EXHIBIT 2.1
AGREEMENT AND PLAN OF REORGANIZATION
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THIS AGREEMENT AND PLAN OF REORGANIZATION (this "Agreement") is made and
entered into as of March 16, 2001 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 Community Trust
Financial Services Corporation ("CT Financial Services"), a corporation
organized and existing under the laws of the State of Georgia, with its
principal office located in Hiram, Georgia.
Preamble
The Boards of Directors of GB&T and CT Financial Services 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 CT Financial Services 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 CT Financial Services will be converted
into the right to receive shares of capital stock of GB&T. As a result,
shareholders of CT Financial Services will become shareholders of GB&T, and the
wholly-owned subsidiaries of CT Financial Services, Community Trust Bank,
Community Loan Company, and Metroplex Appraisals, Inc. will continue to conduct
business and operations as wholly-owned subsidiaries of GB&T. GB&T will become
the owner of the equity position in Cash Transactions, L.L.C. that is currently
owned by CT Financial Services. The transactions described in this Agreement are
subject to the approvals of the Boards of Directors of both GB&T and CT
Financial Services, the shareholders of GB&T and CT Financial Services, 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 to this Agreement that the
merger(i) for federal income tax purposes shall qualify as a "reorganization"
within the meaning of Section 368(a) of the Internal Revenue Code and (ii) for
accounting purposes shall be accounted for as a "pooling of interests."
As a condition and inducement to GB&T's willingness to consummate the
transactions contemplated by this Agreement, each of the directors of CT
Financial Services 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 hereto 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,
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CT Financial Services shall be merged with and into GB&T in accordance with the
provisions of Section 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 CT Financial Services.
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 CT Financial Services approve this Agreement
to the extent such approval is required by applicable Law; (c) the date on which
the Shareholders of GB&T 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
CT Financial Services 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
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Effective Time, together with a director from the present CT Financial Services
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 GB&T Bank from and after the Effective Time
shall consist of the directors of GB&T Bank immediately preceding the Effective
Time. Such directors shall serve in accordance with the Articles of
Incorporation and Bylaws of GB&T Bank.
(c) The directors of Community Trust Bank from and after the
Effective Time shall consist of the directors of Community Trust Bank
immediately preceding the Effective time, together with a director from the GB&T
board of directors as selected by the GB&T board of directors. Such directors
shall serve in accordance with the Articles of Incorporation and Bylaws of
Community Trust Bank.
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 CT Financial Services, 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 CT Financial Services Common Stock (excluding
shares held by GB&T or CT Financial Services 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 .786 shares of GB&T Common Stock (the "Exchange Ratio").
3.2 Anti-Dilution Provisions. In the event GB&T or CT Financial Services
changes the number of shares of GB&T Common Stock or CT Financial Services
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 CT Financial Services. Each of the shares of CT
Financial Services Common Stock held by any GB&T Company or by any CT Financial
Services 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.
(a) Each option to purchase CT Financial Services Common Stock ("CT
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Financial Services 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 CT
Financial Services 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 CT Financial
Services Option shall be equal to the number of shares of CT Financial Services
Common Stock subject to each such CT Financial Services 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 CT Financial Services
Options shall be determined by dividing the per share exercise price of the CT
Financial Services Common Stock subject to each such CT Financial Services
Option by the Exchange Ratio and rounding down to the nearest cent. It is
intended that the foregoing assumption of CT Financial Services 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 CT Financial Services 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 CT Financial Services such modification will not
constitute a "modification" as defined in Section 424 of the Internal Revenue
Code for options which are incentive stock options and as long as the
accountants for both parties opine that such modification will not affect
"pooling of interests" treatment required under Section 9.1(h)) 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 CT Financial Services 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 From 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 CT Financial Services 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 CT Financial Services 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 CT
Financial Services Options for resale thereunder.
3.5 Dissenting Shareholders. Any holder of shares of CT Financial
Services 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 the
certificate or certificates representing shares for which payment is being made.
In the event that after the Effective Time a dissenting shareholder of CT
Financial Services fails to perfect, or effectively withdraws or loses,
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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 CT
Financial Services Common Stock is entitled under this Article III (without
interest) upon surrender by such holder of the certificate or certificates
representing shares of CT Financial Services Common Stock held by such holder.
3.6 Fractional Shares. Notwithstanding any other provision of this
Agreement, each holder of shares of CT Financial Services Common Stock exchanged
pursuant to the Merger, or of options to purchase shares of CT Financial
Services 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 $18.00. 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 CT
Financial Services shall cause the exchange agent selected by GB&T (the
"Exchange Agent") to mail to the former holders of CT Financial Services 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 CT Financial Services Common Stock shall pass, only upon
proper delivery of such certificates to the Exchange Agent). After the
Effective Time, each holder of shares of CT Financial Services 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 CT Financial Services Common Stock
is entitled as a result of the Merger until such holder surrenders his or her
certificate or certificates representing the shares of CT Financial Services
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 CT
Financial Services 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 CT Financial Services
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 CT Financial Services Shareholders. The stock
transfer books of CT Financial Services shall be closed as to holders of CT
Financial Services Common Stock immediately prior to the Effective Time and no
transfer of CT Financial Services Common Stock by any such holder shall
thereafter be made or recognized. Until surrendered for exchange in accordance
with the provisions of Section 4.1 of this Agreement, each certificate
theretofore representing shares
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of CT Financial Services 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 CT Financial Services
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 CT Financial Services Common Stock are converted,
regardless of whether such holders have exchanged their certificates
representing CT Financial Services 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 CT
Financial Services 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 CT Financial
Services 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 CT Financial Services
CT Financial Services hereby represents and warrants to GB&T as follows:
5.1 Organization, Standing, and Power. CT Financial Services 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. CT Financial Services has the corporate
power and authority to carry on its business as now conducted and to own, lease
and operate its Assets. CT Financial Services 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 CT Financial Services.
5.2 Authority; No Breach By Agreement.
(a) CT Financial Services 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 CT Financial
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Services, subject to the approval of this Agreement by the holders of a majority
of the outstanding shares of CT Financial Services Common Stock, which is the
only shareholder vote required for approval of this Agreement and consummation
of the Merger by CT Financial Services. Subject to such requisite shareholder
approval, this Agreement represents a legal, valid and binding obligation of CT
Financial Services, enforceable against CT Financial Services 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 CT
Financial Services, nor, except as described in Section 5.2 of the CT Financial
Services Disclosure Memorandum, the consummation by CT Financial Services of the
transactions contemplated hereby, nor compliance by CT Financial Services with
any of the provisions hereof will (i) conflict with or result in a breach of any
provision of CT Financial Services's Articles of Incorporation or Bylaws, or
(ii) 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 CT Financial Services Company under, any Contract or Permit of any CT
Financial Services 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 CT Financial Services, 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 CT Financial Services 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 CT Financial Services, no notice to, filing with, or
Consent of any public body or authority is necessary for the consummation by CT
Financial Services of the Merger and the other transactions contemplated in this
Agreement.
5.3 Capital Stock.
(a) The authorized capital stock of CT Financial Services consists of
10,000,000 shares of CT Financial Services Common Stock, of which 2,398,569
shares are issued and outstanding as of the date of this Agreement and not more
than 2,650,715 shares will be issued and outstanding at the Effective Time. All
of the issued and outstanding shares of capital stock of CT Financial Services
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 CT Financial
Services have been issued in violation of any preemptive rights of the current
or past shareholders of CT Financial Services.
(b) Except as set forth in Section 5.3 of this Agreement, or as
disclosed in Section 5.3 of the CT Financial Services Disclosure Memorandum,
there are no shares of capital stock or
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other equity securities of CT Financial Services outstanding and no outstanding
Rights relating to the capital stock of CT Financial Services.
5.4 CT Financial Services Subsidiaries. CT Financial Services has
disclosed in Section 5.4 of the CT Financial Services Disclosure Memorandum all
of the CT Financial Services Subsidiaries as of the date of this Agreement.
Except as disclosed in Section 5.4 of the CT Financial Services Disclosure
Memorandum, CT Financial Services or one of its Subsidiaries owns all of the
issued and outstanding shares of capital stock of each CT Financial Services
Subsidiary. No equity securities of any CT Financial Services Subsidiary are or
may become required to be issued (other than to another CT Financial Services
Company) by reason of any Rights, and there are no Contracts by which any CT
Financial Services Subsidiary is bound to issue (other than to another CT
Financial Services Company) additional shares of its capital stock or Rights, or
by which any CT Financial Services Company is or may be bound to transfer any
shares of the capital stock of any CT Financial Services Subsidiary (other than
to another CT Financial Services Company). There are no Contracts relating to
the rights of any CT Financial Services Company to vote or to dispose of any
shares of the capital stock of any CT Financial Services Subsidiary. All of the
shares of capital stock of each CT Financial Services Subsidiary held by a CT
Financial Services 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 CT Financial Services Company free and clear of any Lien
except as disclosed by the CT Financial Services Disclosure Memorandum. Each CT
Financial Services 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 CT Financial
Services 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 CT Financial Services. Each CT Financial Services 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. CT Financial Services has included in Section
5.5 of the CT Financial Services Disclosure Memorandum copies of all CT
Financial Services Financial Statements for periods ended prior to the date
hereof and will deliver to GB&T copies of all CT Financial Services Financial
Statements prepared subsequent to the date hereof. The CT Financial Services
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 CT Financial Services 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 CT Financial Services Companies as of the dates indicated and
the consolidated results of operations, changes in shareholders' equity, and
cash flows of the CT Financial Services 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 notes thereto or, in the case of interim
financial statements, to normal
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recurring year-end adjustments that are not Material in amount or effect).
5.6 Absence of Undisclosed Liabilities. No CT Financial Services Company
has any Liabilities that are reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on CT Financial Services except (i)
Liabilities which are accrued or reserved against in the consolidated balance
sheets of CT Financial Services as of December 31, 2000, included in the CT
Financial Services Financial Statements or reflected in the notes thereto. No
CT Financial Services Company has incurred or paid any Liability since December
31, 2000 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
CT Financial Services.
5.7 Absence of Certain Changes or Events. Since December 31, 2000, except
as disclosed in Section 5.7 of the CT Financial Services Disclosure Memorandum
and to the knowledge of CT Financial Services, (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 CT Financial
Services, and (b) the CT Financial Services 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 CT
Financial Services provided in Article VII of this Agreement and which would
likely have a Material Adverse Effect on CT Financial Services.
5.8 Tax Matters.
(a) All Tax returns required to be filed by or on behalf of any of
the CT Financial Services 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 CT Financial Services and all returns filed
are complete and accurate in all Material respects to the Knowledge of CT
Financial Services. 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 CT Financial Services, 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 CT Financial Services, except as
reserved against in the CT Financial Services Financial Statements delivered
prior to the date of this Agreement or as disclosed in Section 5.8(a) of the CT
Financial Services 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 CT Financial
Services Disclosure Memorandum, none of the CT Financial Services 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 CT
Financial Services Company, which deficiency is reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on CT Financial
Services.
(c) Adequate provision for any Taxes due or to become due for any of
the CT Financial Services Companies for the period or periods through and
including the date of the
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respective CT Financial Services Financial Statements has been made and is
reflected on such CT Financial Services Financial Statements.
(d) Deferred Taxes of the CT Financial Services Companies have been
provided for in accordance with GAAP.
(e) To the knowledge of CT Financial Services, each of the CT
Financial Services 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 CT Financial
Services.
5.9 Allowance for Possible Loan Losses. The allowance for possible loan or
credit losses (the "Allowance") shown on the balance sheet of Community Trust
Bank included in the most recent CT Financial Services Financial Statements
dated prior to the date of this Agreement was, and the Allowance shown on the
balance sheet of Community Trust Bank included in the CT Financial Services
Financial Statements as of dates subsequent to the execution of this Agreement
will be, as of the dates thereof, adequate to the Knowledge of CT Financial
Services (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 Community Trust Bank
and other extensions of credit (including letters of credit and commitments to
make loans or extend credit) by Community Trust Bank 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 CT Financial Services.
5.10 Assets. Except as disclosed in Section 5.10 of the CT Financial
Services Disclosure Memorandum or as disclosed or reserved against in the CT
Financial Services Financial Statements, the CT Financial Services Companies
have good and marketable title, and to the Knowledge of CT Financial Services,
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 CT Financial
Services Statement. All Material tangible properties used in the businesses of
the CT Financial Services Companies are in good condition, reasonable wear and
tear excepted, and are usable in the ordinary course of business consistent with
CT Financial Services's past practices. All Assets which are Material to the
business of the CT Financial Services Companies and held under leases or
subleases by any of the CT Financial Services 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 CT
Financial Services 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 CT Financial Services Companies is a named insured
are reasonably sufficient. The Assets of the CT Financial Services Companies
include all assets
10
required to operate the business of the CT Financial Services Companies as
presently conducted.
5.11 Environmental Matters. Except as disclosed in Section 5.11 of the CT
Financial Services Disclosure Memorandum:
(a) To the Knowledge of CT Financial Services, each CT Financial
Services 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 CT Financial Services.
(b) There is no Litigation pending or to the Knowledge of CT
Financial Services threatened before any court, governmental agency or authority
or other forum in which any CT Financial Services Company, or to the Knowledge
of CT Financial Services, 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 CT Financial Services 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 CT Financial
Services, and to the Knowledge of CT Financial Services, there is no reasonable
basis for any such Litigation.
(c) To the Knowledge of CT Financial Services, 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 CT Financial
Services.
5.12 Compliance with Laws. To the knowledge of CT Financial Services, each
CT Financial Services 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 CT Financial
Services, and, to the Knowledge of CT Financial Services, 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
CT Financial Services. Except as disclosed in Section 5.12 of the CT Financial
Services Disclosure Memorandum, no CT Financial Services 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 CT Financial Services; and
(b) to the Knowledge of CT Financial Services, 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 CT Financial Services 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 CT Financial Services, (ii)
threatening to revoke any
11
Permits, the revocation of which is reasonably likely to have, individually or
in the aggregate, a Material Adverse Effect on CT Financial Services, or (iii)
requiring any CT Financial Services 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 CT Financial Services Company is the subject of
any Litigation asserting that it or any other CT Financial Services 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 CT
Financial Services 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 CT Financial Services Company, pending or, to its Knowledge,
threatened, nor, to its Knowledge, is there any activity involving any CT
Financial Services Company's employees seeking to certify a collective
bargaining unit or engaging in any other organization activity.
5.14 Employee Benefit Plans.
(a) CT Financial Services has disclosed in Section 5.14 of the CT
Financial Services 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 CT Financial Services 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 "CT Financial Services Benefit Plans"). Any of
the CT Financial Services 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 "CT Financial Services ERISA Plan." Each CT Financial Services 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 "CT Financial Services Pension
Plan." No CT Financial Services Pension Plan is or has been a multi-employer
plan within the meaning of Section 3(37) of ERISA.
(b) To the Knowledge of CT Financial Services, 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 CT
Financial Services. Each CT Financial Services 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 CT Financial Services, there are no circumstances likely to result
in revocation of any such favorable determination letter. To the Knowledge of
CT Financial Services, no CT Financial Services Company nor any other party has
engaged in a transaction with respect to any CT Financial Services Benefit Plan
that, assuming the taxable period of such transaction expired as of the date
hereof,
12
would subject any CT Financial Services 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 CT Financial Services.
(c) Neither CT Financial Services nor any ERISA Affiliate of CT
Financial Services 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 CT Financial Services nor any ERISA Affiliate of CT
Financial Services 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 CT Financial
Services Disclosure Memorandum, (i) no CT Financial Services Company has any
obligations for retiree health and life benefits under any of the CT Financial
Services 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 CT
Financial Services Company to amend or terminate any such Plan; and (iii) any
amendment or termination of any such Plan will not cause any CT Financial
Services Company to incur any Liability that is reasonably likely to have a
Material Adverse Effect on CT Financial Services.
(f) Except as disclosed in Section 5.14(f) of the CT Financial
Services 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 CT Financial Services Company from any CT Financial Services
Company under any CT Financial Services Benefit Plan or otherwise, (ii) increase
any benefits otherwise payable under any CT Financial Services 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 CT Financial Services Company and their respective
beneficiaries have been fully reflected on the CT Financial Services Financial
Statements to the extent required by and in accordance with GAAP, in all
Material respects.
(h) To the Knowledge of CT Financial Services, CT Financial Services
and each ERISA Affiliate of CT Financial Services 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 CT Financial Services Company to
incur any Liability that is reasonably likely to have a Material Adverse Effect
on CT Financial Services.
(i) Except as disclosed in Section 5.14(i) of the CT Financial
Services Disclosure Memorandum, neither CT Financial Services nor any ERISA
Affiliate of CT Financial Services 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
13
(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 CT
Financial Services, there are no actions, audits, investigations, suits or
claims pending against any CT Financial Services Benefit Plan, any trust or
other funding agency created thereunder, or against any fiduciary of any CT
Financial Services Benefit Plan or against the assets of any CT Financial
Services Benefit Plan.
5.15 Material Contracts. Except as disclosed in Section 5.15 of the CT
Financial Services Disclosure Memorandum or otherwise reflected in the CT CT
Financial Services Financial Statements, none of the CT Financial Services
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 CT Financial Services Company or the guarantee by any
CT Financial Services 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 CT Financial Services Companies,
and (d) any other Contract (excluding this Agreement) or amendment thereto that
is required to be filed as an Exhibit to a Form 10-KSB or Form 10-QSB filed by
CT Financial Services with the SEC as of the date of this Agreement that has not
been filed as an exhibit to any CT Financial Services a 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 "CT Financial Services Contracts"). None of the
CT Financial Services Companies is in Default under any CT Financial Services
Contract, other than Defaults which are not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on CT Financial
Services. All of the indebtedness of any CT Financial Services Company for money
borrowed is prepayable at any time by such CT Financial Services Company without
penalty or premium except as disclosed in CT Financial Services Company
Disclosure Memorandum.
5.16 Legal Proceedings. Except as disclosed in Section 5.16 of the CT
Financial Services Disclosure Memorandum, there is no Litigation instituted or
pending, or, to the Knowledge of CT Financial Services, 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 CT
Financial Services 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 CT Financial Services, nor are there any Orders of
any Regulatory Authorities, other governmental authorities, or arbitrators
outstanding against any CT Financial Services Company, that are reasonably
likely to have, individually or in the aggregate, a Material Adverse Effect on
CT Financial Services.
5.17 Reports. Since January 1, 1999, each CT Financial Services 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
aggregate, a Material Adverse
14
Effect on CT Financial Services). 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 CT Financial
Services'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 CT Financial
Services, no statement, certificate, instrument or other writing furnished or to
be furnished by any CT Financial Services 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 CT Financial Services, none of the
information supplied or to be supplied by any CT Financial Services 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 CT Financial Services, none of the information supplied or to be
supplied by any CT Financial Services Company or any Affiliate thereof for
inclusion in the Proxy Statement to be mailed to CT Financial Services's
shareholders in connection with the CT Financial Services Shareholders' Meeting,
and any other documents to be filed by a CT Financial Services 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 CT Financial Services, 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 CT Financial Services
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 CT
Financial Services Shareholders' Meeting. All documents that any CT Financial
Services 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 CT Financial Services
Company, to the Knowledge of CT Financial Services, 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 pooling-of-
interests accounting treatment or 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 CT Financial Services, 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 CT Financial Services 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 CT Financial
Services 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 CT
Financial Services Company that may be acquired or controlled by it.
5.21 State Anti-Takeover Laws. Each CT Financial Services 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
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14-2-1131 et seq. of the GBCC.
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ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF GB&T
GB&T hereby represents and warrants to CT Financial Services 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 CT Financial Services shareholders, 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).
(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
16
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 10,000,000
shares of GB&T Common Stock, of which 2,766,138 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 CT Financial Services Common Stock upon
consummation of the Merger, when issued in accordance with the terms of this
Agreement, will be, duly and validly issued and outstanding and fully paid and
nonassessable under the GBCC. None of the outstanding shares of GB&T Common
Stock have been, and none of the shares of GB&T Common Stock to be issued in
exchange for shares of CT Financial Services 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.
(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.
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
17
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 ended
prior to the date hereof and will deliver to CT Financial Services 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
December 31, 2000, included in the GB&T Financial Statements or reflected in the
notes thereto. No GB&T Company has incurred or paid any Liability since December
31, 2000, 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 December 31, 2000, 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
18
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 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
19
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 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 Companies is a named insured are reasonably
sufficient. The Assets of the Companies include all assets required to operate
the business of the Companies as presently conducted.
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.
(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
20
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 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 CT Financial Services 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
21
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 CT Financial Services. 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.
(d) Neither 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
22
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.
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, 1999, 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
23
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 CT Financial Services 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 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
pooling-of-interests accounting treatment or 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.
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ARTICLE VII
CONDUCT OF BUSINESS PENDING CONSUMMATION
7.1 Affirmative Covenants of CT Financial Services. Unless the prior
written consent of GB&T shall have been obtained, and except as otherwise
contemplated herein or disclosed in the CT Financial Services Disclosure
Memorandum, CT Financial Services 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
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 CT Financial Services. Except as disclosed in
the CT Financial Services Disclosure Memorandum, from the date of this Agreement
until the earlier of the Effective Time or the termination of this Agreement, CT
Financial Services 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 CT Financial Services Company, or
(b) incur any additional debt obligation or other obligation for
borrowed money (other than indebtedness of a CT Financial Services Company to
another CT Financial Services Company) in excess of an aggregate of $50,000 (for
the CT Financial Services Companies on a consolidated basis) except in the
ordinary course of the business of the CT Financial Services 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 CT Financial Services
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 CT Financial Services 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 CT Financial Services Company, or declare or pay any
dividend or make any other distribution in respect of CT Financial Services's
capital stock except for a regular cash dividend in accordance with past
practices (provided, however, that a second quarter dividend shall not be
declared by CT Financial Services for the second quarter of
25
2001 if the CT Financial Services shareholders will be eligible for a second
quarter dividend from GB&T); 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 CT
Financial Services 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 CT Financial Services Common Stock or any
other capital stock of any CT Financial Services 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
(e) except as disclosed in Section 7.2(e) of the CT Financial Services
Disclosure Memorandum, adjust, split, combine or reclassify any capital stock of
any CT Financial Services Company or issue or authorize the issuance of any
other securities in respect of or in substitution for shares of CT Financial
Services Common Stock or sell, lease, mortgage or otherwise dispose of or
otherwise encumber (i) any shares of capital stock of any CT Financial Services
Subsidiary (unless any such shares of stock are sold or otherwise transferred
to another CT Financial Services 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 CT Financial Services 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 CT Financial Services 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 CT Financial Services, in each case as
disclosed in Section 7.2(g) of the CT Financial Services 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 CT Financial Services
Disclosure Memorandum; enter into or amend any severance agreements with
officers of any CT Financial Services Company; grant any general increase in
compensation to all employees except as disclosed in Section 7.2(g) of the CT
Financial Services Disclosure Memorandum; grant any increase in fees or other
increases in compensation or other benefits to directors of any CT Financial
Services 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 CT Financial
Services Company and any Person (unless such amendment is required by Law) that
the CT Financial Services 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
26
(i) adopt any new employee benefit plan of any CT Financial Services
Company or make any material change in or to any existing employee benefit plans
of any CT Financial Services 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
(k) commence any Litigation other than in accordance with past practice,
settle any Litigation involving any Liability of any CT Financial Services
Company for money damages in excess of $50,000 or which imposes Material
restrictions upon the operations of any CT Financial Services 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; or
(m) [Reserved]
7.3 (a) Affirmative Covenants of GB&T. Unless the prior written consent of
CT Financial Services 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, in each case in a manner which is adverse to and
discriminates against the holders of CT Financial Services 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.
27
ARTICLE VII
ADDITIONAL AGREEMENTS
8.1 Registration Statement; Proxy Statement; Shareholder Approval.
(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. CT Financial Services 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) CT Financial Services 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 CT Financial Services deems appropriate.
(c) GB&T 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 GB&T deems appropriate.
(d) In connection with both the CT Financial Services and GB&T
Shareholders' Meetings, (i) GB&T shall prepare and file with the SEC on their
joint behalf a Joint Proxy Statement (which shall be included in the
Registration Statement) and mail it to both CT Financial Services's and GB&T's
shareholders, (ii) the Parties shall furnish to each other all information
concerning them that they may reasonably request in connection with such Joint
Proxy Statement, (iii) the Boards of Directors of CT Financial Services and GB&T
shall recommend (subject to compliance with the fiduciary duties of the members
of the Boards of Directors as advised by counsel) to their shareholders the
approval of this Agreement and (iv) the Boards of Directors and officers of both
CT Financial Services and GB&T 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 CT
Financial Services Common Stock pursuant to the Merger.
8.3 Applications. GB&T shall promptly prepare and file, and CT Financial
Services 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 CT Financial Services to review (and approve with respect to
information relating to CT Financial Services) such applications prior to filing
same and shall provide copies of such applications to CT Financial Services and
its counsel.
8.4 Filings with State Offices. Upon the terms and subject to the conditions
of this Agreement,
28
GB&T shall execute and file the 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 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 CT Financial
Services 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.
29
8.8 Acquisition Proposals. Except with respect to this Agreement and the
transactions contemplated hereby, neither CT Financial Services nor any
Affiliate thereof nor any investment banker, attorney, accountant or other
representative (collectively, "Representatives") retained by CT Financial
Services shall directly or indirectly solicit any Acquisition Proposal by any
Person. Except to the extent necessary to comply with the fiduciary duties of CT
Financial Services's Board of Directors as advised by counsel, neither CT
Financial Services 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 CT Financial Services 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. CT Financial Services 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, CT Financial
Services 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. Each of the Parties further undertakes and
agrees to use its reasonable best efforts to cause the Merger to be eligible,
and to take no action which would cause the Merger not to be accounted for as a
"pooling of interests" for accounting treatment.
8.10 Agreement of Affiliates. CT Financial Services has disclosed in Section
8.10 of the CT Financial Services Disclosure Memorandum all Persons whom it
reasonably believes is an "affiliate" of CT Financial Services for purposes of
Rule 145 under the 1933 Act. CT Financial Services shall use its reasonable
efforts to cause each such Person to deliver to GB&T and CT Financial Services,
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 CT
Financial Services 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. If the
Merger will qualify for pooling-of-interests accounting treatment, the GB&T
Common Stock issued to such Affiliates of CT Financial Services in exchange for
the CT Financial Services Common Stock shall not be transferable until such time
as the financial results covering at least 30 days of combined operations of
GB&T and CT Financial Services have been published within the meaning of Section
201.01 of the SEC's Codification of Financial Reporting Policies regardless of
whether each such person has provided the written agreement referred to in this
Section 8.10. GB&T shall be entitled to place restrictive legends upon
certificates for shares of GB&T Common Stock issued to Affiliates of CT
Financial Services 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.
30
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 CT Financial Services 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 under such employee benefit plans, the service of the employees of
the CT Financial Services 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 CT Financial Services 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 CT Financial Services
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 CT Financial Services 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 CT Financial
Services Disclosure Memorandum to GB&T between any CT Financial Services Company
and any current or former director, officer, or employee thereof and all
provisions for vested benefits accrued through the Effective Time under the CT
Financial Services Benefit Plans.
(i) 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 (the "Employment
Agreement"). GB&T agrees that its acquisition of CT Financial Services as a
result of the Merger shall constitute a "Change in Control" of CT Financial
Services as defined in such agreements. GB&T agrees that as a result of such
"Change in Control" that each employee may terminate the Employment Agreements
pursuant to the terms of the Employment Agreement and receive from GB&T the
payments described in the Employment Agreements.
(ii) GB&T agrees that at the Closing it shall execute an amendment to
the Employment Agreement between Xxxxxx Xxxxxx and CT Financial Services dated
January 1, 2000 (the "Austin Employment Agreement") which shall:
(x) amend Section 9.02 by deleting the following words at
the end of such section
"twenty (20) miles from the location of the main office of the Bank and a circle
having a radius of fifteen (15) miles from the location of each branch offices
of the Bank and each office of CLC, all as set forth on Exhibit "A" to this
-----------
Agreement" and substituting in lieu thereof the following words:
"fifteen (15) miles from the location of the main office of the Bank at
0000 Xxxxxxx Xxxxxxx,
00
Xxxxx, Xxxxxxx 00000;" and
(y) delete Section 9.03 and Exhibit "A" in their entirety.
-----------
(iii) GB&T agrees and acknowledges that its acquisition of CT
Financial Services as a result of the Merger shall constitute a "Change in
Control" of CT Financial Services as defined in Section 7 of CT Financial
Services 1993 Directors Stock Option Plan as amended and Section 7 of CT
Financial Services 1993 Stock Option Plan as amended and that as a result
thereof all outstanding options under such plans which are not fully vested
shall be 100% vested as of the Effective Time in accordance with Section
5(b)(iii) of each respective plan.
8.12 D&O Insurance Coverage and Indemnification. Immediately prior to
Closing, CT Financial Services 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 CT Financial Services,
but is pre-approved by GB&T. Further, GB&T shall assume all liability (to the
extent CT Financial Services was so liable) for claims for indemnification
arising under CT Financial Services' Articles of Incorporation or Bylaws or
under any indemnification contract disclosed to GB&T, as existing on January 1,
2001.
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 each of CT Financial
Services and GB&T 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.
(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.
(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
32
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 CT Financial Services 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 CT Financial Services Common Stock for GB&T Common Stock will not give rise
to gain or loss to the shareholders of CT Financial Services with respect to
such exchange (except to the extent of any cash received), (iii) neither GB&T
nor CT Financial Services 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 CT Financial Services Options qualifying as "incentive
sock 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 CT Financial Services reasonably
satisfactory in form and substance to such counsel.
(g) Affiliate Agreements. The Parties shall have received from each
affiliate of CT Financial Services the affiliates letter referred to in Section
8.10 hereof.
(h) Pooling Letter. The Parties shall have received a letter from Xxxxxxx
& Xxxxxxx, LLC, and from Xxxxxx, Xxxxxx & Xxxxx, LLP, both dated as of the
Effective Time, to the effect that the Merger will qualify for pooling-of-
interests accounting treatment under Accounting Principles Board Opinion No. 16
if closed and consummated in accordance with this Agreement.
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:
(a) Representations and Warranties. For purposes of this Section 9.2(a),
the accuracy of the representations and warranties of CT Financial Services set
forth or referred to in this Agreement
33
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 CT Financial Services set forth in
Section 5.3 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 CT Financial Services set
forth in this Agreement (excluding the representations and warranties set forth
in Sections 5.3, 5.19, 5.20 and 5.21) such that the aggregate effect of such
inaccuracies would have, or is reasonably likely to have, a Material Adverse
Effect on CT Financial Services; 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 CT Financial Services 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. CT Financial Services 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 CT Financial Services'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. CT Financial Services shall have delivered to GB&T
an opinion of Xxxxxx & Xxxxxx, LLP, counsel to CT Financial Services, 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
CT Financial Services 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, it 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 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 CT Financial Services' 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 CT Financial Services' 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
34
relief sought being obtained.
(g) Support Agreements. Within ten (10) calendar days of the execution of
this Agreement, each of the directors of CT Financial Services shall have
executed and delivered to GB&T a Support Agreement substantially in the form of
Exhibit 6 to this Agreement).
9.3 Conditions to Obligations of CT Financial Services. The obligations of
CT Financial Services 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 CT Financial Services 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 (excluding the
representations and warranties set forth in Sections 6.17 and 6.18) 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 CT Financial Services (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 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 CT Financial Services and its counsel shall request.
(d) Opinion of Counsel. GB&T shall have delivered to CT Financial Services
an opinion of Xxxxxx, Xxxxxx & Xxxxx, LLP, counsel to GB&T, dated as of the
Effective Time, in form reasonably acceptable to CT Financial Services, as to
matters set forth in Exhibit 4 hereto.
(e) CT Financial Services Fairness Opinion. CT Financial Services shall
have received from Xxxxxx, Xxxxxx a letter, dated not more than five (5)
business days prior to the date of the Joint Proxy Statement, reconfirming the
oral fairness opinion received by CT Financial Services at or prior to the
execution of this Agreement, to the effect that, in the opinion of such firm,
the consideration to be paid to CT Financial Services shareholders in connection
with the Merger is fair, from a financial point of view, to the shareholders of
CT Financial Services.
35
(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 therefore initiated
which, in the good faith judgment of the Board of Directors of CT Financial
Services, it is not in the best interests of the shareholders of CT Financial
Services 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
CT Financial Services'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 CT Financial Services's business or assets as a result of the Merger, which,
in any case, in the reasonable judgment of CT Financial Services 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 CT
Financial Services, 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 CT Financial Services
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 CT Financial Services 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 Agreement in the case of GB&T and Section 9.3(a)
of this Agreement in the case of CT Financial Services; 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 CT Financial Services 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
36
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 July 31, 2001, 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 CT Financial Services 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; or
(g) By the Board of Directors of either Party on or before two (2)
business days following the business day of receipt of the Disclosure Memorandum
of the other Party (which receipt shall not be later than the date of the
execution of this Agreement in the event that such Party, after a review of the
Disclosure Memorandum provided by the other Party, determines not to proceed
with the Merger.
(h) CT Financial Services shall be entitled, at its option, to terminate
the transaction, upon written notice to GB&T prior to Closing, if, and only if,
the average last daily sales price of a share of GB&T Common Stock, as quoted on
NASDAQ, for the twenty (20) trading days immediately preceding the scheduled
Closing Date (whether or not shares actually are traded on some of those days),
is less than $13.00 per share on the Closing Date.
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
representations, 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
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:
37
"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 CT Financial Services or
any of its Subsidiaries or the acquisition of a substantial equity interest in,
or a substantial portion of the Assets of CT Financial Services 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.
"CT Financial Services Benefit Plans" shall have the meaning set forth in
Section 5.14 of this Agreement.
"CT Financial Services Common Stock" shall mean the $2.50 per value common
stock of CT
38
Financial Services.
"CT Financial Services Companies" shall mean, collectively, CT Financial
Services and all CT Financial Services Subsidiaries.
"CT Financial Services Disclosure Memorandum" shall mean the written
information entitled "CT Financial Services 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.
"CT Financial Services Financial Statements" shall mean (a) the consolidated
balance sheets (including related notes and schedules, if any) of CT Financial
Services as of December 31, 1998, 1999 and 2000, 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,
1998, 1999, and 2000, included in the CT Financial Services Disclosure
Memorandum, and (b) the consolidated balance sheets (including related notes and
schedules, if any) of CT Financial Services 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,
2000.
"CT Financial Services Options" shall have the meaning set forth in Section
3.4 of this Agreement, if any such options exist.
"CT Financial Services Shareholders' Meeting" shall mean the meeting of the
shareholders of CT Financial Services to be held pursuant to Section 8.1 of this
Agreement, including any adjournment or adjournments thereof.
"CT Financial Services Stock Plans" shall mean the existing stock option and
other stock-based compensation plans of CT Financial Services disclosed in
Section 5.14 of the CT Financial Services Disclosure Memorandum.
"CT Financial Services Subsidiaries" shall mean the subsidiaries of CT
Financial Services.
"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 CT Financial Services
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. (S) 9601(8).
39
"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. (S) 9601 et. seq., the Resource, Conservation and
Recovery Act, 42 U.S.C. (S) 6901 et. seq., the Toxic Substance Control Act, 15
U.S.C. (S) 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 6, inclusive, shall mean the Exhibits so marked, copies
of which are attached to this Agreement. Such Exhibits are hereby incorporated
by reference herein and made a part hereof and may be referred to in this
Agreement and any other related instrument or document without being attached
hereto.
"GAAP" shall mean generally accepted accounting principles, consistently
applied during the periods involved.
"GBCC" shall mean the Georgia Business Corporation Code.
"GB&T Bank" shall mean Gainesville Bank & Trust, a Georgia state-chartered
bank and a GB&T Subsidiary.
"GB&T Common Stock" shall mean the $5.00 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 CT
Financial Services 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.
"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, 1998,
1999, and 2000, 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, 1998, 1999, and 2000, and (b) the
consolidated balance sheets (including related notes and schedules, if any) of
GB&T and related
40
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, 2000.
"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. (S)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).
"Internal Revenue Code" shall mean the Internal Revenue Code of 1986, as
amended, and the rules and regulations promulgated thereunder.
"Joint Proxy Statement" shall mean the proxy statement used by CT Financial
Services and by GB&T to solicit the approval of their respective 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 CT Financial Services.
"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.
"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,
41
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 CT Financial Services with and into GB&T
referred to in Section 1.1 of this Agreement.
"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
42
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 CT Financial Services, and "Parties" shall
mean both GB&T and CT Financial Services.
"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.
"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
CT Financial Services 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 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
43
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.
"Tax" or "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.
"Community Trust Bank" shall mean Community Trust Bank, a Georgia state-
chartered bank and a CT Financial Services Subsidiary.
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.
(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. This
Section 11.2(b) shall be the non-breaching Party's sole and exclusive remedy for
actionable breach by the breaching Party under 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
44
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. 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 CT Financial Services, each of GB&T
and CT Financial Services, as the case may be, agrees to indemnify and hold the
other Party harmless of and from any Liability in respect of any such claim.
11.4 Entire Agreement. Except as otherwise expressly provided herein, this
Agreement (including the documents and instruments referred to herein)
constitutes the entire agreement between the Parties with respect to the
transactions contemplated hereunder and supersedes all prior arrangements or
understandings with respect thereto, written or oral. Nothing in this Agreement
expressed or implied, is intended to confer upon any Person, other than the
Parties or their respective successors, any rights, remedies, obligations, or
liabilities under or by reason of this Agreement, 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 CT Financial Services 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 CT
Financial Services, to waive or extend the time for the compliance or
fulfillment by CT Financial Services 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 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, CT Financial Services, 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 CT Financial Services
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 CT Financial Services.
(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
45
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, XX 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. Xxx 0000
Xxxxxxxxxxx, XX 00000
Telecopy No: 000-000-0000
Attention: Xxxxxx X. Xxxxxx, Esq.
CT Financial Services: Community Trust Financial Services Corporation
000 Xxxxxxxx Xxxxxxx - Xxxxx 000
Xxxxx, XX 00000
Telecopier No. 000-000-0000.
Attention: Xxxxxx X. Xxxxxx, President
Copy to Counsel: Xxxxxx & Xxxxxx, LLP
0000 Xxxxxxxxx Xx., X. X.
Xxxxx 000
Xxxxxxx, XX 00000
Telecopier No. 000-000-0000.
Attention: T. Xxxxxxxx Xxxxxxx, Jr., Esq.
46
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
-------------------
President & CEO
Attest: /s/ Xxxxxx X. Xxxxxx
---------------------
Secretary
CT Financial Services Corporation
By: /s/ Xxxxxx X. Xxxxxx
--------------------
President
Attest: /s/ Xxxxx Xxxx
--------------
Secretary
47
