of the State of Georgia, without regard to any
applicable conflicts of Laws.
11.10 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.
11.11 CAPTIONS, ARTICLES AND SECTIONS. The captions contained in this
Agreement are for reference purposes only and are not part of this Agreement.
Unless otherwise indicated, all references to particular Articles or Sections
shall mean and refer to the referenced Articles and Sections of this Agreement.
11.12 INTERPRETATIONS. Neither this Agreement nor any uncertainty or
ambiguity herein shall be construed or resolved against any party, whether under
any rule of construction or otherwise. No party to this Agreement shall be
considered the draftsman. The parties acknowledge and agree that this Agreement
has been reviewed, negotiated, and accepted by all parties and their attorneys
and shall be construed and interpreted according to the ordinary meaning of the
words used so as fairly to accomplish the purposes and intentions of all parties
hereto.
11.13 ENFORCEMENT OF AGREEMENT. The Parties hereto agree that
irreparable damage would occur in the event that any of the provisions of this
Agreement was not performed in accordance with its specific terms or was
otherwise breached. It is accordingly agreed that the Parties shall be entitled
to an injunction or injunctions to prevent breaches of this Agreement and to
enforce specifically the terms and provisions hereof in any court of the United
States or any state having jurisdiction, this being in addition to any other
remedy to which they are entitled at law or in equity.
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11.14 SEVERABILITY. Any term or provision of this Agreement which is
invalid or unenforceable in any jurisdiction shall, as to that jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction. If any provision of this
Agreement is so broad as to be unenforceable, the provision shall be interpreted
to be only so broad as is enforceable.
IN WITNESS WHEREOF, each of the Parties has caused this Agreement to be
executed on its behalf by its duly authorized officers as of the day and year
first above written.
FIRST BANKING COMPANY OF SOUTHEAST GEORGIA
By: /s/ Xxxxx Xxx Xxxxxx
----------------------------------------
Xxxxx Xxx Xxxxxx.
President & Chief Executive Officer
XXXXX BANCORP, INC.
By: /s/ J. Xxxxxx Xxxxx
----------------------------------------
J. Xxxxxx Xxxxx
Chairman of the Board
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