Exhibit (2).1
AGREEMENT AND PLAN OF MERGER
BY AND BETWEEN
SOUTH ALABAMA BANCORPORATION, INC.
THE MONROE COUNTY BANK
AND
XXXXXXXX STATE BANK
Dated as of
October 14, 1997
TABLE OF CONTENTS
Page
AGREEMENT AND PLAN OF MERGER . . . . . . . . . . . . . . . . . . . . . . .1
Preamble . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
ARTICLE ONE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8
TRANSACTIONS AND TERMS OF MERGER. . . . . . . . . . . . . . . . . . .8
1.1 Merger. . . . . . . . . . . . . . . . . . . . . . . . . . .8
1.2 Time and Place of Closing . . . . . . . . . . . . . . . . .9
1.3 Effective Time. . . . . . . . . . . . . . . . . . . . . . .9
ARTICLE TWO. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9
TERMS OF MERGER . . . . . . . . . . . . . . . . . . . . . . . . . . .9
2.1 Articles of Incorporation . . . . . . . . . . . . . . . . .9
2.2 Bylaws. . . . . . . . . . . . . . . . . . . . . . . . . . .9
2.3 Directors and Officers. . . . . . . . . . . . . . . . . . .9
ARTICLE THREE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
MANNER OF CONVERTING SHARES . . . . . . . . . . . . . . . . . . . . 10
3.1 Conversion of Shares. . . . . . . . . . . . . . . . . . . 10
3.2 Shares Held by PSB, MCB or SAB. . . . . . . . . . . . . . 10
3.3 Dissenting Stockholders . . . . . . . . . . . . . . . . . 10
3.4 Fractional Shares.. . . . . . . . . . . . . . . . . . . . 11
ARTICLE FOUR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
EXCHANGE OF SHARES. . . . . . . . . . . . . . . . . . . . . . . . . 11
4.1 Exchange Procedures . . . . . . . . . . . . . . . . . . . 11
4.2 Rights of Former PSB Stockholders . . . . . . . . . . . . 11
ARTICLE FIVE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
REPRESENTATIONS AND WARRANTIES OF PSB . . . . . . . . . . . . . . . 12
5.1 Organization, Standing, and Power . . . . . . . . . . . . 12
5.2 Authority; No Breach By Agreement . . . . . . . . . . . . 12
5.3 Capital Stock . . . . . . . . . . . . . . . . . . . . . . 13
5.4 PSB Subsidiaries. . . . . . . . . . . . . . . . . . . . . 14
5.5 Financial Statements. . . . . . . . . . . . . . . . . . . 14
5.6 Absence of Undisclosed Liabilities. . . . . . . . . . . . 14
5.7 Absence of Certain Changes or Events. . . . . . . . . . . 14
5.8 Tax Matters . . . . . . . . . . . . . . . . . . . . . . . 14
5.9 Allowance for Possible Loan Losses. . . . . . . . . . . . 15
5.10 Assets. . . . . . . . . . . . . . . . . . . . . . . . . . 15
5.11 Environmental Matters . . . . . . . . . . . . . . . . . . 15
5.12 Compliance with Laws. . . . . . . . . . . . . . . . . . . 16
5.13 Labor Relations . . . . . . . . . . . . . . . . . . . . . 17
5.14 Employee Benefit Plans. . . . . . . . . . . . . . . . . . 17
5.15 Material Contracts. . . . . . . . . . . . . . . . . . . . 18
5.16 Legal Proceedings . . . . . . . . . . . . . . . . . . . . 19
5.17 Reports . . . . . . . . . . . . . . . . . . . . . . . . . 19
5.18 Statements True and Correct . . . . . . . . . . . . . . . 19
5.19 Accounting, Tax and Regulatory Matters. . . . . . . . . . 20
5.20 Charter Provisions. . . . . . . . . . . . . . . . . . . . 20
ARTICLE SIX. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
REPRESENTATIONS AND WARRANTIES OF SAB AND MCB . . . . . . . . . . . 20
6.1 Organization, Standing, and Power . . . . . . . . . . . . 20
6.2 Authority; No Breach By Agreement . . . . . . . . . . . . 20
6.3 Reports . . . . . . . . . . . . . . . . . . . . . . . . . 21
ARTICLE SEVEN. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
CONDUCT OF BUSINESS PENDING CONSUMMATION. . . . . . . . . . . . . . 21
7.1 Covenants of PSB and SAB. . . . . . . . . . . . . . . . . 21
7.2 Negative Covenants of PSB . . . . . . . . . . . . . . . . 22
7.3 Affirmative Covenants of SAB. . . . . . . . . . . . . . . 23
7.4 Affirmative Covenants of PSB. . . . . . . . . . . . . . . 24
ARTICLE EIGHT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
ADDITIONAL AGREEMENTS . . . . . . . . . . . . . . . . . . . . . . . 24
8.1 Registration Statement; Proxy Statement; Stockholder Approval
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
8.2 Applications. . . . . . . . . . . . . . . . . . . . . . . 24
8.3 Filings with State Offices. . . . . . . . . . . . . . . . 25
8.4 Agreement as to Efforts to Consummate . . . . . . . . . . 25
8.5 Investigation and Confidentiality . . . . . . . . . . . . 25
8.6 Press Releases. . . . . . . . . . . . . . . . . . . . . . 26
8.7 Certain Actions . . . . . . . . . . . . . . . . . . . . . 26
8.8 Charter Provisions. . . . . . . . . . . . . . . . . . . . 26
8.9 Agreement of Affiliates . . . . . . . . . . . . . . . . . 27
8.10 Compensation and Employee Benefits. . . . . . . . . . . . 27
8.11 D & O Coverage. . . . . . . . . . . . . . . . . . . . . . 27
ARTICLE NINE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
CONDITIONS PRECEDENT TO OBLIGATIONS TO CONSUMMATE . . . . . . . . . 28
9.1 Conditions to Obligations of Each Party . . . . . . . . . 28
9.2 Conditions to Obligations of SAB and MCB. . . . . . . . . 29
9.3 Conditions to Obligations of PSB. . . . . . . . . . . . . 30
ARTICLE TEN. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
10.1 Termination . . . . . . . . . . . . . . . . . . . . . . . 30
10.2 Effect of Termination. . . . . . . . . . . . . . . . 32
10.3 Survival of Representations and Covenants. . . . . . 32
ARTICLE ELEVEN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
11.1 Expenses. . . . . . . . . . . . . . . . . . . . . . . . . 32
11.2 Brokers and Finders. . . . . . . . . . . . . . . . . 32
11.3 Entire Agreement . . . . . . . . . . . . . . . . . . 32
11.4 Amendments . . . . . . . . . . . . . . . . . . . . . 33
11.5 Waivers. . . . . . . . . . . . . . . . . . . . . . . 33
11.6 Assignment . . . . . . . . . . . . . . . . . . . . . 33
11.7 Notices. . . . . . . . . . . . . . . . . . . . . . . 33
11.8 Governing Law. . . . . . . . . . . . . . . . . . . . 34
11.9 Counterparts.. . . . . . . . . . . . . . . . . . . . 35
11.10 Captions . . . . . . . . . . . . . . . . . . . . . . 35
11.11 Enforcement of Agreement . . . . . . . . . . . . . . 35
11.12 Severability . . . . . . . . . . . . . . . . . . . . 35
LIST OF EXHIBITS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (this "Agreement") is made
and entered into as of October 14, 1997, by and between SOUTH ALABAMA
BANCORPORATION, INC. ("SAB"), an Alabama corporation with its principal
office located in Mobile, Alabama, THE MONROE COUNTY BANK ("MCB"), an Alabama
banking corporation and wholly owned subsidiary of SAB with its principal
office located in Monroeville, Alabama, and XXXXXXXX STATE BANK ("PSB" ), an
Alabama banking corporation with its principal office located in Peterman,
Alabama.
Preamble
The Boards of Directors of SAB, MCB and PSB are of the opinion that
the transactions described herein are in the best interests of the Parties
and their respective stockholders. This Agreement provides for the merger
of PSB with and into MCB. At the effective time of such merger, the
outstanding shares of the capital stock of PSB shall be converted into the
right to receive shares of the common stock of SAB (except as provided herein).
As a result, stockholders of PSB shall become stockholders of SAB, and MCB
shall continue to conduct the business and operations of PSB. The
transactions described in this Agreement are subject to the approvals of the
stockholders of PSB and MCB, the Superintendent of Banks and the Federal
Deposit Insurance Corporation, and the 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.
NOW, THEREFORE, in consideration of the above and the mutual
warranties, representations, covenants and agreements set forth herein, the
Parties agree as follows:
Definitions
Except as otherwise provided herein, the capitalized terms set forth
below (in their singular and plural forms as applicable) shall have the
following meanings:
"ABCA" shall mean the Alabama Business Corporation Act.
"Acquisition Proposal" with respect to a Party shall mean any
tender offer or exchange offer or any proposal for a merger, acquisition
of all of the stock or assets of, or other business combination
involving such Party or any of its Subsidiaries or the acquisition of a
substantial equity interest in, or a substantial portion of the assets
of, such Party or any of its Subsidiaries.
"Affiliate" of a Person shall mean: (i) any other Person
directly, or indirectly through one or more intermediaries, controlling,
controlled by or under common control with such Person; (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 delivered pursuant hereto and incorporated herein
by reference. References to "the date of this Agreement," "the date
hereof" and words of similar import shall refer to the date this
Agreement was first executed, October 14, 1997.
"Allowance" shall have the meaning provided in Section 5.9 of
this Agreement.
Articles of Incorporation shall mean the articles of
incorporation, certificate of incorporation or charter document of like
effect of a corporation.
"Articles of Merger" shall mean the Articles of Merger to be
executed by MCB and filed with the Secretary of State of the State of
Alabama relating to the Merger as contemplated by Section 1.1 of this
Agreement.
"Assets" of a Person shall mean all of the assets, properties,
businesses and rights of such Person of every kind, nature, character
and description, whether real, personal or mixed, tangible or intangible,
accrued or contingent, or otherwise relating to or utilized in such
Person's business, directly or indirectly, in whole or in part, whether
or not carried on the books and records of such Person, and whether or
not owned in the name of such Person or any Affiliate of such Person and
wherever located.
"BHC Act" shall mean the federal Bank Holding Company Act of
1956, as amended.
"Book Value" shall mean the book value according to GAAP,
either per share or in the aggregate, as applicable, of the shares of
PSB Common Stock.
"Broker Fees" shall have the meaning provided in Section 11.2
of this Agreement.
"Closing" shall mean the closing of the transactions
contemplated hereby, as described in Section 1.2 of this Agreement.
"Consent" shall mean any consent, approval, authorization,
clearance, exemption, waiver, or similar affirmation by any Person
pursuant to any Contract, Law, Order, or Permit.
"Contract" shall mean any written or oral agreement,
arrangement, authorization, commitment, contract, indenture, instrument,
lease, obligation, plan, practice, restriction, understanding or
undertaking of any kind or character, or other document to which any
Person is a party or that is binding on any Person or its capital
stock, Assets or business.
"Creditor's Laws" shall have the meaning provided in Section
5.2 of this Agreement.
"Deemed Book Value" shall be determined as follows: SAB shall
give PSB notice within fifteen (15) days after the approval of the
Merger by the Federal Deposit Insurance Corporation of any adjustments
it deems should be made to the most recent available Book Value. If PSB
agrees to such adjustments or fails to object thereto within ten (10)
days after delivery of such notice, Book Value shall be so adjusted and,
as so adjusted, shall be the Deemed Book Value. If PSB objects to such
adjustment within such ten (10) day period and PSB and SAB are unable to
agree on the Deemed Book Value within fifteen (15) days after delivery
of such notice by SAB, then this Agreement shall terminate with the
effect provided in Section 10.2 hereof.
"Default" shall mean (i) any breach or violation of or
default under any Contract, Order or Permit, (ii) any occurrence of any
event that with the passage of time or the giving of notice or both
would constitute a breach or violation of or default under any Contract,
Order or Permit, or (iii) any occurrence of any event that with or
without the passage of time or the giving of notice would give rise to a
right to terminate or revoke, change the current terms of, or
renegotiate, or to accelerate, increase, or impose any Liability under,
any Contract, Order or Permit, where, in any such event, such Default
is reasonably likely to have, individually or in the aggregate, a Material
Adverse Effect on a Party.
"Effective Time" shall mean the date and time at which the
Merger becomes effective as defined in Section 1.3 of this Agreement.
"Environmental Laws" shall mean all Laws which are
administered, interpreted or enforced by the United States Environmental
Protection Agency and state and local agencies with jurisdiction over
pollution or protection of the environment.
"Equitable Discretion" shall have the meaning provided in
Section 5.2 of this Agreement.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended.
"ERISA Affiliate" shall have the meaning provided in Section
5.14 of this Agreement.
"ERISA Plan" shall have the meaning provided in Section 5.14 of
this Agreement.
"Exchange Agent" shall have the meaning provided in Section
4.1 of this Agreement.
"Exchange Ratio" shall have the meaning given such term in
Section 3.1 hereof.
"Exhibits" 1 through 5, inclusive, shall mean the Exhibits so
marked, copies of which are attached to this Agreement. Such Exhibits
are hereby incorporated by reference herein and made a part hereof, and
may be referred to in this Agreement and any other related instrument or
document without being attached hereto.
"GAAP" shall mean generally accepted accounting principles,
consistently applied during the periods involved.
"Hazardous Material" shall mean any pollutant, contaminant, or
hazardous substance within the meaning of the Comprehensive Environment
Response, Compensation, and Liability Act, 42 U.S.C. Section 9601 et
seq., or any similar federal, state or local Law.
"Internal Revenue Code" shall mean the Internal Revenue Code
of 1986, as amended, and the rules and regulations promulgated thereunder.
"Knowledge" as used with respect to a Person shall mean the
knowledge after due inquiry of the Chairman, President, Chief Financial
Officer, Chief Accounting Officer, Chief Credit Officer, General Counsel,
any Assistant or Deputy General Counsel, or any Senior or Executive Vice
President of such Person; provided, however, that for purposes of
Section 5.11 captioned Environmental Matters, Knowledge shall mean actual
knowledge of such Person, without inquiry other than such inquiry at the
time a loan was made as was then reasonable in the course of making a
loan secured by real property.
"Law" shall mean any code, law, ordinance, regulation,
reporting or licensing requirement, rule, or statute applicable to a
Person or its Assets, Liabilities or business, including, without
limitation, those promulgated, interpreted or enforced by any of the
Regulatory Authorities.
"Liability" shall mean any direct or indirect, primary or
secondary, liability, indebtedness, obligation, penalty, cost or expense
(including, without limitation, costs of investigation, collection and
defense), claim, deficiency, guaranty or endorsement of or by any Person
(other than endorsements of notes, bills, checks, and drafts presented
for collection or deposit in the ordinary course of business) of any
type, whether accrued, absolute or contingent, liquidated or
unliquidated, matured or unmatured, or otherwise.
"Lien" shall mean any conditional sale agreement, default of
title, easement, encroachment, encumbrance, hypothecation, infringement,
lien, mortgage, pledge, reservation, restriction, security interest,
title retention or other security arrangement, or any adverse right or
interest, charge, or claim of any nature whatsoever of, on, or with
respect to any property or property interest, other than (i) Liens for
current property Taxes not yet due and payable, (ii) for a depository
institution, pledges to secure deposits and other Liens incurred in the
ordinary course of the banking business, and (iii) Liens which are not
reasonably likely to have, individually or in the aggregate, a Material
Adverse Effect on a Party.
"Litigation" shall mean any action, arbitration, cause of
action, claim, complaint, criminal prosecution, demand letter,
governmental or other examination or investigation, hearing, inquiry,
administrative or other proceeding, or notice (written or oral) by any
Person alleging potential Liability or requesting information relating
to or affecting a Party, its business, its Assets (including, without
limitation, Contracts related to it), or the transactions contemplated
by this Agreement, but shall not include regular, periodic examinations
of depository institutions and their Affiliates by Regulatory
Authorities.
"Loan Property" shall mean any property owned by the Party in
question or by any of its Subsidiaries or in which such Party or
Subsidiary holds a security interest, and, where required by the
context, includes the owner or operator of such property, but only with
respect to such property.
"Market Value," when used with reference to SAB Common Stock,
shall mean the average of the closing bid and closing ask price as
reported by NASDAQ, adjusted for the effect of any stock split, stock
dividend or other similar recapitalization between the date hereof and
the Effective Time.
"Material" for purposes of this Agreement shall be determined
in light of the facts and circumstances of the matter in question;
provided that any specific monetary amount stated in this Agreement
shall determine materiality in that instance.
"Material Adverse Effect" on a Party shall mean an event,
change or occurrence which has a material adverse impact on (i) the
financial position or business of such Party and its Subsidiaries, taken
as a whole, or (ii) the ability of such Party to perform its obligations
under this Agreement or to consummate the Merger or the other
transactions contemplated by this Agreement, provided that "material
adverse impact" shall not be deemed to include the impact of (x) changes
in banking and similar Laws of general applicability or interpretations
thereof by courts or governmental authorities, (y) changes in generally
accepted accounting principles or regulatory accounting principles
generally applicable to banks and their holding companies, and (z) the
Merger on the operating performance of the Parties.
"Merger" shall mean the merger of PSB with and into MCB
referred to in Section 1.1 of this Agreement.
"NASD" shall mean the National Association of Securities
Dealers, Inc.
"NASDAQ" shall mean the National Association of Securities
Dealers Automated Quotations System.
"1933 Act" shall mean the Securities Act of 1933, as amended.
"1934 Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Order" shall mean any administrative decision or award,
decree, injunction, judgment, order, quasi-judicial decision or award,
ruling, or writ of any federal, state, local or foreign or other court,
arbitrator, mediator, tribunal, administrative agency or Regulatory
Authority.
"Participation Facility" shall means any facility in which the
Party in question or any of its Subsidiaries participates in the
management and, where required by the context, includes the owner or
operator or such property, but only with respect to such property.
"Party" shall mean PSB on the one hand and SAB and MCB on the
other, and "Parties" shall mean PSB, SAB and MCB.
"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.
"Previously Disclosed" shall mean information delivered in
writing prior to the date of this Agreement in the manner and to the
Party and counsel described in Section 11.7 of this Agreement and
describing in reasonable detail the matters contained therein.
"Proxy Statement" shall mean the proxy statement/prospectus
used by PSB to solicit the approval of its stockholders of the
transactions contemplated by this Agreement.
"PSB Benefit Plans" shall have the meaning set forth in
Section 5.14 of this Agreement.
"PSB Common Stock" shall mean the $100 par value common stock
of PSB.
"PSB Financial Statements" shall mean (i) the balance sheets
(including related notes and schedules, if any) of PSB as of June 30,
1997, December 31, 1996 and December 31, 1995, and the related
statements of income, changes in stockholders' equity, and cash flows
(including related notes and schedules, if any) for the period ended
June 30, 1997 and each of the two fiscal years ended December 31, 1996,
and 1995, as delivered by PSB to SAB, and (ii) the consolidated balance
sheets of PSB (including related notes and schedules, if any) and
related statements of income, changes in stockholders' equity, and cash
flows (including related notes and schedules, if any) delivered by PSB
to SAB with respect to periods ended subsequent to June 30, 1997.
"Registration Statement" shall mean the Registration Statement
on Form S-4, or other appropriate form, filed with the SEC by SAB under
the 1933 Act in connection with the transactions contemplated by this
Agreement.
"Regulatory Authorities" shall mean, collectively, the Federal
Trade Commission, the United States Department of Justice, the Board of
Governors of the Federal Reserve System, the Office of the Comptroller
of the Currency, the Federal Deposit Insurance Corporation, all state
regulatory agencies having jurisdiction over the Parties and their
respective Subsidiaries, the NASD, and the SEC.
"SAB Common Stock" shall mean the $.01 par value common stock
of SAB.
"SAB Companies" shall mean, collectively, SAB and all SAB
Subsidiaries.
"SAB Subsidiaries" shall mean the current Subsidiaries of SAB
and any corporation, bank, savings association, or other organization
acquired as a Subsidiary of SAB in the future and owned by SAB at the
Effective Time.
"SEC Documents" shall mean all reports and registration
statements filed, or required to be filed, by a Party or any of its
Subsidiaries with any Regulatory Authority pursuant to the Securities
Laws.
"Securities Laws" shall mean the 1933 Act, the 1934 Act, the
Investment Company Act of 1940, as amended, the Investment Advisors Act
of 1940, as amended, the Trust Indenture Act of 1939, as amended, and
the rules and regulations of any Regulatory Authority promulgated
thereunder.
"Stockholders' Meeting" shall mean the Meeting of the
stockholders of PSB to be held pursuant to Section 8.1 of this
Agreement, including any adjournment or adjournments thereof.
"Subsidiaries" shall mean all those corporations, banks,
associations, or other entities of which the entity in question owns or
controls 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, however, there shall not be included
any such entity acquired through foreclosure or any such entity the
equity securities of which are owned or controlled in a fiduciary
capacity.
"Surviving Corporation" shall mean MCB as the surviving
corporation resulting from the Merger.
"Taxes" shall mean any federal, state, county, local, foreign
and other taxes, assessments, charges, fares, and impositions, including
interest and penalties thereon or with respect thereto.
"Trading Day" shall mean a day on which NASDAQ is open for
trading activities.
"Valuation Period" shall mean the period of twenty (20)
consecutive Trading Days ending on the Trading Day preceding by two
Trading Days the Effective Time.
ARTICLE ONE
TRANSACTIONS AND TERMS OF MERGER
1.1 Merger. Subject to the terms and conditions of this Agreement,
at the Effective Time, PSB shall be merged with and into MCB in accordance
with the provisions of Article 11 of the ABCA and Article 7A of the Alabama
Banking Code and with the effect provided in Section 11.06 of the ABCA (the
"Merger"). MCB shall be the Surviving Corporation resulting from the Merger
and shall continue to be governed by the Laws of the State of Alabama. 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 SAB,
MCB and PSB.
1.2 Time and Place of Closing. 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 as the Parties, acting through their chief executive officers or
chief financial officers, may mutually agree. The place of Closing shall
be at the offices of Hand Xxxxxxxx, L.L.C., Mobile, Alabama, or such other
place 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 Alabama (the "Effective Time").
Subject to the terms and conditions hereof, unless otherwise mutually agreed
upon in writing by the chief executive officers or chief financial officers
of each Party, the Parties shall use their reasonable efforts to cause the
Effective Time to occur as soon as practicable after the last to occur of (i)
the effective date (including expiration of any applicable waiting period) of
the last required Consent of any Regulatory Authority having authority over
and approving or exempting the Merger, and (ii) the date on which the
stockholders of MCB and PSB approve this Agreement to the extent such
approval is required by applicable Law, but in no event later than five (5)
business days after such occurrence.
ARTICLE TWO
TERMS OF MERGER
2.1 Articles of Incorporation. The Articles of Incorporation of
MCB in effect immediately prior to the Effective Time shall be the Articles
of Incorporation of the Surviving Corporation immediately following the
Effective Time, with the amendments set forth in Exhibit 1 hereto.
2.2 Bylaws. The Bylaws of MCB in effect immediately prior to the
Effective Time shall be the Bylaws of the Surviving Corporation immediately
following the Effective Time, with the amendments set forth in Exhibit 2
hereto, until otherwise amended or repealed.
2.3 Directors and Officers.
(a) The directors of the Surviving Corporation from and after
the Effective Time shall consist of the incumbent directors of MCB, who shall
serve as directors of the Surviving Corporation from and after the Effective
Time in accordance with the Bylaws of the Surviving Corporation.
(b) The principal officers of the Surviving Corporation upon
the Effective Time shall be the incumbent principal officers of MCB, who
shall serve as officers of the Surviving Corporation from and after the
Effective Time in accordance with the Bylaws of the Surviving Corporation.
ARTICLE THREE
MANNER OF CONVERTING SHARES
3.1 Conversion of Shares. Subject to the provisions of this
Article Three, at the Effective Time, by virtue of the Merger and without any
action on the part of the holders thereof, the shares of the constituent
corporations shall be converted as follows:
(a) Each share of MCB and SAB Common Stock issued and outstanding
immediately prior to the Effective Time shall remain issued and
outstanding from and after the Effective Time.
(b) Each share of PSB Common Stock (other than shares to be
canceled pursuant to Section 3.2 of this Agreement and shares held by
stockholders who perfect their dissenters' rights of appraisal as
provided in Section 3.3 of this Agreement) issued and outstanding at
the Effective Time shall cease to be outstanding and shall be converted
into and exchanged for the right to receive the number of shares of SAB
Common Stock having an average Market Value during the Valuation Period
of 1.3 times the Deemed Book Value of such share of PSB Common Stock,
rounded to the nearest one-hundreth of a share (the "Exchange Ratio").
3.2 Shares Held by PSB, MCB or SAB. Each of the shares of PSB
Common Stock held by PSB or by any SAB Company, 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.
3.3 Dissenting Stockholders. Any holder of shares of PSB Common
Stock who perfects his dissenters' rights of appraisal in accordance with and
as contemplated by Article 13 of the ABCA, shall be entitled to receive the
value of such shares in cash as determined pursuant to such provision of Law;
provided, however, that no such payment shall be made to any dissenting
stockholder unless and until such dissenting stockholder has complied with the
applicable provisions of the ABCA and surrendered to the Exchange Agent the
certificate or certificates representing the shares for which payment is
being made. In the event that after the Effective Time a dissenting
stockholder of PSB fails to perfect, or effectively withdraws or loses, his
right to appraisal and of payment for his shares, the Exchange Agent shall
issue and deliver the consideration to which such holder of shares of PSB
Common Stock is entitled under this Article Three (without interest) upon
surrender by such holder of the certificate or certificates representing
shares of PSB Common Stock held by him.
3.4 Fractional Shares. Notwithstanding any other provision of
this Agreement, each holder of shares of PSB Common Stock exchanged pursuant
to the Merger, who would otherwise have been entitled to receive a fraction
of a share of SAB 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 SAB Common
Stock multiplied by the Market Value of one share of SAB Common Stock on the
Trading Day preceding by two Trading Days the Effective Time. No such holder
will be entitled to dividends, voting rights, or any other rights as a
stockholder in respect of any fractional shares.
ARTICLE FOUR
EXCHANGE OF SHARES
4.1 Exchange Procedures. Promptly after the Effective Time, SAB
and MCB shall cause the exchange agent selected by them (the "Exchange Agent")
to mail to the former stockholders of PSB appropriate transmittal materials
(which shall specify that delivery shall be effected, and risk of loss and
title to the certificates theretofore representing shares of PSB Common Stock
shall pass, only upon proper delivery of such certificates to the Exchange
Agent). After the Effective Time, each holder of shares of PSB Common Stock
(other than shares to be canceled pursuant to Section 3.2 of this Agreement
or as to which dissenters' rights of appraisal have been perfected as
provided in Section 3.3 of this Agreement) issued and outstanding at the
Effective Time shall surrender the certificate or certificates representing
such shares to the Exchange Agent and shall promptly upon surrender thereof
receive in exchange therefor the consideration provided in Section 3.1 of
this Agreement, together with all undelivered dividends or distributions in
respect of such shares (without interest thereon) pursuant to Section 4.2 of
this Agreement. To the extent required by Section 3.4 of this Agreement,
each holder of shares of PSB Common Stock issued and outstanding at the
Effective Time also shall receive, upon surrender of the certificate or
certificates representing such shares, cash in lieu of any fractional share
of SAB Common Stock to which such holder may be otherwise entitled (without
interest). SAB shall not be obligated to deliver the consideration to which
any former holder of PSB Common Stock is entitled as a result of the Merger
until such holder surrenders his certificate or certificates representing
the shares of PSB Common Stock for exchange as provided in this Section 4.1.
The certificate or certificates of PSB Common Stock so surrendered shall be
duly endorsed as the Exchange Agent may require. Any other provision of this
Agreement notwithstanding, neither SAB, the Surviving Corporation nor the
Exchange Agent shall be liable to a holder of PSB Common Stock for any
amounts paid or property delivered in good faith to a public official
pursuant to any applicable abandoned property Law.
4.2 Rights of Former PSB Stockholders. At the Effective Time,
the stock transfer books of PSB shall be closed as to holders of PSB Common
Stock immediately prior to the Effective Time, and no transfer of PSB Common
Stock by any such holder shall thereafter be made or recognized. Until
surrendered for exchange in accordance with the provisions of Section 4.1 of
this Agreement, each certificate theretofore representing shares of PSB Common
Stock ("PSB Certificate"), other than shares to be canceled pursuant to
Sections 3.2 and 3.3 of this Agreement, shall from and after the Effective
Time represent for all purposes only the right to receive the consideration
provided in Sections 3.1 and 3.4 of this Agreement in exchange therefor. To
the extent permitted by Law, former stockholders of record of PSB shall be
entitled to vote after the Effective Time at any meeting of SAB stockholders
the number of whole shares of SAB Common Stock into which their respective
shares of PSB Common Stock are converted, regardless of whether such holders
have exchanged their PSB Certificates for certificates representing SAB
Common Stock in accordance with the provisions of this Agreement. Whenever a
dividend or other distribution is declared by SAB on the SAB Common Stock,
the record date for which is at or after the Effective Time, the declaration
shall include dividends or other distributions on all shares issuable
pursuant to this Agreement. Notwithstanding the preceding sentence, any
person holding any PSB Certificate at or after six (6) months after the
Effective Time (the Cutoff ) shall not be entitled to receive any dividend
or other distribution payable after the Cutoff to holders of SAB Common Stock,
which dividend or other distribution is attributable to such person's SAB
Common Stock represented by said PSB Certificate held after the Cutoff, until
such person surrenders said PSB Certificate for exchange as provided in
Section 4.1 of this Agreement. However, upon surrender of such PSB
Certificate, both the SAB Common Stock certificate (together with all such
undelivered dividends or other distributions, without interest) and any
undelivered cash payments to be paid for fractional share interests (without
interest) shall be delivered and paid with respect to each share represented
by such PSB Certificate.
ARTICLE FIVE
REPRESENTATIONS AND WARRANTIES OF PSB
PSB hereby represents and warrants to SAB and MCB as follows:
5.1 Organization, Standing, and Power. PSB is a corporation duly
organized, validly existing and in good standing under the Laws of the State
of Alabama, and has the corporate power and authority to carry on its
business as now conducted and to own, lease and operate its Assets. PSB 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. PSB has delivered to SAB and MCB
complete and correct copies of its Articles of Incorporation and Bylaws.
5.2 Authority; No Breach By Agreement.
(a) PSB has all corporate power and authority necessary to
execute, deliver and, subject to Article Nine hereof, 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 PSB, subject to the approval of this Agreement
by the holders of PSB Common Stock in accordance with the ABCA and Section
5-7A-2, Code of Alabama (1975). Subject to such requisite stockholder
approval, this Agreement represents a legal, valid, and binding obligation of
PSB, enforceable against PSB in accordance with its terms (except in all
cases as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, or similar Laws affecting the
enforcement of creditors' rights generally ("Creditor's Laws") 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 ("Equitable Discretion")).
(b) Neither the execution and delivery of this Agreement by
PSB, nor the consummation by PSB of the transactions contemplated hereby,
nor compliance by PSB with any of the provisions hereof, will (i) conflict
with or result in a breach of any provision of PSB's Articles of
Incorporation or Bylaws, or (ii) constitute or result in a Default under, or
require any Consent pursuant to, or result in the creation of any Lien on any
Asset of PSB under, any Contract or Permit of PSB or, (iii) subject to receipt
of the requisite approvals referred to in Section 9.1(b) of this Agreement,
violate any Law or Order applicable to PSB or its Assets.
(c) Other than in connection or compliance with the
provisions of the Securities Laws, applicable state corporate and securities
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, no
notice to, filing with, or Consent of, any public body or authority is
necessary for the consummation by PSB of the Merger and the other
transactions contemplated in this Agreement.
5.3 Capital Stock.
(a) The authorized capital stock of PSB consists only of 750
shares of PSB Common Stock, of which 750 shares are issued and outstanding.
All of the issued and outstanding shares of capital stock of PSB are duly and
validly issued and outstanding and are fully paid and nonassessable under the
ABCA. None of the outstanding shares of capital stock of PSB has been issued
in violation of any preemptive rights of the current or past stockholders
of PSB.
(b) There are no shares of capital stock or other equity
securities of PSB outstanding and no outstanding options, warrants, scrip,
rights to subscribe to, calls, or commitments of any character whatsoever
relating to, or securities or rights convertible into or exchangeable for,
shares of the capital stock of PSB or contracts, commitments, understandings,
or arrangements by which PSB is or may be bound to issue additional shares of
its capital stock or options, warrants, or rights to purchase or acquire any
additional shares of its capital stock.
5.4 PSB Subsidiaries. PSB has no Subsidiaries.
5.5 Financial Statements. PSB has delivered to SAB prior to the
execution of this Agreement copies of all PSB Financial Statements for
periods ended prior to the date hereof and will deliver to SAB copies of all
PSB Financial Statements prepared subsequent to the date hereof. The PSB
Financial Statements (as of the dates thereof and for the periods covered
thereby) (i) are or, if dated after the date of this Agreement, will be in
accordance with the books and records of PSB, which are or will be, as the
case may be, complete and correct and which have been or will have been, as
the case may be, maintained in accordance with good business practices, and
(ii) present or will present, as the case may be, fairly the financial
position of PSB as of the dates indicated and the results of operations,
changes in stockholders' equity, and cash flows of PSB for the periods
indicated, in accordance with GAAP.
5.6 Absence of Undisclosed Liabilities. PSB has no Liabilities
that are reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on PSB, except Liabilities which are accrued or
reserved against in the balance sheets of PSB as of June 30, 1997, included
in the PSB Financial Statements or reflected in the notes thereto. PSB has
not incurred or paid any Liability since June 30, 1997, except for such
Liabilities incurred or paid in the ordinary course of business consistent
with past business practice and which are not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on PSB.
5.7 Absence of Certain Changes or Events. Since June 30, 1997,
except as disclosed in the PSB Financial Statements or as Previously
Disclosed, (i) there have been no events, changes or occurrences which have
had, or are reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on PSB, and (ii) PSB has 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 breach or violation of any of the covenants and agreements of PSB
provided in Article Seven of this Agreement.
5.8 Tax Matters.
(a) All Tax returns required to be filed by or on behalf of
PSB have been timely filed, or requests for extensions have been timely
filed, granted, and have not expired for periods ended on or before June 30,
1997, and on or before the date of the most recent fiscal year end
immediately preceding the Effective Time, and all returns filed are complete
and accurate. All Taxes shown on filed 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 Material Adverse Effect on PSB, except as
reserved against in the PSB Financial Statements delivered prior to the
date of this Agreement or as Previously Disclosed. All Taxes and other
Liabilities due with respect to completed and settled examinations or
concluded Litigation have been paid.
(b) PSB has not 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) Adequate provision for any Taxes due or to become due for
PSB for the period or periods through and including the date of the
respective PSB Financial Statements has been made and is reflected on such
PSB Financial Statements.
(d) Deferred Taxes of PSB have been provided for in
accordance with GAAP.
5.9 Allowance for Possible Loan Losses. The allowance for possible
loan or credit losses (the "Allowance") shown on the balance sheet of PSB
included in the most recent PSB Financial Statements dated prior to the date
of this Agreement was, and the Allowance shown on the balance sheet of PSB
included in the PSB 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 losses relating to or inherent in the loan and
lease portfolios (including accrued interest receivables) of PSB and other
extensions of credit (including letters of credit and commitments to make loans
or extend credit) by PSB as of the dates thereof.
5.10 Assets. Except as Previously Disclosed or as disclosed or
reserved against in the PSB Financial Statements, PSB has good and marketable
title, free and clear of all Liens, to all of its Assets. All tangible
properties used in the business of PSB are in good condition, reasonable wear
and tear excepted, and are usable in the ordinary course of business
consistent with PSB's past practices. All Assets which are material to PSB's
business held under leases or subleases by PSB, are held under valid
Contracts enforceable in accordance with their respective terms (except as
enforceability may be limited by Creditor s Laws and Equitable Discretion), and
each such Contract is in full force and effect. The policies of fire, theft,
liability, and other insurance maintained with respect to the Assets or
businesses of PSB provide adequate coverage under current industry practices
against loss or Liability, and the fidelity and blanket bonds in effect as to
which PSB is a named insured are reasonably sufficient. The Assets of PSB
include all assets required to operate the business of PSB as presently
conducted.
5.11 Environmental Matters.
(a) PSB, and to its knowledge its Participation Facilities
and its Loan Properties, are, and have been, in compliance with all
Environmental Laws.
(b) There is no Litigation pending or threatened before any
court, governmental agency or authority or other forum in which PSB or, to
its knowledge, any of its Participation Facilities have been or, with respect
to threatened Litigation, may be named as a defendant (i) for alleged
noncompliance (including by any predecessor) with any Environmental Law or
(ii) relating to the release into the environment of any Hazardous Material (as
defined below) or oil, whether or not occurring at, on, under or involving a
site owned, leased or operated by PSB or any of its Participation Facilities.
(c) There is no Litigation pending or, to PSB s knowledge,
threatened before any court, governmental agency or board or other forum in
which any of its Loan Properties (or PSB in respect of such Loan Property)
have been or, with respect to threatened Litigation, may, to PSB's knowledge,
be named as a defendant or potentially responsible party (i) for alleged
noncompliance (including by any predecessor) with any Environmental Law or
(ii) relating to the release into the environment of any Hazardous Material
or oil, whether or not occurring at, on, under or involving a Loan Property.
(d) To PSB s knowledge, there is no reasonable basis for any
Litigation of a type described in subsections (b) or (c).
(e) During the period of (i) PSB's ownership or operation of
any of its current properties, (ii) PSB's participation in the management of
any Participation Facility, or (iii) PSB's holding of a security interest in
a Loan Property, there have been, to PSB's knowledge with respect to (ii) and
(iii), no releases of Hazardous Material or oil in, on, under or affecting
such properties. Prior to the period of (i) PSB's ownership or operation of
any of their respective current properties, (ii) PSB's participation in the
management of any Participation Facility, or (iii) PSB's holding of a
security interest in a Loan Property, there were, to PSB's knowledge with
respect to (ii) and (iii), no releases of Hazardous Material or oil in, on,
under or affecting any such property, Participation Facility or Loan Property.
5.12 Compliance with Laws. PSB is duly registered as a banking
corporation under the Alabama Banking Code. PSB has in effect all Permits
necessary for it to own, lease or operate its Assets and to carry on its
business as now conducted, and there has occurred no Default under any such
Permit. PSB is not or has not, as applicable:
(a) In violation of any Laws, Orders or Permits applicable to
its business or employees conducting its business; and
(b) 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 PSB is not
in compliance with any of the Laws or Orders which such governmental
authority or Regulatory Authority enforces, (ii) threatening to revoke
any Permits, the revocation of which is reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on PSB, or
(iii) requiring PSB to enter into or consent to the issuance of a cease
and desist order, formal agreement, directive, commitment or memorandum
of understanding, or to adopt any Board resolution or similar
undertaking, which restricts materially the conduct of its business, or
in any manner relates to its capital adequacy, its credit or reserve
policies, its management, or the payment of dividends.
5.13 Labor Relations. PSB is not the subject of any Litigation
asserting that it has committed an unfair labor practice (within the meaning
of the National Labor Relations Act or comparable state law) or seeking to
compel it to bargain with any labor organization as to wages or conditions of
employment, nor is there any strike or other labor dispute involving PSB,
pending or threatened, or to its Knowledge, is there any activity involving
any PSB's employees seeking to certify a collective bargaining unit or
engaging in any other organization activity.
5.14 Employee Benefit Plans.
(a) PSB has delivered or made available to MCB and SAB prior
to the execution of this Agreement copies of all pension, retirement,
profit-sharing, deferred compensation, stock option, employee stock
ownership, severance pay, vacation, bonus, or other incentive plan, all
other written employee programs, arrangements, or agreements, all medical,
vision, dental, or other health plans, all life insurance plans, and all
other employee benefit plans or fringe benefit plans, including, without
limitation, "employee benefit plans" as that term is defined in Section 3(3)
of ERISA, currently adopted, maintained by, sponsored in whole or in part by,
or contributed to by PSB or any Affiliate of PSB 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 "PSB Benefit Plans"). Any of the PSB Benefit
Plans which is an "employee pension benefit plan," as that term is defined in
Section 3(2) of ERISA, is referred to herein as a "PSB ERISA Plan." Each
PSB ERISA Plan which is also a "defined benefit plan" (as defined in Section
414(j) of the Internal Revenue Code) is referred to herein as a "PSB Pension
Plan." No PSB Pension Plan is or has been a multiemployer plan within the
meaning of Section 3(37) of ERISA.
(b) All PSB Benefit Plans are in compliance with the
applicable terms of ERISA, the Internal Revenue Code, and any other
applicable Laws. Each PSB 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 PSB is not aware
of any circumstances likely to result in revocation of any such favorable
determination letter. PSB has not engaged in a transaction with respect to
any PSB Benefit Plan that, assuming the taxable period of such transaction
expired as of the date hereof, would subject PSB to a tax or penalty imposed
by either Section 4975 of the Internal Revenue Code or Section 502(i) of ERISA.
(c) No PSB ERISA Plan which is a defined benefit pension plan
has any "unfunded current liability," as that term is defined in Section
302(d)(8)(A) of ERISA, and the fair market value of the assets of any such
plan exceeds the plan's "benefit liabilities," as that term is defined in
Section 4001(a)(16) of ERISA, when determined under actuarial factors that
would apply if the plan terminated in accordance with all applicable legal
requirements. Since the date of the most recent actuarial valuation, there
has been (i) no material change in the financial position of any PSB Pension
Plan, (ii) no change in the actuarial assumptions with respect to any PSB
Pension Plan, and (iii) no increase in benefits under any PSB Pension Plan
as a result of plan amendments or changes in applicable Law. Neither any PSB
Pension Plan nor any "single-employer plan," within the meaning of Section
4001(a)(15) of ERISA, currently or formerly maintained by PSB, or the
single-employer plan of any entity which is considered one employer with PSB
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. PSB has not provided, nor is
it required to provide, security to a PSB Pension Plan or to any
single-employer plan of an ERISA Affiliate pursuant to Section 401(a)(29) of
the Code.
(d) No Liability under Subtitle C or D of Title IV or ERISA
has been or is expected to be incurred by PSB with respect to any ongoing,
frozen or terminated single-employer plan or the single-employer plan of any
ERISA Affiliate. PSB has not incurred any withdrawal Liability with respect
to a multiemployer plan under Subtitle B of Title IV or ERISA (regardless of
whether based on contributions of an ERISA Affiliate). No notice of a
"reportable event," within the meaning of Section 4043 of ERISA for which the
30-day reporting requirement has not been waived, has been required to be
filed for any PSB Pension Plan or by any ERISA Affiliate within the 12-month
period ending on the date hereof.
(e) Except as Previously Disclosed, (i) PSB has no
obligations for retiree health and life benefits under any of the PSB Benefit
Plans and (ii) there are no restrictions on the rights of PSB to amend or
terminate any such Plan without incurring any Liability thereunder.
(f) Neither the execution and delivery of this Agreement nor
the consummation of the transactions contemplated hereby will (i) result in
any payment (including, without limitation, severance, unemployment
compensation, golden parachute or otherwise) becoming due to any director or
any employee of PSB from PSB under any PSB Benefit Plan or otherwise, (ii)
increase any benefits otherwise payable under any PSB Benefit Plan, or
(iii) result in any acceleration of the time of payment or vesting of any
such benefit.
5.15 Material Contracts. Except as Previously Disclosed or
otherwise reflected in the PSB Financial Statements, neither PSB, nor any of
its Assets, business 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 with any Person, (ii) any Contract relating
to the borrowing of money by PSB or the guarantee by PSB of any such
obligation (other than Contracts evidencing deposit liabilities, purchases of
federal funds, fully-secured repurchase agreements, Federal Home Loan Bank
advances, trade payables, and Contracts relating to borrowings or guarantees
made in the ordinary course of business), and (iii) any other Contract or
amendment thereto that requires PSB to make payments aggregating $10,000 or
more in any 12-month period (together with all Contracts referred to in
Sections 5.10 and 5.14(a) of this Agreement, the "PSB Contracts"). PSB is
not in Default under any PSB Contract. All of the indebtedness of PSB for
money borrowed is prepayable at any time by PSB without penalty or premium.
5.16 Legal Proceedings. Except as Previously Disclosed, there is
no Litigation instituted or pending, or threatened (or unasserted but
considered probable of assertion and which if asserted would have at least a
reasonable probability of an unfavorable outcome) against PSB, or against any
Asset, interest, or right of PSB, nor are there any Orders of any Regulatory
Authorities, other governmental authorities, or arbitrators outstanding
against PSB.
5.17 Reports. Since January 1, 1994, PSB 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 (i) the SEC, (ii)
other Regulatory Authorities, and (iii) any applicable state securities or
banking authorities. As of their respective dates, each of such reports and
documents, including the financial statements, exhibits, and schedules
thereto, complied in all material respects with all applicable Laws. As of
its respective date, each such report and document did not, in all material
respects, contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
made therein, in light of the circumstances under which they were made, not
misleading.
5.18 Statements True and Correct. No statement, certificate,
instrument or other writing furnished or to be furnished by PSB or any
Affiliate thereof to SAB 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 PSB or any Affiliate thereof for inclusion in the Registration
Statement to be filed by SAB with the SEC will, when the Registration
Statement becomes effective, be false or misleading with respect to any material
fact, or omit to state any material fact necessary to make the statements
therein not misleading. None of the information supplied or to be supplied
by PSB or any Affiliate thereof for inclusion in the Proxy Statement to be
mailed to PSB's stockholders in connection with the Stockholders' Meeting,
and any other documents to be filed by PSB or any Affiliate thereof with the
SEC or any other Regulatory Authority in connection with the transactions
contemplated hereby, will, at the respective time such documents are filed,
and with respect to the Proxy Statement, when first mailed to the
stockholders of PSB, be false or misleading with respect to any material fact,
or omit to state any material fact necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading, or,
in the case of the Proxy Statement or any amendment thereof or supplement
thereto, at the time of the Stockholders' Meeting, be false or misleading
with respect to any material fact, or omit to state any material fact
necessary to correct any statement in any earlier communication with respect
to the solicitation of any proxy for the Stockholders' Meeting. All
documents that PSB or any Affiliate thereof is responsible for filing with
any Regulatory Authority in connection with the transactions contemplated
hereby will comply as to form in all material respects with the provisions of
applicable Law.
5.19 Accounting, Tax and Regulatory Matters. Neither PSB nor any
Affiliate thereof has taken any action or has any Knowledge of any fact or
circumstance that is reasonably likely to (i) prevent the transactions
contemplated hereby, including the Merger, from qualifying as a
reorganization within the meaning of Section 368(a) of the Internal Revenue
Code, or (ii) materially impede or delay receipt of any Consents of
Regulatory Authorities referred to in Section 9.1(b) of this Agreement or
result in the imposition of a condition or restriction of the type referred
to in the last sentence of such Section.
5.20 Charter Provisions. PSB 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 Articles of Incorporation,
Bylaws or other governing instruments of PSB.
ARTICLE SIX
REPRESENTATIONS AND WARRANTIES OF SAB AND MCB
SAB and MCB hereby jointly and severally represent and warrant to
PSB as follows:
6.1 Organization, Standing, and Power. SAB and MCB are
corporations duly organized, validly existing, and in good standing under the
Laws of the State of Alabama, and have the corporate power and authority to
carry on their businesses as now conducted and to own, lease and operate
their Assets.
6.2 Authority; No Breach By Agreement.
(a) SAB and MCB each have the corporate power and authority
necessary to execute, deliver and, subject to Article Nine hereof, perform
their respective 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 SAB and MCB. This
Agreement represents a legal, valid, and binding obligation of both SAB and
MCB, enforceable against SAB and MCB in accordance with its terms (except in
all cases as such enforceability may be limited by Creditors' Laws and
Equitable Discretion).
(b) Neither the execution and delivery of this Agreement by
SAB and MCB, nor the consummation by SAB and MCB of the transactions
contemplated hereby, nor compliance by SAB and MCB with any of the
provisions hereof, will (i) conflict with or result in a breach of any
provision of their respective Articles of Incorporation or Bylaws, or (ii)
constitute or result in a Default under, or require any Consent pursuant to,
or result in the creation of any Lien on any Asset of any SAB Company under,
any Contract or Permit of any SAB Company, where any failure to obtain such
Consent is reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on SAB, or, (iii) subject to receipt of the requisite
approvals referred to in Section 9.1(b) of this Agreement, violate any Law or
Order applicable to any SAB Company or any of their respective Assets.
(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 Material Adverse Effect on SAB or
MCB, no notice to, filing with, or Consent of, any public body or authority
is necessary for the consummation by SAB and MCB of the Merger and the other
transactions contemplated in this Agreement.
6.3 Reports. Since January 1, 1994, or the date of organization
if later, each SAB Company 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 (i) the SEC, including, but not limited to,
Forms 10-K, Forms 10-Q, Forms 8-K, and proxy statements, (ii) other Regulatory
Authorities, and (iii) any applicable state securities or banking authorities
(except, in the case of state securities authorities, failures to file which
are not reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on SAB). 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.
ARTICLE SEVEN
CONDUCT OF BUSINESS PENDING CONSUMMATION
7.1 Covenants of PSB and SAB. Unless the prior written consent of
PSB, in the case of SAB, and SAB, in the case of PSB, shall have been
obtained, and except as otherwise expressly contemplated herein, each of PSB
and SAB shall and shall cause itself and/or each of its Subsidiaries, as
applicable, to (a) preserve intact its business organizations, goodwill,
relationships with depositors, customers and employees, and Assets and
maintain its rights and franchises, and (b) take no action which would (i)
adversely affect the ability of any Party to obtain any Consents required
for the transactions contemplated hereby without imposition of a condition
or restriction of the type referred to in the last sentences of Section 9.1(b)
or 9.1(c) of this Agreement, or (ii) adversely affect the ability of any
Party to perform its covenants and agreements under this Agreement.
7.2 Negative Covenants of PSB. From the date of this Agreement
until the earlier of the Effective Time or the termination of this Agreement,
PSB covenants and agrees that PSB will not do or agree or commit to do, any
of the following without the prior written consent of the chief executive
officer, president or chief financial officer of SAB and of MCB, which
consent shall not be unreasonably withheld:
(a) amend its Articles of Incorporation, Bylaws or other
governing instruments; or
(b) incur any additional debt obligation or other obligation
for borrowed money except in the ordinary course of the business
consistent with past practices (which shall include creation of deposit
liabilities, purchases of federal funds, advances from the Federal
Reserve Bank or the 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 share of stock held by PSB of
any Lien or permit any such Lien to exist; or
(c) repurchase, redeem, or otherwise acquire or exchange
(other than exchanges in the ordinary course under employee benefit
plans), directly or indirectly, any shares, or any securities
convertible into any shares, of the capital stock of PSB, or declare or
pay any dividend or make any other distribution in respect of PSB's
capital stock; or
(d) except for this Agreement, issue, sell, pledge, encumber,
enter into any Contract to issue, sell, pledge, or encumber, authorize
the issuance of, or otherwise permit to become outstanding, any
additional shares of PSB Common Stock or any other capital stock of PSB,
or any stock appreciation rights, or any option, warrant, conversion, or
other right to acquire any such stock, or any security convertible into
any such stock; or
(e) adjust, split, combine or reclassify any capital stock of
PSB or issue or authorize the issuance of any other securities in
respect of or in substitution for shares of its capital stock or sell,
lease, mortgage or otherwise dispose of or otherwise encumber any shares
of capital stock of PSB or any Asset other than in the ordinary course
of business for reasonable and adequate consideration; or
(f) acquire any direct or indirect equity interest in any
Person, other than in connection with (i) foreclosures in the ordinary
course of business, and (ii) acquisitions of control by a depository
institution Subsidiary in its fiduciary capacity; or
(g) grant any increase in compensation or benefits to the
employees or officers of PSB, except in accordance with past practice
Previously Disclosed or as required by Law; pay any bonus except in
accordance with past practice Previously Disclosed or the provisions of
any applicable program or plan adopted by its Board of Directors prior
to the date of this Agreement; enter into or amend any severance
agreements with officers of PSB; grant any material increase in fees or
other increases in compensation or other benefits to directors of PSB
except in accordance with past practice Previously Disclosed; or
(h) enter into or amend any employment Contract between PSB
and any Person (unless such amendment is required by Law) that PSB 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;
(i) adopt any new employee benefit plan or make any material
change in or to any existing employee benefit plans of PSB other than
any such change that is required by Law or that, in the opinion of
counsel, is necessary or advisable to maintain the tax qualified status
of any such plan; or
(j) make any significant change in any accounting methods or
systems of internal accounting controls, except as may be appropriate
to conform to changes in regulatory accounting requirements or GAAP;
(k) commence any Litigation other than in accordance with
past practice, settle any Litigation involving any Liability of PSB for
material money damages or restrictions upon the operations of PSB, or,
except in the ordinary course of business, modify, amend or terminate
any material Contract or waive, release, compromise or assign any
material rights or claims;
(l) operate its business otherwise than in the ordinary
course of business; or
(m) fail to file timely any report required to be filed by it
with any Regulatory Authority.
7.3 Affirmative Covenants of SAB. SAB agrees and covenants that:
(a) it will cooperate fully in seeking all necessary approvals
of Regulatory Authorities of the Merger;
(b) it will take all necessary corporate action to effect the
issuance of shares of SAB Common Stock as provided in Articles 3 and 4
hereof;
(c) as a shareholder of MCB, it will vote in favor of the
Merger; and
(d) it will give written notice promptly to PSB upon becoming
aware of the occurrence or impending occurrence of any event or
circumstance relating to it which (i) is reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on it or
(ii) would cause or constitute a material breach of any of its
representations, warranties, or covenants contained herein, and it will
use its reasonable efforts to prevent or promptly to remedy the same.
7.4 Affirmative Covenants of PSB.
(a) PSB agrees to give written notice promptly to SAB and MCB
upon becoming aware of the occurrence or impending occurrence of any
event or circumstance relating to it which (i) is reasonably likely to
have, individually or in the aggregate, a Material Adverse Effect on it
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.
(b) PSB shall deliver to SAB and MCB copies of all reports
filed with Regulatory Authorities promptly after the same are filed.
ARTICLE EIGHT
ADDITIONAL AGREEMENTS
8.1 Registration Statement; Proxy Statement; Stockholder Approval.
As soon as practicable after execution of this Agreement, SAB shall file the
Registration Statement with the SEC, and shall use its reasonable efforts to
cause the Registration Statement to become effective under the 1933 Act and
take any action required to be taken under the applicable state Blue Sky or
securities Laws in connection with the issuance of the shares of SAB Common
Stock upon consummation of the Merger. PSB shall furnish all information
concerning it and the holders of its capital stock as SAB may reasonably
request in connection with such action. PSB shall call a Stockholders'
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
adoption of this Agreement and such other related matters as it deems
appropriate. In connection with the Stockholders' Meeting, (i) PSB shall
prepare a Proxy Statement and mail it to its stockholders, (ii) SAB shall
furnish to PSB all information concerning it that PSB may reasonably request
in connection with such Proxy Statement, (iii) the Board of Directors of PSB
shall recommend (subject to compliance with its fiduciary duties as advised
by counsel) to its stockholders the approval of this Agreement, and (iv) the
Board of Directors and officers of PSB shall use their reasonable efforts to
obtain such stockholders' approval (subject to compliance with their
fiduciary duties as advised by counsel).
8.2 Applications. SAB or MCB shall promptly prepare and file, and
PSB shall cooperate in the preparation and, where appropriate, filing of,
applications with all Regulatory Authorities having jurisdiction over the
transactions contemplated by this Agreement seeking the requisite Consents
necessary to consummate the transactions contemplated by this Agreement.
8.3 Filings with State Offices. Upon the terms and subject to the
conditions of this Agreement, MCB shall execute and file the Articles of
Merger, with the certificate of approval of the Superintendent of Banks, with
the Secretary of State of the State of Alabama in connection with the Closing.
8.4 Agreement as to Efforts to Consummate. Subject to the terms
and conditions of this Agreement, each Party agrees to use, and to cause its
Subsidiaries to use, its reasonable efforts to take, or cause to be taken,
all actions, and to do, or cause to be done, all things necessary, proper, or
advisable under applicable Laws to consummate and make effective, as soon as
practicable after the date of this Agreement, the transactions contemplated
by this Agreement, including, without limitation, using its reasonable
efforts to lift or rescind any Order adversely affecting its ability to
consummate the transactions contemplated herein and to cause to be satisfied
the conditions referred to in Article Nine of 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.
8.5 Investigation and Confidentiality.
(a) Prior to the Effective Time, PSB will keep SAB and MCB
advised of all material developments relevant to its business and to
consummation of the Merger and shall permit SAB and MCB to make or cause
to be made such investigation of the business and properties of PSB and
of its financial and legal condition as SAB and MCB reasonably request,
provided that such investigation shall be reasonably related to the
transactions contemplated hereby and shall not interfere unnecessarily
with normal operations. No investigation by SAB and MCB shall affect
the representations and warranties of PSB.
(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 all documents
and copies thereof, and all work papers containing confidential
information received from the other Party.
(c) Each Party agrees to give the other Party notice as soon
as practicable after any determination by it of any fact or occurrence
relating to the other Party which it has discovered through the course
of its investigation and which represents, or is reasonably likely to
represent, either a material breach of any representation, warranty,
covenant or agreement of the other Party or which has had or is reasonably
likely to have a Material Adverse Effect on the other Party.
(d) In the event this Agreement is terminated without the
consummation of the Merger, neither Party shall use confidential
information about the other Party obtained pursuant hereto to solicit
customers of the other Party for a period of eighteen (18) months after
the date of such termination, or if the exact date of such termination
is unascertainable, then for a period of twenty-one (21) months after
the date hereof.
8.6 Press Releases. Prior to the Effective Time, PSB, SAB and MCB
shall consult with each other as to the form and substance of any press
release or other public disclosure materially related to this Agreement or
any other transaction contemplated hereby; provided, however, that nothing in
this Section 8.6 shall be deemed to prohibit SAB from making any disclosure
which its counsel deems necessary or advisable in order to satisfy such
Party's disclosure obligations imposed by Law.
8.7 Certain Actions.
(a) Except with respect to this Agreement and the
transactions contemplated hereby, neither PSB nor any Affiliate thereof
or any investment banker, attorney, accountant or other representative
retained by PSB (collectively, "PSB Representatives") shall directly or
indirectly solicit any Acquisition Proposal by any Person. Neither PSB
nor any Affiliate or Representative thereof shall furnish any non-public
information that it is not legally obligated to furnish, negotiate with
respect to, or enter into any Contract with respect to, any Acquisition
Proposal, but PSB may communicate information about such an Acquisition
Proposal to its stockholders if and to the extent that it is required to
do so in order to comply with its legal obligations. PSB shall promptly
notify SAB orally and in writing in the event that it receives any
inquiry or proposal relating to any such transaction. PSB shall (i)
immediately cease and cause to be terminated any existing activities,
discussions or negotiations with any Persons conducted heretofore with
respect to any of the foregoing, and (ii) direct and use its reasonable
efforts to cause all PSB Representatives not to engage in any of the
foregoing.
(b) SAB shall promptly notify PSB orally and in writing in
the event that it receives any inquiry or proposal relating to an
Acquisition Proposal; provided, that no such notice shall be required if
it would violate any confidentiality agreement or would require public
notice of such Acquisition Proposal before such notice would otherwise
be timely made.
8.8 Charter Provisions. PSB shall 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 Articles of
Incorporation, Bylaws or other governing instruments of PSB.
8.9 Agreement of Affiliates. PSB shall use its reasonable best
efforts to cause each Person who is an "affiliate" within the meaning of SEC
Rule 145 to deliver to SAB not later than thirty (30) days prior to the
Effective Time, a written agreement, substantially in the form of Exhibit 3,
providing that such Person will not sell, pledge, transfer, or otherwise
dispose of the shares of PSB 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 SAB Common Stock to
be received by such Person upon consummation of the Merger except in
compliance with applicable provisions of the 1933 Act and the rules and
regulations thereunder and until such time as financial results covering at
least thirty (30) days of combined operations of MCB and PSB have been
published within the meaning of Section 201.01 of the SEC's Codification of
Financial Reporting Policies. If the Merger will qualify for pooling-of-
interests accounting treatment, shares of SAB Common Stock issued to such
affiliates of PSB in exchange for shares of PSB Common Stock (and shares of
SAB Common Stock held by persons who are "affiliates" of SAB) shall not be
transferable until such time as financial results covering at least thirty
(30) days of combined operations of MCB and PSB 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 8.9 (and SAB shall be
entitled to place restrictive legends upon certificates for shares of SAB
Common Stock issued to Affiliates of PSB pursuant to this Agreement to
enforce the provisions of this Section 8.9). SAB shall not be required to
maintain the effectiveness of the Registration Statement under the 1933 Act
for the purposes of resale of SAB Common Stock by such Affiliates.
8.10 Compensation and Employee Benefits. The Parties contemplate
that at the Effective Time neither the compensation and employee benefit
plans of PSB nor the SAB Companies shall be affected by the Merger and that
such plans shall continue in effect as though the Merger had not occurred.
The Parties further contemplate, however, that it is desirable that SAB and
its Subsidiaries offer more uniform employee compensation and benefits and
that at some point after the Effective Time SAB and its Subsidiaries will
adopt uniform policies and plans, giving due regard to the benefits offered
to current employees.
8.11 D & O Coverage. SAB and/or MCB shall purchase what is
customarily known as "tail" insurance coverage for liability arising out of
the actions in their official capacities of the directors and officers of
PSB. Such coverage shall be for liability which arose prior to the Effective
Time and for which claims are made after the Effective Time, and it shall
extend for a period of not less than two (2) years from the Effective Time.
Such coverage shall be in an amount and with an insurance company deemed
reasonable by SAB and MCB. SAB and PSB shall have the right to require PSB
to pay for said coverage, provided such payment does not adversely affect
Deemed Book Value.
ARTICLE NINE
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 11.5 of this Agreement:
(a) Stockholder Approval. The stockholders of PSB and MCB
shall have adopted this Agreement, and the consummation of the
transactions contemplated hereby, including 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, without limitation, requirements relating to the raising of
additional capital or the disposition of assets) which in the reasonable
judgment of the Board of Directors of either Party would so materially
adversely impact the economic or business benefits of the transactions
contemplated by this Agreement so as to render inadvisable the
consummation of the Merger.
(c) Consents and Approvals. Each Party shall have obtained
any and all Consents required for consummation of the Merger (other than
those referred to in Section 9.1(b) of this Agreement) or for the
preventing of any Default under any Contract or Permit of such Party
which, if not obtained or made, is reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on such
Party. 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
either Party would so materially adversely impact the economic or
business benefits of the transactions contemplated by this Agreement so
as to render inadvisable the consummation of the Merger.
(d) Legal Proceedings. No court or governmental or
regulatory authority of competent jurisdiction shall have enacted,
issued, promulgated, enforced or entered any Law or Order (whether
temporary, preliminary or permanent) or taken any other action which
prohibits, restricts or makes illegal consummation of the transactions
contemplated by this Agreement.
(e) Registration Statement. The Registration Statement shall
be effective under the 1933 Act, no stop orders suspending the
effectiveness of the Registration Statement shall have been issued, no
action, suit, proceeding or investigation by the SEC to suspend the
effectiveness thereof shall have been initiated and be continuing, and
all necessary approvals under state securities Laws or the 1933 Act or
1934 Act relating to the issuance or trading of the shares of SAB
Common Stock issuable pursuant to the Merger shall have been received.
(f) Tax Matters. SAB and PSB shall have received a written
opinion of counsel from Xxxxxx, Xxxxxx, Xxxxx & Xxxxx, P.A. and Hand
Xxxxxxxx, L.L.C., respectively, in form reasonably satisfactory to them
(the "Tax Opinions"), 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 PSB Common Stock for
SAB Common Stock will not give rise to gain or loss to the stockholders
of PSB with respect to such exchange (except to the extent of any cash
received), and (iii) neither PSB, SAB nor MCB will recognize gain or
loss as a consequence of the Merger (except for income and deferred gain
recognized pursuant to Treasury regulations issued under Section 1502 of
the Internal Revenue Code). In rendering such Tax Opinion, counsel for
PSB and SAB shall be entitled to rely upon representations of officers
of PSB and SAB reasonably satisfactory in form and substance to such
counsel.
9.2 Conditions to Obligations of SAB and MCB. The obligations of
SAB and MCB 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 SAB pursuant to Section 11.5(a) of
this Agreement:
(a) Representations and Warranties. The representations and
warranties of PSB set forth or referred to in this Agreement shall be
true and correct 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.
(b) Performance of Agreements and Covenants. Each and all of
the agreements and covenants of PSB 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 respects.
(c) Certificates. PSB shall have delivered to SAB (i) a
certificate, dated as of the Effective Time and signed on its behalf by
its chief executive officer and its chief financial officer, to the
effect that the conditions of its obligations set forth in Section
9.2(a) and 9.2(b) of this Agreement have been satisfied, and (ii)
certified copies of resolutions duly adopted by PSB's Board of Directors
and stockholders 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 SAB and its counsel shall request.
(d) Opinion of Counsel. PSB shall have delivered to SAB an
opinion of Xxxxxx, Xxxxxx, Xxxxx & Xxxxx, P.A., counsel to PSB, dated as
of the Closing, in substantially the form of Exhibit 4 hereto.
9.3 Conditions to Obligations of PSB. The obligations of PSB 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 PSB pursuant to Section 11.5(b) of this
Agreement:
(a) Representations and Warranties. The representations and
warranties of SAB and MCB set forth or referred to in this Agreement
shall be true and correct 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.
(b) Performance of Agreements and Covenants. Each and all of
the agreements and covenants of SAB and MCB 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. SAB shall have delivered to PSB (i) a
certificate, dated as of the Effective Time and signed on its behalf by
its chief executive officer and its chief financial officer, to the
effect that the conditions of its obligations set forth in Section
9.3(a) and 9.3(b) of this Agreement have been satisfied, and (ii)
certified copies of resolutions duly adopted by SAB's Board of Directors
and MCB's Board of Directors and stockholder 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 PSB and its counsel
shall request.
(d) Opinion of Counsel. SAB and MCB shall have delivered to
PSB an opinion of Hand Xxxxxxxx, L.L.C., counsel to SAB and MCB, dated
as of the Effective Time, in substantially the form of Exhibit 5 hereto.
ARTICLE TEN
TERMINATION
10.1 Termination. Notwithstanding any other provision of this
Agreement, and notwithstanding the approval of this Agreement by the
stockholders of PSB and MCB or both, this Agreement may be terminated and
the Merger abandoned at any time prior to the Effective Time:
(a) By mutual consent of the Board of Directors of SAB and
MCB and the Board of Directors of PSB; or
(b) By the Board of Directors of either Party in the event of
a breach by the other Party of any representation or warranty contained
in this Agreement which cannot be or has not been cured within thirty
(30) days after the giving of written notice to the breaching Party of
such breach and which breach is reasonably likely, in the opinion of the
non-breaching Party, to have, individually or in the aggregate, a
Material Adverse Effect on the breaching Party; or
(c) By the Board of Directors of either Party in the event of
a material breach by the other Party of any covenant or agreement
contained in this Agreement which cannot be or has not been cured within
thirty (30) days after the giving of written notice to the breaching
Party of such breach; or
(d) By the Board of Directors of either Party (provided that
the terminating Party is not then in material breach of any
representation, warranty, covenant, or other agreement contained in this
Agreement) in the event (i) any Consent of any Regulatory Authority
required for consummation of the Merger and the other transactions
contemplated hereby shall have been denied by final nonappealable action
of such authority or if any action taken by such authority is not
appealed within the time limit for appeal, or (ii) if the stockholders
of PSB fail to vote their approval of this Agreement and the
transactions contemplated hereby as required by the ABCA and the Alabama
Banking Code at the Stockholders' Meeting where the transactions were
presented to such stockholders for approval and voted upon; or
(e) By the Board of Directors of PSB in the event the average
Market Value of SAB Common Stock for the Valuation Period is less than
$13.00 or more than $26.00 per share; or
(f) By the Board of Directors of SAB in the event the average
Market Value of SAB Common Stock for the Valuation Period is less than
$13.00 per share; or
(g) By the Board of Directors of SAB in the event that Deemed
Book Value is less than $1,900,000.
(h) By the Board of Directors of either Party in the event
that the Merger shall not have been consummated by March 31, 1998, 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(h); or
(i) By the Board of Directors of either Party in the event
that any of the conditions precedent to the obligations of such Party to
consummate the Merger cannot be satisfied or fulfilled by the date
specified in Section 10.1(h) of this Agreement.
10.2 Effect of Termination. In the event of the termination
and abandonment of this Agreement pursuant to Section 10.1 of this Agreement,
this Agreement shall become void and have no effect, except that (i) the
provisions of this Section 10.2 and Article Eleven and Section 8.5(b) of this
Agreement shall survive any such termination and abandonment, and (ii) a
termination pursuant to Sections 10.1(b), 10.1(c) or 10.1(h) of this
Agreement shall not relieve the breaching Party from Liability for an
uncured willful breach of a representation, warranty, covenant, or
agreement giving rise to such termination.
10.3 Survival of Representations and Covenants. The
respective representations, warranties, obligations, covenants, and
agreements of the Parties shall survive the Effective Time.
ARTICLE ELEVEN
MISCELLANEOUS
11.1 Expenses. Each of the parties shall bear and pay all costs
and expenses incurred by it or on its behalf in connection with the
transactions contemplated hereunder. It is agreed and understood that work
done by SAB and MCB and/or their respective attorneys and advisors to prepare
and file the Registration Statement shall not be deemed to be done on behalf
of PSB, and the costs and expenses therefor shall not be the responsibility
of PSB.
11.2 Brokers and Finders. 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 ("Broker Fees"). 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 PSB or SAB, each of PSB and
SAB, 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.
11.3 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.
11.4 Amendments. To the extent permitted by Law, this
Agreement may be amended by a subsequent writing signed by each of the
Parties upon the approval of the Boards of Directors of each of the Parties;
provided, however, that after approval of this Agreement by the holders of
PSB Common Stock or MCB Common Stock, there shall be made no amendment that
pursuant to the ABCA requires further approval by the PSB, SAB or MCB
stockholders without the further approval of such stockholders.
11.5 Waivers.
(a) Prior to or at the Effective Time, SAB, 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 PSB, to waive or extend the time for the compliance or
fulfillment by PSB of any and all of its obligations under this Agreement,
and to waive any or all of the conditions precedent to the obligations of SAB
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 SAB.
(b) Prior to or at the Effective Time, PSB, 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 SAB or MCB, to waive or extend the time for the compliance
or fulfillment by SAB or MCB of any and all of their respective obligations
under this Agreement, and to waive any or all of the conditions precedent to
the obligations of PSB 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
PSB.
11.6 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.
11.7 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:
PSB: Xxxxxxxx State Bank
000 Xxx Xxxxxxxx Xxxxxxx
Xxxxxxxx, Xxxxxxx 00000
Telecopy Number: (000) 000-0000
Attention: X. Xxxxxxx Xxxxxx, President
Copy to Counsel: Xxxxxx, Xxxxxx, Xxxxx & Xxxxx, P.A.
00 Xxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxx 00000-0000
Telecopy Number: (000) 000-0000
Attention: Xxxxx X. Xxxxx
SAB: South Alabama Bancorporation, Inc.
P. O. Box 3067 (36652)
000 Xx. Xxxxxx Xxxxxx
Xxxxxx, Xxxxxxx 00000
Telecopy Number: (000) 000-0000
Attention: W. Xxxx Xxxxx, Jr., President
MCB: The Monroe County Bank
P. O. Box 806 (36461-0806)
000 Xxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxx 00000
Telecopy Number: (000) 000-0000
Attention: Xxxxxx X. Xxxxx, President
Copy to Counsel
for SAB and MCB: Hand Xxxxxxxx, L.L.C.
3000 First National Bank Building
P. O. Box 123 (36601)
Xxxxxx, Xxxxxxx 00000
Telecopy Number: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxxx
11.8 Governing Law. This Agreement shall be governed by and construed
in accordance with the Laws of the State of Alabama, without regard to any
applicable conflicts of Laws.
11.9 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of
which together shall constitute one and the same instrument.
11.10 Captions. The captions contained in this Agreement are for
reference purposes only and are not part of this Agreement.
11.11 Enforcement of Agreement. The Parties hereto agree that
irreparable damage would occur in the event that any of the provisions of
this Agreement were not performed in accordance with its specific terms or
was otherwise breached. It is accordingly agreed that the Parties shall be
entitled to an injunction or injunctions to prevent breaches of this
Agreement and to enforce specifically the terms and provisions hereof in any
court of the United States or any state having jurisdiction, this being in
addition to any other remedy to which they are entitled at law or in equity.
11.12 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 and its corporate seal to be hereunto affixed and
attested by its respective duly authorized officers as of the day and year
first above written.
ATTEST: SOUTH ALABAMA BANCORPORATION,
INC.
/s/ F. Xxxxxxx Xxxxxxx BY:/s/ W. Xxxx Xxxxx, Jr.
Secretary W. Xxxx Xxxxx, Jr., President
[CORPORATE SEAL]
ATTEST: THE MONROE COUNTY BANK
/s/ Xxxx X. Xxxxxxx, Xx. BY:/s/ Xxxxxx X. Xxxxx
Cashier Xxxxxx X. Xxxxx, President
[CORPORATE SEAL]
ATTEST: XXXXXXXX STATE BANK
/s/ Xxxxxx X. Xxxxxxx, Xx. BY:/s/ X. Xxxxxxx Xxxxxx
Vice President X. Xxxxxxx Xxxxxx, President
[CORPORATE SEAL]
LIST OF EXHIBITS
Exhibit Number Description
1. Amendment to the Articles of Incorporation of The Monroe County
Bank (Section 2.1).
2. Amendment to the Bylaws of The Monroe County Bank (Section 2.2)
3. Form of agreement of Affiliates of PSB. (Section 8.9).
4. Form of opinion of counsel for PSB. (Section 9.2(d)).
5. Form of opinion of counsel for SAB. (Section 9.3(d)).
Exhibit 1
AMENDMENTS TO ARTICLES OF INCORPORATION
None.
Exhibit 2
AMENDMENTS TO BYLAWS
None.
Exhibit 3
AFFILIATE AGREEMENT
South Alabama Bancorporation, Inc.
Mobile, Alabama
Attention: W. Xxxx Xxxxx, Jr., President
Gentlemen:
The undersigned is a stockholder of Xxxxxxxx State Bank ( PSB ), a
corporation organized and existing under the laws of the State of Alabama and
located in Peterman, Alabama, and will become a stockholder of the South
Alabama Bancorporation, Inc. ("SAB") pursuant to the transactions described
in the Agreement and Plan of Merger, dated as of ________, 1997 (the
"Agreement"), by and between SAB, The Monroe County Bank, an Alabama banking
corporation and wholly owned subsidiary of SAB ("MCB"), and PSB. Under
the terms of the Agreement, PSB will be merged into and with MCB (the "Merger"),
and the shares of the common stock of PSB ("PSB Common Stock") will be
converted into and exchanged for shares of the common stock of SAB ("SAB
Common Stock"). This Affiliate Agreement represents an agreement between the
undersigned and SAB regarding certain rights and obligations of the
undersigned in connection with the shares of SAB to be received by the
undersigned as a result of the Merger.
In consideration of the Merger and the mutual covenants contained
herein, the undersigned and SAB hereby agree as follows:
1. Affiliate Status. The undersigned understands and agrees that as to PSB
he is an affiliate under Rule 145(c) as defined in Rule 405 of the
Rules and Regulations of the Securities and Exchange Commission ("SEC")
under the Securities Act of 1933, as amended ("1933 Act"), and the
undersigned anticipates that he will be such an affiliate at the time of
the Merger.
2. Covenants and Warranties of Undersigned. The undersigned represents,
warrants and agrees that:
(a) The SAB Common Stock received by the undersigned as a result of
the Merger will be taken for his own account and not for others,
directly or indirectly, in whole or in part.
(b) SAB has informed the undersigned that any distribution by the
undersigned of SAB Common Stock has not been registered under the 1933
act and that shares of SAB Common Stock received pursuant to the Merger
can only be sold by the undersigned (1)following registration under the
1933 Act, or (2) in conformity with the volume and other requirements of
Rule 145(d) promulgated by the SEC as the same now exist or may
hereafter be amended, or (3) to the extent some other exemption from
registration under the 1933 Act might be available. The undersigned
understands that SAB is under no obligation to file a registration
statement with the SEC covering the disposition of the undersigned's
shares of SAB Common Stock.
(c) The undersigned is aware that SAB intends to treat the Merger
as a tax-free reorganization under Section 368 of the Internal Revenue
Code ("Code") for federal income tax purposes. The undersigned agrees
to treat the transaction in the same manner as SAB for federal income
tax purposes. The undersigned acknowledges that Section 1.368-1(b) of
the Income Tax Regulations requires "continuity of interest" in order
for the Merger to be treated as tax-free under Section 368 of the Code.
This requirement is satisfied if, taking into account those PSB
stockholders who receive cash in exchange for their stock, who receive
cash in lieu of fractional shares, or who dissent from the Merger, there
is no plan or intention on the part of the PSB stockholders to sell
or otherwise dispose of the SAB Common Stock to be received in the
Merger that will reduce such stockholders' ownership to a number of
shares having, in the aggregate, a value at the time of the merger of
less than 50% of the total fair market value of the PSB Common Stock
outstanding immediately prior to the Merger. The undersigned has no
prearrangement, plan or intention to sell or otherwise dispose of an
amount of his SAB Common Stock to be received in the Merger which would
cause the foregoing requirement not to be satisfied.
3. Restrictions on Transfer. The undersigned understands and agrees that
stop transfer instructions with respect to the shares of SAB Common
Stock received by the undersigned pursuant to the Merger will be given
to SAB's Transfer Agent and that there will be placed on the
certificates of such shares, or shares issued in substitution thereof,
a legend stating in substance:
The shares represented by this certificate may not be sold, transferred
or otherwise disposed of except or unless (1) covered by an effective
registration statement under the Securities Act of 1933, as amended, (2)
in accordance with (i) Rule 145(d) (in the case of shares issued to an
individual who is not an affiliate or the Corporation) or (ii) Rule 144
(in the case of shares issued to an individual who is an affiliate of
the Corporation) of the Rules and Regulations of such Act, or (3) in
accordance with a legal opinion satisfactory to counsel for the
Corporation that such sale or transfer is otherwise exempt from the
registration requirements of such Act.
Such legend will also be placed on any certificate representing SAB securities
issued subsequent to the original issuance of the SAB Common Stock pursuant
to the Merger as a result of any stock dividend, stock split, or other
recapitalization as long as the SAB Common Stock issued to the undersigned
pursuant to the Merger has not been transferred in such manner to justify the
removal of the legend therefrom. If the provisions of Rules 144 and 145 are
amended to eliminate restrictions applicable of the SAB Common Stock received
by the undersigned pursuant to the Merger, or at the expiration of the
restrictive period set forth in Rule 145(d), SAB, upon the request of the
undersigned, will cause the certificates representing the share of SAB Common
Stock issued to the undersigned in connection with the Merger to be reissued
free of any legend relating to the restrictions set forth in Rules 144 and
145(d) upon receipt by SAB of an opinion of its counsel to the effect that
such legend may be removed.
4. Understanding of Restrictions on Dispositions. The undersigned has
carefully read the Agreement and this Affiliate Agreement and discussed
their requirements and impact upon his ability to sell, transfer, or
otherwise dispose of the shares of SAB Common Stock received by the
undersigned, to the extent he believes necessary, with his counsel
or counsel for PSB.
5. Filing of Reports by SAB. SAB agrees, for a period of three years after
the effective date of the Merger, to file on a timely basis all reports
required to be filed by it pursuant to Section 13 of the Securities
Exchange Act of 1934, as amended, so that the public information
provisions of Rule 145(d) promulgated by the SEC as the same are
presently in effect will be available to the undersigned in the event
the undersigned desires to transfer any shares of SAB Common Stock
issued to the undersigned pursuant to the Merger.
6. Transfer Under Rule 145(d). If the undersigned desires to sell or
otherwise transfer the shares of SAB Common Stock received by him in
connection with the Merger at any time during the restrictive period set
forth in Rule 145(d), the undersigned will provide the necessary
representation letter to the transfer agent for SAB Common Stock together
with such additional information as the transfer agent may reasonably
request. If SAB's counsel concludes that such proposed sale or transfer
complies with the requirements of Rule 145(d), SAB shall cause such
counsel to provide such opinions as may be necessary to SAB's Transfer
Agent so that the undersigned may complete the proposed sale or transfer.
7. Acknowledgments. The undersigned recognizes and agrees that the
foregoing provisions also apply to (i) the undersigned's spouse, (ii)
any relative of the undersigned or of the undersigned's spouse who has
the same home as the undersigned, (iii) any trust or estate in which the
undersigned, the undersigned's spouse, and any such relative
collectively own at least a 10% beneficial interest or of which any of
the foregoing serves as trustee, executor, or in any similar capacity,
and (iv) any corporation or other organization in which the undersigned,
the undersigned's spouse and any such relative collectively own at least
10% of any class of equity securities or of the equity interest. The
undersigned further recognizes that, in the event that the undersigned
is a director or officer of SAB or becomes a director or officer of SAB
upon consummation of the Merger, among other things, any sale of SAB
common Stock by the undersigned within a period of less than six months
following the effective time of the Mergers may subject the undersigned
to liability pursuant to Section 16(b) of the Securities Exchange Act of
1934, as amended.
8. Miscellaneous. This Affiliate Agreement is the complete agreement
between SAB and the undersigned concerning the subject matter hereof.
Any notice required to be sent to any party hereunder shall be sent by
registered or certified mail, return receipt requested, using the
addresses set forth herein or such other address as shall be furnished
in writing by the parties. This Affiliate Agreement shall be governed
by the laws of the State of Delaware.
This Affiliate Agreement is executed as of the day of , 1997.
Very truly yours,
Signature
Print Name
Address
AGREED TO AND ACCEPTED as of
, 1997
SOUTH ALABAMA BANCORPORATION, INC.
By:
Exhibit 0
XXXXXXXXXX XX XXXXXX, XXXXXX, XXXXX & XXXXX, P.A.
, 0000
Xxxxx Xxxxxxx Bancorporation, Inc.
Mobile, Alabama
The Monroe County Bank
Monroeville, Alabama
Re: Merger of Xxxxxxxx State Bank with and into The Monroe County Bank
Gentlemen:
We are counsel to Xxxxxxxx State Bank ('PSB'), a banking corporation
organized and existing under the laws of the State of Alabama, and have
represented PSB in connection with the execution and delivery of the
Agreement and Plan of Merger, dated as of __________, 1997 (the "Agreement"),
by and between South Alabama Bancorporation, Inc. ("SAB"), The Monroe County
Bank ("MCB") and PSB.
This opinion is delivered pursuant to Section 9.2(d) of the Agreement.
Capitalized terms used in this opinion shall have the meaning set forth in the
Agreement.
In rendering this opinion, we have examined the corporate books and
records of PSB, and made such other investigations as we have deemed
necessary. We have relied upon certificates of public officials and
officers of PSB as to certain questions of fact.
Based upon and subject to the foregoing, we are of the opinion that:
9. PSB is a corporation duly organized, validly existing and in good
standing under the laws of the State of Alabama with full corporate
power and authority to carry on the business in which it is engaged and
to own the properties owned by it.
10. The execution and delivery of the Agreement and compliance with its
terms do not and will not violate or contravene any provision of the
Articles of Incorporation or Bylaws of PSB or, to the best of our
knowledge, result in any conflict with, breach or, or default or
acceleration under any mortgage, agreement, lease, indenture, or other
instrument, order, judgment or decree to which PSB is a party or by
which PSB is bound.
11. In accordance with the Bylaws of PSB and pursuant to resolutions duly
adopted by its Board of Directors and stockholders, the Agreement has
been duly adopted and approved by the Board of Directors of PSB and by
the stockholders of PSB at the Stockholders' Meeting.
12. The Agreement has been duly and validly executed and delivered by PSB
and, assuming valid authorization, execution and delivery by SAB and MCB,
constitutes a valid and binding agreement of PSB enforceable in
accordance with its terms, except as enforceability may be limited by
bankruptcy, insolvency, reorganization, or similar laws affecting
creditors' rights generally, provided, however, that we express no
opinion as to the availability of the equitable remedy of specific
performance.
13. The authorized capital stock of PSB consists of _____________ shares of
PSB Common Stock, of which shares were issued and
outstanding as of , 1997. The shares of PSB Common Stock that
are issued and outstanding were not issued in violation of any statutory
preemptive rights of shareholders, were duly issued and are fully paid
and nonassessable under the Alabama Business Corporation Act. To our
knowledge, there are no options, subscriptions, warrants, calls, rights
or commitments obligating PSB to issue any equity securities or acquire
any of its equity securities.
This opinion is delivered solely for reliance by SAB and MCB.
Sincerely,
XXXXXX, XXXXXX, XXXXX & XXXXX, P.A.
Exhibit 5
LETTERHEAD OF HAND XXXXXXXX, L.L.C.
March 26, 0000
Xxxxxxxx Xxxxx Xxxx
Xxxxxxxx, Xxxxxxx
Re: Merger of Xxxxxxxx State Bank with and into The Monroe County Bank
Gentlemen:
We are counsel to South Alabama Bancorporation, Inc. ("SAB"), a
corporation organized and existing under the laws of the State of Alabama,
and The Monroe County Bank ("MCB"), a banking corporation organized and
existing under the laws of the State of Alabama, and have represented SAB and
MCB in connection with the execution and delivery of the Agreement and
Plan of Merger, dated as of _____________, 1997, (the Agreement ), by and
between Xxxxxxxx State Bank ("PSB"), MCB and SAB.
This opinion is delivered pursuant to Section 9.3(d) of the Agreement.
Capitalized terms used in this opinion shall have the meaning set forth in
the Agreement.
In rendering this opinion, we have examined the corporate books and
records of SAB and MCB, and made such other investigations as we have deemed
necessary. We have relied upon certificates of public officials and
officers of SAB and MCB as to certain questions of fact.
Based upon and subject to the foregoing, we are of the opinion that:
14. SAB is a corporation duly organized, validly existing and in good
standing under the laws of the State of Alabama with full corporate
power and authority to carry on the business in which it is engaged and
to own the properties owned by it.
15. MCB is a corporation duly organized, validly existing and in good
standing under the laws of the State of Alabama with full corporate
power and authority to carry on the business in which it is engaged and
to own the properties owned by it.
16. The execution and delivery of the Agreement and compliance with its
terms do not and will not violate or contravene any provision of the
Articles of Incorporation or Bylaws of SAB or, to the best of our
knowledge but without any independent investigation, result in any
conflict with, breach of, or default or acceleration under any mortgage,
agreement, lease, indenture, or other instrument, order, arbitration
award, judgment or decree to which SAB is a party or by which SAB is
bound.
17. The execution and delivery of the Agreement and compliance with its
terms do not and will not violate or contravene any provision of the
Articles of Incorporation or Bylaws of MCB or, to the best of our
knowledge but without any independent investigation, result in any
conflict with, breach of, or default or acceleration under any mortgage,
agreement, lease, indenture, or other instrument, order, arbitration
award, judgment or decree to which MCB is a party or by which MCB is
bound.
18. In accordance with the Bylaws of SAB and pursuant to resolutions duly
adopted by its Board of Directors and stockholders, the Agreement has
been duly adopted and approved by the Board of Directors of SAB.
19. In accordance with the Bylaws of MCB and pursuant to resolutions duly
adopted by its Board of Directors and stockholders, the Agreement has
been duly adopted and approved by the Board of Directors and
stockholders of MCB.
20. The Agreement has been duly and validly executed and delivered by SAB
and MCB and, assuming valid authorization, execution and delivery by
PSB, constitutes a valid and binding agreement of SAB and MCB
enforceable in accordance with its terms, except as enforceability may
be limited by bankruptcy, insolvency, reorganization, or similar laws
affecting creditors' rights generally, provided, however, that we
express no opinion as to the availability of the equitable remedy of
specific performance.
21. The authorized capital stock of SAB consists of _________ shares of SAB
Common Stock, of which ________ shares were issued and outstanding as of
____________, 1997, and __________ shares of preferred stock, no par
value, none of which is issued and outstanding. The shares of SAB
Common Stock that are issued and outstanding were not issued in
violation of any statutory preemptive rights of shareholders, were duly
issued and are fully paid and nonassessable under the Alabama Business
Corporation Act. The shares of SAB Common Stock to be issued to the
stockholders of PSB as contemplated by the Agreement are duly
authorized, have been registered under the Securities Act of 1933, as
amended, and when properly issued and delivered following consummation
of the Merger will be validly issued, fully paid and non-assessable.
This opinion is delivered solely for reliance by PSB.
Yours very truly,
HAND XXXXXXXX, L.L.C.
By:___________________________________________
