AGREEMENT AND PLAN OF REORGANIZATION BY AND AMONG WGNB CORP., WEST GEORGIA NATIONAL BANK, FIRST HARALSON CORPORATION, AND FIRST NATIONAL BANK OF GEORGIA Dated as of January 22, 2007
Exhibit
2.1
BY
AND AMONG
WEST
GEORGIA NATIONAL BANK,
FIRST
XXXXXXXX CORPORATION,
AND
FIRST
NATIONAL BANK OF GEORGIA
Dated
as of January 22, 2007
i
TABLE
OF CONTENTS
|
Page
|
||
|
Parties
|
1
|
|
|
Preamble
|
1
|
|
|
ARTICLE
1 TRANSACTIONS AND TERMS OF MERGERS
|
1
|
|
|
1.1
|
Company
Merger
|
1
|
|
1.2
|
Bank
Merger
|
1
|
|
1.3
|
Time
and Place of Closing
|
2
|
|
1.4
|
Effective
Time
|
2
|
|
ARTICLE
2 TERMS OF MERGER
|
2
|
|
|
2.1
|
Articles
|
2
|
|
2.2
|
Bylaws
|
2
|
|
2.3
|
Directors
and Officers.
|
3
|
|
ARTICLE
3 MANNER OF CONVERTING SHARES
|
3
|
|
|
3.1
|
Conversion
of First Xxxxxxxx Shares
|
3
|
|
3.2
|
Conversion
of Target Bank Shares
|
5
|
|
ARTICLE
4 EXCHANGE OF SHARES
|
5
|
|
|
4.1
|
Exchange
Procedures
|
5
|
|
4.2
|
Rights
of Former First Xxxxxxxx Shareholders
|
6
|
ii
|
ARTICLE
5 REPRESENTATIONS AND WARRANTIES OF FIRST XXXXXXXX AND TARGET
BANK
|
6
|
|
|
5.1
|
Organization,
Standing, and Power
|
6
|
|
5.2
|
Authority
of First Xxxxxxxx and Target Bank; No Breach by Agreement
|
7
|
|
5.3
|
Capital
Stock
|
8
|
|
5.4
|
First
Xxxxxxxx Subsidiaries
|
8
|
|
5.5
|
Financial
Statements
|
8
|
|
5.6
|
Absence
of Undisclosed Liabilities
|
9
|
|
5.7
|
Loan
and Investment Portfolios
|
9
|
|
5.8
|
Absence
of Certain Changes or Events
|
9
|
|
5.9
|
Tax
Matters
|
11
|
|
5.10
|
Allowance
for Possible Loan Losses
|
12
|
|
5.11
|
Assets
|
12
|
|
5.12
|
Intellectual
Property
|
13
|
|
5.13
|
Environmental
Matters
|
14
|
|
5.14
|
Compliance
with Laws
|
15
|
|
5.15
|
Labor
Relations
|
16
|
|
5.16
|
Employee
Benefit Plans
|
16
|
|
5.17
|
Material
Contracts
|
18
|
|
5.18
|
Legal
Proceedings
|
19
|
|
5.19
|
Reports
|
19
|
|
5.20
|
Accounting,
Tax and Regulatory Matters
|
19
|
|
5.21
|
Community
Reinvestment Act
|
19
|
|
5.22
|
Privacy
of Customer Information
|
19
|
|
5.23
|
Technology
Systems
|
20
|
|
5.24
|
Bank
Secrecy Act Compliance
|
20
|
|
5.25
|
First
Xxxxxxxx Disclosure Memorandum
|
20
|
|
5.26
|
Affiliates
|
21
|
|
5.27
|
Board
Recommendation
|
21
|
|
ARTICLE
6 REPRESENTATIONS AND WARRANTIES OF WGNB AND PURCHASER
BANK
|
21
|
|
|
6.1
|
Organization,
Standing and Power
|
21
|
|
6.2
|
Authority;
No Breach by Agreement
|
21
|
|
6.3
|
Capital
Stock
|
22
|
|
6.4
|
WGNB
Subsidiaries
|
23
|
|
6.5
|
SEC
Filings; Financial Statements
|
23
|
|
6.6
|
Absence
of Undisclosed Liabilities
|
24
|
|
6.7
|
Absence
of Certain Changes or Events
|
24
|
|
6.8
|
Legal
Proceedings
|
24
|
|
6.9
|
Community
Reinvestment Act
|
24
|
|
6.10
|
Technology
Systems
|
25
|
|
6.11
|
Bank
Secrecy Act Compliance
|
25
|
|
6.12
|
WGNB
Disclosure Memorandum
|
25
|
|
6.13
|
Board
Recommendation
|
25
|
|
ARTICLE
7 CONDUCT OF BUSINESS PENDING CONSUMMATION
|
26
|
|
|
7.1
|
Affirmative
Covenants of Each Party
|
26
|
|
7.2
|
Negative
Covenants of First Xxxxxxxx and Target Bank
|
26
|
iii
|
7.3
|
Negative
Covenants of WGNB
|
28
|
|
7.4
|
Adverse
Changes in Condition
|
28
|
|
7.5
|
Reports
|
28
|
|
7.6
|
Loan
Portfolio Review
|
28
|
|
ARTICLE
8 ADDITIONAL AGREEMENTS
|
28
|
|
|
8.1
|
WGNB
Registration Statement
|
28
|
|
8.2
|
Nasdaq
Listing
|
29
|
|
8.3
|
Applications
|
29
|
|
8.4
|
Filings
with State Offices
|
30
|
|
8.5
|
Agreement
as to Efforts to Consummate
|
30
|
|
8.6
|
Investigation
and Confidentiality
|
30
|
|
8.7
|
No
Solicitations
|
31
|
|
8.8
|
Press
Releases
|
31
|
|
8.9
|
Tax
Treatment
|
31
|
|
8.10
|
Charter
Provisions
|
32
|
|
8.11
|
Agreement
and Support of Affiliates
|
32
|
|
8.12
|
Indemnification
and Insurance
|
32
|
|
8.13
|
Employee
Benefits and Contracts
|
34
|
|
8.14
|
Support
of WGNB Directors
|
34
|
|
ARTICLE
9 CONDITIONS PRECEDENT TO OBLIGATIONS TO CONSUMMATE
|
34
|
|
|
9.1
|
Conditions
to Obligations of Each Party
|
34
|
|
9.2
|
Conditions
to Obligations of WGNB and Purchaser Bank
|
36
|
|
9.3
|
Conditions
to Obligations of First Xxxxxxxx and Target Bank
|
37
|
|
ARTICLE
10 TERMINATION
|
38
|
|
|
10.1
|
Termination
|
38
|
|
10.2
|
Effect
of Termination
|
39
|
|
10.3
|
Non-Survival
of Representations and Covenants
|
39
|
|
10.4
|
Termination
Payment
|
39
|
|
10.5
|
Reimbursement
of Expenses
|
39
|
|
ARTICLE
11 MISCELLANEOUS
|
40
|
|
|
11.1
|
Definitions
|
40
|
|
11.2
|
Expenses
|
49
|
|
11.3
|
Brokers
and Finders
|
49
|
|
11.4
|
Entire
Agreement
|
49
|
|
11.5
|
Amendments
|
50
|
|
11.6
|
Waivers
|
50
|
|
11.7
|
Assignment
|
50
|
|
11.8
|
Notices
|
51
|
|
11.9
|
Governing
Law
|
51
|
|
11.10
|
Counterparts
|
51
|
|
11.11
|
Captions;
Articles and Sections
|
51
|
|
11.12
|
Interpretations
|
52
|
|
11.13
|
Severability
|
52
|
iv
EXHIBITS
Exhibit
A Agreement
and Plan of Merger for Bank Merger
Exhibit
B Affiliate
and Support Agreement
Exhibit
C WGNB
Support Agreement
Exhibit
D Matters
as to which Xxxxxx Xxxxxxxxx LLP will Opine
Exhibit
E Noncompetition
Agreement
Exhibit
F Matters
as to which Xxxxxxxx Xxxxxxx LLP will Opine
v
THIS
AGREEMENT AND PLAN OF REORGANIZATION (this “Agreement”) is made and entered into
as of January 22, 2007, by and among WGNB CORP., a corporation organized under
the laws of Georgia, with its principal office located in Carrollton, Georgia
(“WGNB”), WEST GEORGIA NATIONAL BANK, a national banking association organized
under the laws of the United States with its main office located in Carrollton,
Georgia, and a wholly owned subsidiary of WGNB (“Purchaser Bank”), FIRST
XXXXXXXX CORPORATION, a corporation organized under the laws of Georgia, with
its principal office located in Buchanan, Georgia (“First Xxxxxxxx”) and FIRST
NATIONAL BANK OF GEORGIA, a national banking association organized under the
laws of the United States with its main office located in Buchanan, Georgia,
and
a wholly owned subsidiary of First Xxxxxxxx (“Target Bank”).
Preamble
The
respective Boards of Directors of First Xxxxxxxx and WGNB are of the opinion
that the transactions described herein are in the best interests of the parties
to this Agreement and their respective shareholders. This Agreement provides
for
(i) the merger of First Xxxxxxxx with and into WGNB, as a result of which the
outstanding shares of the capital stock of First Xxxxxxxx shall be converted
into the right to receive cash and shares of the common stock of WGNB and the
shareholders of First Xxxxxxxx (other than those shareholders, if any, who
exchange their shares solely for cash) shall become shareholders of WGNB (the
“Company Merger”), and (ii) the merger of Target Bank with and into Purchaser
Bank (the “Bank Merger” and, together with the Company Merger, the “Mergers”).
The transactions described in this Agreement are subject to the approvals of
the
shareholders of WGNB and First Xxxxxxxx, the Federal Reserve, the Georgia
Department, the OCC and the FDIC and the satisfaction of certain other
conditions described in this Agreement. It is the intention of the parties
of
this Agreement that for federal income tax purposes, the Company Merger shall
qualify as a “reorganization” within the meaning of Section 368(a) of the
Internal Revenue Code.
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 parties agree
as follows:
ARTICLE
1
TRANSACTIONS
AND TERMS OF MERGERS
1.1 Company
Merger.
Subject
to the terms and conditions of this Agreement, First Xxxxxxxx shall be merged
with and into WGNB in accordance with the provisions of Section 14-2-1101
et
seq. of
the
GBCC. WGNB shall be the surviving corporation resulting from the Company Merger
and shall continue to be governed by the Laws of the State of
Georgia.
1.2 Bank
Merger. Concurrent
with the consummation of the Company Merger, Target Bank shall be merged with
and into Purchaser Bank in accordance with the 12 U.S.C. 215 pursuant to the
terms and conditions of the Bank Agreement and Plan of Merger and Merger
Agreement attached hereto as Exhibit A.
First
Xxxxxxxx shall vote the shares of Target Bank in favor of the Bank Merger
Agreement and the Bank Merger.
-1-
1.3 Time
and Place of Closing.
The
closing of the transactions contemplated hereby (the “Closing”) will take place
at 9:00 A.M. on the date that the Effective Time occurs (or the immediately
preceding day if the Effective Time is earlier than 9:00 A.M.), or at such
other
time as the Parties, acting through their authorized officers, may mutually
agree. The Closing shall be held at the office of Xxxxxxxx Xxxxxxx LLP, 000
Xxxxxxxxx Xxxxxx, X.X., Xxxxx 0000, Xxxxxxx, Xxxxxxx 00000, or at such location
as may be mutually agreed upon by the Parties.
1.4 Effective
Time.
The
Mergers and other transactions contemplated by this Agreement shall become
effective on the date and at the time the respective Articles of Merger
reflecting the Mergers shall become effective with the Secretary of State of
Georgia (with respect to the Company Merger) and the OCC (with respect to the
Bank Merger) (the “Effective Time”). At the Effective Time, the separate
corporate existence of First Xxxxxxxx and Target Bank shall cease, and WGNB
and
Purchaser Bank, respectively, shall continue as the Surviving Entity.
ARTICLE
2
TERMS
OF MERGER
2.1 Articles
.
(a) The
Articles of Incorporation of WGNB in effect immediately prior to the Effective
Time shall be the Articles of Incorporation of the surviving corporation.
(b) The
Articles of Association of Purchaser Bank in effect immediately prior to the
Effective Time shall be the Articles of Association of the surviving bank .The
Articles of Association of the surviving bank shall be amended as of the
Effective Time to change the name of Purchaser Bank to “First National Bank of
Georgia” by deleting Article I of the Articles of Association of the surviving
bank in its entirety and inserting the following in lieu thereof:
“Article
I:
The
title
of this Association, which shall carry on the business of banking under the
laws
of the United States, shall be “First National Bank of Georgia.””
2.2 Bylaws.
(a) The
Bylaws of WGNB in effect immediately prior to the Effective Time shall be the
Bylaws of the surviving corporation until duly amended or repealed.
(b) The
Bylaws of Purchaser Bank in effect immediately prior to the Effective Time
shall
be the Bylaws of the surviving bank. The Bylaws of the surviving bank shall
be
amended to reflect the change in the name of the surviving bank as contemplated
by Section 2.1(b).
-2-
2.3 Directors
and Officers.
(a) The
directors of WGNB in office immediately prior to the Effective Time shall serve
as the directors of WGNB from and after the Effective Time, provided,
that at
the Effective Time, WGNB shall take such steps as are reasonably necessary
to
cause the Board of Directors of WGNB to be comprised of 11 directors; eight
of
the directors shall be persons who are serving as a member of the Board of
Directors of WGNB immediately prior to the Effective Time and three of the
directors shall be Xxxx X. Xxxxxxxxx, Xxxxxxx X. Xxxxx and Xxx X. Xxxxxx, who
are serving as members of the Board of Directors of First Xxxxxxxx immediately
prior to the Effective Time. After the Effective Time, WGNB shall take such
steps as are reasonably necessary to cause (i) W. Xxxxxx Xxxxx, Xx. to be
elected as Chairman, and (ii) Xxxx X. Xxxxxxxxx to be elected as
Vice-Chairman. The chairmen of each committee of the Board of Directors of
WGNB
and Purchaser Bank will continue to serve in such capacity unless and until
replaced in accordance with past practice.
(b) The
directors of Target Bank in office immediately prior to the Effective Time
shall
be elected to the Board of Directors of Purchaser Bank at the Effective Time
thus increasing the number of directors of Purchaser Bank. As of the date
hereof, Purchaser Bank has 14 directors and Target Bank has nine directors.
If
these directors remain in office through the Effective Time, Purchaser Bank’s
Board of Directors will be comprised of 23 members.
(c) The
officers of WGNB and Purchaser Bank in office immediately prior to the Effective
Time shall serve as the officers of the surviving corporation and the surviving
bank, respectively, from and after the Effective Time; provided,
that at
the Effective Time, each of WGNB and Purchaser Bank shall take such steps as
are
reasonably necessary to cause (i) X. X. Xxxxxx, III to be elected as Chief
Executive Officer, (ii) Xxxx X. Xxxxxxxxx to be elected as Executive
Vice-President, (iii) Xxxxxxx X. Xxxxx to be elected as President, (iv) Xxxxxx
X. Xxxxx to be elected as Senior Executive Vice-President and Chief Financial
Officer of the Purchaser Bank and Secretary/Treasurer of WGNB and (iv) Xxxxxx
X.
Xxxxxx to be elected as Group Vice-President of Purchaser Bank
only.
(d) Directors
and officers of WGNB and Purchaser Bank after the Effective Time will continue
to be subject to mandatory retirement at age 70 and election by shareholders
or
directors as the case may be.
ARTICLE
3
MANNER
OF CONVERTING SHARES
3.1 Conversion
of First Xxxxxxxx Shares.
Subject
to the provisions of this Section 3.1, at the Effective Time, by virtue of
the
Company Merger and without any action on the part of WGNB, First Xxxxxxxx,
or
the shareholders of either of the foregoing, the shares of the constituent
corporations shall be converted as follows:
(a) Each
share of capital stock of WGNB issued and outstanding immediately prior to
the
Effective Time shall remain issued and outstanding from and after the Effective
Time.
-3-
(b) Subject
to the conditions set forth herein, each share of First Xxxxxxxx Common Stock
outstanding immediately prior to the Effective Time, other than shares held
by
First Xxxxxxxx or with respect to which the holders thereof have perfected
dissenters’ rights under Article 13 of the GBCC (the “Dissenting Shares”), shall
automatically be converted at the Effective Time into the right to receive
(i)
cash in an amount equal to a Pro Rata Share of the Cash Consideration and (ii)
a
number of shares of WGNB Common Stock equal to a Pro Rata Share of the Stock
Consideration. Such shares to be converted are sometimes referred to herein
as
the “Outstanding First Xxxxxxxx Shares.”
Holders
of the Outstanding First Xxxxxxxx Shares shall have the right to elect to
receive their pro rata portion of the Merger Consideration in cash, WGNB Common
Stock or both, provided,
that
such elections shall be subject to adjustment to ensure that no less than
$11,562,500 or more than $18,500,000 in Cash Consideration (subject to reduction
to reflect any Dissenting Shares) and no more than 1,222,683 shares of WGNB
Common Stock are issued in the Company Merger (subject to reduction to reflect
any Dissenting Shares and more than $11,562,500 in Cash Consideration). Such
adjustment shall be undertaken such that (i) in the event elections for the
Cash
Consideration exceed $18,500,000, then only those holders of Outstanding First
Xxxxxxxx Shares that have elected to receive greater than a Pro Rata Share
of
the Cash Consideration for each share held shall have their elections adjusted
(with such adjustments being made on a pro rata basis among all such holders
electing greater than the Pro Rata Share of the Cash Consideration) and (ii)
in
the event elections for the Stock Consideration exceed 1,222,683 shares, then
only those holders of Outstanding First Xxxxxxxx Shares that have elected to
receive greater than a Pro Rata Share of the Stock Consideration for each share
held shall have their elections adjusted (with such adjustments being made
on a
pro rata basis among all such holders electing greater than the Pro Rata Share
of the Stock Consideration). The shares of any holder that does not provide
an
election with respect to his, her, or its shares shall be deemed “Default
Election Shares.” The Exchange Agent (as defined in Section 4.1) shall first
satisfy all elections that have been submitted by Holders of Outstanding First
Xxxxxxxx Shares (subject to any necessary adjustments) and then shall allocate
the remaining Cash Consideration and the remaining Stock Consideration to the
Default Election Shares on a pro rata basis.
(c) Notwithstanding
any other provision of this Agreement, each holder of Outstanding First Xxxxxxxx
Shares exchanged pursuant to the Merger who would otherwise have been entitled
to receive a fraction of a share of WGNB Common Stock (after taking into account
all certificates delivered by such holder) shall receive, in lieu thereof,
cash
(without interest) in an amount equal to such fractional part of a share of
WGNB
Common Stock multiplied by $28.37. No such holder will be entitled to any
dividends declared by WGNB, nor will such holder be entitled to voting rights,
or any other rights as a shareholder of WGNB in respect of any fractional
shares.
(d) Each
share of First Xxxxxxxx Common Stock that is not an Outstanding First Xxxxxxxx
Share as of the Effective Time shall be canceled without consideration
therefor.
(e) No
Dissenting Shares shall be converted in the Merger. All such shares shall be
canceled and the holders thereof shall thereafter have only such rights as
are
granted to dissenting shareholders under Article 13 of the GBCC; provided,
however,
that if
any such shareholder fails to perfect his or her rights as a dissenting
shareholder with respect to his or her Dissenting Shares in accordance with
Article 13 of the GBCC or withdraws or loses such holder’s Dissenter’s Rights,
such shares held by such shareholder shall be treated the same as all other
holders of First Xxxxxxxx Common Stock who at the Effective Time held
Outstanding First Xxxxxxxx Shares.
-4-
(g) In
the
event WGNB or First Xxxxxxxx changes the number of shares of WGNB Common Stock
or First Xxxxxxxx Common Stock, respectively, issued and outstanding prior
to
the Effective Time as a result of a stock split, stock dividend or similar
recapitalization with respect to such stock and the record date or effective
date thereof is prior to the Effective Time, the Merger Consideration shall
be
proportionately adjusted.
3.2 Conversion
of Target Bank Shares.
Subject
to the provisions of this Section 3.2, at the Effective Time, by virtue of
the
Bank Merger and without any action on the part of Purchaser Bank, Target Bank,
or the shareholders of either of the foregoing, the shares of the constituent
banks shall be converted as follows:
(a) Each
share of capital stock of Purchaser Bank issued and outstanding immediately
prior to the Effective Time shall remain issued and outstanding from and after
the Effective Time.
(b) Each
share of Target Bank common stock outstanding immediately prior to the Effective
Time shall automatically be cancelled at the Effective Time.
ARTICLE
4
EXCHANGE
OF SHARES
4.1 Exchange
Procedures.
Prior
to the Effective Time, Purchaser Bank shall act as exchange agent (the “Exchange
Agent”) to effect the delivery of the Merger Consideration to holders of First
Xxxxxxxx Common Stock. At the Effective Time, WGNB shall deliver the Merger
Consideration to the Exchange Agent. Promptly following the Effective Time,
the
Exchange Agent shall send to each holder of Outstanding First Xxxxxxxx Shares
immediately prior to the Effective Time a letter of transmittal (the “Letter of
Transmittal”) for use in exchanging certificates previously evidencing shares of
First Xxxxxxxx Common Stock (“Old Certificates”). The Letter of Transmittal will
contain instructions with respect to the surrender of Old Certificates and
the
distribution of cash and certificates representing WGNB Common Stock, which
cash
and certificates shall be deposited with the Exchange Agent by WGNB as of the
Effective Time. If any certificates for shares of WGNB Common Stock are to
be
issued in a name other than that for which an Old Certificate surrendered or
exchanged is issued, the Old Certificate so surrendered shall be properly
endorsed and otherwise in proper form for transfer and the person requesting
such exchange shall affix any requisite stock transfer tax stamps to the Old
Certificate surrendered or provide funds for their purchase or establish to
the
satisfaction of the Exchange Agent that such taxes are not payable. Subject
to
applicable law and to the extent that the same has not yet been paid to a public
official pursuant to applicable abandoned property laws, upon surrender of
his
or her Old Certificates, the holder thereof shall be paid the consideration
to
which he, she or it is entitled. All such property, if held by the Exchange
Agent for payment or delivery to the holders of unsurrendered Old Certificates
and unclaimed at the end of one year after the Effective Time, shall at such
time be paid or redelivered by the Exchange Agent to WGNB, and after such time
any holder of an Old Certificate who has not surrendered such certificate shall,
subject to applicable laws and to the extent that the same has not yet been
paid
to a public official pursuant to applicable abandoned property laws, look as
a
general creditor only to WGNB for payment or delivery of such property. In
no
event will any holder of First Xxxxxxxx Common Stock exchanged in the Merger
be
entitled to receive any interest on any amounts held by the Exchange Agent
or
WGNB of the Merger Consideration.
-5-
4.2 Rights
of Former First Xxxxxxxx Shareholders.
At the
Effective Time, the stock transfer books of First Xxxxxxxx shall be closed
as to
holders of First Xxxxxxxx Common Stock immediately prior to the Effective Time
and no transfer of First Xxxxxxxx Common Stock by any such holder shall
thereafter be made or recognized. Until surrendered for exchange in accordance
with the provisions of Section 4.1, each Old Certificate theretofore
representing Outstanding First Xxxxxxxx Shares shall from and after the
Effective Time represent for all purposes only the right to receive the
consideration provided in Section 3.1 in exchange therefor. To the extent
permitted by Law, former shareholders of record of First Xxxxxxxx shall be
entitled to vote after the Effective Time at any meeting of WGNB shareholders
the number of whole shares of WGNB Common Stock into which their respective
shares of First Xxxxxxxx Common Stock are converted, regardless of whether
such
holders have exchanged their Old Certificates for certificates representing
WGNB
Common Stock in accordance with the provisions of this Agreement.
Whenever
a dividend or other distribution is declared by WGNB on the WGNB Common Stock,
the record date for which is at or after the Effective Time, the declaration
shall include dividends or other distributions on all shares of WGNB Common
Stock issuable pursuant to this Agreement, but no dividend or other distribution
payable to the holders of record of WGNB Common Stock as of any time subsequent
to the Effective Time shall be delivered to the holder of any Old Certificate
until such holder surrenders such Old Certificate for exchange as provided
in
Section 4.1. However, upon surrender of such Old Certificate, both the WGNB
Common Stock certificate and any undelivered dividends and cash payments payable
hereunder (without interest) shall be delivered and paid with respect to each
share represented by such Old Certificate.
ARTICLE
5
REPRESENTATIONS
AND WARRANTIES OF FIRST XXXXXXXX AND TARGET BANK
First
Xxxxxxxx and Target Bank, jointly and severally, hereby represent and warrant
to
WGNB and Purchaser Bank as follows:
5.1 Organization,
Standing, and Power.
First
Xxxxxxxx is a corporation duly organized, validly existing, and in good standing
under the Laws of Georgia and is duly registered as a bank holding company
under
the BHC Act, and Target Bank is a national banking association duly organized,
validly existing and in good standing under the Laws of the United States.
Each
has the corporate power and authority to carry on its business as now conducted
and to own, lease and operate its Assets. Each of the First Xxxxxxxx Entities
is
duly qualified or licensed to transact business as a foreign corporation in
good
standing in the jurisdictions where the character of its Assets or the nature
or
conduct of its business requires it to be so qualified or licensed. The minute
book and other organizational documents for each of the First Xxxxxxxx Entities
have been made available to WGNB for its review and, except as disclosed in
Section 5.1 of the First Xxxxxxxx Disclosure Memorandum, accurately reflect
all
amendments thereto and all proceedings of the Board of Directors and
shareholders thereof.
-6-
5.2 Authority
of First Xxxxxxxx and Target Bank; No Breach by Agreement.
(a) Each
of
First Xxxxxxxx and Target Bank 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 Mergers, have been duly and validly
authorized by all necessary corporate action in respect thereof on the part
of
First Xxxxxxxx and Target Bank. Subject to the requisite approval by First
Xxxxxxxx’x and Target Bank’s shareholders and any applicable Consents of
Regulatory Authorities, this Agreement represents a legal, valid, and binding
obligation of each of First Xxxxxxxx and Target Bank, enforceable against First
Xxxxxxxx and Target Bank in accordance with its terms (except in all cases
as
such enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, receivership, conservatorship, moratorium, or similar Laws
affecting the enforcement of creditors’ rights generally and except that the
availability of the equitable remedy of specific performance or injunctive
relief is subject to the discretion of the court before which any proceeding
may
be brought).
(b) Neither
the execution and delivery of this Agreement by First Xxxxxxxx or Target Bank,
nor the consummation by First Xxxxxxxx or Target Bank of the transactions
contemplated hereby, nor compliance by First Xxxxxxxx or Target Bank with any
of
the provisions hereof, will (i) conflict with or result in a breach of any
provision of First Xxxxxxxx’x Articles of Incorporation or Bylaws or any
resolution adopted by the board of directors or the shareholders of First
Xxxxxxxx that is currently in effect, (ii) conflict with or result in a breach
of any provision of Target Bank’s Articles of Association or Bylaws or any
resolution adopted by the board of directors or the shareholders of Target
Bank
that is currently in effect, (iii) except as disclosed in Section 5.2(b) of
the
First Xxxxxxxx Disclosure Memorandum, constitute or result in a Default under,
or require any Consent pursuant to, or result in the creation of any Lien on
any
Asset of any First Xxxxxxxx Entity under, any Contract or Permit of the First
Xxxxxxxx Entities, (iv) subject to receipt of the requisite Consents referred
to
in Section 9.1(b), constitute or result in a Default under, or require any
Consent pursuant to, any Law or Order applicable to the First Xxxxxxxx Entities
or any of their Assets (including any WGNB Entity or First Xxxxxxxx Entity
becoming subject to or liable for the payment of any Tax or any of the Assets
owned by any WGNB Entity or First Xxxxxxxx Entity being reassessed or revalued
by any Taxing authority).
(c) Other
than in connection or compliance with the provisions of the Securities Laws,
applicable state corporate and securities Laws, and other than Consents required
from Regulatory Authorities, and other than notices to or filings with the
IRS
or the Pension Benefit Guaranty Corporation with respect to any employee benefit
plans, no notice to, filing with, or Consent of, any public body or authority
is
necessary for the consummation by First Xxxxxxxx of the Company Merger, by
Target Bank of the Bank Merger, and the other transactions contemplated in
this
Agreement.
-7-
5.3 Capital
Stock.
(a) The
authorized capital stock of First Xxxxxxxx consists of (i) 25,000 shares of
Class A Common (voting) Stock, no par value per share, of which 20,216 shares
are issued and outstanding and (ii) 225,000 shares of Class B Common
(non-voting) Stock, no par value per share, of which 183,041 are issued and
outstanding. All of the issued and outstanding shares of capital stock of First
Xxxxxxxx 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
First Xxxxxxxx has been issued in violation of any preemptive rights of the
current or past shareholders of First Xxxxxxxx.
(b) The
authorized capital stock of Target Bank consists of 20,000 shares of $1.00
par
value per share common stock, of which 20,000 shares are issued and outstanding.
All of the issued and outstanding shares of capital stock of Target Bank are
duly and validly issued and outstanding and are fully paid and nonassessable
(except pursuant to 12 U.S.C. Section 55) and none of the outstanding shares
of
capital stock of Target Bank has been issued in violation of any preemptive
rights.
(c) Except
as
set forth in Sections 5.3(a) and (b) above, there are no shares of capital
stock, preferred stock or other equity securities of First Xxxxxxxx or Target
Bank outstanding and no outstanding Equity Rights relating to the capital stock
of any First Xxxxxxxx Entity.
5.4 First
Xxxxxxxx Subsidiaries.
Except
as described in Section 5.4 of the First Xxxxxxxx Disclosure Memorandum: (i)
First Xxxxxxxx has no Subsidiaries other than Target Bank and Financial Interest
Group Inc. and does not own, for its own account, any stocks, options, calls,
warrants or rights to acquire stock or other equity in any partnership, limited
liability company or corporation; (ii) First Xxxxxxxx owns all of the issued
and
outstanding capital stock of Target Bank and Financial Interest Group Inc.
and
(iii) all of such shares are held free and clear of any Lien. Target Bank has
no
subsidiaries other than First Georgia Insurance Agency, Inc. Target Bank owns
all of the issued and outstanding capital stock of First Georgia Insurance
Agency, Inc., and all of such shares are held free and clear of any Lien.
Financial Interest Group, Inc. and First Georgia Insurance Agency, Inc. have
no
subsidiaries.
5.5 Financial
Statements.
First
Xxxxxxxx has delivered to WGNB copies of all First Xxxxxxxx Financial Statements
and will deliver to WGNB copies of all similar financial statements prepared
subsequent to the date hereof. The First Xxxxxxxx Financial Statements and
any
supplemental financial statements (as of the date thereof and for the periods
covered thereby) (i) are, or if dated after the date of this Agreement will
be,
in accordance with the books and records of First Xxxxxxxx, which are and 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, (b) present or will present, as the case may be and
in
all material respects, fairly the financial position of First Xxxxxxxx as of
the
dates indicated and the results of operation, changes in shareholders’ equity,
and cash flows of First Xxxxxxxx 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 thereof or, in the case of interim financial statements,
to the normal recurring year-end adjustments that are not material in any amount
or effect), and (c) do not or will not, as the case may be, 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 therein, in light of the
circumstances in which they were made, not misleading.
-8-
5.6 Absence
of Undisclosed Liabilities.
First
Xxxxxxxx has no Liabilities of a nature required to be reflected on a
consolidated balance sheet prepared in accordance with GAAP, except Liabilities
that are accrued or reserved against in the consolidated balance sheet of First
Xxxxxxxx as of June 30, 2006, included in the First Xxxxxxxx Financial
Statements or reflected in the notes thereto. First Xxxxxxxx has not incurred
or
paid any Liability since December 31, 2005, except for such Liabilities incurred
or paid (i) in the ordinary course of business consistent with past business
practice and that are not reasonably likely to have, individually or in the
aggregate, a First Xxxxxxxx Material Adverse Effect or (ii) in connection with
the transactions contemplated by this Agreement.
5.7 Loan
and Investment Portfolios.
As of
the date of this Agreement, all loans, discounts and financing leases reflected
on the First Xxxxxxxx Financial Statements were, and with respect to the First
Xxxxxxxx Financial Statements delivered as of the dates subsequent to the
execution of this Agreement, will be as of the dates thereof, (i) at the time
and under the circumstances in which made, made for good, valuable and adequate
consideration in the ordinary course of business, (ii) evidenced by genuine
notes, agreements or other evidences of indebtedness and (iii) to the extent
secured, have been secured by valid liens and security interests that have
been
perfected. Except as specifically set forth in Section 5.7 of the First Xxxxxxxx
Disclosure Memorandum, no First Xxxxxxxx Entity is a party to any written or
oral loan agreement, note or borrowing arrangement, including any loan guaranty,
that was, as of the most recent month-end (i) delinquent by more than 30 days
in
the payment of principal or interest, (ii) known by the First Xxxxxxxx Entities
to be otherwise in Default for more than 30 days, (iii) classified as
“substandard,” “doubtful,” “loss,” “other assets especially mentioned” or any
comparable classification by First Xxxxxxxx, First Xxxxxxxx Bank, the Federal
Reserve, the OCC, the Georgia Department or the FDIC, or (iv) an obligation
of
any director, executive officer or 10% shareholder of any First Xxxxxxxx Entity
who is subject to Regulation O of the Federal Reserve Board (12 C.F.R. Part
215), or any person, corporation or enterprise controlling, controlled by or
under common control with any of the foregoing.
5.8 Absence
of Certain Changes or Events.
Except
as disclosed in the First Xxxxxxxx Financial Statements delivered prior to
the
date of this Agreement or in Section 5.8 of the First Xxxxxxxx Disclosure
Memorandum or as contemplated in this Agreement, (i) there have been no events,
changes, or occurrences which have had, or are reasonably likely to have,
individually or in the aggregate, a First Xxxxxxxx Material Adverse Effect,
(ii)
First Xxxxxxxx has not declared, set aside for payment or paid any dividend
to
holders of, or declared or made any distribution on, any shares of First
Xxxxxxxx Common Stock other than its regular quarterly dividends and (iii)
the
First Xxxxxxxx Entities have not taken any action, or failed to take any action,
prior to the date of this Agreement, which action or failure, if taken after
the
date of this Agreement, would represent or result in a material breach or
violation of any of the covenants and agreements of the First Xxxxxxxx Entities
provided in Article 7. Except as may result from the transactions contemplated
by this Agreement, none of the First Xxxxxxxx Entities have, since the date
of
the First Xxxxxxxx Financial Statements delivered prior to the date of this
Agreement:
-9-
(a) since
June 30, 2006, except as set forth in Section 5.8(a) of the First Xxxxxxxx
Disclosure Memorandum, borrowed any money other than deposits or overnight
fed
funds or entered into any capital lease or leases; or, except in the ordinary
course of business and consistent with past practices: (i) lent any money or
pledged any of its credit in connection with any aspect of its business whether
as a guarantor, surety, issuer of a letter of credit or otherwise, (ii)
mortgaged or otherwise subjected to any Lien any of its assets, sold, assigned
or transferred any of its assets in excess of $100,000 in the aggregate or
(iv)
incurred any other Liability or loss representing, individually or in the
aggregate, over $100,000;
(b) since
June 30, 2006, suffered over $100,000 in damage, destruction or loss to
immovable or movable property, whether or not covered by insurance;
(c) since
June 30, 2006, experienced any material adverse change in Asset concentrations
as to customers or industries or in the nature and source of its Liabilities
or
in the mix or interest-bearing versus noninterest-bearing deposits;
(d) since
December 31, 2006, except as set forth in Section 5.8(d) of the First
Xxxxxxxx Disclosure Memorandum, had any customer with a loan or deposit balance
of more than $50,000 terminate, or received notice of such customer’s intent to
terminate, its relationship with a First Xxxxxxxx Entity;
(e) since
June 30, 2006, failed to operate its business in the ordinary course consistent
with past practices, or failed to use reasonable efforts to preserve its
business or to preserve the goodwill of its customers and others with whom
it
has business relations;
(f) since
June 30, 2006, except as set forth in Section 5.8(f) of the First Xxxxxxxx
Disclosure Memorandum, forgiven any debt owed to it in excess of $100,000,
or
canceled any of its claims or paid any of its noncurrent obligations or
Liabilities;
(g) since
June 30, 2006, except as set forth in Section 5.8(g) of the First Xxxxxxxx
Disclosure Memorandum, made any capital expenditure or capital addition or
betterment in excess of $50,000;
(h) since
June 30, 2006, except as set forth in Section 5.8(h) of the First Xxxxxxxx
Disclosure Memorandum, entered into any agreement requiring the payment,
conditionally or otherwise, of any salary, bonus, extra compensation (including
payments for unused vacation or sick time), pension or severance payment to
any
of its present or former directors, officers or employees, except such
agreements as are terminable at will without any penalty or other payment by
it
or increased (except for increases of not more than 5% consistent with past
practices) the compensation (including salaries, fees, bonuses, profit sharing,
incentive, pension, retirement or other similar payments) of any such person
whose annual compensation would, following such increase, exceed
$50,000;
-10-
(i) since
June 30, 2006, except as required in accordance with GAAP, changed any
accounting practice followed or employed in preparing the First Xxxxxxxx
Financial Statements;
(j) since
June 30, 2006, authorized or issued any additional shares of First Xxxxxxxx
Common Stock, preferred stock, or Equity Rights; or
(k) since
June 30, 2006, entered into any agreement, contract or commitment to do any
of
the foregoing set forth in Sections 5.8(a) through (j) above.
5.9 Tax
Matters.
(a) All
Tax
Returns required to be filed by or on behalf of the First Xxxxxxxx Entities
have
been timely filed or requests for extensions have been timely filed, granted,
and have not expired for all periods ended on or before the date of the most
recent fiscal year end immediately preceding the Effective Time and all Tax
Returns filed are complete and accurate in all material respects. All Taxes
shown on filed Tax Returns have been paid. There is no audit examination,
deficiency, or refund Litigation with respect to any Taxes, except as reserved
against in the First Xxxxxxxx Financial Statements delivered prior to the date
of this Agreement or as disclosed in Section 5.9 of the First Xxxxxxxx
Disclosure Memorandum. First Xxxxxxxx’x federal income Tax Returns have not been
audited by the IRS. All Taxes and other Liabilities due with respect to
completed and settled examinations or concluded Litigation have been paid.
There
are no Liens with respect to Taxes upon any of the Assets of the First Xxxxxxxx
Entities.
(b) The
First
Xxxxxxxx Entities have not executed an extension or waiver of any statute of
limitations on the assessment or collection of any Tax due that is currently
in
effect.
(c) The
provision for any Taxes due or to become due for First Xxxxxxxx for the period
or periods through and including the date of the respective First Xxxxxxxx
Financial Statements that has been made and is reflected on such First Xxxxxxxx
Financial Statements is sufficient to cover all such Taxes.
(d) Deferred
Taxes of First Xxxxxxxx have been provided for in accordance with
GAAP.
(e) The
First
Xxxxxxxx Entities are in compliance with, and their respective records contain
all information and documents (including properly completed IRS Forms W-9)
necessary to comply with, all applicable information reporting and Tax
withholding requirements under federal, state, and local Tax Laws, and such
records identify with specificity all accounts subject to backup withholding
under Section 3406 of the Internal Revenue Code.
-11-
(f) None
of
the First Xxxxxxxx Entities has experienced a change in ownership with respect
to their respective stock, within the meaning of Section 382 of the Internal
Revenue Code, other than the ownership change that will occur as a result of
the
transactions contemplated by this Agreement.
5.10
Allowance
for Possible Loan Losses.
The
allowance for possible loan or credit losses (the “Allowance”) shown on the
consolidated balance sheets of First Xxxxxxxx included in the First Xxxxxxxx
Financial Statements and the Allowance shown on the consolidated balance sheets
of First Xxxxxxxx as of dates subsequent to the execution of this Agreement
will
be, as of the dates thereof, adequate (within the meaning of GAAP and applicable
regulatory requirements or guidelines) to provide for all known or reasonably
anticipated losses relating to or inherent in the loan and lease portfolios
(including accrued interest receivables) of First Xxxxxxxx and other extensions
of credit (including letters of credit and commitments to make loans or extend
credit) by First Xxxxxxxx as of the dates thereof.
5.11
Assets.
(a) Except
as
disclosed in Section 5.11 of the First Xxxxxxxx Disclosure Memorandum or as
disclosed or reserved against in the First Xxxxxxxx Financial Statements
delivered prior to the date of this Agreement, the First Xxxxxxxx Entities
have
good and marketable title, free and clear of all Liens, to their respective
Assets, except for (i) mortgages and encumbrances that secure indebtedness
that
is properly reflected in the First Xxxxxxxx Financial Statements or that secure
deposits of public funds as required by law; (ii) Liens for taxes accrued but
not yet payable; (iii) Liens arising as a matter of law in the ordinary course
of business, provided
that the
obligations secured by such Liens are not delinquent or are being contested
in
good faith; (iv) such imperfections of title and encumbrances, if any, as do
not
materially detract from the value or materially interfere with the present
use
of any of such properties or Assets or the potential sale of any of such owned
properties or Assets; and (v) capital leases and leases, if any, to third
parties for fair and adequate consideration. All tangible properties used in
the
business of the First Xxxxxxxx Entities are in good condition, reasonable wear
and tear excepted, and are usable in the ordinary course of business consistent
with such First Xxxxxxxx Entity’s past practices. All Assets which are material
to the First Xxxxxxxx Entities’ business on a consolidated basis, held under
leases or subleases by any of the First Xxxxxxxx Entities, are held under valid
Contracts enforceable against the First Xxxxxxxx Entities 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.
-12-
(b) The
First
Xxxxxxxx Entities have paid all amounts due and payable under any insurance
policies and guarantees applicable to the First Xxxxxxxx Entities and their
Assets and operations; all such insurance policies and guarantees are in full
force and effect, and all the First Xxxxxxxx Entities’ material properties are
insured against fire, casualty, theft, loss, and such other events against
which
it is customary to insure, all such insurance policies being in amounts and
with
deductibles that are adequate and are consistent with past practice and
experience. None of the First Xxxxxxxx Entities has received notice from any
insurance carrier that (i) any policy of insurance will be canceled or that
coverage thereunder will be reduced or eliminated, or (ii) premium costs with
respect to such policies of insurance will be substantially increased. There
are
presently no claims for amounts exceeding in any individual case $10,000 pending
under such policies of insurance and no notices of claims in excess of such
amounts have been given by any First Xxxxxxxx Entity under such
policies.
(c) With
respect to each lease of any real property or personal property to which any
First Xxxxxxxx Entity is a party (whether as lessee or lessor), except for
financing leases in which a First Xxxxxxxx Entity is lessor, (i) such lease
is
in full force and effect in accordance with its terms by the First Xxxxxxxx
Entity; (ii) all rents and other monetary amounts that have become due and
payable thereunder have been paid by the First Xxxxxxxx Entity; (iii) there
exists no Default under such lease by the First Xxxxxxxx Entity; and (iv) upon
receipt of the consents described in Section 5.11(c) of the First Xxxxxxxx
Disclosure Memorandum, the Merger will not constitute a default or a cause
for
termination or modification of such lease.
(d) First
Xxxxxxxx has no legal obligation, absolute or contingent, to any other person
to
sell or otherwise dispose of any substantial part of its Assets or to sell
or
dispose of any of its Assets except in the ordinary course of business
consistent with past practices.
(e) The
First
Xxxxxxxx Entities’ Assets include all material Assets required to operate the
business of the First Xxxxxxxx Entities as presently conducted.
5.12
Intellectual
Property.
The
First Xxxxxxxx Entities own or have a license to use all of the Intellectual
Property used by the First Xxxxxxxx Entities in the course of their business.
The First Xxxxxxxx Entities are the owner of or have a license to any
Intellectual Property sold or licensed to a third party by the First Xxxxxxxx
Entities in connection with the First Xxxxxxxx Entities’ business operations,
and the First Xxxxxxxx Entities have the right to convey by sale or license
any
Intellectual Property so conveyed. The First Xxxxxxxx Entities have not received
notice of Default under any of their Intellectual Property licenses. No
proceedings have been instituted, or are pending or overtly threatened, that
challenge the rights of the First Xxxxxxxx Entities with respect to Intellectual
Property used, sold or licensed by the First Xxxxxxxx Entities in the course
of
their business, nor has any person claimed or alleged any rights to such
Intellectual Property. The conduct of the First Xxxxxxxx Entities’ business does
not infringe any Intellectual Property of any other person. Except as disclosed
in Section 5.12 of the First Xxxxxxxx Disclosure Memorandum, the First Xxxxxxxx
Entities are not obligated to pay any recurring royalties to any Person with
respect to any such Intellectual Property. Except as disclosed in Section 5.12
of the First Xxxxxxxx Disclosure Memorandum, no officer, director or employee
of
the First Xxxxxxxx Entities is a party to any Contract that restricts or
prohibits such officer, director or employee from engaging in activities
competitive with any Person, including any First Xxxxxxxx
Entity.
-13-
5.13
Environmental
Matters.
(a) Except
as
disclosed in Section 5.13(a) of the First Xxxxxxxx Disclosure Memorandum, the
First Xxxxxxxx Entities, their Participation Facilities, and their Operating
Properties are, and have been, in compliance with all Environmental
Laws.
(b) Except
as
disclosed in Section 5.13(b) of the First Xxxxxxxx Disclosure Memorandum, there
is no Litigation pending has been asserted in writing against or overtly
threatened before any court, governmental agency, or authority or other forum
in
which the First Xxxxxxxx Entities or any of their Operating Properties or
Participation Facilities (or First Xxxxxxxx in respect of such Operating
Property or Participation Facility) has been or, with respect to overtly
threatened Litigation, may be named as a defendant (i) for alleged noncompliance
(including by any predecessor) with any Environmental Law or (ii) relating
to
the Release into the indoor or outdoor Environment of any Hazardous Material,
whether or not occurring in, at, on, under, about, adjacent to, or affecting
(or
potentially affecting) an Asset currently or formerly owned, leased, or operated
by the First Xxxxxxxx Entities or any of their Operating Properties or
Participation Facilities, nor is there any reasonable basis for any Litigation
of a type described in this sentence.
(c) During
the period of (i) the First Xxxxxxxx Entities’ ownership or operation of any of
its Assets, (ii) the First Xxxxxxxx Entities’ participation in the management of
any Participation Facility, or (iii) the First Xxxxxxxx Entities’ holding of a
security interest in a Operating Property, there has been no Release of any
Hazardous Material in, at, on, under, about, adjacent to, or affecting (or
potentially affecting) such properties that would require notification or
remediation pursuant to any Environmental Law. Prior to the period of (i) the
First Xxxxxxxx Entities’ ownership or operation of any of its Assets, (ii) the
First Xxxxxxxx Entities’ participation in the management of any Participation
Facility, or (iii) the First Xxxxxxxx Entities’ holding of a security interest
in a Operating Property, there was no Release of any Hazardous Material in,
at,
on, under, about, or affecting any such property, Participation Facility or
Operating Property that would require notification or remediation pursuant
to
any Environmental Law. No lead-based paint that is not encapsulated or friable
asbestos in any form is present in, at, on, under, about, or affecting (or
potentially affecting) any Asset.
(d) The
First
Xxxxxxxx Entities have delivered to WGNB true and complete copies and results
of
any reports, studies, analyses, tests, monitoring, correspondence and other
documents and information possessed or initiated by First Xxxxxxxx pertaining
to
Hazardous Materials in, at, on, under, about, or affecting (or potentially
affecting) any Asset, or concerning compliance by the First Xxxxxxxx Entities
or
any other Person for whose conduct they are or may be held responsible, with
Environmental Laws.
(e) There
are
no aboveground or underground storage tanks for the storage of Hazardous
Material, whether in use or closed, in, at, on, under any Asset. Section 5.13(e)
of the First Xxxxxxxx Disclosure Memorandum contains a detailed description
of
all above-ground or underground storage tanks removed by or on behalf of the
First Xxxxxxxx Entities at or from any Asset. Any such tank removals were
performed in accordance with Environmental Laws and no soil or groundwater
contamination resulted from the operation or removal of such
tanks.
-14-
(f) To
their
respective knowledge, the First Xxxxxxxx Entities have obtained and maintained
in full force and effect all permits required by any applicable Environmental
Law necessary to conduct the activities and business of First Xxxxxxxx Entities
as currently conducted, and to occupy or operate the Operating Properties and
Participation Facilities (collectively the “Environmental Permits”). First
Xxxxxxxx Entities have conducted its activities and Business in compliance
in
all material respects with all terms and conditions of any Environmental
Permits. First Xxxxxxxx Entities have filed all report and notifications
required to be filed under applicable Environmental laws and Environmental
Laws
and Environmental Permits.
(g) With
respect to the Operating Properties and Participation Facilities, First Xxxxxxxx
Entities have not received any notification pursuant to any Environmental Laws,
nor does First Xxxxxxxx Entities have any knowledge, that (i) any work, repairs,
corrective or remedial action, construction or capital expenditures are required
to be made as a condition of continued compliance with any Environmental Laws
or
any license, permit or approval issued pursuant thereto, (ii) any license,
permit or approval is about to be reviewed, made subject to limitations or
conditions, revoked, withdrawn or terminated or (iii) any events, conditions,
circumstances, activities, practices, incidents, actions or omissions may
interfere with or prevent compliance or continued compliance with any
Environmental law.
5.14
Compliance
with Laws.
First
Xxxxxxxx is a Georgia corporation and a registered bank holding company under
the BHC Act and has in effect all Permits necessary for it to own, lease, or
operate its Assets and to carry on its business as now conducted, and there
has
occurred no Default under any such Permit. Target Bank is a national banking
association whose deposits are and will at the Effective Time be insured by
the
FDIC and has in effect all Permits necessary for it to own, lease, or operate
its Assets and to carry on its business as now conducted, and there has occurred
no Default under any such Permit. Except as disclosed in Section 5.14 of the
First Xxxxxxxx Disclosure Memorandum, none of the First Xxxxxxxx Entities
are:
(a) in
Default under any of the provisions of their respective Articles of
Incorporation, Articles of Association or Bylaws (or other governing
instruments);
(b) in
Default under any Laws, Orders, or Permits applicable to their business or
employees conducting their respective businesses; or
(c) since
January 1, 2006, in receipt of any notification or communication from any agency
or department of federal, state, or local government or any Regulatory Authority
or the staff thereof (i) asserting that any First Xxxxxxxx Entity is not in
compliance with any of the Laws or Orders which such governmental authority
or
Regulatory Authority enforces, (ii) threatening to revoke any Permits or (iii)
requiring any First Xxxxxxxx Entity to enter into or consent to the issuance
of
a cease and desist order, formal agreement, directive, commitment, or memorandum
of understanding, or to adopt any board resolution or similar undertaking,
which
restricts materially the conduct of its respective business or in any manner
relates to capital adequacy, credit or reserve policies or
management.
-15-
Copies
of
all reports, correspondence, notices and other documents relating to any
inspection, audit, monitoring or other form of review or enforcement action
by a
Regulatory Authority have been made available to WGNB.
5.15
Labor
Relations.
The
First Xxxxxxxx Entities are not a party to any Litigation asserting that it
has
committed an unfair labor practice (within the meaning of the National Labor
Relations Act or comparable state law) or seeking to compel it to bargain with
any labor organization or other employee representative to wages or conditions
of employment, nor are the First Xxxxxxxx Entities party to any collective
bargaining agreement, nor is there any pending or threatened strike, slowdown,
picketing, work stoppage or other labor dispute involving any First Xxxxxxxx
Entity. To the Knowledge of First Xxxxxxxx, there is no activity involving
any
of First Xxxxxxxx Entities’ employees seeking to certify a collective bargaining
unit or engaging in any other organization activity.
5.16
Employee
Benefit Plans.
(a) The
First
Xxxxxxxx Entities have listed in Section 5.16 of the First Xxxxxxxx Disclosure
Memorandum, and have delivered or made available to WGNB prior to the execution
of this Agreement copies in each case of, all pension, retirement,
profit-sharing, employee stock ownership, deferred compensation, stock option,
employee stock ownership, severance pay, vacation, cash or stock 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 “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 the First Xxxxxxxx Entities or ERISA Affiliate thereof for
the
benefit of employees, former employees, retirees, dependents, spouses,
directors, independent contractors, or other beneficiaries and under which
employees, former employees, retirees, dependents, spouses, directors,
independent contractors, or other beneficiaries are eligible to participate
(collectively, the “First Xxxxxxxx Benefit Plans”). Any of the First Xxxxxxxx
Benefit Plans that is an “employee pension benefit plan,” as that term is
defined in Section 3(2) of ERISA, is referred to herein as a “First Xxxxxxxx
ERISA Plan.” Each First Xxxxxxxx ERISA Plan that is also a “defined benefit
plan” (as defined in Section 414(j) of the Internal Revenue Code) is referred to
herein as a “First Xxxxxxxx Pension Plan.” No First Xxxxxxxx Pension Plan is or
has been a multi-employer plan within the meaning of Section 3(37) of
ERISA.
(b) Except
as
disclosed in Section 5.16 of the First Xxxxxxxx Disclosure Memorandum, all
First
Xxxxxxxx Benefit Plans are in compliance with the applicable terms of ERISA,
the
Internal Revenue Code, and any other applicable Laws. Except as set forth in
Section 5.16(b) of the First Xxxxxxxx Disclosure Memorandum, each First Xxxxxxxx
ERISA Plan that is intended to be qualified under Section 401(a) of the Internal
Revenue Code (i) has received a favorable determination letter from the IRS
issued in response to an application filed pursuant to Revenue Procedure 2000-27
or any subsequently issued Revenue Procedure or (ii) is entitled to rely upon
an
opinion letter issued in response to an application filed by the sponsor of
a
master, prototype or volume submitter plan pursuant to Revenue Procedure 2000-20
or any subsequently issued Revenue Procedure, and the First Xxxxxxxx Entities
are not aware of any circumstances likely to result in revocation of any such
favorable determination or opinion letter or to disqualify the First Xxxxxxxx
Entities from relying upon such opinion letter to the fullest extent permitted
under Revenue Procedure 2004-6. The First Xxxxxxxx Entities have not engaged
in
a transaction with respect to any First Xxxxxxxx Benefit Plan that, assuming
the
taxable period of such transaction expired as of the date hereof, would subject
the First Xxxxxxxx Entities to a Tax imposed by either Section 4975 of the
Internal Revenue Code or Section 502(i) of ERISA.
-16-
(c) No
First
Xxxxxxxx Pension Plan has any “unfunded current liability,” as that term is
defined in Section 302(d)(8)(A) of ERISA, based on actuarial assumptions set
forth for such plan’s most recent actuarial valuation. Since the date of the
most recent actuarial valuation, there has been (i) no material adverse change
in the financial position of any First Xxxxxxxx Pension Plan, (ii) no material
adverse change in the actuarial assumptions with respect to any First Xxxxxxxx
Pension Plan, and (iii) no increase in benefits under any First Xxxxxxxx Pension
Plan as a result of plan amendments or changes in applicable Law which are
reasonably likely to materially adversely affect the funding status of any
such
plan. Neither any First Xxxxxxxx Pension Plan nor any “single-employer plan,”
within the meaning of Section 4001(a)(15) of ERISA, currently or formerly
maintained by the First Xxxxxxxx Entities, or the single-employer plan of any
entity which is considered one employer with any First Xxxxxxxx Entity under
Section 4001 of ERISA or Section 414 of the Internal Revenue Code or Section
302
of ERISA (whether or not waived) (an “ERISA Affiliate”) has an “accumulated
funding deficiency” within the meaning of Section 412 of the Internal Revenue
Code or Section 302 of ERISA. The First Xxxxxxxx Entities have not provided,
and
are not required to provide, security to a First Xxxxxxxx Pension Plan or to
any
single-employer plan of an ERISA Affiliate pursuant to Section 401(a)(29) of
the
Internal Revenue Code.
(d) Within
the six-year period preceding the Effective Time, no Liability under Subtitle
C
or D of Title IV of ERISA has been or is expected to be incurred by First
Xxxxxxxx with respect to any ongoing, frozen, or terminated single-employer
plan
or the single-employer plan of any ERISA Affiliate. The First Xxxxxxxx Entities
have not incurred any withdrawal Liability with respect to a multi-employer
plan
under Subtitle B of Title IV of ERISA (regardless of whether based on
contributions of an ERISA Affiliate). No notice of a “reportable event,” within
the meaning of Section 4043 of ERISA for which the 30-day reporting requirement
has not been waived, has been required to be filed for any First Xxxxxxxx
Pension Plan or by any ERISA Affiliate within the 12-month period ending on
the
date hereof.
(e) Except
as
disclosed in Section 5.16 of the First Xxxxxxxx Disclosure Memorandum, the
First
Xxxxxxxx Entities have no Liability for retiree health and life benefits under
any of the First Xxxxxxxx Benefit Plans and there are no restrictions on the
rights of the First Xxxxxxxx Entities to amend or terminate any such retiree
health or benefit plan without incurring any Liability
thereunder.
-17-
(f) Except
as
disclosed in Section 5.16 of the First Xxxxxxxx Disclosure Memorandum, neither
the execution and delivery of this Agreement nor the consummation of the
transactions contemplated hereby will (i) result in any payment (including
severance, unemployment compensation, golden parachute, or otherwise) becoming
due to any director or any employee of the First Xxxxxxxx Entities from any
of
the First Xxxxxxxx Entities under any First Xxxxxxxx Benefit Plan or otherwise,
(ii) increase any benefits otherwise payable under any First Xxxxxxxx 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 entitlements under any executive compensation, supplemental
retirement, or employment agreement) of employees and former employees of the
First Xxxxxxxx Entities and their respective beneficiaries, other than
entitlements accrued pursuant to funded retirement plans subject to the
provisions of Section 412 of the Internal Revenue Code or Section 302 of ERISA,
have been fully reflected on the First Xxxxxxxx Financial Statements to the
extent required by and in accordance with GAAP.
(h) Each
nonqualified deferred compensation plan, within the meaning of Section 409A
of
the Internal Revenue Code, maintained by the First Xxxxxxxx Entities has been
operated in compliance with the requirements of Section 409A (or an available
exemption therefrom) such that amounts of compensation deferred thereunder
will
not be includible in gross income under Section 409A prior to the distribution
of benefits in accordance with the terms of the plan and will not be subject
to
the additional tax under Section 409A(a)(1)(B)(ii).
5.17
Material
Contracts.
Except
as disclosed in Section 5.17 of the First Xxxxxxxx Disclosure Memorandum or
otherwise reflected in the First Xxxxxxxx Financial Statements, neither the
First Xxxxxxxx Entities nor any of their respective Assets, businesses, or
operations that are a party to, or is bound or affected by, or receives benefits
under, (i) any employment, severance, termination, consulting, or retirement
Contract, (ii) any Contract relating to the borrowing of money by any First
Xxxxxxxx Entity or the guarantee by any First Xxxxxxxx Entity of any such
obligation (other than Contracts evidencing deposit liabilities, purchases
of
federal funds, fully-secured repurchase agreements, and Federal Home Loan Bank
advances of depository institution Subsidiaries, trade payables and Contracts
relating to borrowings or guarantees made in the ordinary course of business),
(iii) any Contract that prohibits or restricts the First Xxxxxxxx Entities
from
engaging in any business activities in any geographic area, line of business
or
otherwise in competition with any other Person, (iv) any Contract involving
Intellectual Property (other than Contracts entered into in the ordinary course
of business with customers), (v) any Contract relating to the provision of
data
processing, network communication, or other technical services to or by the
First Xxxxxxxx Entities, (vi) any Contract relating to the purchase or sale
of
any goods or services (other than Contracts entered into in the ordinary course
of business and involving payments under any individual Contract not in excess
of $100,000), and (vii) any exchange-traded or over-the-counter swap, forward,
future, option, cap, floor, or collar financial Contract, or any other interest
rate or foreign currency protection Contract not included on its balance sheet
that is a financial derivative Contract (the “First Xxxxxxxx Contracts”). With
respect to each First Xxxxxxxx Contract and except as disclosed in Section
5.17
of the First Xxxxxxxx Disclosure Memorandum: (i) the Contract is in full force
and effect against the applicable First Xxxxxxxx Entity; (ii) the First Xxxxxxxx
Entity is not in Default thereunder; (iii) the First Xxxxxxxx Entity has not
repudiated or waived any material provision of any such Contract; and (iv)
no
other party to any such Contract is in Default in any respect, or has repudiated
or waived any material provision thereunder. All of the indebtedness of the
First Xxxxxxxx Entities for money borrowed is prepayable at any time by the
First Xxxxxxxx Entities without penalty or premium.
-18-
5.18
Legal
Proceedings.
There
is no Litigation instituted, pending or overtly threatened (or unasserted but
considered probable of assertion and which if asserted would have at least
a
reasonable probability of a material unfavorable outcome) against the First
Xxxxxxxx Entities, or against any employee benefit plan of the First Xxxxxxxx
Entities, or against any Asset, interest, or right of any of them, nor are
there
any Orders of any Regulatory Authorities, other governmental authorities, or
arbitrators outstanding against any First Xxxxxxxx Entity. Section 5.18 of
the
First Xxxxxxxx Disclosure Memorandum contains a summary of all Litigation as
of
the date of this Agreement to which any First Xxxxxxxx Entity is a party and
that names any First Xxxxxxxx Entity as a defendant or cross-defendant or for
which any First Xxxxxxxx Entity has any potential Liability in excess of
$50,000.
5.19
Reports.
Since
December 31, 2005, the First Xxxxxxxx Entities have timely filed all reports
and
statements, together with any amendments required to be made with respect
thereto, that they were required to file with Regulatory Authorities. As of
their respective dates, each of such reports and documents, including the
financial statements, exhibits, and schedules thereto, complied in all material
respects with all applicable Laws. As of its respective date, each such report
and document did not, in all material respects, contain any untrue statement
of
a material fact or omit to state a material fact required to be stated therein
or necessary to make the statements made therein, in light of the circumstances
under which they were made, not misleading.
5.20
Accounting,
Tax and Regulatory Matters.
First
Xxxxxxxx has not taken or agreed to take any action and has no Knowledge of
any
fact or circumstance that is reasonably likely to (i) prevent the Merger from
qualifying as a reorganization within the meaning of Section 368(a) of the
Internal Revenue Code, or (ii) materially impede or delay receipt of any
Consents of Regulatory Authorities referred to in Section 9.1(b) or result
in
the imposition of a condition or restriction of the type referred to in the
last
sentence of such Section.
5.21
Community
Reinvestment Act.
To the
extent applicable to such entity, each of the First Xxxxxxxx Entities has
complied in all material respects with the provisions of the Community
Reinvestment Act (“CRA”), and the rules and regulations thereunder, each has a
CRA rating of not less than “satisfactory,” has received no material criticism
from regulators with respect to discriminatory lending practices, and has no
Knowledge of any conditions or circumstances that are likely to result in a
CRA
rating of less than “satisfactory” or material criticism from regulators with
respect to discriminatory lending practices.
5.22
Privacy
of Customer Information.
(a) The
First
Xxxxxxxx Entities are the sole owner or, in the case of participated loans,
a
co-owner with the other participant(s), of all individually identifiable
personal information (“IIPI”) relating to customers, former customers and
prospective customers that will be transferred to the WGNB Entities pursuant
to
this Agreement and the other transactions contemplated hereby. For purposes
of
this Section 5.22, “IIPI” shall include any information relating to an
identified or identifiable natural person.
-19-
(b) The
collection and use of such IIPI by the First Xxxxxxxx Entities, the transfer
of
such IIPI to the WGNB Entities, and the use of such IIPI by the WGNB Entities
as
contemplated by this Agreement complies with all applicable privacy policies,
the Fair Credit Reporting Act, the Xxxxx-Xxxxx-Xxxxxx Act and all other
applicable state, federal and foreign privacy law, and any contract or industry
standard relating to privacy.
5.23
Technology
Systems.
(a) Except
to
the extent indicated in Schedule 5.23 of the First Xxxxxxxx Disclosure
Memorandum, no third party consents will be necessary as a result of the
transactions contemplated by this Agreement to enable use of the electronic
data
processing, information, record keeping, communications, telecommunications,
hardware, third party software, networks, peripherals, portfolio trading and
computer systems, including any outsourced systems and processes, and
Intellectual Property that are used by the First Xxxxxxxx Entities
(collectively, the “Technology Systems”) to continue to be used by the WGNB
Entities to the same extent and in the same manner that they have been used
by
the First Xxxxxxxx Entities.
(b) The
Technology Systems (for a period of 18 months prior to the Effective Date)
have
not suffered unplanned disruption causing a First Xxxxxxxx Material Adverse
Effect. Except for ongoing payments due under relevant third party agreements,
the Technology Systems are free from any Liens. Access to business critical
parts of the Technology Systems is not shared with any third party.
(c) Details
of First Xxxxxxxx’x disaster recovery and business continuity arrangements have
been provided in writing to WGNB.
(d) The
First
Xxxxxxxx Entities have not received notice of or are aware of any material
circumstances including, without limitation, the execution of this Agreement,
that would enable any third party to terminate any of the First Xxxxxxxx
Entities’ agreements relating to the Technology Systems (including maintenance
and support).
5.24
Bank
Secrecy Act Compliance.
The
First Xxxxxxxx Entities are in compliance in all material respects with the
provisions of the Bank Secrecy Act of 1970, as amended (the “Bank Secrecy Act”),
and all regulations promulgated thereunder including, but not limited to, those
provisions that address suspicious activity reports and compliance programs,
and
all applicable requirements of the Office of Foreign Assets Control. Without
limiting the foregoing, Target Bank has implemented a Bank Secrecy Act
compliance program that adequately covers all of the required program elements
as required by 12 C.F.R. §21.21.
5.25
First
Xxxxxxxx Disclosure Memorandum.
First
Xxxxxxxx has delivered to WGNB the First Xxxxxxxx Disclosure Memorandum
containing certain information regarding the First Xxxxxxxx Entities as
indicated at various places in this Agreement. All information set forth in
the
First Xxxxxxxx Disclosure Memorandum shall be deemed for all purposes of this
Agreement to constitute part of the representations and warranties of First
Xxxxxxxx and Target Bank under this Article 5. The information contained in
the
First Xxxxxxxx Disclosure Memorandum shall be deemed to be part of and qualify
all representations and warranties contained in this Article 5 and the covenants
in Article 7 to the extent applicable.
-20-
5.26
Affiliates.
Section
5.26 of the First Xxxxxxxx Disclosure Memorandum sets forth all Persons whom
First Xxxxxxxx reasonably believes is an Affiliate of First Xxxxxxxx for
purposes of Rule 145 under the 1933 Act.
5.27
Board
Recommendation.
The
Board of Directors of First Xxxxxxxx, at a meeting duly called and held, has
by
unanimous vote of the directors present (who constituted all of the directors
then in office) (i) determined that this Agreement and the transactions
contemplated hereby, including the Mergers, and the First Xxxxxxxx Affiliate
and
Support Agreements (as defined in Section 8.11 and the transactions contemplated
thereby, taken together, are fair to and in the best interests of the
shareholders (ii) resolved to recommend that the holders of the shares of First
Xxxxxxxx Common Stock approve this Agreement and (iii) approved the Bank Merger
as the sole shareholder of the capital stock of Target Bank.
ARTICLE
6
REPRESENTATIONS
AND WARRANTIES OF WGNB AND PURCHASER BANK
WGNB
and
Purchaser Bank, jointly and not severally, hereby represent and warrant to
First
Xxxxxxxx and Target Bank as follows:
6.1 Organization,
Standing and Power.
WGNB is
a corporation duly organized, validly existing, and in good standing under
the
Laws of Georgia and is duly registered as a bank holding company under the
BHC
Act, and Purchaser Bank is a national banking association duly organized,
validly existing and in good standing under the Laws of the United States.
Each
has the corporate power and authority to carry on its business as now conducted
and to own, lease and operate its Assets. Each of the WGNB Entities is duly
qualified or licensed to transact business as a foreign corporation in good
standing in the jurisdictions where the character of its Assets or the nature
or
conduct of its business requires it to be so qualified or licensed. The minute
book and other organizational documents for each of the WGNB Entities have
been
made available to First Xxxxxxxx for its review and, except as set forth in
Section 6.1 of the WGNB Disclosure Memorandum, accurately reflect all amendments
thereto and all proceedings of the Board of Directors and shareholders
thereof.
6.2 Authority;
No Breach by Agreement.
(a) Each
of
WGNB and Purchaser Bank 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 Mergers, have been duly and validly
authorized by all necessary corporate action in respect thereof on the part
of
WGNB and Purchaser Bank. Subject to approval of WGNB’s shareholders, and receipt
of the requisite Consents of Regulatory Authorities, this Agreement represents
a
legal, valid, and binding obligation of WGNB and Purchaser Bank, enforceable
against each of WGNB and Purchaser Bank in accordance with its terms (except
in
all cases as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, receivership, conservatorship, moratorium, or
similar Laws affecting the enforcement of creditors’ rights generally and except
that the availability of the equitable remedy of specific performance or
injunctive relief is subject to the discretion of the court before which any
proceeding may be brought).
-21-
(b) Neither
the execution and delivery of this Agreement by WGNB or Purchaser Bank, nor
the
consummation by WGNB or Purchaser Bank of the transactions contemplated hereby,
nor compliance by WGNB or Purchaser Bank with any of the provisions hereof,
will
(i) conflict with or result in a breach of any provision of WGNB’s Articles of
Incorporation or Bylaws or any resolution adopted by the board of directors
or
the shareholders of WGNB that is currently in effect, (ii) conflict with or
result in a breach of any provision of Purchaser Bank’s Articles of Association
or Bylaws or any resolution adopted by the board of directors or the
shareholders of Purchaser Bank that is currently in effect, (iii) except as
disclosed in Section 6.2(b) of the WGNB Disclosure Memorandum, constitute or
result in a Default under, or require any Consent pursuant to, or result in
the
creation of any Lien on any Asset of any WGNB Entity under, any Contract or
Permit of the WGNB Entities, (iv) subject to receipt of the requisite Consents
referred to in Section 9.1(b), constitute or result in a Default under, or
require any Consent pursuant to, any Law or Order applicable to the WGNB
Entities or any of their Assets (including any WGNB Entity or First Xxxxxxxx
becoming subject to or liable for the payment of any Tax or any of the Assets
owned by any WGNB Entity or First Xxxxxxxx being reassessed or revalued by
any
Taxing authority).
(c) Other
than in connection or compliance with the provisions of the Securities Laws,
applicable state corporate and securities Laws, and rules of the Nasdaq Capital
Market, and other than Consents required from Regulatory Authorities, and other
than notices to or filings with the IRS or the Pension Benefit Guaranty
Corporation with respect to any employee benefit plans, no notice to, filing
with, or Consent of any public body or authority is necessary for the
consummation by WGNB of the Company Merger, by Purchaser Bank of the Bank
Merger, and the other transactions contemplated in this Agreement.
6.3 Capital
Stock.
(a) The
authorized capital stock of WGNB consists of 10,000,000 shares of WGNB Common
Stock, of which (i) 5,000,613 shares are issued and outstanding, (ii) 920,997
shares are reserved for issuance pursuant to Equity Rights granted under the
WGNB 1994 Incentive Stock Option Plan and the WGNB 2003 Incentive Stock Option
Plan and (iii) shares reserved for issuance pursuant to the Equity Rights issued
by WGNB pursuant to that certain Rights Agreement dated as of February 12,
1997
between WGNB and SunTrust Bank, Atlanta. All of the issued and outstanding
shares of WGNB Common Stock are, and all of the shares of WGNB Common Stock
to
be issued in exchange for shares of First Xxxxxxxx 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 WGNB Common
Stock has been, and none of the shares of WGNB Common Stock to be issued in
exchange for shares of First Xxxxxxxx Common Stock upon consummation of the
Merger will be, issued in violation of any preemptive rights of the current
or
past shareholders of WGNB.
-22-
(b) The
authorized capital stock of Purchaser Bank consists of 10,000,000 shares of
$1.25 par value per share common stock, of which 5,000,613 shares are issued
and
outstanding. All of the issued and outstanding shares of capital stock of
Purchaser Bank are duly and validly issued and outstanding and are fully paid
and nonassessable (except pursuant to 12 U.S.C. Section 55) and none of the
outstanding shares of capital stock of Purchaser Bank has been issued in
violation of any preemptive rights.
(c) Except
as
set forth in Section 6.3(a) of this Agreement, there are no shares of capital
stock, preferred stock or other equity securities of WGNB outstanding and no
outstanding Equity Rights relating to the capital stock of WGNB.
6.4 WGNB
Subsidiaries.
Except
as described in Section 6.4 of the WGNB Disclosure Memorandum: (i) WGNB has
no
Subsidiaries other than Purchaser Bank and WGNB Investments, Inc. and does
not
own, for its own account, any stocks, options, calls, warrants or rights to
acquire stock or other equity in any partnership, limited liability company
or
corporation; (ii) WGNB owns all of the issued and outstanding capital stock
of
Purchaser Bank and WGNB Investments, Inc. and (iii) all of such shares are
held
free and clear of any Lien. Purchaser Bank and WGNB Investments, Inc. have
no
subsidiaries.
6.5 SEC
Filings; Financial Statements.
(a) WGNB
has
timely filed and made available to First Xxxxxxxx all SEC Documents required
to
be filed by WGNB since December 31, 2005 (the “WGNB SEC Reports”). The WGNB SEC
Reports (i) at the time filed, complied in all material respects with the
applicable requirements of the Securities Laws and other applicable Laws and
(ii) did not, at the time they were filed (or, if amended or superseded by
a
filing prior to the date of this Agreement, then on the date of such filing)
contain any untrue statement of a material fact or omit to state a material
fact
required to be stated in such WGNB SEC Reports or necessary in order to make
the
statements in such WGNB SEC Reports, in light of the circumstances under which
they were made, not misleading. No WGNB Subsidiary is required to file any
SEC
Documents.
(b) Each
of
the WGNB Financial Statements (including, in each case, any related notes)
contained in the WGNB SEC Reports, including any WGNB SEC Reports filed after
the date of this Agreement until the Effective Time, complied as to form in
all
material respects with the applicable published rules and regulations of the
SEC
with respect thereto, was prepared in accordance with GAAP applied on a
consistent basis throughout the periods involved (except as may be indicated
in
the notes to such financial statements or, in the case of unaudited interim
statements, as permitted by Form 10-Q of the SEC), and fairly presented in
all
material respects the consolidated financial position of WGNB and its
Subsidiaries as at the respective dates and the consolidated results of
operations and cash flows for the periods indicated, except that the unaudited
interim consolidated financial statements were or are subject to normal and
recurring year-end adjustments which were not or are not expected to be material
in amount or effect.
-23-
6.6 Absence
of Undisclosed Liabilities.
No WGNB
Entity has any Liabilities of a nature required to be reflected on a balance
sheet prepared in accordance with GAAP, except Liabilities that are accrued
or
reserved against in the consolidated balance sheets of WGNB as of June 30,
2006,
included in the WGNB Financial Statements delivered prior to the date of this
Agreement or reflected in the notes thereto. No WGNB Entity has incurred or
paid
any Liability since December 31, 2005, except for such Liabilities incurred
or
paid (i) in the ordinary course of business consistent with past business
practice and that are not reasonably likely to have, individually or in the
aggregate, a WGNB Material Adverse Effect, or (ii) in connection with the
transactions contemplated by this Agreement.
6.7 Absence
of Certain Changes or Events.
Since
June 30, 2006, except as set forth in the WGNB SEC Reports, (i) there have
been
no events, changes or occurrences which have had, or are reasonably likely
to
have, individually or in the aggregate, an WGNB Material Adverse Effect, and
(ii) none of the WGNB Entities has 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 WGNB provided in Article
7.
6.8 Legal
Proceedings.
(a) Except
as
disclosed in Section 6.8 of the WGNB Disclosure Memorandum, there is no
Litigation instituted, pending or overtly 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 WGNB Entity,
or
against any director, employee or employee benefit plan of any WGNB Entity,
or
against any Asset, interest, or right of any of them, nor are there any Orders
of any Regulatory Authorities, other governmental authorities, or arbitrators
outstanding against any WGNB Entity, that in any case would be required to
be
disclosed in a Form 10-K or Form 10-Q pursuant to Item 103 of Regulation S-K
that are not so disclosed.
(b) There
are
no material uncured violations, or violations with respect to which material
refunds or restitution may be required, cited in any compliance report to any
WGNB Entity as a result of examination by any bank or bank holding company
regulatory authority.
(c) No
WGNB
Entity is subject to any written agreement, memorandum or order or decree with
or by any bank or bank holding company regulatory authority, nor has any WGNB
Entity been advised by any regulatory agency that it is considering issuing
or
requesting any such written agreement, memorandum, letter, order or
decree.
-24-
6.9 Community
Reinvestment Act.
To the
extent applicable to such entity, each of the WGNB Entities has complied in
all
material respects with the provisions of the CRA, and the rules and regulations
thereunder, each has a CRA rating of not less than “satisfactory,” has received
no material criticism from regulators with respect to discriminatory lending
practices, and has no Knowledge of any conditions or circumstances that are
likely to result in a CRA rating of less than “satisfactory” or material
criticism from regulators with respect to discriminatory lending
practices.
6.10
Technology
Systems.
(a) The
electronic data processing, information, record keeping, communications,
telecommunications, hardware, third party software, networks, peripherals,
portfolio trading and computer systems, including any outsourced systems and
processes, and Intellectual Property that are used by the WGNB Entities
(collectively, the “WGNB Technology Systems”) (for a period of 18 months prior
to the Effective Date) have not suffered unplanned disruption causing a WGNB
Material Adverse Effect. Except for ongoing payments due under relevant third
party agreements, the Technology Systems are free from any Liens. Access to
business critical parts of the Technology Systems is not shared with any third
party.
(b) The
WGNB
Entities have not received notice of or are aware of any material circumstances
including, without limitation, the execution of this Agreement, that would
enable any third party to terminate any of the WGNB Entities’ agreements
relating to the Technology Systems (including maintenance and
support).
6.11
Bank
Secrecy Act Compliance.
The
WGNB Entities are in compliance in all material respects with the provisions
of
the Bank Secrecy Act and all regulations promulgated thereunder including,
but
not limited to, those provisions that address suspicious activity reports and
compliance programs, and all applicable requirements of the Office of Foreign
Assets Control. Without limiting the foregoing, Purchaser Bank has implemented
a
Bank Secrecy Act compliance program that adequately covers all of the required
program elements as required by 12 C.F.R. §21.21.
6.12
WGNB
Disclosure Memorandum.
WGNB
has delivered to First Xxxxxxxx the WGNB Disclosure Memorandum containing
certain information regarding the WGNB Entities as indicated at various places
in this Agreement. All information set forth in the WGNB Disclosure Memorandum
shall be deemed for all purposes of this Agreement to constitute part of the
representations and warranties of WGNB and Purchaser Bank under this Article
6.
The information contained in the WGNB Disclosure Memorandum shall be deemed
to
be part of and qualify all representations and warranties contained in this
Article 6 and the covenants in Article 7 to the extent applicable.
6.13
Board
Recommendation.
The
Board of Directors of WGNB, at a meeting duly called and held, has by unanimous
vote of the directors present (who constituted all of the directors then in
office) (i) determined that this Agreement and the transactions contemplated
hereby, including the Mergers, and the transactions contemplated thereby, taken
together, are fair to and in the best interests of the shareholders (ii)
resolved to recommend that the holders of the shares of WGNB Common Stock
approve this Agreement and (iii) approved the Bank Merger as the sole
shareholder of the capital stock of Purchaser Bank.
-25-
ARTICLE
7
CONDUCT
OF BUSINESS PENDING CONSUMMATION
7.1 Affirmative
Covenants of Each Party.
From
the date of this Agreement until the earlier of the Effective Time or the
termination of this Agreement, unless the prior written consent of the other
Party shall have been obtained, and except as otherwise expressly contemplated
herein, each Party shall and shall cause each of its Subsidiaries to (i) operate
its business only in the usual, regular, and ordinary course, (ii) preserve
intact its business organization and material Assets and maintain its rights
and
franchises, and (iii) take no action that would (A) materially adversely affect
the ability of either Party to obtain any Consents required for the transactions
contemplated hereby without imposition of a condition or restriction of the
type
referred to in the last sentences of Section 9.1(b) or 9.1(c), or (B) materially
adversely affect the ability of either Party to perform its covenants and
agreements under this Agreement.
7.2 Negative
Covenants of First Xxxxxxxx and Target Bank.
From
the date of this Agreement until the earlier of the Effective Time or the
termination of this Agreement, unless the prior written consent of WGNB shall
have been obtained, which consent shall not be unreasonably withheld, and except
as otherwise expressly contemplated herein, each of First Xxxxxxxx and Target
Bank covenants and agrees that the First Xxxxxxxx Entities will not do or agree
or commit to do any of the following:
(a) amend
their Articles of Incorporation, Articles of Association, Bylaws or other
governing instruments, or
(b) incur
any
additional debt obligation or other obligation for borrowed money in excess
of
an aggregate of $50,000 except in the ordinary course of business of First
Xxxxxxxx or Target Bank consistent with past practices (which shall include
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 the First Xxxxxxxx Entities of any Lien
or permit any such Lien to exist (other than in connection with deposits,
repurchase agreements, bankers acceptances, “treasury tax and loan” accounts
established in the ordinary course of business, the satisfaction of legal
requirements in the exercise of trust powers, and Liens in effect as of the
date
hereof that are disclosed in the First Xxxxxxxx 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 First Xxxxxxxx’x capital stock, or
declare or pay any dividend or make any other distribution in respect of First
Xxxxxxxx’x capital stock; provided,
however,
that
First Xxxxxxxx may pay a special one-time cash dividend, in an aggregate amount
not to exceed $7,250,000, to the First Xxxxxxxx shareholders of record as of
immediately prior to the Effective Time and may pay its regularly scheduled
quarterly dividends to its shareholders of record not to exceed $.72 per share
on January 31, 2007 and March 30, 2007 and not to exceed $.73 per
share on June 29, 2007 (provided the Closing occurs after June 29,
2007 and First Xxxxxxxx shareholders would not otherwise be entitled to receive
the regularly scheduled WGNB third quarter dividend) provided
further,
that
WGNB shall give First Xxxxxxxx prior written notice if it intends to change
the
record date of its quarterly dividend to shareholders to a date other than
March 30, 2007 or June 29, 2007; or
-26-
(d) issue,
sell, pledge, encumber, authorize the issuance of, enter into any Contract
to
issue, sell, pledge, encumber, or authorize the issuance of, or otherwise permit
to become outstanding, any additional shares of First Xxxxxxxx Common Stock
or
any other capital stock of any First Xxxxxxxx Entity, or any stock appreciation
rights, or any option, warrant, or other Equity Right; or
(e) adjust,
split, combine or reclassify any shares of First Xxxxxxxx Common Stock or issue
or authorize the issuance of any other securities in respect of or in
substitution for shares of First Xxxxxxxx Common Stock, or sell, lease, mortgage
or otherwise dispose of or otherwise encumber any Asset having a book value
in
excess of $50,000 other than in the ordinary course of business for reasonable
and adequate consideration; or
(f) except
for purchases of U.S. Treasury securities, U.S. Government agency securities
or
obligations of the State of Georgia, or any subdivisions thereof that have
maturities of seven years or less and which do not exceed $1,000,000 in the
aggregate during any calendar quarter, 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, or otherwise
acquire direct or indirect control over any Person, other than in connection
with (i) foreclosures in the ordinary course of business, (ii) acquisitions
of
control by a depository institution Subsidiary in its fiduciary capacity, or
(iii) the creation of new wholly owned Subsidiaries organized to conduct or
continue activities otherwise permitted by this Agreement; or
(g) enter
into or amend any employment Contract with any Person (unless such amendment
is
required by Law or this Agreement) that such First Xxxxxxxx Entity does not
have
the unconditional right to terminate without Liability (other than Liability
for
services already rendered), at any time on or after the Effective Time;
or
(i) adopt
any
new employee benefit plan or terminate or withdraw from, or make any material
change in or to, any existing employee benefit plans of the First Xxxxxxxx
Entities other than any such change that is required by Law or that, in the
opinion of counsel, is necessary or advisable to maintain the tax qualified
status of any such plan, or make any distributions from such employee benefit
plans, except as required by Law or contemplated by this Agreement, the terms
of
such plans or consistent with past practice; or
(j) make
any
significant change in any Tax or accounting methods or systems of internal
accounting controls, except as may be appropriate to conform to changes in
Tax
Laws or regulatory accounting requirements or GAAP; or
-27-
(k) commence
any Litigation other than in accordance with past practice, or settle any
Litigation involving any Liability of the First Xxxxxxxx Entities for over
$50,000 in money damages or any restrictions upon the operations of the First
Xxxxxxxx Entities; or
(l) except
in
the ordinary course of business, enter into, modify, amend or terminate any
Contract (including any loan Contract with an unpaid balance) or waive, release,
compromise or assign any right or claim in an amount exceeding
$50,000.
7.3 Negative
Covenants of WGNB.
From
the date of this Agreement until the earlier of the Effective Time or the
termination of this Agreement, unless the prior written consent of First
Xxxxxxxx shall have been obtained, which consent shall not be unreasonably
withheld, and except as otherwise expressly contemplated herein, WGNB covenants
and agrees that it will not do or agree or commit to amend the Articles of
Incorporation or Bylaws of WGNB, in each case, in any manner adverse to the
holders of First Xxxxxxxx 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 that (i) is reasonably likely to
have,
individually or in the aggregate, a First Xxxxxxxx Material Adverse Effect
or an
WGNB Material Adverse Effect, as applicable, or (ii) would cause or constitute
a
material breach of any of its representations, warranties, or covenants
contained herein, and to use its reasonable efforts to prevent or promptly
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.
7.6 Loan
Portfolio Review.
Each
Party shall have the right to perform due diligence reviews of the other Party’s
lending activities at 45-day intervals between the date of this Agreement and
the Effective Time.
ARTICLE
8
ADDITIONAL
AGREEMENTS
8.1 WGNB
Registration Statement.
(a) WGNB
will
promptly prepare and file on Form S-4 a Registration Statement (which will
include the Proxy Statement) complying with all the requirements of the 1933
Act
(and the rules and regulations thereunder) applicable thereto, for the purpose,
among other things, of registering the WGNB Common Stock that will be issued
to
the holders of First Xxxxxxxx Common Stock pursuant to the Merger. WGNB shall
use commercially reasonable efforts to cause the Registration Statement to
become effective as soon as practicable, to qualify the WGNB Common Stock under
the Securities Laws of such jurisdictions as may be required and to keep the
Registration Statement and such qualifications current and in effect for so
long
as is necessary to consummate the transactions contemplated hereby. As a result
of the registration of the WGNB Common Stock pursuant to the Registration
Statement, such stock shall be freely tradable by the shareholders of First
Xxxxxxxx except to the extent that the transfer of any shares of WGNB Common
Stock received by shareholders of First Xxxxxxxx is subject to the provisions
of
Rule 145 under the Securities Act or restricted under applicable Tax rules.
First Xxxxxxxx and its counsel shall have reasonable opportunity to review
and
comment on the Registration Statement being filed with the SEC and any responses
filed with the SEC regarding the Registration Statement.
-28-
(b) Each
of
the Parties will cooperate in the preparation of the Registration Statement
and
Proxy Statement that complies with the requirements of the Securities Laws,
for
the purpose of submitting this Agreement and the transactions contemplated
hereby to WGNB’s and First Xxxxxxxx’x shareholders for approval. Each of the
Parties will as promptly as practicable after the date hereof furnish all such
data and information relating to it and its Subsidiaries, as applicable, as
the
other Party may reasonably request for the purpose of including such data and
information in the Registration Statement and the Proxy Statement. None of
the
information to be supplied by any Party for inclusion in (i) the Registration
Statement will, at the time the Registration Statement becomes effective under
the Securities Act, contain any untrue statement of a material fact required
to
be stated therein or necessary to make the statements therein, not misleading,
(ii) the Proxy Statement will, at the date it is first mailed to First
Xxxxxxxx’x shareholders and at the time of the First Xxxxxxxx shareholders’
meeting (except to the extent amended or supplemented by a subsequent
communication), contain any untrue statement of a material fact or omit to
state
any material fact required to be stated therein or necessary in order to make
the statements therein, in light of the circumstances under which they were
made, not misleading or (iii) any other document filed with any other
regulatory agency in connection herewith will, at the time such document is
filed, fail to comply as to form in all material respects with the provisions
of
applicable Law. The Proxy Statement will comply as to form in all material
respects with the requirements of the 1934 Act and the rules and regulations
thereunder, except that no representation or warranty is made by First Xxxxxxxx
with respect to statements made or incorporated by reference therein based
on
information supplied by any WGNB Entity for inclusion or incorporation by
reference in the Proxy Statement.
8.2 Nasdaq
Listing.
WGNB
shall list, prior to or at the Effective Time, on the Nasdaq Capital Market
the
shares of WGNB Common Stock to be issued to the holders of First Xxxxxxxx Common
Stock pursuant to the Merger, and WGNB shall give all notices and make all
filings with the Nasdaq Capital Market required in connection with the
transactions contemplated herein.
8.3 Applications.
WGNB
and Purchaser Bank shall prepare and file, and First Xxxxxxxx and Target Bank
shall cooperate in the preparation and, where appropriate, filing, applications
with all Regulatory Authorities having jurisdiction over the transactions
contemplated by this Agreement seeking the requisite Consents necessary to
consummate the transactions contemplated by this Agreement. The Parties shall
deliver to each other copies of all filings, correspondence and orders to and
from all Regulatory Authorities in connection with the transactions contemplated
hereby.
-29-
8.4 Filings
with State Offices.
Upon
the terms and subject to the conditions of this Agreement, WGNB and Purchaser
Bank shall execute and file the respective Articles of Merger with the Secretary
of 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 to consummate and make effective,
as
soon as reasonably practicable after the date of this Agreement, the
transactions contemplated by this Agreement, including using its reasonable
efforts to lift or rescind any Order adversely affecting its ability to
consummate the transactions contemplated herein and to cause to be satisfied
the
conditions referred to in Article 9; provided
that
nothing herein shall preclude either Party from exercising its rights under
this
Agreement. Each Party shall use, and shall cause each of its Subsidiaries to
use, its reasonable efforts to obtain all Consents necessary or desirable for
the consummation of the transactions contemplated by this Agreement including
promptly calling for a special meeting of its shareholders to vote on this
Agreement.
8.6 Investigation
and Confidentiality.
(a) Prior
to
the Effective Time, each Party shall keep the other Party advised of all
material developments relevant to its business and to consummation of the Merger
and shall permit the other Party to make or cause to be made such investigation
of the business and properties of it and its Subsidiaries and of their
respective financial and legal conditions as the 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 confidential information furnished to it by the other
Party concerning its and its Subsidiaries’ businesses, operations, and financial
positions and shall not use such information for any purpose except in
furtherance of the transactions contemplated by this Agreement. If this
Agreement is terminated prior to the Effective Time, each Party shall promptly
return or certify the destruction of all documents and copies thereof and all
work papers containing confidential information received from the other
Party.
(c) Each
Party 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 First Xxxxxxxx Material Adverse Effect
or
an WGNB Material Adverse Effect, as applicable.
-30-
8.7 No
Solicitations.
(a) Except
as
contemplated by Section 8.7(c) of this Agreement and prior to the Effective
Time
or until the termination of this Agreement, First Xxxxxxxx shall not, without
the prior written approval of WGNB,
(i) directly
or indirectly solicit or initiate inquiries or proposals with respect to,
furnish any information regarding, enter into any Contract with respect to
or
participate in any Acquisition Proposal; or
(ii) withdraw
its recommendation to the First Xxxxxxxx shareholders regarding the Merger
or
make a recommendation regarding any Acquisition Transaction.
(b) First
Xxxxxxxx shall instruct its officers, directors, agents and affiliates to
refrain from doing any of the above and will notify WGNB immediately if any
such
inquiries or proposals are received by it, any such information is requested
from it, or any such negotiations or discussions are sought to be initiated
with
any of its officers, directors, agents and affiliates.
(c) Nothing
contained in this Section 8.7 shall prohibit any officer or director of First
Xxxxxxxx from taking any action that the Board of Directors of First Xxxxxxxx
shall determine in good faith, after consultation with its financial advisors
and legal counsel, is required by law or is required to discharge his or her
fiduciary duties to First Xxxxxxxx and its shareholders.
(d) First
Xxxxxxxx shall immediately cease and cause to be terminated all existing
discussions or negotiations with any persons conducted with respect to any
Acquisition Transaction except those contemplated by this
Agreement.
(e) Each
Party shall promptly advise the other Party following the receipt of any
Acquisition Proposal and the details thereof and advise the other Party of
any
developments with respect to such Acquisition Proposal promptly upon the
occurrence thereof.
8.8 Press
Releases.
Prior
to the Effective Time, First Xxxxxxxx and WGNB shall consult with each other
as
to the form and substance of any press release or other public disclosure
materially related to this Agreement or any other transaction contemplated
hereby; provided,
that
nothing in this Section 8.8 shall be deemed to prohibit any Party from making
any disclosure its legal counsel deems necessary or advisable in order to
satisfy such Party’s disclosure obligations imposed by Law.
8.9 Tax
Treatment.
Each of
the Parties undertakes and agrees to use its reasonable efforts to cause the
Merger, and to take no action which would cause the Merger not, to qualify
as a
tax-free “reorganization” within the meaning of Section 368(a) of the Internal
Revenue Code for federal income tax purposes.
-31-
8.10
Charter
Provisions.
(a) First
Xxxxxxxx shall take all necessary action to ensure that the entering into of
this Agreement and the consummation of the Company Merger and the other
transactions contemplated hereby do not and will not result in the grant of
any
rights to any Person under First Xxxxxxxx’x Articles of Incorporation, Bylaws or
other governing instruments or restrict or impair the ability of WGNB or any
of
its Subsidiaries to vote, or otherwise to exercise the rights of a shareholder
with respect to, shares of First Xxxxxxxx that may be directly or indirectly
acquired or controlled by them.
(b) First
Xxxxxxxx and Target Bank shall take all necessary action to ensure that the
entering into of this Agreement and the consummation of the Bank Merger and
the
other transactions contemplated hereby do not and will not result in the grant
of any rights to any Person under Target Bank’s Articles of Association, Bylaws
or other governing instruments or restrict or impair the ability of WGNB or
any
of its Subsidiaries to vote, or otherwise to exercise the rights of a
shareholder with respect to, shares of Target Bank that may be directly or
indirectly acquired or controlled by them.
8.11
Agreement
and Support of Affiliates.
First
Xxxxxxxx has disclosed in Section 5.26 of the First Xxxxxxxx Disclosure
Memorandum all Persons whom it reasonably believes is an “affiliate” of First
Xxxxxxxx for purposes of Rule 145 under the 1933 Act. First Xxxxxxxx shall
use
its reasonable efforts to cause each such Person to deliver to WGNB not later
than 30 days after the date of this Agreement, a written affiliate and support
agreement, substantially in the form of Exhibit “B” hereto (the “First Xxxxxxxx
Affiliate and Support Agreements”).
8.12
Indemnification
and Insurance.
WGNB
covenants and agrees that:
(a) all
rights to indemnification (including, without limitation, rights to mandatory
advancement of expenses) and all limitations of liability existing in favor
of
indemnified parties under First Xxxxxxxx’ Articles of Incorporation and Bylaws
as in effect as of the date of this Agreement with respect to matters occurring
prior to or at the Effective Time (an “Indemnified Party”) shall survive the
Merger and shall continue in full force and effect, without any amendment
thereto, for a period concurrent with the applicable statute of limitations;
provided,
however,
that
all rights to indemnification in respect of any claim asserted or made as to
which WGNB is notified in writing within such period shall continue until the
final disposition of such claim. Without limiting the foregoing, in any case
in
which approval is required to effect any indemnification, the determination
of
any such approval shall be made, at the election of the Indemnified Party,
by
independent counsel mutually agreed upon between WGNB and the Indemnified
Party.
-32-
(b) Promptly
after receipt by an Indemnified Party of notice of the commencement of any
action, such Indemnified Party shall, if a claim in respect thereof is to be
made against WGNB under this Section 8.12, notify WGNB in writing of the
commencement thereof. In case any such action shall be brought against any
Indemnified Party, WGNB shall be entitled to participate therein and, to the
extent that it shall wish, to assume the defense thereof, with counsel
reasonably satisfactory to such Indemnified Party, and, after notice from WGNB
to such Indemnified Party of its election so to assume the defense thereof,
WGNB
shall not be liable to such Indemnified Party under this Section 8.12 for any
legal expenses of other counsel or any other expenses subsequently incurred
by
such Indemnified Party; provided,
however,
if WGNB
elects not to assume such defense or if counsel for the Indemnified Party
advises WGNB in writing that there are material substantive issues that raise
conflicts of interest between WGNB or First Xxxxxxxx and the Indemnified Party,
such Indemnified Party may retain counsel satisfactory to it, and WGNB shall
pay
all reasonable fees and expenses of such counsel for the Indemnified Party
promptly as statements therefor are received. Notwithstanding the foregoing,
WGNB shall not be obligated to pay the fees and expenses of more than one
counsel for all Indemnified Parties in respect of such claim unless in the
reasonable judgment of an Indemnified Party a conflict of interest exists
between an Indemnified Party and any other Indemnified Parties in respect to
such claims.
(c) First
Xxxxxxxx shall cause the persons serving as officers or directors of First
Xxxxxxxx or Target Bank, immediately prior to the Effective Time to be covered
for a period of three years from the Effective Time by the directors’ and
officers’ liability insurance policy maintained by First Xxxxxxxx with respect
to acts or omissions occurring prior to or at the respective effective times
that were committed by such officers and directors in their capacity as such;
provided
that (i)
WGNB may substitute a policy or policies with at least the same coverage and
amounts and terms and conditions that are no less advantageous (or with First
Xxxxxxxx’x consent, give prior to the Effective Time, any other policy); and
(ii) the aggregate premium to be paid by First Xxxxxxxx for such insurance
shall
not exceed 150% of the most current annual premium paid by First Xxxxxxxx for
its directors and officers liability insurance, without WGNB’s prior
approval.
(d) If
WGNB
or any of its successors or assigns (i) shall consolidate with or merge into
any
corporation or entity and shall not be the continuing or surviving corporation
or entity of such consolidation or merger or (ii) shall transfer all or
substantially all of its properties and assets to any individual, corporation
or
other entity, then and in each such case, proper provisions shall be made so
that the successors and assigns of WGNB shall assume the obligations set forth
in this Section 8.12.
(e) The
provisions of this Section 8.12 are intended to be for the benefit of, and
shall
be enforceable by, each Indemnified Party and his or her heirs and
representatives.
-33-
8.13
Employee
Benefits and Contracts.
Following the Effective Time, WGNB shall provide generally to officers and
employees of the First Xxxxxxxx Entities (who continue employment with WGNB
or
any of its Subsidiaries) employee benefits on terms and conditions which, when
taken as a whole, are substantially similar to those then currently provided
by
WGNB to its other similarly situated officers and employees. For purposes of
benefit accrual (but only for purposes of determining benefits accruing under
payroll practices such as vacation policy or under fringe benefit programs
that
do not rise to the level of a “plan” within the meaning of Section 3(3) of
ERISA), eligibility to participate and vesting determinations in connection
with
the provision of any such employee benefits, service with the First Xxxxxxxx
Entities prior to the Effective Date shall be counted. WGNB shall also honor
in
accordance with their terms all employment, severance, consulting, option and
other contracts of a compensatory nature to the extent disclosed in Section
8.13
of the First Xxxxxxxx Disclosure Memorandum between any First Xxxxxxxx Entity
and any current or former director, officer or employee thereof, and no other
contracts of the types described that are not so disclosed shall be deemed
to be
assumed by WGNB by reason of this Section 8.13. If, during the calendar year
in
which falls the Effective Time, WGNB shall terminate any “group health plan,”
within the meaning of Section 4980B(g)(2) of the Internal Revenue Code, in
which
one or more First Xxxxxxxx Entities employees participated immediately prior
to
the Effective Time (a “First Xxxxxxxx Plan”), WGNB shall use its best efforts to
cause any successor group health plan to waive any underwriting requirements;
to
give credit for any such First Xxxxxxxx Entities employee’s participation in the
First Xxxxxxxx Plan prior to the Effective Time for purposes of applying any
pre-existing condition limitations set forth therein; and to give credit for
covered expenses paid by any such First Xxxxxxxx Entities employee under a
First
Xxxxxxxx Plan prior to the Effective Time towards satisfaction of any annual
deductible limitation and out-of pocket maximum applied under such successor
group health plan. WGNB also shall be considered a successor employer for and
shall provide to “qualified beneficiaries,” determined immediately prior to the
Effective Time, under any First Xxxxxxxx Plan appropriate “continuation
coverage” (as those terms are defined in Section 4980B of the Internal Revenue
Code) following the Effective Time under either the First Xxxxxxxx Plan or
any
successor group health plan maintained by WGNB. At the request of WGNB, First
Xxxxxxxx will take all appropriate action to terminate, prior to the Effective
Time, any retirement plan maintained by the First Xxxxxxxx Entities that is
intended to be qualified under Section 401(a) of the Internal Revenue
Code.
8.14
Support
of WGNB Directors .
WGNB
shall use its reasonable efforts to cause each of its directors to deliver
to
First Xxxxxxxx not later than 30 days after the date of this Agreement, a
written support agreement substantially in the form of Exhibit “C” hereto (the
“WGNB Support Agreements”).
ARTICLE
9
CONDITIONS
PRECEDENT TO OBLIGATIONS TO CONSUMMATE
9.1 Conditions
to Obligations of Each Party.
The
respective obligations of each Party to perform this Agreement and consummate
the Merger and the other transactions contemplated hereby are subject to the
satisfaction of the following conditions, unless waived by both Parties pursuant
to Section 11.6:
(a) Shareholder
Approval.
The
shareholders of each of WGNB and First Xxxxxxxx shall have approved this
Agreement, and the consummation of the transactions contemplated hereby,
including the Merger, as and to the extent required by Law and, by the
provisions of any governing instruments.
-34-
(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 that is necessary to consummate the transactions contemplated hereby
shall be conditioned or restricted in a manner (including requirements relating
to the raising of additional capital or the disposition of Assets) which in
the
reasonable judgment of the Board of Directors of any Party would so materially
adversely impact the economic or business benefits of the transactions
contemplated by this Agreement that, had such condition or requirement been
known, such Party would not, in its reasonable judgment, have entered into
this
Agreement.
(c) Consents
and Approvals.
Each
Party shall have obtained any and all Consents required for consummation of
the
Merger (other than those referred to in Section 9.1(b)) or for the preventing
of
any Default under any Contract or Permit of such Party which, if not obtained
or
made, is reasonably likely to have, individually or in the aggregate, a First
Xxxxxxxx Material Adverse Effect or a WGNB Material Adverse Effect, as
applicable. No Consent so obtained which is necessary to consummate the
transactions contemplated hereby shall be conditioned or restricted in a manner
which in the reasonable judgment of the Board of Directors of either Party
would
so materially adversely impact the economic or business benefits of the
transactions contemplated by this Agreement that, had such condition or
requirement been known, such Party would not, in its reasonable judgment, have
entered into this Agreement.
(d) Legal
Proceedings.
No
court or governmental or regulatory authority of competent jurisdiction shall
have enacted, issued, promulgated, enforced or entered any Law or Order (whether
temporary, preliminary or permanent) or taken any other action that prohibits,
restricts or makes illegal consummation of the transactions contemplated by
this
Agreement.
(e) Registration
Statement.
The
Registration Statement shall be effective under the 1933 Act, no stop orders
suspending the effectiveness of the Registration Statement shall have been
issued, no action, suit, proceeding or investigation by the SEC to suspend
the
effectiveness thereof shall have been initiated and be continuing, and all
necessary approvals under state securities Laws or the 1933 Act or 1934 Act
relating to the issuance or trading of the shares of WGNB Common Stock issuable
pursuant to the Merger shall have been received.
(f)
Nasdaq
Listing.
The
shares of WGNB Common Stock issuable pursuant to the Merger shall have been
approved for listing on the Nasdaq Capital Market.
(g) Tax
Matters.
Each
Party shall have received a written opinion of counsel from Xxxxxxxx Xxxxxxx
LLP, in form reasonably satisfactory to such Parties, to the effect that (i)
the
Merger will constitute a reorganization within the meaning of Section 368(a)
of
the Internal Revenue Code, and (ii) the exchange in the Merger of First Xxxxxxxx
Common Stock for WGNB Common Stock will not give rise to gain or loss to the
shareholders of First Xxxxxxxx with respect to such exchange (except to the
extent of any cash received).
-35-
9.2 Conditions
to Obligations of WGNB and Purchaser Bank.
The
obligations of WGNB and Purchaser Bank to perform under this Agreement and
consummate the Mergers and the other transactions contemplated hereby are
subject to the satisfaction of the following conditions, unless waived by WGNB
pursuant to Section 11.6(a):
(a) Representations
and Warranties.
The
representations and warranties of First Xxxxxxxx and Target Bank set forth
in
this Agreement shall be true and correct as of the date of this Agreement and
as
of the Effective Time with the same effect as though all such representations
and warranties had been made on and as of the Effective Time (provided that
representations and warranties that are confined to a specified date shall
speak
only as of such date), except for inaccuracies that are not reasonably likely
to
have a First Xxxxxxxx Material Adverse Effect.
(b) Performance
of Agreements and Covenants.
Each
and all of the agreements and covenants of First Xxxxxxxx and Target Bank 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.
Each of
First Xxxxxxxx and Target Bank shall have delivered to WGNB and Purchaser Bank
(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 set forth in Section 9.1 as relates to First Xxxxxxxx or Target
Bank, as applicable, Section 9.2(a) (qualified as to such officer’s Knowledge
with respect to such matters as the parties may deem appropriate) and Section
9.2(b) have been satisfied, and (ii) certified copies of resolutions duly
adopted by their respective Boards 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 WGNB and its counsel
shall
request.
(d) Opinion
of Counsel.
First
Xxxxxxxx shall have delivered to WGNB an opinion of Xxxxxx Xxxxxxxxx LLP, dated
as of the Closing Date, covering those matters set forth in Exhibit “C” hereto,
which opinion may be rendered in accordance with the Interpretive Standards
on
Legal Opinions to Third Parties in Corporate Transactions promulgated by the
Corporate and Banking Law Section of the State Bar of Georgia (January 1, 1992)
or the American Bar Association (the “Interpretive Standards”).
(e) Opinion
of Financial Advisor.
WGNB
shall have received the opinion of Sandler X’Xxxxx & Partners, L.P., to the
effect that, as of the date of this Agreement, the Merger Consideration to
be
paid to the holders of First Xxxxxxxx Common Stock is fair, from a financial
point of view, to WGNB, a signed copy of which shall have been delivered to
First Xxxxxxxx.
(f) Affiliate
Agreements.
WGNB
shall have received from each director and executive officer of First Xxxxxxxx
disclosed in Section 5.26 of the First Xxxxxxxx Disclosure Memorandum a First
Xxxxxxxx Affiliate and Support Agreement.
-36-
(g) Noncompete
Agreements.
WGNB
shall have received from each director of First Xxxxxxxx and Target Bank a
signed noncompete agreement in the form set forth as Exhibit “E” hereto
providing that for a period of two years after their respective service as
a
director or executive officer of the surviving corporation or surviving bank,
as
the case may be, terminates such director will not serve on the board of
directors or in an executive capacity of any financial institution (or holding
company therefor) with offices located within Xxxxxxxx, Xxxxxxx or Xxxxxxx
counties in Georgia.
(h) Employment
Agreements.
WGNB
shall have executed mutually satisfactory employment agreements with each of
Xxxx X. Xxxxxxxxx, Xxxxxxx X. Xxxxx and Xxxxxx X. Xxxxxx.
9.3 Conditions
to Obligations of First Xxxxxxxx and Target Bank.
The
obligations of First Xxxxxxxx and Target Bank to perform under this Agreement
and consummate the Mergers and the other transactions contemplated hereby are
subject to the satisfaction of the following conditions, unless waived by First
Xxxxxxxx pursuant to Section 11.6(b):
(a) Representations
and Warranties.
The
representations and warranties of WGNB and Purchaser Bank set forth in this
Agreement shall be true and correct as of the date of this Agreement and as
of
the Effective Time with the same effect as though all such representations
and
warranties had been made on and as of the Effective Time (provided that
representations and warranties that are confined to a specified date shall
speak
only as of such date), except for inaccuracies that are not reasonably likely
to
have an WGNB Material Adverse Effect.
(b) Performance
of Agreements and Covenants.
Each
and all of the agreements and covenants of WGNB and Purchaser Bank 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.
WGNB
and Purchaser Bank shall have delivered to First Xxxxxxxx and Target Bank (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 set forth in Section 9.1 as relates to WGNB and Target Bank, Section
9.3(a) (qualified as to such officer’s Knowledge with respect to such matters as
the parties may deem appropriate) and Section 9.3(b) have been satisfied, and
(ii) certified copies of resolutions duly adopted by their respective Boards
of
Directors and the shareholders of WGNB evidencing the taking of all corporate
action necessary to authorize the execution, delivery and performance of this
Agreement, and the consummation of the transactions contemplated hereby, all
in
such reasonable detail as First Xxxxxxxx and its counsel shall
request.
(d) Opinion
of Counsel.
WGNB
shall have delivered to First Xxxxxxxx an opinion of Xxxxxxxx Xxxxxxx LLP,
counsel to WGNB, dated as of the Closing Date, covering those matters set forth
in Exhibit “F” hereto, which opinion may be rendered in accordance with the
Interpretive Standards.
-37-
(e) Opinion
of Financial Advisor.
First
Xxxxxxxx shall have received the opinion of Sheshunoff & Co. Investment
Banking, to the effect that, as of the date of this Agreement, the Merger
Consideration to be received by the holders of First Xxxxxxxx Common Stock
is
fair, from a financial point of view, to such holders, a signed copy of which
shall have been delivered to WGNB.
ARTICLE
10
TERMINATION
10.1
Termination.
Notwithstanding any other provision of this Agreement, and notwithstanding
the
approval of this Agreement by the shareholders of WGNB or First Xxxxxxxx, this
Agreement may be terminated and the Merger abandoned at any time prior to the
Effective Time:
(a) By
mutual
written consent of the Boards of Directors of WGNB and First Xxxxxxxx;
or
(b) By
the
Board of Directors of either WGNB or First Xxxxxxxx (provided that the
terminating Party is not then in material breach of any representation,
warranty, covenant, or other agreement contained in this Agreement) in the
event
of a material breach by the other Party of any representation, warranty,
covenant or agreement contained in this Agreement which cannot be or has not
been cured within 30 days after the giving of written notice to the breaching
Party of such breach (provided that the right to effect such cure shall not
extend beyond the date set forth in subparagraph (d) below) and which breach
is
reasonably likely, in the opinion of the non-breaching Party, to have,
individually or in the aggregate, a First Xxxxxxxx Material Adverse Effect
or an
WGNB Material Adverse Effect, as applicable, on the breaching Party;
or
(c) By
the
Board of Directors of either WGNB or First Xxxxxxxx in the event (i) any Consent
of any Regulatory Authority required for consummation of the Merger and the
other transactions contemplated hereby shall have been denied by final
nonappealable action of such authority or if any action taken by such authority
is not appealed within the time limit for appeal, or (ii) the shareholders
of
either WGNB or First Xxxxxxxx fail to vote their approval of the matters
relating to this Agreement and the transactions contemplated hereby at the
shareholders’ meeting where such matters were presented to such shareholders for
approval and voted upon; or
(d) By
the
Board of Directors of either WGNB or First Xxxxxxxx in the event that the Merger
shall not have been consummated by September 30, 2007, 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(d); or
(e) By
the
Board of Directors of either WGNB or First Xxxxxxxx in the event that any of
the
conditions precedent to the obligations of such Party to consummate the Merger
cannot be satisfied or waived by the date specified in Section 10.1(d),
provided
that the
failure to consummate the Merger is not caused by the Party electing to
terminate pursuant to this Section 10.1(e); or
-38-
(f) By
the
Board of Directors of WGNB if the Board of Directors of First Xxxxxxxx:
(i) shall
withdraw, modify or change its recommendation to the First Xxxxxxxx shareholders
with respect to this Agreement or the Merger or shall have resolved to do any
of
the foregoing or;
(ii) either
recommends to the First Xxxxxxxx shareholders or affirmatively approves any
Acquisition Transaction or makes any announcement of any agreement to enter
into
an Acquisition Transaction; or
(g) By
the
Board of Directors of First Xxxxxxxx if First Xxxxxxxx receives a bona fide
written offer with respect to an Acquisition Transaction, and the Board of
Directors of First Xxxxxxxx determines in good faith, after consultation with
its financial advisors and counsel, that such Acquisition Transaction is more
favorable to First Xxxxxxxx’ shareholders than the transactions contemplated by
this Agreement; or
(h) By
the
Board of Directors of WGNB if the holders of more than 10% in the aggregate
of
the Outstanding First Xxxxxxxx Shares vote such shares against this Agreement
or
the Merger at any meeting called for the purpose of voting thereon and exercise
their dissenters’ rights in accordance with Article 13 of the GBCC.
10.2
Effect
of Termination.
In the
event of the termination and abandonment of this Agreement pursuant to Section
10.1, this Agreement shall become void and have no effect, except that (i)
the
provisions of this Section 10.2 and Article 11 and Section 8.6(b) 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 this Article 10
and
Articles 1, 2, 3, 4 and 11 and Sections 8.6 and 8.12.
10.4
Termination
Payment.
If this
Agreement is terminated by either of the Parties pursuant to subsection 10.1(f)
or 10.1(g), then First Xxxxxxxx (or its successor) shall pay or cause to be
paid
to WGNB, as liquidated damages and not as a penalty, upon demand a termination
payment of $2.0 million payable in same day funds.
10.5
Reimbursement
of Expenses.
Notwithstanding the provisions of Section 11.2 of this Agreement, if this
Agreement is terminated pursuant to subsection 10.1(b), the breaching Party
shall 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 30 days after the
termination of this Agreement. This Section 10.5 shall be the non-breaching
Party’s sole and exclusive remedy for actionable breach by the breaching Party
under this Agreement.
-39-
ARTICLE
11
MISCELLANEOUS
11.1
Definitions.
(a) Except
as
otherwise provided herein, the capitalized terms set forth below shall have
the
following meanings:
“1933
Act”
shall
mean the Securities Act of 1933, as amended.
“1934
Act”
shall
mean the Securities Exchange Act of 1934, as amended.
“Acquisition
Proposal”
with
respect to a Party shall mean any tender offer or exchange offer or any proposal
for a merger, acquisition of all of the stock or assets of or other business
combination involving the acquisition of such Party or any of its Subsidiaries
or the acquisition of a substantial equity interest in, or a substantial portion
of the assets of, such Party or any of its Subsidiaries.
“Acquisition
Transaction”
shall
mean: (i) any merger, consolidation, share exchange, business combination or
other similar transaction (other than the transactions contemplated by this
Agreement); (ii) any sale, lease, transfer or other disposition of all or
substantially all of the assets of First Xxxxxxxx, or the beneficial ownership
or 15% or more of any class of First Xxxxxxxx capital stock; or (iii) any
acquisition, by any person or group, of the beneficial ownership of 15% or
more
of any class of First Xxxxxxxx capital stock.
“Affiliate”
of
a
Person shall mean: (i) any other Person directly, or indirectly through one
or
more intermediaries, controlling, controlled by or under common control with
such Person; (ii) any officer, director, partner, employer, or direct or
indirect beneficial owner of any 10% or greater equity or voting interest of
such Person; or (iii) any other Person for which a Person described in clause
(ii) acts in any such capacity.
“Agreement”
shall
mean this Agreement and Plan of Reorganization, including the Exhibits delivered
pursuant hereto and incorporated herein by reference.
“Allowance”
shall
have the meaning set forth in Section 5.10.
“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.
-40-
“Bank
Merger”
shall
have the meaning set forth in the Preamble to the Agreement.
“Bank
Secrecy Act” shall
have the meaning set forth in Section 5.24.
“BHC
Act”
shall
mean the federal Bank Holding Company Act of 1956, as amended.
“Cash
Consideration”
shall
mean an
amount
equal to (i) the
sum
between $11,562,500 and
$18,500,000 elected by holders of the Outstanding First Xxxxxxxx Shares
less
(ii)
the dollar amount equal to (A) the
sum
between $11,562,500 and
$18,500,000 referenced in the preceding clause multiplied
by (B) the Dissenter Ratio.
The
Parties agree that the sum referenced in clause (i) above shall equal
$11,562,500 if holders of Outstanding First Xxxxxxxx Shares elect to receive
less than $11,562,500 in cash and shall equal $18,500,000 if holders of
Outstanding First Xxxxxxxx Shares elect to receive more than $18,500,000 in
cash.
“Closing”
shall
have the meaning set forth in Section 1.3.
“Closing
Date”
shall
mean the date on which the Closing occurs.
“Company
Merger”
shall
have the meaning set forth in the Preamble to the Agreement.
“Consent”
shall
mean any consent, approval, authorization, clearance, exemption, waiver, or
similar affirmation by any Person pursuant to any Contract, Law, Order, or
Permit.
“Contract”
shall
mean any written or oral agreement, arrangement, authorization, commitment,
contract, indenture, instrument, lease, obligation, plan, practice, restriction,
understanding, or undertaking of any kind or character, or other document to
which any Person is a party or that is binding on any Person or its capital
stock, Assets or business.
“CRA”
shall
have the meaning set forth in Section 5.21.
“Default”
shall
mean (i) any breach or violation of, default under, contravention of, or
conflict with, any Contract, Law, Order, or Permit, (ii) any occurrence of
any
event that with the passage of time or the giving of notice or both would
constitute a breach or violation of, default under, contravention of, or
conflict with, any Contract, Law, Order, or Permit, or (iii) any occurrence
of
any event that with or without the passage of time or the giving of notice
would
give rise to a right of any Person to exercise any remedy or obtain any relief
under, terminate or revoke, suspend, cancel, or modify or change the current
terms of, or renegotiate, or to accelerate the maturity or performance of,
or to
increase or impose any Liability under, any Contract, Law, Order, or
Permit.
-41-
“Default
Election Shares”
shall
have the meaning set forth in Section 3.1(b).
“Dissenter
Ratio”
shall
mean the ratio equal to (i) the number of Dissenting Shares divided by (ii)
the
number of shares of First Xxxxxxxx Common Stock outstanding immediately prior
to
the Effective Time.
“Dissenting
Shares”
shall
have the meaning set forth in Section 3.1(b).
“Effective
Time”
shall
have the meaning set forth in Section 1.4.
“Environment”
shall
mean any soil, land surface or subsurface strata, surface waters (including
navigable waters, ocean waters, streams, ponds, natural or artificial drainage
systems, and wetlands), groundwaters, drinking water supply, stream sediments,
ambient air (including indoor air), plant and animal life, biota, and any other
environmental media or natural resource.
“Environmental
Laws”
shall
mean any federal, state or local law, statute, ordinance, code, rule,
regulation, license, authorization, decision, order, injunction, decree, or
rule
of common law (including but not limited to nuisance or trespass claims), and
any judicial interpretation of any of the foregoing, which pertains to health,
safety, any Hazardous Material, or the Environment (including, but not limited
to, ground, air, water or noise pollution or contamination, and underground
or
above-ground storage tanks) and shall include without limitation, the Solid
Waste Disposal Act, 42 U.S.C. § 6901 et
seq.;
the
Comprehensive Environmental Response, Compensation and Liability Act of 1980,
42
U.S.C. §9601 et
seq.
(“CERCLA”), as amended by the Superfund Amendments and Reauthorization Act of
1986 (“XXXX”); the Resource Conservation and Recovery Act, as amended, 42.
U.S.C. Section 6901 et
seq.;
the
Hazardous Materials Transportation Act, 49 U.S.C. § 1801 et
seq.;
the
Federal Water Pollution Control Act, 33 U.S.C. § 1251 et
seq.;
the
Clean Air Act, 42 U.S.C. § 7401 et
seq.;
the
Toxic Substances Control Act, 15 U.S.C. § 2601 et
seq.;
the
Safe Drinking Water Act, 42 U.S.C. § 300f et
seq.
and any
other state or federal environmental statutes, and all rules, regulations,
orders and decrees now or hereafter promulgated under any of the foregoing,
as
any of the foregoing now exist or may be changed or amended or come into effect
in the future.
“Equity
Rights”
shall
mean all arrangements, calls, commitments, Contracts, options, rights to
subscribe to, script, understandings, warrants, or other binding obligations
of
any character whatsoever relating to, or securities or rights convertible into
or exchangeable for, shares of the capital stock of a Person or by which a
Person is or may be bound to issue additional shares of its capital stock or
other Equity Rights.
“ERISA”
shall
mean the Employee Retirement Income Security Act of 1974, as
amended.
“Exchange
Agent”
shall
have the meaning set forth in Section 4.1.
-42-
“Exhibits”
A
through F, 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
thereto.
“FDIC”
shall
mean the Federal Deposit Insurance Corporation.
“Federal
Reserve”
shall
mean the Board of Governors of the Federal Reserve System.
“FICG”
shall
mean the Financial Institutions Code of Georgia.
“First
Xxxxxxxx Affiliate and Support Agreements”
shall
have the meaning set forth in Section 8.11.
“First
Xxxxxxxx Benefit Plans” shall
have the meaning set forth in Section 5.16(a).
“First
Xxxxxxxx Common Stock”
shall
mean, collectively, the no par value Class A Common (voting) Stock of First
Xxxxxxxx and the no par value Class B Common (non-voting) Stock of First
Xxxxxxxx.
“First
Xxxxxxxx Contracts”
shall
have the meaning set forth in Section 5.17.
“First
Xxxxxxxx Disclosure Memorandum”
shall
mean the written information entitled “First Xxxxxxxx Disclosure Memorandum”
delivered prior to the date of this Agreement to WGNB describing in reasonable
detail the matters contained therein and, with respect to each disclosure made
therein, specifically referencing each Section of this Agreement under which
such disclosure is being made. Information disclosed with respect to one Section
shall not be deemed to be disclosed for purposes of any other Section not
specifically referenced with respect thereto.
“First
Xxxxxxxx Entities”
shall
mean, collectively, First Xxxxxxxx and Target Bank.
“First
Xxxxxxxx Financial Statements”
shall
mean (i) the consolidated audited balance sheets (including related notes and
schedules, if any) of First Xxxxxxxx as of December 31, 2005 and 2004, and
the
related consolidated statements of income, changes in shareholders’ equity, and
cash flows (including related notes and schedules, if any), and (ii) the
unaudited consolidated balance sheet (including related notes and schedules,
if
any) of First Xxxxxxxx as of June 30, 2006, and the related consolidated
statements of income, changes in shareholders’ equity, and cash flows (including
related notes and schedules, if any) for the six month period ended June 30,
2006, as delivered by First Xxxxxxxx to WGNB prior to execution of this
Agreement.
-43-
“First
Xxxxxxxx Material Adverse Effect”
shall
mean an event, change or occurrence which, individually or together with any
other event, change or occurrence, has a material adverse impact on (i) the
financial position, business, or results of operations of the First Xxxxxxxx
Entities, taken as a whole, or (ii) the ability of First Xxxxxxxx to perform
its
obligations under this Agreement or to consummate the Merger or the other
transactions contemplated by this Agreement, provided
that
“Material Adverse Effect” shall not be deemed to include the impact of (a)
changes in banking and similar Laws of general applicability or interpretations
thereof by courts or governmental authorities, (b) changes in generally accepted
accounting principles or regulatory accounting principles generally applicable
to banks and their holding companies, (c) actions and omissions of First
Xxxxxxxx taken with the prior informed written Consent of WGNB in contemplation
of the transactions contemplated hereby, and (d) the direct effects of
compliance with this Agreement on the operating performance of First Xxxxxxxx,
including expenses incurred by First Xxxxxxxx in consummating the transactions
contemplated by this Agreement.
“GAAP”
shall
mean generally accepted accounting principles, consistently applied during
the
periods involved.
“GBCC”
shall
mean the Georgia Business Corporation Code.
“Georgia
Department”
shall
mean the Georgia Department of Banking and Finance.
“Hazardous
Material”
shall
mean any substance, whether solid, liquid or gaseous: (i) which is listed,
defined or regulated as a “hazardous substance,” “hazardous waste,”
“contaminant,” or “solid waste,” or otherwise classified as hazardous or toxic,
in or pursuant to any Environmental Law; (ii) which is or contains friable
asbestos, radon, any polychlorinated biphenyl, polybrominated diphenyl ether,
urea formaldehyde foam insulation, explosive or radioactive material, or motor
fuel, petroleum product, constituent or by-product, or other petroleum
hydrocarbons; or (iii) which causes a contamination or nuisance, or a hazard,
or
threat of the same, to public health, human health or the
Environment.
“IIPI”
shall
have the meaning set forth in Section 5.22(a).
“Intellectual
Property”
shall
mean copyrights, patents, trademarks, service marks, service names, trade names,
applications therefor, technology rights and licenses, computer software
(including any source or object codes therefor or documentation relating
thereto), trade secrets, franchises, know-how, inventions, and other
intellectual property rights.
“Internal
Revenue Code”
shall
mean the Internal Revenue Code of 1986, as amended, and the rules and
regulations promulgated thereunder.
“Interpretive
Standards” shall
have the meaning set forth in Section 9.2(d).
“IRS”
shall
mean the Internal Revenue Service.
-44-
“Knowledge”
as
used
with respect to a Person (including references to such Person being aware of
a
particular matter) shall mean the personal knowledge after due inquiry of the
chairman, president, chief financial officer, chief accounting officer, chief
operating officer, chief credit officer, executive or other vice president
of
such Person and the knowledge of any such persons obtained or which would have
been obtained from a reasonable investigation.
“Law”
shall
mean any code, law (including common law), ordinance, regulation, reporting
or
licensing requirement, rule, or statute applicable to a Person or its Assets,
Liabilities, or business, including those promulgated, interpreted or enforced
by any Regulatory Authority.
“Letter
of Transmittal”
shall
have the meaning set forth in Section 4.1.
“Liability”
shall
mean any direct or indirect, primary or secondary, liability, indebtedness,
obligation, penalty, cost or expense (including costs of investigation,
collection and defense), claim, deficiency, guaranty or endorsement of or by
any
Person (other than endorsements of notes, bills, checks, and drafts presented
for collection or deposit in the ordinary course of business) of any type,
whether accrued, absolute or contingent, liquidated or unliquidated, matured
or
unmatured, or otherwise.
“Lien”
shall
mean any conditional sale agreement, default of title, easement, encroachment,
encumbrance, hypothecation, infringement, lien, mortgage, pledge, reservation,
restriction, security interest, title retention or other security arrangement,
or any adverse right or interest, charge, or claim of any nature whatsoever
of,
on, or with respect to any property or property interest, other than (i) Liens
for current property Taxes not yet due and payable, (ii) for depository
institution Subsidiaries of a Party, pledges to secure deposits and other Liens
incurred in the ordinary course of the banking business, and (iii) Liens which
do not materially impair the use of or title to the Assets subject to such
Lien.
“Litigation”
shall
mean any action, arbitration, cause of action, claim, charge, complaint,
criminal prosecution, governmental or other examination or investigation,
hearing, administrative or other proceeding relating to or affecting a Party,
its business, its Assets (including Contracts related to it), or the
transactions contemplated by this Agreement, but shall not include regular,
periodic examinations of depository institutions and their Affiliates by
Regulatory Authorities.
“Merger
Consideration”
shall
mean the value of the total consideration payable to holders of the Outstanding
First Xxxxxxxx Shares and Dissenting Shares pursuant to this Agreement, not
including the special one-time cash dividend payable by First Xxxxxxxx in
accordance with Section 7.2(c), which shall have a deemed value of
$46,250,000.
“Mergers”
shall
have the meaning set forth in the Preamble to the Agreement.
-45-
“Nasdaq
Capital Market”
shall
mean the Capital Market System of The Nasdaq Stock Market, Inc.
“OCC”
shall
mean The Office of the Comptroller of the Currency.
“Old
Certificates”
shall
have the meaning set forth in Section 4.1.
“Operating
Property”
shall
mean any property owned, leased, or operated by the Party in question or by
any
of its Subsidiaries or in which such Party or Subsidiary holds a security
interest or other interest (including an interest in a fiduciary capacity),
and,
where required by the context, includes the owner or operator of such property,
but only with respect to such property.
“Order”
shall
mean any administrative decision or award, decree, injunction, judgment, order,
quasi-judicial decision or award, ruling, or writ of any federal, state, local
or foreign or other court, arbitrator, mediator, tribunal, administrative
agency, or Regulatory Authority.
“Outstanding
First Xxxxxxxx Shares” shall
have the meaning set forth in Section 3.1(b).
“Participation
Facility”
shall
mean any facility or property in which the Party in question or any of its
Subsidiaries participates in the management and, where required by the context,
said term means the owner or operator of such facility or property, but only
with respect to such facility or property.
“Party”
shall
mean any of WGNB, Purchaser Bank, First Xxxxxxxx or Target Bank, and “Parties”
shall mean all of WGNB, Purchaser Bank, First Xxxxxxxx or Target
Bank.
“Permit”
shall
mean any federal, state, local, and foreign governmental approval,
authorization, certificate, easement, filing, franchise, license, notice,
permit, or right to which any Person is a party or that is or may be binding
upon or inure to the benefit of any Person or its securities, Assets, or
business.
“Person”
shall
mean a natural person or any legal, commercial or governmental entity, such
as,
but not limited to, a corporation, general partnership, joint venture, limited
partnership, limited liability company, trust, business association, group
acting in concert, or any person acting in a representative
capacity.
“Pro
Rata Share”
shall
mean the quotient obtained by dividing (i) the number one by (ii) the total
number of Outstanding First Xxxxxxxx Shares as of the Effective
Time.
“Proxy
Statement”
shall
mean the joint proxy statement used by WGNB and First Xxxxxxxx to solicit the
approval of their respective shareholders of the transactions contemplated
by
this Agreement, which shall include the prospectus of WGNB relating to the
issuance of the WGNB Common Stock to holders of First Xxxxxxxx Common
Stock.
-46-
“Registration
Statement”
shall
mean the Registration Statement on Form S-4, or other appropriate form,
including any pre-effective or post-effective amendments or supplements thereto,
filed with the SEC by WGNB under the 1933 Act with respect to the shares of
WGNB
Common Stock to be issued to the shareholders of First Xxxxxxxx in connection
with the transactions contemplated by this Agreement.
“Regulatory
Authorities”
shall
mean, collectively, the SEC, the Nasdaq Capital Market, the Federal Trade
Commission, the United States Department of Justice, the Board of the Governors
of the Federal Reserve System, the OCC, the Federal Deposit Insurance
Corporation, the Georgia Department and all other federal, state, county, local
or other governmental or regulatory agencies, authorities (including
self-regulatory authorities), instrumentalities, commissions, boards or bodies
having jurisdiction over the Parties and their respective
Subsidiaries.
“Release”
or
“Released”
means
any spilling, leaking, pumping, pouring, emptying, injecting, emitting,
discharging, depositing, escaping, leaching, migration, filtration, pouring,
seepage, disposal, dumping, or other releasing into the indoor or outdoor
Environment, whether intentional or unintentional, including, without
limitation, the abandonment or discarding of barrels, containers and other
closed receptacles containing Hazardous Materials or the movement of Hazardous
Materials in, on, under or through the Environment.
“Representative”
shall
mean any investment banker, financial advisor, attorney, accountant, consultant,
or other representative engaged by a Person.
“SEC
Documents”
shall
mean all forms, proxy statements, registration statements, reports, schedules,
and other documents filed, or required to be filed, by a Party or any of its
Subsidiaries with any Regulatory Authority pursuant to the Securities
Laws.
“Securities
Laws”
shall
mean the 1933 Act, the 1934 Act, the Investment Company Act of 1940, as amended,
the Investment Advisors Act of 1940, as amended, the Trust Indenture Act of
1939, as amended, and the rules and regulations of any Regulatory Authority
promulgated thereunder.
“Stock
Consideration”
shall
mean the number of shares of WGNB Common Stock equal to (i) the Total Share
Number minus (ii) the product of (A) the Total Share Number and (B) the
Dissenter Ratio.
“Subsidiaries”
shall
mean all those corporations, associations, or other business entities of which
the entity in question either (i) owns or controls 50% or more of the
outstanding equity securities either directly or through an unbroken chain
of
entities as to each of which 50% or more of the outstanding equity securities
is
owned directly or indirectly by its parent (provided, there shall not be
included any such entity the equity securities of which are owned or controlled
in a fiduciary capacity), (ii) in the case of partnerships, serves as a general
partner, (iii) in the case of a limited liability company, serves as a managing
member, or (iv) otherwise has the ability to elect a majority of the directors,
trustees or managing members thereof.
-47-
“Tax
Return”
shall
mean any report, return, information return, or other information required
to be
supplied to a taxing authority in connection with Taxes, including any return
of
an affiliated or combined or unitary group that includes a Party or its
Subsidiaries.
“Tax”
or
“Taxes”
shall
mean any federal, state, county, local, or foreign taxes, charges, fees, levies,
imposts, duties, or other assessments, including income, gross receipts, excise,
employment, sales, use, transfer, license, payroll, franchise, severance, stamp,
occupation, windfall profits, environmental, federal highway use, commercial
rent, customs duties, capital stock, paid-up capital, profits, withholding,
Social Security, single business and unemployment, disability, real property,
personal property, registration, ad valorem, value added, alternative or add-on
minimum, estimated, or other tax or governmental fee of any kind whatsoever,
imposes or required to be withheld by the United States or any state, county,
local or foreign government or subdivision or agency thereof, including any
interest, penalties, and additions imposed thereon or with respect
thereto.
“Technology
Systems”
shall
have the meaning set forth in Section 5.23(a).
“Total
Share Number”
shall
mean the number of shares of WGNB Common Stock rounded down to the nearest
whole
share equal to (A) $46,250,000 less the Cash Consideration, (B) divided by
$28.37.
“WGNB
Common Stock”
shall
mean the $1.25 par value common stock of WGNB.
“WGNB
Disclosure Memorandum”
shall
mean the written information entitled “WGNB Disclosure Memorandum” delivered
prior to the date of this Agreement to First Xxxxxxxx describing in reasonable
detail the matters contained therein and, with respect to each disclosure made
therein, specifically referencing each Section of this Agreement under which
such disclosure is being made. Information disclosed with respect to one Section
shall not be deemed to be disclosed for purposes of any other Section not
specifically referenced with respect thereto.
“WGNB
Entities”
shall
mean, collectively, WGNB and Purchaser Bank.
“WGNB
Financial Statements”
shall
mean (i) the consolidated balance sheets (including related notes and schedules,
if any) of WGNB as of December 31, 2005 and 2004, and the related consolidated
statements of income, changes in shareholders’ equity, and cash flows (including
related notes and schedules, if any), as filed by WGNB in SEC Documents, and
(ii) the unaudited consolidated balance sheets (including related notes and
schedules, if any) of WGNB as of June 30, 2006, and the related consolidated
statements of income, changes in shareholders’ equity, and cash flows (including
related notes and schedules, if any), for the six month period ended
June 30, 2006 as delivered by WGNB to First Xxxxxxxx prior to execution of
this Agreement.
-48-
“WGNB
Material Adverse Effect”
shall
mean an event, change or occurrence which, individually or together with any
other event, change or occurrence, has a material adverse impact on (i) the
financial position, business, or results of operations of WGNB and its
Subsidiaries, taken as a whole, or (ii) the ability of WGNB to perform its
obligations under this Agreement or to consummate the Merger or the other
transactions contemplated by this Agreement, provided
that
“Material Adverse Effect” shall not be deemed to include the impact of (a)
changes in banking and similar Laws of general applicability or interpretations
thereof by courts or governmental authorities, (b) changes in generally accepted
accounting principles or regulatory accounting principles generally applicable
to banks and their holding companies, (c) actions and omissions of WGNB (or
any
of its Subsidiaries) taken with the prior informed written Consent of First
Xxxxxxxx in contemplation of the transactions contemplated hereby, and (d)
the
direct effects of compliance with this Agreement on the operating performance
of
WGNB, including expenses incurred by WGNB in consummating the transactions
contemplated by this Agreement.
“WGNB
SEC Reports”
shall
have the meaning set forth in Section 6.5.
(b) 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.
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.
11.3
Brokers
and Finders.
Except
as disclosed in Section 11.3 of the First Xxxxxxxx Disclosure Memorandum and
of
the WGNB Disclosure Memorandum, each of the Parties represents and warrants
that
neither it nor any of its officers, directors, employees, or Affiliates has
employed any broker or finder or incurred any Liability for any financial
advisory fees, investment bankers’ fees, brokerage fees, commissions, or
finders’ fees in connection with this Agreement or the transactions contemplated
hereby. In the event of a claim by any broker or finder based upon his or its
representing or being retained by or allegedly representing or being retained
by
First Xxxxxxxx or by WGNB, each of First Xxxxxxxx and WGNB, as the case may
be,
agrees to indemnify and hold the other Parties 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.
-49-
11.5
Amendments.
To the
extent permitted by Law, this Agreement may be amended by a subsequent writing
signed by each of the Parties upon the approval of each of the Parties, whether
before or after shareholder approval of this Agreement has been obtained;
provided,
that
after any such approval by the holders of either the WGNB Common Stock or the
First Xxxxxxxx Common Stock, there shall be made no amendment that pursuant
to
Section 14-2-1106 of the GBCC requires further approval by such shareholders
without the further approval of such shareholders; and further provided,
that
after any such approval by the holders of either the WGNB Common Stock or the
First Xxxxxxxx Common Stock, as the case may be, the provisions of this
Agreement relating to the manner or basis in which shares of First Xxxxxxxx
Common Stock will be exchanged for shares of WGNB Common Stock shall not be
amended in a manner adverse to the holders of First Xxxxxxxx Common Stock or
WGNB Common Stock, as the case may be, without any requisite approval of the
holders of the issued and outstanding shares of First Xxxxxxxx Common Stock
or
WGNB Common Stock, as the case may be, entitled to vote thereon.
11.6
Waivers.
(a) Prior
to
or at the Effective Time, WGNB, acting through its Board of Directors, chief
executive officer or other authorized officer, shall have the right to waive
any
Default in the performance of any term of this Agreement by First Xxxxxxxx
or
Target Bank, to waive or extend the time for the compliance or fulfillment
by
First Xxxxxxxx or Target Bank of any and all of its obligations under this
Agreement, and to waive any or all of the conditions precedent to the
obligations of WGNB or Purchaser Bank under this Agreement, except any condition
which, if not satisfied, would result in the violation of any Law. No such
waiver shall be effective unless in writing signed by a duly authorized officer
of WGNB.
(b) Prior
to
or at the Effective Time, First Xxxxxxxx, acting through its Board of Directors,
chief executive officer or other authorized officer, shall have the right to
waive any Default in the performance of any term of this Agreement by WGNB
or
Purchaser Bank, to waive or extend the time for the compliance or fulfillment
by
WGNB or Purchaser Bank of any and all of its obligations under this Agreement,
and to waive any or all of the conditions precedent to the obligations of First
Xxxxxxxx or Target Bank under this Agreement, except any condition which, if
not
satisfied, would result in the violation of any Law. No such waiver shall be
effective unless in writing signed by a duly authorized officer of First
Xxxxxxxx.
(c) The
failure of any Party at any time or times to require performance of any
provision hereof shall in no manner affect the right of such Party at a later
time to enforce the same or any other provision of this Agreement. No waiver
of
any condition or of the breach of any term contained in this Agreement in one
or
more instances shall be deemed to be or construed as a further or continuing
waiver of such condition or breach or a waiver of any other condition or of
the
breach of any other term of this Agreement.
11.7
Assignment.
Except
as expressly contemplated hereby, neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by any Party hereto
(whether by operation of Law or otherwise) without the prior written consent
of
the other Parties. 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.
-50-
11.8
Notices.
All
notices or other communications which are required or permitted hereunder shall
be in writing and sufficient if delivered by hand, by facsimile transmission,
by
registered or certified mail, postage pre-paid, or by courier or overnight
carrier, to the persons at the addresses set forth below (or at such other
address as may be provided hereunder), and shall be deemed to have been
delivered as of the date so delivered:
|
First
Xxxxxxxx
|
First
Xxxxxxxx Corporation
|
|
and
Target Bank:
|
3559
Business 27, X.X. Xxx 000
|
Xxxxxxxx,
Xxxxxxx 00000
|
Attention:
|
Xxxx
X. Xxxxxxxxx, President
|
|
With
a copy to:
|
Xxxxxxx
X. Xxxxxxx, Esq.
|
Xxxxxxxx
X. Xxxxxxxxx, Esq.
Xxxxxx
Xxxxxxxxx LLP
0000
Xxxx
Xxxxxxxxx Xxxxxx, X.X
Xxxxxxx,
Xxxxxxx 00000
|
WGNB
and
|
|
Purchaser
Bank:
|
000
Xxxxx Xxxxxx, P. O. Xxx 000
|
Xxxxxxxxxx,
Xxxxxxx 00000
|
Attention:
|
X.
X. Xxxxxx, III, President
|
and
Chief
Executive Officer
|
With
a copy to:
|
Xxxxxx
X. Xxxxxx, Esq.
|
Xxxxxxxx
Xxxxxxx LLP
000
Xxxxxxxxx Xxxxxx XX
Xxxxx
0000
Xxxxxxx,
Xxxxxxx 00000-0000
11.9
Governing
Law.
This
Agreement shall be governed by and construed in accordance with the Laws of
the
State of Georgia, without regard to any applicable conflicts of
Laws.
11.10
Counterparts.
This
Agreement may be executed in two or more counterparts, each of which shall
be
deemed to be an original, but all of which together shall constitute one and
the
same instrument.
11.11
Captions;
Articles and Sections.
The
captions contained in this Agreement are for reference purposes only and are
not
part of this Agreement. Unless otherwise indicated, all references to particular
Articles or Sections shall mean and refer to the referenced Articles and
Sections of this Agreement.
-51-
11.12 Interpretations.
Neither
this Agreement nor any uncertainty or ambiguity herein shall be construed or
resolved against any Party, whether under any rule of construction or otherwise.
No Party to this Agreement shall be considered the draftsman. The Parties
acknowledge and agree that this Agreement has been reviewed, negotiated, and
accepted by all Parties and their attorneys and shall be construed and
interpreted according to the ordinary meaning of the words used so as fairly
to
accomplish the purposes and intentions of all Parties hereto.
11.13
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.
-52-
IN
WITNESS WHEREOF, each of the Parties has caused this Agreement to be executed
on
its behalf by its duly authorized officers as of the day and year first above
written.
|
“WGNB”
|
|||
|
By:
|
/s/
X.X. Xxxxxx, III
|
||
|
Name:
X.X. Xxxxxx, III
|
|||
|
Title:
President & CEO
|
|||
|
“Purchaser
Bank”
|
|||
|
WEST
GEORGIA NATIONAL BANK
|
|||
|
By:
|
/s/
X.X. Xxxxxx, III
|
||
|
Name:
X.X. Xxxxxx, III
|
|||
|
Title:
President & CEO
|
|||
|
“First
Xxxxxxxx”
|
|||
|
FIRST
XXXXXXXX CORPORATION
|
|||
|
By:
|
/s/
Xxxx X. Xxxxxxxxx
|
||
|
Name:
Xxxx X. Xxxxxxxxx
|
|||
|
Title:
President
|
|||
|
“Target
Bank”
|
|||
|
FIRST
NATIONAL BANK OF GEORGIA
|
|||
|
By:
|
/s/
Xxxxxxx X. Xxxxx
|
||
|
Name:
Xxxxxxx X. Xxxxx
|
|||
|
Title:
President
|
|||
-53-
EXHIBIT
“A”
AGREEMENT
AND PLAN OF MERGER
BY
AND BETWEEN
WEST
GEORGIA NATIONAL BANK
AND
FIRST
NATIONAL BANK OF GEORGIA
This
Agreement and Plan of Merger (the “Plan”) is made and entered into as of the ___
day of ___________, 2007, by and between West Georgia National Bank, a bank
organized under the laws of the United States of America and located in
Carrollton, Georgia (“West Georgia”), and First National Bank of Georgia(“First
National”), a bank organized under the laws of the United States of America and
located in Buchanan, Georgia.
W I T N E S S E T H:
WHEREAS,
on January 22, 0000, Xxxx Xxxxxxx and its parent, WGNB Corp. (“WGNB”), and First
National and its parent, First Xxxxxxxx Corporation (“First Xxxxxxxx”), entered
into an Agreement and Plan of Reorganization (the “Agreement”), pursuant to
which WGNB will acquire First Xxxxxxxx and First National (the
“Acquisition”);
WHEREAS,
pursuant to the Agreement, First National will merge with and into West Georgia;
NOW,
THEREFORE, in consideration of the above premises and the mutual warranties,
representations, covenants and agreements set forth herein, the parties agree
as
follows:
1.
MERGER.
PURSUANT TO THE PROVISIONS OF SECTION 18(C) OF THE FEDERAL DEPOSIT INSURANCE
ACT
AND SECTION 215A OF THE NATIONAL BANK ACT, FIRST NATIONAL SHALL BE MERGED WITH
AND INTO WEST GEORGIA. WEST GEORGIA SHALL BE THE SURVIVOR OF THE MERGER (THE
“RESULTING BANK”), AND SHALL OPERATE WITH THE NAME “FIRST NATIONAL BANK OF
GEORGIA.”
2.
EFFECTIVE
DATE OF THE MERGER.
THE MERGER SHALL BECOME EFFECTIVE AT 12:01 A.M. ON ________________, 2007 (THE
“EFFECTIVE DATE”).
3.
LOCATION,
ARTICLES AND BYLAWS AND DIRECTORS OF THE RESULTING BANK.
ON THE EFFECTIVE DATE OF THE MERGER:
(a) The
head
office of the Resulting Bank shall be located at the head office of West Georgia
immediately prior to the Effective Date of the Merger.
(b) The
Articles of Association of the Resulting Bank shall be the Articles of
Association of West Georgia in effect immediately prior to the Effective Date
of
the Merger, except that Articles of Association shall be amended by deleting
Article I thereof in its entirety and inserting the following in lieu
thereof:
A-1
“Article
I:
The
title
of this Association, which shall carry on the business of banking under the
laws
of the United States, shall be “First National Bank of Georgia.””
The
Bylaws of the Resulting Bank shall be the Bylaws of West Georgia in effect
immediately prior to the Effective Date of the Merger, except that said Bylaws
shall be amended to reflect the change in the name of the Resulting
Bank.
(c) The
Board
of Directors of the Resulting Bank shall be as set forth in the Articles of
Merger, and shall serve until the next annual meeting of the shareholders of
the
Resulting Bank or until such time as their successors have been elected and
qualified.
4.
MANNER
OF CONVERTING SHARES.
(a) By
virtue
of the Merger, automatically and without any action on the part of the holder
thereof, each of the shares of First National Common Stock issued and
outstanding immediately prior to the Effective Date of the Merger shall be
cancelled and retired at the Effective Date and no consideration shall be issued
in exchange therefor.
(b) Upon
and
after the Effective Date, each issued and outstanding share of West Georgia
Common Stock shall remain unchanged and shall continue to evidence the same
number of shares of West Georgia Common Stock.
5.
CONDITIONS
PRECEDENT TO CONSUMMATION OF THE MERGER.
CONSUMMATION OF THE MERGER HEREIN PROVIDED FOR IS CONDITIONED UPON (A)
RECEIPT OF ALL NECESSARY CONSENTS TO THE MERGER FROM APPLICABLE REGULATORY
AUTHORITIES, (B) APPROVAL OF THE AGREEMENT BY FIRST XXXXXXXX, AS SOLE
SHAREHOLDER OF FIRST NATIONAL.
6.
TERMINATION.
THIS PLAN MAY BE TERMINATED AT ANY TIME PRIOR TO THE EFFECTIVE DATE UPON THE
TERMINATION OF THE AGREEMENT.
7.
COUNTERPARTS,
HEADINGS, GOVERNING LAW.
THIS PLAN MAY BE EXECUTED SIMULTANEOUSLY IN ANY NUMBER OF COUNTERPARTS, EACH
OF
WHICH SHALL BE DEEMED AN ORIGINAL BUT ALL OF WHICH SHALL CONSTITUTE ONE AND
THE
SAME INSTRUMENT. THE TITLE OF THIS PLAN AND THE HEADINGS HEREIN ARE FOR
CONVENIENCE OR REFERENCE ONLY AND SHALL NOT BE DEEMED A PART OF THIS PLAN.
THIS
PLAN SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE
OF GEORGIA.
A-2
IN
WITNESS WHEREOF, the parties hereto have caused this Agreement and Plan of
Merger to be executed by their duly authorized officers and their seals to
be
affixed hereto, all as of the day and year first above written.
|
“West
Georgia”
|
|||
|
WEST
GEORGIA NATIONAL BANK
|
|||
|
[BANK
SEAL]
|
By:
|
||
|
Name:
|
|||
|
Title:
|
|||
|
ATTEST:
|
|||
|
Secretary
|
|||
|
“First
National”
|
|||
|
FIRST
GEORGIA NATIONAL BANK
|
|||
|
[BANK
SEAL]
|
By:
|
||
|
Name:
|
|||
|
Title:
|
|||
|
ATTEST:
|
|||
|
Secretary
|
|||
A-3
EXHIBIT
“B”
AFFILIATE
AND SUPPORT AGREEMENT
Attention:
President
Ladies
and Gentlemen:
The
undersigned is a shareholder of First Xxxxxxxx Corporation (“First Xxxxxxxx”), a
corporation organized under the laws of the State of Georgia and located in
Buchanan, Georgia, and will become a shareholder of WGNB Corp. (“WGNB”) pursuant
to the transactions described in the Agreement and Plan of Reorganization,
dated
as of January 22, 2007 (the “Agreement”), by and among WGNB, West Georgia
National Bank, First Xxxxxxxx and First National Bank of Georgia. Under the
terms of the Agreement, First Xxxxxxxx will be merged into and with WGNB (the
“Merger”), and the shares of the no par value Class A Common (voting) Stock and
the no par value Class B Common (non-voting) Stock of First Xxxxxxxx
(collectively, “First Xxxxxxxx Common Stock”) will be converted into and
exchanged for cash and shares of the $1.25 par value common stock of WGNB (“WGNB
Common Stock”). This Affiliate and Support Agreement represents an agreement
between the undersigned and WGNB regarding certain rights and obligations of
the
undersigned in connection with the shares of First Xxxxxxxx Common Stock held
by
the undersigned and WGNB Common Stock to be received by the undersigned as
a
result of the Merger.
In
consideration of the benefits the undersigned will receive as a shareholder
of
First Xxxxxxxx and the mutual covenants contained herein, the undersigned and
WGNB hereby agree as follows:
1.
Vote
on the Merger.
The
undersigned agrees to vote all shares of First Xxxxxxxx Common Stock that the
undersigned owns beneficially or of record in favor of approving the Agreement,
unless WGNB is then in breach or default in any material respect as regards
any
covenant, agreement, representation or warranty as to it contained in the
Agreement; provided,
however,
that
nothing in this sentence shall be deemed to require the undersigned to vote
any
shares of First Xxxxxxxx Common Stock over which he or she has or shares voting
power solely in a fiduciary capacity on behalf of any person other than First
Xxxxxxxx, if the undersigned determines, in good faith after consultation and
receipt of an opinion of counsel, that such a vote would cause a breach of
fiduciary duty to such other person.
2.
Restriction
on Transfer.
The
undersigned further agrees that he or she will not, without the prior written
consent of WGNB, transfer any shares of First Xxxxxxxx Common Stock prior to
the
Effective Date, as that term is set forth in the Agreement, except by operation
of law, by will, or under the laws of descent and distribution.
3.
Affiliate
Status. The
undersigned understands and agrees that as to First Xxxxxxxx the undersigned
is
an “affiliate” under Rule 145(c) as defined in Rule 405 of the Rules and
Regulations of the Securities and Exchange Commission (“SEC”) under the
Securities Act of 1933, as amended (“1933 Act”), and the undersigned anticipates
that the undersigned will be such an “affiliate” at the time of the
Merger.
B-1
4.
Covenants
and Warranties of Undersigned. The
undersigned represents, warrants and agrees that WGNB has informed the
undersigned that any distribution by the undersigned of WGNB Common Stock has
not been registered under the 1933 Act and that shares of WGNB Common Stock
received pursuant to the Merger for a period of one (1) year after the Effective
Time can only be sold by the undersigned (i) following registration under the
1933 Act, or (ii) in conformity with the volume and other requirements of Rule
145(d) promulgated by the SEC as the same now exist or may hereafter be amended,
or (iii) to the extent some other exemption from registration under the 1933
Act
might be available. The undersigned understands that WGNB is under no obligation
to file a registration statement with the SEC covering the disposition of the
undersigned’s shares of WGNB Common Stock.
5.
Understanding
of Restrictions on Dispositions. The
undersigned has carefully read the Agreement and this Affiliate Agreement and
discussed their requirements and impact upon his or her ability to sell,
transfer or otherwise dispose of the shares of WGNB Common Stock received by
the
undersigned in connection with the Merger, to the extent he or she believes
necessary, with his or her counsel or counsel for First Xxxxxxxx.
6.
Filing
of Reports by WGNB. WGNB
agrees, for a period of two years after the effective date of the Merger, to
file on a timely basis all reports required to be filed by it pursuant to
Section 13 of the Securities Exchange Act of 1934, as amended, so that the
public information provisions of Rule 145(d) promulgated by the SEC as the
same
are presently in effect will be available to the undersigned in the event the
undersigned desires to transfer any shares of WGNB Common Stock issued to the
undersigned pursuant to the Merger.
7.
Miscellaneous.
This
Affiliate and Support Agreement is the complete agreement between WGNB and
the
undersigned concerning the subject matter hereof. Any notice required to be
sent
to any party hereunder shall be sent by registered or certified mail, return
receipt requested, using the addresses set forth herein or such other address
as
shall be furnished in writing by the parties. This Affiliate and Support
Agreement shall be governed by the laws of the State of Georgia.
8.
Capitalized
Terms.
All
capitalized terms in this Affiliate and Support Agreement shall have the same
meaning as given such terms of the Agreement and Plan of Merger by and among
WGNB, West Georgia National Bank, First Xxxxxxxx and First National Bank of
Georgia.
This
Affiliate Agreement is executed as of the _____ day of _________,
2007.
|
Very
truly yours,
|
|
|
Signature
|
|
|
Print
Name
|
|
|
Address
|
|
|
Telephone
No.
|
|
AGREED
TO AND ACCEPTED as
of
|
||
|
__________________,
2007
|
||
|
By:
|
||
|
Its:
|
||
B-2
EXHIBIT
“C”
SUPPORT
AGREEMENT
First
Xxxxxxxx Corporation
Attention:
President
Ladies
and Gentlemen:
The
undersigned is a shareholder of WGNB Corp. (“WGNB”), a corporation organized
under the laws of the State of Georgia and located in Carrollton, Georgia.
Pursuant to the transactions described in the Agreement and Plan of
Reorganization, dated as of January 22, 2007 (the “Agreement”), by and among
WGNB, West Georgia National Bank, First Xxxxxxxx Corporation (“First Xxxxxxxx”)
and First National Bank of Georgia, First Xxxxxxxx will be merged into and
with
WGNB (the “Merger”), and the shares of the no par value Class A Common (voting)
Stock and the no par value Class B Common (non-voting) Stock of First Xxxxxxxx
(collectively, “First Xxxxxxxx Common Stock”) will be converted into and
exchanged for cash and shares of the $1.25 par value common stock of WGNB (“WGNB
Common Stock”). This Support Agreement represents an agreement between the
undersigned and First Xxxxxxxx regarding certain rights and obligations of
the
undersigned in connection with the shares of WGNB Common Stock owned by the
undersigned.
In
consideration of the benefits the undersigned will receive as a shareholder
of
WGNB and the mutual covenants contained herein, the undersigned and First
Xxxxxxxx hereby agree as follows:
1.
Vote
on the Merger.
The
undersigned agrees to vote all shares of WGNB Common Stock that the undersigned
owns beneficially or of record in favor of approving the Agreement, unless
First
Xxxxxxxx is then in breach or default in any material respect as regards any
covenant, agreement, representation or warranty as to it contained in the
Agreement; provided,
however,
that
nothing in this sentence shall be deemed to require the undersigned to vote
any
shares of WGNB Common Stock over which he or she has or shares voting power
solely in a fiduciary capacity on behalf of any person other than WGNB, if
the
undersigned determines, in good faith after consultation and receipt of an
opinion of counsel, that such a vote would cause a breach of fiduciary duty
to
such other person.
2.
Restriction
on Transfer.
The
undersigned further agrees that he or she will not, without the prior written
consent of First Xxxxxxxx, transfer any shares of WGNB Common Stock prior to
the
Effective Date, as that term is set forth in the Agreement, except by operation
of law, by will, or under the laws of descent and distribution.
3.
Miscellaneous.
This
Support Agreement is the complete agreement between First Xxxxxxxx and the
undersigned concerning the subject matter hereof. Any notice required to be
sent
to any party hereunder shall be sent by registered or certified mail, return
receipt requested, using the addresses set forth herein or such other address
as
shall be furnished in writing by the parties. This Support Agreement shall
be
governed by the laws of the State of Georgia.
C-1
4.
Capitalized
Terms.
All
capitalized terms in this Support Agreement shall have the same meaning as
given
such terms of the Agreement and Plan of Merger by and among WGNB, West Georgia
National Bank, First Xxxxxxxx and First National Bank of Georgia.
This
Support Agreement is executed as of the _____ day of _________,
2007.
|
Very
truly yours,
|
|
|
Signature
|
|
|
Print
Name
|
|
|
Address
|
|
|
Telephone
No.
|
|
AGREED
TO AND ACCEPTED as
of
|
||
|
__________________,
2007
|
||
|
FIRST
XXXXXXXX CORPORATION
|
||
|
By:
|
||
|
Its:
|
||
C-2
EXHIBIT
“D”
MATTERS
AS TO WHICH
XXXXXX
XXXXXXXXX LLP WILL OPINE
Capitalized
terms used in this Exhibit shall have the meaning set forth in the Agreement.
The opinion to be delivered pursuant to Section 9.2(d) of the Agreement
may, at the option of the opinion giver, be delivered in accordance with the
standards set forth under the Report on Legal Opinions to Third Parties in
Corporate Transactions (January 1, 1992) published by the Executive
Committee of the Corporate and Banking Law Section of the State Bar of Georgia.
1.
First
Xxxxxxxx is a bank holding company existing and in good standing under the
laws
of the State of Georgia with corporate power and authority to conduct its
business and to own and use its Assets.
2.
Target
Bank is a national banking association existing and in good standing under
the
federal Banking Laws of the United States of America with all requisite power
and authority to conduct its business and to own and use its Assets. The
deposits of Target Bank are insured by the Federal Deposit Insurance Corporation
to the extent provided by law.
3.
First
Xxxxxxxx’x authorized capital stock consists of 25,000 shares of no par value
Class A Common (voting) Stock (the “Class A Common Stock”), and 225,000 shares
of no par value Class B Common (non-voting) Stock (the “Class B Common Stock”
and collectively, with the Class A Common Stock, the “First Xxxxxxxx Common
Stock”), of which, to our knowledge, __________ shares of Class A Common Stock
and ______ shares of Class B Common Stock were outstanding as of January 22,
2007 and _______ shares and ______ shares of Class A Common Stock and Class
B
Common Stock, respectively, were outstanding as of the Closing Date. To our
knowledge, the shares of First Xxxxxxxx Common Stock have been duly authorized
and validly issued, were not issued in violation of any statutory preemptive
rights of shareholders, and are fully paid and nonassessable. To our knowledge,
there are no options, subscriptions, warrants, calls, rights or commitments
obligating First Xxxxxxxx to issue or acquire any of its equity securities
outstand as of the date hereof.
4.
Based
solely on our review of the minute book and stock transfer records of Target
Bank, First Xxxxxxxx owns directly or indirectly all the issued and outstanding
shares of the capital stock of Target Bank. To our knowledge, there are no
options, subscriptions, warrants, calls, rights or commitments obligating Target
Bank to issue equity securities or acquire its equity securities.
5.
The
execution and delivery by each of First Xxxxxxxx and Target Bank of the
Agreement do not, and if each of First Xxxxxxxx and Target Bank were to now
perform its respective obligations under the Agreement such performance would
not, violate or contravene any provision of such entity’s Articles of
Incorporation, Articles of Association or Bylaws or, to our knowledge, result
in
any material breach of or default or acceleration under any First Xxxxxxxx
Contract.
D-1
6.
The
Agreement has been duly and validly executed and delivered by each of First
Xxxxxxxx and Target Bank and, assuming valid authorization, execution and
delivery by WGNB and Purchaser Bank, constitutes a valid and binding agreement
of each of First Xxxxxxxx and Target Bank enforceable against First Xxxxxxxx
and
Target Bank in accordance with its terms.
D-2
EXHIBIT
“E”
NONCOMPETITION
AGREEMENT
This
Noncompetition Agreement (this “Agreement”) is made as of _________________,
2007, by and among WGNB CORP. (“WGNB”), a Georgia corporation, WEST GEORGIA
NATIONAL BANK, a national banking association formed under the laws of the
United States and a wholly owned subsidiary of WGNB (“Purchaser Bank” and,
collectively with WGNB, the “Company”), and _______________________ (the
“Director”), a resident of the State of Georgia.
WHEREAS,
the
Director currently serves as a director of either First Xxxxxxxx Corporation,
a
corporation organized under the laws of the State of Georgia (“First Xxxxxxxx”)
or First Georgia National Bank, a national banking association formed under
the
laws of the United States and a wholly owned subsidiary of First Xxxxxxxx
(“Target Bank”) or both; and
WHEREAS,
WGNB,
Purchaser Bank, First Xxxxxxxx and Target Bank are parties to an Agreement
and
Plan of Reorganization dated as of January 22, 2007 (the “Reorganization
Agreement”); and
WHEREAS,
the
Reorganization Agreement contemplates that, prior to the Closing (as defined
in
the Reorganization Agreement), as a condition and inducement to the willingness
of WGNB and Purchaser Bank to enter into the Reorganization Agreement, the
Director will enter into this Agreement with the Company and Purchaser Bank;
and
WHEREAS,
WGNB
shall provide to the Director for a period of three years commencing on the
date
of the Closing (the “Closing Date”) directors’ and officers’ liability insurance
with respect to acts or omissions of the Director occurring prior to or at
the
Closing Date (the “Coverage”); and
WHEREAS,
in the
course of serving as a director of First Xxxxxxxx and Target Bank, the Director
has gained knowledge of the business, affairs, finances, management, marketing
programs and philosophy, clients and methods of operation of First Xxxxxxxx
and
Target Bank; and
WHEREAS,
the
Company would suffer irreparable harm if the Director were to use such
knowledge, information and business acumen other than as set forth herein.
NOW,
THEREFORE,
in
consideration of the provision of the Coverage to the Director and such other
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the Company and the Director agree as follows:
1.
Definitions.
Whenever used in this Agreement, the following terms shall have the meanings
set
forth below:
E-1
(a) “Affiliate”
is
used
to indicate any company or entity controlled by, controlling or under common
control with WGNB.
(b) “Agreement”
means
this Agreement, together with any exhibits, schedules, addendum or amendments
hereto.
(c) “Applicable
Period”
means
the period from the Termination Date until the second anniversary
thereof.
(d) “Area”
means
the geographic area located within the boundaries of Xxxxxxxx, Xxxxxxx and
Xxxxxxx counties in Georgia.
(e) “Business
of the Company”
means
the business of banking, including, but not limited to, the origination, closing
and selling of loans; receiving deposits and otherwise engaging in the business
of banking.
(f) “Competing
Business”
means
any business or enterprise which is engaged in a business that is the same
or
essentially the same as the Business of the Company.
(g) “Confidential
Information”
means
information which does not rise to the status of a Trade Secret, which is or
has
been disclosed to the Director or of which the Director became or becomes aware
as a consequence of or through his relationship to First Xxxxxxxx, Target Bank
or the Company (including information created by the Director expressly for
First Xxxxxxxx, Target Bank or the Company), which has value to First Xxxxxxxx,
Target Bank or the Company (or to third parties who have entrusted the
information to First Xxxxxxxx, Target Bank or the Company) and is not generally
known to the public including without limitation information related to the
parties’ business relationship and discussions in furtherance thereof.
(h) “Company
Information”
means
Confidential Information and Trade Secrets. Company Information shall not
include any data or information that (i) has been voluntarily disclosed to
the
public by the Company; (ii) has been independently developed and disclosed
to
the public by others; (iii) otherwise enters the public domain through lawful
means; (iv) was already known by the Director at the time of disclosure; (v)
has
been disclosed pursuant to a requirement of a governmental agency or of law
without similar restrictions or other protections against public disclosure,
or
has been required to be disclosed by operation of law; provided, however, that
the Director must first have given written notice of such required disclosure
to
the Company and taken reasonable steps to allow the Company to seek to protect
the confidentiality of the information required to be disclosed; or (vi) is
independently developed by the Director without use of Company Information
and
does not relate to the Business of the Company.
(i) “Termination
Date”
means
the date such director no longer serves on the Board of Directors of either
WGNB
or the Company, as the case may be.
E-2
(j) “Trade
Secrets”
means
all information, without regard to form, which is or has been disclosed to
the
Director or of which the Director became or becomes aware as a consequence
of or
through his relationship to First Xxxxxxxx, Target Bank or the Company
(including information created by the Director expressly for First Xxxxxxxx,
Target Bank or the Company) including, but not limited to, technical or
nontechnical data, formulas, patterns, compilations, computer programs, devices,
methods, techniques, drawings, processes, product designs, methods of
manufacture, custom product configurations, financial data, financial plans,
product or service plans, marketing and distribution methods, or ideas or lists
of actual or potential customers or suppliers which is not commonly known by
or
available to the public and which information (i) derives economic value, actual
or potential, from not being generally known to, and not being readily
ascertainable by proper means by, other persons who can obtain economic value
from its disclosure or use; and (ii) is the subject of efforts that are
reasonable under the circumstances to maintain its secrecy. Trade Secrets also
includes information about third parties or information received from third
parties which is in the possession of the Company and which meets the above
definition of Trade Secrets as to those third parties.
2.
Effective
Date.
This
Agreement will become effective on the Closing Date, and will be of no force
or
effect unless and until the acquisition is consummated in accordance with the
terms of the Reorganization Agreement.
3.
Covenant
Not To Compete.
The
Director hereby covenants to and agrees with the Company that, unless otherwise
expressly consented to, approved or otherwise permitted by the Board of
Directors of WGNB in writing, for the Applicable Period, within the Area, the
Director will not at any time, either directly or indirectly, on his behalf
or
in the service or on behalf of others, engage in, provide or perform services
of
a substantially similar nature to those he performed for First Xxxxxxxx or
the
Target Bank for a Competing Business, or own a controlling beneficial interest
in any Competing Business; provided,
however,
that
passive ownership by the Director of less than one percent (1%) of the
outstanding equity securities or interests of any Competing Business whose
equity securities are registered under Section 12 of the Securities and Exchange
Act of 1934, as amended, for investment purposes only, and the investments
by
those directors set forth in Exhibit A shall not constitute a breach of this
provision.
4.
Covenant
Not to Solicit Client or Customers.
The
Director hereby covenants to and agrees with the Company that, for the
Applicable Period, he will not, without the prior written consent of WGNB,
either directly or indirectly, on the Director’s own behalf or in the service or
on behalf of others, solicit, divert or appropriate, or attempt to solicit,
divert or appropriate, to any Competing Business any client or customer or
actively sought prospective client or customer of First Xxxxxxxx or the Target
Bank with whom the Director has had material contact on behalf of First Xxxxxxxx
or Target Bank during the 12 months immediately preceding the Closing
Date.
X-0
0.
Xxxxxxxx
Not to Solicit Employees.
The
Director hereby covenants to and agrees with the Company that, without the
prior
written approval of WGNB, for the Applicable Period, he will not, either
directly or indirectly, on the Director’s own behalf or in the service or on
behalf of others, solicit, divert or hire away, or attempt to solicit, divert
or
hire away, any person employed by the Company who was employed by First Xxxxxxxx
or the Target Bank immediately prior to the Closing Date, within the Area and
with whom the Director had material contact, whether or not such employee is
a
full-time employee or a temporary employee of the Company and whether or not
such employment is pursuant to a written agreement and whether or not such
employment is for a determined period or is at will; provided that this section
shall not be violated if the Director employs a Company employee (i) who is
no
longer employed by the Company, or (ii) who responds to any advertisement that
is not specifically directed to employees of the Company.
6.
Nondisclosure
of Confidential Information.
The
Director acknowledges that, during his service as a director of First Xxxxxxxx
and Target Bank, he learned and had access to Company Information regarding
First Xxxxxxxx and its Affiliates. The Director acknowledges that such Company
Information as is acquired and used by the Company or its Affiliates is a
special, valuable and unique asset. The Director hereby agrees that all Company
Information obtained by the Director in the course of his serving as a director
of First Xxxxxxxx and Target Bank is confidential and proprietary and will
remain the exclusive property of the Company or its Affiliates, as the case
may
be. The Director covenants to and agrees with the Company that he will not
(irrespective of the circumstances under which Director’s association with First
Xxxxxxxx or the Target Bank terminates), for any reason, use for his own benefit
or the benefit of any person or entity with which he may be associated or,
subject to the following sentence, disclose any such Company Information to
any
person, firm, corporation, association or other entity for any reason or purpose
whatsoever without the prior written consent of an executive officer of the
Company. Notwithstanding the foregoing, the Director may disclose such
information if such disclosure is required by law. Upon termination of his
service as a director of First Xxxxxxxx or Target Bank, all documents, records
and notebooks, including copies thereof, then in the Director’s possession or
under his control, whether prepared by him or others, will be returned to First
Xxxxxxxx or its successor. The provisions of this Section with respect to
Company Information will apply during the Director’s serving as director of
First Xxxxxxxx or Target Bank and after termination of such service for any
reason for the Applicable Period and, with respect to Trade Secrets, will
continue to apply thereafter for so long as such Trade Secrets remain entitled
to protection under applicable law.
7.
Termination.
This
Agreement will terminate upon expiration of the period during which the Trade
Secrets described in Section 6 are entitled to protection. Prior to such date,
the Agreement may only be terminated by mutual, written agreement of the
Director and the Company.
8.
Remedy
for Breach of Provisions Hereof; Injunction.
(a) Injunction.
The
Director agrees that the provisions of Sections 3, 4, 5, and 6 are reasonable
and necessary to protect the legitimate interests and properties of the Company,
that the Company is engaged in and throughout the Area in the Business of the
Company and that the Company has no adequate remedy at law for any breach or
threatened or attempted breach by the Director thereof and, accordingly, the
Director also agrees that the Company may, in addition to the other remedies
that may be available to it hereunder or at law, commence proceedings in equity
for an injunction temporarily or permanently enjoining the Director from
violating such provisions; and for purposes of any such proceeding in equity,
it
will be presumed and it is hereby agreed by the parties hereto that the remedies
at law available to the Company would be inadequate and that the Company would
suffer immediate and irreparable harm as a result of the violation of any
provision hereof by the Director.
E-4
(b) Consent
to Partial Enforcement; Severability.
It is
the desired intent of the parties hereto that the provisions of Sections 3,
4,
5, and 6 will be enforced to the fullest extent permissible in each jurisdiction
in which enforcement is sought. Accordingly, the Company and the Director agree
that if any of the provisions set forth in Sections 3, 4, 5, and 6 are deemed
by
any court to be invalid, unenforceable or overly broad, the court may reduce,
amend or reform such provisions to a scope which it deems reasonable under
the
circumstances. If any one or more provisions hereof or portions thereof are
held
to be invalid or unenforceable, the validity and enforceability of the remaining
provisions and portions hereof will not be affected thereby.
9.
Independent
of Other Agreements.
The
covenants and agreements of the Director hereunder are independent of the
covenants, representations, warranties and agreements of the parties to the
Reorganization Agreement, and no default, breach or failure to perform by any
party to the Reorganization Agreement will constitute an excuse or other
justification for the Director to fail to observe fully his covenants and
agreements hereunder. No course of dealing among the Company and the Director
and no delay by the Company in exercising any right, power or remedy hereunder,
in equity or at law, will constitute a waiver of, or otherwise prejudice, any
such right, power or remedy.
10. Knowledge;
Advice of Counsel.
The
Director represents and warrants that he has read and understands each of the
provisions of this Agreement and that he has had the opportunity to seek and
obtain the advice of legal counsel before agreeing to be bound by the terms
hereof. The Director represents and warrants to the Company that (i) this
Agreement is a valid and binding obligation of the Director, enforceable against
him in accordance with its terms and (ii) he is free to enter into this
Agreement and is not under any contractual or other restraint that would
prohibit or impede in any respect his performance hereunder. The Director
acknowledges and agrees that the Company would not have agreed to enter into
the
Reorganization Agreement but for the execution, delivery and performance by
the
Director of this Agreement.
11. Attorneys’
Fees.
In the
event of commencement of an action at law or in equity by either party arising
under or to enforce the provisions of this Agreement, the prevailing party
will
be entitled to receive such reasonable and actual attorneys’ fees and costs, in
addition to any other relief granted.
12. Assignability.
(a) By
the
Company.
The
rights and obligations of the Company and its Affiliates under this agreement
will inure to the benefit of and be binding upon the successors and assigns
the
Company and its Affiliates. The Company may, on notice, but without the consent
of the Director, assign this Agreement to one of its
Affiliates.
E-5
(b) By
the
Director.
The
Director’s rights and obligations hereunder may not be assigned or alienated and
any attempt to do so by the Director will be void.
13. Notices.
All
notices and other communications provided for herein will be in writing and
shall be deemed to be given when delivered in person or deposited in the United
States Mail, registered or certified, return receipt requested, with proper
postage prepaid and addressed as follows:
If
to the
Director:
If
to
WGNB or Purchaser Bank:
WGNB
Corp.
000
Xxxxx
Xxxxxx
X.X.
Xxx
000
Xxxxxxxxxx,
Xxxxxxx 00000
Attn:
President and Chief Executive Officer
or
such
other address as will be furnished in writing by any party to the others.
Notices mailed as provided herein will be deemed given on receipt or refusal
of
an otherwise proper delivery.
14. Miscellaneous.
(a) Governing
Law; Venue.
This
Agreement will be governed by and construed and enforced in accordance with
the
internal, substantive laws of the State of Georgia, without giving effect to
the
conflicts of law rules thereof.
(b) Amendment;
Waiver.
No
amendment or modification of, or supplement to, this Agreement will be binding
unless it is in writing, signed by the parties hereto. The waiver by any party
to this Agreement of a breach of any provision hereof by any other party will
not be construed as a waiver of any subsequent breach by any party.
(c) Entire
Agreement.
This
Agreement represents the entire agreement between the parties with respect
to
the subject matter of this Agreement and except as expressly provided herein
supersedes all prior understandings and agreements, whether written or oral,
with respect to the subject matter hereof.
E-6
(d) Binding
Effect.
This
Agreement has been duly authorized by all necessary authority, does not conflict
with any applicable agreement or restriction and will be binding upon and will
inure to the benefit of the parties hereto, the Company and, to the extent
expressly provided herein, to their respective successors and assigns, and
no
other person will acquire or have any right under or by virtue of this
Agreement.
(e) Severability
of Provisions.
If any
provision or any portion of any provision of this Agreement, or the application
of any such provision or any portion thereof to any person or circumstance,
will
be held invalid or unenforceable, the remaining portion of such provisions
or
this Agreement and the application of such provision or portion of such
provision as is held invalid or unenforceable to persons or circumstances other
than those as to which it is held invalid or unenforceable, will not be thereby
affected.
(f) Counterparts.
This
Agreement may be executed in two or more counterparts, each of which will be
deemed an original, but of which taken together will constitute one and the
same
agreement.
IN
WITNESS WHEREOF,
each of
the parties hereto have duly executed and delivered this Agreement as of the
date first above written.
|
“WGNB”
|
|||
|
WGNB
CORP.
|
|||
|
By:
|
|||
|
Name:
|
|||
|
Title:
|
|||
|
“Purchaser
Bank”
|
|||
|
WEST
GEORGIA NATIONAL BANK
|
|||
|
By:
|
|||
|
Name:
|
|||
|
Title:
|
|||
|
“Director”
|
|||
| Name: | |||
E-7
EXHIBIT
“F”
MATTERS
AS TO WHICH
XXXXXXXX
XXXXXXX LLP WILL OPINE
Capitalized
terms used in this Exhibit shall have the meaning set forth in the Agreement.
The opinion to be delivered pursuant to Section 9.3(d) of the Agreement
may, at the option of the opinion giver, be delivered in accordance with the
standards set forth under the Report on Legal Opinions to Third Parties in
Corporate Transactions (January 1, 1992) published by the Executive
Committee of the Corporate and Banking Law Section of the State Bar of Georgia.
1.
WGNB
is a
bank holding company existing and in good standing under the laws of the State
of Georgia with corporate power and authority to conduct its business and to
own
and use its Assets.
2.
Purchaser
Bank is a national banking association existing and in good standing under
the
federal Banking Laws of the United States of America with all requisite power
and authority to conduct its business and to own and use its Assets. The
deposits of Purchaser Bank are insured by the Federal Deposit Insurance
Corporation to the extent provided by law.
3.
WGNB’s
authorized capital stock consists of 10,000,000 shares of WGNB Common Stock,
of
which, to our knowledge, _______ shares were outstanding as of January 22,
2007
and _________ shares were outstanding as of the Closing Date. To our knowledge,
the shares of WGNB Common Stock have been duly authorized and validly issued,
were not issued in violation of any statutory preemptive rights of shareholders
and are fully paid and nonassessable.
4.
The
execution and delivery by each of WGNB and Purchaser Bank of the Agreement
do
not, and if each of WGNB and Purchaser Bank were now to perform its respective
obligations under the Agreement such performance would not, violate or
contravene any provision of such entity’s Articles of Incorporation, Articles of
Association or Bylaws or, to our knowledge, result in any material breach of
or
default or acceleration under any Contract to
which
any WGNB Entity is a party or by which is bound and which is filed as an exhibit
to the Annual Report on Form 10-K for the year ended December 31, 2005 (the
“Annual Report”) filed by WGNB under the Securities Exchange Act of 1934, as
amended (the “Exchange Act”), or any report filed by WGNB under the Exchange Act
subsequent to the Annual Report.
5.
The
Agreement has been duly and validly executed and delivered by each of WGNB
and
Purchaser Bank, and, assuming valid authorization, execution and delivery by
each of First Xxxxxxxx and Target Bank, constitutes a valid and binding
agreement of each of WGNB and Purchaser Bank enforceable in accordance with
its
terms.
6.
The
shares of WGNB Common Stock to be issued to the shareholders of First Xxxxxxxx
as contemplated in the Agreement have been registered under the Securities
Act
of 1933, as amended, and when issued and delivered following consummation of
the
Company Merger will be fully paid and nonassessable under the Georgia Business
Corporation Code.
