EXHIBIT 2.1
-----------
AGREEMENT AND PLAN OF REORGANIZATION
------------------------------------
THIS AGREEMENT AND PLAN OF REORGANIZATION (this "Agreement") is made and
entered into as of October 1, 2004 by and between GB&T BANCSHARES, INC.
("GB&T"), a corporation organized and existing under the laws of the State of
Georgia, with its principal office located in Gainesville, Georgia, and FNBG
BANCSHARES, INC. ("FNBG"), a corporation organized and existing under the laws
of the State of Georgia, with its principal office located in Duluth, Georgia.
PREAMBLE
--------
The Boards of Directors of GB&T and FNBG are of the opinion that the
transactions described herein are in the best interests of the parties and their
respective shareholders. This Agreement provides for the merger of FNBG with
and into GB&T, with GB&T being the surviving corporation of the merger. At the
effective time of such merger, the outstanding shares of capital stock of FNBG
will be converted into the right to receive shares of capital stock of GB&T. As
a result, shareholders of FNBG will become shareholders of GB&T, and the
wholly-owned subsidiary of FNBG, First National Bank of Gwinnett ("FNB
Gwinnett"), will continue to conduct business and operations as a wholly-owned
subsidiary of GB&T. The transactions described in this Agreement are subject to
the approvals of the Boards of Directors of both GB&T and FNBG, the shareholders
of FNBG, the Board of Governors of the Federal Reserve System, the Georgia
Department of Banking and Finance and the satisfaction of certain other
conditions described in this Agreement. It is the intention of the Parties 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.
As a condition and inducement to GB&T's willingness to consummate the
transactions contemplated by this Agreement, each of the directors of FNBG will
execute and deliver to GB&T an agreement (a "Support Agreement") within ten (10)
calendar days of the date of this Agreement, in substantially the form of
Exhibit 6 to this Agreement.
Certain terms used in this Agreement are defined in Section 11.1 of this
Agreement.
NOW, THEREFORE, in consideration of the above and the mutual warranties,
representations, covenants and agreements set forth herein, the receipt and
legal sufficiency of which are hereby acknowledged, the Parties agree as
follows:
ARTICLE I
---------
TRANSACTIONS AND TERMS OF MERGER
--------------------------------
1.1 MERGER. Subject to the terms and conditions of this Agreement, at the
------
Effective Time, FNBG shall be merged with and into GB&T in accordance
with the provisions of Sections 14-2-1101, 14-2-1103, and 14-2-1105 of
the GBCC and with the effect provided in Section 14-2-1106 of the GBCC
(the "Merger"). GB&T shall be the Surviving Corporation resulting from
the Merger. 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 GB&T and FNBG.
1
1.2 TIME AND PLACE OF CLOSING. The Closing will take place at 10:00 a.m.
--------------------------
on the date that the Effective Time occurs (or the immediately
preceding day if the Effective Time is earlier than 10:00 a.m.), or at
such other time as the Parties, acting through their Designated
Officers may mutually agree. The place of Closing shall be at the
offices of Xxxxxx, Xxxxxx & Xxxxx, LLP, Gainesville, Georgia, or such
other place as may be mutually agreed upon by the Parties.
1.3 EFFECTIVE TIME. The Merger and the other transactions contemplated by
---------------
this Agreement shall become effective on the date and at the time the
Articles of Merger reflecting the Merger shall become effective with
the Secretary of State of the State of Georgia (the "Effective Time").
Subject to the terms and conditions hereof, unless otherwise mutually
agreed upon in writing by the Designated Officer of each Party, the
Parties shall use their reasonable efforts to cause the Effective Time
to occur on the last business day of the month in which occurs the
last to occur of (a) 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, (b) the date on which the shareholders of FNBG approve
this Agreement to the extent such approval is required by applicable
Law; or such later date as may be mutually agreed upon in writing by
the Designated Officer of each Party.
1.4 EXECUTION OF SUPPORT AGREEMENTS. Within ten (10) calendar days of the
-------------------------------
execution of this Agreement and as a condition hereto, each of the
directors of FNBG will execute and deliver to GB&T a Support
Agreement, in substantially the form of Exhibit 6 to this Agreement.
ARTICLE II
----------
TERMS OF MERGER
---------------
2.1 ARTICLES OF INCORPORATION. The Articles of Incorporation of GB&T in
---------------------------
effect immediately prior to the Effective Time shall be the Articles
of Incorporation of the Surviving Corporation from and after the
Effective Time until otherwise amended or repealed.
2.2 BYLAWS. The Bylaws of GB&T in effect immediately prior to the
------
Effective Time shall be the Bylaws of the Surviving Corporation from
and after the Effective Time until otherwise amended or repealed.
2.3 DIRECTORS AND OFFICERS.
----------------------
(a) The officers and directors of the Surviving Corporation from and
after the Effective Time shall consist of the officers and
directors of GB&T immediately preceding the Effective Time,
together with a director from the present FNBG board of directors
to be selected by the GB&T board of directors. Such officers and
directors shall serve in accordance with the Articles of
Incorporation and Bylaws of the Surviving Corporation.
(b) The directors of FNB Gwinnett from and after the Effective Time
shall consist of the directors of FNB Gwinnett immediately
preceding the Effective Time, together with a director from the
GB&T board of directors as selected by the
2
GB&T board of directors. Such directors shall serve in accordance
with the Articles of Incorporation and Bylaws of FNB Gwinnett.
ARTICLE III
-----------
MANNER OF CONVERTING SHARES
---------------------------
3.1 CONVERSION OF SHARES. Subject to the provisions of this Article III,
--------------------
at the Effective Time, by virtue of the Merger and without any action
on the part of GB&T or FNBG, or the shareholders of either of the
foregoing, the shares of the constituent corporations shall be
converted as follows:
(a) Each share of GB&T 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 FNBG Common Stock (excluding shares held by GB&T or
FNBG or any of their respective Subsidiaries, in each case other
than in a fiduciary capacity or as a result of debts previously
contracted) issued and outstanding at the Effective Time shall
cease to be outstanding and shall be converted into and exchanged
for the right to receive (1) cash, and/or (2) shares of GB&T
Common Stock, as stated hereinafter. Subject to the overall limit
that no more than 30 percent of the consideration for conversion
of all of the FNBG shares be paid in the form of cash, individual
shareholders of FNBG will be given the option to select either
(X) cash of $30.00 for each share of FNBG stock or (Y) 1.38
shares of GB&T Common Stock for each share of FNBG stock ("the
Exchange Ratio"). Alternatively, shareholders of FNBG may select
a percentage they wish to receive in cash and a percentage in
GB&T Common Stock. In the event that the total amount to be
received in cash as selected by the shareholders of FNBG exceeds
$8,753,760.00, then the amount of cash to be received by each
FNBG shareholder electing some portion as cash shall be adjusted
downward, pro-rata, so that the overall limit of cash of
$8,753,760.00 is not exceeded. If no election is made by a
shareholder, then the shareholder shall receive One Hundred
Percent (100%) in GB&T Common Stock.
3.2 ANTI-DILUTION PROVISIONS. In the event GB&T or FNBG changes the
-------------------------
number of shares of GB&T Common Stock or FNBG Common Stock,
respectively, issued and outstanding prior to the Effective Time as a
result of a stock split, reverse stock split, stock dividend or
similar recapitalization with respect to such stock and the record
date therefor (in the case of a stock dividend) or the effective date
therefor (in the case of a stock split or similar recapitalization)
shall be after the date hereof and prior to the Effective Time, the
Exchange Ratio shall be proportionately adjusted.
3.3 SHARES HELD BY GB&T OR FNBG. Each of the shares of FNBG Common Stock
----------------------------
held by any GB&T Company or by any FNBG 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.
3.4 CONVERSION OF STOCK OPTIONS; RESTRICTED STOCK.
---------------------------------------------
3
(a) Each option to purchase FNBG Common Stock ("FNBG Option")
outstanding at the Effective Time shall be converted into and
become rights with respect to GB&T Common Stock and GB&T shall
assume each such option in accordance with the terms of the stock
option plan under which it was issued and the stock option or
other agreement by which it is evidenced. From and after the
Effective Time (all subject to appropriate adjustment for any
transactions described in Section 3.2 if the record date with
respect to such transaction is on or after the Effective Time),
(i) each FNBG Option assumed by GB&T may be exercised solely for
GB&T Common Stock, (ii) the number of GB&T Common Stock subject
to each FNBG Option shall be equal to the number of shares of
FNBG Common Stock subject to each such FNBG Option immediately
prior to the Effective Time, multiplied by the Exchange Ratio and
(iii) the per share exercise price of the GB&T Common Stock
subject to the FNBG Options shall be determined by dividing the
per share exercise price of the FNBG Common Stock subject to each
such FNBG Option by the Exchange Ratio and rounding down to the
nearest cent. It is intended that the foregoing assumption of
FNBG Options shall be undertaken in a manner that will not
constitute a "modification" as defined in Section 424 of the
Internal Revenue Code as to any FNBG Option which is an incentive
stock option as defined in Section 422 of the Internal Revenue
Code. GB&T will modify each stock option that it assumes (as long
as in the opinion of counsel for FNBG such "modification" will
not constitute a modification as defined in Section 424 of the
Internal Revenue Code for options which are incentive stock
options) to provide that the options may be exercised, in
addition to the other payment methods set out in the relevant
option plan, by the reduction of the number of shares subject to
the option so that the difference between the option exercise
price for such shares and the fair market value of such shares on
the option exercise date shall equal the option exercise price of
the total number of shares for which the option is being
exercised.
(b) At all times after the Effective Time, GB&T shall reserve for
issuance such number of GB&T Common Stock as shall be necessary
to permit the exercise of FNBG Options in the manner contemplated
by this Agreement. At or prior to, or at the election of GB&T
within a reasonable time (not to exceed 30 days) after, the
Effective Time, GB&T shall file a Registration Statement on Form
S-3 or Form S-8, as the case may be (or any successor or other
appropriate form), with respect to the GB&T Common Stock subject
to the FNBG Options and shall use its best efforts to maintain
the effectiveness of such registration statement or registration
statements (and maintain the current status of the prospectus or
prospectuses contained therein) for so long as any of the FNBG
Options remain outstanding. GB&T shall make any filings required
under any applicable state securities laws to qualify the GB&T
Common Stock subject to such FNBG Options for resale thereunder.
3.5 DISSENTING SHAREHOLDERS. Any holder of shares of FNBG Common Stock
------------------------
who perfects such holder's dissenters' rights of appraisal in
accordance with and as contemplated by Article 13 of the GBCC shall be
entitled to receive the value of such shares in cash as determined
pursuant to such provision of the GBCC; provided, that no such payment
shall be made to any dissenting shareholder unless and until such
dissenting shareholder has complied with the applicable provisions of
the GBCC and has surrendered to GB&T
4
the certificate or certificates representing shares for which payment
is being made. In the event that after the Effective Time a dissenting
shareholder of FNBG fails to perfect, or effectively withdraws or
loses, such holder's right to appraisal and of payment for such
holder's shares, GB&T shall issue and deliver the consideration to
which such holder of shares of FNBG Common Stock is entitled under
this Article III (without interest) upon surrender by such holder of
the certificate or certificates representing shares of FNBG Common
Stock held by such holder.
3.6 FRACTIONAL SHARES. Notwithstanding any other provision of this
------------------
Agreement, each holder of shares of FNBG Common Stock exchanged
pursuant to the Merger, or of options to purchase shares of FNBG
Common Stock, who would otherwise have been entitled to receive a
fraction of a share of GB&T Common Stock or the right to purchase a
fraction of a share (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 GB&T Common Stock multiplied by $21.74. No such holder will
be entitled to dividends, voting rights, or any other rights as a
stockholder in respect of any fractional shares.
ARTICLE IV
----------
EXCHANGE OF SHARES
------------------
4.1 EXCHANGE PROCEDURES. Promptly after the Effective Time, GB&T and FNBG
-------------------
shall cause the exchange agent selected by GB&T (the "Exchange Agent")
to mail to the former holders of FNBG Common Stock appropriate
transmittal materials (which shall specify that delivery shall be
effected, and risk of loss and title to the certificates theretofore
representing shares of FNBG Common Stock shall pass, only upon proper
delivery of such certificates to the Exchange Agent). After the
Effective Time, each holder of shares of FNBG Common Stock (other than
shares to be canceled pursuant to Section 3.3 of this Agreement or
shares as to which dissenters' rights have been perfected as provided
in Section 3.5 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 and 3.6 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.
Neither GB&T nor the Exchange Agent shall be obligated to deliver the
consideration to which any former holder of FNBG Common Stock is
entitled as a result of the Merger until such holder surrenders his or
her certificate or certificates representing the shares of FNBG Common
Stock for exchange, as provided in this Section 4.1 or appropriate
affidavits and indemnity agreements in the event such share
certificates have been lost, mutilated, or destroyed. The certificate
or certificates of FNBG Common Stock so surrendered shall be duly
endorsed as GB&T may require. Any other provision of this Agreement
notwithstanding, neither GB&T nor the Exchange Agent shall be liable
to a holder of FNBG 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 FNBG SHAREHOLDERS. The stock transfer books of FNBG
-----------------------------------
shall be closed as to holders of FNBG Common Stock immediately prior
to the Effective Time and no transfer of FNBG Common Stock by any such
holder shall thereafter be made or
5
recognized. Until surrendered for exchange in accordance with the
provisions of Section 4.1 of this Agreement, each certificate
theretofore representing shares of FNBG Common Stock (other than
shares to be canceled pursuant to Section 3.3 or shares as to which
dissenters' rights have been perfected as provided in Section 3.5 of
this Agreement) shall from and after the Effective Time represent for
all purposes only the right to receive the consideration provided in
Section 3.1 and 3.6 of this Agreement in exchange therefor. To the
extent permitted by Law, former holders of record of FNBG Common Stock
shall be entitled to vote after the Effective Time at any meeting of
GB&T shareholders the number of whole shares of GB&T Common Stock into
which their respective shares of FNBG Common Stock are converted,
regardless of whether such holders have exchanged their certificates
representing FNBG Common Stock for certificates representing GB&T
Common Stock in accordance with the provisions of this Agreement.
Whenever a dividend or other distribution is declared by GB&T on the
GB&T 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, but
no dividend or other distribution payable to the holders of record of
GB&T Common Stock as of any time subsequent to the Effective Time
shall be delivered to the holder of any certificate representing
shares of FNBG Common Stock issued and outstanding at the Effective
Time until such holder surrenders such certificate for exchange as
provided in Section 4.1 of this Agreement. However, upon surrender of
such FNBG Common Stock certificate, both GB&T 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 certificate.
ARTICLE V
---------
REPRESENTATIONS AND WARRANTIES OF FNBG
--------------------------------------
FNBG hereby represents and warrants to GB&T as follows:
5.1 ORGANIZATION, STANDING, AND POWER. FNBG is a corporation duly
------------------------------------
organized, validly existing, and in good standing under the Laws of
the State of Georgia and is duly registered as a bank holding company
under the BHC Act and under Georgia law. FNBG has the corporate power
and authority to carry on its business as now conducted and to own,
lease and operate its Assets. FNBG is duly qualified or licensed to
transact business as a foreign corporation in good standing in the
states of the United States and foreign jurisdictions where the
character of its Assets or the nature or conduct of its business
requires it to be so qualified or licensed, except for such
jurisdictions in which the failure to be so qualified or licensed is
not reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on FNBG.
5.2 AUTHORITY; NO BREACH BY AGREEMENT.
---------------------------------
(a) FNBG has the corporate power and authority necessary to execute,
deliver and perform its obligations under this Agreement and to
consummate the transactions contemplated hereby. The execution,
delivery and performance of this Agreement and the consummation
of the transactions contemplated herein, including the Merger,
have been duly and validly authorized by all necessary corporate
action in respect thereof on the part of FNBG, subject to the
approval
6
of this Agreement by the holders of a majority of the outstanding
shares of FNBG Common Stock, which is the only shareholder vote
required for approval of this Agreement and consummation of the
Merger by FNBG. Subject to such requisite shareholder approval,
this Agreement represents a legal, valid and binding obligation
of FNBG, enforceable against FNBG 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 and except that the availability of the equitable
remedy of specific performance or injunctive relief is subject to
the discretion of the court before which any proceeding may be
brought).
(b) Neither the execution and delivery of this Agreement by FNBG,
nor, except as described in Section 5.2 of the FNBG Disclosure
Memorandum, the consummation by FNBG of the transactions
contemplated hereby, nor compliance by FNBG with any of the
provisions hereof will (i) conflict with or result in a breach of
any provision of FNBG's Articles of Incorporation or Bylaws, or
(ii) to the Knowledge of FNBG subject to the receipt of the
requisite approvals referred to in Section 9.1(b) of this
Agreement, 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 FNBG Company under, any Contract or Permit of
any FNBG Company, where such Default or Lien, or any failure to
obtain such Consent, is reasonably likely to have, individually
or in the aggregate, a Material Adverse Effect on FNBG, or (iii)
to the Knowledge of FNBG 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 FNBG 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 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, 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 FNBG, no notice to, filing with, or
Consent of any public body or authority is necessary for the
consummation by FNBG of the Merger and the other transactions
contemplated in this Agreement.
5.3 CAPITAL STOCK.
-------------
(a) The authorized capital stock of FNBG consists of 10,000,000
shares of FNBG Common Stock, of which 777,895 shares are issued
and outstanding as of the date of this Agreement and not more
than 777,895 shares will be issued and outstanding at the
Effective Time. All of the issued and outstanding shares of
capital stock of FNBG are duly and validly issued and outstanding
and are fully paid and nonassessable under the GBCC. None of the
outstanding shares of capital stock of FNBG have been issued in
violation of any preemptive rights of the current or past
shareholders of FNBG.
7
(b) Except as set forth in Section 5.3 of this Agreement, or as
disclosed in Section 5.3 of the FNBG Disclosure Memorandum, there
are no shares of capital stock or other equity securities of FNBG
outstanding and no outstanding Rights relating to the capital
stock of FNBG.
5.4 FNBG SUBSIDIARIES. FNBG has disclosed in Section 5.4 of the FNBG
------------------
Disclosure Memorandum all of the FNBG Subsidiaries as of the date of
this Agreement. Except as disclosed in Section 5.4 of the FNBG
Disclosure Memorandum, FNBG or one of its Subsidiaries owns all of the
issued and outstanding shares of capital stock of each FNBG
Subsidiary. No equity securities of any FNBG Subsidiary are or may
become required to be issued (other than to another FNBG Company) by
reason of any Rights, and there are no Contracts by which any FNBG
Subsidiary is bound to issue (other than to another FNBG Company)
additional shares of its capital stock or Rights, or by which any FNBG
Company is or may be bound to transfer any shares of the capital stock
of any FNBG Subsidiary (other than to another FNBG Company). There are
no Contracts relating to the rights of any FNBG Company to vote or to
dispose of any shares of the capital stock of any FNBG Subsidiary. All
of the shares of capital stock of each FNBG Subsidiary held by a FNBG
Company are fully paid and nonassessable under the applicable Law of
the jurisdiction in which such Subsidiary is incorporated or organized
and are owned by a FNBG Company free and clear of any Lien except as
disclosed by the FNBG Disclosure Memorandum. Each FNBG Subsidiary is
either a bank, a savings association or a corporation and is duly
organized, validly existing, and (as to corporations) in good standing
under the Laws of the jurisdiction in which it is organized and has
the corporate power and authority necessary for it to own, lease and
operate its Assets and to carry on its business as now conducted. Each
FNBG Subsidiary is duly qualified or licensed to transact business as
a foreign corporation in good standing in the states of the United
States and foreign jurisdictions where the character of its Assets or
the nature or conduct of its business requires it to be so qualified
or licensed, except for such jurisdictions in which the failure to be
so qualified or licensed is not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on FNBG.
Each FNBG Subsidiary that is a depository institution is an "insured
institution" as defined in the Federal Deposit Insurance Act and
applicable regulations thereunder, and the deposits in which are
insured by the Bank Insurance Fund or the Savings Association
Insurance Fund, as appropriate.
5.5 FINANCIAL STATEMENTS. FNBG has included in Section 5.5 of the FNBG
---------------------
Disclosure Memorandum copies of all FNBG Financial Statements for
periods ended prior to the date hereof and will deliver to GB&T copies
of all FNBG Financial Statements prepared subsequent to the date
hereof. The FNBG Financial Statements (as of the dates thereof and for
the periods covered thereby) (a) are, or if dated after the date of
this Agreement will be, in accordance with the books and records of
the FNBG Companies, which are or will be, as the case may be, complete
and correct in all Material respects and which have been or will have
been, as the case may be, maintained in accordance with good business
practices, and (b) present or will present, as the case may be and in
all Material respects, fairly the consolidated financial position of
the FNBG Companies as of the dates indicated and the consolidated
results of operations, changes in shareholders' equity, and cash flows
of the FNBG Companies for the periods indicated, in accordance with
GAAP (subject to any exceptions as to consistency specified therein or
as may be indicated in the
8
notes thereto or, in the case of interim financial statements, to
normal recurring year-end adjustments that are not Material in amount
or effect).
5.6 ABSENCE OF UNDISCLOSED LIABILITIES. No FNBG Company has any
-------------------------------------
Liabilities that are reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on FNBG except (i) Liabilities
which are accrued or reserved against in the consolidated balance
sheets of FNBG as of July 31, 2004, included in the FNBG Financial
Statements or reflected in the notes thereto. No FNBG Company has
incurred or paid any Liability since July 31, 2004 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 FNBG.
5.7 ABSENCE OF CERTAIN CHANGES OR EVENTS. Since July 31, 2004, except as
-------------------------------------
disclosed in Section 5.7 of the FNBG Disclosure Memorandum and to the
Knowledge of FNBG, (a) 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 FNBG,
and (b) the FNBG Companies have not taken any action, or failed to
take any action, prior to the date of this Agreement, which action or
failure, if taken after the date of this Agreement, would represent or
result in a material breach or violation of any of the covenants and
agreements of FNBG provided in Article VII of this Agreement and which
would likely have a Material Adverse Effect on FNBG.
5.8 TAX MATTERS.
------------
(a) All Tax returns required to be filed by or on behalf of any of
the FNBG Companies have been timely filed or requests for
extensions have been timely filed, granted, and have not expired,
except to the extent that all such failures to file, taken
together, are not reasonably likely to have a Material Adverse
Effect on FNBG and all returns filed are complete and accurate in
all Material respects to the Knowledge of FNBG. All Taxes shown
on filed returns have been paid or adequate provision for the
payment thereof has been made. As of the date of this Agreement,
to the Knowledge of FNBG, 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
FNBG, except as reserved against in the FNBG Financial Statements
delivered prior to the date of this Agreement or as disclosed in
Section 5.8(a) of the FNBG Disclosure Memorandum. All Taxes and
other Liabilities due with respect to completed and settled
examinations or concluded Litigation have been paid.
(b) Except as disclosed in Section 5.8(b) of the FNBG Disclosure
Memorandum, none of the FNBG Companies has executed an extension
or waiver of any statute of limitations on the assessment or
collection of any Tax due that is currently in effect, and no
unpaid tax deficiency has been asserted in writing against or
with respect to any FNBG Company, which deficiency is reasonably
likely to have, individually or in the aggregate, a Material
Adverse Effect on FNBG.
(c) Adequate provision for any Taxes due or to become due for any of
the FNBG Companies for the period or periods through and
including the date of the
9
respective FNBG Financial Statements has been made and is
reflected on such FNBG Financial Statements.
(d) Deferred Taxes of the FNBG Companies have been provided for in
accordance with GAAP.
(e) To the Knowledge of FNBG, each of the FNBG Companies is in
compliance with, and its records contain all information and
documents (including, without limitation, properly completed IRS
Forms W-9) necessary to comply with, all applicable information
reporting and Tax withholding requirements under federal, state
and local Tax Laws, and such records identify with specificity
all accounts subject to backup withholding under Section 3406 of
the Internal Revenue Code, except for such instances of
noncompliance and such omissions as are not reasonably likely to
have, individually or in the aggregate, a Material Adverse Effect
on FNBG.
5.9 ALLOWANCE FOR POSSIBLE LOAN LOSSES. The allowance for possible loan or
----------------------------------
credit losses (the "Allowance") shown on the balance sheet of FNB
Gwinnett included in the most recent FNBG Financial Statements dated
prior to the date of this Agreement was, and the Allowance shown on
the balance sheet of FNB Gwinnett included in the FNBG Financial
Statements as of dates subsequent to the execution of this Agreement
will be, as of the dates thereof, adequate to the Knowledge of FNBG
(within the meaning of GAAP and applicable regulatory requirements or
guidelines) t o provide for losses relating to or inherent in the loan
and lease portfolios (including accrued interest receivables) of FNB
Gwinnett and other extensions of credit (including letters of credit
and commitments to make loans or extend credit) by FNB Gwinnett as of
the dates thereof except where the failure of such Allowance to be so
adequate is not reasonably likely to have a Material Adverse Effect on
FNBG.
5.10 ASSETS. Except as disclosed in Section 5.10 of the FNBG Disclosure
------
Memorandum or as disclosed or reserved against in the FNBG Financial
Statements, the FNBG Companies have good and marketable title, and to
the Knowledge of FNBG, free and clear of all Liens, to all of their
respective Assets indicated as owned by the respective Company as of
the date of the respective FNBG Statement. To the Knowledge of FNBG,
all Material tangible properties used in the businesses of the FNBG
Companies are in good condition, reasonable wear and tear excepted,
and are usable in the ordinary course of business consistent with
FNBG's past practices. All Assets which are Material to the business
of the FNBG Companies and held under leases or subleases by any of the
FNBG Companies are held under valid Contracts enforceable in
accordance with their respective terms (except as enforceability may
be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or other Laws affecting the enforcement of creditors'
rights generally and except that the availability of the equitable
remedy of specific performance or injunctive relief is subject to the
discretion of the court before which any proceedings may be brought),
and each such Contract is in full force and effect. The policies of
fire, theft, liability and other insurance maintained with respect to
the Assets or businesses of the FNBG Companies provide adequate
coverage under current industry practices against loss or Liability,
and the fidelity and blanket bonds in effect as to which any of the
FNBG Companies is a named insured are reasonably sufficient. The
Assets of the FNBG
10
Companies include all assets required to operate the business of the
FNBG Companies as presently conducted.
5.11 ENVIRONMENTAL MATTERS. Except as disclosed in Section 5.11 of the
----------------------
FNBG Disclosure Memorandum:
(a) To the Knowledge of FNBG, each FNBG Company, its Participation
Facilities and its Loan Properties are, and have been, in
compliance with all Environmental Laws, except for noncompliance
which is not reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on FNBG.
(b) There is no Litigation pending or to the Knowledge of FNBG
threatened before any court, governmental agency or authority or
other forum in which any FNBG Company, or to the Knowledge of
FNBG, any of its Loan Properties or Participation Facilities has
been or, with respect to threatened Litigation, may be named as a
defendant or potentially responsible party (i) for alleged
noncompliance with any Environmental Law or (ii) relating to the
release into the Environment of any Hazardous Material, whether
or not occurring at, on, under or involving a site owned, leased
or operated by any FNBG Company or any of its Loan Properties or
Participation Facilities, except for such Litigation pending or
threatened the resolution of which is not reasonably likely to
have, individually or in the aggregate, a Material Adverse Effect
on FNBG, and to the Knowledge of FNBG, there is no reasonable
basis for any such Litigation.
(c) To the Knowledge of FNBG, there have been no releases of
Hazardous Material in, on, under or affecting any Participation
Facility or Loan Property, except such as are not reasonably
likely to have, individually or in the aggregate, a Material
Adverse Effect on FNBG.
5.12 COMPLIANCE WITH LAWS. To the Knowledge of FNBG, each FNBG Company has
--------------------
in effect all Permits necessary for it to own, lease or operate its
Assets and to carry on its business as now conducted, except for those
Permits the absence of which are not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on FNBG,
and, to the Knowledge of FNBG, there has occurred no Default under any
such Permit, other than Defaults which are not reasonably likely to
have, individually or in the aggregate, a Material Adverse Effect on
FNBG. Except as disclosed in Section 5.12 of the FNBG Disclosure
Memorandum, no FNBG Company:
(a) to the Knowledge of FNBG, is in violation of any Laws, Orders or
Permits applicable to its business or employees conducting its
business, except for violations which are not reasonably likely
to have, individually or in the aggregate, a Material Adverse
Effect on FNBG; and
(b) to the Knowledge of FNBG, has received any notification or
communication from any agency or department of federal, state, or
local government or any Regulatory Authority or the staff thereof
(i) asserting that any FNBG Company is not in compliance with any
of the Laws or Orders which such governmental authority or
Regulatory Authority enforces, where such noncompliance is
reasonably likely to have, individually or in the aggregate, a
Material Adverse
11
Effect on FNBG, (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 FNBG, or (iii)
requiring any FNBG Company 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. No FNBG Company is the subject of any Litigation
----------------
asserting that it or any other FNBG Company has committed an unfair
labor practice (within the meaning of the National Labor Relations Act
or comparable state law) or seeking to compel it or any other FNBG
Company to bargain with any labor organization as to wages or
conditions of employment, nor is there any strike or other labor
dispute involving any FNBG Company, pending or, to its Knowledge,
threatened, nor, to its Knowledge, is there any activity involving any
FNBG Company's employees seeking to certify a collective bargaining
unit or engaging in any other organization activity.
5.14 EMPLOYEE BENEFIT PLANS.
------------------------
(a) FNBG has disclosed in Section 5.14 of the FNBG Disclosure
Memorandum and delivered or made available to GB&T prior to the
execution of this Agreement copies in each case of all pension,
retirement, profit-sharing, deferred compensation, stock option,
employee stock ownership, severance pay, vacation, bonus, or
other incentive plans, 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 any
FNBG Company or Affiliate thereof for the benefit of employees,
retirees, dependents, spouses, directors, independent
contractors, or other beneficiaries and under which employees,
retirees, dependents, spouses, directors, independent
contractors, or other beneficiaries are eligible to participate
(collectively, the "FNBG Benefit Plans"). Any of the FNBG 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
"FNBG ERISA Plan." Each FNBG 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 "FNBG Pension Plan." No
FNBG Pension Plan is or has been a multi-employer plan within the
meaning of Section 3(37) of ERISA.
(b) To the Knowledge of FNBG, all FNBG Benefit Plans are in
compliance with the applicable terms of ERISA, the Internal
Revenue Code, and any other applicable Laws the breach or
violation of which are reasonably likely to have, individually or
in the aggregate, a Material Adverse Effect on FNBG. Each FNBG
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 to
the Knowledge of FNBG, there are no circumstances likely to
result in revocation of any such favorable determination letter.
To the
12
Knowledge of FNBG, no FNBG Company nor any other party has
engaged in a transaction with respect to any FNBG Benefit Plan
that, assuming the taxable period of such transaction expired as
of the date hereof, would subject any FNBG Company to a tax or
penalty imposed by either Section 4975 of the Internal Revenue
Code or Section 502(i) of ERISA in amounts which are reasonably
likely to have, individually or in the aggregate, a Material
Adverse Effect on FNBG.
(c) Neither FNBG nor any ERISA Affiliate of FNBG maintains an
"employee pension benefit plan," within the meaning of Section
3(2) of ERISA that is or was subject to Title IV of ERISA.
(d) Neither FNBG nor any ERISA Affiliate of FNBG has any past,
present or future obligation or liability to contribute to any
multi-employer plan, as defined in Section 3(37) of ERISA.
(e) Except as disclosed in Section 5.14(e) of the FNBG Disclosure
Memorandum, (i) no FNBG Company has any obligations for retiree
health and life benefits under any of the FNBG Benefit Plans,
except as required by Section 601 of ERISA and Section 4980B of
the Code; (ii)there are no restrictions on the rights of any FNBG
Company to amend or terminate any such Plan; and (iii) any
amendment or termination of any such Plan will not cause any FNBG
Company to incur any Liability that is reasonably likely to have
a Material Adverse Effect on FNBG.
(f) Except as disclosed in Section 5.14(f) of the FNBG Disclosure
Memorandum, neither the execution and delivery of this Agreement
or 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 any
FNBG Company from any FNBG Company under any FNBG Benefit Plan or
otherwise, (ii) increase any benefits otherwise payable under any
FNBG Benefit Plan, or (iii) result in any acceleration of the
time of payment or vesting of any such benefit.
(g) The actuarial present values of all accrued deferred compensation
entitlements (including, without limitation, entitlements under
any executive compensation, supplemental retirement, or
employment agreement) of employees and former employees of any
FNBG Company and their respective beneficiaries have been fully
reflected on the FNBG Financial Statements to the extent required
by and in accordance with GAAP, in all Material respects.
(h) To the Knowledge of FNBG, FNBG and each ERISA Affiliate of FNBG
has complied with the continuation of coverage requirements of
Section 1001 of the Consolidated Omnibus Budget Reconciliation
Act of 1985, as amended, and ERISA Sections 601 through 608 in a
manner that will not cause any FNBG Company to incur any
Liability that is reasonably likely to have a Material Adverse
Effect on FNBG.
(i) Except as disclosed in Section 5.14(i) of the FNBG Disclosure
Memorandum, neither FNBG nor any ERISA Affiliate of FNBG is
obligated, contingently or
13
otherwise, under any agreement to pay any amount which would be
treated as a "parachute payment," as defined in Section 280G(b)
of the Internal Revenue Code (determined without regard to
Section 280G(b)(2)(A)(ii) of the Internal Revenue Code).
(j) Other than routine claims for benefits, to the Knowledge of FNBG,
there are no actions, audits, investigations, suits or claims
pending against any FNBG Benefit Plan, any trust or other funding
agency created thereunder, or against any fiduciary of any FNBG
Benefit Plan or against the assets of any FNBG Benefit Plan.
5.15 MATERIAL CONTRACTS. Except as disclosed in Section 5.15 of the FNBG
-------------------
Disclosure Memorandum or otherwise reflected in the FNBG Financial
Statements, none of the FNBG Companies, nor any of their respective
Assets, businesses or operations, is a party to, or is bound or
affected by, or receives benefits under, (a) any employment,
severance, termination, consulting or retirement Contract providing
for aggregate payments to any Person in any calendar year in excess of
$25,000, excluding "at will" employment arrangements, (b) any Contract
relating to the borrowing of money by any FNBG Company or the
guarantee by any FNBG Company of any such obligation (other than
Contracts evidencing deposit liabilities, purchases of federal funds,
Federal Home Loan Bank advances, fully-secured repurchase agreements,
trade payables, and Contracts relating to borrowings or guarantees
made in the ordinary course of business), (c) any Contracts between or
among FNBG Companies, and (d) any other Contract (excluding this
Agreement) or amendment thereto that is required to be filed as an
Exhibit to Form 10-KSB or Form 10-QSB filed by FNBG with the SEC as of
the date of this Agreement that has not been filed as an exhibit to
any FNBG Form 10-KSB or 10-QSB filed with the SEC (together with all
Contracts referred to in Sections 5.10 and 5.14(a) of this Agreement,
the "FNBG Contracts"). None of the FNBG Companies is in Default under
any FNBG Contract, other than Defaults which are not reasonably likely
to have, individually or in the aggregate, a Material Adverse Effect
on FNBG. All of the indebtedness of any FNBG Company for money
borrowed is prepayable at any time by such FNBG Company without
penalty or premium except as disclosed in FNBG Disclosure Memorandum.
5.16 LEGAL PROCEEDINGS. Except as disclosed in Section 5.16 of the FNBG
------------------
Disclosure Memorandum, there is no Litigation instituted or pending,
or, to the Knowledge of FNBG, threatened (or unasserted but considered
probable of assertion and which if asserted would have at least a
reasonable probability of an unfavorable outcome) against any FNBG
Company, or against any Asset, interest, or right of any of them, that
is reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on FNBG, nor are there any Orders of any
Regulatory Authorities, other governmental authorities, or arbitrators
outstanding against any FNBG Company, that are reasonably likely to
have, individually or in the aggregate, a Material Adverse Effect on
FNBG.
5.17 REPORTS. Since January 1, 2000, each FNBG 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 (a)
the Regulatory Authorities, and (b) any applicable federal and 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
14
aggregate, a Material Adverse Effect on FNBG). 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 to FNBG's Knowledge did not, in any Material
respect, 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. To the Knowledge of FNBG, no statement,
---------------------------
certificate, instrument or other writing furnished or to be furnished
by any FNBG Company or any Affiliate thereof to GB&T 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
Materially misleading. To the Knowledge of FNBG, none of the
information supplied or to be supplied by any FNBG Company or any
Affiliate thereof for inclusion in the Registration Statement to be
filed by GB&T 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. To the Knowledge of FNBG, none of
the information supplied or to be supplied by any FNBG Company or any
Affiliate thereof for inclusion in the Proxy Statement to be mailed to
FNBG's shareholders in connection with the FNBG Shareholders' Meeting,
and any other documents to be filed by a FNBG Company 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 shareholders of FNBG, 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 FNBG Shareholders' Meeting, be false or
misleading with respect to any Material fact, or omit to state any
Material fact necessary to correct any statement in any earlier
communication with respect to the solicitation of any proxy for the
FNBG Shareholders' Meeting. All documents that any FNBG Company or any
Affiliate thereof are 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. No FNBG Company, to the
------------------------------------------
Knowledge of FNBG, or any Affiliate thereof has taken any action, or
agreed to take any action, or has any Knowledge of any fact or
circumstance that is reasonably likely to (a) prevent the transactions
contemplated hereby, including the Merger, from qualifying for
treatment as a reorganization within the meaning of Section 368(a) of
the Internal Revenue Code, or (b) 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 second sentence of such
Section. To the Knowledge of FNBG, there exists no fact, circumstance,
or reason why the requisite Consents referred to in Section 9.1(b) of
this Agreement cannot be received in a timely manner without the
imposition of any condition or restriction of the type described in
the second sentence of such Section 9.1(b).
15
5.20 CHARTER PROVISIONS. Each FNBG Company 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
any FNBG Company or restrict or impair the ability of GB&T to vote, or
otherwise to exercise the rights of a shareholder with respect to,
shares of any FNBG Company that may be acquired or controlled by it.
5.21 STATE ANTI-TAKEOVER LAWS. Each FNBG Company has taken all necessary
-------------------------
action to exempt the transactions contemplated by this Agreement from
any applicable "moratorium," "control share," "fair price," "business
combination," or other anti-takeover laws and regulations of the State
of Georgia including those laws contained within Sections 14-2-1110 et
--
seq. and 14-2-1131 et seq. of the GBCC.
---- -------
ARTICLE VI
----------
REPRESENTATIONS AND WARRANTIES OF GB&T
--------------------------------------
GB&T hereby represents and warrants to FNBG as follows:
6.1 ORGANIZATION, STANDING, AND POWER. GB&T is a corporation duly
------------------------------------
organized, validly existing, and in good standing under the Laws of
the State of Georgia, and is duly registered as a bank holding company
under the BHC Act and under Georgia law. GB&T has the corporate power
and authority to carry on its business as now conducted and to own,
lease and operate its Assets. GB&T is duly qualified or licensed to
transact business as a foreign corporation in good standing in the
states of the United States and foreign jurisdictions where the
character of its Assets or the nature or conduct of its business
requires it to be so qualified or licensed, except for such
jurisdictions in which the failure to be so qualified or licensed is
not reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on GB&T.
6.2 AUTHORITY; NO BREACH BY AGREEMENT.
-------------------------------------
(a) Subject to the actions required for listing by NASDAQ of the
shares to be issued to FNBG shareholders, which GB&T shall
promptly undertake, GB&T has the corporate power and authority
necessary to execute, deliver and perform its obligations under
this Agreement and to consummate the transactions contemplated
hereby. The execution, delivery and performance of this Agreement
and the consummation of the transactions contemplated herein,
including the Merger, have been duly and validly authorized by
all necessary corporate action in respect thereof on the part of
GB&T. Subject to the approval of this Agreement by the holders of
a majority of the outstanding shares of GB&T, this Agreement
represents a legal, valid and binding obligation of GB&T,
enforceable against GB&T 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 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).
16
(b) Except as described in Section 6.2 of the GB&T Disclosure
Memorandum, neither the execution and delivery of this Agreement
by GB&T, nor the consummation by GB&T of the transactions
contemplated hereby, nor compliance by GB&T with any of the
provisions hereof will (i) conflict with or result in a breach of
any provision of GB&T'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 any GB&T Company under, any Contract or Permit of any
GB&T Company, where such Default or Lien, or any failure to
obtain such Consent, is reasonably likely to have, individually
or in the aggregate, a Material Adverse Effect on GB&T, 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 GB&T 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 NASDAQ, 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, 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 GB&T, no notice to,
filing with, or Consent of, any public body or authority is
necessary for the consummation by GB&T of the Merger and the
other transactions contemplated in this Agreement.
6.3 CAPITAL STOCK.
--------------
(a) The authorized capital stock of GB&T consists of 20,000,000
shares of GB&T Common Stock, of which 10,051,696 shares were
issued and outstanding as of the date of this Agreement. All of
the issued and outstanding shares of GB&T Common Stock are, and
all of the shares of GB&T Common Stock to be issued in exchange
for shares of FNBG Common Stock upon consummation of the Merger,
when issued in accordance with the terms of this Agreement, will
be, duly and validly issued and outstanding and fully paid and
nonassessable under the GBCC or otherwise. None of the
outstanding shares of GB&T Common Stock have been, and none of
the shares of GB&T Common Stock to be issued in exchange for
shares of FNBG Common Stock upon consummation of the Merger will
be, issued in violation of any preemptive rights of the current
or past shareholders of GB&T or any other party.
(b) [Reserved]
(c) Except as set forth in Sections 6.3(a) of this Agreement, or as
disclosed in Section 6.3(c) of the GB&T Disclosure Memorandum,
there are no other shares of capital stock or other equity
securities of GB&T outstanding and no outstanding Rights relating
to the capital stock of GB&T.
17
6.4 GB&T SUBSIDIARIES. GB&T has disclosed in Section 6.4 of the GB&T
------------------
Disclosure Memorandum all of the GB&T Subsidiaries as of the date of
this Agreement. Except as disclosed in Section 6.4 of the GB&T
Disclosure Memorandum, GB&T owns all of the issued and outstanding
shares of capital stock of each GB&T Subsidiary. No equity securities
of any GB&T Subsidiary are or may become required to be issued (other
than to another GB&T Company) by reason of any Rights, and there are
no Contracts by which any GB&T Subsidiary is bound to issue (other
than to another GB&T Company) additional shares of its capital stock
or Rights, or by which any GB&T Company is or may be bound to transfer
any shares of the capital stock of any GB&T Subsidiary (other than to
another GB&T Company). There are no Contracts relating to the rights
of any GB&T Company to vote or to dispose of any shares of the capital
stock of any GB&T Subsidiary. All of the shares of capital stock of
each GB&T Subsidiary held by a GB&T Company are fully paid and
nonassessable under the applicable Law of the jurisdiction in which
such Subsidiary is incorporated or organized and are owned by GB&T
free and clear of any Lien. Each GB&T Subsidiary is either a bank, a
savings association, a corporation or a limited liability company and
is duly organized, validly existing, and (as to corporations) in good
standing under the Laws of the jurisdiction in which it is organized
and has the corporate power and authority necessary for it to own,
lease and operate its Assets and to carry on its business as now
conducted. Each GB&T Subsidiary is duly qualified or licensed to
transact business as a foreign corporation in good standing in the
states of the United States and foreign jurisdictions where the
character of its Assets or the nature or conduct of its business
requires it to be so qualified or licensed, except for such
jurisdictions in which the failure to be so qualified or licensed is
not reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on GB&T. Each GB&T Subsidiary that is a
depository institution is an "insured institution" as defined in the
Federal Deposit Insurance Act and applicable regulations thereunder,
and the deposits in which are insured by the Bank Insurance Fund or
the Savings Association Insurance Fund, as appropriate.
6.5 FINANCIAL STATEMENTS. GB&T has included in Section 6.5 of the GB&T
---------------------
Disclosure Memorandum copies of all GB&T Financial Statements for
periods beginning January 1, 2000 and ending prior to the date hereof
and will deliver to FNBG copies of all GB&T Financial Statements
prepared subsequent to the date hereof. The GB&T Financial Statements
(as of the dates thereof and for the periods covered thereby) (a) are,
or if dated after the date of this Agreement will be, in accordance
with the books and records of the GB&T Companies, 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 (b) present or will present, as the case may
be, fairly the consolidated financial position of the GB&T Companies
as of the dates indicated and the consolidated results of operations,
changes in shareholders' equity, and cash flows of the GB&T Companies
for the periods indicated, in accordance with GAAP (subject to
exceptions as to consistency specified therein or as may be indicated
in the notes thereto or, in the case of interim financial statements,
to normal recurring year-end adjustments that are not Material in
amount or effect).
6.6 ABSENCE OF UNDISCLOSED LIABILITIES. No GB&T Company has any
-------------------------------------
Liabilities that are reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on GB&T, except Liabilities which
are accrued or reserved against in the consolidated balance sheets of
GB&T as of July 31, 2004, included in the GB&T Financial Statements
18
or reflected in the notes thereto. No GB&T Company has incurred or
paid any Liability since July 31, 2004, 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 GB&T.
6.7 ABSENCE OF CERTAIN CHANGES OR EVENTS. Since July 31, 2004, except as
-------------------------------------
disclosed in Section 6.7 of the GB&T Disclosure Memorandum, (a) 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 GB&T, and (b) the GB&T Companies have not
taken any action, or failed to take any action, prior to the date of
this Agreement, which action or failure, if taken after the date of
this Agreement, would represent or result in a material breach or
violation of any of the covenants and agreements of GB&T provided in
Article VII of this Agreement.
6.8 TAX MATTERS.
------------
(a) All Tax returns required to be filed by or on behalf of any of
the GB&T Companies have been timely filed or requests for
extensions have been timely filed, granted, and have not expired,
except to the extent that all such failures to file, taken
together, are not reasonably likely to have a Material Adverse
Effect on GB&T, and all returns filed are complete and accurate
to the Knowledge of GB&T. All Taxes shown on filed returns have
been paid or adequate provision for payment thereof has been
made. As of the date of this Agreement, to the Knowledge of GB&T,
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 GB&T, except as reserved
against in the GB&T Financial Statements delivered prior to the
date of this Agreement or as disclosed in Section 6.8(a) of the
GB&T Disclosure Memorandum. All Taxes and other Liabilities due
with respect to completed and settled examinations or concluded
Litigation have been paid.
(b) Except as disclosed in Section 6.8(b) of the GB&T Disclosure
Memorandum, none of the GB&T Companies has executed an extension
or waiver of any statute of limitations on the assessment or
collection of any Tax due that is currently in effect, and no
unpaid tax deficiency has been asserted in writing against or
with respect to any GB&T Company, which deficiency is reasonably
likely to have, individually or in the aggregate, a Material
Adverse Effect on GB&T.
(c) Adequate provision for any Taxes due or to become due for any of
the GB&T Companies for the period or periods through and
including the date of the respective GB&T Financial Statements
has been made and is reflected on such GB&T Financial Statements.
(d) Deferred Taxes of the GB&T Companies have been provided for in
accordance with GAAP.
(e) Each of the GB&T Companies is in compliance with, and its records
contain all information and documents (including, without
limitation, properly completed
19
IRS Forms W-9) necessary to comply with, all applicable
information reporting and Tax withholding requirements under
federal, state and local Tax Laws, and such records identify with
specificity all accounts subject to backup withholding under
Section 3406 of the Internal Revenue Code, except for such
instances of noncompliance and such omissions as are not
reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on GB&T.
6.9 ALLOWANCE FOR POSSIBLE LOAN LOSSES. The Allowance shown on the
--------------------------------------
consolidated balance sheets of GB&T included in the most recent GB&T
Financial Statements dated prior to the date of this Agreement was,
and the Allowance shown on the consolidated balance sheets of GB&T
included in the GB&T 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 the GB&T Companies and other extensions of credit
(including letters of credit and commitments to make loans or extend
credit) by the GB&T Companies as of the dates thereof except where the
failure of such Allowance to be so adequate is not reasonably likely
to have a Material Adverse Effect on GB&T.
6.10 ASSETS. Except as disclosed in Section 6.10 of the GB&T Disclosure
------
Memorandum or as disclosed or reserved against in the GB&T Financial
Statements, the GB&T Companies have good and marketable title free and
clear of all Liens, to all of their respective Assets indicated as
owned by the respective GB&T Company as of the date of the respective
GB&T statement. All Material tangible properties used in the
businesses of the GB&T Companies are in good condition, reasonable
wear and tear excepted and are usable in the ordinary course of
business consistent with GB&T's past practices. All Assets which are
Material to the business of the GB&T Companies and held under leases
or subleases by any of the GB&T Companies are held under valid
Contracts enforceable in accordance with their respective terms
(except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other Laws affecting the
enforcement of creditors' rights generally and except that the
availability of the equitable remedy of specific performance or
injunctive relief is subject to the discretion of the court before
which any proceedings may be brought), and each such Contract is in
full force and effect. The policies of fire, theft, liability any
other insurance maintained with respect to the Assets or businesses of
the GB&T Companies provide adequate coverage under current industry
practices against loss or Liability, and the fidelity and blanket
bonds in effect as to which any of the GB&T Companies is a named
insured are reasonably sufficient. The Assets of the GB&T Companies
include all assets required to operate the business of the GB&T
Companies as presently conducted. GB&T has adequate financial
resources to consummate the transactions contemplated by this
Agreement.
6.11 ENVIRONMENTAL MATTERS. Except as disclosed in Section 6.11 of the
----------------------
GB&T Disclosure Memorandum:
(a) To the Knowledge of GB&T, each GB&T Company, its Participation
Facilities and its Loan Properties are, and have been, in
compliance with all Environmental Laws, except for noncompliance
which is not reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on GB&T.
20
(b) There is no Litigation pending or to the Knowledge of GB&T
threatened before any court, governmental agency or authority or
other forum in which any GB&T Company or, to the Knowledge of
GB&T, any of its Loan Properties or Participation Facilities has
been or, with respect to threatened Litigation, may be named as a
defendant or potentially responsible party (i) for alleged
noncompliance with any Environmental Law or (ii) relating to the
release into the Environment of any Hazardous Material, whether
or not occurring at, on, under or involving a site owned, leased
or operated by any GB&T Company or any of its Loan Properties or
Participation Facilities, except for such Litigation pending or
threatened the resolution of which is not reasonably likely to
have, individually or in the aggregate, a Material Adverse Effect
on GB&T and to the Knowledge of GB&T, there is no reasonable
basis for any such Litigation.
(c) To the Knowledge of GB&T, there have been no releases of
Hazardous Material in, on, under or affecting any Participation
Facility or Loan Property, except such as are not reasonably
likely to have, individually or in the aggregate, a Material
Adverse Effect on GB&T.
6.12 COMPLIANCE WITH LAWS. Each GB&T Company has in effect all Permits
----------------------
necessary for it to own, lease or operate its Assets and to carry on
its business as now conducted, except for those Permits the absence of
which are not reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on GB&T, and there has occurred
no Default under any such Permit, other than Defaults which are not
reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on GB&T. Except as disclosed in Section 6.12
of the GB&T Disclosure Memorandum, no GB&T Company:
(a) is in violation of any Laws, Orders or Permits applicable to its
business or employees conducting its business, except for
violations which are not reasonably likely to have, individually
or in the aggregate, a Material Adverse Effect on GB&T; and
(b) has received any notification or communication from any agency or
department of federal, state, or local government or any
Regulatory Authority or the staff thereof (i) asserting that any
GB&T Company is not in compliance with any of the Laws or Orders
which such governmental authority or Regulatory Authority
enforces, where such noncompliance is reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on
GB&T, (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 GB&T, or (iii) requiring
any GB&T Company 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.
6.13 LABOR RELATIONS. No GB&T Company is the subject of any Litigation
----------------
asserting that it or any other GB&T Company has committed an unfair
labor practice (within the meaning of the National Labor Relations Act
or comparable state law) or seeking to compel it or any
21
other GB&T Company to bargain with any labor organization as to wages
or conditions of employment, nor is there any strike or other labor
dispute involving any GB&T Company, pending or, to its Knowledge,
threatened, nor, to its Knowledge, is there any activity involving any
GB&T Company's employees seeking to certify a collective bargaining
unit or engaging in any other organization activity.
6.14 EMPLOYEE BENEFIT PLANS.
------------------------
(a) GB&T has disclosed in Section 6.14 of the GB&T Disclosure
Memorandum and delivered or made available to FNBG prior to the
execution of this Agreement copies in each case of all pension,
retirement, profit-sharing, deferred compensation, stock option,
employee stock ownership, severance pay, vacation, bonus, or
other incentive plans, 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 any
GB&T Company or Affiliate thereof for the benefit of employees,
retirees, dependents, spouses, directors, independent
contractors, or other beneficiaries and under which employees,
retirees, dependents, spouses, directors, independent
contractors, or other beneficiaries are eligible to participate
(collectively, the "GB&T Benefit Plan"). Any of the GB&T 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
"GB&T ERISA Plan". Each GB&T 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 "GB&T Pension Plan". No
GB&T Pension Plan is or has been a multi-employer plan within the
meaning of Section 3(37) of ERISA.
(b) All GB&T Benefit Plans are in compliance with the applicable
terms of ERISA, the Internal Revenue Code, and any other
applicable Laws the breach or violation of which are reasonably
likely to have, individually or in the aggregate, a Material
Adverse Effect on FNBG. Each GB&T 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 GB&T is not aware of any circumstances
likely to result in revocation of any such favorable
determination letter. To the Knowledge of GB&T, no GB&T Company
nor any other party has engaged in a transaction with respect to
any GB&T Benefit Plan that, assuming the taxable period of such
transaction expired as of the date hereof, would subject any GB&T
Company to a tax or penalty imposed by either Section 4975 of the
Internal Revenue Code or Section 502(i) of ERISA in amounts which
are reasonably likely to have, individually or in the aggregate,
a Material Adverse Effect on GB&T.
(c) Neither GB&T nor any ERISA Affiliate of GB&T maintains an
"employee pension benefit plan", within the meaning of Section
3(2) of ERISA that is or was subject to Title IV of ERISA.
22
(d) Neither GB&T nor any ERISA Affiliate of GB&T has any past,
present or future obligation or liability to contribute to any
multi-employer plan, as defined in Section 3(37) of ERISA.
(e) Except as disclosed in Section 6.14(e) of the GB&T Disclosure
Memorandum, (i) no GB&T Company has any obligations for retiree
health and live benefits under any of the GB&T Benefit Plans,
except as required by Section 601 of ERISA and Section 4980B of
the Code; (ii) there are no restrictions on the rights of any
GB&T Company to amend or terminate any such Plan; and (iii) any
amendment or termination of any such Plan will not cause any GB&T
Company to incur any Liability that is reasonably likely to have
a Material Adverse Effect on GB&T.
(f) Except as disclosed in Section 6.14(f) of the GB&T Disclosure
Memorandum, neither the execution and delivery of this Agreement
or 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 any
GB&T Company from any GB&T Company under any GB&T Benefit Plan or
otherwise, (ii) increase any benefits otherwise payable under any
GB&T Benefit Plan, or (iii) result in any acceleration of the
time of payment or vesting of any such benefit.
(g) The actuarial present values of all accrued deferred compensation
entitlements (including, without limitation, entitlements under
any executive compensation, supplemental retirement, or
employment agreement) of employees and former employees of any
GB&T Company and their respective beneficiaries have been fully
reflected on the GB&T Financial Statements to the extent required
by and in accordance with GAAP.
(h) GB&T and each ERISA Affiliate of GB&T has complied with the
continuation of coverage requirements of Section 1001 of the
Consolidated Omnibus Budget Reconciliation Act of 1985, as
amended, and ERISA Sections 601 through 608 in a manner that will
not cause any GB&T Company to incur any Liability that is
reasonably likely to have a Material Adverse Effect on GB&T.
(i) Except as disclosed in Section 6.14(i) of the GB&T Disclosure
Memorandum, neither GB&T nor any ERISA Affiliate of GB&T is
obligated, contingently or otherwise, under any agreement to pay
any amount which would be treated as a "parachute payment", as
defined in Section 280G(b) of the Internal Revenue Code
(determined without regard to Section 280G(b) (2) (A) (ii) of the
Internal Revenue Code).
(j) Other than routine claims for benefits, to the Knowledge of GB&T,
there are no actions, audits, investigations, suits or claims
pending against any GB&T Benefit Plan, any trust or other funding
agency created thereunder, or against any fiduciary of any GB&T
Benefit Plan or against the assets of any GB&T Benefit Plan.
23
6.15 MATERIAL CONTRACTS. Except as disclosed in Section 6.15 of the GB&T
-------------------
Disclosure Memorandum or otherwise reflected in the GB&T Financial
Statements, none of the GB&T Companies, nor any of their respective
Assets, businesses or operations, is a party to, or is bound or
affected by, or receives benefits under, (a) any Contract relating to
the borrowing of money by any GB&T Company or the guarantee by any
GB&T Company of any such obligation (other than Contracts evidencing
deposit liabilities, purchases of federal funds, Federal Home Loan
Bank advances, fully-secured repurchase agreements, trade payables,
and Contracts relating to borrowings or guarantees made in the
ordinary course of business), and (b) any other Contract (excluding
this Agreement) or amendment thereto that is required to be filed as
an Exhibit to a Form 10-K or Form 10-Q filed by GB&T with the SEC as
of the date of this Agreement that has not been filed as an Exhibit to
any GB&T Form 10-K or 10-Q filed with the SEC (the "GB&T Contracts").
None of the GB&T Companies is in Default under any GB&T Contract,
other than Defaults which are not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on GB&T.
6.16 LEGAL PROCEEDINGS. Except as disclosed in Section 6.16 of the GB&T
------------------
Disclosure Memorandum, there is no Litigation instituted or pending,
or, to the Knowledge of GB&T, threatened (or unasserted but considered
probable of assertion and which if asserted would have at least a
reasonable probability of an unfavorable outcome) against any GB&T
Company, or against any Asset, interest, or right of any of them, that
is reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on GB&T, nor are there any Orders of any
Regulatory Authorities, other governmental authorities, or arbitrators
outstanding against any GB&T Company, that are reasonably likely to
have, individually or in the aggregate, a Material Adverse Effect on
GB&T.
6.17 REPORTS. Except as disclosed in the GB&T Disclosure Memorandum since
-------
January 1, 2000, each GB&T 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 (a) the SEC,
including, but not limited to, Forms 10-KSB, Forms 10-QSB, Forms 8-K,
and Proxy Statements, (b) other Regulatory Authorities, and (c) 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 GB&T). As of their respective dates, each
of such reports and documents, including the financial statements,
Exhibits, and schedules thereto, complied in all Material respect with
all applicable Laws. As of its respective date, each such report and
document to GB&T's Knowledge did not, in any 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.
6.18 STATEMENTS TRUE AND CORRECT. No statement, certificate, instrument or
---------------------------
other writing furnished or to be furnished by any GB&T Company or any
Affiliate thereof to FNBG pursuant to this Agreement or any other
document, agreement or instrument referred to herein contains or will
contain any untrue statement of Material fact or will omit to state a
Material fact necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading. None of
the information supplied or to be supplied by any GB&T Company or any
Affiliate thereof for inclusion in the Registration Statement to be
filed by GB&T with the SEC, will, when the Registration Statement
24
becomes effective, be false or misleading with respect to any Material
fact, or omit to state any Material fact necessary to make the
statements therein not misleading. None of the information supplied or
to be supplied by any GB&T Company or any Affiliate thereof for
inclusion in the Proxy Statement to be mailed to GB&T shareholders in
connection with the GB&T Shareholders' Meeting, and any other
documents to be filed by a GB&T Company 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 shareholders of GB&T, 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 GB&T Shareholders' Meeting, be false or
misleading with respect to any Material fact, or omit to state any
Material fact necessary to correct any statement in an earlier
communication with respect to the solicitation of any proxy for the
GB&T Shareholders' Meeting. All documents that any GB&T Company or any
Affiliate thereof are responsible for filing with any Regulatory
Authority in connection with the transactions contemplated hereby will
comply as to form in all Material respects with the provisions of
applicable Law.
6.19 ACCOUNTING, TAX AND REGULATORY MATTERS. No GB&T Company or any
------------------------------------------
Affiliate thereof has taken any action, or agreed to take any action,
or has any Knowledge of any fact or circumstance that is reasonably
likely to (a) prevent the transactions contemplated hereby, including
the Merger, from qualifying for treatment as a reorganization within
the meaning of Section 368(a) of the Internal Revenue Code, or (b)
materially impede or delay receipt of any Consents of Regulatory
Authorities referred to in Section 9.1(b) of this Agreement. To the
Knowledge of GB&T, there exists no fact, circumstance, or reason why
the requisite Consents referred to in Section 9.1(b) of this Agreement
cannot be received in a timely manner without the imposition of any
condition or restriction of the type described in the second sentence
of such Section 9.1(b).
6.20 CHARTER PROVISIONS. Each GB&T Company 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
any GB&T Company or restrict or impair the ability of GB&T to vote, or
otherwise to exercise the rights of a shareholder with respect to,
shares of any GB&T Company that may be acquired or controlled by it.
ARTICLE VII
-----------
CONDUCT OF BUSINESS PENDING CONSUMMATION
----------------------------------------
7.1 AFFIRMATIVE COVENANTS OF FNBG. Unless the prior written consent of
--------------------------------
GB&T shall have been obtained, and except as otherwise contemplated
herein or disclosed in the FNBG Disclosure Memorandum, FNBG shall, and
shall cause each of its Subsidiaries, from the date of this Agreement
until the Effective Time or termination of this Agreement: (a) to
operate its business in the usual, regular and ordinary course; (b) to
preserve intact its business organization and Assets and maintain its
rights and franchises; (c) to use its reasonable efforts to cause its
representations and warranties to be correct at all times; and (d) to
take no action which would reasonably be expected to (i) adversely
affect the
25
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 sentence of Section
9.1(b) or 9.1(c) of this Agreement or (ii) adversely affect in any
Material respect the ability of either Party to perform its covenants
and agreements under this Agreement.
7.2 NEGATIVE COVENANTS OF FNBG. Except as disclosed in the FNBG
-----------------------------
Disclosure Memorandum, from the date of this Agreement until the
earlier of the Effective Time or the termination of this Agreement,
FNBG covenants and agrees that it will not do or agree or commit to
do, or permit any of its Subsidiaries to do or agree or commit to do,
any of the following without the prior written consent of the chief
executive officer of GB&T, which consent shall not be unreasonably
withheld:
(a) amend the Articles of Incorporation, Bylaws or other governing
instruments of any FNBG Company, or
(b) incur any additional debt obligation or other obligation for
borrowed money (other than indebtedness of a FNBG Company to
another FNBG Company) in excess of an aggregate of $50,000 (for
the FNBG Companies on a consolidated basis) except in the
ordinary course of the business of the FNBG Companies consistent
with past practices (which shall include, for any of its
Subsidiaries, creation of deposit liabilities, purchases of
federal funds, advances from the Federal Reserve Bank or Federal
Home Loan Bank, and entry into repurchase agreements fully
secured by U.S. government or agency securities), or impose, or
suffer the imposition, on any Asset of any FNBG Company of any
Lien or permit any such Lien to exist (other than in connection
with deposits, repurchase agreements, bankers acceptances,
Federal Home Loan Bank advances, "treasury tax and loan" accounts
established in the ordinary course of business, the satisfaction
of legal requirements in the exercise of trust powers, and Liens
in effect as of the date hereof that are disclosed in the FNBG
Disclosure Memorandum); or
(c) repurchase, redeem, or otherwise acquire or exchange (other than
exchanges in the ordinary course under employee benefit plans),
directly or indirectly, any shares, or any securities convertible
into any shares, of the capital stock of any FNBG Company, or
declare or pay any dividend or make any other distribution in
respect of FNBG's capital stock; or
(d) except for this Agreement, or pursuant to the exercise of stock
options outstanding as of the date hereof and pursuant to the
terms thereof in existence on the date hereof, or as disclosed in
Section 7.2(d) of the FNBG Disclosure Memorandum, issue, sell,
pledge, encumber, authorize the issuance of or enter into any
Contract to issue, sell, pledge, encumber, or authorize the
issuance of or otherwise permit to become outstanding, any
additional shares of FNBG Common Stock or any other capital stock
of any FNBG Company, 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
26
(e) except as disclosed in Section 7.2(e) of the FNBG Disclosure
Memorandum, adjust, split, combine or reclassify any capital
stock of any FNBG Company or issue or authorize the issuance of
any other securities in respect of or in substitution for shares
of FNBG Common Stock or sell, lease, mortgage or otherwise
dispose of or otherwise encumber (i) any shares of capital stock
of any FNBG Subsidiary (unless any such shares of stock are sold
or otherwise transferred to another FNBG Company) or (ii) any
Asset having a book value in excess of $25,000 other than in the
ordinary course of business for reasonable and adequate
consideration; or
(f) except for purchases of U.S. Treasury securities or U.S.
Government agency securities or securities of like maturity or
grade or general obligations of states and municipalities,
purchase any securities or make any material investment, either
by purchase of stock or securities, contributions to capital,
Asset transfers, or purchase of any Assets, in any Person other
than a wholly-owned FNBG Subsidiary; or otherwise acquire direct
or indirect control over any Person, other than in connection
with (i) foreclosures in the ordinary course of business, or (ii)
acquisitions of control in its fiduciary capacity; or
(g) grant any increase in compensation or benefits to any employees
whose annual salary exceeds $35,000 of any FNBG Company
(including such discretionary increases as may be contemplated by
existing employment agreements), except in accordance with past
practice or previously approved by the Board of Directors of
FNBG, in each case as disclosed in Section 7.2(g) of the FNBG
Disclosure Memorandum or as required by Law; pay any severance or
termination pay or any bonus other than pursuant to written
policies or written Contracts in effect on the date of this
Agreement and disclosed in Section 7.2(g) of the FNBG Disclosure
Memorandum; enter into or amend any severance agreements with
officers of any FNBG Company; grant any general increase in
compensation to all employees except as disclosed in Section
7.2(g) of the FNBG Disclosure Memorandum; grant any increase in
fees or other increases in compensation or other benefits to
directors of any FNBG Company; or voluntarily accelerate the
vesting of any stock options or other stock-based compensation or
employee benefits; or
(h) enter into or amend any employment Contract between any FNBG
Company and any Person (unless such amendment is required by Law)
that the FNBG Company does not have the unconditional right to
terminate without Liability (other than Liability for services
already rendered), at any time on or after the Effective Time; or
(i) adopt any new employee benefit plan of any FNBG Company or make
any material change in or to any existing employee benefit plans
of any FNBG Company 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 Tax or accounting methods or
systems of internal accounting controls, except as may be
appropriate to conform to changes in Tax Laws or regulatory
accounting requirements or GAAP; or
27
(k) commence any Litigation other than in accordance with past
practice, settle any Litigation involving any Liability of any
FNBG Company for money damages in excess of $50,000 or which
imposes Material restrictions upon the operations of any FNBG
Company;
(l) 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.
7.3 (a) AFFIRMATIVE COVENANTS OF GB&T. Unless the prior written consent
-------------------------------
of FNBG shall have been obtained, and except as otherwise
contemplated herein or as disclosed in the GB&T Disclosure
Memorandum, GB&T shall, and shall cause each of its Subsidiaries
to, from the date of this Agreement until the Effective Time or
termination of this Agreement: (a) operate its business in the
usual, regular and ordinary course; (b) preserve intact its
business organization and Assets and maintain its rights and
franchises; (c) use its reasonable efforts to cause its
representations and warranties to be correct at all times; and
(d) take no action which would reasonably be expected to (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 sentence of Section 9.1(b) or 9.1(c) of this
Agreement or (ii) adversely affect in any Material respect the
ability of either Party to perform its covenants and agreements
under this Agreement.
(b) NEGATIVE COVENANTS OF GB&T. GB&T will not amend its Articles of
---------------------------
Incorporation or bylaws, or take any other action with respect to
its capital structure, in each case in a manner which is adverse
to and discriminates against the holders of FNBG Common Stock.
7.4 ADVERSE CHANGES IN CONDITION. Each Party agrees to give written notice
----------------------------
promptly to the other Party upon becoming aware of the occurrence or
impending occurrence of any event or circumstance relating to it or
any of its Subsidiaries which (a) is reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on it or
(b) is reasonably likely to cause or constitute a Material breach of
any of its representations, warranties, or covenants contained herein,
and to use its reasonable efforts to prevent or promptly to remedy the
same.
7.5 REPORTS. Each Party and its Subsidiaries shall file all reports
-------
required to be filed by it with Regulatory Authorities between the
date of this Agreement and the Effective Time and shall deliver to the
other Party copies of all such reports promptly after the same are
filed.
ARTICLE VIII
------------
ADDITIONAL AGREEMENTS
---------------------
8.1 Registration Statement; Proxy Statement; Shareholder Approval.
28
(a) As soon as reasonably practicable after execution of this
Agreement, GB&T 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 GB&T Common Stock upon consummation of the Merger.
FNBG shall furnish all information concerning it and the holders
of its capital stock as GB&T may reasonably request in connection
with such action.
(b) FNBG shall call a Shareholders' Meeting, to be held as soon as
reasonably practicable after the Registration Statement is
declared effective by the SEC, for the purpose of voting upon
approval of this Agreement and such other related matters as FNBG
deems appropriate.
(c) In connection with the FNBG Shareholders' Meeting, (i) GB&T shall
prepare and file with the SEC on FNBG's behalf a Proxy Statement
(which shall be included in the Registration Statement) and mail
it to FNBG's shareholders, (ii) the Parties shall furnish to each
other all information concerning them that they may reasonably
request in connection with such Proxy Statement, (iii) the Board
of Directors of FNBG shall recommend (subject to compliance with
the fiduciary duties of the members of the Board of Directors as
advised by counsel) to their shareholders the approval of this
Agreement and (iv) the Board of Directors and officers of FNBG
shall use their reasonable efforts to obtain such shareholders'
approval (subject to compliance with their fiduciary duties as
advised by counsel).
8.2 EXCHANGE LISTING. GB&T shall list, as of the Effective Time, on the
-----------------
NASDAQ the shares of GB&T Common Stock to be issued to the holders of
FNBG Common Stock pursuant to the Merger.
8.3 APPLICATIONS. GB&T shall promptly prepare and file, and FNBG shall
------------
cooperate in the preparation and, where appropriate, filing of,
applications with the Board of Governors of the Federal Reserve System
and the Georgia Department of Banking and Finance seeking the
requisite Consents necessary to consummate the transactions
contemplated by this Agreement. GB&T shall permit FNBG to review (and
approve with respect to information relating to FNBG) such
applications prior to filing same and shall provide copies of such
applications to FNBG and its counsel.
8.4 FILINGS WITH STATE OFFICES. Upon the terms and subject to the
-----------------------------
conditions of this Agreement, GB&T shall promptly execute and file the
Georgia Certificate of Merger with the Secretary of State of the State
of Georgia in connection with the Closing.
8.5 AGREEMENT AS TO EFFORTS TO CONSUMMATE. Subject to the terms and
------------------------------------------
conditions of this Agreement, each Party agrees to use, and to cause
its Subsidiaries to use, its reasonable efforts to take, or cause to
be taken, all actions, and to do, or cause to be done, all things
necessary, proper or advisable under applicable Laws, as promptly as
practicable so as to permit consummation of the Merger at the earliest
possible date and to otherwise enable consummation of the transactions
contemplated hereby and shall cooperate fully with the other Party
hereto to that end (it being understood that any amendments to the
29
Registration Statement filed by GB&T in connection with the GB&T
Common Stock to be issued in the Merger shall not violate this
covenant), 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 9 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.
8.6 INVESTIGATION AND CONFIDENTIALITY.
-----------------------------------
(a) Prior to the Effective Time, each Party will keep the other Party
advised of all Material developments relevant to its business and
to consummation of the Merger and shall permit the other Party to
make or cause to be made such investigation of the business and
properties of it and its Subsidiaries and of their respective
financial and legal conditions as the other Party reasonably
requests, provided that such investigation shall be reasonably
related to the transactions contemplated hereby and shall not
interfere unnecessarily with normal operations. No investigation
by a Party shall affect the representations and warranties of the
other Party.
(b) Each Party shall, and shall cause its advisers and agents to,
maintain the confidentiality of all information furnished to it
by the other Party concerning its and its Subsidiaries'
businesses, operations, and financial positions and shall not use
such information for any purpose except in furtherance of the
transactions contemplated by this Agreement. If this Agreement is
terminated prior to the Effective Time, each Party shall promptly
return or certify the destruction of all documents and copies
thereof and all work papers containing 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.
8.7 PRESS RELEASES. Prior to the Effective Time, GB&T and FNBG shall agree
--------------
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 8.7 shall be deemed to prohibit any Party from making
any disclosure which its counsel deems necessary or advisable in order
to satisfy such Party's disclosure obligations imposed by Law.
8.8 ACQUISITION PROPOSALS. Except with respect to this Agreement and the
----------------------
transactions contemplated hereby, neither FNBG nor any Affiliate
thereof nor any investment banker, attorney, accountant or other
representative (collectively, "Representatives") retained by FNBG
shall directly or indirectly solicit any Acquisition Proposal by any
Person. Except to the extent necessary to comply with the fiduciary
duties of FNBG's Board of Directors
30
as advised by counsel, neither FNBG 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
FNBG may communicate information about such an Acquisition Proposal to
its shareholders if and to the extent that it is required to do so in
order to comply with its legal obligations as advised by counsel. FNBG
shall promptly notify GB&T orally and in writing in the event that it
receives any inquiry or proposal relating to any such transaction.
Unless the prior written consent of GB&T is obtained, FNBG shall (a)
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 (b) direct and use its reasonable
efforts to cause all of its Representatives not to engage in any of
the foregoing.
8.9 ACCOUNTING AND TAX TREATMENT. Each of the Parties undertakes and
-------------------------------
agrees to use its reasonable efforts to cause the Merger to qualify,
and to take no action which would cause the Merger not to qualify, for
treatment as a "reorganization" within the meaning of Section 368(a)
of the Internal Revenue Code for federal income tax purposes.
8.10 AGREEMENT OF AFFILIATES. FNBG has disclosed in Section 8.10 of the
-------------------------
FNBG Disclosure Memorandum all Persons whom it reasonably believes is
an "affiliate" of FNBG for purposes of Rule 145 under the 1933 Act.
FNBG shall use its reasonable efforts to cause each such Person to
deliver to GB&T and FNBG, not later than thirty (30) days after the
date of this Agreement, a written agreement, substantially in the form
of Exhibit 1, providing that such Person will not sell, pledge,
transfer or otherwise dispose of the shares of FNBG 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 GB&T 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.
GB&T shall be entitled to place restrictive legends upon certificates
for shares of GB&T Common Stock issued to Affiliates of FNBG pursuant
to this Agreement to enforce the provisions of this Section 8.10. GB&T
shall not be required to maintain the effectiveness of the
Registration Statement under the 1933 Act for the purposes of resale
of GB&T Common Stock by such Affiliates.
8.11 EMPLOYEE BENEFITS, CONTRACTS AND DEFERRED COMPENSATION PLAN.
-----------------------------------------------------------------
(a) Following the Effective Time, GB&T shall provide generally to officers
and employees of the FNBG Companies who continue employment with GB&T
or its Subsidiaries following the Effective Time employee benefits
under employee benefit plans, on terms and conditions which when taken
as a whole are substantially similar to those currently provided by
the GB&T Companies to their similarly situated officers and employees.
For purposes of participation and vesting of benefits under such
employee benefit plans, the service of the employees of the FNBG
Companies prior to the Effective Time shall be treated as service with
a GB&T Company participating in such employee benefit plans, provided
that, with respect to any employee benefit plan where the benefits are
funded through insurance, the granting of such benefits shall be
subject to the consent of the appropriate insurer and may be
conditioned upon an employee's participation in a FNBG Benefit Plan of
the same type immediately prior to the Effective Time. GB&T shall
waive, under its medical plan, any pre-existing condition exclusion
for any FNBG
31
employee who continues in employment after the Effective Time and
becomes covered under such medical plan, to the extent that such
pre-existing condition would have been covered under the comparable
FNBG employee benefit plan and the individual with the pre-existing
condition was covered under such plan.
(b) GB&T and its Subsidiaries also shall honor in accordance with their
terms all employment, severance, consulting and other compensation
Contracts and deferred compensation plans disclosed in Section 8.11 of
the FNBG Disclosure Memorandum to GB&T between any FNBG Company and
any current or former director, officer, or employee thereof and all
provisions for vested benefits accrued through the Effective Time
under the FNBG Benefit Plans. GB&T acknowledges and agrees that
pursuant to the Merger it shall assume and have the obligations and
liabilities set out in those certain Employment Agreements described
on Exhibit 5 attached hereto, if any (the "Employment Agreements").
8.12 D&O INSURANCE COVERAGE AND INDEMNIFICATION. Immediately prior to
----------------------------------------------
Closing, FNBG shall obtain from its regular insurance carrier "tail"
coverage for its officers and directors under its current policy terms
and conditions, the expense for which shall be paid by FNBG, but is
pre-approved by GB&T. Further, GB&T shall assume all liability (to the
extent FNBG was so liable) for claims for indemnification arising
under FNBG's Articles of Incorporation or Bylaws or under any
indemnification contract disclosed to GB&T, as existing on August 1,
2004.
ARTICLE IX
----------
CONDITIONS PRECEDENT TO OBLIGATIONS TO CONSUMMATE
-------------------------------------------------
9.1 CONDITIONS TO OBLIGATIONS OF EACH PARTY. The respective obligations
-----------------------------------------
of each Party to perform this Agreement and consummate the Merger and
the other transactions contemplated hereby are subject to the
satisfaction of the following conditions, unless waived by both
Parties pursuant to Section 11.6 of this Agreement:
(a) SHAREHOLDER APPROVAL. The shareholders of FNBG shall have
---------------------
approved this Agreement, and the consummation of the transactions
contemplated hereby, including the Merger, as and to the extent
required by Law, NASDAQ or by the provisions of any governing
instruments, and the Shareholders shall also have approved an
amendment to the FNBG Stock Incentive Plan so as to provide for
full vesting on a "change of control" of FNBG.
(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 as to render
inadvisable the consummation of the Merger.
32
(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 as to render
inadvisable the consummation of the Merger.
(d) 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 GB&T Common Stock issuable
pursuant to the Merger shall have been received.
(e) EXCHANGE LISTING. The shares of GB&T Common Stock issuable
-----------------
pursuant to the Merger shall have been approved for listing on
the NASDAQ.
(f) TAX MATTERS. GB&T and FNBG shall have received a written opinion
-----------
of counsel from Xxxxxx, Xxxxxx & Xxxxx, LLP, in form reasonably
satisfactory to them (the "Tax Opinion"), to the effect that for
federal income tax purposes (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 FNBG
Common Stock for GB&T Common Stock will not give rise to gain or
loss to the shareholders of FNBG with respect to such exchange
(except to the extent of any cash received), (iii) neither GB&T
nor FNBG 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); and (iv) the assumption by GB&T of FNBG Options
qualifying as "incentive stock options" under Section 422 of the
Internal Revenue Code will satisfy the requirements of Section
424(a) of the Internal Revenue Code and will not constitute a
modification of such options under Section 424(h) of the Internal
Revenue Code. In rendering such Tax Opinion, counsel shall be
entitled to rely upon representations of officers of GB&T and
FNBG reasonably satisfactory in form and substance to such
counsel.
(g) AFFILIATE AGREEMENTS. The Parties shall have received from each
---------------------
affiliate of FNBG the affiliates letter referred to in Section
8.10 hereof.
9.2 CONDITIONS TO OBLIGATIONS OF GB&T. The obligations of GB&T 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 GB&T pursuant to Section 11.6(a) of this
Agreement:
33
(a) REPRESENTATIONS AND WARRANTIES. For purposes of this Section
--------------------------------
9.2(a), the accuracy of the representations and warranties of
FNBG set forth or referred to in this Agreement shall be assessed
as of the date of this Agreement and as of the Effective Time
with the same effect as though all such representations and
warranties had been made on and as of the Effective Time
(provided that representations and warranties which are confined
to a specified date shall speak only as of such date). The
representations and warranties of FNBG set forth in Section Five
of this Agreement shall be true and correct in all Material
respects (except for inaccuracies which are de minimis in
amount). There shall not exist inaccuracies in the
representations and warranties of FNBG set forth in this
Agreement such that the aggregate effect of such inaccuracies
would have, or is reasonably likely to have, a Material Adverse
Effect on FNBG; provided that, for purposes of this sentence
only, those representations and warranties which are qualified by
references to "Material" or "Material Adverse Effect" shall be
deemed not to include such qualifications.
(b) PERFORMANCE OF AGREEMENTS AND COVENANTS. Each and all of the
-------------------------------------------
agreements and covenants of FNBG 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. FNBG shall have delivered to GB&T (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 Sections 9.2(a) and 9.2(b) of this Agreement have been
satisfied, and (ii) certified copies of resolutions duly adopted
by FNBG's Board of Directors and shareholders evidencing the
taking of all corporate action necessary to authorize the
execution, delivery and performance of this Agreement, and the
consummation of the transactions contemplated hereby, all in such
reasonable detail as GB&T and its counsel shall request.
(d) OPINION OF COUNSEL. FNBG shall have delivered to GB&T an opinion
------------------
of Powell, Goldstein, Xxxxxx & Xxxxxx, LLP, counsel to FNBG,
dated as of the Effective Time, in form reasonably satisfactory
to GB&T, as to the matters set forth in Exhibit 2 hereto.
(e) CLAIMS/INDEMNIFICATION LETTERS. Each of the directors and
-------------------------------
officers of FNBG shall have executed and delivered to GB&T
letters in substantially the form of Exhibit 3 hereto.
(f) LITIGATION. No preliminary or permanent injunction or other
----------
order by any federal or state court which prevents the
consummation of the Merger shall have been issued and shall
remain in effect, nor any action therefor initiated which, in the
good faith judgment of the Board of Directors of GB&T, is not in
the best interests of the shareholders of GB&T to contest; and
there shall not have been instituted or be pending any action or
proceeding by any United States federal or state government or
governmental agency or instrumentality (i) challenging or seeking
to restrain or prohibit the consummation of the Merger or seeking
34
Material damages in connection with the Merger; or (ii) seeking
to prohibit GB&T's or the Surviving Corporation's ownership or
operation of all or a Material portion of GB&T's or FNBG's
business or assets, or compel GB&T or the Surviving Corporation
to dispose of or hold separate all or a Material portion of
GB&T's or FNBG's business or assets as a result of the Merger,
which, in any case, in the reasonable judgment of GB&T based upon
a legal opinion from legal counsel, could result in the relief
sought being obtained.
(g) SUPPORT AGREEMENTS. Within ten (10) calendar days of the
-------------------
execution of this Agreement, each of the directors of FNBG shall
have executed and delivered to GB&T a Support Agreement
substantially in the form of Exhibit 6 to this Agreement.
(h) NON-COMPETE AGREEMENTS. Noncompete Agreements shall have been
-----------------------
entered into between all FNBG outside directors and GB&T
substantially in the form of Exhibit 7 to this Agreement.
(i) EMPLOYMENT AGREEMENTS. Employment Agreements shall have been
----------------------
entered into between GB&T, as Employer, and Xxxxx Xxxxx and Xxxx
Xxxxx, FNBG employees substantially in the form of Exhibit 8 to
this Agreement.
9.3 CONDITIONS TO OBLIGATIONS OF FNBG. The obligations of FNBG 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 FNBG pursuant to Section 11.6(b) of this
Agreement:
(a) REPRESENTATIONS AND WARRANTIES. For purposes of this Section
--------------------------------
9.3(a), the accuracy of the representations and warranties of
GB&T set forth or referred to in this Agreement shall be assessed
as of the date of this Agreement and as of the Effective Time
with the same effect as though all such representations and
warranties had been made on and as of the Effective Time
(provided that representations and warranties which are confined
to a specified date shall speak only as of such date). There
shall not exist inaccuracies in the representations and
warranties set forth in this Agreement such that the aggregate
effect of such inaccuracies would have, or is reasonably likely
to have a Material Adverse Effect on GB&T; provided that, for
purposes of this sentence only, those representations and
warranties which are qualified by reference to "Material" or
"Material Adverse Effect" shall be deemed not to include such
qualifications.
(b) PERFORMANCE OF AGREEMENTS AND COVENANTS. Each and all of the
-------------------------------------------
agreements and covenants of GB&T 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. GB&T shall have delivered to FNBG (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 GB&T's Board of Directors
35
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 FNBG and its counsel
shall request.
(d) OPINION OF COUNSEL. GB&T shall have delivered to FNBG an opinion
------------------
of Xxxxxx, Xxxxxx & Xxxxx, LLP, counsel to GB&T, dated as of the
Effective Time, in form reasonably acceptable to FNBG, as to
matters set forth in Exhibit 4 hereto.
(e) INTENTIONALLY OMITTED.
---------------------
(f) LITIGATION. No preliminary or permanent injunction or other
----------
order by any federal or state court which prevents the
consummation of the Merger shall have been issued and shall
remain in effect, nor any action therefor initiated which, in the
good faith judgment of the Board of Directors of FNBG, it is not
in the best interests of the shareholders of FNBG to contest; and
there shall not have been instituted or be pending any action or
proceeding by any United States federal or state government or
governmental agency or instrumentality (i) challenging or seeking
to restrain or prohibit the consummation of the Merger or seeking
material damages in connection with the Merger; or (ii) seeking
to prohibit GB&T's or the Surviving Corporation's ownership or
operation of all or a Material portion of GB&T's or FNBG's
business or assets, or compel GB&T or the Surviving Corporation
to dispose of or hold separate all or a Material portion of
GB&T's or FNBG's business or assets as a result of the Merger,
which, in any case, in the reasonable judgment of FNBG based upon
a legal opinion from legal counsel, could result in the relief
sought being obtained.
ARTICLE X
---------
TERMINATION
-----------
10.1 TERMINATION. Notwithstanding any other provision of this Agreement,
-----------
and notwithstanding the approval of this Agreement by the shareholders
of FNBG, or GB&T 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 FNBG and the Board
of Directors of GB&T; or
(b) By the Board of Directors of either Party (provided that the
terminating Party is not then in breach of any representation or
warranty contained in this Agreement under the applicable
standard set forth in Section 9.2(a) of this Agreement in the
case of FNBG and Section 9.3(a) in the case of GB&T or in
Material breach of any covenant or agreement contained in this
Agreement) in the event of a Material breach by the other Party
of any representation or warranty contained in this Agreement
which cannot be or has not been cured within thirty (30) days
after the giving of written notice to the breaching Party of such
breach and which breach would provide the non-breaching Party the
ability to refuse to consummate the Merger under the standard set
forth in Section 9.2(a) of this
36
Agreement in the case of GB&T and Section 9.3(a) of this
Agreement in the case of FNBG; or
(c) By the Board of Directors of either Party (provided that the
terminating Party is not then in breach of any representation or
warranty contained in this Agreement under the applicable
standard set forth in Section 9.2(a) of this Agreement in the
case of FNBG and Section 9.3(a) in the case of GB&T or in the
Material breach of any covenant or other agreement contained in
this Agreement) in the event of a Material breach by the other
Party of any covenant or agreement contained in this Agreement
which cannot be or has not been cured within thirty (30) days
after the giving of written notice to the breaching Party of such
breach; or
(d) By the Board of Directors of either Party 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) the shareholders of either
party fail to vote their approval of this Agreement and the
transactions contemplated hereby as required by the GBCC at the
shareholders' meeting where the transactions were presented to
such shareholders for approval and voted upon; or
(e) By the Board of Directors of either Party in the event that the
Merger shall not have been consummated on or before February 28,
2005, but only if the failure to consummate the transactions
contemplated hereby on or before such date is not caused by any
breach of this Agreement by the Party electing to terminate
pursuant to this Section 10.1(e); or
(f) By the Board of Directors of either Party (provided that the
terminating Party is not then in breach of any representation or
warranty contained in this Agreement under the applicable
standard set forth in Section 9.2(a) of this Agreement in the
case of FNBG and Section 9.3(a) in the case of GB&T or in the
Material breach of any covenant or other agreement contained in
this Agreement) in the event that any of the conditions precedent
to the obligations of such Party to consummate the Merger (other
than as contemplated by Section 10.1(d) of this Agreement) cannot
be satisfied or fulfilled by the date specified in Section
10.1(e) 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 the provisions of this Section 10.2 and Article 11 and Section
8.6(b) of this Agreement shall survive any such termination and
abandonment.
10.3 NON-SURVIVAL OF REPRESENTATIONS AND COVENANTS. The respective
-------------------------------------------------
repesenta-ions, warranties, obligations, covenants, and agreements of
the Parties shall not survive the Effective Time except for this
Section 10.3 and Articles II, III, IV and XI and Sections 8.10, 8.11
and 8.12 of this Agreement.
ARTICLE XI
----------
MISCELLANEOUS
-------------
37
11.1 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:
"1933 ACT" shall mean the Securities Act of 1933, as amended.
"1934 ACT" shall mean the Securities Exchange Act of 1934, as amended.
"ACQUISITION PROPOSAL" shall mean any tender offer or exchange offer
or any proposal for a merger (other than the Merger), acquisition of
all of the stock or Assets of, or other business combination involving
FNBG or any of its Subsidiaries or the acquisition of a substantial
equity interest in, or a substantial portion of the Assets of FNBG 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, 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 such
capacity.
"AGREEMENT" shall mean this Agreement and Plan of Reorganization,
including the Exhibits delivered pursuant hereto and incorporated
herein by reference.
"ALLOWANCE" shall have the meaning provided in Section 5.9 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.
"CLOSING" shall mean the closing of the transactions contemplated
hereby, as described in Section 1.2 of this Agreement.
"CLOSING DATE" shall mean the date on which the Closing occurs.
"CONSENT" shall mean any consent, approval, authorization, clearance,
exemption, waiver, or similar affirmation by any Person pursuant to
any Contract, Law, Order, or Permit.
"CONTRACT" shall mean any written or oral agreement, 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.
38
"DEFAULT" shall mean (a) any breach or violation of or default under
any Contract, Order or Permit, (b) 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 (c) 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.
"DESIGNATED OFFICER" shall be the officer of GB&T and FNBG who is
designated by their respective Boards of Directors to make such
decisions as are specified herein.
"EFFECTIVE TIME" shall mean the date and time at which the Merger
becomes effective as defined in Section 1.3 of this Agreement.
"ENVIRONMENT" shall have the meaning specified in the Comprehensive
Environmental Response, Compensation and Liability Act, 42 U.S.C. Sec.
9601(8).
"ENVIRONMENTAL LAWS" shall mean all Laws pertaining to pollution or
protection of the Environment and which are administered, interpreted
or enforced by the United States Environmental Protection Agency and
state and local agencies with primary jurisdiction over pollution or
protection of the environment, including, without limitation, the
Comprehensive Environmental Response, Compensation and Liability Act,
42 U.S.C. Sec. 9601 et. seq., the Resource, Conservation and Recovery
Act, 42 U.S.C. Sec. 6901 et. seq., the Toxic Substance Control Act, 15
U.S.C. Sec. 2601, et. seq., and all implementing regulations and state
counterparts of such acts.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended.
"ERISA AFFILIATE" shall refer to a relationship between entities such
that the entities would, now or at any time in the past, constitute a
"single employer" within the meaning of Section 414 of the Internal
Revenue Code.
"ERISA PLAN" shall have the meaning provided in Section 5.14 of this
Agreement.
"EXCHANGE RATIO" shall have the meaning provided in Section 3.1 of
this Agreement.
"EXHIBITS" 1 through 8, inclusive (but excluding Exhibit 5 which has
been intentionally omitted), 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.
"FNB GWINNETT" shall mean First National Bank of Gwinnett, a bank
chartered under the banking laws of the United States and a FNBG
Subsidiary.
"FNBG BENEFIT PLANS" shall have the meaning set forth in Section 5.14
of this Agreement.
39
"FNBG COMMON STOCK" shall mean the $1.00 par value common stock of
FNBG.
"FNBG COMPANIES" shall mean, collectively, FNBG and all FNBG
Subsidiaries, and "FNBG Company" shall mean, individually, any of
them.
"FNBG DISCLOSURE MEMORANDUM" shall mean the written information
entitled "FNBG Disclosure Memorandum" delivered on or prior to the
date of this Agreement to GB&T describing in reasonable detail the
matters contained therein, specifically referencing each Section of
this Agreement under which such disclosure is being made.
"FNBG FINANCIAL STATEMENTS" shall mean (a) the consolidated balance
sheets (including related notes and schedules, if any) of FNBG as of
December 31, 2001, 2002, 2003 and the related statements of income,
changes in shareholders' equity, and cash flows (including related
notes and schedules, if any) for each of the three fiscal years ended
December 31, 2001, 2002, and 2003, included in the FNBG Disclosure
Memorandum, and (b)the consolidated balance sheets (including related
notes and schedules, if any) of FNBG and related statements of income,
changes in shareholders' equity, and cash flows (including related
notes and schedules, if any) with respect to periods ended subsequent
to December 31, 2003.
"FNBG OPTIONS" shall have the meaning set forth in Section 3.4 of this
Agreement, if any such options exist.
"FNBG SHAREHOLDERS' MEETING" shall mean the meeting of the
shareholders of FNBG to be held pursuant to Section 8.1 of this
Agreement, including any adjournment or adjournments thereof.
"FNBG STOCK PLANS" shall mean the existing stock option and other
stock-based compensation plans of FNBG disclosed in Section 5.14 of
the FNBG Disclosure Memorandum.
"FNBG SUBSIDIARIES" shall mean the subsidiaries of FNBG.
"GAAP" shall mean generally accepted accounting principles,
consistently applied during the periods involved.
"GBCC" shall mean the Georgia Business Corporation Code.
"GB&T COMMON STOCK" shall mean the no par value common stock of GB&T.
"GB&T COMPANIES" shall mean, collectively, GB&T and all GB&T
Subsidiaries.
"GB&T DISCLOSURE MEMORANDUM" shall mean the written information
entitled "GB&T Disclosure Memorandum" delivered on or prior to the
date of this Agreement to FNBG describing in reasonable detail the
matters contained therein and, with respect to each disclosure made
therein, specifically referencing each Section of this Agreement under
which such disclosure is being made.
40
"GB&T FINANCIAL STATEMENTS" shall mean (a) the consolidated balance
sheets (including related notes and schedules, if any) of GB&T as of
December 31, 2001, 2002, and 2003, and the related statements of
income, changes in shareholders' equity, and cash flows (including
related notes and schedules, if any) for each of the three years ended
December 31, 2001, 2002, and 2003, and (b) the consolidated balance
sheets (including related notes and schedules, if any) of GB&T and
related statements of income, changes in shareholders' equity, and
cash flows (including related notes and schedules, if any) included in
SEC Documents filed with respect to periods ended subsequent to
December 31, 2003.
"GB&T SHAREHOLDERS' MEETING" shall mean the meeting of the
shareholders of GB&T to be held pursuant to Section 8.1 of this
Agreement, including any adjournment or adjournments thereof.
"GB&T STOCK PLANS" shall mean the existing stock option and other
stock-based compensation plans of GB&T.
"GB&T SUBSIDIARIES" shall mean the Subsidiaries of GB&T at the
Effective Time.
"GEORGIA CERTIFICATE OF MERGER" shall mean the Certificate of Merger
to be executed by GB&T and filed with the Secretary of State of the
State of Georgia relating to the Merger as contemplated by Section 1.1
of this Agreement.
"HAZARDOUS MATERIAL" shall mean any substance which is a "hazardous
substance" or "toxic substance" as defined in the Comprehensive
Environment Response, Compensation, and Liability Act, 42 U.S.C. Sec.
9601 et seq., or any other substance or material defined, designated,
classified or regulated as hazardous or toxic under any Environmental
Law, specifically including asbestos requiring abatement, removal or
encapsulation pursuant to the requirements of Environmental Laws of
polychlorinated biphenyls, and petroleum and petroleum products,
provided, notwithstanding the foregoing or any other provision in this
Agreement to the contrary, the words "Hazardous Material" shall not
mean or include any such Hazardous Material used, generated,
manufactured, stored or otherwise handled in normal quantities in the
ordinary course of business in compliance with all applicable
Environmental Laws, or such that may be naturally occurring in any
ambient air, surface water, ground water, land surface or subsurface
strata.
"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, or any Senior or
Executive Vice President of such Person.
"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.
41
"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, 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 on, or with
respect to, any property or property interest, other than (i) Liens
for current property Taxes not yet due and payable; (ii) for
depository institution Subsidiaries of a Party, pledges to secure
deposits and (iii) other Liens incurred in the ordinary course of the
banking business.
"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 other than the violations of law section from
such reports.
"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.
"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 (a) the financial
position, business, or results of operations of such Party and its
Subsidiaries, taken as a whole, or (b) 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 (w) changes in banking and similar Laws of general
applicability or interpretations thereof by courts or governmental
authorities, (x) changes in GAAP or regulatory accounting principles
generally applicable to banks and their holding companies, (y) actions
and omissions of a Party (or any of its Subsidiaries) taken with the
prior informed consent of the other Party in contemplation of the
transactions contemplated hereby, or (z) the Merger and compliance
with the provisions of this Agreement on the operating performance of
the Parties.
"MERGER" shall mean the merger of FNBG with and into GB&T referred to
in Section 1.1 of this Agreement.
42
"NASDAQ" shall mean the National Association of Security Dealers
Automated Quotation System.
"ORDER" shall mean any administrative decision or award, decree,
injunction, judgment, order, quasi-judicial decision or award, ruling,
or writ of any federal, state, local or foreign or other court,
arbitrator, mediator, tribunal, administrative agency or Regulatory
Authority.
"PARTICIPATION FACILITY" shall mean any facility or property in which
the Party in question or any of its Subsidiaries participates in the
management (including any property or facility held in a joint
venture) and, where required by the context, said term means the owner
or operator of such facility or property, but only with respect to
such facility or property.
"PARTY" shall mean either GB&T or FNBG, and "Parties" shall mean both
GB&T and FNBG.
"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, Liabilities, or business.
"PERSON" shall mean a natural person or any legal, commercial or
governmental entity, such as, but not limited to, a corporation,
general partnership, joint venture, limited partnership, limited
liability company, trust, business association, group acting in
concert, or any person acting in a representative capacity.
"PROXY STATEMENT" shall mean the proxy statement used by FNBG to
solicit the approval of its shareholders of the transactions
contemplated by this Agreement which shall be included in the
prospectus of GB&T relating to shares of GB&T Common Stock to be
issued to the shareholders of FNBG.
"REGISTRATION STATEMENT" shall mean the Registration Statement on Form
S-4, or other appropriate form, filed with the SEC by GB&T under the
1933 Act with respect to the shares of GB&T Common Stock to be issued
to the shareholders of FNBG in connection with the transactions
contemplated by this Agreement and which shall include the Joint Proxy
Statement.
"REGULATORY AUTHORITIES" shall mean, collectively if applicable, the
Federal Trade Commission, the United States Department of Justice, the
Board of the Governors of the Federal Reserve System, the Office of
Thrift Supervision (including its predecessor, the Federal Home Loan
Bank Board), 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.
"RIGHTS" shall mean all arrangements, calls, commitments, Contracts,
options, rights to subscribe to, scrip, understandings, warrants or
other binding obligations of any character whatsoever relating to, or
securities or rights convertible into or exchangeable for, shares
43
of the capital stock of a Person or by which a Person is or may be
bound to issue additional shares of its capital stock or other Rights.
"SEC" shall mean the United States Securities and Exchange Commission.
"SEC DOCUMENTS" shall mean all forms, proxy statements, registration
statements, reports, schedules and other documents filed, or required
to be filed, by a Party or any of its Subsidiaries with any Regulatory
Authority pursuant to the Securities Laws.
"SECURITIES LAWS" shall mean the 1933 Act, the 1934 Act, the
Investment Company Act of 1940, as amended, the Investment Advisors
Act of 1940, as amended, the Trust Indenture Act of 1939, as amended,
and the rules and regulations of any Regulatory Authority promulgated
thereunder.
"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.
"SUPPORT AGREEMENTS" shall mean the various Support Agreements, each
in substantially the form of Exhibit 6 to this Agreement.
"SURVIVING CORPORATION" shall mean GB&T as the surviving corporation
resulting from the Merger.
"TAXES" shall mean any federal, state, county, local or foreign
income, profits, franchise, gross receipts, payroll, sales,
employment, use, property, withholding, excise, occupancy and other
taxes, assessments, charges, fares or impositions, including interest,
penalties and additions imposed thereon or with respect thereto.
Any singular term in this Agreement shall be deemed to include the
plural, and any plural term the singular. Whenever the words "include,"
"includes," or "including" are used in this Agreement, they shall be deemed
followed by the words "without limitation."
11.2 EXPENSES.
--------
(a) Except as otherwise provided in this Section 11.2, each of the
Parties shall bear and pay all direct costs and expenses incurred
by it or on its behalf in connection with the transactions
contemplated hereunder, including filing, registration and
application fees, printing fees, and fees and expenses of its own
financial or other consultants, investment bankers, accountants
and counsel, except that each of the Parties shall bear and pay
(i) one-half of the filing fees payable in connection with the
Registration Statement and the applications filed with other
Regulatory Authorities, and (ii) one-half of the costs incurred
in connection with the printing or copying of the Joint Proxy
Statement.
44
(b) Notwithstanding the provisions of Section 11.2(a) of this
Agreement, if for any reason this Agreement is terminated
pursuant to Sections 10.1(b) or 10.1(c) of this Agreement, the
breaching Party agrees to pay the non-breaching Party an amount
equal to the reasonable and documented fees and expenses incurred
by such non-breaching Party in connection with the examination
and investigation of the breaching Party, the preparation and
negotiation of this Agreement and related agreements, regulatory
filings and other documents related to the transactions
contemplated hereunder, including, without limitation, fees and
expenses of investment banking consultants, accountants,
attorneys and other agents. Final settlement with respect to
payment of such fees and expenses shall be made within thirty
(30) days after the termination of this Agreement.
11.3 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, other than as identified in Section
11.3 of each party's Disclosure Memorandum, and GB&T specifically
acknowledges its understanding that the fee owed by FNBG as disclosed
in FNBG's Disclosure Memorandum will be paid immediately following
closing. 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 GB&T or FNBG, each of GB&T and FNBG, as the case
may be, agrees to indemnify and hold the other Party harmless of and
from any Liability in respect of any such claim.
11.4 ENTIRE AGREEMENT. Except as otherwise expressly provided herein, this
----------------
Agreement (including the Exhibits, 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, other than as provided in Section 8.10 of
this Agreement.
11.5 AMENDMENTS. To the extent permitted by Law, this Agreement may be
----------
amended by a subsequent writing signed by each of the Parties upon the
approval of the Boards of Directors of each of the Parties; provided,
however, that after any such approval by the holders of FNBG Common
Stock, there shall be made no amendment that pursuant to the GBCC
requires further approval by such shareholders without the further
approval of such shareholders.
11.6 WAIVERS.
-------
(a) Prior to or at the Effective Time, GB&T, acting through its Board
of Directors, chief executive officer or Designated Officer,
shall have the right to waive any Default in the performance of
any term of this Agreement by FNBG, to waive or extend the time
for the compliance or fulfillment by FNBG of any and all of its
obligations under this Agreement, and to waive any or all of the
conditions precedent to the obligations of GB&T under this
Agreement, except any condition which, if not satisfied, would
result in the violation of any Law. No
45
such waiver shall be effective unless in writing and signed by a
duly authorized officer of GB&T.
(b) Prior to or at the Effective Time, FNBG, acting through its Board
of Directors, chief executive officer or Designated Officer,
shall have the right to waive any Default in the performance of
any term of this Agreement by GB&T, to waive or extend the time
for the compliance or fulfillment by GB&T of any and all of its
obligations under this Agreement, and to waive any or all of the
conditions precedent to the obligations of FNBG 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 and signed by a duly authorized
officer of FNBG.
(c) The failure of any Party at any time or times to require
performance of any provision hereof shall in no manner affect the
right of such Party at a later time to enforce the same or any
other provision of this Agreement. No waiver of any condition or
of the breach of any term contained in this Agreement in one or
more instances shall be deemed to be or construed as a further or
continuing waiver of such condition or breach or a waiver of any
other condition or of the breach of any other term of this
Agreement.
11.7 ASSIGNMENT. Except as expressly contemplated hereby, neither this
----------
Agreement nor any of the rights, interests or obligations hereunder
shall be assigned by any Party hereto (whether by operation of Law or
otherwise) without the prior written consent of the other Party.
Subject to the preceding sentence, this Agreement will be binding
upon, inure to the benefit of and be enforceable by the Parties and
their respective successors and assigns.
11.8 NOTICES. All notices or other communications which are required or
-------
permitted hereunder shall be in writing and sufficient if delivered by
hand, by facsimile transmission, 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:
GB&T: GB&T Bancshares, Inc.
P. O. Box 2760
000 Xxxxx Xxxxxx Xxxxxxx
Xxxxxxxxxxx, Xxxxxxx 00000
Telecopy No: 000-000-0000
ATTN: XXXXXXX X. XXXX, PRESIDENT
COPY TO COUNSEL: Xxxxxx, Xxxxxx & Xxxxx, LLP
000 X. X. Xxxxxx Xxxxxxx
P. O. Box 1457
Xxxxxxxxxxx, Xxxxxxx 00000
Telecopy No: 000-000-0000
ATTENTION: XXXXXX X. XXXXXX, ESQ.
FNBG Bancshares, Inc.
46
0000 Xxxxxx Xxxxxx Xxxx
Xxxxxx, Xxxxxxx 00000
ATTENTION: XXXXX X. XXXXX, PRESIDENT
COPY TO COUNSEL: Powell, Goldstein, Xxxxxx & Xxxxxx, LLP
000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxxxx 00000
Telecopy No.: 000-000-0000
ATTENTION: XXXXXXX X. XXXXXXX, ESQ.
11.9 GOVERNING LAW. This Agreement shall be governed by and construed in
--------------
accordance with the Laws of the State of Georgia, without regard to
any applicable conflicts of Laws, except to the extent that the
federal laws of the United States may apply to the Merger.
11.10 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.
11.11 CAPTIONS. The captions contained in this Agreement are for reference
--------
purposes only and are not part of this Agreement.
11.12 ENFORCEMENT OF AGREEMENT. The Parties hereto agree that irreparable
------------------------
damage would occur in the event that any of the provisions of this
Agreement was not performed in accordance with its specific terms or
was otherwise breached. It is accordingly agreed that the Parties
shall be entitled to an injunction or injunctions to prevent breaches
of this Agreement and to enforce specifically the terms and provisions
hereof in any court of the United States or any state having
jurisdiction, this being in addition to any other remedy to which they
are entitled at law or in equity.
11.13 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 officers thereunto as of the day and year first above written.
GB&T BANCSHARES, INC.
By:
/s/ Xxxxxxx X. Xxxx
-----------------------------
Xxxxxxx X. Xxxx
President and CEO
47
Attest:
/s/ Xxxxxx X. Xxxxxx
-----------------------------
Vice Chairman
(Affix Corporate Seal)
FNBG BANCSHARES, INC.
By:
/s/ Xxxxx X. Xxxxx
-----------------------------
Xxxxx X. Xxxxx
President
Attest:
/s/ Xxxxxx X. Xxxxx
-----------------------------
Secretary
(Affix Corporate Seal)
48
GB&T/FNBG MERGER AGREEMENT
SCHEDULE OF EXHIBITS
1 Affiliate Agreement (Section 8.10)
2. Powell, Goldstein, Xxxxxx & Xxxxxx Opinion Letter (Section 9.2(d))
3. Claims/Indemnification Letters (Section 9.2(e))
4. Xxxxxx, Xxxxxx & Xxxxx Opinion Letter (Section 9.3(d))
5. Intentionally Omitted
6. Support Agreement (Preamble, Section 1.4;
Section 9.2(g))
7. Noncompete Agreements (Section 9.2(h))
8. Employment Agreement (Section 9.2(i))
49
