AGREEMENT AND PLAN OF MERGER
----------------------------
THIS AGREEMENT AND PLAN OF MERGER (the "Agreement"), dated effective as
of the 7th day of January, 2004, by and among SYNOVUS FINANCIAL CORP., a
Georgia corporation ("Seller"), CAPITAL CITY BANK GROUP, INC., a Florida
corporation ("Purchaser"), QUINCY STATE BANK, a Florida chartered commercial
bank (the "Bank"), and CAPITAL CITY BANK, a Florida chartered commercial bank
("CCB").
RECITALS:
WHEREAS, Seller is a financial services company that owns and operates,
among other things, 40 wholly-owned banking subsidiaries, and Purchaser is a
financial holding company that owns CCB; and
WHEREAS, one of Seller's wholly-owned banking subsidiaries is the Bank;
and
WHEREAS, upon the terms and conditions hereinafter set forth and as set
forth in the Bank Plan of Merger attached hereto as Exhibit A and
incorporated herein by reference (the "Plan of Merger"), the respective
boards of directors of the Bank and CCB deem it advisable and in the best
interests of each such entity and their respective shareholders that the
Merger (as defined below) be effected.
NOW THEREFORE, in consideration of their mutual promises and obligations
hereunder, and intending to be legally bound hereby, Seller, Purchaser, Bank,
and CCB prescribe the terms and conditions hereof and the manner and basis of
carrying the Merger and its related transactions into effect, which shall be
as follows:
ARTICLE 1
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TERMS OF MERGER
1.1 Merger. Subject to the terms and conditions hereinafter set forth
and as set forth in the Plan of Merger, at the Effective Time (defined
below), the Bank shall merge with and into CCB (the "Merger") in accordance
with the provisions of, and with the effect provided in, Section 658.42 of
the Florida Statutes, with CCB being the resulting bank (the "Resulting
Bank"). All of the issued and outstanding shares of Bank common stock,
$20.00 par value per share ("Quincy Stock"), shall be surrendered to the
Purchaser in exchange for the Purchase Price (as defined below), shall cease
to be outstanding and shall be extinguished. All of the issued and
outstanding shares of CCB common stock, $100.00 par value per share ("CCB
Stock"), shall continue to be outstanding as of the Effective Time and shall
be the outstanding common stock of the Resulting Bank. The Resulting Bank
shall continue to be governed by the laws of the State of Florida. The
Merger shall be consummated pursuant to the terms of this Agreement and the
Plan of Merger, which have been approved and adopted by the respective Boards
of Directors of the Bank and CCB.
1.2 Closing Date and Effective Time. The closing of the transactions
contemplated
hereby (the "Closing") will take place at the close of business on the date
that the Effective Time (as defined below) 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 Date"). The Closing Date shall be held at such
location as may be mutually agreed upon by the parties or may be conducted by
mail or telefax as may be mutually agreed upon by the parties. The Merger
and other transactions contemplated by this Agreement shall become effective
on the date and at the time the Plan of Merger reflecting the Merger shall
become effective with the Secretary of State of the State of Florida (the
"Effective Time"). Subject to the terms and conditions hereof, unless
otherwise mutually agreed upon in writing by the authorized officers of each
party, the parties shall use their reasonable efforts to cause the Effective
Time to occur within 60 days after the last to occur of (a) the receipt of
all regulatory approvals and the expiration of any required waiting periods;
and (b) the satisfaction of the conditions specified in Article 6 of this
Agreement. The actual Effective Time within the 60-day period shall be
mutually agreed upon by Purchaser and Seller.
1.3 Purchase Price. The aggregate consideration for the Merger shall
be $26,100,000 (the "Purchase Price"). The Purchase Price shall be due and
payable on the Closing Date (as defined below) pursuant to reasonable
instructions provided by Seller to Purchaser in immediately available funds.
1.4 Charter. The Articles of Incorporation of CCB in effect
immediately prior to the Effective Time shall be the Articles of
Incorporation of the Resulting Bank until duly amended or repealed.
1.5 Bylaws. The Bylaws of CCB in effect immediately prior to the
Effective Time shall be the Bylaws of the Resulting Bank until duly amended
or repealed.
1.6 Directors and Officers. The directors of CCB in office immediately
prior to the Effective Time shall serve as the directors of the Resulting
Bank from and after the Effective Time in accordance with the Bylaws of the
Resulting Bank. The officers of CCB in office immediately prior to the
Effective Time together with such additional persons as may thereafter be
elected, shall serve as the officers of the Resulting Bank from and after the
Effective Time in accordance with the Bylaws of the Resulting Bank.
ARTICLE 2
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ACTIONS PENDING THE CLOSING DATE
2.1 Seller's Actions. Between the date of this Agreement and earlier
of the Closing Date or the termination of this Agreement, Seller and the Bank
covenant to Purchaser that (a) the Bank shall conduct its business only in
the ordinary course, and in a manner designed to preserve intact its business
organization and assets and maintain its rights and franchises; (b) the Bank
shall take no action which would (i) adversely affect the ability of any
party to obtain any consents required for the transactions contemplated
hereby without imposition of a condition or restriction of the type referred
to in the last sentences of Section 6.1(a) or 6.1(b), or (ii) adversely
affect the ability of any party to perform its covenants and agreements under
this Agreement;
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and, (c) the Bank shall not, without prior written consent of Purchaser, do
or agree or commit to do any of the following:
(a) amend the articles of incorporation, charter, bylaws, or other
governing instruments of the Bank;
(b) unless required by law, in accordance with past practice, or
as disclosed on Schedule 2.1(b) of the Bank's Disclosure Memorandum
(as defined in Section 3.1(a)): grant any increase in compensation
or benefits to the employees or officers of the Bank; or, pay any
severance or termination pay or any bonus other than pursuant to
written policies or written contracts in effect on the date of this
Agreement and made available to Purchaser for its review; or, enter
into or amend any severance agreements with officers of the Bank;
or, grant any increase in fees or other increases in compensation
or other benefits to directors of the Bank; or, voluntarily
accelerate the vesting of any stock options or other stock-based
compensation or employee benefits or other equity rights of or in
the Bank;
(c) enter into, terminate, modify, or amend any contract, lease or
other agreement with any officer or director of the Bank or any
"associate" of any such officer or director, as such term is
defined in Regulation 14A under the Securities Exchange Act of
1934, as amended, other than in the ordinary course of its banking
business;
(d) incur or assume any liabilities, other than in the ordinary
course of its business consistent with past practices (which shall
include, without limitation, past practices regarding the creation
of deposit liabilities, purchases of federal funds 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 Bank 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 Schedule 2.1(d) of the Bank's
Disclosure Memorandum);
(e) purchase or dispose of assets or properties, other than in the
ordinary course of the Bank's business consistent with past
practice or as otherwise permitted herein;
(f) repurchase, redeem, or otherwise acquire or exchange directly
or indirectly, any shares, or any securities convertible into any
shares, of the capital stock of the Bank, or declare or pay any
dividend or make any other distribution in respect of the Bank's
capital stock which would cause the Bank's shareholders equity to
be below $11,185,000, which is equal to the shareholder's equity of
the Bank as reflected in its unaudited financial statements for the
period ended September 30, 2003;
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(g) except for this Agreement, 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 Quincy Stock or any
other capital stock of the Bank, or any stock appreciation rights,
or any option, warrant, or other equity rights;
(h) adjust, split, combine or reclassify any capital stock of the
Bank or issue or authorize the issuance of any other securities in
respect of or in substitution for shares of the Quincy Stock, or
sell, lease, mortgage or otherwise dispose of or otherwise encumber
any shares of capital stock of the Bank;
(i) except for purchases that are approved by Purchaser in writing
and made in accordance with Synovus Master Investment Policies, a
copy of which has been made available to Purchaser, 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 entity, other than in connection with (x)
foreclosures in the ordinary course of business, or (y) the
creation of new wholly owned subsidiaries organized to conduct or
continue activities otherwise permitted by this Agreement;
(j) (x) make any new loans or extensions of credit or renew,
extend or renegotiate any existing loans or extensions of credit
(1) with respect to properties or businesses outside of the current
market area for the Bank or to borrowers whose principal residence
is outside of the current market area for the Bank, (2) that are
unsecured in excess of $100,000, or (3) that are secured in excess
of $300,000; (y) purchase or sell (except for sales of single
family residential first mortgage loans in the ordinary course of
the Bank's business for fair market value) any whole loans, leases,
mortgages or any loan participations or agented credits, or other
interest therein (1) that are unsecured in excess of $100,000, or
(2) that are secured in excess of $300,000; or, (z) renew or
renegotiate any loans or credits having an outstanding principal
balance of $50,000 or more that are on any watch list and/or are
classified or special mentioned or take any similar actions with
respect to collateral held with respect to debts previously
contracted or other real estate owned, except pursuant to safe and
sound banking practices and with prior disclosure to Purchaser;
provided, however, that the Bank may, without the prior notice to
or written consent of Purchaser, renew or extend existing credits
on substantially similar terms and conditions as present at the
time such credit was made or last extended, renewed or modified,
for a period not to exceed one year and at rates not less than
market rates for comparable credits and transactions and without
any release of any collateral except as the Bank is presently
obligated under existing written agreements kept as part of the
Bank's official records;
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(k) 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 generally accepted accounting principles
("GAAP");
(l) commence any litigation other than in accordance with past
practice, settle any litigation involving any liability of the Bank
for material money damages or restrictions upon the operations of
the Bank;
(m) except in the ordinary course of business, enter into, modify,
amend or terminate any material contract calling for payments
exceeding $25,000 or waive, release, compromise or assign any
material rights or claims; or
(n) directly or indirectly agree to take any of the foregoing
actions.
2.2 Purchaser's Actions. Between the date of this Agreement and the
earlier of the Closing Date or the Termination of this Agreement, except as
otherwise expressly contemplated herein, Purchaser covenants to Seller that
it shall not, without the prior written consent of Seller, which consent
shall not be unreasonably withheld, take any action that would:
(a) delay or adversely affect the ability of Purchaser to obtain
any necessary approvals of regulatory authorities required for the
transactions contemplated hereby;
(b) adversely affect its ability to perform its covenants and
agreements on a timely basis under this Agreement; or
(c) directly or indirectly agree to take any of the foregoing
actions.
2.3 Adverse Changes in Condition. Each party agrees to give written
notice promptly to each other party upon becoming aware of the occurrence or
impending occurrence of any event or circumstance relating to it or, in the
case of the Bank and CCB, any of their subsidiaries, which (a) is reasonably
likely to have, individually or in the aggregate, a Material Adverse Effect
(as defined below) on such party, or (b) 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. For purposes of this Agreement, a "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 (x) the
financial position, business, or results of operations of the respective
party, taken as a whole, or (y) the ability of the respective party to
perform its obligations under this Agreement or to consummate the Merger or
the other transactions contemplated by this Agreement; provided that Material
Adverse Effect shall not be deemed to include the impact of: (aa) changes in
banking and similar laws of general applicability or interpretations thereof
by courts or governmental authorities; (bb) changes in GAAP or regulatory
accounting principles generally applicable to banks and their holding
companies; (cc) actions and omissions of the respective party (of any of its
subsidiaries) taken with the prior informed written consent of the other
party in contemplation of the
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transactions contemplated hereby; and, (dd) the direct effects of compliance
with this Agreement on the operating performance of the respective party,
including expenses incurred by the respective party in consummating the
transactions contemplated by this Agreement.
2.4 Reports. Each party 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 to the extent permitted under
applicable law. Any financial statements contained in any reports to a
regulatory authority shall be prepared in accordance with laws, rules and
regulations applicable to such reports.
ARTICLE 3
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REPRESENTATIONS AND WARRANTIES
3.1 Seller's Representations and Warranties. Seller and the Bank
hereby, jointly and severally, represent and warrant to Purchaser on the date
of this Agreement and again on the Closing Date that:
(a) Seller's Disclosure Memorandum. Seller has delivered to
Purchaser a memorandum (the "Seller's Disclosure Memorandum")
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 be deemed to be disclosed for purposes of any
other Section not specifically referenced with respect thereto,
unless it is clear from the disclosure of such information that it
does not apply to other Sections. All information set forth in
Seller's Disclosure Memorandum or in documents incorporated by
reference in Seller's Disclosure Memorandum is true, correct and
complete, does not omit to state any fact necessary in order to
make the statements therein not misleading. The information
contained in Seller's Disclosure Memorandum shall be deemed to be
part of and qualify all representations and warranties contained in
this Article 3 and/or other Sections of the Agreement which are
referenced therein. Seller shall promptly provide Purchaser with
written notification of any event, occurrence or other information
necessary to maintain Seller's Disclosure Memorandum as true,
correct and complete at all times prior to and including the
Closing.
(b) Ownership of Stock. Bank is a wholly-owned subsidiary of
Seller as Seller owns all 10,000 shares of the issued and
outstanding common stock of the Bank, which constitutes all of the
issued and outstanding stock of any class of securities of the
Bank, and there are no other owners of stock or other securities of
the Bank or interests convertible into such and no person or entity
has any right to acquire any securities of Bank. Seller has good,
valid, and marketable title to all of such shares, free and clear
of any liens, claims, pledges, options, or adverse claims and
charges of any nature whatsoever. All of the issued and
outstanding
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shares of capital stock of the Bank are duly and validly issued and
outstanding and are fully paid and nonassessable under the Florida
Business Corporation Act ("FBCA") and the Florida Financial
Institutions Code. None of the outstanding shares of capital stock
of the Bank has been issued in violation of any preemptive rights
of the current or past shareholders of the Bank.
(c) Organization. Both Seller and Bank are duly organized
entities, validly existing and in good standing under the laws of
the States of Georgia and Florida, respectively. Both Seller and
Bank are duly qualified to transact business in all jurisdictions
where the character of their business requires such qualification.
(d) Authority. This Agreement has been authorized by all
necessary corporate action of Seller and the Bank, has been duly
and validly executed and delivered by Seller and the Bank, and
constitutes a legal, valid, and binding agreement of Seller and the
Bank enforceable against Seller and the Bank in accordance with its
terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium, and similar laws of general
applicability relating to or affecting creditors' rights and to
general equity principles involving specific performance or
injunctive relief.
(e) Approvals; No Violations. Except as disclosed in Seller's
Disclosure Memorandum, the execution, delivery, and performance of
this Agreement by Seller and the Bank do not, and the consummation
of the transactions contemplated hereby by Seller and the Bank will
not: (1) violate or contravene any provisions of the articles of
incorporation or bylaws of Seller or the Bank; or (2) constitute a
breach or violation of, or a default under, any law, rule or
regulation, or any judgment, decree, order, governmental permit or
license, or agreement, indenture or instrument of Seller or the
Bank or to which Seller or the Bank is subject, or enable any
person to enjoin any of the transactions contemplated hereby; and
the consummation of the transactions contemplated hereby will not
require any consent or approval under any such law, rule,
regulation, judgment, decree, order, governmental permit or license
or the consent or approval of any other party to any such
agreement, indenture or instrument, other than the required
approvals of applicable regulatory authorities and any consents and
approvals, the absence of which will not have a Material Adverse
Effect on the Bank.
(f) Articles and Bylaws. Attached as Exhibit E are copies of: (1)
the articles of incorporation of the Bank and all amendments,
restatements, articles of merger or consolidation or other filings
with respect thereto; and (2) the currently effective bylaws of the
Bank. All amendments to, and articles of merger and other filings
with respect to, the Bank's articles of incorporation and every
other reorganization involving the Bank were made in accordance
with its articles of incorporation, and its bylaws and applicable
law (including the giving of proper notice of dissenters' and/or
appraisal rights in connection with any such amendment or other
actions requiring such notice) without violation of any
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preemptive rights, and the Bank has otherwise complied with its
charter or articles of incorporation and bylaws as in effect at the
applicable time.
(g) No Claimants. Without limiting the foregoing, no act or
omission of Seller or the Bank or any predecessor (including any
prior offer, issuance, redemption, purchase, sale, transfer,
negotiation or transaction of any nature or kind with respect to
any capital stock or other securities or ownership interest, or
options, warrants, subscriptions, puts, calls or other rights,
commitments, undertakings or understandings to acquire any capital
stock or other securities or ownership interest, of the Bank or any
predecessor) has resulted in any former shareholder or holder of
any ownership interest in a predecessor (or alleged or purported
former shareholder or holder of any ownership interest in a
predecessor) of the Bank or any other person or entity: (1) having
any valid claim or cause of action whatsoever against the Bank; or
(2) to come to have any valid claim or cause of action whatsoever
against the Bank or Purchaser, by virtue of, or in any way
connected with, the transactions contemplated by this Agreement.
(h) Combinations Involving the Bank. All mergers, consolidations,
liquidations, purchases, or other transactions by which the Bank
acquired its business and property were conducted in accordance
with its articles of incorporation, bylaws, any other applicable
agreements, instruments, or documents and applicable law (including
the giving of proper notice of dissenters' and/or appraisal rights)
without violation of any preemptive rights.
(i) Financial Statements. The unaudited financial statements of
the Bank for the year ended December 31, 2002 and the nine-month
period ended September 30, 2003: (1) are correct in all material
respects as of the date thereof; (2) fairly present the financial
condition and results of operations of the Bank as of the dates and
for the periods indicated therein; and (3) contain and reflect
provisions for taxes, reserves, and other liabilities of the Bank
in accordance with generally accepted accounting principles. The
books and records of the Bank and the basis on which the unaudited
financial statements referenced above were prepared fully and
fairly reflect all material transactions of the Bank and are
correct in all material respects.
(j) Allowance for Possible Loan Losses. The allowances for
possible loan and lease credit losses (collectively, the
"Allowance") shown on the balance sheet of the Bank immediately
prior to the Effective Time will be, as of the date 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
portfolio (including accrued interest receivables) of the Bank and
other extensions of credit (including letters of credit) by the
Bank as of the dates thereof.
(k) Regulatory Reports. Seller has delivered or made available to
Purchaser each of the Bank's quarterly reports to the Federal
Deposit Insurance Corporation
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("FDIC") and all correspondence relating to such reports and
statements, with respect to each of such periods from January 1,
2001 through the date of this Agreement and will deliver or make
available to Purchaser such reports, statements and correspondence
for the periods after the date of this Agreement through the
Effective Time. Each of the reports referred to above was or will
be (as appropriate) properly prepared in accordance with all
applicable law and properly presents in all material respects all
information required to be included therein.
(l) Obligations and Liabilities. Except as set forth in Schedule
3.1(l) of Seller's Disclosure Memorandum, the Bank has no
liabilities or obligations secured or unsecured, whether accrued,
absolute, contingent or otherwise, known or unknown, due or to
become due, including but not limited to tax liabilities, that
should have been but are not reflected in or reserved against in
the Bank's Closing Date Financial Statements (as defined below), or
the Bank's unaudited financial statements as of December 31, 2002
and September 30, 2003 or disclosed in the notes thereto.
(m) Material Financial Change. Since September 30, 2003, there
has not been the occurrence of one or more events, conditions,
actions or states of facts which, either individually or in the
aggregate, have caused a Material Adverse Effect on the Bank; and,
(2) the Bank or Seller has not taken any action, or failed to take
any action, prior to the date of this Agreement, which action or
failure, if taken after the date of this Agreement, would represent
or result in a breach or violation of any of the covenants of
Seller provided in Articles 4 or 5.
(n) Tax Liabilities of Bank.
(i) Filing of Tax Returns. Seller and the Bank with respect
to all their Tax (as defined below) returns have either (1)
timely filed with the appropriate taxing authorities each
return (including, without limitation, information returns and
other material information) in respect of Taxes, required to
be filed through the date hereof, or (2) requested any
extension of time within which to file such Tax return and
timely filed within the extension period such return for which
an extension of time was granted. All such returns are, and
the information contained therein is, complete and accurate in
all material respects. Seller has made available to Purchaser
copies of such portions of the federal, state, foreign, and
local income tax returns of Seller for the last four years
that relate to the Bank. Except as set forth in Schedule
3.1(n) of Seller's Disclosure Memorandum, Seller has not
derived income or operated a trade or business in any foreign
country, state, or locality. For purposes of this Agreement,
"Tax" or "Taxes" shall mean all federal, state, local, foreign
and other taxes, assessments or other governmental charges,
including, without limitation, (x) income, estimated income,
business, occupation, franchise, property, sales, use, excise,
employment, unemployment,
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payroll, social security, ad valorem, transfer, gains,
profits, capital stock, license, gross receipts, stamp, real
estate, severance and withholding taxes, and (y) interest,
penalties and additions in connection therewith, in each case,
for which Seller and each of its subsidiaries is or may be
liable (including as a result of the application of Treas.
Reg. Section 1.1502-6).
(ii) Payment of Taxes. All Taxes in respect of periods
beginning before the date hereof if due and payable, have been
timely paid, and if not yet due and payable, have an adequate
reserve established therefore in accordance with GAAP, which
reserves are set forth in Schedule 3.1(n) of Seller's
Disclosure Memorandum, or are being contested in good faith by
Seller or the Bank pursuant to appropriate proceedings which
are being diligently pursued and an adequate reserve therefore
has been established in accordance with GAAP, as set forth in
Schedule 3.1(n) of Seller's Disclosure Memorandum. Seller
does not have any material liability for Taxes in excess of
the amounts so paid or reserves so established. Seller has,
within the time and manner prescribed by applicable law, rules
and regulations, withheld and paid over to the proper taxing
or other governmental authorities all Taxes required to be
withheld and paid over. Except (x) acts, events or omissions
that are ordinary business activities, (y) to the extent
relating to income Purchaser receives after the Closing, or
(z) as set forth in Schedule 3.1(n) of Seller's Disclosure
Memorandum, no acts, events or omissions have occurred on or
before the Closing Date that would result in material Taxes
for which the Bank is or may become liable that will apply in
a period or a portion thereof beginning on or after the
Closing Date.
(iii) Audit History. Except as set forth in Schedule 3.1(n)
of Seller's Disclosure Memorandum, there are no deficiencies
for Taxes claimed, proposed or assessed by any taxing or other
governmental authority that have not yet been fully and
finally resolved and, if such resolution required payment of
any Taxes, such payment has been made. Except as set forth in
Schedule 3.1(n) of Seller's Disclosure Memorandum, there are
no pending, or to the best of Seller's and the Bank's
knowledge, threatened audits, investigations or claims for or
relating to Taxes, and there are no matters under discussion
with any taxing or other governmental authority with respect
to Taxes, in each case, that, in the reasonable judgment of
Seller, the Bank or their respective tax advisers, likely to
result in a material additional amount of Taxes. Audits of
federal, state, foreign and local returns for Taxes of the
Bank by the relevant taxing authorities have been completed
for each period set forth in Schedule 3.1(n). Except as set
forth in Schedule 3.1(n) of Seller's Disclosure Memorandum, no
extension of a statute of limitations relating to Taxes is in
effect with respect to Seller or the Bank.
(iv) Tax Elections.
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(a) All material elections with respect to Taxes
affecting the Bank that are effective as of the date
hereof are set forth in Schedule 3.1(n) of Seller's
Disclosure Memorandum.
(b) Neither Seller nor the Bank: (w) has made a consent
dividend election under Section 565 of the Internal
Revenue
Code of 1986 (the "Code"); (x) has consented at any time
under Section 341(f)(1) of the Code to have the
provisions of Section 341(f)(2) of the Code apply to any
disposition of the Bank's assets; (y) has agreed, or is
required, to make any adjustment under Section 481(a) of
the Code by reason of a change in accounting method or
otherwise; or (z) has made an election, or is required,
to treat any asset of the Bank as owned by another
person pursuant to the provisions of Section 168(f)(8)
of the Internal Revenue Code of 1954, as amended and in
effect immediately prior to the enactment of the Tax
Reform Act of 1986, or as tax-exempt bond financed
property within the meaning of Section 168(g) of the
Code or as tax-exemption use property within the meaning
of Section 168(h)(1) of the Code. All citations to the
Code, or the Treasury Regulations promulgated
thereunder, shall include all amendments thereto and any
substitute and successor provisions. All section
references to the Code (or Treasury Regulations) shall
include all similar provisions under the applicable
state, local or foreign tax law.
(v) Asset Liens. There are no liens for Taxes (other than
for current Taxes not yet due and payable) on any assets of
the Bank.
(vi) Tax Rulings/Binding Agreement. The Bank has not
requested or received any ruling from any taxing authority, or
signed any binding agreement with any taxing authority
(including, without limitation, any advance pricing
agreement), that would impact the amount of Tax after the
Closing Date.
(vii) Power of Attorney. Except as discussed in Section
3.1(n) of Seller's Disclosure Memorandum, there is no power of
attorney granted by the Bank relating to Tax that is currently
in force.
(viii) Prior Affiliated Groups. Schedule 3.1(n) of Seller's
Disclosure Memorandum lists all combined consolidated or
unitary groups of which the Bank has been a member and which
has filed a combined, consolidated or unitary return for
federal, state, local, or foreign tax purposes, other than
Seller.
(ix) Tax-Sharing Agreements. Except for the tax-sharing
agreement of Seller's Consolidated Group of which the Bank is
a member (a complete
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and accurate copy of which was delivered to Purchaser prior to
the date hereof), the Bank is not a party to a tax-sharing
agreement or any similar arrangement.
(x) Existing Partnerships and Single Member LLCs. Except as
set forth in Schedule 3.1(n) of Seller's Disclosure
Memorandum, the Bank (y) is not subject to any joint venture,
partnership, or other agreement or arrangement which is
treated as a partnership for federal income tax purposes or
(z) does not own a single member limited liability company
which is treated as a disregarded entity.
(xi) Parachute Payments. Except as set forth in Schedule
3.1(n) of Seller's Disclosure Memorandum, the Bank has not
made or become obligated to make, or will, as a result of any
event connected with the acquisition of the Bank by Purchaser
or any other transaction contemplated herein, make or become
obligated to make, any "excess parachute payment" as defined
in Section 280G of the Code (without regard to subsection
(b)(4) thereof).
(xii) Balance of Intercompany Items. Except as set forth in
Schedule 3.1(n) of Seller's Disclosure Memorandum, all items
of income, gain, deduction or loss from an intercompany
transaction will be taken into account as of the Closing Date
under the matching and acceleration rules of Treas. Reg.
Section 1.1502-13.
(xiii) Debt or Stock of Acquiring Group. The Bank does not
own any debt obligation or any shares issued by any member of
Purchaser.
(xiv) Compliance with Section 6038A. Seller and the Bank
have complied with all reporting and record keeping
requirements under Section 6038A of the Code with respect to
certain foreign-owned companies and transactions with certain
related parties.
(xv) Section 338(h)(10) Election. The Bank is a
"consolidated target" under Treas. Reg. Section 1.338(h)(10)-
1(b). To Seller's and the Bank's knowledge, Seller is not
prohibited from making an election under Section 338(h)(10) of
the Code and to make a comparable election under each
applicable state and local tax law with respect to the Bank.
(xvi) FIRPTA. Seller is not a "foreign person" as defined in
Section 1445(f)(3) of the Code.
(xvii) Permanent Establishment. The Bank does not have and
has not had a permanent establishment in any foreign country,
as defined in any applicable tax treaty or convention between
the United States of America and any such foreign country.
12
(o) No Pending Litigation or Restriction.
Except as set forth in Schedule 3.1(o) of Seller's Disclosure
Memorandum:
(i) There is no litigation, action, investigation, proceeding
or controversy before any court or governmental agency
pending, and there is no pending claim, action or proceeding
against the Bank or Seller with respect to Seller's ownership
of the Bank, and to Seller's and the Bank's knowledge, no such
litigation, action, investigation proceeding, controversy,
claim or action has been threatened; and
(ii) The Bank is not subject to any agreement, memorandum of
understanding, commitment letter, board resolution or similar
arrangement with, or transmitted to, any regulatory authority
restricting its operations as conducted on the date hereof or
requiring that certain actions be taken.
(p) Employee Benefit Plans.
(i) Except as set forth in Schedule 3.1(p) of Seller's
Disclosure Memorandum, (and which plans or documents have been
delivered or made available to Purchaser prior to the
execution of this Agreement), the Bank does not sponsor,
contribute to, participate in or maintain any: qualified or
nonqualified pension, retirement, profit-sharing, deferred
compensation, stock option, employee stock ownership,
severance pay, vacation, bonus, incentive compensation plan,
written employee program or arrangements, medical, vision,
dental, health plan, life insurance plan, any "employee
benefit plan" as that term is defined in Section 3(3) of
Employee Retirement Income Security Act of 1974 ("ERISA") or
any other employee benefit plan or fringe benefit plan not
reflected above, which are currently contributed to,
participated in or maintained by (1) Seller; (2) any
affiliate; or (3) an ERISA Affiliate (as defined below) for
the benefit of the employees, retirees, dependents, spouses,
directors, independent contractors, or other beneficiaries and
under which employees, retirees, dependents, spouses,
directors, independent contractors, or other beneficiaries of
the Bank (such agreements, plans, etc., are collectively
referred to as the "Bank Benefit Plans").
(ii) No Bank Benefit Plan is or has been a multiemployer plan
within the meaning of Section 3(37) of ERISA.
(iii) There is no breach of any provision of any Bank Benefit
Plan, and there is no violation of ERISA, the Code, of any
other applicable Laws that, individually or in the aggregate,
are reasonably likely to have, individually or in the
aggregate, a Bank Material Adverse Effect. To the knowledge
of Seller, the Bank, or each ERISA Affiliate, none of the
13
Seller, the Bank or any ERISA Affiliate has engaged in a
transaction described in by Section 4975 of the Code or by
Section 404, Section 406, or Section 502(i) of ERISA with
respect to any Bank Benefit Plan that would subject the Bank
to a tax, fine, or penalty imposed thereunder.
(iv) None of the Seller, Bank or any ERISA Affiliate has
maintained a Bank Benefit Plan on or after January 1, 1998
that is or was subject to Title IV of ERISA during such
period.
(v) Except as set forth in Schedule 3.1(p) of Seller's
Disclosure Memorandum, the Bank has no liability for retiree
termination, health or life benefits under any Bank Benefit
Plan, other than health coverage continuation rights mandated
by applicable law, and there are no restrictions on the rights
of Bank to amend or terminate any such Bank Benefit Plan
without incurring any liability thereunder. To the extent
permitted by applicable law, Seller shall continue after the
Effective Time to provide benefits for the retirees listed on
Schedule 3.1(p) of Seller's Disclosure Memorandum, and for any
additional retirees of the Bank as of the Effective Time, in
accordance with the current provisions of Bank Benefit Plans
that Seller, the Bank, or any ERISA Affiliate may continue
after the Closing Date and/or any other benefit plans
maintained by Seller, the Bank, or by any ERISA Affiliate on
or before the Closing Date. Purchaser, CCB and the Resulting
Bank shall only be responsible for providing benefits to the
retirees listed on Schedule 3.1(p) of Seller's Disclosure
Memorandum to the extent required by applicable law. To the
extent Purchaser, CCB or the Resulting Bank are responsible
for providing any benefits to retirees listed on Schedule
3.1(p) of Seller's Disclosure Memorandum, or for any
additional retirees of the Bank as of the Effective Time,
Seller shall promptly pay Purchaser an amount equal to the
amount the Resulting Bank or Purchaser must pay for any such
benefits.
(vi) Except as set forth in Schedule 3.1(p) of Seller's
Disclosure Memorandum, neither the execution and delivery of
this Agreement nor the consummation of the transactions
contemplated hereby will: (1) result in any payment
(including severance, unemployment compensation, golden
parachute, or otherwise) becoming due to any director or any
employee of the Bank under any Bank Benefit Plan or otherwise;
(2) increase any benefits otherwise payable to any director or
employee of the Bank under any Bank Benefit Plan; or, (3)
result in any acceleration of the time of payment or vesting
of any benefit under any Bank Benefit Plan.
(vii) The actuarial present values of all accrued
entitlements under any and all Bank Benefit Plans (including
entitlements under any executive compensation, supplemental
retirement, or employment agreement) of employees and former
employees of the Bank and their respective
14
beneficiaries, other than entitlements accrued pursuant to
funded retirement plans subject to the provisions of Section
401(a) and/or 412 of the Code or Section 302 of ERISA, have
been fully reflected on the Bank's September 30, 2003
financial statements to the extent required by and in
accordance with GAAP.
(q) Real Properties.
(i) Schedule 3.1(q) of Seller's Disclosure Memorandum sets
forth a listing of all real property owned by the Bank,
including the Bank's banking facilities and all other real
estate or foreclosed properties and any improvements thereon
(collectively, the "Real Property"). Except for the Real
Property listed in Schedule 3.1(q) of Seller's Disclosure
Memorandum, the Bank does not own, operate, or lease any other
site. Except as set forth in Schedule 3.1(q) of Seller's
Disclosure Memorandum, with respect to each parcel of Real
Property, the Bank has good indefeasible marketable fee simple
title to that Real Property and owns the same free and clear
of all mortgages, liens, unpaid bills for material or labor
pertaining to the Real Property, leases, licenses, occupancy
agreements, encumbrances, title defects and exceptions to
title other than: (1) the lien of current taxes not yet due
and payable; and (2) such imperfections of title and
restrictions, covenants and easements (including utility
easements) which do not materially detract from, interfere
with or restrict the present or future use of that Real
Property for any purpose whatsoever. Except as set forth in
Schedule 3.1(q) of Seller's Disclosure Memorandum, the Bank
has exclusive possession of the Real Property and has not
entered into any contracts for the sale of the Real Property
and no other person or entity has any rights of first
refusals, options, or other preferential rights to purchase
the Real Property.
(ii) Except as set forth in Schedule 3.1(q) of Seller's
Disclosure Memorandum, to Seller's and the Bank's knowledge,
the Real Property complies with all applicable federal, state,
and local laws, regulations, ordinances, or orders of any
governmental or regulatory authority, including those relating
to zoning, building, and use permits, and the parcels of Real
Property upon which Bank's banking or other offices are
situated, or which are used by Bank in conjunction with its
banking or other offices or for other purpose, may, under
applicable zoning ordinances, be used for the purposes for
which they currently are used as a matter of right rather than
as a conditional or nonconforming use.
(iii) With respect to each parcel of Real Property that
currently is used by Bank as a banking office, to Seller's and
Bank's knowledge, all improvements and fixtures included in or
on that Real Property are in good condition and repair,
ordinary wear and tear excepted, and there does not exist any
condition which in any material respect interferes
15
with Bank's use (or will interfere with Buyer's use after the
transaction) of that Real Property or those improvements and
fixtures as a banking office, or that materially adversely
affects the economic value of that Real Property or those
improvements and fixtures.
(iv) Except as set forth in Schedule 3.1(q) of Seller's
Disclosure Memorandum, (x) there are no pending, or to
Seller's and Bank's knowledge, threatened or contemplated
condemnation proceedings affecting the Real Property, nor (y)
are there any contracts affecting title to the Real Property
or the Bank's interest therein.
(r) Personal Property and Other Assets. With the exception of the
assets listed in Schedule 3.1(r) of Seller's Disclosure Memorandum,
which are the sole assets of Seller and will remain the assets of
Seller at and after the Effective Time, all of the fixed assets
used by the Bank and material to the operation of its business are,
except as set forth in Schedule 3.1(r) of Seller's Disclosure
Memorandum, owned by the Bank and are free and clear of all liens,
encumbrances, leases, title defects, or exceptions to title. To
Seller's and the Bank's knowledge, all of Bank's personal property
material to its business is in good operating condition and repair,
ordinary wear and tear excepted.
(s) Consents, Licenses, Approvals. The Bank has all permits,
licenses, certificates of authority, orders, and approvals of, and
has made all filings, applications, and registrations with federal,
state, local and foreign governmental or regulatory bodies that are
required in order to permit it to carry on its business as it is
presently conducted. All such permits, licenses, certificates of
authority, orders, and approvals are in full force and effect, and
to the best knowledge of Seller and the Bank, no suspension or
cancellation of any of them is threatened.
(t) Collective Bargaining Agreements. The Bank is not a party to,
nor is bound by, any collective bargaining agreement, contract, or
other agreement or understanding with a labor union or labor
organization, nor is the Bank the subject of a proceeding asserting
that it has committed an unfair labor practice or seeking to compel
it to bargain with any labor organization as to wages and
conditions of employment, nor is there any strike or other labor
dispute involving the Bank pending or threatened, nor, to the
knowledge of Seller and the Bank, is there any activity involving
any of the Bank's employees which is seeking to certify a
collective bargaining unit or engaging in any other labor
organization activity related to the Bank.
(u) Environmental Issues.
(i) Except as disclosed in Schedule 3.1(u) of Seller's
Disclosure Memorandum or in any Environmental Survey (as
defined in Section 5.1 hereto), there are no actions, suits,
demands, written notices or other communications, claims,
investigations or proceedings pending or, to the knowledge of
Seller and the Bank, threatened against the Bank (1) relating
16
to any Environmental Law or (2) relating to the release,
discharge, spillage, or disposal (collectively "Releases")
into the environment of any Hazardous Substance, whether or
not occurring at, on, under, or affecting (or potentially
affecting) any Real Property, including without limitation any
written notices, demand letters or requests for information
from any federal or state environmental agency relating to any
such Releases or liabilities under or violations of
Environmental Law (including by a predecessor), nor is there
any reasonable basis, including but not limited to, any
present or past actions, activities, circumstances,
conditions, event or incidents, that could lead to such
actions, suits, demands, notices, claims, investigations or
proceedings which would be reasonably likely to have,
individual or in the aggregate, a Material Adverse Effect on
the Bank.
(ii) The Bank and its Real Property are, and have been, in
compliance with all Environmental Laws, except for violations
which are not reasonably likely to have, individually or in
the aggregate, a Material Adverse Effect on the Bank.
(iii) The Bank has not used, stored, disposed or arranged for
the disposal of Hazardous Substances either on the Real
Property or off-site or at any property owned, leased or
operated by the Bank now or in the past. There are no
underground storage tanks located either on the Real Property
or, to the knowledge of Seller and the Bank, at any property
owned, leased or operated by the Bank now or in the past.
(iv) Except as set forth in Schedule 3.1(u) of Seller's
Disclosure Memorandum, during the period of (1) the Bank's
ownership or operation of any property, including but not
limited to the Real Property, or (2) the Bank's holding of a
security interest in any property, there have been no Releases
of Hazardous Substances in, on, under, or affecting (or
potentially affecting) such properties where such Releases
would be reasonably likely to have, individual or in the
aggregate, a Material Adverse Effect on the Bank, provided
that as to clause (2), such representation and warranty shall
be subject to, and thereby limited by, the knowledge of Seller
and the Bank. Except as set forth in Schedule 3.1(u) of
Seller's Disclosure Memorandum, to the knowledge of Seller and
the Bank, prior to the period of (1) the Bank's ownership or
operation of any property, including but not limited to the
Real Property or (2) the Bank's holding of a security interest
in any property, there were no Releases of Hazardous
Substances in, on, under, or affecting any such property where
such Releases would be reasonably likely to have, individual
or in the aggregate, a Material Adverse Effect on the Bank.
(v) There are no conditions or circumstances at the Real
Property which pose a risk to the environment, the health or
safety of persons, or
17
the market value of the Real Property, except as set forth in
Schedule 3.1(u) of Seller's Disclosure Memorandum.
(vi) For purposes of this Agreement, the following terms
shall have the indicated meaning:
(1) "Environmental Law" means any Legal Requirement
that requires or relates to:
(a) advising appropriate authorities, employees,
and the public of intended or actual releases of
pollutants or hazardous substances or materials,
violations of discharge limits, or other
prohibitions and of the commencements of
activities, such as resource extraction or
construction, that could have significant impact on
the Environment;
(b) preventing or reducing to acceptable levels
the release of pollutants or hazardous substances
or materials into the Environment;
(c) reducing the quantities, preventing the
release, or minimizing the hazardous
characteristics of wastes that are generated;
(d) assuring that products are designed,
formulated, packaged, and used so that they do not
present unreasonable risks to human health or the
Environment when used or disposed of;
(e) protecting resources, species, or ecological
amenities;
(f) reducing to acceptable levels the risks
inherent in the transportation of hazardous
substances, pollutants, oil, or other potentially
harmful substances;
(g) cleaning up pollutants that have been
released, preventing the Threat of Release, or
paying the costs of such clean up or prevention; or
(h) making responsible parties pay private
parties, or groups of them, for damages done to
their health or the Environment, or permitting
self-appointed representatives of the public
interest to recover for injuries done to public
assets.
18
(2) "Hazardous Substance" shall mean any material which
may be dangerous to health or to the environment,
including without implied limitation, asbestos
containing materials ("ACM"), lead-based paint, and all
"hazardous matter," "hazardous waste," "hazardous
substances," "oil," "petroleum," and "petroleum
products" as defined under Environment Law, including
all of the following statutes and their implementing
regulations, as the same may have been amended from time
to time: (i) Comprehensive Environmental Response,
Compensation and Liability Act of 1980, 42 U.S.C.
Section 9601 et seq.; (ii) Toxic Substances Control Act,
15 U.S.C. Section 2601 et seq.; (iii) Federal
Insecticide, Fungicide, and Rodenticide Act, 7 U.S.C.
Section 136; (iv) Hazardous Materials Transportation
Act, 49 U.S.C. Sections 1801-1812; (v) Federal Water
Pollution Control Act, 33 U.S.C. Section 1251 et seq.;
(vi) Resource Conservation and Recovery Act, 42 U.S.C.
Section 6901 et seq.; (vii) Clean Air Act, 42 U.S.C.
Section 7401 et seq.; (viii) Safe Drinking Water Act, 42
U.S.C. Section 3808 et seq.; or (ix) applicable or
equivalent laws and regulations of the State of Florida
relating to hazardous matter, substances or wastes, oil
or other petroleum products, and air or water quality;
provided that, notwithstanding the foregoing or any
other provision of this Agreement to the contrary, the
words "Hazardous Substance(s)" shall not mean or include
such hazardous substances used, generated, manufactured,
stored, disposed of or otherwise handled in normal
quantities in the ordinary course of business in
compliance with applicable Environmental Laws, or such
of the foregoing that may be naturally occurring in the
soil or groundwater in, at, under or about any real
property.
(v) Insurance. The Bank has insurance contracts in full force and
effect which provide for coverages which are usual and customary as
to amount and scope in the business of the Bank.
(w) Deposits.
(i) All deposits of the Bank are insured with the Bank
Insurance Fund of the FDIC to the maximum extent permitted by
law, all deposit insurance premiums due from the Bank to the
FDIC have been paid in full in a timely fashion, and no
proceeding has been commenced or instigated by the FDIC or
otherwise to terminate such insurance.
(ii) Except as disclosed in Schedule 3.1(w) of Seller's
Disclosure Memorandum, none of the deposits of the Bank is a
"brokered" deposit or subject to any encumbrance, legal
restraint or other legal process known to the Bank.
19
(x) Intellectual Property. Except for Intellectual Property (as
defined below) which is owned or licensed by Seller and which is
operated, accessed, or otherwise used by the Bank, at the
discretion of or as permitted by Seller due to its affiliated
status with Seller, including without limitation the Bank's use of
the "Synovus" name, the Bank (i) owns or has a license to use all
of the Intellectual Property used by it in the course of its
business, (ii) is the owner of or has a license to any Intellectual
Property sold or licensed to a third party by it in connection with
its business operations, and (iii) has the right to convey by sale
or license any of its Intellectual Property licenses. No
proceedings have been instituted, or are pending or, to the
knowledge of Seller or the Bank, threatened, which challenge the
rights of the Bank with respect to Intellectual Property used, sold
or licensed by the Bank in the course of its business, nor has any
person claimed or alleged any rights to such Intellectual Property.
The conduct of the business of the Bank does not infringe any
Intellectual Property of any other person or entity. Except as
disclosed in Schedule 3.1(x) of Seller's Disclosure Memorandum, the
Bank is not obligated to pay any recurring royalties to any person
or entity with respect to any such Intellectual Property. No
officer, director, or to the knowledge of Seller or the Bank, any
employee of the Bank is party to any agreement which restricts or
prohibits such officer, director or employee from engaging in
activities competitive with any person or entity. For purposes of
this Agreement, "Intellectual Property" shall mean copyrights,
patents, trademarks, service marks, service names, trade names,
applications therefore, technology rights and licenses, computer
software (including any source or object codes therefore or
documentation relating thereto), trade secrets, franchises, know-
how, inventions, customer lists, and other intellectual property
rights.
(y) State Takeover Laws. Seller has taken all necessary action to
exempt the transactions contemplated by this Agreement from, or if
necessary to challenge the validity or applicability of, any
applicable "moratorium," "fair price," "business combination,"
"control share," or other anti-takeover laws (collectively,
"Takeover Laws"), including Sections 607.0901 and 607.0902 of the
FBCA.
(z) Charter Provisions. Seller has taken all action so that the
entering into this Agreement and the consummation of the Merger and
the other transactions contemplated by this Agreement do not and
will not result in the grant of any rights to any person or entity
under the articles of incorporation, bylaws, or other governing
instruments of the Bank or restrict or impair the ability of
Purchaser or any of its subsidiaries to vote, or otherwise to
exercise the rights of a shareholder with respect to, shares of the
Bank that may be directly or indirectly acquired or controlled by
them.
(aa) Investments: No Subsidiaries. Except as described on
Schedule 3.1(aa) of Seller's Disclosure Memorandum, the Bank does
not own, directly or indirectly, any shares of capital stock of any
corporation or any equity investment in any partnership,
association or other business organization.
20
(bb) Loan Portfolio. Except as described in Schedule 3.1(bb) of
Seller's Disclosure Memorandum, with respect to each loan (a
"Loan") owned by the Bank in whole or in part, including without
limitation Participation Loans (as defined in Section 5.4): (i) the
note and the related security documents are each legal, valid and
binding obligations of the maker or obligor thereof, enforceable
against such maker or obligor in accordance with their terms, and
create a perfected lien on the property securing the Loan, subject
to the effect of bankruptcy, insolvency, reorganization, moratorium
or other similar laws relating to creditor's rights generally, and
to general equitable principles; (ii) the Bank is the sole holder
of legal and beneficial title to each Loan (or the Bank's
applicable participation interest); (iii) there is no pending, or
to the best of the Seller's and the Bank's knowledge, threatened
litigation, condemnation proceeding or similar proceeding affecting
the property which serves as security for a Loan; (iv) except as
disclosed on Schedule 3.1 (bb), there are no actions, suits,
demands, notices, claims, investigations, or proceedings involving
any Environmental Law pending, or to the best of Seller's and the
Bank's knowledge, threatened against any property which serves as
security for a Loan; (v) the Bank has complied with all applicable
federal and state laws, rules and regulations; (vi) with respect
to a Loan held in the form of a participation, the participation
documentation is legal, valid, binding and enforceable and the
interest in such Loan of the Bank created by such participation
would not be a part of the insolvency estate of the Loan originator
or other third party upon the insolvency thereof.
(cc) Community Reinvestment Act. The Bank's Community
Reinvestment Act rating is "Satisfactory."
(dd) Transaction with Insiders. All of the loans, transactions,
agreement, and dealing between the Bank and any "Insider," as
defined in Regulation O as promulgated by the Board of Governors of
the Federal Reserve System, comply in all material respects with
the provisions of Regulation O.
(ee) Compliance with Laws and Regulations. To Seller's and the
Bank's knowledge, the business and operations of the Bank have been
and are conducted in accordance with all applicable laws, rules,
and regulations including without limitation all employment laws,
the noncompliance with which represents a Material Adverse Effect
on the Bank, and except as disclosed in Schedule 3.1(ee) of
Seller's Disclosure Memorandum, the Bank is not subject to or being
threatened with, any material fine, penalty, liability, or legal
disability to its business as the result of its failure to comply
with any requirement of any governmental body or agency having
jurisdiction over it, the conduct of its business, the use of its
assets and properties, or any premises occupied by it. The Bank
has filed all reports and maintained all records required to be
filed or maintained since January 1, 2001 under applicable rules
and regulations of the FDIC and the Florida Department of Financial
Services. To Seller's and the Bank's knowledge, each such filing
contains the information required to be stated
21
therein and such information was true and correct as of the time
such report was filed.
(ff) Full Disclosure. To Seller's and the Bank's knowledge, none
of the information concerning Seller or the Bank contained in this
Agreement and the exhibits and schedules hereto, or in any of the
lists, documents or instruments attached hereto or to be delivered
by or on behalf of Seller to Purchaser as contemplated by any
provision of this Agreement, or in any information memorandum or
other document to be used in connection with the transactions
contemplated hereby, contains or will contain any untrue statement
of a material fact or omits, or will omit to state, any material
fact necessary in order to make statements contained herein or
therein, in light of the circumstances under which they are or have
been made, not misleading.
3.2 Purchaser's Representations and Warranties. Purchaser and CCB,
jointly and severally, hereby represent and warrant to Seller and the Bank on
the date of this Agreement and on the Closing Date that, except as previously
disclosed in writing to Seller:
(a) Organization. Purchaser and CCB are duly organized entities,
validly existing and in good standing under the laws of the State
of Florida. Purchaser and CCB are duly qualified to transact
business in all jurisdictions where the character of its business
requires such qualification.
(b) Authority. This Agreement has been authorized by all
necessary corporate action of Purchaser and CCB, has been duly and
validly executed and delivered by Purchaser and CCB and subject to
receipt of required regulatory approvals, constitutes a legal,
valid and binding agreement of Purchaser and CCB enforceable
against Purchaser and CCB in accordance with its terms, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or
affecting creditors' rights and to general equity principles
involving specific performance or injunctive relief.
(c) Approvals; No Violations. The execution, delivery and
performance of this Agreement by Purchaser and CCB do not, and the
consummation of the transactions contemplated hereby by Purchaser
and CCB will not: (1) violate or contravene any provisions of the
articles of incorporation or bylaws of Purchaser or CCB; or (2)
constitute a breach or violation of, or a default under, any law,
rule or regulation or any judgment, decree, order, governmental
permit or license, or agreement, indenture or instrument of
Purchaser or CCB or to which Purchaser or CCB is subject which
breach, violation or default would have a Material Adverse Effect
on Purchaser, or enable any person to enjoin any of the
transactions contemplated hereby; and the consummation of the
transaction contemplated hereby will not require any consent or
approval under any such law, rule, regulation, judgment, decree,
order, governmental permit or license or the consent or approval of
any other party to any such agreement, indenture or instrument,
other than the required approvals of
22
applicable regulatory authorities and any consents and approvals,
the absence of which will not have a Material Adverse Effect on
Purchaser.
(d) No Pending Litigation or Restriction.
(i) There is no litigation, proceeding or controversy before
any court or governmental agency pending, and there is no
pending claim, action or proceeding against Purchaser, which
is likely to have a Material Adverse Effect on Purchaser or to
prevent consummation of the transaction contemplated hereby,
and, to the best of its knowledge or the knowledge of its
executive officers, no such litigation, proceeding,
controversy, claim or action has been threatened or is
contemplated; and
(ii) Purchaser is not subject to any agreement, memorandum of
understanding, commitment letter, board resolution or similar
arrangement with, or transmitted to, any regulatory authority
materially restricting its operations as conducted on the date
hereof or requiring that certain actions be taken which could
reasonably be expected to have a Material Adverse Effect on
the financial condition of Purchaser.
(e) Consents, Licenses, Approvals. Purchaser has all
material permits, licenses, certificates of authority, orders, and
approvals of, and has made all filings, applications, and
registrations with, federal, state, local, and foreign governmental
or regulatory bodies that are required in order to permit it to
carry on its business as it is presently conducted and the absence
of which would have a Material Adverse Effect on Purchaser; all
such permits, licenses, certificates of authority, orders, and
approvals are in full force and effect, and to the best knowledge
of Purchaser no suspension or cancellation of any of them is
threatened.
(f) Full Disclosure. To Purchaser's knowledge, none of the
information concerning Purchaser or CCB contained in this Agreement
and the schedules hereto, or in any of the lists, documents or
instruments attached hereto or to be delivered by or on behalf of
Purchaser to Seller as contemplated by any provision of this
Agreement, or in any information memorandum or other document to be
used in connection with the transaction contemplated hereby,
contains or will contain any untrue statement of a material fact or
omits, or will omit to state, any material fact necessary in order
to make statements contained herein or therein, in light of the
circumstances under which they are or have been made, not
misleading.
ARTICLE 4
---------
COVENANTS
4.1 Covenants. Seller hereby covenants to Purchaser, and Purchaser
23
hereby covenants to Seller, that:
(a) Necessary Action. It shall take or cause to be taken all
action necessary or desirable under this Agreement on its part as
promptly as practicable, including the filing of all necessary
applications, so as to permit the consummation of the transactions
contemplated by this Agreement at the earliest possible date and
cooperate fully with the other party hereto to that end.
(b) Press Releases. From the date of this Agreement until the
Closing Date, neither Seller nor Purchaser shall make any public
announcement or public comment regarding this Agreement or the
transactions contemplated herein without first consulting with the
other party hereto and reaching an agreement upon the substance and
timing of such announcement or comment; provided however, that
nothing in this Section 4.1(b) shall be deemed to prohibit either
party from making any disclosure which its counsel deems necessary
or advisable in order to satisfy such party's disclosure
obligations imposed by law.
(c) Employee, Depositor, and Customer Communications. Seller and
Purchaser acknowledge the sensitivity of this transaction to the
employees, depositors, and customers of the Bank during the period
from the date of this Agreement to the Closing Date. Accordingly,
except where required by a regulatory agency in connection with the
approval of the transactions contemplated herein, by applicable law
(as supported by an opinion of legal counsel) or for announcements
or communication that are ministerial in nature (e.g., settlement
of employee benefits and effectuating the deconversion): (i)
neither Seller nor the Bank shall issue any announcement or
communication, the goal of which is to reach all or a substantial
portion or group of employees (other than directors and senior
officers of the Bank), depositors, or customers of the Bank
regarding the transactions contemplated herein without first
obtaining Purchaser's written approval, which approval shall not be
unreasonably withheld; and (ii) neither Purchaser nor CCB shall
issue any announcement or communication, the goal of which is to
reach all or a substantial portion or group of employees,
depositors, or customers of the Bank regarding the transactions
contemplated herein without first obtaining Seller's written
approval, which approval shall not be unreasonably withheld. Where
an announcement or communication is required by a regulatory agency
or by applicable law (to the extent permitted above) or is to be a
joint announcement or communication by Seller and Purchaser, such
announcement or communication shall be in form and substance
mutually satisfactory to the parties hereto and to any applicable
regulatory authority. With the exception of the communications
provided for above, Purchaser or CCB may not communicate with the
employees, depositors, and other customers of the Bank.
Notwithstanding anything to the contrary in the foregoing, the Bank
and Seller agree that it is in their mutual best interest to
facilitate Purchaser's and/or CCB's approved written and/or oral
announcements or communications with the Bank's employees regarding
the transactions contemplated in this Agreement. Seller, therefore,
will use its reasonable efforts to
24
transmit or facilitate such announcements or communications of
Purchaser with the Bank's employees as soon as practicable after
Purchaser's request is approved by Seller.
(d) Access to Information. In the case of Seller, from and
subsequent to the date hereof, it will: (1) give Purchaser and its
counsel and accountants reasonable access to the Bank's premises
and books and records during normal business hours for any
reasonable purpose related to the transactions contemplated hereby;
(2) cooperate and instruct its counsel and accountants to cooperate
with Purchaser and with its counsel and accountants with regard to
the formulation and production of all necessary information,
disclosures, financial statements, and regulatory filings with
respect to the transactions contemplated by this Agreement; (3)
prior to the Effective Time, Seller and the Bank shall keep
Purchaser advised of all material developments relevant to the
Bank's business and to the consummation of the Merger. In the case
of Purchaser, it will give Seller access to the Bank's premises for
a 48-hour period immediately following the Effective Time to remove
those assets listed on Schedule 3.1(r) of Seller's Disclosure
Memorandum which may be located at the Bank.
(e) Notice to Other Party. It shall notify the other party hereto
as promptly as practicable of: (1) any breach of any of its
representations, warranties or agreements contained herein; (2) any
occurrence, or impending occurrence, of any event or circumstance
which would cause or constitute a material breach of any of the
representations, warranties or agreements of it contained herein;
(3) any material adverse change in its financial condition, results
of operations or business; and (4) it shall use its best efforts to
prevent or remedy the same.
(f) Application for Approval to Effect Merger. Purchaser shall
prepare and file applications required by law with the appropriate
regulatory authorities for approval to effectuate the Merger and to
effect in all other respects the transactions contemplated herein
no later than thirty (30) calendar days from the date of the
execution of this Agreement. Purchaser agrees to process such
applications in a diligent manner and to provide Seller promptly
with a copy of such applications as filed (except for any
confidential portions thereof) and all material notices, orders,
opinions, correspondence and other documents with respect thereto,
and to use its best efforts to obtain all necessary regulatory
approvals. On the date hereof, Purchaser knows of no reason why
such applications should not receive all such approvals. Purchaser
shall promptly notify Seller upon receipt by Purchaser of
notification that any application provided for hereunder has been
denied. Seller shall provide such assistance and information to
Purchaser as shall be reasonably necessary for Purchaser to comply
with the provisions of this Section 4.1(f) and with the
requirements of the applicable regulatory authorities.
(g) Shareholder's Equity of Bank. With respect to Seller, it
agrees that the shareholder's equity of the Bank on the Closing
Date shall be equal to
25
$11,185,000, which is equal to the shareholder's equity of the Bank
as reflected in its unaudited financial statements for the period
ended September 30, 2003.
(h) Employee Matters.
(i) Immediately prior to Closing, Seller shall cause the Bank
to withdraw as an ERISA Affiliate from any Bank Benefit Plan.
Seller shall retain all liabilities respecting the Bank's
sponsorship of, or the participation of Bank employees in,
Bank Benefit Plans prior to the Closing.
(ii) Effective as of the Closing Date, Purchaser agrees that
the Resulting Bank shall: (x) employ any Bank employee, not
disclosed to Seller pursuant to Section 4.1(h)(iv), on an "at-
will" basis ("Hired Employees"); (y) treat any Hired
Employee's period of service with Seller prior to the Closing
Date as service to Purchaser (1) for eligibility and vesting
purposes for employee benefit plans and (2) for calculating
vacation and sick time under the applicable Purchaser or CCB
employee benefit policies, however, there shall be no past
service credit for the calculation of the benefit accruals for
any other employee benefits or under any retirement plans; and
(z) waive pre-existing condition limitations, if any. Hired
Employees shall not be required to satisfy the deductible and
employee payments required by Purchaser's comprehensive
medical and/or dental plans for the calendar year of the
Closing Date to the extent of amount previously credited
during such calendar year under comparable plans maintained by
Seller.
(iii) CCB shall be obligated to pay a Severance Payment (as
defined below) to a Bank employee only if (x) the employee
remains continuously employed by the Bank from the date hereof
through the Closing Date; and (y) one of the following two
circumstances is satisfied at any time within a sixty (60) day
period after the Closing:
(1) Purchaser or CCB requires the Bank employee to
report to a job that is located more than fifty (50)
miles from that employee's current work location, the
employee rejects Purchaser's direction and the employee
then resigns or is involuntarily terminated; or
(2) Purchaser or CCB fails to continue to employ the
Bank employee on terms substantially similar to those in
effect immediately prior to Closing and the employee
then resigns at his or her discretion. This clause (2)
shall not restrict Purchaser's or CCB's right to
terminate, in good faith, a Bank employee's employment
for cause. The parties agree that termination for cause
shall not trigger a Severance Payment obligation under
this
26
Agreement as to such terminated Bank employee. For
purposes of this clause (2), the term "cause" shall mean
the termination of a Bank employee's employment by
Purchaser or CCB due to: (A) conduct by the Bank
employee that amounts to fraud or dishonesty; (B) the
conviction of the Bank employee of a felony; (C)
insubordination or inattention to his or her duties and
responsibilities which remains uncured after five (5)
business days following notice to the Bank employee of
such improper conduct; or (D) conduct by the Bank
employee that results in removal from his or her
position as an officer or employee pursuant to a written
order by any regulatory agency with authority or
jurisdiction over the Resulting Bank.
Except as provided in this Section, neither Purchaser nor any
of its affiliates shall otherwise be obligated to make any
Severance Payment to Bank employees. For purposes of this
Agreement, a "Severance Payment" shall mean a payment equal to
the greater of (1) two weeks' of the employee's base salary
for every full year of service with the Bank, not to exceed
six (6) months of the employee's base salary as of the Closing
Date, or (2) one month of the employee's base salary as of the
Closing Date. Any Severance Payment that Purchaser must pay
under this Section shall be paid within thirty (30) days after
the affected employee's termination of employment. If, within
sixty (60) days after the effective date of termination of
employment with the Bank (or the Resulting Bank), a Bank
employee who received a Severance Payment is employed by
Seller or an affiliate of Seller, then Seller shall promptly
pay to Purchaser an amount equal to the gross Severance
Payment paid by Purchaser to that Bank employee.
(iv) At least ten (10) days before the Closing Date,
Purchaser will provide to Seller a list of Bank employees who
it expects will be entitled to a Severance Payment under
Section 4.1(h)(iii). Purchaser agrees to promptly update such
list throughout the sixty (60) day period specified in Section
4.1(h)(iii)(y). In the event a Severance Payment is made to a
Bank employee who Purchaser fails to give, within three (3)
business days after the date of the Bank employee's
termination date, written notice to Seller (which notice shall
include, at a minimum, the Bank employee's name, the effective
date of termination and reference to this Agreement), Seller
shall have no obligation, as to such Bank employee, to pay
Purchaser the gross Severance Payment paid to the Bank
employee if Seller or one of its affiliates employs the Bank
employee within sixty (60) days of the effective date of the
Bank employee's termination of employment with the Bank (or
the Resulting Bank).
(v) Seller is responsible for the filing of Forms W-2 with
the Internal Revenue Service and any required filing with
state tax authorities, with
27
respect to wages and benefits paid to each Hired Employee for
periods ending on or prior to the Closing Date.
(vi) Seller agrees that, for a period of one (1) year
following the Closing Date, Seller will not employ or attempt
to employ any employee of CCB; provided, that Seller shall not
be precluded from hiring any employee who has resigned or been
terminated by Purchaser.
(vii) On or as soon as practicable after the Closing Date,
Seller will pay directly to each Bank employee an amount in
cash equal to the value, if any, of that Bank employee's
nonvested account balances under the Synovus/TSYS Profit
Sharing Plan and the Synovus/TSYS Money Purchase Pension Plan
with the value of the nonvested portion of such accounts
determined as of December 31, 2003. Seller will deem any such
payment of the nonvested account balances as compensation to
the Bank employees and Seller will withhold and remit or pay,
as applicable, all attributable taxes.
(i) Section 338(h)(10) Election. Seller and Purchaser agree to
join in making an election under Section 338(h)(10) of the Code
(the "Election") with respect to the acquisition of the Bank. As
soon as practicable after the Closing Date, Seller and Purchaser
shall mutually prepare an Internal Revenue Services Form 8023,
including without limitation, all additional data and materials
required to be attached to such Form 8023. Seller and Purchaser
shall also cooperate with each other to take all actions necessary
and appropriate (including, without limitation, filing such
additional forms, returns, elections, schedules and other documents
as may be required) to effect and preserve such Election (and
comparable provisions of each applicable state and local tax law)
or any successor provisions. Seller shall use its best efforts in
taking all actions necessary to make the Election.
With respect to the Election, the Aggregate Deemed Sales Price (the
"ADSP") shall be allocated among the assets of the Bank pursuant to
Treasury regulations and rulings. Purchaser shall (at its own
expense) prepare and present to Seller for Seller's review such
allocation and documentation in support of such allocation, and
Purchaser and Seller shall use their good faith best efforts to
agree upon such allocation. Seller or Purchaser shall use their
respective best efforts to resolve any disagreement that arises in
the allocation and if no resolution is achieved within three months
after the Closing Date, Purchaser shall (at its own expense)
engage, subject to Seller's approval which shall not be
unreasonably withheld, an independent accounting firm whose
determination of the issue for which there is disagreement shall be
final and binding on Seller and Purchaser and shall be enforceable
in any court of competent jurisdiction. Seller shall cooperate
with Purchaser in preparing the allocation and promptly provide
Purchaser with information and documentation, as appropriate, for
preparing the allocation. The parties shall take no action
inconsistent with, or fail to take any action necessary for the
validity of, the Election, and shall adopt and utilize the asset
values
28
determined from such allocation for the purpose of all tax returns
filed by them, and shall not voluntarily take any action
inconsistent therewith upon examination of any tax return, in any
refund claim, in any litigation or otherwise with respect to such
tax returns.
(j) Closing Financial Statements. At least ten (10) days before
Closing, Seller shall provide to Purchaser financial statements for
the Bank (the "Pre-Closing Financial Statements") as of the end of
the calendar month for the calendar month immediately preceding the
Closing Date. Within three (3) business days after Closing, Seller
shall provide to Purchaser financial statements for the Bank (the
"Closing Date Financial Statements") as of the Closing Date. The
Pre-Closing Financial Statements and the Closing Date Financial
Statements shall be (1) correct in all material respects as of the
date thereof; (2) fairly present the financial condition and
results of operation of the Bank as of the dates and for the
periods indicated therein; and (3) contain and reflect provisions
for taxes, reserves, and other liabilities of the Bank in
accordance with generally accepted accounting principles. Prior to
the Effective Time, Seller and the Bank shall make adjustments to
the Pre-Closing Financial Statements and any other financial
statements (including, without limitation, the Closing Date
Financial Statements) of the Bank that are, as mutually agreed upon
by Seller and Purchaser, necessary to conform these financial
statements to GAAP. In the event Seller and Purchase cannot agree
on the adjustments to be made to the Pre-Closing Financial
Statements and any other financial statements (including, without
limitation, the Closing Date Financial Statements) of the Bank,
Seller and Purchaser agree that KPMG LLP (or other comparable
accounting firm agreed upon by the parties) will conduct an
independent review of the subject financial statements to determine
what adjustments, if any, are required to conform such financial
statements to GAAP with the expense of any such review being shared
equally between Seller and Purchaser. The parties agree that the
determination by KPMG LLP (or other comparable accounting firm)
shall be final and binding upon the parties and enforceable in a
court of competent jurisdiction.
(k) Direct or Indirect Action. Seller and Purchaser will not
directly or indirectly take any action or omit to take any action
to cause any of its representations and warranties made in this
Agreement to become untrue.
ARTICLE 5
---------
ADDITIONAL AGREEMENTS AND COVENANTS
5.1 Real Property Matters. At its option and expense, Purchaser may
cause to be conducted: (1) a title examination, physical survey, zoning
compliance review, and structural inspection of the Real Property and
improvements thereon that is used by Bank as a banking office (collectively,
the "Property Examination"); and (2) site inspections, historic reviews,
regulatory analyses, and environmental assessments of the Real Property as
Purchaser shall deem necessary or desirable (collectively, the "Environmental
Survey"); provided, however, should
29
Purchaser elect to complete an Environmental Survey of any Real Property, it
shall notify Seller before commencing the Environmental Survey and shall make
reasonable efforts to coordinate the Environmental Survey with Seller.
If, in the course of the Property Examination or Environmental Survey,
Purchaser discovers a "Material Defect" (as defined below) with respect to
the Real Property, Purchaser shall have the option, at its sole discretion,
exercisable upon written notice to Seller ("Material Defect Notice") to: (1)
waive the Material Defect; (2) direct Seller to cure the Material Defect to
Purchaser's satisfaction; or (3) terminate this Agreement (with such
termination being deemed to be a termination under Section 7.1).
If Purchaser elects to direct Seller to cure the Material Defect, then
Seller shall notify Purchaser by written notice within five (5) days of
receipt of the Material Defect Notice whether Seller elects to (1) cure such
Material Defect, (2) in lieu of curing the Material Defect, seek approval
from Purchaser to indemnify Purchaser as to claims related to the Material
Defect on terms then agreed upon with Purchaser ("Material Defect
Indemnification"), or (3) petition Purchaser to waive the Material Defect
without Seller curing, or providing indemnification as to, the Material
Defect. If Seller elects to cure, then Seller shall have thirty (30) days
from the date of the receipt of the Material Defect Notice, or such later
time, which shall not be later than the Closing Date, as shall be mutually
agreeable to the parties in which to cure such Material Defect to Purchaser's
satisfaction. If Seller elects to seek approval from Purchaser to provide to
Purchaser Material Defect Indemnification, then Purchaser and Seller agree to
use their best efforts to promptly come to an agreement regarding the
specific terms of such Material Defect Indemnification. If Seller either (1)
fails to cure a Material Defect to Purchaser's satisfaction within the period
specified above, (2) fails to reach agreement with Purchaser as to the
provision of Material Defect Indemnification, or (3) petitions Purchaser to
waive the Material Defect and such petition is denied in writing by
Purchaser, then Purchaser may terminate this Agreement (with such termination
being deemed to be a termination under Section 7.1).
For purposes of this Agreement, a "Material Defect" shall include:
(a) the existence of any lien (other than the lien of Real Property
taxes not yet due and payable), encumbrance, zoning restriction,
easement, covenant or other restriction, title imperfection or title
irregularity, or the existence of any facts or conditions that
constitute a material breach of Seller's representations and warranties
contained in Section 3.1(q) or 3.1(u), in either such case that
Purchaser reasonably believes will materially adversely affect its use
of any parcel of the Real Property for the purpose for which it
currently is used or the value or marketability of any parcel of the
Real Property, or as to which Purchaser otherwise objects;
(b) the existence of any structural defects or conditions of disrepair
in the improvements on the Real Property (including any equipment,
fixtures or other components related thereto) that Purchaser reasonably
believes would cost more
30
than $75,000 in the aggregate to repair, remove or correct as to all
such Real Property; or
(c) the existence of facts or circumstances relating to any of the Real
Property reflecting that: (1) there likely has been a discharge,
disposal, release, threatened release, or emission by any person of any
Hazardous Substance on, from, under, at, or relating to the Real
Property; or (2) any action has been taken or not taken, or a condition
or event likely has occurred or exists, with respect to the Real
Property which constitutes or would constitute a violation of any
Environmental Laws as to which Purchaser reasonably believes, based on
the advice of legal counsel or other consultants, that Seller or Bank
could become responsible or liable, or that Purchaser could become
responsible or liable, following the Closing Date, for assessment,
removal, remediation, monetary damages, or civil, criminal or
administrative penalties or other corrective action and in connection
with which the amount of expense or liability which Seller or Bank could
incur, or for which Purchaser could become responsible or liable,
following the Closing Date, could equal or exceed an aggregate of
$75,000 or more as to all such Real Property.
5.2 Indemnification.
(a) Loss. For purposes of this Section 5.2, the term "Loss" is
defined as, and shall mean and include, any liability, loss, cost,
damage, expense or payment, including reasonable attorneys' and
other professional fees and expenses incurred in investigating or
defending against any loss.
(b) By Seller. Seller agrees, to indemnify, defend and hold
Purchaser and its directors, officers, employees, shareholders,
agents and affiliates (the "Purchaser Group") harmless from,
against and in respect of, any Loss incurred or suffered by
Purchaser Group with respect to (i) any misstatement, error or
omission by Seller or the Bank as to any warranty or representation
under Sections 3.1(b), 3.1(c), 3.1(d), 3.1(e), 3.1(f), 3.1(g),
3.1(h), 3.1(n), 3.1(o), 3.1(p), 3.1(q)(ii), 3.1(q)(iii),
3.1(q)(iv), 3.1(w), 3.1(y), 3.1(z), 3.1(aa) and 3.1(ff); (ii)
Asbestos Litigation as set forth in Section 5.8; and (iii) any
covenant of Seller or the Bank under Sections 4.1(h), 4.1(j), and
5.7.
(c) Certain Limitations. The foregoing indemnification
obligations are subject to the following limitations:
(i) Time by Which Initial Claim Must be Made. No
indemnification shall be required under this Section 5.2
unless Purchaser gives notice of such claim to Seller of the
facts that are the basis for such indemnification within the
following time periods:
(A) in the case of matters involving claims under
Sections 3.1(b), 3.1(g), 3.1(n), 3.1(o), 3.1(p),
4.1(h)(vii), or 5.2(b)(ii) of this
31
Agreement, within one hundred eighty (180) days after the
expiration of the statute of limitations (including any
waiver and extensions thereof); or
(B) in the case of matters involving claims under any
other Section not specified in 5.2(c)(i)(A) above, within
the shorter of: (1) two years following the Closing Date;
or, (2) the expiration of the statute of limitations
(including any waiver and extensions thereof).
(ii) Deductible. Except for indemnification provided under
Sections 5.2(b)(ii), no indemnification shall be required
under this Section 5.2 unless and until, and only to the
extent that, the total Losses exceed $20,000 individually or
$100,000 in the aggregate. The foregoing limitations shall
not apply to claims with respect to or as a result of any
breach, whether by act or omission, resulting from a willful
or deliberate misrepresentation by Seller or the Bank intended
to mislead Purchaser.
(iii) Indemnification Cap. Except for indemnification
provided under Sections 5.2(b)(ii), no indemnification shall
be required under this Section 5.2 for that portion of any
Loss, individually or in the aggregate, which exceeds
$5,000,000.
(iv) Receipt of Insurance Proceeds. The amount of any
indemnifiable Loss or Losses incurred by Purchaser shall be
reduced by the amount Purchaser recovers (after deducting all
attorneys' fees, expenses and other costs of recovery) from
any insurer or other party liable for such Loss or Losses, and
Purchaser agrees to use its best efforts to effect any such
recovery.
(d) Procedure Regarding Indemnification. Purchaser shall notify
Seller in writing of any fact or circumstance which gives rise to
any indemnification obligation with reasonable promptness after
such fact or circumstance first comes to the attention of an
executive officer of Purchaser or any affiliate thereof. A failure
to notify Seller will not relieve Seller from any liability it may
have hereunder or otherwise, except to the extent that such failure
materially prejudices Seller's rights or its ability to defend
against such complaint, action or proceeding. If Seller so elects
or is requested by Purchaser, it will assume the defense of such
action or proceeding, including the employment of counsel (which
may be counsel to Purchaser) reasonably satisfactory to Purchaser
and the payment of the fees and disbursements of such counsel. In
the event, however, that Purchaser reasonably determines in its
judgment that having common counsel would present such counsel with
a conflict of interest or if Seller fails to assume the defense of
the action or proceeding in a timely manner, then Purchaser may
employ separate counsel to represent or defend it in any such
action or proceeding and Seller will pay the fees and disbursements
of such counsel; provided, however, that Seller
32
will not be required to pay the fees and disbursements of more than
one separate counsel for all indemnified parties in any
jurisdiction in any single action or proceeding. Purchaser will
cooperate with Seller in the defense of any such action or
proceeding. In any action or proceeding the defense of which is
assumed by Seller, Purchaser will have the right to participate in
such action or proceeding and to retain its own counsel at
Purchaser's own expense. Seller shall not be liable for any
settlement effected without its prior written consent.
5.3 Taxes.
(a) Actions Prior to Closing
(i) Termination of Existing Tax-Sharing Agreements. All tax-
sharing agreements or similar arrangements involving the Bank or to
which the Bank is a party shall be terminated with respect to the
Bank on or prior to the Closing Date, and, after the Closing Date,
the Bank shall not be bound thereby or have any liability or
benefit thereunder.
(ii) Tax Elections. No new elections, and no changes in current
elections, with respect to Taxes affecting the Bank shall be made
after the date of this Agreement without the prior written consent
of Purchaser, which consent shall not be unreasonably withheld.
(iii) Tax Certificates. Seller and the Bank shall provide
Purchaser on or prior to the Closing Date, with all forms,
certificates and/or other instruments required in connection with
the transfer and recording taxes and charges arising from the
transactions contemplated by this Agreement, together with evidence
satisfactory to Purchaser that such transfer taxes and charges have
been paid in full by Seller, (y) an affidavit stating, under
penalties of perjury, Seller's United States taxpayer
identification number and that Seller is not a foreign person
pursuant to Section 1445(b)(2) of the Code and (z) a clearance
certificate or similar documents which may be required by any state
taxing authority to relieve Purchaser of any obligation to withhold
any portion of payments to Seller pursuant to this Agreement.
(iv) Access to Books and Records. Between the date of the
Agreement and the Closing Date, Seller and the Bank shall give
Purchaser and its authorized representatives reasonable access to
all books, records and returns of the Bank and Seller and have
their personnel and accountants available to respond to reasonable
requests of Purchaser and its authorized representatives.
(v) Settlement of Tax Reserves. To the extent there are Tax
reserves shown on the books of Seller with respect to consolidated,
combined or unitary Taxes for which Seller files a return,
including the Bank (excluding reserves established for deferred
Taxes), the Bank shall be
33
permitted to distribute an amount equal to such reserves
attributable to earnings of the Bank to Seller (or any other
affiliate designated by Seller) prior to the Closing Date. The
computation of such amount shall be based on the existing tax
sharing agreement of Seller's consolidated group, subject to
Purchaser's review and consent, which shall not be unreasonably
withheld.
(b) Survival of Representations and Warranties. The representations
and warranties of Seller contained in Section 3.1(n) of this Agreement
shall survive the Closing until the expiration of the applicable statute
of limitations (giving effect to any waiver or extension thereof).
(c) Filing of Tax Returns.
(i) Seller shall prepare and timely file all consolidated,
combined or unitary income tax returns for Seller's consolidated
group for all periods ending on or prior to the Closing Date
(including, with respect to the Bank, a short taxable year ending
on the Closing Date) and shall include the Bank in such returns.
All such returns shall be prepared in accordance with past practice
(unless a contrary position is required by law), to the extent any
position taken in such returns may affect the tax liability of the
Bank after the Closing. Seller shall pay all tax liabilities shown
on such returns. In connection with preparation of such returns,
Seller shall prepare books and working papers (including a closing
of the books as of the Closing Date) which shall clearly
demonstrate the income and activities of the Bank for the period
ending on the Closing Date. Seller shall provide a copy of
portions of such returns relating to the Bank to Purchaser for its
review at least 20 days prior to the filing of such returns.
Seller shall not file any amended return for a period ending on or
before the Closing without Purchaser's consent (which consent shall
not be unreasonably withheld) if the filing of any such amended
return may affect the tax liability of the Bank or for which
Purchaser is or may become liable.
(ii) Purchaser shall prepare and timely file all tax returns with
respect to the Bank other than the income tax returns referred to
in Section 5.3(c)(i) above, that are required to be filed after the
Closing, and shall duly and timely pay Taxes due on such tax
returns. To the extent such tax returns relate to any period
beginning before the Closing Date and ending after the Closing Date
(a "Straddle Period"), Purchaser's preparation of such tax returns
shall be subject to Seller's review and approval, which approval
shall not be unreasonably withheld. Purchaser shall make such tax
returns for a Straddle Period available for Seller's review and
approval no later than 20 business days before the due date for
filing such tax returns. Within 10 days before the due date for
the filing of such tax return, whether or not Seller agrees with
the contents of such tax return,
34
Seller shall pay the Bank or Purchaser an amount equal to the
amount of Taxes shown as due on such tax returns allocable to
Seller for the portion of the Straddle Period up to and including
the Closing Date (such portion being referred to as a "Pre-Closing
Partial Period") less any estimated Taxes paid for such Taxes prior
to the Closing Date and less any reserves established and reported
on the closing balance sheet as of the Closing Date for such Taxes
(other than deferred Taxes).
(d) Seller Indemnity. In addition to any indemnification provided in
Section 5.2, the Seller hereby indemnifies, defends and holds Purchaser,
the Bank and each of their respective affiliates, successors and assigns
harmless from and against any and all Taxes for which the Bank and any
Bank subsidiaries shall be liable (including Taxes payable as a result
of the application of Treas. Reg. Section 1.1502-6) (i) with respect to
all periods ending on or prior to the Closing Date, (ii) with respect to
each Straddle Period, but only with respect to the portion of each such
period up to and including the Closing Date (such portion being referred
to as a "Pre-Closing Partial Period"), (iii) without duplication,
resulting from the untruth or inaccuracy of any representation or
warranty as to Taxes set forth in this Agreement, and (iv) without
duplication, resulting from any breach of any covenant or agreement as
to Taxes set forth in this Agreement. Seller shall be entitled to any
net refunds of Taxes (including interest thereon) with respect to the
periods described in clauses (i) and (ii) above, except to the extent
such refund arises as the result of a carryback of a loss or other tax
benefit.
(e) Purchaser Indemnity. In addition to any indemnification provided
in Section 5.2, the Purchaser hereby indemnifies and holds Seller and
its affiliates, successors and assigns harmless from and against any and
all Taxes for which the Bank and any Bank subsidiaries shall be liable
(i) with respect to all periods beginning after the Closing Date and
(ii) with respect to each Straddle Period, but only with respect to the
portion of each such period beginning the day after the Closing Date
(such portion a "Post-Closing Partial Period"). Purchaser shall be
entitled to all refunds of Taxes with respect to the periods described
in clauses (i) and (ii) above.
(f) Carryovers and Carrybacks. For purposes of this Section, Tax or
Taxes shall include the amount of Taxes which would have been paid but
for the application of any credit or net operating or capital loss
deduction attributable to periods beginning after the Closing Date or to
any Post-Closing Partial Period. If the Bank earns any credit or loss
that is carried back to offset income for a period ending on or prior to
the Closing Date and if Seller realized reduction in Tax for such a
period as a result of such carryback in the form of a refund, Seller
shall pay to Purchaser the amount of such reduction within 30 days after
the receipt of the refund; provided, however, that Seller shall not make
such payment to Purchaser to the extent Seller could otherwise offset
such income (to which such carryback was applied) with Seller's
consolidated group's own credit or net operating or capital loss
pursuant to normal consolidated return and other applicable rules.
35
Seller shall, at the request of Purchaser, reasonably cooperate in
connection with the filing of necessary returns and other documents and
the related procedure, and provide a basis for the computation of the
amount paid to Purchaser pursuant to this Section in reasonable detail.
Purchaser shall be solely responsible for, and shall indemnify and/or
reimburse Seller for, any costs or expenses incurred in connection with
any carryback or any Tax filing relating thereto.
(g) Allocation Between Partial Periods. Any Taxes for a Straddle
Period shall be apportioned between the Pre-Closing Partial Period and
the Post-Closing Partial Period, based, in the case of real and personal
property Taxes, on a per diem basis and, in the case of other Taxes
(including, without limitation, income taxes and taxes in lieu of income
taxes), on the actual activities, taxable income or taxable loss of the
Bank and any Bank subsidiaries during such Pre-Closing Partial Period
and such Post-Closing Partial Period, based on a closing of the books
(including taking of inventories) as of the close of business on the
Closing Date. The Bank shall not be permitted to carry out any
transaction outside the ordinary course of its trade or business on the
Closing Date after the Closing (other than the transactions contemplated
by this Agreement).
(h) Control of Post-Closing Audits and Other Proceedings.
(i) Seller, on the one hand, and Purchaser, on the other hand,
agree to give prompt notice to each other of any proposed
adjustment to Taxes for periods ending on or prior to the Closing
Date or any Pre-Closing Partial Period, within 10 days after
receipt of such proposed adjustment. If the indemnified party
fails to provide prompt notice, the indemnifying party's indemnity
obligation shall be reduced, but only to the extent of any damages
(or an increase thereof) incurred as a result of the delay.
(ii) Seller and Purchaser shall cooperate with each other in the
conduct of any audit or other proceedings involving the Bank for
periods ending on or prior to the Closing Date and Pre-Closing
Partial Periods and each may participate at its own expense,
provided that Seller shall have the right to control the conduct of
any such audit or proceeding for which Seller agrees that any
resulting Tax is covered by its indemnity. Purchaser shall execute
or cause to be executed powers of attorney or other necessary
documents in order for Seller to exercise its control over such
audit or proceeding. Seller may not settle or otherwise resolve
any such claim, suit or proceeding without the consent of
Purchaser, which consent shall not be unreasonably withheld.
Seller and Purchaser shall jointly control all proposed adjustments
to Taxes relating to a Straddle Period.
(i) Cooperation. Seller and Purchaser agree to furnish or cause to be
furnished to each other, upon reasonable request, as promptly as
practicable, such information and assistance (including, without
limitation, access to books and records) relating to the Bank as is
reasonably necessary for the preparation of any
36
return for Taxes, claim for refund or audit, and the prosecution or
defense of any claim, suit or proceeding relating to any proposed
adjustment. Any information obtained shall be kept confidential by the
parties hereto (unless disclosure is required by law or legal process or
by a regulatory authority). Purchaser and Seller shall each use
reasonable efforts not to have materials, books, records or files
relating to the Bank or the Subsidiaries destroyed.
(j) Arbitration. If Seller and Purchaser disagree on any issue or
amount relating to Taxes that needs to be agreed on in connection with
the transaction contemplated by this Agreement, the disagreeing party
shall notify the other party of such disagreement in writing. Seller
and Purchaser shall use their respective best efforts to resolve any
such disagreement and if no resolution is achieved within 30 days,
Seller and Purchaser shall mutually select an independent accounting
firm, whose determination of the issue for which there is disagreement
shall be final and binding on Seller and Purchaser and shall be
enforceable in any court of competent jurisdiction. Upon resolution or
determination of such issue, there shall be promptly made a payment, if
necessary, between Seller and Purchaser in order to take into account
the results of such resolution or determination.
5.4 Loan Participations.
(a) Right to Participate. Seller and the Bank, jointly and
severally, represent and warrant to Purchaser that all loan
participations between the Bank and any of Seller's affiliates
("Loan Participations") which are reflected on the Bank's balance
sheets as of September 30, 2003 and the date of this Agreement are
disclosed by borrower name, loan amount, and maturity date in
Schedule 5.4 of Seller's Disclosure Memorandum. Seller and Bank
recognize that Purchaser and CCB are purchasing rights in the Loan
Participations in connection with this Agreement, and these rights
are material to Purchaser's decision to purchase the Bank. In
recognition of these rights, Seller hereby agrees that except as
provided in this Section neither Seller nor any of its agents or
affiliates will take any act, or omit to take any act, that would
result in the Bank or the Resulting Bank losing its pro rata
portion of, or any rights in, any of the Loan Participations.
Except as provided in this Section, neither Seller nor any of its
affiliates will refinance, modify, renew, amend, replace with
additional or new credit facilities or otherwise change the Bank's
rights in the Loan Participations except as and to the extent
permitted in the participation agreement. In the event Seller or
any of its affiliates desire to refinance, modify, renew, amend,
replace with additional or new credit facilities or otherwise
change the Bank's or the Resulting Bank's rights in a Loan
Participation, Seller shall first submit a written offer (the
"Offer") to Purchaser for the Resulting Bank to participate in the
new lending arrangement. The Offer shall (i) provide the name and
address of the existing borrower(s) and identify the affected Loan
Participation, (ii) provide sufficient documentation for the
Resulting Bank to perform an independent credit analysis, (iii)
permit the Resulting Bank to participate in the new lending
arrangement at the same or
37
greater percentage as the Resulting Bank participates in the
affected Loan Participation, and (iv) permit the Resulting Bank to
participate in the new lending arrangement under the same terms and
conditions as offered to affiliates of Seller. For purposes of
this Section, the date on which Seller or Seller's affiliates
deliver(s) the Offer shall be deemed the "Offer Date." Purchaser
shall have the option, exercisable by written notice given to
Seller within fifteen (15) days of the Offer Date, to participate
in the new lending arrangement under the terms and conditions
specified in the Offer. Purchaser, in its sole discretion, may
reject such Offer, in which case, Purchaser shall have no further
liability with respect to, or obligation to participate in, such
loan, nor shall Seller or its affiliates have any further liability
or obligation to Purchaser and its affiliates under this Agreement
to offer or permit participation in such loan.
(b) Purchaser's Right to Reject Participation Loans. Seller shall
afford to the officers and authorized representatives of Purchaser,
subject to Seller's normal security requirements, access to all
necessary loan instruments relating to the Participation Loans in
order that Purchaser may have full opportunity to make reasonable
investigations of the Participation Loans, the Participation Loan
instruments and the Participation Loans' collateral. Prior to
fifteen (15) business days prior to Closing, Purchaser shall have
the right to reject any Participation Loans, in its sole
discretion, and Seller shall cause the Bank to transfer and assign
such loans to Seller or an affiliate of Seller (other than the
Bank) as of the Closing Date.
5.5 Certain Actions. Except with respect to this Agreement and the
transactions contemplated hereby, Seller or any affiliate thereof or any
representatives thereof retained shall not directly or indirectly solicit any
Acquisition Proposal (as defined below) by any person or entity for the Bank,
except to the extent the Board of Directors of Seller, after having consulted
with and considered the advice of outside counsel, reasonably determines in
good faith that the failure to take such actions would constitute a breach of
fiduciary duties of the members of such Board of Directors to Seller's
shareholders under applicable law. Seller's affiliate or representative
thereof shall not furnish any non-public information that it is not legally
obligated to furnish, negotiate with respect to, or enter into any agreement
with respect to, any Acquisition Proposal for the Bank, but Seller may
communicate information about such an Acquisition Proposal for the Bank to
its shareholders if and to the extent that it is required to do so in order
to comply with its legal obligations. Seller shall promptly advise Purchaser
following the receipt of any Acquisition Proposal for the Bank and the
details thereof, and advise Purchaser of any developments with respect to
such Acquisition Proposal for the Bank promptly upon the occurrence thereof.
Seller shall (i) immediately cease and cause to be terminated any existing
activities, discussions or negotiations with any persons or entities
conducted heretofore with respect to any of the foregoing, (ii) direct and
use its reasonable best efforts to cause all of its affiliates and
representatives not to engage in any of the foregoing, and (iii) use its
reasonable best efforts to enforce any confidentiality or similar agreement
relating to any such activities, discussions, negotiations or Acquisition
Proposal. Seller will take all actions necessary or advisable to inform the
appropriate individuals or entities referred to in the first sentence of this
Section of the obligations undertaken in this Section. For purposes of this
Agreement,
38
"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.
5.6 Covenant of Seller Not to Solicit. Seller hereby agrees that from
the date of this Agreement and for a period of three (3) years after the
Closing Date, Seller and its affiliates shall not specifically target and
solicit the customers of the Bank, unless Seller or its affiliates (other
than through the Bank) had a prior relationship (outside of any relationship
established through the business of the Bank) with such customers and is able
to demonstrate the existence of such relationship. Nothing in this section,
however, shall prevent Seller or its affiliates from taking such actions as
may be required to comply with any applicable federal or state laws, rules or
regulations or from servicing or communicating with the then-current
customers of Seller or its affiliates, nor shall this Section apply to
solicitations by Seller or its affiliates that are general in nature (e.g.,
geographically generated solicitations) if such solicitations are merely
incidental or only involve the use of information obtained through sources
other than the Bank, nor shall this Section apply to any communications (and
resulting follow up communications) involving Seller and its affiliates with
customers of the Bank who express, on an unsolicited basis, an interest in
transferring or retaining their banking relationship with Seller or an
affiliate of Seller.
5.7 Assumption of Automobile Lease and Transfer of Bank Employee.
Seller hereby agrees to assume any and all liabilities and payments for that
certain automobile lease, dated August 5, 2003, for a 2004 Pontiac Grand Am
that is currently used by Xxxxx Xxxxxx, the Bank's human resource manager
("HR Manager"). Seller further agrees to employ HR Manager as of the Closing
Date as an employee of Seller or one of Seller's affiliates (other than the
Bank). Not withstanding anything in this Agreement to the contrary, neither
Purchaser nor any of its affiliates or the Bank shall have any obligation to
pay any Severance Payment to the HR Manager.
5.8 Asbestos Litigation.
(a) Within ten (10) days after the effective date of this
Agreement, Seller and Purchaser will develop a plan, to the
satisfaction of Purchaser in Purchaser's sole discretion, for the
removal or mitigation of any and all ACM in or at the main office
of the Bank located in Quincy, Florida (the "Quincy Office").
Within forty-five (45) days after the development of such plan,
Seller shall remove or mitigate any and all ACM in accordance with
such plan. Upon completion of the removal or mitigation of such
ACM, Seller shall promptly notify Purchaser of such completion and
Purchaser shall be permitted to conduct additional site inspections
and environmental assessments of the Quincy Office to confirm that
the ACM has been removed or mitigated to Purchasers' satisfaction.
Purchaser and Seller shall work together to assure the removal or
mitigation of any remaining ACM to Purchaser's satisfaction prior
to the Closing Date.
39
(b) Notwithstanding any limitations set forth in Section
5.2(c)(ii) and (iii), Seller agrees to indemnify, defend and hold
Purchaser and its directors, officers, employees, shareholders,
agents, and affiliates harmless from, against and in respect of,
any current or future Asbestos Loss (as defined below) arising out
of or related to (i) the exposure to ACM from or at the Quincy
Office prior to the Effective Time, (ii) the disturbance,
mitigation, or removal, prior to the Effective Time, of ACM from or
at the Quincy Office, and (iii) the pending litigation between Xxxx
Xxxxxx Xxxxxxxx, Xx. and Xxxxxx Xxxxxx Xxxxxxx, Xx. and Quincy
State Bank and Tarpon Electric Inc., as more fully described in
Schedule 3.1(o) of Seller's Disclosure Memorandum (collectively,
"Asbestos Litigation"). Seller agrees to assume all costs of and
responsibility for any and all Asbestos Litigation and to conduct
the defense of such Asbestos Litigation, except that Seller agrees
that neither Seller nor any of its affiliates will take any action,
or fail to take any action, that would result in Seller taking a
position that is adverse or harmful to Purchaser's or any of its
affiliates' rights on and after the Effective Time to occupy and
possess the Quincy Office. If Purchaser so elects in its sole
discretion, Purchaser or its affiliates may assume control of the
defense of any Asbestos Litigation from Seller, including the
employment of attorneys (which may be counsel for Seller), at
Purchaser's sole cost and expense for such attorneys, provided that
Seller shall remain responsible for all costs and expenses of the
Asbestos Litigation other than attorneys' fees for the matters
assumed. At any time in its sole judgment, the party not in
control of the defense of such Asbestos Litigation may monitor the
defense of the Asbestos Litigation and/or employ separate counsel
to represent or defend the party in any such action or proceeding,
provided such party remains responsible for the fees and
disbursements of such counsel. In the event, however, that
Purchaser reasonably determines at any time in its sole judgment
that Seller or any of its affiliates has taken or proposes to take
any action, or has failed to take any action, that has resulted or
would result in Seller taking a position that is adverse or harmful
to Purchaser's or any of its affiliates' rights on and after the
Effective Time to occupy and possess the Quincy Office, then
Purchaser may employ separate counsel to represent or defend
Purchaser in any such action or proceeding and Seller shall pay the
fees and disbursements of such counsel. The party in control of
the defense of any Asbestos Litigation shall not settle such
Asbestos Litigation without the other party's express written
consent which shall not be unreasonably withheld. The party not in
control of the defense of the Asbestos Litigation will cooperate
with the party in control of such litigation in the defense of the
claim, including, but not limited to, cooperating with contested
claims, counterclaims, and availability of witnesses and documents.
For purposes of this Section, the term "Asbestos Loss" is defined
as, and shall mean and include, any liability, loss, cost, damage,
court costs, settlement costs, judgment amounts, costs of appeal,
expense or payment, including reasonable attorneys' and other
professional fees and expenses incurred in investigating or
defending against any loss or in enforcing this Section.
40
5.9 Assignment of Intellectual Property. By no later than the Closing
Date, Seller and the Bank shall assign and transfer to Purchaser and/or an
entity controlled by Purchaser and designated by Purchaser all of Seller and
the Bank's right, title, and interest in and to all trade names, service
marks, trademarks, fictitious names, logos, and other intellectual property
which consists of or includes the word "Quincy" and all federal and state
registrations, if any, with respect thereto.
5.10 Further Assurances. Seller hereby agrees to promptly deliver,
and to cause Seller's affiliates to promptly deliver, to the Resulting Bank
or the Purchaser such deposits, checks, payments, customer correspondence,
and other similar items relating to customer accounts, intercompany accounts,
or property of the Bank or the Resulting Bank and do all matters and things
which may be convenient or necessary to more effectively and completely carry
out the intentions of this Agreement. Seller agrees to reconcile and make
current as of the end of the month immediately preceding the Closing Date all
of the Bank's general ledger accounts. On or before the Closing Date, Seller
shall deliver to Purchaser proper documentation of the entries (with proper
aging of accounts) reconciling and making current the Bank's general ledger
accounts.
ARTICLE 6
---------
CONDITIONS TO CONSUMMATION
6.1 Mutual Conditions to Closing. The respective obligations of Seller
and of Purchaser to effect the transactions contemplated by this Agreement
shall be subject to the satisfaction prior to the Closing Date of the
following conditions, unless waived by both parties pursuant to Section 7.5:
(a) Procurement of all governmental and regulatory consents and
approvals which are necessary to the consummation of the
transactions contemplated by this Agreement. All consents of,
filings and registrations with regulatory authorities shall be in
full force and effect and all waiting periods required by law shall
have expired. No consent obtained from any regulatory authority
which is necessary to consummate the transactions contemplated
hereby shall be conditioned or restricted in a manner (including
requirements relating to the raising of additional capital or the
disposition of assets) which in the reasonable judgment of the
board of directors of Purchaser would so materially adversely
affect the economic or business benefits of the transactions
contemplated by this Agreement that, had such condition or
requirement been known, Purchaser would not, in its reasonable
judgment, have entered into this Agreement.
(b) Each party shall have obtained any and all consents required
for consummation of the Merger (other than those referred to in
Section 6.1(a) 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
Seller Material Adverse Effect, Bank Material Adverse Effect, or a
Purchaser Material Adverse Effect, as applicable. No consent so
obtained which
41
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 Purchaser would so
materially adversely affect the economic or business benefits of
the transactions contemplated by this Agreement, that, had such
condition or requirement been know, Purchaser would not, in its
reasonable judgment, have entered into this Agreement.
(c) The satisfaction of all other statutory or regulatory
requirements which are necessary to the consummation of the
transactions contemplated by this Agreement.
(d) No party hereto shall be subject to any order, decree or
injunction or any other action of a United States federal or state
court of competent jurisdiction permanently restraining, enjoining
or otherwise prohibiting the transactions contemplated by this
Agreement.
(e) No party hereto shall be subject to any order, decree or
injunction or any other action of a United States federal or state
governmental, regulatory or administrative agency or commission
permanently restraining, enjoining or otherwise prohibiting the
transactions contemplated by this Agreement.
6.2 Purchaser's Conditions to Closing. The obligation of Purchaser to
effect the transactions contemplated by this Agreement shall be subject to
the following additional conditions:
(a) Representations and Warranties. Each of the representations,
warranties and covenants contained herein of Seller shall be true
on, the effective date of the Agreement and the Closing Date as if
made on such date (or the date when made in the case of any
representation or warranty which specifically relates to an earlier
date), except for any misstatement, error, or omission which is not
reasonably likely to have, individual or in the aggregate, a
Material Adverse Effect on the Bank.
(b) Certification of Representations and Warranties. Purchaser
shall have received a certificate signed by the Chief Executive
Officer, dated as of the Closing Date, to the effect that the
conditions set forth in Sections 6.1 (as they related to Seller or
the Bank) and 6.2(a) have been satisfied, and certified copies of
resolutions duly adopted by the Bank's Board of Directors and sole
shareholder 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
thereby, all in such reasonable detail as Purchaser and its counsel
shall request.
(c) Absence of Litigation. No legal, administrative, arbitration
or other proceedings by any person shall be pending or threatened
by or before any court or any governmental authority to restrain or
prohibit the transactions
42
contemplated hereby or to obtain damages in connection with such
transactions in an amount that would have a Material Adverse Effect
on the Bank. For purposes of the foregoing, such proceedings shall
not have been "threatened" unless a potential litigant or
governmental authority has notified Purchaser or Seller or any of
their respective counsel of its present intention to initiate such
proceedings.
(d) Material Adverse Change. Purchaser shall not have learned of
any fact or condition with respect to the business, properties,
assets, liabilities, deposit relationships or earnings of the Bank
which is materially at variance with one or more of the warranties
or representations set forth in this Agreement or which, in the
reasonable judgment of Purchaser, has or will have a Material
Adverse Effect on the Bank.
(e) Opinion of Counsel. Purchaser shall have received an opinion
of Powell, Goldstein, Xxxxxx & Xxxxxx LLP, dated as of the Closing
Date, in form reasonably satisfactory to Purchaser, as to matters
set forth in Exhibit B.
(f) Financial Conditions. Purchaser shall have received the Pre-
Closing Financial Statements, and the balance sheet included as
part of the Pre-Closing Financial Statements shall reflect
shareholder's equity of not less than $11,185,000.00, which is
equal to the shareholder's equity of the Bank as reflected in its
unaudited financial statements for the period ended September 30,
2003.
(g) Material Defects. If Seller has elected to cure a Material
Defect, Seller shall have cured the Material Defect to Purchaser's
satisfaction.
(h) Mitigation of Asbestos. The ACM at the Quincy Office shall
have been removed or mitigated to the satisfaction of Purchaser in
Purchaser's sole discretion.
6.3 Seller's Conditions to Closing. The obligation of Seller and the
Bank to effect the transactions contemplated by this Agreement shall be
subject to the following additional conditions:
(a) Representations and Warranties. Each of the representations,
warranties and covenants contained herein of Purchaser and CCB
shall be true on, the effective date of the Agreement and the
Closing Date as if made on such date (or the date when made in the
case of any representation or warranty which specifically relates
to an earlier date), except for any misstatement, error, or
omission which is not reasonably likely to have, individual or in
the aggregate, a Material Adverse Effect on Purchaser.
(b) Certification of Representations and Warranties. Seller shall
have received a certificate signed by the Chief Executive Officer,
dated as of the Closing Date, to the effect that the conditions set
forth in Sections 6.1 (as they
43
related to Purchaser or CCB) and 6.3(a) have been satisfied, and
certified copies of resolutions duly adopted by CCB's Board of
Directors and sole shareholder 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 thereby, all in such reasonable detail as
Seller and its counsel shall request.
(c) Absence of Litigation. No legal, administrative, arbitration
or other proceedings by any person shall be pending or threatened
by or before any court or any governmental authority to restrain or
prohibit any of the transactions contemplated hereby or to obtain
damages in connection with any of such transactions in an amount
that would have a Material Adverse Effect on Purchaser. For
purposes of the foregoing, such proceedings shall not have been
"threatened" unless a potential litigant or governmental authority
has notified Purchaser or Seller or any of their respective counsel
of its present intention to initiate such proceedings.
(d) Material Adverse Change. Seller shall have not learned of any
fact or condition with respect to the business, properties, assets,
liabilities, deposit relationships or earnings of Purchaser which
in the reasonable judgment of Seller, is materially at variance
with one or more of the warranties or representations set forth in
this Agreement or which, in the reasonable judgment of Seller, has
or will have a Material Adverse Effect on Purchaser.
(e) Opinion of Counsel. Seller shall have received an opinion of
Gunster, Yoakley & Xxxxxxx, P.A., counsel to Purchaser, dated as of
the Closing Date, in form reasonably satisfactory to Seller, as to
matters set forth in Exhibit C.
ARTICLE 7
---------
TERMINATION
7.1 Termination by Mutual Consent or Expiration. This Agreement may be
terminated at any time prior to the Closing Date hereunder by the mutual
written consent of Seller and Purchaser. This Agreement will automatically
terminate if the Closing Date does not occur by June 30, 2004, unless the
parties shall have agreed upon an extension of time in which to consummate
the transactions contemplated by this Agreement.
7.2 Termination by Seller. Seller may (but shall not be obligated to)
terminate this Agreement by giving notice to Purchaser provided that Seller
is not in material breach of any representation, warranty, covenant, or other
agreement contained in this Agreement if:
(a) Any condition in Article 6 which must be fulfilled by
Purchaser before Seller is obligated to consummate the transactions
contemplated by this Agreement shall not have been fulfilled on or
before the date specified for the fulfillment thereof; or
44
(b) A default by Purchaser or CCB under or a material breach of
this Agreement, or a material misstatement, error or omission in
any representation or warranty set forth in this Agreement which
cannot be or has not been cured within thirty (30) days after the
giving of written notice to the breaching party of such breach and
which breach is reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on the breaching party.
7.3 Termination by Purchaser. Purchaser may (but shall not be
obligated to) terminate this Agreement by giving notice to Seller provided
that Purchaser is not in material breach of any representation, warranty,
covenant, or other agreement contained in this Agreement if:
(a) Any condition in Article 6 of this Agreement which must be
fulfilled by Seller or the Bank before Purchaser is obligated to
consummate the transactions contemplated by this Agreement shall
not have been fulfilled on or before the date specified for the
fulfillment thereof; or
(b) A default by Seller or the Bank under or a material breach of
this Agreement, or a material misstatement, error or omission in
any representation or warranty set forth in this Agreement which
cannot be or has not been cured within thirty (30) days after the
giving of written notice to the breaching party of such breach and
which breach is reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on the breaching party.
7.4 Effect of Termination. In the event of the termination or
abandonment of this Agreement pursuant to the provisions of this Article 7,
this Agreement shall have no further effect, except that (i) the provisions
of Sections 4.1(c) and 7.4 and Article 8 (except Section 8.2) shall survive
any such termination and abandonment, and (ii) a termination pursuant to
Sections 7.2(b) and 7.3(b) shall not relieve the breaching party from
liability for an uncured willful breach of a representation, warranty,
covenant, or agreement giving rise to such termination.
7.5 Extensions; Waiver. At any time prior to the Closing Date, Seller
or Purchaser may each, on its own behalf:
(a) extend the time for the performance of any of the obligations
or other acts of the other party;
(b) waive any inaccuracies in the representations and warranties
by the other party contained herein or in any document delivered by
the other party pursuant hereto; or
(c) waive compliance by the other party with the agreements or
conditions contained herein.
Notwithstanding the foregoing, any such waiver or failure to insist upon
strict compliance
45
with such obligation, agreement or condition shall not operate as a waiver
of, or estoppel with respect to, any subsequent or other failure to comply
with any obligation, covenant, agreement, or condition of this Agreement.
ARTICLE 8
---------
OTHER MATTERS
8.1 Entire Agreement; Amendment. This Agreement and the
Confidentiality Agreement referred to in Section 8.6, including any exhibits,
schedules and other attachments, represents the entire agreement of the
parties hereto with reference to the transactions contemplated hereby and
supersedes any and all other oral or written agreements heretofore made. No
change, waiver or discharge relating to this Agreement shall be valid unless
in writing and signed by an authorized representative of each party.
8.2 Survival. The representations, warranties, covenants and
agreements made by the parties in this Agreement and in any agreement,
certificate, instrument or other document delivered pursuant to this
Agreement shall survive the Closing Date for the period specified in Section
5.2(c)(i) of this Agreement for giving notices, and shall survive beyond such
period (to the extent permitted under Section 5.2(c)(i)) only if and to the
extent that notice is properly given pursuant to Section 5.2(c) of this
Agreement within the time periods specified in such section, except that (i)
the covenant of Seller contained in Section 5.3(d) of this Agreement shall
survive for the period specified in Section 5.3(b); (ii) Section 5.4 of this
Agreement shall survive for the term of all Loan Participation agreements
between the Bank and any affiliate bank of Seller; and (iii) Section 5.8 of
this Agreement shall survive for the period specified in Section
5.2(c)(i)(A). The representations and warranties contained in Sections
3.1(a), 3.1(i), 3.1(j), 3.1(k), 3.1(l), 3.1(m), 3.1(q)(i), 3.1(r), 3.1(s),
3.1(t), 3.1(u), 3.1(v), 3.1(x), 3.1(bb), 3.1(cc), 3.1(dd) and 3.1(ee) shall
not survive the Closing Date.
8.3 Counterparts. This Agreement may be executed in multiple and/or
facsimile originals, and each copy of this Agreement bearing the manually
executed, facsimile transmitted or photocopied signature of each of the
parties hereto shall be deemed to be an original.
8.4 Governing Law. This Agreement shall be governed by, and
interpreted in accordance with, the laws of the State of Florida without
giving effect to any conflict of laws doctrine or statute.
8.5 Expenses. Each party hereto will bear all expenses incurred by it
in connection with this Agreement and the transactions contemplated hereby,
including, but not limited to, the fees and expenses of its respective
counsel and accountants; provided, however, that if this Agreement is
terminated pursuant to Sections 7.2(b) or 7.3(b), as the case may be, in
addition to such damages as may be recoverable in law or equity, the
terminating party shall be entitled to recover from the breaching party upon
demand, itemization and documentation, its reasonable legal, accounting,
consulting and other expenses incurred in connection with the transaction.
8.6 Confidentiality.
46
(a) In addition to the parties' respective obligations under the
Confidentiality Letter, dated September 2, 2003 (the
"Confidentiality Letter"), as attached to this Agreement as Exhibit
D, which are hereby reaffirmed and adopted, and incorporated by
reference herein, 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. In
the event that a party is required by applicable law or valid court
process to disclose any such confidential information then such
party shall provide the other party with prompt written notice of
any such requirement so that the other party may seek a protective
order or other appropriate remedy and/or waive compliance with this
Section 8.6. If in the absence of a protective order or other
remedy or the receipt of a waiver by the other party, a party is
nonetheless, in the written opinion of counsel, legally compelled
to disclose any such confidential information to any tribunal or
else stand liable for contempt or suffer other censure or penalty,
a party may, without liability hereunder, disclose to such tribunal
only that portion of the confidential information which such
counsel advises such party is legally required to be disclosed,
provided that such disclosing party use its best efforts to
preserve the confidentiality of such confidential information,
including without limitation, by cooperating with the other party
to obtain an appropriate protective order or other reliable
assurance that confidential treatment will be accorded such
confidential information by such tribunal. If this Agreement is
terminated prior to the Effective Time, upon written request of the
other party, 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. Confidential information for purposes of this Agreement
shall mean "Confidential Information" as defined in the
Confidentiality Letter.
(b) Seller shall use its reasonable efforts to exercise its rights
under confidentiality agreements entered into with persons or
entities, if any, which were considering an acquisition proposal
with respect to the Bank to preserve the confidentiality of the
information relating to the Bank provided to such persons or
entities and their affiliates and representatives.
(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 Seller Material
Adverse Effect, Bank Material Adverse Effect, or a Purchaser
Material Adverse Effect, as applicable.
(d) Upon request of Purchaser, Seller shall request within 10 days
of the date thereof, that all third parties that received
confidential information regarding the
47
Bank within the last 12 months in connection with a possible sale
transaction involving the Bank promptly return such confidential
information to Seller.
8.7 Notices. All notices, requests, acknowledgments and other
communications hereunder to a party shall be in writing and shall be
delivered by hand, transmitted by facsimile, delivered by overnight courier
or sent by registered or certified mail, postage paid, to such party at its
address set forth below or such other address as such party may specify by
notice to the other party hereto. Each such notice shall be deemed
delivered: (a) on the date delivered by messenger or courier service; (b) on
the date of confirmation of receipt, if by facsimile; and (c) either upon the
date of receipt or refusal of delivery, if mailed.
If to Seller or the Bank:
Synovus Financial Corp.
Attn: Xxxxxx X. Xxxxxxxx, CFO
000 Xxxxx Xxxxxx, Xxxxx 000
Xxxxxxxx, Xxxxxxx 00000
Fax: (000) 000-0000
with a copy to:
Synovus Financial Corp.
Attn: Xxxxxxxx Xxxxxx
General Counsel's Xxxxxx
000 Xxxxx Xxxxxx, Xxxxx 000
Xxxxxxxx, Xxxxxxx 00000
Fax: (000) 000-0000
If to Purchaser or CCB:
Capital City Bank Group, Inc.
Attn: X. Xxxxxxxxx Xxxxx
000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxx 00000
Fax: 000-000-0000
with a copy to Counsel:
Gunster, Yoakley & Xxxxxxx, P.A.
Attn: Xxxxxxx X Xxxxx, Esq.
000 Xxxx Xxxxxxx Xxxx., Xxxxx 0000
Xxxx Xxxxxxxxxx, Xxxxxxx 00000
Fax: 000-000-0000
8.8 Binding Nature. All terms and provisions of this Agreement shall
be binding upon and shall inure to the benefit of the parties hereto and
their respective successors and assigns.
48
8.9 No Third Party Rights. Except as expressly provided for herein,
nothing in this Agreement is intended to confer upon any other person any
rights or remedies of any nature whatsoever under or by reason of this
Agreement. Nothing in this Agreement is intended to relieve or discharge the
obligation or liability of any third persons to any party to this Agreement,
nor shall any provision give any third persons any right of subrogation or
action over or against any party to this Agreement.
8.10 Assignment. This Agreement may not be assigned by any party
hereto without the written consent of the other party.
8.11 Remedies. Except as limited in Sections 5.2 and 8.2 of this
Agreement, in the event of any breach of this Agreement or misrepresentation
hereunder by any of the parties hereto, any other party hereto damaged
thereby shall have all the rights, remedies and causes of action available at
law or in equity.
8.12 Specific Performance. The parties hereto agree that irreparable
damage would occur in the event that any of the provisions of this Agreement
were not performed in accordance with their specific terms or were otherwise
breached. It is accordingly agreed that the parties shall be entitled to an
injunction or injunctions to prevent breaches of this Agreement and to
enforce specifically the terms and provisions hereof in any court of the
United States or any state having jurisdiction, this being in addition to any
other remedies to which they are entitled at law or in equity.
8.13 Exhibits and Schedules. All exhibits, schedules, attachments to
exhibits or schedules and other attachments to this Agreement are hereby
incorporated by reference into this Agreement and made a part of this
Agreement as if set out in full in the first place that reference is made
thereto.
8.14 Headings; Number; Gender. Descriptive headings in this Agreement
are for convenience only and shall not control or affect the meaning or
construction of any provisions of this Agreement. Whenever the context so
requires, the singular number shall include the plural and the plural shall
include the singular. Likewise, the gender of any pronoun shall include all
other genders.
8.15 Brokers and Finders. Except for Xxxxx Capital Group, L.L.C. as to
Purchaser, 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 Seller or by Purchaser, each of Seller and Purchaser, as the case may be,
agrees to indemnify and hold the other party harmless of and from any
liability in respect of any such claim.
49
(signatures begin on next page)
50
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed in counterparts by their duly authorized officers as of the date
first written above.
SELLER:
SYNOVUS FINANCIAL CORP.
By: /s/ Xxxxxx X. Xxxxxxxx
------------------------------
Title: Executive V.P. & CFO
---------------------------
Attest: /s/ Xxxxx Xxxxxx
--------------------------
Title: Assistant Secretary
---------------------------
PURCHASER:
CAPITAL CITY BANK GROUP, INC.
By: /s/ X. Xxxxxxxxx Xxxxx
------------------------------
Title: Executive V.P. & CFO
---------------------------
Attest: /s/ Xxxx Xxx
--------------------------
Title: Administrative Assistant
---------------------------
BANK:
QUINCY STATE BANK
By: /s/ Xxxxx Xxxxx
------------------------------
Title: President
---------------------------
Attest: /s/ Xxxxxxx Xxxxxxxx
--------------------------
Title: Senior V.P.
---------------------------
51
CCB:
CAPITAL CITY BANK
By: /s/ X. Xxxxxxxxx Xxxxx
------------------------------
Title: Executive V.P. & CFO
---------------------------
Attest: /s/ Xxxx Xxx
--------------------------
Title: Administrative Assistant
---------------------------
52
LIST OF EXHIBITS
Exhibit Description
------- -----------
A Bank Plan of Merger
B Matters as to which Powell,
Goldstein, Xxxxxx & Xxxxxx LLP will
opine (Section 6.2(e))
C Matters as to which Xxxxxxx Xxxxxxx
will opine (Section 6.3(d))
D Confidentiality Agreement
E Articles of incorporation of the Bank
and all amendments, restatements,
articles of merger or consolidation
or other filings with respect thereto
and the currently effective bylaws of
the Bank.
EXHIBIT A
PLAN OF MERGER
AND MERGER AGREEMENT
Pursuant to the provisions of Section 658.42 of the Florida Statutes,
the undersigned banks do hereby adopt and enter into this Plan of Merger and
Merger Agreement (this "Agreement") for the purpose of merging (the "Merger")
Quincy State Bank, a Florida chartered commercial bank (the "Bank") with and
into Capital City Bank, a Florida chartered commercial bank ("CCB"):
(a) The name of each constituent bank and the specific location of
its main office are as follows:
1. Capital City Bank
000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxx 00000
The specific location of each of its branch offices is set
forth on Schedule 1 attached hereto.
2. Quincy State Bank
0 Xxxx Xxxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxx 00000
The specific location of each of its branch offices is set
forth on Schedule 2 attached hereto.
(b) With respect to the resulting state bank:
1. The name and the specific location of the proposed main
office are:
Capital City Bank
000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxx 00000
The name of each of its branch offices will be Capital
City Bank. The specific location of each of its existing
and proposed branch offices is set forth on Schedule 3
attached hereto.
2. The name and address of each director who is to serve
until the next meeting of the shareholders at which
directors are elected are set forth on Schedule 4 attached
hereto.
3. The name and address of each executive officer are set
forth on Schedule 5 attached hereto.
4. The resulting bank will have a single class of common
stock, par value $100 per share ("Resulting Bank Common
Stock"), consisting of 5,000 authorized
shares, of which 1,000 will be outstanding. The amount of
the surplus fund will be $____________ and the amount of
retained earnings will be $____________.
5. The resulting bank shall have trust powers.
6. The complete articles of incorporation under which the
resulting bank will operate are attached hereto as
Schedule 6.
(c) The terms for the exchange of shares of the constituent banks
are as follows:
1. At the Effective Time (as defined below), each issued and
outstanding share of the common stock of the Bank, par
value $20 per share, shall, by virtue of the Merger and
without any action by the holder thereof, be extinguished.
At the Effective Time, each of the 1,000 issued and
outstanding shares of the common stock of CCB, par value
$100 per share, shall continue to be outstanding and held
by Capital City Bank Group, Inc., a Florida corporation,
and shall constitute all of the issued and outstanding
Resulting Bank Common Stock.
2. The "Effective Time" shall mean 11:59 pm on the date
requested by CCB, as soon as practicable after the
delivery of this Agreement and certified resolutions to
the Florida Department of Financial Services (the
"Department").
(d) This Agreement is subject to approval by the Department and by
the shareholders of the Bank and CCB.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
____________, 2003.
CAPITAL CITY BANK
By:
---------------------
Name:
-------------------
Title:
------------------
QUINCY STATE BANK
By:
---------------------
Name:
-------------------
Title:
------------------
EXHIBIT B
MATTERS AS TO WHICH XXXXXX, XXXXXXXX WILL OPINE
1. Synovus Financial Corp. ("Seller") is a corporation duly organized,
validly existing and in good standing under the laws of the State of Georgia,
is qualified to transact business in all jurisdictions where the character of
its business requires such qualification and has full corporate power to
enter into the transactions contemplated by the Agreement and Plan of Merger.
2. Quincy State Bank (the "Bank") is a bank duly organized, validly
existing, and in good standing under the laws of the State of Florida, is
qualified to transact business in all jurisdictions where the character of
its business requires such qualification and has full corporate power to
enter into the transactions contemplated by the Agreement and Plan of Merger.
3. Bank is a wholly-owned subsidiary of Seller as Seller owns all
10,000 shares of the issued and outstanding common stock of the Bank, which
constitutes all of the issued and outstanding stock of any class of
securities of the Bank, and there are no other owners of stock or other
securities of the Bank or interests convertible into such and no person or
entity has any right to acquire any securities of Bank. Seller has good,
valid, and marketable title to all of such shares, free and clear of any
liens, claims, pledges, options, or adverse claims and charges of any nature
whatsoever. All of the issued and outstanding shares of capital stock of the
Bank are duly and validly issued and outstanding and are fully paid and
nonassessable under the Florida Business Corporation Act ("FBCA") and the
Florida Financial Institutions Code. None of the outstanding shares of
capital stock of the Bank has been issued in violation of any preemptive
rights of the current or past shareholders of the Bank.
4. The execution, delivery, and performance of the Agreement and Plan
of Merger by Seller and the Bank do not, and the consummation of the
transactions contemplated thereby by Seller and the Bank will not: (1)
violate or contravene any provisions of the articles of incorporation or
bylaws of Seller or the Bank; or (2) to our knowledge, constitute a breach or
violation of, or a default under, any law, rule or regulation, or any
judgment, decree, order, governmental permit or license, or agreement,
indenture or instrument of Seller or the Bank or to which Seller or the Bank
is subject, or enable any person to enjoin any of the transactions
contemplated hereby.
5. Seller and the Bank have obtained all necessary consents and
approvals of, and made all necessary filings with, and notices to, all
federal, state, local, and foreign governmental and regulatory bodies for the
consummation by Seller and the Bank of the transactions contemplated in the
Agreement and Plan of Merger.
6. Both the Agreement and Plan of Merger and the Bank Plan of Merger
have been duly and validly executed and delivered by Seller and the Bank and,
assuming valid authorization, execution and delivery by Capital City Bank
Group, Inc. and Capital City Bank, as the case may be, constitute valid and
binding agreements of Seller and the Bank enforceable in accordance with
their respective terms.
7. Seller and the Bank have taken all necessary action to exempt the
transactions contemplated by the Agreement and Plan of Merger from, or if
necessary to challenge the validity or applicability of, any applicable
"moratorium," "fair price," "business combination," "control share," or other
anti-takeover laws, including without limitation, Sections 607.0901 and
607.0902 of the Florida Statutes.
8. Seller and the Bank have taken all necessary action so that the
entering into of the Agreement and Plan of Merger and the consummation of the
transactions contemplated by the Agreement and Plan of Merger do not and will
not result in the grant of any rights to any person or entity under the
articles of incorporation, bylaws or other governing instruments of Seller
and the Bank or restrict or impair the ability of Purchaser or any of its
subsidiaries to vote, or otherwise to exercise the rights of a stockholder
with respect to, shares of the Bank that may be directly or indirectly
acquired or controlled by them.
9. There is no litigation instituted or pending, or, to our knowledge,
threatened (or unasserted but considered probable of assertion and which if
asserted would have at least a reasonable probability of an unfavorable
outcome) against Seller (as to its ownership interest in the Bank) or the
Bank, except as disclosed in the Seller's Disclosure Memorandum. There is no
litigation instituted or pending, or, to our knowledge, threatened (or
unasserted but considered probable of assertion and which if asserted would
have at least a reasonable probability of an unfavorable outcome) against
Seller or the Bank or any Bank Benefit Plan, or against any director or
employee of Seller or the Bank, in their capacity as such, 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 Seller or the Bank which would have a material adverse
effect on the ability of Seller or the Bank to consummate the transactions
contemplated in the Agreement and Plan of Merger.
Our opinion concerning the validity, binding effect, and enforceability
of the Agreement and Plan of Merger means that (i) the Agreement and Plan of
Merger constitutes an effective contract under applicable laws, (ii) the
Agreement and Plan of Merger is not invalid in its entirety because of a
specific statutory prohibition or public policy and is not subject in its
entirety to a contractual defense, and (iii) subject to the last sentence of
this paragraph, some remedy is available if Seller or the Bank is in material
default under the Agreement and Plan of Merger. This opinion does not mean
that (i) any particular remedy is available upon a material default, or (ii)
every provision of the Agreement and Plan of Merger will be upheld or
enforced in any or each circumstance by a court. Furthermore, the validity,
binding effect, and enforceability of the Agreement and Plan of Merger may be
limited or otherwise affected by (i) bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance or other similar statutes, rules,
regulations or other laws affecting the enforcement of creditors' rights
and remedies generally, and (ii) the unavailability of, or limitation on the
availability of, a particular right or remedy (whether in a proceeding in
equity or at law) because of an equitable principle or a requirement as to
commercial reasonableness, conscionability or good faith.
EXHIBIT C
MATTERS AS TO WHICH GUNSTER, YOAKLEY & XXXXXXX, P.A. WILL OPINE
1. Capital City Bank Group, Inc. ("Purchaser") has been incorporated
under the Florida Business Corporation Act (or prior law), its status is
active, and it has full corporate power and authority to carry on the
business in which it is engaged, to own and use its assets, and to enter into
the transactions contemplated by the Agreement and Plan of Merger.
2. Capital City Bank ("CCB") has been organized under the laws of the
state of Florida, its status is active, and it has full corporate power and
authority to carry on the business in which it is engaged, to own and use its
assets, and to enter into the transactions contemplated by the Agreement and
Plan of Merger.
3. The execution, delivery, and performance of the Agreement and Plan
of Merger by Purchaser and CCB do not, and the consummation of the
transactions contemplated thereby by Purchaser and CCB will not: (1) violate
or contravene any provisions of the articles of incorporation or bylaws of
Purchaser or CCB, or (2) to our knowledge, constitute a breach or violation
of, or a default under, any law, rule or regulation, or any judgment, decree,
order, governmental permit or license, or agreement, indenture or instrument
of Purchaser or CCB or to which Purchaser or CCB is subject which breach,
violation or default would have a Material Adverse Effect on Purchaser, or
enable any person to enjoin any of the transactions contemplated hereby.
4. Both the Agreement and Plan of Merger and the Bank Plan of Merger
have been duly and validly executed and delivered by Purchaser and CCB and,
assuming valid authorization, execution and delivery by Seller and the Bank,
as the case may be, constitute valid and binding agreements of Purchaser and
CCB enforceable in accordance with their respective terms.
5. Other than consents required from the Florida Department of
Financial Services and the Federal Reserve Board or its designee, and other
than notices to or filings with the Internal Revenue Service or the Pension
Benefit Guaranty Corporation with respect to any Bank Benefit Plan, no notice
to, filing with, or consent or approval of, any federal, state, local, or
foreign governmental or regulatory body is necessary for the consummation by
Purchaser and CCB of the transactions contemplated in the Agreement and Plan
of Merger.
6. There is no litigation instituted or pending, or, to our knowledge,
threatened (or unasserted but considered probable of assertion and which if
asserted would have at least a reasonable probability of an unfavorable
outcome) against Purchaser or CCB, or against any director or employee of
Purchaser or CCB, in their capacity as such, 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 Purchaser or CCB which would have a material adverse effect on the
ability of Purchaser or CCB to consummate the
transactions contemplated in the Agreement and Plan of Merger.
Our opinion concerning the validity, binding effect, and enforceability
of the Agreement and Plan of Merger means that (i) the Agreement and Plan of
Merger constitutes an effective contract under applicable laws, (ii) the
Agreement and Plan of Merger is not invalid in its entirety because of a
specific statutory prohibition or public policy and is not subject in its
entirety to a contractual defense, and (iii) subject to the last sentence of
this paragraph, some remedy is available if Purchaser or CCB is in material
default under the Agreement and Plan of Merger. This opinion does not mean
that (i) any particular remedy is available upon a material default, or (ii)
every provision of the Agreement and Plan of Merger will be upheld or
enforced in any or each circumstance by a court. Furthermore, the validity,
binding effect, and enforceability of the Agreement and Plan of Merger may be
limited or otherwise affected by (i) bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance or other similar statutes, rules,
regulations or other laws affecting the enforcement of creditors' rights and
remedies generally, and (ii) the unavailability of, or limitation on the
availability of, a particular right or remedy (whether in a proceeding in
equity or at law) because of an equitable principle or a requirement as to
commercial reasonableness, conscionability or good faith.
EXHIBIT D
Confidentiality Agreement
EXHIBIT E
The following are copies of the articles of incorporation of the Bank and all
amendments, restatements, articles of merger or consolidation or other
filings with respect thereto and the currently effective bylaws of the Bank.
246373.0000000.6 29
FTL 247340.1
246373.5246373.6
FTL 247340.1
246373.5246373.6
FTL 247340.1
